Election 2008: Political economics 101

Posted on 23 October 2008 by Jacob Jasperson

With the election drawing near, and many voters still undecided (even here at Marquette) the Warrior thought it would be a good idea to shed some much needed light on the two candidates, particularly their economic policies and the impact it would have on Marquette students. All information and statistics has been taken entirely from the two candidates websites, unless otherwise noted.

Perhaps the focal point of Senator Obama’s economic plan has been tax cuts for the middle class, not the wealthy. In fact, it’s in the first paragraph of his economic plan, along with stagnant wages and rising prices. There are several points to Sen. Obama’s plan; in the interest of time, I chose the three points that I thought most directly pertained to Marquette students:

Windfall profit taxes on big oil
$50 billion to jumpstart the economy
End tax breaks for companies shipping jobs overseas

The windfall profit tax he proposes would tax excessive profits that oil companies make in order to fund his $1,000 emergency energy credit. This credit would be given to “American families” (though this term is not clearly defined) to help pay for rising energy bills. While the $1,000 may be a nice supplement for families, the tax used to pay for it would drive up the cost of oil, leaving American families with higher bills to pay in the end.
Senator Obama’s $50 billion plan to jumpstart the economy is actually a plan to protect one million American jobs that are in danger of being lost, according to his website. It is broken into two parts; $25 billion for a State Growth Fund, and another $25 billion for a Jobs and Growth Fund.
Senator Obama also mentions later in his website the need to create a National Infrastructure Reinvestment that would be in charge of funding road, bridge, and other infrastructure repairs. Senator Obama plans on allocating $60 billion over three years, which would negate the usefulness of the Jobs and Growth Fund (designed to do the exact same thing, as per his website).

The last point I want to talk about is a little misleading. Senator Obama wants to end tax breaks for companies that ship jobs overseas. While I agree that we need to encourage producers and manufactures to keep jobs in America, I don’t think we will be successful by taxing them more than is fair. The tax break Sen. Obama is referring to is the difference that companies need to pay when they ship their products from other counties into the United States. If the tax on the country of origin is less than the tax rate in U.S., the company must then pay the difference between the two – but not the whole tax. Ending this practice would in essence be an over taxation, and would discourage trade with the United States. On the other hand, one part of Senator Obama’s plan that makes a lot of sense is his worker retraining program. He wants to increase funding for worker retraining, which will be crucial in this age of globalization.

Much as the focal point of Senator Obama’s plan is middle class tax reform, Senator McCain has preached tax cuts across the board, in conjunction with decreased government spending. This is perhaps the single largest ideological difference between Senators Obama and McCain – big vs. small government. The three main points of Senator McCain’s plan that I want to talk about are:

Government reform
Better Healthcare
Supporting Small Businesses

Government reform has been a hot button topic in the campaign cycle. Senator McCain states on his website that he wants to bring the budget to balance by the year 2013, before the end of his first term in office. He cites several ways of doing this; reasonable economic growth through lower capital gains tax rates and corporate tax rates (to keep jobs here in America), a one year spending freeze on all non defense, non veterans discretionary spending, and fiscal discipline. The one year freeze I find particularly interesting; a good idea perhaps in theory, with question marks on the application side.

Another hot topic in the campaign has been healthcare. Senator McCain seeks a market approach to fixing healthcare; he wants to lower costs through competition and technology improvements. He also specifically cites smoking on his issues page, stating that he wants to increase smoking cessation programs – perhaps an unpopular idea among hard line conservatives, but one I find to be intriguing. He also talks about transparency in healthcare costs. This is something you can appreciate if you’ve ever received a hospital bill.

Finally, Senator McCain talks about supporting small businesses. One of the main points he makes in his small business section is that by lowering the costs of energy, we can eliminate much of the overhead these small businesses pay. He goes into greater detail in his energy section, but does strongly support drilling domestically for oil, along with increased nuclear energy and clean coal. Senator McCain also supports decreasing the corporate tax rate from 35% to 25%, a move he says will help American stay competitive in this global economy. While I agree lower corporate tax rates are essential for growth here in the U.S., it certainly isn’t essential for small business growth, as many of these businesses are organized as a sole proprietorship or LLC. He also takes time to mention free trade in his small business section, which he feels will open the United States up to more business opportunities, rewarding the small business owner looking for that niche.

Senators Obama and McCain have economic plans as different as any I’ve ever seen; both have good points, and both have bad points. We have two very different approaches to solving our economic crisis, and you as the voter get to decide which one is the best. Don’t take that responsibility lightly. Get informed on the issues that matter to you; the economy, trade, labor, social issues, whatever you are passionate about. Apathy in life will only get you so far; to quote an episode of the West Wing, “Decisions are made by those who show up.”

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