Obama's Economic Plan

In a stunning about face this week, Barack Obama announced that "I've got an economic plan that is similar to Bill Clinton's." On its face, this would mean that, if elected, Barack Obama would raise taxes on all taxpayers, support NAFTA and reduce welfare, three cornerstones of the Clinton economic legacy. This would be a serious reversal of Senator Obama's campaign promises and his stated policies. Other than a crass attempt to hitch his fate to the Clinton star, the comment highlights the serious risk to our current economic situation that is posed by Barack Obama's pledge to raise taxes on the producers of jobs and capital, increase welfare and abrogate our commitment to NAFTA. These policies create a serious probability of leading our economy into further economic dismay.

Barack Obama is wholly disingenuous in implying that his tax policy will have the same success as the Clinton policy when, in fact, the economic environment inherited by Bill Clinton was vastly different from today's economy. Obama's assertion is similar to saying that because an aspirin cures a headache it will do the same for cancer. President Clinton benefited from an economy that grew by 4.2% in the first quarter of his Presidency, the Dow was up 5.8% for the year prior to his election, total national debt was 54% of national output and information technology was in its infancy. Tax rates inherited by Clinton had been reduced by 60% under Reagan and Bush Senior since the Carter years. When President Clinton increased taxes, he simultaneously brought our national budget into balance in sixteen months. He signed NAFTA against the will of his own party.

Yesterday, the country's growth contracted by .3%, providing one-half of the technical verification of the recession being felt around the country and certain to be inherited by the next President. The Dow is down 32.5% for the year, our national debt is at nearly 70% of total GDP (after WWII national debt was 102% of GDP and America was at the beginning of its stunning economic success). Currently, unless investors are able to forcefully advance new energy technologies, there is no analog to the 1990's information revolution which can give us the necessary economic stimulus for innovation and job growth. Supporters of the Illinois Senator not only ignore the current fragile economy, but also the obvious consequences of Obama's opposition to NAFTA and his destructive economic philosophy. In fact, Senator Obama's policy of higher taxes and higher tariffs for our fragile economy at this time is exactly the wrong direction for the country.

One of the reasons that Barack Obama could well lose on Tuesday is because voters are beginning to realize that his policies will tank the economy and the markets. The stock market looks forward, not backward, and there is a direct correlation between the declining Dow and the increasing poll numbers for Barack Obama. According to the June Gallop Poll, by a margin of 87 to 13, Americans care more about improving the economy than they do about redistributing wealth.

According to his rhetoric, Barack Obama is helping working Americans. In fact, John McCain offers bigger tax breaks to the working class than Barack Obama. (The only reason you do not know this is because you have not looked at the fact that no one earning under $50,000 will pay any tax under John McCain and, on the famous "Obama Taxometer", the untruthful Obama campaign does not include the $5,000 health care tax credit that John McCain in giving to every American). Moreover, almost 75% of Americans making $100,000 have some capital gains. As the value of their investments turns negative they will suffer badly, even if Barack Obama does not raise their taxes. A declining economy is bad for everyone.

It is dishonest for Senator Obama to claim he will fix this economy by taxing the top 5%. His spending increases on programs alone amount to $300 billion per year. The dishonesty is to say that this will be paid by his tax on the top 5%. It is simply not possible. As the Obama plan makes clear, the additional taxes of the "rich" have already been committed to his "refundable tax credits". According to the Tax Policy Center, the Obama tax plan will take $70 billion from the top 5% of earners in the country and redistribute it to the 60 million Americans who pay no tax.

Senator Obama's economic philosophy will make America neither stronger nor fairer. Today, the top 1% of earners contributes 40% of the nation's $2.6 trillion tax intake and the bottom 50% pay 2.9% of our nation's total needs. This is in contrast to the 17% of total tax paid by the top filers under the Carter Administration when the top marginal rate was 70%. It has been shown that reductions in tax rates increase tax revenues because incentives to private enterprise strengthen the economy and create jobs and a larger tax base.

As he exploits the current widespread economic uncertainty in the nation and blames the richest, Barack Obama not only ignites an insidious class war, but also ignores the inconvenient fact that America's top earners have paid double in taxes since the reduction of their tax rates under George Bush. Namely, in 2003 the richest Americans paid $136 billion in taxes and after the tax cut in 2006 they paid $274 billion. Times of economic uncertainty are exactly when our government needs to cling to business and the generators of wealth and jobs, not use them as scapegoats.

