Tom Keene: Everyone I talk to says Governor Romney’s economics are a mystery.
Glenn Hubbard: I don’t think it is a mystery at all, Tom. It is really about restoring confidence in the country’s economy, getting our long term future policy right, and making it okay to invest in America again, to invest in plant and equipment. And that boils down to a set of changes in tax reforms, entitlement reforms, regulatory reforms, financial reforms.
Tom Keene: If we are not in recession, but we are in a two percent U.S. economy, does Governor Romney have to be more creative up front if he’s elected?
Glenn Hubbard:Governor Romney is watching developments in the near term in the economy very closely. But I think he believes that getting the long term right helps you in the short term. We have seen too much in Washington, of saying, well, let’s fix the short term and the long term will take care of itself.
Tom Keene: Can you be more specific about the Romney plan?
Glenn Hubbard: It means tax reform that could raise long-term growth over the next decade by about half a percentage point every year. It means entitlement reform that removes the chance of large tax increases. It means getting federal spending down to its traditional share of GDP. It means getting regulation that actually passes cost-benefit analysis, something this administration has not done. And free trade.