Although Romney supported the bailout of the banks, he opposed Mr. Obama鈥檚 bailout of the auto industry. He also opposed Obama鈥檚 2009 stimulus act, officially titled the American Recovery and Reinvestment Act. Romney鈥檚 economic heavyweights use flawed logic in challenging the stimulus. They cite studies that apparently show that the Act鈥檚 鈥�cash for clunkers,鈥� 鈥渉ousing鈥� programs, and 鈥済reen鈥� investments did not stimulate the economy.
But only a small percentage of the stimulus was devoted to these programs. For example, cash for clunkers accounted for less than 1 percent of the Act鈥檚 spending. Furthermore, the independent and nonpartisan Congressional Budget Office (CBO) and several independent economists have estimated that the stimulus added significantly to both economic growth and employment.
What if Romney had won the GOP primary in 2008 and become president? What if he had followed the advice of his economic advisers? It鈥檚 fair to assume he would have 1) blocked the bailout of GM and Chrysler; 2) not pursued the 2009 stimulus act; and 3) replaced Ben Bernanke, the chairman of the Federal Reserve Board (Fed), with a person who would not have adopted the monetary stimulus policies that have kept interest rates low.
Romney would have likely adopted the same type of 鈥渢ight鈥� fiscal and monetary policies that led to the Great Depression, and we likely would have had Great Depression II. After independently reaching this conclusion, I heard Alan Mulally, CEO of Ford Motor Company, which was not bailed out, express a similar view on Fox News.
