Thanks for posting these articles Jenny. The Washington Post is one of my favorites so it's nice to hear some arguments against Obama's plan from such a familiar source.
The article makes a valid argument that Obama's tax cuts would lower people's incentives to "become too successful." However, I tend to disagree with this economic philosophy.
Personally, I think the argument that a lack of incentive-based tax policies discourages hard work and success is an economic theory that doesn't really play out in reality. For example, if given the chance to take a promotion at work (or take a different job) that would pay me more and provide more opportunities for growth and success, I can't honestly say that I would turn it down because it would put me in a higher tax bracket, or that I would intentionally not work hard to ensure the opportunity never presented itself in the first place. I don't think anyone really makes decisions this way.
I also think that implicit in the Post's argument is the belief that the opposite approach would work. In other words, if you give rich people tax breaks then it gives people an incentive to get rich, which is better for both the economy and the individual. This has pretty much been the Bush philosophy for the last 8 years--can we honestly say that it's worked? Bush isn't McCain, I agree, but especially when it comes to taxes, McCain's main proposal is to continue what Bush has already done.
Lastly, the Post makes the argument that there's no free lunch--Obama has to pay for all these tax cuts. True, but doesn't McCain also have to pay for his? That said, who's would cost more? The Tax Policy Center states that Obama's overall tax plan would cost about $2.9 trillion over the next 10 years while McCain's would cost $4.2 trillion over the same period.
Where I ultimately come out on this one is 1) I don't think Bush's ideas have worked, 2) I don't see any noticeable differences between McCain's ideas and Bush's, 3) given 1 and 2, shouldn't we at least give Obama's ideas a try?
I'm not a bush fan (much to my wife's amazement). Also not a McCain fan, for the record.
But it doesn't really make sense to me that people simplify the economy by stating that Bush's ideas haven't worked. Tax policy doesn't operate in a vacuum.
We've all heard people blame our current economic mess on Bush, Clinton, Carter, Wall Street Greedy, People willing to take loans that they knew they couldn't afford, banks willing to give them.
If only it were simply enough to find the person, group, industry, or party to blame, and make them fix it.
Can anyone honestly feel good about saying that, if Gore had been elected 8 years ago, or Kerry, or Obama that we'd not be in the same mess. I couldn't.
I know I recently heard Bill Clinton state that his administration could have done more to prevent it, but didn't.
Thanks for the comment Jeff. I think your point is a good one. I admit it's an oversimplification to blame all our economic woes on Bush. And I can't deny that my siting this as one of my arguments against McCain has been heavily influenced by Obama's rhetoric. I'm a fan. What can I say.
I do, however, think there is some evidence out there that suggests Bush hasn't done a great job on the economy. For instance, Fox News reported back in January '07 that, under Bush 3.7 million new jobs were created from January '01 to December '06 while under Clinton and Reagan 17.6 and 9.5 million were created respectively during similar periods. The fact that jobs growth under Bush was worse than both a D and an R suggests to me that it's not a party problem so much as it is an administration problem.
Now I understand that this isn't all Bush's fault. President's have to deal with the unexpected just like the rest of us. But to me this merely points out the need to look not only at a candidate's policies but at their approach to governing. On this point I side with Obama (I know, surprise surprise). But seriously, look at their choice of VP, the constancy of their messages, the choice of advisers--I personally think Obama's done a much better job than McCain. In fact, The Economist did a survey of economists and found that 71% of unaffiliated respondents said Obama has a better grasp on economic issues and that he surrounds himself with better advisers than McCain.
Ultimately, while I prefer Obama's policies, I much more prefer his approach to McCains and that makes me feel like he'll do a better job with all the crap he'll have to deal with and maybe--and I know this is a big maybe--he would have done better with the crap Bush had to deal with.
All that aside, I feel like I should say, in the interest of full disclosure, that I by no means claim to be an expert on all this stuff nor am I such a flaming liberal that I can't see faults in Obama just like any other politician. My arguments and responses are sincerely meant to further the conversation and are not meant to prove anyone wrong or myself right. I very much appreciate it when people express views that disagree with my own. It helps me think, and I think it's better for all of us.
PS. Does it make me look desperate when I respond to comments so quickly???
