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Great summary of Obama vs McCains Economic Policies

Posted by Miguel on 2008-09-22 12:43:50
3 forum posts
You got Becker, Buchanan, and Vernon Smith rootin' for McCain. You got Stiglitz, Romer and Robert Solow for Obama. You've got more economists for both, but I think Obama wins in the number of first class minds supporting him. This is not entirely meaningful, though. None of you have ever met or will ever meet a man smarter or bolder than James Buchanan. It's not to say he's always right, but who knows?

So on to the plans. We're going to implicitly be referring to the websites so follow along:

OBAMA


I don't see why oil companies should particularly have higher taxes compared to any other profitable company. It doesn't make much sense except people love to whine about gas prices. On the other hand, the tax is more or less lump sum tax so shouldn't much affect the behavior of those oil companies. I'll get more money in rebate than I would in shareholder price. Screw them.

The 50 billion stimulus package? Don't worry about that yet. That's blue on black.

The tax relief for working families? Good idea. Tax relief for old people? Bad idea. Though at least he'll exclude fabulously wealthy old folks. They vote, so what are you going to do? Also this idea that preparing taxes is incredibly onerous to most Americans isn't so true. Have a stall with Turbo-Tax installed. Jeez. Well it plays with some voters. In an case, Obama's focus is on lessening the tax burden on middle class families and increasing it on the rich(leaving the poor essentially alone since they don't pay much federal tax anyway). Probably not a terrible idea since there are a lot more poor people we want to make middle class than middle class people we want to make rich. If MTV keeps going we could have a revolution on our hands without some tax changes.

Obama's trade policies are a bit pie in the sky. We aren't so grand that we can force the world to enact "fair" trading policies. I'm hoping that he hasn't really invested a lot of himself in this and can just concede to lowering barriers to trade.

Also I dig worker training rather than trying to restrict the labor market, in reference to plans to supposedly encourage companies to hire domestic workers rather than workers in other countries. This doesn't matter too much, though. This isn't one of those things that presidents have a lot of control over.

Invest in green technologies? Sure. Investing in technology usually produces a bigger return than the ridiculously low rates the US government can borrow at. Go for it. Super-plus ditto for more job training. Go ahead and do it for general science investment and R&D. Inventing the piano tie is something you can brag about to other countries forever. Obama has several plans to encourage this.

He wants to put a bunch of money into transportation investment. If his transportation investment plan is roads, I don't like it. If it's rail, I like it.

I think unions could definitely use a resurgence in the US. There are times and places where unions create inefficiencies. There times and places where unions correct inefficiencies. Given the incredible productivity advances and the concurrent stagnation of wages, unions could see a resurgence. My brother's in a union and they do good things in the South, mostly. Maybe because we don't have much union here. Anyway, I think the scales could tip the other way a little bit. Obama's way better on this than McCain. He has consistently defended unions' ability to organize. He is explicitly stating that he will continue this.

That he has made a plan on mortgages, credit, and bankruptcy on the scale that he has has been rendered cute. We'll see what else he has to say on these issues later.

To sum up: he's good on tax policy, government spending, and domestic equity programs. He's pro-labor, take it or leave it. He's not as strong on international trade, predictably. Maybe he'll consult with Biden on what is possible, and ,more importantly to me and the electorate, what will secure the best result for Americans. His website has concrete plans, but they certainly can't include all the decisions Obama is going to have to make as president.


MCCAIN


McCain and Obama have pretty similar views on workplace flexibility. Expand the FMLA, encourage telecommuting, enhancing worker training. I don't know how seriously either candidate can follow through.

Health care is a huge, big deal. I think it's a good idea for everybody to have health care so the remaining questions are how much health care and how can we make health care cheaper for everybody. My understanding is that, in some way, McCain wants to radically change the health insurance is addressed in the US, not the he would especially have the power to do so. The main problem I can see with McCain's plan, severing insurance from employers and attempting to create a total free market solution, is that the incredibly overpowering information problems in health care were what made employer insurance not just a good idea based on income tax (Hell, notice how your company won't buy you a car or a house or clothes or booze or a TV but will always have a health insurance program?{I'm talking to the people with real jobs you peons}) but also a great program based on information aggregation. I think a nationalized insurance program would help with these information problems further. That is what Obama is suggesting. He also has based his plan on an existing, successful program rather than an abstract idea.

