The Remaining Four Candidates on Economy

19 02 2008

In part two of the issues that matter to me and what the remaining four candidates have to say about it, today I’ll look at the Economy. To recap– Autism, Economy and Energy are my three hot topics. Yesterday, I researched Autism.  

Economy

Obama:

Obama offers $210 billion economic plan that creates construction, environmental jobs

(From International Herald Tribune)
Democrat Barack Obama said Wednesday that as president he would spend $210 billion (€143.97 billion) to create jobs in construction and environmental industries, as he tried to win over economically struggling voters.

Obama’s investment would be over 10 years as part of two programs. The larger is $150 billion (€102.84 billion) to create 5 million so-called “green collar” jobs to develop more environmentally friendly energy sources.

Sixty billion would go to a National Infrastructure Reinvestment Bank to rebuild highways, bridges, airports and other public projects. Obama estimated that could generate nearly 2 million jobs, many of them in the construction industry that has been hit by the housing crisis.

“This agenda is paid for,” Obama said as the Republican National Committee promoted an “Obama Spend-O-Meter” online to track his proposals and portray him as a tax-and-spend liberal. Obama explained that the money for his spending proposals will come from ending the Iraq war, cutting tax breaks for corporations, taxing carbon pollution and raising taxes on high income earners.

Neera Tanden, Hillary Rodham Clinton’s policy director, said Obama was offering ideas Clinton proposed months ago. “Voters may ask themselves that if Senator Obama cannot produce his own ideas on the campaign trail, how will he solve new problems as president?” Tanden said in a memo e-mailed to reporters.

Obama, who has faced criticism that he does not have enough policy specifics, asked autoworkers at the General Motors plant in Wisconsin, to “bear with me” as his began a policy speech that he said would be unlike his typical rousing addresses to rallies. He read from a TelePrompTer in a cavernous training room, flanked by sparkling new vehicles and a large American flag.

“Today I want to take it down a notch,” Obama said. “This is going to be a speech that’s a little more detailed. It’s going to be a little bit longer, not as many applause lines.”

Obama pointedly did not include one of his biggest applause lines, that he would require vehicle manufacturers to raise fuel economy standards. Obama often points out that he delivered that message straight to the automakers during a speech last year in Detroit.

But he did not mention it on the plant visit that came a day after GM reported the largest annual loss ever for an American automaker — $38.7 billion (€26.53 billion) in 2007.

“I know that General Motors received some bad news yesterday,” Obama said. “I also know how much progress you’ve made, how many hybrids and fuel-efficient vehicles you’re churning out. And I believe that if our government is there to support you, and give you the assistance you need to retool and make this transition, that this plant will be here for another hundred years.”

Obama heads into Tuesday’s Wisconsin primary as the favorite in the state and the front-runner for the nomination. His victories this week in eight contests have put him ahead of rival Hillary Rodham Clinton in the delegate chase.

But Obama did not pursue the front-runner strategy of ignoring rivals. He repeatedly criticized Clinton in an effort to beat back the challenge she still poses to him.

He tied her to likely Republican presidential nominee John McCain for their shared vote to authorize the war in Iraq. He lumped her with President George W. Bush for offering an economic recovery plan that did not include immediate relief, without mentioning that both the president and Clinton quickly adopted tax rebates.

Obama’s appearance in Janesville was part of a strategy to reach out to voters who might be struggling in the economy and who have supported Clinton in most contests so far. Combining exit polls from 19 states that had competitive Democratic primaries before Tuesday, Clinton had a 49 percent to 46 percent edge over Obama with voters who named the economy as the No. 1 problem.

But Obama seemed to be turning that around in his most recent victories Tuesday. In Virginia and Maryland, Obama dominated among the one-half of Democratic voters who named the economy as their chief concern. In both states, about six in 10 Democrats who cited the economy voted for Obama.

