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

[dartagnan]

Why is it that I'm skeptical when somebody named "Lynn Forester de Rothschild" tells me she has the interests of middle-class Americans at heart?

[holmsolo]

You got that right. Suspect that this woman is probably well versed in the top 1%, and has their interest at heart not the middle class. Just check out her bio : http://en.wikipedia.org/wiki/Evelyn_de_Rothschild
Seems like she might be just a "little" out of touch with the middle class.

[fedupinpa]

Our economy is consumer driven not producer driven. Without consumers these new businesses created by the investment of the wealthy will have no one to buy their products or use their services. The economy will not grow.The last eight years prove this.

[BertrandRussell]

Which forces us to wonder:

Why does the "War on Drugs" focus on the producer rather than the consumer?

Simple answer is that the "War on Drugs" is a sham.

[ChibiOne]

Not that I disagree on the war on drugs being a sham, but they focus on the producer because there are way too many consumers. If they tried to go after everyone that just used the product, there would literally be no police for anything else in the entire nation.

The real question is: why do so many people feel so miserable with their lives that they are willing to risk incarceration just to have some kind of relief?

[Viper]

Well said...

Regards

[Soulsurfer]

Exactly. Without lots of jobs, there is no economy, period. The markets NEEDED to deflate, because most of the gains were strictly on paper, created by shuffling paper. Now, no matter who gets elected, taxes will have to be raised, no doubt. You can't get elected promising to raise taxes. Rolling back W's tax breaks will be a big help, but won't come close to filling the gap left by the unlimited spending of the Republican administration and congress. We're 10 TRILLION in debt! How do we pay that off without raising taxes? Republicans wanted war, supported it, funded it, borrowed for it, NOW WE HAVE TO PAY FOR IT! And while the development, manufacture, and implementation of green infrastructure may not be the job powerhouse that semicon and IT was, it will certainly help spur economic growth by creating millions of jobs, IF WE CAN FIGHT THE INDUSTRY LOBBIES THAT HAVE BEEN PAYING TO HOLD IT BACK. The author above also mixes numbers and percentages while making a point about wealthier people paying more taxes than poor people. Capital gains is a form of social welfare for the wealthy. Tax it at the same rate as regular income. It's unearned, made by betting on the market, whether its housing or securities. And McCain is not taxing people making under 50K? Horsefeathers!

[Bitsko]

And now folks are hoarding their money because of hard times. Economists are saying that's not a good thing during a recession. We working class folks get it coming and going.

[ChibiOne]

Yes, strangely enough, capitalism only works when enough people have capital.

Huh, go figure.

[BrirtObserver]

You are of course entitled to your opinion the majority of the people here do not agree with you. Your points are in this article are weak and superficial to say the least.

What you do not seem to understand is when you changed teams, your stature in this movement disappeared, forever.

Based on your weak argument and the backing of this Republican ticket (a ticket largely regarded as racists) you simply have no standing.

You say you are still a Democrat but you are tainted goods, any Democratic ticket you may want to back in the future will suffer adversely because of you.

[Menemshasunset]

Haven't been to HuffPo for over 6 months-it's still scary here and just like the entire Bush term- free from the constraints of a reality based universe where experience matters.
As Kristen Breitweiser wrote a few months ago in her "You Broke it - You Own it- Obama style;
"Those who are responsible for putting Democrats in the broken place we are in right now with regard to Barack Obama had better own it to the end. Leave those bumper stickers on and wear those campaign pins. . because YOU OWN IT. And people are going to want to know who to blame."

Watch what you wish for- when the "in it for the money" press leaves the Obama campaign staff and decides to finally vet the new President- hold his feet to the fire- the entire Democratic party will pay-
You will own all the blame- The One had better have those messianic powers otherwise the Democrats will have a lower approval rating than they have in Congress now-is that even possible?

