With Congressman Paul Ryan on the ticket with Mitt Romney, it is clear that a Romney-Ryan administration would choose eliminating the federal deficit over creating jobs as their economic plan.
So what does this mean for small businesses if $6 trillion was cut from federal spending over the next 10 years as proposed by Mr. Ryan and supported by Mr. Romney?
I’ve warned about such an austerity approach. It is the road Europe chose during the Great Recession and the economic results have been disastrous. Last Friday I told you about the dramatic rise in abandoned babies and children by families in Europe that can’t afford to feed and clothe them.
More than three-fifths of the cuts proposed by Mr. Ryan come from programs for low-income Americans. These cuts are so severe that the nation’s Catholic bishops protested the proposal as failing to meet society’s moral obligations, saying the plans “will hurt hungry children, poor families, vulnerable seniors.”
But aside from our concern for the less fortunate, what happens when government stops supporting the vulnerable in our society or helping states and local governments with education and first responder financing or investing in roads and bridges? The answer is a dramatic drop in money on Main Street.
The funds for these programs aren’t being spent on European vacations or the buying of more stocks or paying for big bonuses for corporate executives. That is what the wealthy and big corporations will do with their $4 trillion in tax cuts if the Romney-Ryan plan is enacted.
The money targeted for the austerity budget is being spent today in your local communities.
Main Street will suffer as it has in Europe and especially in Greece and Italy. And for what? Even the Ryan budget plan wouldn’t balance the federal budget for 30 years.
Government austerity is a failed model. While there will be no austerity for the wealthy and multinational corporations, there will be plenty for small businesses.