View Full Version : Elections Gee... where do we get the impression that McCain is economically clueless?

07-28-2008, 02:13 AM
I've been reading some shit on McCain's confusing tax policies tonight, which I've already written about on this forum.

Slate absolutely slaughters (http://www.slate.com/blogs/blogs/trailhead/archive/2008/07/24/just-a-little-2-8-trillion-gap.aspx) the McCain campaign for saying one thing to us ordinary dumbass citizens on the campaign trail and saying something completely different to sobered experts on McCain's tax policy.

How bad is the discrepancy between what McCain says to us and what his campaign says to tax experts?

$2.8 trillion dollars (http://www.taxpolicycenter.org/UploadedPDF/411741_updated_candidates.pdf).

I'm not even kidding. And I'll repeat it just so you can take it all in: John McCain's tax policy, as his campaign tells tax experts, would cost $2.8 trillion differently than what he actually tells us.

How the **** do you do that?

Slate contacted Douglas Holtz-Eakin, McCain’s chief economic adviser, about this discrepancy.

And here was DHE's answer, says Slate:

“[McCain] has certainly I’m sure said things in town halls” that don’t jibe perfectly with his written plan. But that doesn’t mean it’s official.

I see. So basically, John McCain occasionally speaks to tax related issues on the campaign trail, and it would be presumptuous of us to think of what he says as "official" policy. Think of it as a rough draft! If you want the real story, read the report by the Tax Policy Center! Problem solved!

Nonetheless, what we have here is a candidate saying one thing, and his campaign saying another:

McCain has said that he would repeal the individual AMT, but his economic advisors say that the AMT will be patched but not eliminated except under the simplified alternative system. McCain has said that he would allow businesses to expense all investments in equipment immediately, and he'd double the deduction for dependents, but his economic advisors say that only short-lived investments would qualify for immediate deduction, that the larger deduction for dependents would phase in slowly and NEVER double the original deduction. McCain has said that he would give individuals the option to pay tax under a simplified alternative tax system, but his economic advisors say that the simplified alternative tax system would be totally revenue neutral.
And on and on and on, until McCain is so far away from what his economic advisors want, that he's $2.8 trillion dollars off.

Is it any surprise that McCain is NOT being treated like a serious candidate this election?

I mean, these are blunders you expect from the ****ing Greens, not the Presidential Candidate for the Republican Party.

The Republican Party has done it to itself this election cycle, and you did it by wanting your cake and eating it too. You got a candidate who's promising both, and it's no coincidence his economic policies don't make a lick of sense.

Ultra Peanut
07-28-2008, 03:32 AM
Jesus. Christ.

07-28-2008, 11:07 AM
National sales tax.

07-28-2008, 11:34 AM
He is clueless in general.

07-28-2008, 11:35 AM
If he backs into the presidency, he will be "Clueless In Chief"

07-28-2008, 07:57 PM
He is clueless in general.

If he backs into the presidency, he will be "Clueless In Chief"
Uh... okay.

07-28-2008, 10:25 PM
So can we call that a $2.8 trillion SURGE in differences?

07-29-2008, 07:53 AM
So can we call that a $2.8 trillion SURGE in differences?
Only if it's working. ;)

07-29-2008, 08:45 AM
Obamanomics Is a Recipe for Recession
July 29, 2008

What if I told you that a prominent global political figure in recent months has proposed: abrogating key features of his government's contracts with energy companies; unilaterally renegotiating his country's international economic treaties; dramatically raising marginal tax rates on the "rich" to levels not seen in his country in three decades (which would make them among the highest in the world); and changing his country's social insurance system into explicit welfare by severing the link between taxes and benefits?

The first name that came to mind would probably not be Barack Obama, possibly our nation's next president. Yet despite his obvious general intelligence, and uplifting and motivational eloquence, Sen. Obama reveals this startling economic illiteracy in his policy proposals and economic pronouncements. From the property rights and rule of (contract) law foundations of a successful market economy to the specifics of tax, spending, energy, regulatory and trade policy, if the proposals espoused by candidate Obama ever became law, the American economy would suffer a serious setback.

To be sure, Mr. Obama has been clouding these positions as he heads into the general election and, once elected, presidents sometimes see the world differently than when they are running. Some cite Bill Clinton's move to the economic policy center following his Hillary health-care and 1994 Congressional election debacles as a possible Obama model. But candidate Obama starts much further left on spending, taxes, trade and regulation than candidate Clinton. A move as large as Mr. Clinton's toward the center would still leave Mr. Obama on the economic left.

