With the presidential election looming in the next week, I thought it would be appropriate to write about the plan each candidate has for the economy if they are elected, as well as a brief analysis of the strengths and weaknesses of each person’s ideas. As John McCain’s “Jobs for America” economic plan is around thirteen pages long and Barack Obama’s “At a Glance” section of his economic policies is around five pages long, I realized I could not include every detail of what each candidate hopes to accomplish during their term. Instead, I have identified three important categories (taxes, international trade, and energy) in which they have differing points of view and will briefly outline their plans in each.
One of Barack Obama’s major points during this campaign has been that he
wants to provide tax relief for lower and middle class Americans and compensate for that by increasing taxes on the top 1% of wage earners. In fact, according to Martin Crutsinger, an economic writer for the Associated Press, under Obama the top 1% would see an average increase in taxes of $93,709 annually while the bottom 20% and middle 20% would experience average annual declines in taxes of $567 and $1,118, respectively (see another forecast, left). All told, Obama’s taxation plans would result in an increase in federal revenues of approximately $627 billion over the next decade. Additionally, Obama’s international trade policies would be tailored towards keeping jobs in America and fighting for fair trade internationally. Obama is not a strong believer in free trade between nations. He believes the North American Free Trade Agreement (NAFTA) should be amended to be more fair to American workers, and that, not only should companies no longer receive tax breaks for sending jobs overseas, but that tax breaks should be given to companies that support American workers. Finally, Obama hopes to invest heavily in green energies to reduce our dependence on foreign oil as well as create new jobs. He wants to invest $150 billion over 10 years to advance the development of green energies and energy infrastructure, as well as create a federal Renewable Portfolio Standard (RPS) that will require 25% of American electricity to be derived from renewable sources by the year 2025.
Unlike Barack Obama, John McCain’s economic policies are rooted more in his confidence in a free trade economy. Interestingly, in an article for the Media General News Service, Dan Griswold, director of the Center for Trade Policy Studies at the Cato Institute, calls McCain an “unabashed free trader,” and that “there's a stark contrast between the two major presidential candidates on trade, probably the starkest…in decades.” McCain wants to reduce barriers to international trade, level the global playing field, and create a way to effectively enforce global trading rules. With regards to taxes, McCain believes that tax rates should be kept low; promising to keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase-out the Alternative Minimum Tax. Additionally, he believes the corporate tax rate should be cut from 35% to 25% and the Estate Tax rate should be reduced to 15%. Compared to Obama, McCain’s energy plan is less focused on funding research for new forms of energy, but rather on finding ways to make energy more affordable. His energy plan calls for increased domestic exploration of oil and natural gas, and he hopes to build 45 new nuclear power plants by the year 2030, devote $2 billion to finding a clean way of using coal, and more strictly regulate the oil futures markets to prevent the speculative pricing of oil. The fact that he is focused on lowering current energy costs does not mean that he does not support other research. He has proposed a $300 million prize for an improved battery technology that has the size, capacity, cost, and power to be able to deliver a viable power source for hybrids at 30% of the current costs.
Originally, being a fiscal conservative, I believed that John McCain’s economic plan would be better than Barack Obama’s. However, as I read more and more about each plan, I found that there were things I liked and disliked about each one. I liked McCain’s plan to build 45 new nuclear power plants by 2030 and his $300 million prize for creating an improved battery technology. Nuclear energy is safer than people give it credit for (see below, right), and it is also a low emission and relatively inexpensive source of energy. Combined with a battery that would make electric cars or hybrids cheaper and more efficient, the United States could reduce its emissions as a country drastically. Conversely, I do not like his plan to increase domestic energy exploration or his encouragement of the use of coal as an energy source. No matter how clean we may make them, they are still non-renewable resources. If he wants to make a significant impact on the availability of oil, McCain should fund the development of an efficient oil shale extraction method. As Michael Schirber points out in U.S. News and World Report, American shale reserves contain approximately 2 trillion barrels of oil – more than double the amount of crude oil humans have ever used. On the other hand, despite m
y conservative inclinations, I liked many of Obama’s ideas. I agree the NAFTA needs to be amended. In a 2006 Economic Policy Institute (EPI) research report, Robert Scott, an analyst for the EPI, found that NAFTA “eliminated a net total of more than 1 million jobs in the United States, 65% of which were in the manufacturing sector.” Additionally, I agree that the government should raise the minimum wage and eliminate income taxes for seniors making less than $50,000 a year. Taxing seniors living on social security and their retirement accounts is unnecessary and makes it harder for people to make enough money to retire. This is especially true if they are making minimum wage. Having worked for minimum wage before (which is significantly higher in California than in other parts of the country), I can attest that it is not enough to cover one’s cost of living. While I liked many of Obama’s ideas, there were some that I did not agree with. I think that giving more protections for unions (such as banning the permanent replacement of striking workers) and expanding the Family and Medical Leave Act to companies that have more than 25 employees (rather than more than 50) would only hurt our economy, especially the small businesses Obama claims to be encouraging. If an individual decides to stop working out of protest, they should not be guaranteed the right to keep their job. They elected to stop doing it in the first place. And while I would love to see the Family and Medical Leave Act expanded, companies that are smaller than 50 people are reliant on every single employee they have, so being forced to allow one to take time off would significantly affect their ability to operate.
