In previous posts we have argued about economic policy of McCain and its similarity to Bush. He believes we (which needs to be defined) are taxed too much and has proposed extending the Bush tax cuts and additional tax cuts for the upper % income earners and big businesses. Now it is hard to have this argument even with economists because there are lots of ways to look at statistics. Last week, we heard comments like "the upper income earners are paying a higher % of the tax burden than ever before." Of course that was a comment on Fox News and it may be subjective.
Mike has previously defended Bush's influence on the deficit as minor if you consider % of GDP. Thus, the graphic above shows a clear difference between supply side economics (Reagan, Bush, and potentially McCain) and the Democratic Administrations. Notice how under the years of a Republican Administration the deficit as a percentage of GDP increase drastically. But under Clinton, a balanced budget agreement actually lowered the deficit over the eight years.
Now during the Reagan Administration there was a Democratically controlled congress which was blamed for over spending when Reagan only want to increase spending on defense. And the 6/8 years of Clinton had a Republican controlled Congress. The real test was the first 6 years of Bush where the Republicans also controlled both houses of congress and despite their platform of small government, the opposite occurred.
My main reason for this post is to learn from Mike and Jim, who understand these issues better than I, why should I support McCain who has offered a tax policy that is projected to increase the deficit by trillons of dollars.
15 comments:
Rich, I find your economic reasoning a bit muddled, but still fairly standard. I find it interesting that I'm supposed to ignore the apparent increase in the ratio of 80% in the late Roosevelt adminstration but I'm supposed to think that the 20% increase in the Reagan years was drastic. As I recall, Eisenhower and Nixon were Republicans and displayed a downward trend in the ND/GDP ratio.
I also find this graph unpersuasive because it actually does not measure what you wish. It measures debt-to-GDP, while I think that you would like a graph that displays deficit-to-GDP over time, which would presumably measure US gov't willingness to spend more than incoming receipts. Doubtless, the desired graph would either be 1) unkind to Republicans, esp. in recent years and 2) equally muddled in terms of causality.
I suggest the 20/21st century economic history of the US cannot be easily summarized neither by a graph nor by looking at the party of the President in office at the time. I also suggest that (contra both Reagan and Clinton) Presidents have very little to do with the economy. That being said, I will say this: both Presidents Reagan and Bush 43 were strongly interested in increased defense spending and were willing to get Democrats on board by acceding to their spending demands. While you or I may have been interested in spending the money elsewhere (or not at all), that is how they decided to reach their goals.
I find neither McCain nor Obama's tax policies to be desirable nor reality-based. Both will increase the deficit, both will increase the national debt.
The Tax Policy Center estimates that over 10 years, McCain's tax proposals could increase the national debt by as much as $4.5 trillion with interest, while Obama's could add as much as $3.3 trillion.
link
I dont see any economic reasoning in my post. Could you be more specific on what is muddled?
Mike's defense for Bush's increase in the debt was that relative to GDP its minor. Does the graph not show that the Republicans can no longer say they support fiscally conservative policies?
I look at several things to determine my economic views and I love to get my numbers from a small govt. / low tax proponent site:
http://www.heritage.org/research/features/budgetchartbook/index.html
To be 100% honest I believe there has been poor leadership since the introduction of income tax and the advent of the industrial military complex. The simple fact is that the US has slowly slid down the face of socialism ever since the introduction of Medicare / Medicaid / SS.
The Govt. is taking more from the public and spending even more. The numbers are consistently going up, regardless of which party controls Congress / White House.
I love to sound the alarm about Obama, mostly because it’s fun…. but I should also sound the alarm for McCain. Both men think my money / property if theirs to take. They both believe I am my brother’s keeper.
If your looking for 100% honesty..…the simple fact is that neither candidate is going to help the current economic situation. I still believe that at the fringe McCain will do more to deregulate/open the markets and this will help in the long run.
BOTH SUCK.
My arguments on the economy are very week at best when I use the GDP/Debt number.
Excerpt from :
http://www.theobjectivestandard.com/issues/2008-fall/mcbama-vs-america.asp
The proper purpose of government is, as the Founding Fathers recognized, to protect each individual’s right to live his life as he sees fit (the right to life); to act on his own judgment, free from coercion (the right to liberty); to keep, use, and dispose of the product of his efforts (the right to property); and to pursue the goals and values of his choice (the right to the pursuit of happiness). The way government achieves this vital purpose is by banning the use of physical force from social relationships and forbidding foreigners to physically harm citizens or their property. And, crucially, because government is an agent of force, it too must be prohibited from misusing force, which is why the founders wrote the U.S. Constitution, the purpose of which is to limit the power of government to the protection of individual rights. A proper government does everything necessary to protect individual rights and nothing that in any way violates individual rights.
Our Govt. has been on the wrong path for a long time and neither candidate is thinking correctly. CUT!! CUT!!! CUT!!! Current spending on entitlements is out of control!
