This Week on ABC is featuring an interview with Barack Obama.
When asked by George Stephanopoulos about tax cuts and the economy, Senator Obama spoke to the differences in the economic theories of his strategy versus Senator McCain’s.
Obama’s plan, tax cuts to the middle class is a bad idea, and an ill-advised one based on the notion that the economy somehow grows from the bottom up, which is in fact how Obama himself described his plan.
Ben Stein, Lawyer, Writer, Actor and Economist: I ADMIRE Barack Obama…But I am a bit worried that his knowledge of economics may not be as extensive as his legal background. In particular, he’s been campaigning with an idea of a second round of economic stimulus to combat the evident slowdown in the economy, to follow President Bush’s first round that is now wrapping up. The first round hasn’t succeeded, and Senator Obama’s ideas aren’t very promising, either.
The failure of the Bush stimuless program clearly confirms this. Tax cuts for the middle class amount to a few hundred dollars per year – essentially, another Bush stimulus check. Obama has said that he would be in favor of another stimulus package, despite recent evidence that it has failed. So how is that change? How is that different than Bush’s economic strategy?
In a nutshell, why have a stimulus program that may not — and probably should not — stimulate much consumption? And why help pay for it through taxes on a group whose members have done no moral or other wrong and who often are not particularly rich, either (not that it’s a moral wrong to be rich)?
These are complicated issues, and
I am not even remotely sure how to solve all of them myself. But some of Senator Obama’s plan is just hard to rationalize.
Our economy is fueled by consumer spending stemming from consumer confidence and job creation through the formation of new businesses. Tax cuts to those that start these new businesses have been shown time and again to stimulate the very growth that creates jobs and bolsters consumer confidence which leads to increased consumer spending and ultimately increased tax revenues.
It’s simple. Whose name is on your paycheck? Do you want the government to help this entity or person or harm them? Do you want them to be incented to hire more of you or not? Do you want them to be profitable so that they can increase your income at the next review or not?
Our economy is like a train. The engine is corporate America and small businesses – employers large and small. The train cars are working Americans – taxpayers. The caboose represents those that don’t pay taxes or are unable to work or provide for themselves.
Government? Government’s role should be to keep the tracks clear of danger and to help people get on the train, or back on the train if they get knocked off. Government’s role has however become the cargo, and to help more and more people become the caboose.
Make no mistake. We need the caboose. There are people that can’t contribute to our economy and the government should play a part in their care and protection. Liberals however are confused as to which end of the train serves the most important role in our nation and our economy.
Tax cuts and rebates to the cars in the train doesn’t make the train go any faster. Gearing our economy to the caboose hurts everyone on the train, including the caboose. Increasing government just increases the load for the engine.
So why do liberals continue to offer up this strategy as an economic policy? Votes. Political expediency. Obama is pushing this strategy to buy votes, plain and simple; just like every liberal predecessor. That’s not change either. That is the liberalism that is just another stripe in the spectrum of socialism.
What liberals don’t understand, and why usually the American electorate swings in the direction of the Republicans during economic challenges, is that in most cases, “wealthy” Americans are just regular people that took risks to leverage the American dream.
After eight years of Republican liberal fiscal policies, the American people are confused, which goes a long way to explain Obama’s popularity despite his lack of executive experience and ill-fated economic proposals.
John McCain is wise to distance himself from the Bush administration’s economic strategy and is attempting to make the case to voters that the solution to our economic woes is to shrink government, to keep money in the pockets of those that earned it and to stimulate economic growth through the creation of jobs.
Gearing our tax code to continue to penalize the “wealthy” in order to redistribute the booty to and eliminate the risks of life of those that would vote Democrat has weakened our nation and serves to drain the incentive of those that create jobs and take those risks that ultimately grow our economy.
Obama’s plan is a failure out of the box.