People like Lynn de Rothschild are the true patriots. To push back from the oh so cool- "we are ones we've been waiting for" herd takes intellectual reasoning, a knowledge of history and courage- the qualities upon which this country was built

So keep massaging each other's egos- YOUR TIME IS NOW- You best enjoy it while it lasts-
just make sure you keep those bumper stickers on your cars and buttons on your lapels-

[BigIsleDem]

So, let me get this straight, people who vote their pocketbooks, and those of their fellow country club members, and then miscite or make up statistics to support that vote are true patriots? Give me a break. As another post notes, the United States now has GINI coefficient characteristic of third-world countries. The same sort of concentration of wealth was witnessed before the Great Depression. Bush/Cheney have brought us to the precipice. McCain/Palin would send us over. But what does m'Lady care? She'll be safely ensconced in one of her European villas. Must be nice to have a spare country or two to retreat to. We've only got this one, and we're taking it back.

[Tigercat75]

When I listen to this entire BS coming out of the mouths of those supporting McCain, it's very important for our country to vote Sen Obama has the next POTUS. Most McCain supporters don't understand basic economics. It's very simple: Joe the plummer will not have a business unless he has customers and if the customers can no longer afford his services, the business will not make money; plain and simple. People are loosing their jobs, their homes, and life saving under this administration and same will happen if we allow McCain and Palin in the White House. This basic principle of economics applies to all small business in the US. I have yet to see a small business keep their doors open on the BS McCain camp is speaking of. Americans let us show the worlds that we are not as stupid as the McCain’s staff want us to be. We don't need another four years of stupidity!!!

[PhyloSeFiser]

Ms. de Rothschild, according to the nonpartisan Tax Policy Center, your guy, McCain, is planning on 5 trillion dollars of additional spending over the next 10 years, while Obama is planning an increase in spending of 3.5 trillion dollars.

The big difference, aside from prudence, is that much of McCain's new spending goes to the rich in the form of tax cuts. Obama's spending goes to help out the middle class by tax cuts, creating green energy jobs, investing in infrastructure, and improving education and health care.

Do you really believe that spending more money on the rich is the way to fix the economy? Do you really believe that rich people are going to create jobs even though the middle class won't have the purchasing power to create the demand to pay for the jobs? Do you really believe that?

Rich people don't create jobs out of the goodness of there heart. Jobs are created when there is demand for goods and services. We need to focus on building the purchasing power of the middle class. That will not happen by giving more tax breaks to the wealthy. Despite what you claim that is a philosophy that has proven NOT to work.

By the way, the super rich pay such a high percentage of the tax burden because they have at least that much of the wealth in this country. Fair is fair, my dear.

[loper2008]

Is this woman for real? I don't take economic advice from any woman with the title "Lady" before her name.

[abigail1]

anyone else notice that she misspelled Gallup poll?

[L3ftofC3nter]

It's the British spelling of Gallup-LOL!!!

[albanaeon]

Will someone please send this lady a report on the actual distribution of wealth in this country. I get so tired of hearing how much taxes the rich are paying and how little the poor are. Simple point of if you have most of the money, you'll pay most of the taxes. The poor don't pay much since they don't have much money to pay. And I love how much more the rich paid in taxes under Bush ignores how astronomically there wealth has grown these eight years while everyone else has stagnated or worse. Get some facts lady...

[Dynamohum]

This woman just proves how twisted the logic of the rich Stepford Wives is. "We want money, we want all your money, and we won't be happy till you're starving and we're rolling in vats of $100 bills.

[ChunkyMunky]

Here is the difference. The Democrats want to give ME money. The Republicans want to give my boss money so he can decide if he wants to give it to me.

[Ensentium]

Chunk,

do you deserve the money?

[latituded520]

Does the boss?

[ChunkyMunky]

I like money. I would like to have more of it.

[BertrandRussell]

Hmm... does Paris Hilton deserve the money she has access to?

Hmm... does laissez faire capitalism distribute economic benefits equitably?

Hmm... is pure profit motive the only source of social good?

Such weighty questions.

[ProfessorDuh]

Does your boss deserve it more than you?

