Mitt Romney's Non-apology

I read Mitt Romney's book, No Apology.  I found it an interesting read.  He comes across as a very intelligent man.  However, I have reservations about how he would effect policy in the likely event that he is elected president.

He argues that we need to trim back entitlement spending and devote 4% of GDP to the military even after we are out of Afghanistan and Iraq.  He goes over what he thinks, rightly in my opinion, would be the least painful ways of trimming back social spending.  Here I think he is right on track.

He argues that we will need to extend our influence abroad against China, Russia and the Jihadis.  In this area I believe that his approach is risky.  Neither Russia nor the Jihadis pose an existential threat to the U.S.  Granted the Jihadis certainly think they do.  They are depending on divine intervention.  Since I don't believe in Allah that tells you what I think about how likely that assistance is to materialize.

At some point in the foreseeable future China is likely to replace the U.S. as the most powerful country.  While I see this as potentially problematic, particularly if China becomes this powerful prior to becoming democratic, I don't see either party suggesting steps that we could take that would adequately address this issue.  If we want to maintain our lead over China militarily we will need to find a way to make the U.S. economy grow at the same rate as that of China.

It is unrealistic to expect that we can indefinitely continue to out-produce the Chinese by a factor of four or five on a per capita basis.  We will have to triple or quadruple our population.  The only way to do this rapidly enough is to loosen immigration controls.  We need to attract both labor and capital.  Placing that capital into government debt will do no good.  What we need is a combination of low taxes and a balanced budget.  Mitt Romney's ideas of trimming entitlement spending is a step in the right direction, but it probably doesn't go quite far enough.  Drastic measures are necessary if we are to achieve 10% annual growth so as to match the Chinese.

Because of the way spending is structured, Mitt Romney is unlikely to be able to get the cuts in social spending that he wants.  No Republican has in the past, so the empirical case for this being politically realistic isn't there.  The entitlement spending that Mitt Romney believes should be trimmed requires legislative action in order to be cut.  The spending goes on until Congress says so.  In contrast defense spending is largely discretionary.  Legislative action is necessary for it to continue.  Hence assuming the Republicans want to increase defense and cut social spending, and the Democrats want to do the exact opposite, the Democrats will be in a better bargaining position.  In the absence of legislative action most of the social spending that they want will continue, but defense spending will be eliminated.

In the past countries have reached about two thirds of the per capita income of the U.S. and then stalled.  If China were to do that, this would give them an economy twice as large as that of the U.S.  It is doubtful that the U.S. will implement the changes necessary to achieve a 10% growth rate.  It seems inevitable that China will at some point surpass the U.S. as the most powerful country in the world.  This is not failure on our part so much as a discontinuation of failure on their's.

To be fair to Mitt Romney's analysis his plans include maintaining alliances with other countries.  It is possible that together with a group of allies we would be able to maintain a lead over China indefinitely.  However, most of our allies have grown slower than China and sometimes even slower than the U.S.  Further, they seem reluctant to spend massive amounts on defense.  Wishing that France and the U.K. would spend more money on their militaries won't make it happen.