John McCain distinctively wants to cut corporate taxes by a lot: pretty much a third. This is an attempt to attract new business. OK, this might work. Maybe. I would rather that we balance government services with taxes, so firms would relocate here based on a sustainable interest. I'm talking about having a highly skilled work force and excellent infrastructure. If the highly skilled workforce has to immigrate here, that would be really super-awesome if that could be made legal. Immigration in America makes my head want to explode, but I'll stick to the "economic" plans. This tax plan is an empirical question that I personally don't know the answer to. I do know that McCain is proposing a drastic lowering of a tax rate.

McCain wants to ban Internet taxes. I don't know of anyone that wants to start Internet taxes, but kudos to McCain for pre-empting this problem.

McCain wants to encourage freer international trade while also increasing job training, retraining, and tech training. This sounds like a good idea. Implemented well it is a good idea.

Summer gas tax holiday: worst idea ever. This probably gives as much money to OPEC as it does to the American gas consumer-- at the expense of American tax dollars.

Also from McCain's website:

"John McCain believes we should send a strong message to world markets. Under his plan, the United States will be telling oil producing countries and oil speculators that our dependence on foreign oil will come to an end - and the impact will be lower prices at the pump. "


It's awesome that McCain will wave his finger at them Saudis so hard, but there is a distinct lack of follow-up.

Another gem:

"John McCain believes there is nothing more important than keeping alive the American dream of owning a home. Priority number one is to keep well-meaning, deserving home owners who are facing foreclosure in their homes. "


I really like renting so this pisses me off.

And:


"No taxpayer money should bail out real estate speculators or financial market participants who failed to perform due diligence in assessing credit risks. Any assistance for borrowers should be focused solely on homeowners and any government assistance to the banking system should be based solely on preventing systemic risk. "

Bush one-ups you again, McCain. It's way to late to say this kind of stuff. 700 billion dollars.

You can thus ignore the rest of McCain's home ownership section because it won't apply a few weeks from now. Same as above for Obama.


Wasteful spending and the deficit. Well, sounds good, yes?


"The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction".

What an incredibly brave stance.


"A one-year spending pause. Freeze non-defense, non-veterans discretionary spending for a year and use those savings for deficit reduction. A one-year pause in the growth of discretionary spending will be imposed to allow for a comprehensive review of all spending programs. After the completion of a comprehensive review of all programs, projects and activities of the federal government, we will propose a plan to modernize, streamline, consolidate, reprioritize and, where needed, terminate individual programs. "

An impossible idea for an impossible time.



"Take back earmark funds. The McCain Administration will reclaim billions of add-on spending from earmarks and add-ons in FY 2007 and 2008. '

And Palin's home town vanishes. Though I really shouldn't talk about the VP. This is about the men that are vying for president.

The social security stuff is a smoke screen. He won't meaningfully cut SS or he'd be gummed to death by the geriatric mob that is retired and so can actually make it to the polls on a Tuesday.

I don't see how ensuring the lower bound on estate taxes is $10 million dollars is going to really expand growth of small business.

Nuclear power is awesome. My father goes to France all the time and has not noticed the wave of mutants. People afraid of nuclear power are to me like those afraid of contamination of their precious bodily fluids. Here McCain is clearly in the right and Obama is clearly in the wishy-washy. This may be very important to our economic future. On the other hand we have enough coal to last seven generations at least, so clean coal could be a big thing too. The only problem is that we have to get the clean coal to be clean. As oil drilling, it's not going to be a big deal one way or the other. ANWR shouldn't be drilled because of its unique and profound beauty. That is my subjective judgment call and is not useful for analysis.

So McCain is good on nuclear power and international trade(maybe). His health care plan would probably either be a disaster or not enacted(more likely). His ideas about the budget are vague. It is not known what his tax plans would do, though in the short term they would definitely reduce government income.

I'm thinking I'm leaning towards Obama based on all this, especially since I know that congress will still exist after the election. You should also examine a variety of social issues before coming to a final decision.
  3 forum posts