Having looked at each candidate’s economic policies, I realized that it is hard to decide which candidate is better based on economic criteria alone. I agree with some ideas by both McCain and Obama, but disagree with some as well. Choosing a candidate is an issue of deciding which issues are most important. To me, taxation is one of the largest issues, and, as economist Arthur Laffer is quoted saying in the Victorville Daily Press, “”If you tax people who work, and give it to people who don't, pretty soon you're going to have an awful lot of people who don't work.” I could not agree more.
One of Barack Obama’s major points during this campaign has been that he
wants to provide tax relief for lower and middle class Americans and compensate for that by increasing taxes on the top 1% of wage earners. In fact, according to Martin Crutsinger, an economic writer for the Associated Press, under Obama the top 1% would see an average increase in taxes of $93,709 annually while the bottom 20% and middle 20% would experience average annual declines in taxes of $567 and $1,118, respectively (see another forecast, left). All told, Obama’s taxation plans would result in an increase in federal revenues of approximately $627 billion over the next decade. Additionally, Obama’s international trade policies would be tailored towards keeping jobs in America and fighting for fair trade internationally. Obama is not a strong believer in free trade between nations. He believes the North American Free Trade Agreement (NAFTA) should be amended to be more fair to American workers, and that, not only should companies no longer receive tax breaks for sending jobs overseas, but that tax breaks should be given to companies that support American workers. Finally, Obama hopes to invest heavily in green energies to reduce our dependence on foreign oil as well as create new jobs. He wants to invest $150 billion over 10 years to advance the development of green energies and energy infrastructure, as well as create a federal Renewable Portfolio Standard (RPS) that will require 25% of American electricity to be derived from renewable sources by the year 2025.Unlike Barack Obama, John McCain’s economic policies are rooted more in his confidence in a free trade economy. Interestingly, in an article for the Media General News Service, Dan Griswold, director of the Center for Trade Policy Studies at the Cato Institute, calls McCain an “unabashed free trader,” and that “there's a stark contrast between the two major presidential candidates on trade, probably the starkest…in decades.” McCain wants to reduce barriers to international trade, level the global playing field, and create a way to effectively enforce global trading rules. With regards to taxes, McCain believes that tax rates should be kept low; promising to keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase-out the Alternative Minimum Tax. Additionally, he believes the corporate tax rate should be cut from 35% to 25% and the Estate Tax rate should be reduced to 15%. Compared to Obama, McCain’s energy plan is less focused on funding research for new forms of energy, but rather on finding ways to make energy more affordable. His energy plan calls for increased domestic exploration of oil and natural gas, and he hopes to build 45 new nuclear power plants by the year 2030, devote $2 billion to finding a clean way of using coal, and more strictly regulate the oil futures markets to prevent the speculative pricing of oil. The fact that he is focused on lowering current energy costs does not mean that he does not support other research. He has proposed a $300 million prize for an improved battery technology that has the size, capacity, cost, and power to be able to deliver a viable power source for hybrids at 30% of the current costs.