[MadeinAmericaProud]

What chuck is saying he does not drive on tax payers roads, bridges, street lightsand street cleaners.. He does not need police officers, judges and public defenders, school teachers, public hospitals,

25 millions manufacturings jobs since Richard Nixon have transferred to 14 countries the biggest to communistchina. the republicans have destroyed the manufacturing industry and now have the tax payers have to once again bailout the financial sector.

The financial sector have not created jobs only destroyed the middle class workers. The reduce bank teller jobs and gave us a machine to use. Young American don't have those entry jobs in banks. They keeping finding ways to steal money from using credit cards and now they are targeting younger people knowing they don't have a job to pay back. That is also fraud.

[Ensentium]

Chunky... if you were a good worker, you wouldn't have to worry about your boss giving you money. Now that the your Beloved Government Controller has taken your bosses money away...you better watch out cause she's not going to have enough to cover payroll.....and since you're more concerned about what YOU GET instead of how hard you work to EARN the money… you’re probably on the bottom 10% of key workers. Because from my experience… entitlement talk like that generally comes from losers!!!

[Lotus19]

You are clueless to what's happening to workers all across the country. At one time it was the unproductive workers that were being laid off. That no longer applies. And how is what he's saying different from the 'entitlement" that upper management believes they deserve at the expense of workers, taxpayers, and shareholders?

[ChunkyMunky]

I earn a decent wage and I was with you up until you called people who earn less money than you "losers." My point is that I want you to pay me some of your money too.

[Ensentium]

Heck yeah! the heck with all the bosses. I don't want to have to earn a fair wage anymore... I just want to be given everything!

[Lotus19]

I've worked for over 30 yrs. and have never been handed jack. A year before collecting full retirement benefits I'm faced with a layoff and having to leave hundreds of thousands on the table...and this is with a company that just issued a press release about their BILLIONS of dollars in profits and growth.

The WORKERS and the SHAREHOLDERS built the company...not the "bosses" who are getting millions in bonuses and golden parachutes.

The jobs are being sent overseas, and the job that are remaining (because a profitable company does need workers) they are going to be done by contractors who have no benefits or anything. Thank goodness for the union..they are the only ones that a protected job but they're are being reduced through attrition and before you know it ALL jobs will be done for lower pay by people with no benefits...and again..this is at a PROFITABLE company whose greatest selling power is their goodwill public image and how much they care about "working parents". It's disgraceful.

But go right ahead and defend those practices...because the more of us that lose our jobs, the more smaller businesses will see their businesses tank.

[MadeinAmericaProud]

The Mcain family have lived off tax payers before John S. McCain was born.

McCain has run for president for the 3rd time. He went broke early in the primaries. He had 5 months to get organized to include a VP pick. He waited until the last minute to throw on us the palin family. If white people in Alaska don't know palins very well, then in the lower 49 states we really don't know her only Tina Fey on SNL.

You would think by now he would know how to do much better in his campaign being much more organized. This is Obama first time running for president. His votes are not just coming from black voters. Its is all Americans in large numbers. On the republicans side not so much.

[ProfessorDuh]

And here's a news flash. Your boss DOESN'T intend to give it to you. You don't wrangle yourself stupid European titles by giving other people their fair share.

[Lotus19]

Hell..the banks are now having to be forced to ease their grip on the money they were handed during the bail-out. They don't want to use it to ease the credit crunch.

[titimo]

Wrangle my foot. An American with a European 'royal' title is a contradiction in terms. I'd peg Lynn as the quintessential social climber, nothing more.

[dartagnan]

Conservatives believe the rich are the foundation of the economy. They see the economy as a giant upside-down pyramid balanced precariously on its tip. Progressives believe the middle class and working class are the foundation of the economy. They see the economy as a pyramid resting on the broad base of the middle class. Now, which image seems to make more sense?

Or to put it in fewer words: Republican trickle-down economics is full of sh#t.

[albanaeon]

So basically we are faced with an economic plan that might tank the economy or one that has been shown repeated to actually tank the economy. Gee, I wonder what I will be voting for...

