Last updated on February 9th, 2013 at 01:02 am
Any reasonable adult knows the way to financial ruin is insurmountable debt, reduced revenues, and inability to meet financial obligations. There are hundreds-of-thousands of Americans that go through bankruptcy every year, and regardless if it is from over-extending oneself, or astronomical medical costs, crushing debt with no ability to pay is always the cause. Republicans complain vociferously about the nation’s deficit, and it is one of their favorite talking points even though, like every Republican president, George W. Bush added trillions for tax cuts and unfunded wars. It was interesting then, that at the second presidential debate, Willard Romney claimed, more than once, that he knew how to reduce the deficit and balance the budget because that is what he did his entire life whether it was in business, managing the Olympics, or as governor of Massachusetts. However, with Romney’s tendency for lying, it is certain his record will expose exactly the opposite.
If a business struggles, it is not unusual to take out a bank loan to cover operating expenses when revenue is down, but there is always the prospect of an upturn that provides revenue to repay the loan and get the business showing a profit again. However, if there is no upturn and increased revenues, the business has little option but to drastically cut expenses, sell assets, and eventually declare they cannot fulfill their obligations and are bankrupt.
When Romney was governor of Massachusetts, he left the state with a $1 billion dollar budget deficit, and that was after increasing fees on everything from being blind to being buried. If, as he claims, he was such a savvy business man, economic guru, and expert at reducing the deficit, then why was the state left with a huge deficit taxpayers had to repay? He says if Americans would just trust his business acumen, his stellar record at reducing deficits and balancing budgets is enough assurance the people need that he will save the economy. Romney had the same effect when he ran the Salt Lake City Olympics in 2002.
Romney touts his business expertise as the reason the troubled SLC Olympics were successful, but it is difficult to know for sure because he had the records destroyed. He could not destroy the record $1.5 billion of taxpayer money that saved the Olympics, and it is another case of Romney conning other people to pay while he takes credit, and profits. In the 2002 Olympics, the American government picked up the tab and passed it on to the American taxpayer while Romney’s cronies reaped the benefits of taxpayer money. However, the Olympics and state of Massachusetts are not private enterprises, and that is where Willard told the audience his best record of reducing deficits and balancing budgets occurred.
It has been reported time and again that Bain Capital’s tactics did not include reducing deficits or balancing budgets; in fact, it is precisely the opposite. Remember, Romney’s business model, “creative destruction,” entailed creating wealth for investors by destroying companies. Bain Capital’s method of acquiring companies was through leveraged buyouts that David Stockman describes as “raising debt in prodigious amounts on Wall Street so Bain could purchase castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale—the faster the better.” The idea of reducing a company’s debt is contrary to Willard’s creative destruction model, and after reselling debt-burdened businesses to Wall Street, or a Bain cohort like Goldman Sachs, they still walked away with exorbitant management fees as the business suffered from crushing debt. For example, Romney and his partners bought up hundreds of successful small clothing stores and combined them to form Stage Stores. Romney and his partners loaded the company with debt, and then, when the company was at its height, sold nearly all their shares at an enormous profit. In under three years of debt, the stock collapsed and Stage declared bankruptcy whereas majority shareholder, Romney and his bankruptcy team ravaged them for Bain’s benefit.
When Romney says he knows how to reduce deficits and balance budgets, he is lying because it is not the business model he used to create his enormous wealth. His practice was creating debt that someone else had to repay, and when they could not, Bain bought the distressed company, stripped assets, and sent profits offshore to avoid the Internal Revenue Service. When Romney ran the 2002 Olympics, the American people paid $1.5 billion as Romney’s cronies reaped the profits.
When he was governor of Massachusetts, he ran up over $1 billion in debt and left taxpayers and the next governor the bill as he began his six year quest for the White House. Now, Romney expects Americans to believe he knows how to reduce the deficit and balance the budget when it is contrary to his entire record? It is impossible to think this man who spent his entire career creating debt for profit is going to “run” the largest economy in the world and not create more debt. It is not likely; not for Romney, or any other Republican president.
Romney’s tax plan alone will increase the deficit by $5 trillion, and that is not including $2.1 trillion increase in defense spending. The 20% across-the-board tax cut and elimination of capital gains and investment taxes means government will have to borrow to fund the cuts and to keep operating. One thing is certain, if a small business owner was told to take on massive debt with no way to repay it and trust providence would repay the debt, they would run for the hills. There is nothing in Romney’s past, or his proposals for the future, that demonstrate he has any knowledge or experience reducing deficits because he never did, does not know how, and it remains a mystery to Republicans.
Willard Romney asks Americans to trust his creative destruction model will not blow up the deficit with trillions in tax cuts, increased military spending, and giving banks and Wall Street free rein to pillage the economy again. Romney’s plan is more extreme than George W. Bush who took America’s economy close to destruction and increased the deficit like every other Republican president since Ronald Reagan. Unfunded tax cuts and increased military spending with decreasing revenue is how Bush ballooned the deficit, and it is all Romney knows because it has been extremely profitable for him. If he is elected president, Romney will repeat Bain practices and leverage the government with debt because it is the purview of Republicans and something Romney is very good at.
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