REPUBLICAN ECONOMIC OFFER

Published in El Nuevo Herald on April 04, 2012

Barring a phenomenon, between the two Republican, Mitt Romney and Rick Santorum, is the candidate that will challenge President Obama in the upcoming elections. Each has its platform in which the economy plays a role. Then, I will outline what are their main economic proposals and how they compare with the deals of the Obama Administration.

• Mitt Romney

Increase the federal budget to reach $ 19.5 billion. Considers that citizens have lost about $ 11 trillion in net worth. This means that each year Americans spend $ 400 billion less. Even with this consideration, Romney opposed the stimulus plan Obama signed $ 787 billion in February 2009 and known as American Recovery and Reinvestment Act . In other words, the candidate seeks to increase public spending, but rejects President Obama wants to increase it.

Concerning the real estate market, Romney is in favor of not intervening in foreclosure processes, letting them run their course and hit bottom, then allow investors to buy these properties, repair, and then renting and re-enter the market . This differs radically from the recent agreement by the Department of Justice in the Obama Administration with major banks holding mortgages in the country, through which these banks modify loans by $ 25 billion to those homeowners whose debt is greater than the current value of their homes . This is preventing a massive foreclosure that was the next to appear.

While Republicans opposed the passage of a law criminalizing the importation of Chinese goods if China came to see that artificially manipulating its currency to encourage exports, Romney has said that to eliminate the unequal trade between the U.S. and China, is able to resist this manipulation of currency and raise tariffs on Chinese imports. However, Romney was against imposing sanctions on China for its trade abuses in 2011-2012.

Romney agrees not to raise taxes. As governor of Massachusetts, Romney supported the second round of tax cuts proposed and approved by President George W. Bush. This position is diametrically opposed to the offer proposed by Democrats to raise taxes on the wealthiest class, which constitutes 2% of the population but accounts for over 90% of businesses in general.

• Rick Santorum

Intelligently, more blame former President Bush to President Obama for the current crisis. According to Santorum, "Bush set the precedent and this was a bad precedent."

Santorum is in favor of reducing government spending and simplify the tax code, but proposes to completely eliminate corporate taxes for manufacturers who repatriate their profits to the U.S. or other countries. Of course, it would be even more important for the U.S. if these manufacturers were located in U.S. territory and not in China or other countries. In this regard the administration of President Obama has said that those companies that manufacture on American soil will be entitled to take-offs and tax exemptions.

Santorum also said in the Wall Street Journal that "to restore U.S. Competitiveness, all other corporate taxes should be lowered to half and set at a flat rate of 17.5%." During a recent televised speech tycoon Warren Buffet on CNBC, it declared, "is a myth that U.S. corporate taxes are high and are strangling American competitiveness." By contrast, according to Buffett, the corporate tax rate in the U.S. is among the lowest in the industrialized countries, reaching in 2011 an actual cash value of only 12%. Indeed, Buffett deepens stating that U.S. corporate profits have been the highest in the last 50 years since they were 10.1% of gross domestic product, which refers to the value of goods and services produced in the country officially.

Many may agree with the conservative, for example, against abortion and gay marriage, and vice versa. This means there may be conservative Democrats and liberal Republicans. However, the focus in the coming presidential elections will be the economy. As are the times, with unemployment soaring by shifting technological and continuous creation of American jobs to China and other countries, imposing a solution, although not to everyone's taste, is necessary. In this sense, the Republican economic offer does not seem an appropriate response.

Sometimes the regulations are necessary to heading ships. The air and sea traffic has its own regulations, if carried a heavy load slows the trip. If you spend a lot during the journey passengers would be unhappy. However, the most important thing is that the ship will not sink or fall off the plane.

BENJAMIN F. DeYURRE

Economist and journalist.