Hale “Bonddad” Stewart (Blogger with the Huffington Post)  Obama’s Economic Plan is Unworkable Posted February 14, 2008 | 07:19 AM (EST)

Democrat Barack Obama said Wednesday that as president he would spend $210 billion to create jobs in construction and environmental industries, as he tried to win over economically struggling voters.
Obama’s investment would be over 10 years as part of two programs. The larger is $150 billion to create 5 million so-called “green collar” jobs to develop more environmentally friendly energy sources.
Sixty-billion dollars would go to a National Infrastructure Reinvestment Bank to rebuild highways, bridges, airports and other public projects. Obama estimated that could generate nearly 2 million jobs, many of them in the construction industry that’s been hit by the housing crisis.

“This agenda is paid for,” Obama said as the Republican National Committee promoted an “Obama Spend-O-Meter” online to track his proposals and portray him as a tax-and-spend liberal. Obama explained that the money for his spending proposals will come from ending the Iraq war, cutting tax breaks for corporations, taxing carbon pollution and raising taxes on high income earners.

I would love to tell everyone that this is possible; that the US has the money to spend and that we can use major federal initiatives to minimize the impact to the housing mess.

But we don’t.

And this is not a problem only faced by Obama — it’s faced by every major candidate. After 7 years of Republican dominated politics the US just doesn’t have the money to spend. The damage has already been done.

Let’s start with the fiscal history of the last 7 years. This information is from the Treasury Department and it shows the total federal debt outstanding at the end of the federal government’s fiscal year.

09/30/2007 $9,007,653,372,262.48
09/30/2006 $8,506,973,899,215.23
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/30/2001 $5,807,463,412,200.06
09/30/2000 $5,674,178,209,886.86

Currently, the total debt outstanding is $9,250,932,577,938.04.

To put that in perspective, debt as a percentage of GDP has increased from 57.29% in 2001 to 64.47% in 2007. That’s a solid and steady increase.

Now — the Republicans have created a meter on their website to track the increases in government spending. You guys ran the government for 6 years. You had complete control. YOU GOT US INTO THIS MESS IN THE FIRST PLACE. SHUT THE HELL UP.

And no — this is not some ephemeral concept that means nothing the real world. Take a look at a chart of the US dollar:

The dollar has been dropping for the better part of the last 6 years. Over the last few years we’ve seen competition from the euro start to knock the dollar out of it once dominate reserve status — which has helped to continue the dollar’s downward spiral. If we don’t start seriously dealing with the deficit soon, we can expect further declines in the dollar which will seriously hurt us in the long run.

No candidate will run on a cleaning up the deficit platform. It’s not an economic winner — especially during a period of economic problems. In addition, the way to clean-up the mess — raising taxes and asking people who benefited from the last 7 years to now pay their fair share of that growth — is a politically dicey proposition at best. So what is actually in the interest of the country in the long-run just isn’t going to work politically.

And some of Obama’s plan is really good — especially the green-collar jobs idea. That makes great sense, especially in the long-run.

But the money just ain’t there.

Clinton:

1/11/2008 Press Release from her Campaign Web Site

Clinton Unveils Aggressive Plan to Jumpstart U.S. Economy

Plan Would Help Hundreds Of Thousands Of Families Stay In Their Homes; More Than 37 Million Would Receive Energy Assistance

Hillary Clinton is unveiling an aggressive $70 billion stimulus package today that would boost the U.S. economy and help families who have been hit hardest by the economic downturn across America.

Clinton will detail her five-part stimulus plan in a speech at the IBEW Hall in City of Commerce, CA. Her plan would specifically help homeowners who have been hurt by the housing foreclosure crisis, provide immediate relief to families who are facing skyrocketing energy bills, support workers who have lost their jobs, and make immediate investments in “green collar jobs” which will not only stimulate the economy, but improve the environment.

More than 37 million Americans would receive energy assistance under Clinton’s plan, and hundreds of thousands of families would get help to avoid foreclosure and stay in their homes. “Economists and politicians are finally waking up to what many of America’s families already know: that we might be sliding into a recession,” Clinton said.

“But when the bills are stacking up, and you’re just one pink slip away from losing everything you’ve got, the last thing you need is more talk. In the face of rising global competition, our children’s future is at stake. So we don’t need more rhetoric, we need action. We need an immediate strategy to get our economy back on track. I would work with leaders from both parties to pass an aggressive, fast-acting stimulus package to create good new jobs and revitalize our economy.”

