Romney Admits Budget Cuts Would Throw Economy Into ‘Recession Or Depression’

[Cronkite]

1. Spending cuts or tax increases will do it. (we're pretty much screwed)

Right now we are injecting borrowed money into the economy. I don't have the latest numbers but it is roughly 10% of GDP. This is not sustainable long term and at some point it will have to stop. When it stops we will see an instant drop in GDP on the order of 20 to 25% due to the multiplier of the money also being lost.

Raise taxes to cover this? All raising taxes will do is extract the money out of the economy by taxation. It will have the same result as if we stopped borrowing and spending. GDP would decrease by the amount of the tax increase while spending could be maintained.

Cut spending to cover this? Same result- the decrease in spending will be extracted from GDP and cause an immediate drop in GDP.

Continue on borrowing? We are already over 100% GDP and every year we are adding 10% more.

To borrow a phrase from President Obama "it's time to eat our peas". It is going to be very rough but if this isn't addressed it will continue to get worse and making the inevitable correction hurt even more.

I was against the Bush bailouts of the TBTF banks, I was against the stimulus plans since. If we had taken out lumps in 2007 like Iceland did we would be in full recovery mode right now. It would have been very painful but quick. All that has happened with the current policy has been an extension of the pain and nothing has been done to correct the problem (except throw borrowed money at it).

This is just my humble untrained opinion which I am sure many will find fault with.....