Originally, being a fiscal conservative, I believed that John McCain’s economic plan would be better than Barack Obama’s. However, as I read more and more about each plan, I found that there were things I liked and disliked about each one. I liked McCain’s plan to build 45 new nuclear power plants by 2030 and his $300 million prize for creating an improved battery technology. Nuclear energy is safer than people give it credit for (see below, right), and it is also a low emission and relatively inexpensive source of energy. Combined with a battery that would make electric cars or hybrids cheaper and more efficient, the United States could reduce its emissions as a country drastically. Conversely, I do not like his plan to increase domestic energy exploration or his encouragement of the use of coal as an energy source. No matter how clean we may make them, they are still non-renewable resources. If he wants to make a significant impact on the availability of oil, McCain should fund the development of an efficient oil shale extraction method. As Michael Schirber points out in U.S. News and World Report, American shale reserves contain approximately 2 trillion barrels of oil – more than double the amount of crude oil humans have ever used. On the other hand, despite m
y conservative inclinations, I liked many of Obama’s ideas. I agree the NAFTA needs to be amended. In a 2006 Economic Policy Institute (EPI) research report, Robert Scott, an analyst for the EPI, found that NAFTA “eliminated a net total of more than 1 million jobs in the United States, 65% of which were in the manufacturing sector.” Additionally, I agree that the government should raise the minimum wage and eliminate income taxes for seniors making less than $50,000 a year. Taxing seniors living on social security and their retirement accounts is unnecessary and makes it harder for people to make enough money to retire. This is especially true if they are making minimum wage. Having worked for minimum wage before (which is significantly higher in California than in other parts of the country), I can attest that it is not enough to cover one’s cost of living. While I liked many of Obama’s ideas, there were some that I did not agree with. I think that giving more protections for unions (such as banning the permanent replacement of striking workers) and expanding the Family and Medical Leave Act to companies that have more than 25 employees (rather than more than 50) would only hurt our economy, especially the small businesses Obama claims to be encouraging. If an individual decides to stop working out of protest, they should not be guaranteed the right to keep their job. They elected to stop doing it in the first place. And while I would love to see the Family and Medical Leave Act expanded, companies that are smaller than 50 people are reliant on every single employee they have, so being forced to allow one to take time off would significantly affect their ability to operate.Having looked at each candidate’s economic policies, I realized that it is hard to decide which candidate is better based on economic criteria alone. I agree with some ideas by both McCain and Obama, but disagree with some as well. Choosing a candidate is an issue of deciding which issues are most important. To me, taxation is one of the largest issues, and, as economist Arthur Laffer is quoted saying in the Victorville Daily Press, “”If you tax people who work, and give it to people who don't, pretty soon you're going to have an awful lot of people who don't work.” I could not agree more.
1 comment:
Kirk,
I appreciate your insightful and objective examination of the candidates plans for the country. I think that all too often people form opinions and vote accordingly without having ever really tried to learn about the issues involved. I think that focusing your post on the economy made a lot of sense, and I think that the breakdown into three subgroups made for an effective post structure. Your descriptions of their tax, energy and trade plans were fair and concise. The opinion portion of your post was well-written, and again, fair. I agree that Senator McCain should be commended for his commitment to seeking out alternative sources of energy – either of these men, I think, would do more as President to move us beyond oil. Yet I am not convinced that a completely free market approach will be enough – the market is still relatively content with the status quo with regard to energy, and I think incentivizing renewables through government investments makes a lot of sense. I would also disagree with your assertion that workers who strike are choosing to do so, and thus should be permanently replaced if the employer chooses to do so; the ability to strike if conditions are bad enough to warrant it is one of the few ways that workers can have an impact on their livelihood. Although unions can be far from perfect, an alternative in which employers can replace workers easily and without any cost means workers will have no leverage, and as a result, no power to influence the type of work they spend their whole lives doing.
Yet despite some of our political disagreements, I was genuinely encouraged to read a post in which someone would offer a nuanced analysis of complex issues, instead of just injecting “here’s what I think”. Structurally, I think this post worked very well. The only thing I would like to have seen more of is a development of what you point out in your closing paragraph: to what extent does each man’s taxation policies take money from people, and is the cause justified? I, for example, would argue that Senator Obama’s tax policies actually take less money from most working people, and thus, allows most of us to keep more of our hard-earned money; Senator McCain’s plan, on the other hand, would take more money from more working people, in order to keep taxes lower on the top 1%. And in that context, I certainly agree with Mr. Laffer’s observation.
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