I agree with Jeff that no one can say definitively that things would be better had the Supreme Court given the presidency to Gore instead of to Bush, or had Kerry won. But I do feel comfortable expressing my opinion that we would be better off today. Here's why:
1. I think Gore would have been less likely to increase the budget deficit. Remember that Clinton had been running budget surpluses. While Bush was campaigning for tax cuts for the wealthy, Gore was calling for continuing surpluses to shore up Social Security. I think lower deficits are better for the country. For example, they give us more flexibility during economic downturns.
2. I think that Gore's or Kerry's approach to addressing recessions would have been different. Bush has been unwilling to target tax cuts or stimulus measures to the lower and middle classes unless they include larger benefits to the wealthy. During a recession, they key goal is to stimulate demand. Putting more money in the pockets of the lower and middle classes does more to stimulate demand (those classes are more likely to spend their extra dollars). I believe that a Democratic president would have been more willing to target such measures to those classes. Bush's tax cuts and stimulus measures, because they're tilted toward the wealthy, have done less to stimulate demand: we're not getting as much bang for our buck.
3. I don't think Gore or Kerry would have avoided the subprime crisis. But I think either of them would have chosen a Treasury Secretary who would have handled the crisis better. Paulson has dithered and wasted time. His first rescue proposal was terrible. His conservative ideology made him blind to what economic consensus recommended: injecting equity into troubled banks. It wasn't until Gorden Brown announced the British rescue plan (which included injecting equity into British banks) that Paulson finally accepted that that was the necessary approach. We're lucky that Democratic congressmen had insisted that equity injection was included as an option in the bailout bill, or Paulson would have had to come crawling back to Congress.
In summary, I admit that we can't give a president all of the credit or blame for a good or bad economy. But we can analyze how a president addresses a recession or what direction they set regarding fiscal policy. Bush gets a C grade, or worse, in these subjects. I think any of his recent opponents would have done better.
Thanks Alex, for adding lots of "my opinion" "I think" and "I believe" to your last.
I did have some follow-up questions for you, but it is taking me too long to articulate them .... need to get back to amassing wealth (at least trying to) so that I can buy more sticks with which I can beat up the poor lower class. Have a great day.
PALIN 2012! (That’s another joke … still slack jawed at that pick).
6 comments:
Thanks for posting these articles Jenny. The Washington Post is one of my favorites so it's nice to hear some arguments against Obama's plan from such a familiar source.
The article makes a valid argument that Obama's tax cuts would lower people's incentives to "become too successful." However, I tend to disagree with this economic philosophy.
Personally, I think the argument that a lack of incentive-based tax policies discourages hard work and success is an economic theory that doesn't really play out in reality. For example, if given the chance to take a promotion at work (or take a different job) that would pay me more and provide more opportunities for growth and success, I can't honestly say that I would turn it down because it would put me in a higher tax bracket, or that I would intentionally not work hard to ensure the opportunity never presented itself in the first place. I don't think anyone really makes decisions this way.
I also think that implicit in the Post's argument is the belief that the opposite approach would work. In other words, if you give rich people tax breaks then it gives people an incentive to get rich, which is better for both the economy and the individual. This has pretty much been the Bush philosophy for the last 8 years--can we honestly say that it's worked? Bush isn't McCain, I agree, but especially when it comes to taxes, McCain's main proposal is to continue what Bush has already done.
Lastly, the Post makes the argument that there's no free lunch--Obama has to pay for all these tax cuts. True, but doesn't McCain also have to pay for his? That said, who's would cost more? The Tax Policy Center states that Obama's overall tax plan would cost about $2.9 trillion over the next 10 years while McCain's would cost $4.2 trillion over the same period.
Where I ultimately come out on this one is 1) I don't think Bush's ideas have worked, 2) I don't see any noticeable differences between McCain's ideas and Bush's, 3) given 1 and 2, shouldn't we at least give Obama's ideas a try?
I'm not a bush fan (much to my wife's amazement). Also not a McCain fan, for the record.
But it doesn't really make sense to me that people simplify the economy by stating that Bush's ideas haven't worked. Tax policy doesn't operate in a vacuum.
We've all heard people blame our current economic mess on Bush, Clinton, Carter, Wall Street Greedy, People willing to take loans that they knew they couldn't afford, banks willing to give them.
If only it were simply enough to find the person, group, industry, or party to blame, and make them fix it.