Along with my Democratic "friends," I used to make fun of Republicans by saying that they lived in an "evidence-free zone." Well, I now see that it is the Democrats, swept away in the "narrative" and "transcendence" of Barack Obama, that are refusing to look at the facts about the likely consequences of electing Barack Obama. The same media outlets that failed to vet the Iraq War are now failing to vet Barack Obama. Unfortunately, they will never accept responsibility; it will be our country that takes the hit. For me, that is very sad.

John McCain may not be the most eloquent or sexiest candidate in this race, but he is the candidate who will best serve this nation for the next four years. He is reducing taxes for all Americans further than Barack Obama, cutting federal spending and encouraging free trade and energy independence as engines for domestic economic growth. More importantly, he and Sarah Palin actually have a record of taking on the vested interests and their own party (while working with Democrats) to make tough decisions. I have yet to be shown the same evidence of the junior Senator from Illinois.

Regrettably, the road kill of Obama's reckless rhetoric and policies is not the rich taxpayer, but the entire American economy. The pain will be felt mostly by those who lose their jobs in the economic downturn and are the owners of 401ks and other savings who suffer at the stock market continues to decline. Barack Obama has not been held accountable for the obvious consequences of his tax and trade philosophy and policies. If elected, it will be all Americans who will suffer.

PS. Most readers have probably not read this far into the piece, but if you have, I have one more comment.....Since speaking out about this election, I have seen the Obama response is to attack me personally, particularly on the Internet. Fine, but just to let you know, eighteen months ago my husband wrote in the Financial Times that capitalism was in retreat because of the greed on Wall Street. We have subsequently invested only in tax-free government securities. So, my opinion is not driven by my economic interests. I am driven by what I said in the New York Times in June, "I love my country more than my party" ......and it is ok with me if you hate me. xoxoxo

Related: Lynn Forester de Rothschild: Barack Obama's America

Comments

[Village]

One more thing.

We don't want your easy credit anymore. We want HIGHER WAGES instead. When people can just borrow, borrow, borrow to met their wants, it takes all the pressure off higher wages.

That is OVER. No more credit. A living wage is what we want. And for the rich to quit their whining.

[MyTake]

Perfectly stated, thank-you.

[OhioPoBoy]

Eight years of Reverse Robin Hood, taking from the poor and middle class to give to the rich has failed. Ms. Rothschild seems to gloss over that fact as she touts the evils of Obama's plans of "raise taxes on the producers of jobs and capital." This logic has been proven FALSE. This has been tried and FAILED miserably. The only thing trickling down is job losses, housing values, investor equity and the world's opiinion of America. The rich always want more. They always try to persuade us that they are our betters and we should just volunteer to let them lead us to the promised land. We have seen a sort of perverse socialism, akin to fascism which Mussolini originally wanted to name "corporatism," in honor of his idea of allowing the "producers of jobs and capital" to control his nation's direction. Unbridled markets lead to unbridled greed. Letting the market run the world is akin to letting the law of the jungle be the law of the land.

[DuganS1]

How has the govt "taken fromthe poor and middle class and given to the rich"? I remember everyone getting tax cuts in 2001 and a lot of folks being taken off the federa income tax rolls all together. I also recall that poor and middle class folks received unprecendented access to consumer goods and consumers because of the increase in global trade. I also don't understand the comment about job losses as there had been five years of consistent job growth until this year. Home values are also still up from eight years ago, and for most people significantly so.

[RedneckDem]

The poor and middle class received unprecedented access to CREDIT, which they used to purchase consumer goods. You know, just like in the great depression, just before the bottom fell out. Average income has remained stagnant, which means we had a gold rush built upon credit and not new jobs or rising incomes.

Historical job creation during boom times were about three times more than this bubble. Maybe you forgot to subtract the monthly job losses to your rosy job creation lie, or maybe you just consider a job at McD's the same as at GM.