Senator Clinton believes we need to jumpstart the economy without negatively affecting America’s long-term fiscal position. In addition, her plan targets assistance toward hardworking families which are most likely to spend new resources, which will ensure that we give the economy an immediate boost.

Clinton also called on Congress to stand ready to provide an additional $40 billion in direct tax rebates to working and middle class families if the economy continues to worsen.

Hillary’s Economic Stimulus Plan would:

  • Establish a $30 Billion Emergency Housing Crisis Fund to assist states and cities mitigate the effects of mounting foreclosures
  • Take bold action to stem tide of foreclosure, including a 90-day moratorium on subprime foreclosures and an automatic rate freeze on subprime mortgages of at least five years
  • Provide $25 billion in emergency energy assistance for families facing skyrocketing heating bills
  • Accelerating $5 billion in energy efficiency and alternative energy investments to jumpstart green collar job growth:
  • Invest $10 billion in extending and broadening unemployment insurance for those who are struggling to find work:

HILLARY CLINTON’S PLAN TO JUMPSTART OUR AILING ECONOMY

Today, Senator Clinton outlined an economic stimulus plan to help hard hit families and give our economy a much needed boost. Over a month ago, in a speech to Wall Street, Senator Clinton called on the Bush Administration to begin considering economic stimulus. In the month since, while the Administration has failed to act, we have seen growing signs that our economy is faltering. Tens of thousands of families have already been forced out of their homes. Recently, oil hit $100 a barrel, and last Friday, the Bureau of Labor Statistics reported that the economy lost jobs in the private sector in December for the first time in over four years. According to RealtyTrac, more than 201,000 foreclosure filings were reported in November alone, up 68 percent from the year before.

Hillary believes we need real action now. While economists may still be debating whether we’ve met the technical definition of a recession, for hard-hit middle class families that question has already been answered.

That is why today Senator Clinton called on the President and Congressional leaders from both parties to enact an aggressive, fast-acting stimulus package based on common-sense economic principles. Unlike 2001, when President Bush used stimulus as an excuse to force through long-term tax cuts for the wealthiest Americans – which ran up our debt to foreign governments while utterly failing to reignite job growth – Senator Clinton believes we need a strong immediate stimulus to jumpstart the economy without negatively affecting our long-term fiscal position. In addition, stimulus measures should be targeted toward hardworking families that are most likely to spend new resources, which will ensure that we give our economy an immediate boost. As President, Hillary would enact a five-part stimulus package that is consistent with these principles. This package includes:

