Why I’m Voting for Romney

It’s a tough choice between two candidates who sincerely want a better America, and whose campaign rhetoric has been tainted by the need for each of them to appeal to their own party bases--representing very polarized groups. I’ve come down to a few simple ideas to make this decision. My biggest concern is the structural budget deficit the US is facing. The US President answers to the people, of course, but he tends to decide what the people are saying to him--usually leaning to the view of a mandate. We haven’t seen it in our day, but the President may soon come to answer to the bond market. Ask the governments of Greece and Spain how this works. Obama’s agenda--or maybe it’s his party base’s agenda, has driven up baseline federal spending to 24-25% of GDP, from about 20-21%. We’ve never been able to raise more than 18% or so of GDP in taxes, except during WW II. Currently taxes are only raising 15% or so of GDP. Taxes are based on activity and incomes, and the incomes portion is really falling short. If we become a higher cost economy, that part may not improve. I don’t mind a 3% budget deficit. If the economy grows that fast, we won’t increase our debt-to-GDP ratio, and the bond vigilantes won’t be dictating terms to us. If we continue on our current path, however, we are likely to keep running deficits in the 6-10% area, increasing our debt-to-GDP ratio and bringing the bond market into play. Remember that even now the Federal Reserve is buying a big portion of the new debt we’re issuing. We can avoid a debt default in this manner, but only at the cost of a dollar that will buy alarmingly fewer goods and services. The government in this scenario would have little choice but to keep printing money because if it paid high bond rates, government spending could be driven up to 27-28% of GDP, leading to catastrophic deficits. I don’t believe much of either candidate’s published plans, but I think Romney will be more serious about fiscal discipline than Obama. The polarization of America is a big concern to me. It bothers me that so many reasonable Americans can’t engage in civil discourse on politics. On a pure track record basis, Romney was able to reach across the aisle as a Republican governor in a a state where the legislature was 85% Democrats. I don’t think this was solely due to his sparkling personality, but I do believe his experience has taught him that you need to solve problems, not hope they’ll go away. I also think it’s important that Massachusetts has a flat tax. I believe that the progressivity of the tax code is the most corruptive influence on politics today. In Massachusetts, the people have had chances to vote on a progressive tax code, and always turned it down. And this is a very liberal state! If politicians have an expensive dream, they have to get a broad spectrum of people to pay the bill. They can’t sell it to some folks on the basis that others will pay for it. It keeps them honest, well, at least for politicians. But most of all, it creates space for political dialog on real issues. Because once you have a progressive tax code, the central issue is always one of what is the fair share of taxes to be paid by different groups. And it is a question that can never be answered. So instead of talking about how we build wealth as a society and opportunity for all, we argue about who pays. If we didn’t have that argument, we’d have more opportunity to reach across the aisle as Romney did. All of us. Of the two candidates, Romney stands for less progressivity in the tax code. The third decision point for me is track record. Romney has been very successful at most things he’s done. People love to attack him for moving jobs to China, but as a businessman I know that making those decisions has taught him what the reasons are that lead to those decisions. And he knows how government can fix the environment that leads businesspeople to make those decisions so more Americans can keep their jobs. I don’t see any background that would let President Obama understand this at a gut level. He didn’t have much of a track record in the Senate, not introducing any bills, and as President, he let the most divisive elements of his party write key legislation instead of taking on a leadership role in the design of it. I’ve hired lots of people in my career. I attribute most of the success I’ve had to identifying talent and motivation in others--since I didn’t have much talent myself! When I think of myself as interviewing Romney and Obama for the job of President, and think about which one is more likely to solve the complex problems he’ll face, I just think Romney has the track record that tells me he’ll be able to accomplish that.