Also, by 1995 the country had a Republican Congress to limit President Clinton's big government agenda, whereas most political pundits predict strengthened Democratic majorities in both Houses in 2009. Because newly elected presidents usually try to implement the policies they campaigned on, Mr. Obama's proposals are worth exploring in some depth. I'll discuss taxes and trade, although the story on his other proposals is similar.

First, taxes. The table nearby demonstrates what could happen to marginal tax rates in an Obama administration. Mr. Obama would raise the top marginal rates on earnings, dividends and capital gains passed in 2001 and 2003, and phase out itemized deductions for high income taxpayers. He would uncap Social Security taxes, which currently are levied on the first $102,000 of earnings. The result is a remarkable reduction in work incentives for our most economically productive citizens.

The top 35% marginal income tax rate rises to 39.6%; adding the state income tax, the Medicare tax, the effect of the deduction phase-out and Mr. Obama's new Social Security tax (of up to 12.4%) increases the total combined marginal tax rate on additional labor earnings (or small business income) from 44.6% to a whopping 62.8%. People respond to what they get to keep after tax, which the Obama plan reduces from 55.4 cents on the dollar to 37.2 cents -- a reduction of one-third in the after-tax wage!

Despite the rhetoric, that's not just on "rich" individuals. It's also on a lot of small businesses and two-earner middle-aged middle-class couples in their peak earnings years in high cost-of-living areas. (His large increase in energy taxes, not documented here, would disproportionately harm low-income Americans. And, while he says he will not raise taxes on the middle class, he'll need many more tax hikes to pay for his big increase in spending.)

On dividends the story is about as bad, with rates rising from 50.4% to 65.6%, and after-tax returns falling over 30%. Even a small response of work and investment to these lower returns means such tax rates, sooner or later, would seriously damage the economy.

On economic policy, the president proposes and Congress disposes, so presidents often wind up getting the favorite policy of powerful senators or congressmen. Thus, while Mr. Obama also proposes an alternative minimum tax (AMT) patch, he could instead wind up with the permanent abolition plan for the AMT proposed by the Ways and Means Committee Chairman Charlie Rangel (D., N.Y.) -- a 4.6% additional hike in the marginal rate with no deductibility of state income taxes. Marginal tax rates would then approach 70%, levels not seen since the 1970s and among the highest in the world. The after-tax return to work -- the take-home wage for more time or effort -- would be cut by more than 40%.

Now trade. In the primaries, Sen. Obama was famously protectionist, claiming he would rip up and renegotiate the North American Free Trade Agreement (Nafta). Since its passage (for which former President Bill Clinton ran a brave anchor leg, given opposition to trade liberalization in his party), Nafta has risen to almost mythological proportions as a metaphor for the alleged harm done by trade, globalization and the pace of technological change.

Yet since Nafta was passed (relative to the comparable period before passage), U.S. manufacturing output grew more rapidly and reached an all-time high last year; the average unemployment rate declined as employment grew 24%; real hourly compensation in the business sector grew twice as fast as before; agricultural exports destined for Canada and Mexico have grown substantially and trade among the three nations has tripled; Mexican wages have risen each year since the peso crisis of 1994; and the two binational Nafta environmental institutions have provided nearly $1 billion for 135 environmental infrastructure projects along the U.S.-Mexico border.

In short, it would be hard, on balance, for any objective person to argue that Nafta has injured the U.S. economy, reduced U.S. wages, destroyed American manufacturing, harmed our agriculture, damaged Mexican labor, failed to expand trade, or worsened the border environment. But perhaps I am not objective, since Nafta originated in meetings James Baker and I had early in the Bush 41 administration with Pepe Cordoba, chief of staff to Mexico's President Carlos Salinas.

Mr. Obama has also opposed other important free-trade agreements, including those with Colombia, South Korea and Central America. He has spoken eloquently about America's responsibility to help alleviate global poverty -- even to the point of saying it would help defeat terrorism -- but he has yet to endorse, let alone forcefully advocate, the single most potent policy for doing so: a successful completion of the Doha round of global trade liberalization. Worse yet, he wants to put restrictions into trade treaties that would damage the ability of poor countries to compete. And he seems to see no inconsistency in his desire to improve America's standing in the eyes of the rest of the world and turning his back on more than six decades of bipartisan American presidential leadership on global trade expansion. When trade rules are not being improved, nontariff barriers develop to offset the liberalization from the current rules. So no trade liberalization means creeping protectionism.

History teaches us that high taxes and protectionism are not conducive to a thriving economy, the extreme case being the higher taxes and tariffs that deepened the Great Depression. While such a policy mix would be a real change, as philosophers remind us, change is not always progress.

Mr. Boskin, professor of economics at Stanford University and senior fellow at the Hoover Institution, was chairman of the Council of Economic Advisers under President George H.W. Bush.