  • Establishing a $30 Billion Emergency Housing Crisis Fund to assist states and cities mitigate the effects of mounting foreclosures.With our economy facing the prospect of substantial contraction as hundreds of thousands of subprime mortgages reset and housing values erode further, Senator Clinton believes that any effective stimulus package must take aggressive action to mitigate this contraction and help as many families as possible remain in their homes. Her $30 billion fund would provide immediate, time-limited resources to states, cities and community organizations to help prevent unnecessary foreclosures. States and communities could also use the funds to offset the costs associated with vacant properties by supporting efforts like community-level anti-blight programs and helping local housing authorities buy up vacant properties and rent them to working families. When families lose their homes, surrounding property values and local tax revenues decline and the cost of policing and maintaining vacant properties rise. This reduction in revenues and rise in costs can lead cities and states to cutback services, lay off teachers and other vital workers, raise college tuition, or even raise local taxes. The availability of $30 billion in federal assistance will ensure that states and cities have the resources they need to fight foreclosures, prevent a downward housing cycle impacting large numbers of homeowners and to weather the crisis without unnecessary fiscal contraction.
  • Taking bold action to end the housing crisis.Senator Clinton is the only candidate with a comprehensive plan to keep families in their homes and keep the housing crisis from dragging down the economy. More than 2 million foreclosure notices went out last year, devastating families and communities. The foreclosure crisis is also contributing to the decline in home prices which has already cost families an estimated $1.3 trillion. Many experts believe the worst is yet to come. To stem this crisis, Senator Clinton has called for a 90-day moratorium on subprime foreclosures and an automatic rate freeze on subprime mortgages of at least five years or until servicers have converted the unworkable mortgages into loans families can afford. In addition, Senator Clinton proposed to temporarily empower state housing financing agencies to help families refinance unworkable mortgages and temporarily increasing the portfolio caps at Fannie Mae and Freddie Mac, and enabling them to purchase larger loans in high-cost areas. These steps would immediately increase the availability of mortgages for responsible borrowers.
  • Providing $25 billion in emergency energy assistance for families facing skyrocketing heating bills: Rising home heating prices are imposing a serious and immediate financial burden on working families. Yet while more than 37 million American families are eligible for home energy assistance, only 5.6 million – or approximately 16% – are slated to receive any aid this winter. Even those who do receive assistance have seen the average grant decline from 36% of a typical family’s home heating bills in 2003 to only 23% in 2007. Meanwhile, the cost of heating a home is expected to soar as much as 20 – 25% this winter alone. Senator Clinton is calling for an immediate $25 billion investment in home heating assistance grants for all 37 million eligible families. The grants will return the purchasing power of energy assistance to where it was 5 years ago. And they will ensure that hardworking families and seniors on fixed incomes will not have to choose between heating their homes, putting food on the table or purchasing prescription drugs this winter.
  • Accelerating $5 billion in energy efficiency and alternative energy investments to jumpstart green collar job growth:Senator Clinton believes that by immediately implementing components of her comprehensive plan to transition to a green, clean economy, we can both jumpstart green collar jobs and jumpstart our long-term transition to energy independence as well. The immediate actions that could be part of a 2008 stimulus could include a crash weatherization program to cut home energy costs by up to 20% this winter; expanded tax credits to encourage families and businesses to accelerate purchases of hybrids and other low emission vehicles and to reduce energy costs by purchasing efficient appliances, new windows and other clean, efficient technologies, and acceleration of a Green Building Fund and Green Collar Job training program to put tens of thousands of people to work making schools and other public buildings energy efficient.
  • Investing $10 billion in extending and broadening unemployment insurance for those who are struggling to find work: Senator Clinton is calling for stepped up assistance for those who have lost their jobs and are searching for work while trying to provide for their families. By strengthening our unemployment insurance program and extending unemployment insurance for workers who are laid off for extended periods, these efforts will empower more Americans to reenter the labor market in good-paying jobs.
      Standing Ready for $40 Billion Rebate to Working Families: In addition to immediately adopting her 5-part plan, Senator Clinton called on Congress to stand ready to provide an additional $40 billion in direct tax-rebates to working and middle class families if economic circumstances continue to worsen. This additional $40 billion in tax relief should be designed to meet Senator Clinton’s principles for stimulus: it should be fast-acting to kick-start the economy; temporary to be fiscally responsible; and progressive so that it has a high bang-for-the-buck. This means that rebates should not be partially or completely denied to tens of millions of lower income taxpayers, as was the case with President Bush’s plan during the last economic contraction.

Hillary Lays Out Her Economic Plan

Capital Commerce by James Pethokoukis  October 09, 2007 02:31 PM ET

Hillary Clinton gave a lengthy economic policy speech Monday. A few things popped out at me when I gave it a read this morning:

1) As I have been saying in this blog, Clinton is not going to advocate repealing all the Bush tax cuts—as much as her GOP rivals would love her to—just the ones affecting wealthier Americans. “For middle-class Americans, I will extend the tax cuts including the child tax credit, the marriage penalty relief, and lower income tax rates than they currently pay,” she said. Interestingly, Clinton made no mention of capital-gains taxes—the lower rates brought about by the 2003 tax cuts are also due to expire at the end of 2010—even though she had ample opportunity and specifically mentioned her support for making hedge fund managers pay higher taxes.

2) Clinton made mention of “stagnant wages,” even though they’ve been growing at a brisk clip. Just one of many stats on the subject: Average hourly earnings are up 8.4 percent versus September 2005, the fastest pace of wage gains for any two-year period since 1990, according to First Trust Advisors. (Here’s more on the myth of stagnant wages.)