[vippy]

You are so wrong. Our figures have been manipulated to make you think that way.
Our jobs were lost starting with 2001 and then forward. Gone were the days when we
had to be ingenious to find new applicants but we saw an increase in applications
once 2001 came and from then on it got worse. Our unemployment to date is wrong,
it should read like 20%. I challenge anyone to try to find an equal job and see what it
gets you - I did just to manifest my statements. Since I had to pay more and more
income tax with every year since then I cannot say I received a tax cut. In fact, in 2003
the IRS Website said that the rich paid only 1/5 of the total taxes collected. I, for one,
want the rich to pay their fair share. Obviously, the trickle down did not work, we got
peed on! And you, Mrs. Rothchild, you are a PUMA and voted for McCain!

[realpolitic]

The Bush job creation record has been abysmal. He has created perhaps five million jobs over his eight years in office. Clinton created more than 20 million and so did Reagan. Dugan, you sound like a very low information voter who votes solely on some inarticulated ideology. You should read the newspapers from time to time.

Also, real incomes have declined under Bush when they never have before during an economic expansion.

[ConcernedAboutRFuture]

What country do you live in?

Our ENTIRE TREASURY has been emptied and given to Halliburton, KBR, Blackwater and the rest of Bushies friends. And as an exit consolation prize, the biggest bank robbery of $700 billion was pulled off.... while the cigar puffers laugh and drink their 40 year old scotch.

Job losses.... seriously, what country DO you live in? Oh, wait. You're talking about the jobs created at McDonalds, Burger King, Wendys? Why aren't YOU working there for $5 an hour? I want to see how that pays your bills each month. Seriously, if you have the secret on how to survive on $5-$6 an hour, please let me know.

[rwt1138]

I find your argument to be unpersuasive. If I didn't know better, it almost appears like you are trying to convince us that the rich suffered under George Bush's tax policies and that any effort to restore them to pre-Bush levels will result in complete disaster. That is simply nonsense.

The fact is, life under George W Bush for the "producers of jobs and capitol" as you call yourselves has been about as easy as at any point in the last 100 years in terms of tax and regulatory policy, and for giving you and your class a free ride for 8 years we have a wrecked economy and record debt. If you were making this argument from a record of success that would be one thing, but to sit in the shambles of an economic mess that you at the very least benefited from, if not helped create, and say that the solution is to make life easier still so you can clean it up is arrogant.

And please, spare me the "class warfare" canard. When the angry mobs are storming your street with torches and guns, pulling your neighbors from their houses and sticking them on spikes in the front yard after looting them and setting them afire, you can complain about class warfare. Making a case that the wealthy in this country have it way easier than the poor and can afford to contribute more as a result hardly qualifies.

[realpolitic]

Midnight in the Garden of Reaganomics
by Bennet Kelley

Since 1980, the Republicans had one response to every problem -- tax cuts..

Republicans transferred trillions of dollars to the wealthiest Americans, creating the greatest income disparity since the Depression and increasing the national debt by $8.2 trillion (or nearly $75,000 per household). For nearly thirty years, Republicans have chosen to invest in the rich, but not in America and we are witnessing a "quiet collapse in prosperity" as a result. For example, the current United States' rankings on life expectancy, water quality and infant mortality are 24th, 39th and 41st respectively falling behind countries such as Bosnia, Cuba, Panama, Sri Lanka and Vietnam.


We have lived off the sacrifices of others and let our roads, bridges, water systems and other infrastructure decline to second world levels such that it would cost $1.6 trillion to merely get our current infrastructure to a functional level. But as former Federal Reserve Chairman Volcker stressed last week, we need to begin "the physical rebuilding of our nation now.

Today we have the highest level of income inequality, poverty and deaths due to lack of access to health care and the lowest level of social mobility among leading developed nations; but the Republicans' answer is to give tax cuts to the richest few Americans.

Despite their sense of entitlement to power, in this country the power comes from the people.

http://www.huffingtonpost.com/bennet-kelley/midnight-in-the-garden-of_b_139098.html

[sclucie]

Thank you. Thank you. Thank you.

[realpolitic]

Your welcome....your welcome. But thank Bennet Kelly who wrote the article in the Huffington Post.

[rwt1138]

Good post, but I would correct one point. Republicans actually have three possible solutions to any given problem, not one:
Kill it
Deregulate it
Cut its taxes

Iraq, Afghanistan, and judging by McCain's rhetoric, Iran, are "Kill It" problems. if it has to do with business, the solution is always "Deregulate it". For everything else: tax cuts.

