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Obama VS McCain On Taxes

The current state of our economy is not one of enthusiastic confidence and unbridled investment. We’ve got significant debt as a nation that we’re all going to have to pay off for many years to come. But before we as a nation start paying it off, both presidential candidate’s tax proposals plan on adding to it for the next few years. John McCain the self proclaimed “economically conservative Republican” is speaking out against his opponent Obama on the tax front. But the two candidates’ tax proposals and their projected consequences viewed side by side show that for a Democrat, Obama’s plan appears to be the one thats more conservative.

In a recent authoratative analysis provided by The Tax Policy Center stated that “Senator Obama’s plan would add $3.3 trillion to the national debt (including additional interest costs), while Senator McCain’s plan would add $4.5 trillion.

The analysis also showed that under Senator Obama’s plan revenues would total 18.2 percent of GDP in 2013 compared to McCain’s plan where the revenue yield would be 17.8 percent. A difference of .4 percent doesn’t seem like much, but when we’re talking GDP, that’s huge.

And while John McCain is pandering to Middle America saying that he’s in touch with what everyday Americans are experiencing when he lives in the lap of luxury with his millionaire heiress wife and says things like the drawdown of troops in Iraq isn’t important and that economists don’t know what they’re talking about, he doesn’t tell Middle America that his tax plan is designed to significantly benefit those in the upper-most income brackets. He doesn’t tell you that Obama’s plan is more suited to people who don’t make a significant amount of money.

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June 13, 2008 Posted by | Elections, John McCain | , , , , | 3 Comments

John McCain Doesn’t Listen To Economists

John McCain has taken issue with economists. Primarily with ones who say that his gas tax holiday wouldn’t have a positive affect on the economy. At his most recent town-hall meeting hosted by Fox News, John McCain was quoted as saying of such economists “They’re the same ones, I guess, that didn’t tell us about the housing subprime lending crisis. They’re the ones that didn’t tell us about the dot-com meltdown. And they’re the ones that didn’t warn us about inflation that’s coming up.”

Actually, they did tell us about all those things. If John McCain listened to economists he would have heard a number of warnings.

The subprime lending crisis warnings have been sounding for a few years now.

“I’m one guy in a research department, but many people in our mortgage team have been
suggesting that there was froth within the market,” said Jack Malvey, the chief global
fixed-income strategist for Lehman Brothers. “This has really been progressing for
quite some time.”

Others on Wall Street echoed Malvey’s stance. “We’ve contended for a while that there
 was an issue in subprime debt,” said Neal Shear, global head of trading at Morgan
Stanley. “A year ago, we were aware that delinquencies were going to rise.”

It wasn’t that there were no predictions, it was that there were so many people who held
mortgage backed bonds that didn’t understand the risk and were blinded by earning high yields that it gave the market an appearance of doing OK. Many people (but not some economists) fell sway to the idea that if the market is doing well there is no problem.  

Regarding the Dot Com bust, there were plenty of warnings from some from the most influential men in American monetary policy. Warren Buffet and other economists including US central bank chairman Alan Greenspan warned of the dot com bubble as early as 1999 for Mr. Buffet and 1996 for Greenspan. It wasn’t that economists didn’t predict it. It has been argued that Mr. Greenspan didn’t take any action until late 2000 in an effort to provide the Democrats with political capital in the form of prosperous economic times.

And about the warning that inflation is going up, there were also numerous presages. In April of 2005 Policymakers at the Federal Reserve, as well as many other economists expressed some concerns about future inflation. It wasn’t that nobody predicted the rising inflation we’re experiencing. They DID predict the inflation we’re experiencing.  

Honestly, our country could benefit from a president who listens to economists.

While arguing his case for the gas tax holiday, John McCain called out Barack Obama on the gas tax holiday citing his votes in support of a gas tax holiday when gas was a dollar fifty a gallon. But had John McCain been listening to what Obama has been saying, he would have heard Barack Obama say that the gas tax holiday he supported was a failure and cost the people more than it benefited them. He would have heard Obama say that he has experience with this kind of thing and that what the economists are saying is right.

June 13, 2008 Posted by | Elections, John McCain | , | Leave a comment