Kudlow: Romney Captures the Economic Spirit

By Larry Kudlow, CNBC Ancho

NEW YORK ( CNBC) -- Mitt Romney snatched victory from the jaws of defeat in Michigan by unveiling a pro-growth, 20% tax-cut plan and by resetting his limited-government spending cuts and entitlement reforms. In other words, he delivered an economic-growth package. It served him well.

It may not have been the only factor in his victory last week, but it put him squarely in the voter zeitgeist. And it may be apocryphal on Super Tuesday in Ohio, where he has come back to dead even after being down double digits.

Now, if former Senator Rick Santorum had stayed on economic message with his tax-cut plan, he would have swept Michigan. But he unnecessarily wandered off the reservation. Women serving in the military; JFK's church-and-state speech; the threat of ruling out contraception -- by veering in these directions he completely undermined his economic message. And he lost because of it.

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The most important issue for Michigan voters was the economy, which polled 55%, while budget deficits came in second with 24%. Romney held an 18 point lead in both categories. Abortion, a proxy for social issues, came in third at 18%. As a pro-life social conservative I'm not here to diss the social issues. But the economy remains issue number one.

Of course, there have been improvements in the economic numbers of late. And the mainstream-media pundits are ready to hand the general election to President Obama because of it. But they're way overboard on this game.

The public knows there's a debt bomb coming from Medicare, and that this debt bomb could lead to a huge tax-increase bomb. In fact, Ben Bernanke just warned Congress that the economy could hit "a massive fiscal cliff" by January 1, 2013, as the Bush tax cuts and the payroll tax cut expire. This could knock GDP growth down to 1%.

And even with the recent economic improvement, which is threatened by surging oil and retail gas prices, the economic recovery still ranks as one of the lowest on record. GDP growth averaged 2.5 annually over the past two and a half years. Compare that to the Reagan recovery average of 6% growth over the same period and a postwar average of 4.6%.