[realpolitic]

Or just deny the problem exists.

[DuganS1]

The life expectancy numbers are meaningless because the govt can't control what people eat or how much they exercise. The infant mortality numbers are almost just as meaningless as it is either due to a few poor inner city areas as well as the increase in the use of fertility drugs. Poverty in the US is practically non-existent. The infrastructure argument is also not accurate as huge amounts of money has been invested in roads and water treatment centers over the past few decades. Infrastructure is only an issue in a few areas, and definately not those two.

[RedneckDem]

You are an apologist for everything that's gone wrong in this country. Pathetic and soon to be rendered impotent. Watch folks, this is whats called an idealogue who will stick by his theory in the face of facts or "on the ground" results.

[vippy]

I hope the bridge you cross next time will not crumble as two of them did the last 2
years (Texarkana and Minnesota). I see poverty everywhere, just look at the trailers
from coast to coast. Some of them are so shabby they would not qualify for keeping
chickens. What on earth are you looking at when travelling?

[dctackett]

Wow... what little slice of heaven, or should I say bubble, do you live in?...

I think my favorite is "Poverty in the US is practically non-existent"

You don't get around much, do you?

[realpolitic]

Dugan sounds like someone who has never been to America, but has simply read about it as a shining city on a hill with gold streets. Life expectancy is a very relevant indicator of the well being of a country. In America, a lower life expectancy than several other industrialized countries has to do with access to health care. Also, many middle aged people who need high blood pressure or diabetes medicines can not afford them. Many people in inner city neighborhoods, especially those of color, do not have access to large grocery stores that sell fresh fruits and vegetables. Many of the corner stores sell low quality produce at very high prices.

If higher infant mortalty is acceptable to you as long as it is in a few inner city areas, then that says alot about you.

You say "poverty in the US is practically non-existent." I have lived in two major cities in America and see scores of homeless daily. They are millions now losing their homes through the subprime mortgage crisis. Many of our veterans are homeless from time to time.

Regarding infrastructure, our roads do get seasonal maintanence. We are talking about bridges, like the one that collapsed in Minnesota, viaducts, and levees, like the ones that failed in New Orleans and recently in Iowa. They do not repair themselves. Our electrical infrastructure is at second world standards, as seen a few years ago by the power blackout of almost the entire East Coast.

.

[IgIzBliss]

I’ll add this: China is building a national highway system that will connect EVER CITY of 200,000 or MORE inhabitants. It will be done in about 8 years. At that point, the Chinese government will interject a majority of its 200 million rural workers into the global economy (2/3rds of our population!). Despite very low, but quickly rising, wages and standard of living, this highway system will change the global economy. When those workers hit the market, American rural workers (and even urban ones) stand to be completely outclassed.

Sure, we are still the envy of the world, but Reaganites have looted our people and our economy because their wealth best positioned them to do it. Now, when we really need to compete globally, our petty politics is limiting our potential. The conservative belief local school boards should determine what gets taught has done more to put us behind the rest of the world's up and coming economies than anything. There are 9 year old kids in India studying until 2 am on engineering problems just to get into HIGH SCHOOL. Without an about face, we will lose. Regardless of one's faith, if we continue to ignore the need for a NATIONAL STANDARD for education crafted by our best minds, WE WILL BEGIN LOSING, AND CONTINUE TO LOSE IN THE FACE OF A CENTURY THAT IS, WITHOUT DOUBT, CHINA'S AND INDIA'S.

[DuganS1]

We do have national standards for education now. That's what No Child Left Behind did. There are also 18-25 year old kinds from India at American universities who are studying until 2AM every night and getting the best grades in classes here. Most American students just don't have the discipline or the motivation to equal that - I sure didn't. But I think we should just welcome and make those kids Americans. That seems the surest best to eliminate the talent gap.