3) Clinton announced a three-point plan to deal with the mortgage mess. None of it was particularly revolutionary, but at least she had a plan to deal with a problem on the minds of many Americans. Her GOP rivals have been all but silent on the topic.

4) There is an old joke that says the most frightening sentence in the English language is, “I’m from the government, and I’m here to help you.” Well, read Clinton’s speech—full of references to trustbusting Teddy Roosevelt, the space program, and the G.I. Bill—and you’ll see that she’s attempting to convince Americans that government is good, helpful, and in need of smart expansion. “The strength of our economy and the rise of the middle class were products of both a free market and good public policy,” she said.

Republicans get their chance to respond at tonight’s GOP presidential debate in Dearborn, Mich. It’s hosted by CNBC and will focus—finally!—on economic policy.

Huckabee:

From his website:

  • I support the FairTax.
  • As Governor of Arkansas, I cut taxes and fees almost 100 times, saving the taxpayers almost $380 million. I left a surplus of nearly $850 million, which I urged should go back to the people.
  • Our massive deficit is not due to Americans’ being under-taxed, but to the government’s over-spending.
  • To control spending, I believe the President should have the line-item veto.
  • I believe in free trade, but it has to be fair trade.
  • Globalization, done right, done fairly, can be the equivalent of a big pay raise by allowing us to buy things more cheaply.
  • I support making the Bush tax cuts (set to expire in 2010) permanent.
  • Furthermore, I believe that we need to expand upon these cuts by further reducing marginal rates on individual and corporate income, instituting credits for tuition, and eliminating the “death tax.” 

I’d like you to join me at the best “Going Out of Business” sale I can imagine – one held by the Internal Revenue Service. Am I running for president to shut down the federal government? Not exactly. But I am running to completely eliminate all federal income and payroll taxes. And I do mean all – personal federal, corporate federal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment. All our hours filling out forms, all our payments for help with those forms, all our shopping bags filled with disorganized receipts, all our headaches and heartburn from tax stress will vanish. Instead we will have the FairTax, a simple tax based on wealth. When the FairTax becomes law, it will be like waving a magic wand releasing us from pain and unfairness.

The FairTax will replace the Internal Revenue Code with a consumption tax, like the taxes on retail sales forty-five states and the District of Columbia have now. All of us will get a monthly rebate that will reimburse us for taxes on purchases up to the poverty line, so that we’re not taxed on necessities. That means people below the poverty line won’t be taxed at all. We’ll be taxed on what we decide to buy, not what we happen to earn. We won’t be taxed on what we choose to save or the interest those savings earn. The tax will apply only to new goods, so we can reduce our taxes further by buying a used car or computer.

Our current progressive tax system penalizes us for working harder and becoming more successful. As we climb the ladder, the government lurks on each rung, hungry for a bigger bite out of our earnings. The FairTax is also progressive, but it doesn’t punish the American dream of success, or the old-fashioned virtues of hard work and thrift, it rewards and encourages them. The FairTax isn’t intended to raise any more or less money for the federal government to spend – it is revenue neutral.

Expert analyses have shown that the FairTax lowers the lifetime tax burden of all of us: single or married; working or retired; rich, poor or middle class.

The FairTax will instantly make American products 12 to 25% more competitive because the cost of those goods will no longer be inflated by corporate taxes, costs of tax compliance, and Social Security matching payments. When we buy products now, those taxes are built into the cost, so all of us pay corporate taxes indirectly on top of the personal taxes we pay directly. Compliance costs are just make-work with no real added value, yet they consume as much as 3% of our gross domestic product annually. These costs are an especially heavy burden on small businesses, which generate most of our jobs.

If you buy a bottle of domestic wine, you’re paying the taxes/compliance/matching payments of all the folks who produced the grapes, the wine, the bottle, the cork, the label. If you buy a bottle of French wine, the producers had their Value Added Tax rebated to them when the wine was exported. So French consumers pay those taxes, but you don’t. Our current tax system puts our goods at a disadvantage both here and overseas. Other governments give their goods an advantage on the world market, an advantage estimated at 18% compared to American goods.

