If you forced liberals to make the economic case for a President Romney, what would they say? Let's find out.
We all know why Mitt Romney thinks his presidency would help the economy. He claims his tax reform plan would spur growth. He claims Obamacare is holding back hiring, so he'd repeal it. Most people I follow don't find either claim terribly persuasive, since the growth effects of tax reform are small if negligible, and it's low demand, not future regulatory unease, that's the real impediment to job growth.
But even if Romney's wrong, he might yet be right for the economy.
There's a surprisingly robust belief that a Romney presidency -- even if it's a disaster for social issues -- could prove surprisingly, even stealthily, successful for GDP. It goes like this, briefly. A moderate President Romney would delay a shift to austerity, maintaining our healthy, high deficits while pursuing stealth stimulus and long-term deficit reduction plan with Republicans ... all of which has proved just nearly impossible under divided government.
"Romney may deserve the edge" on economics, Matthew Yglesias wrote in his endorsement of Obama this morning for Slate. "I think it's reasonably likely that President Romney would emerge as a closet Keynesian and bring us a lower unemployment rate." In a long piece for New York magazine, Jonathan Chait predicted an out-of-the-gate Romney debt-reduction plan "that increases deficits in the short run [and] allows him to offer a political olive branch to Democrats without breaking faith with his own base." Josh Barro of Bloomberg predicted that Romney could pair higher deficits with a mortgage relief plan favored by his moderate economic advisers.
Should liberals and moderates be more hopeful about the economic prospects of a Romney presidency? I asked a liberal and a moderate.
"I think there may be something to the notion that under a Romney presidency, the GOP would go back to being open to Keynesian stimulus (since they were under Bush)," Michael Linden, director of budget and tax policy at the Center for American Progress, wrote in an email. "We're probably less likely to go over the fiscal cliff if Romney wins and we're definitely less likely to have another debt limit fiasco." Linden noted, however, that Romney had steadfastly avoided a clear or specific policy for housing.
Ron Haskins, a former White House adviser who co-directs the Brookings Center on Children and Families and Budgeting for National Priorities Project, expressed optimism that Romney could uniquely deal with our long-term budget imbalance -- even if he elects to keep deficits high in the short term. "Obama has repeatedly failed to exert leadership on the deficit," he said. "There is no objective way to say Romney is more likely to deal with it, but I think he is. He is inherently a moderate. He's smart, he understands budgets and busienss, and the nature of business is cutting deals." Any deficit reduction deal will require higher tax revenues, and Romney would have a Nixon-in-China opportunity to strike that bargain, Haskins added.
"Of course, I have no way of knowing any of this," he said on the phone. "I'm just responding to your [hypothetical] question."
If Romney does pull out a surprise victory on Tuesday, we will have elected perhaps the most conservative economic agenda in decades -- one that pledges deep tax rate cuts on the rich with unspecified offsets and enacts deep, deep cuts into the parts of the budget that pay for Medicaid, public goods and income security programs. And yet! Liberals can seek solace in the fact that a President Romney would have to tack center in a divided government, and a moderate Republican in the White House be able to enact more short-term stimulus long-term deficit-reduction laws than the incumbent. But essentially, the liberal/moderate case for economic optimism in a GOP Oval Office is: "We hope Romney will change his mind."
Wishful thinking, for sure. But these are liberals, and this is Mitt Romney: They have made more implausible wishes before.
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