Intro to Romneynomics

When people ask me how the Romney economic program works, I focus on three points.

First, the American economy is in bad shape. Persistently high unemployment and slow economic growth are causing pain for many Americans. Economic growth so far this year has averaged only 1.7 percent, which is even lower than the paltry 2 percent last year and the 2.4 percent the year before that. Median household income is declining sharply and the federal debt, which burdens both current and future generations, is exploding.

  
  Photo credit: NewsHour

While we had a financial crisis and a recession four years ago, the recovery from that recession has been far weaker than recoveries from similar recessions in American history. Some say the deep recession is the reason for the slow recovery but that is not what American history shows. Historians of the American business cycle from Milton Friedman writing in the 1960s to Michael Bordo writing today have demonstrated that deeper recessions, even those with financial crises, are typically followed by faster recoveries. The following chart shows that the 6 percent average pace of recovery from the eight previous recessions associated with financial crises has been three times faster than the 2 percent pace of this weak recovery. CONTINUE READING