In the first installment I introduced some of the general reasons I’m voting for Barack Obama on November 4th. The feedback from the original note was positive so I wanted to dig deeper into some of my points.
A lot of you asked about Obama’s positions on various topics. With the attention shifting this week to important issues facing the US, like the economy and current financial mess, it seemed like an opportune time to dig in. As always, if you’re not interested just let me know and I’ll remove you from future emails.
Today I’d like to focus on elements of the Economy, Taxes, and Budget.
What’s Happening with the Economy?
In the last week we’ve had a painful reminder that this election is about more than mooseburgers and name calling. It’s about real issues facing the country both at home and around the world. The economy is once again at the forefront of people’s minds and for good reason.
I don’t presume to understand all the complicated aspects of the current situation but lets try to sum up the key points.
The U.S. government estimates that it will cost $500 billion to buy the risky investments of financial institutions in coming months. That is on top of the nearly $200 billion Treasury Secretary Henry M. Paulson Jr. said earlier this month that he is willing to spend on the government’s rescue of Fannie Mae and Freddie Mac.
- Bailout Is As Big as Budget for Pentagon – Washington Post – Sep 20, 2008
That was a few days ago. Estimates are now reaching $1 TRILLION dollars! That amount of money is hard to imagine, but Ronald Regan had a good analogy.
I’ve been trying … to think of a way to illustrate how big a trillion is. The best that I could come up with is that if you had a stack of $1000 bills in your hand only four inches high, you would be a millionaire. A trillion dollars would be a stack of $1000-dollar bills 67 miles high.
These figures are in addition to the roughly $400 billion deficit (a near record) the US is expected to hit when the budget year ends later this month. [NPR]
Keep in mind, when Clinton took office in 1993 the total public debt was about $6.5 trillion. During his 2 terms he even managed to reduce is slightly. Since Bush has taken office he’s already added on $3.5 trillion in new debt. Add to that the 2008 budget deficit and another trillion in bailouts and you have one of the worst managed economies in the U.S’s history. [Deficit data available from the U.S. Budget Report (PDF) - Whitehouse.gov]
Lack of Oversight / Deregulation
While lack of oversight or sufficient regulation of the financial sector is largely being blamed for the mess we’re in, it’s interesting to see what the candidates and other economic experts have to say about it.
On the campaign trail on Monday, Mr. McCain, the Republican presidential nominee, struck a populist tone. Speaking in Florida, he said that the economy’s underlying fundamentals remained strong but were being threatened “because of the greed by some based in Wall Street and we have got to fix it.â€
But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party’s embrace of deregulation and relying more on market forces than on the government to exert discipline.
While Mr. McCain has cited the need for additional oversight when it comes to specific situations, like the mortgage problems behind the current shocks on Wall Street, he has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.
- In Candidates, 2 Approaches to Wall Street – New York Times – Sep 16, 2008
John McCain’s recent comments on the economy aren’t just coming under fire from Barack Obama’s campaign: arguably the country’s most conservative editorial board said Friday the Arizona senator’s recent “populist rifting” was downright “un-presidential.” A Friday Wall Street Journal editorial sharply criticized McCain for his recent condemnation of Christopher Cox, the chairman of the Securities and Exchange Committee. The Republican presidential nominee told an Iowa crowd Thursday Cox had “betrayed the public trust” and should be fired.
“In a crisis, voters want steady, calm leadership, not easy, misleading answers that will do nothing to help. Mr. McCain is sounding like a candidate searching for a political foil rather than a genuine solution,” the editorial also said.
- Wall Street Journal editorial board skewers McCain – Via CNN
And where has Obama stood on this issue?
Ohh right. He proposed the critical need for “an overhaul of government regulation of the financial markets” back in March!
Obama said, “The American economy does not stand still, and neither should the rules that govern it. Old institutions cannot adequately oversee new practices. Old rules may not fit the roads where our economy is leading. Our free market was never meant to be a free license to take whatever you can get, however you can get it. That is why we have put in place rules of the road to make competition fair and open and honest. We have done this not to stifle, but rather to advance, prosperity and liberty.”
The Democratic presidential candidate said rapidly changing financial markets, coupled with increased government deregulation, have led to a cycle of economic bubbles and sudden declines that endanger Americans and threaten businesses.
- Obama: Fix market regulation – USA Today – Mar 27, 2008
As always, you can also read plenty more about Obama’s Economics policy’s on his website.
Trickle Down vs. Trickle Up Economics
The biggest difference between Obama and McCain is perhaps best seen in their tax proposals. First, a picture:
As reported by the independent Tax Policy Center it’s easy to see the difference here.
Obama would give larger tax cuts to low- and moderate-income households and pay some of the cost by raising taxes on high-income taxpayers. In contrast, McCain would cut taxes across the board and give the biggest cuts to the highest-income households.
So McCain’s plan is to renew Bush’s tax cuts and then give even more breaks to the wealthiest 1% while Obama would try to give more money directly where it’s needed. To add insult to injury, the Tax Policy Center also found that McCain’s proposals would cost $4.2 trillion over 10 years while Obama’s would cost $2.9 trillion during that time. So despite McCain trying to portray Democrats as “pork-barrel spenders”, his proposals actually end up hurting the budget more than Obama’s!
Thanks
Well that’s more than enough for now so thanks for tuning in. As always, comments and questions are welcome so please do let me know what you think. I encourage you to dig into the links here in more detail or read up on the issues elsewhere, but let’s decide this election on sound positions and policies not pigs with lipstick and whatnot.
And Remember…
- It’s not too late to Register to Vote at voteforchange.com. You can also, confirm your registration status, find your polling place, and even vote early so check it out today.
- The first Presidential Debate will be held this Friday at 9:30pm EDT. Don’t miss it!