[peskime]

Evelyn, is your husband's name? What a coincidence, that was the name of my French husband's stepmother and my beloved great grandmother. That is where the coincidence ends.
In the words of Hillary Rodham Clinton, No McCain, no way, no how! Sarah Plain sealed that deal.
Obama/Biden 08

[FemWorkingClass]

"It has been shown that reductions in tax rates increase tax revenues because incentives to private enterprise strengthen the economy and create jobs and a larger tax base. "
This is the underlying basis of "Reaganomics."
NO WHERE can the truth of this statement be shown. The Congressional Office of Management and Budget as well as the General Accounting Office can only report that revenues fail to rise above the level of loss created by ANY tax cut.
Furthermore the cost of United States military expenditure around the world has risen without balancing tax increases. Senator Sanders of Vermont has proposed a temporary (two year) ten percent tax surcharge on ANY individual and corporation earning above a mere million dollars. He is self declared a socialist and even this revenue will not much reduce the defecit or national debt.
Conventional wisdom regarding tax and monetary management policy does not apply to the current recession. It is time for the 'powers that be' to consider unconventional responses to this situation. In other words, to think outside the box of accepted theory.

[dctackett]

no kidding... and don't forget that in 12 years of Reagan and Bush Sr., our national debt more than trippled and Bush Jr. took that and doubled it in less than 8 years.

[Soundofthunder]

Threats of what will happen if we should tax the rich at a rate commensurate to their wealth tend to fall on deaf ears when delivered by one of those so affected. You, Lady Lynn, are one of the well-monied explaining to me why you should remain well-monied in perpetuity, as if that -- and not healthcare, housing, food and clothes -- is an inalienable right.

The mouths of aristocrats speak not falsehoods but half-truths.

SOT

PS How's that?

[Ben08]

Well, I'm not Lady Lynn, but my familly does own a small business and yes we are struggling, which is EXACTLY why an Obama presidency will force us to close our doors and join the ranks of the unemployed and welfare recipients for our family of 5. We've already spoken to our financial folks and in the face of banking issues (can you refinance anything right now?) and other operational requirements the Obama plan will bankrupt us.

Thanks for nothing!

[BruceHNV]

If you own a struggling small business, Obama's tax policies are designed very carefully to HELP you.

You are buying false propaganda to to contrary.

[BBackSoon]

So you have a small business that makes a Profit of more than 250k a year? Isn’t that the whole deal? If your business does over 250k a year that is not what is taxed, what is taxed is what you have left over after you pay your expenses.

If you have a business that is making a PROFIT of over 250k a year then I find it hard to believe you are really hurting.

[dctackett]

so what EXACTLY is in Obama's plan that will forece you to close your doors???

let's see, if you are struggling, I guess that means that you aren't profitting over $200,000... so that means your taxes will be lowered... hmmm... so what is it?

I own a very small business and Obama's plan will be great for me, especially with having more customers with money to spend.

[realpolitic]

And why can't people re-finance loans right now? Because Republican policies of deregulation have induced a credit crisis and has brought about almost another Great Depression. It was Tresury Secretary Paulson, then Chairman of Goldman Sachs, who led the push to expand the leverage available to financial firms to 40 to 1. In other words, they could then borrow $40 of other peple's money for every dollar of their own to bet on their market positions. The $70 trillion dollar or so credit swaps industry was entirely unregulated and Alan Greenspan worked to keep it that way.

[georgiaR]

Lynn, You are absouletly right and these people are being fooled and don't want to hear it. Obama will kill jobs and people making over $66K will actually get a bigger tax cut from McCain

Source: http://money.cnn.com/2008/10/29/news/economy/candidates_tax_plans/index.htm

[schatsie]

you have got to be kidding me, we are ready for a new progressive government instead of being sold down the reaganomices river.... that ideation/philosophy was killed by the second Bush administration......

[ladyhawkke]

Your new progressive movement is nothing more than socialism. I resent the fact that Obama will take from those who have worked to get where they are to give to those who refuse to go out and get a job. I've already seen Obots with signs, "Show me the Money"
Unbelieveable. Go out and get a job and don't expect a handout.

Furthermore, Obama's health care plan pays for health care of ILLEGAL ALIENS!! And he plans to give them driver's licenses. Also, his aunt who was given a deportation order 4 years ago is still living in Boston. The first thing he will do is give her amnesty, along with himself, as I still haven't seen his birth certificate, his medical records, his college records. Funny how everything has a way of getting scrubbed if it's anti-Obama.

