Morning Must-Read: Simon Wren-Lewis: Sticky Prices and Teaching Macroeconomics: How We Confuse Students, and Sometimes Ourselves
Twenty Questions Tim Geithner's Stress Test Should Answer About His Tenure at the Treasury

Counterfactual Romney Administration Fiscal Policy: Naughty, Naughty Glenn Hubbard Edition!: Monday Focus: May 12, 2014

As I see it, former Bush II CEA Chair and McCain and Romney advisor R. Glenn Hubbard can either:

  • Stop saying that Romney's fiscal plan was "essentially" Simpson-Bowles; or
  • Stop saying that Romney's fiscal plan was to extend all of the Bush II 2001-3 tax provisions indefinitely.

Trying to say both simply makes him look silly:

Glenn Hubbard: Mitt Romney adviser: Tim Geithner’s lying: "[Tim Geithner's] going to go out and say what he wants. It just happens to be a lie.... Geithner is making it up. It’s pretty simple. It’s not true.... I was asking him something like, how can Romney’s plan be off base because it’s essentially the Bowles-Simpson structure and Bowles-Simpson actually raises revenue. But I wasn’t suggesting that we’re trying to raise taxes..."

My view?

It is that, most probably, the most likely plan that Mitt Romney had in his heart of hearts for what to do had he become president was to be unwillingly forced to raise taxes by the "necessity" of not going over the fiscal cliff--not even for a quarter--at the start of 2013. It was to propose a "clean" permanent extension, have that fail in Congress, blame the Democrats for filibustering it, reach a compromise that did not indefinitely extend all of the 2001-3 tax provisions, and then say: "I didn't raise your taxes: the Democrats did, and I had to sign their bill in order to get you the half a loaf I got you. I would have gotten 2/3 of a loaf if only I had a Republican senate to work with."

But I wasn't there. I don't really know. Glenn Hubbard was. It would be nice if he would tell us: providing us with some sense of how a Romney presidency really would have been different on the ground than an Obama presidency would be a definite mitzvah.

And there is also the question of what Romney's plan would have been if the Republicans had had effective control over the senate and he had been president in January 2013. I leave that as an exercise for the reader...