Does Romney Not Understand That States Face Balanced Budget Constraints?

How else can one explain this:

Mitt Romney finds the Obama campaign’s accusations that the public sector would lose jobs under his leadership “completely absurd,” he said on “Fox & Friends” Tuesday morning. After Romney said last Friday that the president’s proposals to put more teachers, firefighters and policemen back to work was a bad idea, the Obama campaign countered in the last few days that Romney would cut these jobs. “That’s a very strange accusation,” Romney said. “Of course, teachers and firemen and policemen are hired at the local level and also by states. The federal government doesn’t pay for teachers, firefighters or policemen. So obviously that’s completely absurd.” But Romney also stood by his opposition to the federal government facilitating more hiring public sector hiring. “He’s got a new idea, though, and that is to have another stimulus and to have the federal government send money to try and bail out cities and states,” Romney said of President Obama. “It didn’t work the first time. It certainly wouldn’t work the second time.”

Hey – I understand that Fox & Friends prides itself on absolute stupidity but Mr. Romney aspires to be President. So we should expect a more intelligent discussion. During economic downturns, state and local governments face declining tax revenues and would be forced by their balanced budget constraints to cut spending even though such public austerity is destabilizing from a macroeconomic perspective. This is entire rationale for Federal revenue sharing, which is something that Republican Party has chosen to not only oppose but also to block in the Senate via the filibuster process. Is it working well now? Of course not - because we are not even trying to make it work thanks to this Republican opposition. When Mr. Romney protests in this fashion, he is exhibiting either stupidity of mendacity (to coin Brad DeLong’s phase). If he is really this stupid – he does not deserve to be our next President. But something tells me he is brighter than this – which means he is once again engaging in an incredibly dishonest campaign. But in case Mr. Romney is indeed this clueless, might I recommend something Robert Shiller wrote back in 2010?