[Ensentium]

It's not only that. Think about his latest stump speeches along with what he's been saying all along!!! He wants to fundamentally change America! Change Change Change. Have you liberals thought at all what that means? Let me ask you a few questions: Do you change something you love? ..... NO! You want to improve it but you certainly don't want to "fundamentally Change it"!!!!

Do you want to change something that you feel is so completely flawed? yes, of course. So here here you have it. BO and the left believe AMERICA is so fundamentally flawed that it needs to be changed. AMERICA is GOOD! America is a GREAT COUNTRY. No other country in the History of the world... or for that matter and 50 countries combined has done more good on this earth than AMERICA... and we are about to change that! Thank you for handing this change down to my now spoiled, entitled, restricted speech, restricted liberty, but completely equal children!!!

[Mr-Mikey]

you lose more and more credibility as you post. Sometimes it's better to shaddup rather than continue to spout ... Quit while you're ahead.

Fact: "You're either with us, or against us" mentality in the last 8 years has ruined our world image.

Fact: Our "Allies" as a majority have nothing to do with us if they can help it..

Fact: What ever good we accomplished was erased when we butchered a Sovereign nation called Iraq.

Fact: It will take many administrations to become a "World Power" again.

You don't become a world power by having nukes, You do it through the greater good you do. An that is erased by wanton destruction and carnage. Iraq wasn't the right thing to do, we toppled a regime, destroyed a government, and left an entire area in chaos. Our Troops died for... an I love calling it .. "Daddies War: 2nd act.."

Obama is the voice of reason and of sensibility to calm our troubled neighbors and allies. He's the calming force to sooth all those who would be fearful of an unstable LS. He is also firm in his decision to get this country back on track.

[MadeinAmericaProud]

don't look now but we the super power tanked when destroyed the manufacturing industry sector.

We the tax payer have been paying the private for profit companies during business with local and federal governments. The prisons and military gets a large portions.

[ellocoliberal]

Freedom of Speech. Otherwise, you wasted a lot of space and keystrokes.

Clearly, you have an enlarged, all out of proportion opinion of yourself. Maybe you have so much money that you are clearly better than the rest of us that you pass your judgment on. Seems to be your particular mind set.

Yes dear, lets continue to praise, protect and glorify you rich, greedy pigs. That's what made america great, right?

It would be nice if us working americans could get the chance to "trickle down" all over you right wing pigs. Smile and pretend it rain, manna from heaven, or a typical right wing fetish position.

Take your money, stocks, greed, ego, and lack of dignity and decency, and move to another country and then refuse to pay your taxes over there.

Hey genius- did Obama's economic policy tank our entire economy? (despite your brilliant sugar daddy's warnings- what a laugh- he was only repeating what other people of actual intelligence had already been saying honey.)

or did McSame's economic policy lead to the melt down?

One final thing "madame"- you DON'T read any better, longer, or with more comprehension than me, or any other person you think unable to get through all of your awful post.

It was dismal, and NOT worth reading, but it wasn't too hard to get through all of your dreck, tripe and written offal.

We are all hoping on karma to kick you hard where you have earned it.

[njm50]

RELAX GIRL, you seem s0 angry and upset. OBAMA 08, TEXAS.

[urweatherman]

I am interested to see how relaxed the folks will be when they don't get the handouts that they think they are going to get.....now that will be fun to watch!

[TaiTai]

Nobody in the middle class is expecting a "handout". A tax cut is not a "handout" - just ask the top 1%. Did it occur to you that giving the middle class back more of their money could also help the economy?

[urweatherman]

More evidence to consider: We all know that Congressional actions take time to work. It is a fact, that the economic boom that we experienced late in the 1990s was a direct impact of the actions of the Republican majority that took over earlier in the 90s decade. On the flip-side, it is also evident that our current economic disaster is a direct result of Democrats making gains in Congress earlier in this decade and culminated with the take-over in 2006. Lets face it people and realize the facts....Democratic economic policies do and will always be disastrous for our country. Watch out and run for cover if Obama wins this election. We will face disaster like we have never known before!