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I fear a NIGHTMARE scenario for the United States if Mitt Romney is elected President. I assume he will implement the Ryan budget plan, which will cut taxes for the "investor class" (aka the rich), while reducing government spending by cutting programs that benefit the poor, working and middle class families. Since money knows no nationality, and owes no loyalty but to itself, most of the tax cut the rich receive will be invested in emerging market countries, where it will get the greatest return, or deposited in the secret bank accounts of "offshore tax havens", or hidden away in gold. This money will not circulate through the American economy, create demand, and help the economy grow.
Meanwhile, since Romney promised not to increase the deficit, the budgets would be slashed for programs like: crop insurance for farmers, natural disaster relief, food inspection, interstate highway repair and maintenance, school nutrition programs, unemployment insurance, student financial aid, food stamps, employment training, "Head Start", "aid for dependent children", etc. Cuts in federal grants to local and state governments would mean the layoff of policemen, firemen, and teachers. Of course, all these things and people consume "goods and services" which employ people to meet this demand. To the extent demand is now lessened, employers will cut back and factories may close, jobs will be lost, and the unemployment rate will rise. Rather then the agonizingly slow but steady economic growth we presently have, the economy will begin to shrink, we will be in a "double dip" recession.
As the economy shrinks and people lose jobs, their ability to make their mortgage payments will decrease, and bank foreclosures will increase. They will lose their homes. They will be looking for help, but they will get none from Mitt Romney, since he believes "don't try and stop the foreclosure process. Let it run its course and hit the bottom." But we must always remember the statistics we read about unemployment and foreclosures are not just numbers. They represent real men, women, and children, who, maybe for the first time in their lives question: “Will I eat tonight and where will I sleep?” They are more afraid then they have ever been before in their lives. Without any government help, what will those families be forced to do in order to survive? Prostitute themselves, steal, become criminals in order to put a roof over their head and food on the table for themselves and their children. Is this what Mitt wants, because in some cases, this is what he will get.
But the nightmare continues: Mitt Romney has said, "I have indicated, day one, I will issue an executive order identifying China as a currency manipulator. We'll bring an action against them in front of the WTO (World Trade Organization) for manipulating their currency, and we will go after them." Sounds good until you read what that same WTO states on their Website "The short-sighted protectionist view is that defending particular sectors against imports is beneficial. But that view ignores how other countries are going to respond. The longer term reality is that one protectionist step by one country can easily lead to retaliation from other countries. (For example), the trade war of the 1930s when countries competed to raise trade barriers in order to protect domestic producers and retaliate against each others’ barriers. This worsened the Great Depression."
Will Mitt Romney's actions towards China, if elected president, ignite a fire he may not be able to control? Europe is economically frail, already many countries are in a recession because they adopted the equivalent of the Romney/Ryan budget. Austerity in those countries has only caused the financial condition of the people to worsen, and created political instability and rioting in the streets. At this point, the possible starting a trade war between the world's two largest economies would be a unwarranted risk. A trade war, when combined with Europe's fragile economy, and the downturn in the American economy caused by the Romney/Ryan budget, would result in another economic depression, not just a severe recession.
While the preceding facets of my nightmare are based on facts, what follows is INFORMED SPECULATION. The Romney/Ryan budget has increased economic inequality, in that, it gave significant tax cuts to the rich while cutting benefits such as unemployment insurance, student financial aid, food stamps, "Head Start", school nutrition programs, etc, mostly used by the poor. This will revive and reinvigorate the "Occupy Wall Street" movement, perhaps to the extent where the size of its demonstrations will match those against the war in Vietnam. Because of the economic downturn, and Romney's policies which are seen as causing it (unlike Obama who was seen as inheriting it from the Bush administration), the demonstrators will be angrier then they were in the first wave of the "Occupy Wall Street" movement. Some of the demonstrations may deteriorate into riots, as they have done in London, Greece, and Spain. These will only be splinter groups but media reports, especially Fox News, will focus on them.
President Obama was "hands off" regarding the first wave of "Occupy Wall Street" (OWS) movement and appeased them by using a more populist tone in his speeches. However Romney will not do that, since he will be pressured by his "hard right" supporters, including Rush Limbaugh, into declaring the "Occupy Wall Street" demonstrators are terrorist, because of the riots, and evoking the "Patriot Act." (As an aside, many of the illegal actions in regards to the anti-war movement for which Nixon was impeached in Watergate, would today be perfectly legal under the "Patriot Act."
The "Occupy Wall Street" encampments would then be swept clear and destroyed by soldiers, like what happened under President Hoover, to the encampment of the "Bonus Marchers" in 1932. At that time soldiers with fixed bayonets and hurling tear gas destroyed an encampment of 10,000 people. Two babies died and nearby hospitals were overwhelmed with casualties.
America would be bitterly divided, especially if any demonstrators were killed by soldiers, as they were at "Kent State" during an anti-Vietnam War protest. And as president, we would have a man who is closely tied to Wall Street and corporate financiers, in fact he was one; he was ruthless in the way he handled his business (Bain) and political campaigns; he has no problem being deceptive, to either us or the SEC (as to when he left Bain), along with for many years not disclosing a Swiss bank account on government financial disclosure forms; and he is completely opaque and secretive in whatever he does. With this combination no one could know what would happen next.
As Martin Luther King Jr reminded us, "We must never forget that everything Hitler did in Germany was legal." Hitler in a time of political and economic distress, in a sloppy and flawed political process, achieved office democratically. We say it could never happen here, but as the little known "plot against FDR" shows, it is not unthinkable. The economic system of the United States has already changed, we have gone from capitalism to corporatism; stealthily, without notice. A Wal-mart store, because of the size of the corporate chain, get a special low prices from manufacturers available to no one else; it comes to town and how many stores on main street go out of business. Banking corporations get too big to fail, they take reckless risks to increase profits, they get in trouble, and the taxpayer has to bail them out; while their executives, the same ones who took the risks, get huge bonuses. This is because as Mitt said, "The TARP (bank bailout) program was designed to keep the financial system going," and as a CEO of a private equity firm, he was a part of this financial system and previously had been a partner in transactions with many of these banks. In the past, we would say this could never happen here, but it did. Thus my nightmare ends.
You may think I'm paranoid, and I can only hope you're right. However, many economist believe that if Romney does what he says he wants to, in regards to the budget and China, the economic portion of my nightmare will become a reality. As far as the political portion of my nightmare, the very fact that I can make a coherent, cogent and credible scenario, is scary enough.