So no matter how hard Americans work, no matter how innovative and creative we are, no matter how superior our products are, we suffer from a built-in competitive disadvantage simply because of our tax system. A recent study by MIT found that our tax system deprives us of about $1 billion in exports annually. When you export over-priced goods as we have, you inevitably end up exporting jobs and industries as we now are. We are the square peg trying to fit into the round hole of international trade. The rest of the world isn’t going to change, it’s time that we do.

Under the FairTax, American companies are far less likely to move overseas and foreign companies are far more likely to come here, hiring Americans to build and work in their new plants. The FairTax encourages growth by promoting investment and capital formation.

We have to scrap a 20th century tax system that is holding us back and keeping us down in the 21st century. The FairTax is the path to greater prosperity and job security for us and for our children.

As Governor of Arkansas, I pushed through the Arkansas Legislature the first major, broad-based tax cuts in state history – a $90 million tax relief package for Arkansas families. I also doubled the standard deduction to $2,000 for single taxpayers and $4,000 for those who are married. Some taxes I eliminated entirely: the marriage penalty, bracket creep caused by inflation, income tax on poor families, and capital gains on home sales. To encourage investment, I cut capital gains for both individuals and businesses. To help people better themselves, I provided tax credits for employee training and education. In total, I cut taxes and fees nearly 100 times during my ten-and-a-half years as Governor, saving the people of Arkansas almost $380 million.

When I left office in early 2007, Arkansas had nearly $850 million in state surplus, which I urged should go back to the people in the form of either a tax rebate or tax cut.

I believe that our massive deficit is not due to Americans’ being under-taxed, but due to the federal government’s over-spending. Achieving and maintaining a balanced federal budget is an important and worthy goal necessary to our long-term economic well-being. To achieve a balanced federal budget, I believe the President should have the line-item veto.

I believe in free trade, but it has to be fair trade. We are losing jobs because of an unlevel, unfair trading arena that has to be fixed. Behind the statistics, there are real families and real lives and real pain. I’m running for President because I don’t want people who have worked loyally for a company for twenty or thirty years to walk in one morning and be handed a pink slip and be told, “I’m sorry, but everything you spent your life working for is no longer here.”

I believe that globalization, done right, done fairly, can be a blessing for our society. As the Industrial Revolution raised living standards by allowing ordinary people to buy mass-produced goods that previously only the rich could afford, so globalization gives all of us the equivalent of a big pay raise by letting us buy all kinds of things from clothing to computers to TVs much more inexpensively.

What is the Fair Tax?  http://www.fairtaxplan.org/

January 5, 2008  Boston GlobeWhat’s Foul About the FairTax, by Bruce Bartlett:

Former Arkansas Governor Mike Huckabee’s rise to the top tier of Republican presidential candidates is one of the major stories of this election cycle. Although his strong support among evangelical Christians is a factor in his rise, Huckabee has also benefited from the backing of a small but intense group of people favoring abolition of the federal tax system and its replacement by a 23% national retail sales tax known as the FairTax.

The states would be required to collect this new tax, thus allowing for abolition of the IRS. To prevent poor and middle-class people from being overly burdened, Americans would be sent monthly checks as a partial rebate of the tax.

Unfortunately, like all things in life that are too good to be true, so is this one. Here are a few problems with the FairTax.

  • True rate. …
  • Governments must also pay. …
  • Rebate problems. …
  • Prices will rise. …

The FairTax is unworkable. It is a fantasy to think otherwise.

McCain:

McCain’s economic plan takes long view   Associated Press / January 18, 2008
COLUMBIA, S.C. – Despite calls in Washington for short-term economic relief, Senator John McCain yesterday proposed a long-term economic plan that would lower the corporate income tax rate and provide a host of other tax breaks for business. “We will get through this rough patch, my friends,” McCain told supporters.

The Republican presidential candidate proposed cutting the corporate tax rate to 25 percent from 35 percent, saying it would expand the economy, creating jobs and opportunity. He said his plan was “progrowth, less taxes, and less spending.” He contrasted it with what he called the Democrats’ “tired ideas of tax and spend.”