I forgot to answer the question...
You should vote for McCain because he isn't going to increase taxes.
He knows that increasing taxes will not increase revenue.
He knows that the the only way to fix the govt. is to minimize it.
He knows that there is not enough wealth in the world to support the growing entitlement programs expense.
He knows that if you earn it you should keep it.
He knows that more regulation is bad.
Actually he doesn't know SH-T, but that is what we true Republicans want and need.
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Obama on the other hand wants to raise taxes to increase revenue.
Obama believes he can get the rich to pay for the poor. (They already do, he just wants more)
Obama wants to redistribute wealth. (We already do he just wants more)
Obama wants more govt. control over everything.
Obama wants more regulation.
Obama is a believer in Socialized Everything.
Don't do it yourself, the govt knows best, not you.
It looks like O'Reilly is commenting on this blog post. I am not in a position to fight those points so I will simply point out the other side.
Giving tax breaks to companies does not make them create jobs in the US unless American workers cost less than other places. The pharmaceutical industry is a beautiful example of this. If we gave them unlimited patent life they would still outsource. McCains tax breaks will be just that. Obama has offered incentives for specific things like the creation of jobs in the US and high tech renewable energy.
It's not a matter of giving anything. It's that the govt should take less.
What I guess we disagree about is whether our positions in life were generated by working hard or by starting with an advantage. I believe it is often the latter.
Neither of my parents went to college but they both worked and spent essentially nothing on themselves until retirement. Not only did they pay for my college but it was always a given that I would be going to college.
My life would have been very different if I was raised by just my mom or my dad could not rise through the ranks of his companies because of his race (he started as an electrician in the Navy), or if after buying their home at a low interest rate it then increase significantly after 3 years to a price they could no longer afford.
I agree with you that government programs are wasteful and your libertarian viewpoint is too drastic. Not every problem is caused by laziness.
Rich, do you really buy Obama's "green collar jobs that can't be outsourced" bit? Democrats have been promising alternative energy as a economic answer since the early Clinton years. I'm still skeptical.
Let's put it this way. If you were a senior chemistry major thinking about graduate school would you choose the pharmaceutical industry as an ultimate goal or would you consider options in alternative energy research.
I believe your candidate is preaching change as well Jim except none of his policies actually are change. This country will no longer by the world leader one day if we dont do something different than simply send our military in. Saying that, "they [the Dems] have been saying it for years" doesnt mean I should vote otherwise. From another post we know the Republicans have promised to be fiscally conservative for a lot longer. And it is not because they allowed Democrats to spend. They controlled Congress and spending gets them, both parties, elected.
I voted for Reagan and Bush and then Perot in 92 because like you now I no longer believed the rhetoric of individual candidates. Obama has inspired me mainly because Bush II has been so discouraging.
Obama's Green Jobs really makes me laugh... How's he going to get people to research this?
Give them tax money? Tax credits?
So basically take from the companies he sees as bad and redistribute their money to companies he sees as good.
Then ten years down the road, when those new companies are big, we can take their profits and redistibut them too.
Rich, if I were that senior chemistry major, I'd certainly think about picking say, photovoltaic material science as a career field. But that's not what the Obama campaign is suggesting -- I posit that the mind picture they're trying to create is a 35-yr-old guy installing solar panels at $30/hr. While I certainly hope that's the future, I'm very skeptical the government can provide this with efficiency.
Rich, I'll be very frank and say that I'm not much interested in defending the McCain campaign's policies or rhetoric. He's "my candidate" in a very vague sense. My comments against Obama's rhetoric should not be taken as an argument for voting for McCain.
Although I sense that you were pretty enthusiastic about Obama during the primaries, I find that your interest (as expressed on this blog) is cooling as well. I find most of your statements to be not pro-Obama, but anti-Bush (and by assumptive osmosis, McCain.) Is that an accurate statement?
My enthusiasm for Obama has remained constant. However, it is not founded in all of the Democratic platform. I don't and disagree with you and Mike about government programs, waste, spending, etc. However, the direction of some comments force me to try and present the other side. Moreover, I do not think that everyone in our country is born with the same opportunities and thus I have tried to defend that side of story.
I go back to the first post I every made about Obama. I believe it is time for us to have a President that represents us well in the World.
I'm sure this is only my opinion, but I don't really care if the world likes us.
I've never really found it a compelling argument; what is best for the United States is correlative to what would make other countries like us....
We have been the world leaders in so many things for +100 years, why now do we want to become like them.
The industrialized nations have a far worse situation at hand. Europe has a huge entitlement program debt that is ever increasing. Europe is lowering taxes and becoming more like us.
We don't want to meet in the middle. Going down will not help us. We must move forward.
I also agree with Jim, I too have never been pro-McCain.
I must admit I am a touch anti-Obama...
I'm just really put-off by his EGO. I think it's just a clash with my own.
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