Can anyone honestly feel good about saying that, if Gore had been elected 8 years ago, or Kerry, or Obama that we'd not be in the same mess. I couldn't.
I know I recently heard Bill Clinton state that his administration could have done more to prevent it, but didn't.
Thanks for the comment Jeff. I think your point is a good one. I admit it's an oversimplification to blame all our economic woes on Bush. And I can't deny that my siting this as one of my arguments against McCain has been heavily influenced by Obama's rhetoric. I'm a fan. What can I say.
I do, however, think there is some evidence out there that suggests Bush hasn't done a great job on the economy. For instance, Fox News reported back in January '07 that, under Bush 3.7 million new jobs were created from January '01 to December '06 while under Clinton and Reagan 17.6 and 9.5 million were created respectively during similar periods. The fact that jobs growth under Bush was worse than both a D and an R suggests to me that it's not a party problem so much as it is an administration problem.
Now I understand that this isn't all Bush's fault. President's have to deal with the unexpected just like the rest of us. But to me this merely points out the need to look not only at a candidate's policies but at their approach to governing. On this point I side with Obama (I know, surprise surprise). But seriously, look at their choice of VP, the constancy of their messages, the choice of advisers--I personally think Obama's done a much better job than McCain. In fact, The Economist did a survey of economists and found that 71% of unaffiliated respondents said Obama has a better grasp on economic issues and that he surrounds himself with better advisers than McCain.
Ultimately, while I prefer Obama's policies, I much more prefer his approach to McCains and that makes me feel like he'll do a better job with all the crap he'll have to deal with and maybe--and I know this is a big maybe--he would have done better with the crap Bush had to deal with.
All that aside, I feel like I should say, in the interest of full disclosure, that I by no means claim to be an expert on all this stuff nor am I such a flaming liberal that I can't see faults in Obama just like any other politician. My arguments and responses are sincerely meant to further the conversation and are not meant to prove anyone wrong or myself right. I very much appreciate it when people express views that disagree with my own. It helps me think, and I think it's better for all of us.
PS. Does it make me look desperate when I respond to comments so quickly???
I agree with Jeff that no one can say definitively that things would be better had the Supreme Court given the presidency to Gore instead of to Bush, or had Kerry won. But I do feel comfortable expressing my opinion that we would be better off today. Here's why:
1. I think Gore would have been less likely to increase the budget deficit. Remember that Clinton had been running budget surpluses. While Bush was campaigning for tax cuts for the wealthy, Gore was calling for continuing surpluses to shore up Social Security. I think lower deficits are better for the country. For example, they give us more flexibility during economic downturns.
2. I think that Gore's or Kerry's approach to addressing recessions would have been different. Bush has been unwilling to target tax cuts or stimulus measures to the lower and middle classes unless they include larger benefits to the wealthy. During a recession, they key goal is to stimulate demand. Putting more money in the pockets of the lower and middle classes does more to stimulate demand (those classes are more likely to spend their extra dollars). I believe that a Democratic president would have been more willing to target such measures to those classes. Bush's tax cuts and stimulus measures, because they're tilted toward the wealthy, have done less to stimulate demand: we're not getting as much bang for our buck.
3. I don't think Gore or Kerry would have avoided the subprime crisis. But I think either of them would have chosen a Treasury Secretary who would have handled the crisis better. Paulson has dithered and wasted time. His first rescue proposal was terrible. His conservative ideology made him blind to what economic consensus recommended: injecting equity into troubled banks. It wasn't until Gorden Brown announced the British rescue plan (which included injecting equity into British banks) that Paulson finally accepted that that was the necessary approach. We're lucky that Democratic congressmen had insisted that equity injection was included as an option in the bailout bill, or Paulson would have had to come crawling back to Congress.
In summary, I admit that we can't give a president all of the credit or blame for a good or bad economy. But we can analyze how a president addresses a recession or what direction they set regarding fiscal policy. Bush gets a C grade, or worse, in these subjects. I think any of his recent opponents would have done better.
Thanks Alex, for adding lots of "my opinion" "I think" and "I believe" to your last.
I did have some follow-up questions for you, but it is taking me too long to articulate them .... need to get back to amassing wealth (at least trying to) so that I can buy more sticks with which I can beat up the poor lower class. Have a great day.
PALIN 2012! (That’s another joke … still slack jawed at that pick).
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