McCain appeared to be resisting temporary economic relief for individuals, even as President Bush indicated support for a short-term boost and Ben Bernanke, Federal Reserve chairman, called explicitly for it. Bernanke urged the government to adopt a plan quickly and make it temporary, and he said “putting money into the hands of households and firms” would be more effective than measures such as making Bush’s tax cuts permanent.

McCain adviser Doug Holtz-Eakin suggested the Arizona senator does not favor temporary relief at this time.

“One of the reasons we have the difficulties we do is that spending went out of control,” McCain said yesterday, two days before the South Carolina’s crucial first-in-the-South primary.

McCain’s plan would also establish a permanent research and development tax credit and allow tax breaks for equipment and technology investment. Rudy Giuliani has also proposed cutting the corporate tax rate to 25 percent, while Mitt Romney has suggested eliminating taxes on income from interest, dividends, and capital gains for those earning less than $200,000 a year.

McCain, like the other leading Republicans, supports making permanent the tax cuts Congress approved in Bush’s first term.

Romney, however, said, “It makes sense for Congress to take immediate action” and he’d have his own plan soon, while Fred Thompson said it’s not time for the government to give the economy a jolt.

John McCain and the Economy – A Profile of the John McCain Economic Platform

By Kimberly Amadeo (Your Guide to the US Economy)

McCain’s Economic Stimulus Plan:

  • Cut the corporate tax rate to 25% from 35%. Fund the reductions with cuts in “pork-barrel spending”, such as the 10,000 local projects, totaling over $10 billion, in legislation recently signed by President Bush.
  • Allow expensing of businesss equipment and technology investment for the first year.
  • Establish a tax credit equal to 10% of wages spent on research and development.
McCain’s Long-term Economic Platform: McCain’s Economic Platform includes his short-term stimulus measures, and adds the following:

  • Repeal the Alternative Minimum Tax (AMT) saving middle class families nearly $60 billion a year. This tax was originally designed to fall on the wealthiest but, thanks to inflation, each year it snags more middle-income taxpayers who claim a lot of deductions.
  • Extend expiring tax cuts from Bush’s first term.
  • Approve the President’s line item veto.
  • Add personal accounts to Social Security.
  • More trade agreements.
  • Increase troops in Iraq.
  • More nuclear energy.
  • Tax credit of $2,500 per person / $5,000 per family towards health care insurance.
  • Reduce wasteful government spending, control Medicare costs, reform unemployment training.

. (Source: JohnMcCain.com, On the Issues; IHT, McCain Proposes Economic Plan with Corporate Tax Relief, 1/17/08))

zSB(3,3)

Impact on the Economy: Extending the Bush tax cuts would have no effect on the economy until 2010, when they expire. Repealing the Alternative Minimum Tax is sorely needed, however the $60 million in revenue needs to be replaced. Providing tax cuts to businesses may spur business investment, but may not trickle down to prices which would help consumer spending.
Increasing troops in Iraq would raise the budget deficit. More nuclear energy would help relieve dependence on oil to some extent, however the U.S. has become dependent on Japanese engineers to build them.
More trade agreements would certainly help the economy. However, McCain doesn’t address the main impediment to any U.S. trade agreement, which is massive subsidies to agri-business. This one issue effectively halted the World Trade Organization Doha round. McCain’s general calls to reduce government spending are good, but he gives no detail as to how to accomplish this.Overall, the McCain economic platform would reduce budget revenues and raise costs, increasing the deficit and weakening the U.S. economy. More detail is needed on many of his proposals to effectively determine their impact.

My Take: Hummmm… Well, I don’t think Clinton and Obama are that far apart from each-other. McCain has said– and been reminded often– that he doesn’t know much about economics. Huckabee; I’m still having trouble getting my head around Fair Tax.

The idea of rebuilding our infrastructure as a means of stimulating the economy makes sense. I like the democrat’s idea of investing in “green jobs” and improving our environment in the process.
So, my ratings:
Obama: 1.5 (.5 for Autism Total: 2)
Clinton: 1.5 (1.5 for Autism Total: 3)
Huckabee: 1 (0 for Autism Total: 1)
McCain: 0 (.25 for Autism Total:.25)
Stay tuned for my research on Energy.
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