[boophus]

Here is the info according to Valnity Fair and the Tax Policy Center:

NAME
INCOME ($)
CHANGE UNDER MCCAIN ($)
CHANGE UNDER OBAMA ($)
Bernice the burger flipper
16,860
-33.72
-893.53
Joe the janitor
22,710
-90.34
-726.72
Mickey the mechanic
38,530
-231.18
-874.66
Jim the real plumber
47,000
-282
-1,034
Rita the registered nurse
62,480
-374.88
-1,374.56
Rachel the real estate broker
79,800
-877.8
-1,277.80
Phil the pharmacist
98,960
-1,088.56
-1,539.50
Barack and John, the U.S. senators
169,300
-3,893.90
-2,539.50
Gary the gynecologist
183,600
-4,222.80
-2,754
Joe the plumber
250,000
-6,000
0
Bob the Division I college football coach
1,000,000
-26,000
50,000
Bill the right-wing commentator
10 million
-330,000
610,000
A- the third baseman
34 million
-1,122,000
2,074,000
Oprah the talk show host
275 million
-9,075,000
16,775,000
This table estimates the difference, in dollars, that each candidate’s plan will represent in the taxes paid by various individuals in 2009, compared with 2008 levels. It is based solely on estimated wages and does not take into account any deductions or outside income. (N.B.: Both candidates expect to alter rates again after 2010, when the Bush tax cuts are set to expire.)

[tlintx]

SOME Obama supporters do not want to look at facts or debate facts. They instead would rather attack the person. Encourage everyone to dispute her facts from the article. You can't, she is correct.

Obama the brand is not the same as Obama the man.

[BruceHNV]

Have you read ANY of the (hundreds of) very-well researched posts here that completely refute the entire factual basis of her argument without saying a single negative word about her?

"Obama the brand is not the same as Obama the man." Catchy. And utterly meaningless.

[sarana]

It's in Obama's best interest to emulate the popular Bill Clinton. Perhaps that will detract from some of the negative association arguments.

http://medusa2.wordpress.com/2008/11/02/what-do-rashid-khalidi-and-sirhan-sirhan-have-in-common-ayers-and-obama/

[tlintx]

It is funny how Obama labels President Clinton as a "racist" during the primaries and now expects voters to believe he is aligned with Clinton. Which is it Senator Obama?

SENATOR OBAMA IS NO BILL CLINTON!!!!!!

[BruceHNV]

He never labeled Clinton as "racist." Never. The McCainiacs like to pretend he did, but he didn't. In fact he never labeled or accused anyone of racism.

[pbwebb]

This is an election about needed change. Not more Scalia's on the Supreme Court, more Souter's. It's about average people becoming involved in a national election. and not being told simply to take the limited offerings Washington has always served up as choices. Sorry, the old priviliged white guy has got to go. This time, this year, this Tuesday. Live with it. I am certain four years from now we will be better off than we are now. And if not, there will always be another man of means to elect. No shortage of rich white guys. Maybe, Bloomberg, Then we will have had a Catholic, a black and a Jewish man as president. The new American way.

[pgurlatl]

AMEN TO THAT!!!!

[Tropiholic]

how much was your share of the $20 mill hill debt pooma?

[kraigster]

See U Next Tuesday

[unclesahm]

Rick Davis: Hey, Lynn, how are you? Remember when we had that meeting where you said you'd help us out in exchange for that ambassadorship you would have been guaranteed under a President Clinton but certainly not under Obama?

Lynn: Of course. It's what keeps me up at night.

Rick Davis: Great. Well, turns out that we need to convert decided voters in order to have a snowball's chance. Can you post these essays we had lackeys write up in liberal places like the HuffPo?

Lynn: Sure, I'd love to! I'm no crazy PUMA, I really care!

Rick Davis: Sure, whatever. Here it is.

[2dark]

Excellent.

[backsassing]

That's funny, you do not have a party, and you can save your love for country routine for the right wing blogs.

[bdaved]

Mrs. Rothschild uses some interesting rhetoric. She predicts the "entire American economy" will be the "roadkill of Obama's reckless rhetoric and policies". That seems a little overdone. She says "Yesterday, the country's growth contracted by .3%". Instantaneously, one would infer. She says "the top 1% of earners contribute 40% of the nation's $2.6 trillion tax intake and the bottom 50% pay 2.9% of our nation's total needs". Those 50% are getting a bit of a free ride from the 1%, one could infer, if one gets past the difference between "tax intake" and "our nation's total needs", which thoroughly confuses me. I'm not so ready to discount the contributions of Americans of all income levels to "our nation's total needs".