Tax Cuts for the Leisure Class

Well, the Obama administration gave in to Republican demands to extend the Bush era tax cuts for all wage earners, including to the insanely rich which alone will cost $700 billion.  The President argued that the compromise was necessary so that taxes would not rise on the middle class at the end of the year.  Of course the Republicans held the unemployed hostage proclaiming they would let jobless benefits expire for the long-term unemployed unless Obama handed over $700 billion (to be added to the national debt) for the leisure class.  It worked, and the Republicans with smug smiles say this news is encouraging.

Here’s the thing – Republicans have said that they could not support the $56 billion unemployment extension package unless it was paid for by spending cuts.  Yet in the same breath, they demand $700 billion in tax cuts for the millionaire and billionaires among them, (their preferred customers) without a plan to pay for it.  Just charge it to the national debt they say.

As the NY Times reported in the article Tax Cuts Suggests New Path for Obama, the entire package of tax relief will cost $900 billion – call it another stimulus package.  The Republicans have claimed that the tax cut for the wealthy will create jobs.  Now that they have it and there is no more uncertainty, the American public regardless of party affiliation needs to hold the Republicans accountable for job creation.

Who is McCain, Reagan?

In a recent interview in the Washington Times, McCain had this to say about the Bush years: “spending, the conduct of the war in Iraq for years, growth in the size of government, larger than any time since the Great Society, laying a $10 trillion debt on future generations of America, owing $500 billion to China, obviously, failure to both enforce and modernize the [financial] regulatory agencies that were designed for the 1930s and certainly not for the 21st century, failure to address the issue of climate change seriously.”

McCain is frantically trying to distance himself from Bush the younger. Keep in mind that he would like to be compared to Ronald Reagan.

Lets examine some of McCain’s comments:

“laying a 10 trillion debt on future generations of Americans” – It was John McCain’s hero, Ronald Reagan who laid the foundation for the Republican tradition of massive deficit spending.  Zfacts.com has a short analysis of the National Debt that illustrates the point.  Earlier in the campaign, when asked how he planned to balance the budget, McCain said he would follow the example of Reagan, leaving out the small detail that the federal deficit tripled under Reagan.

In an detailed analysis of the US National Debt, Steve McGourty demonstrates that when Reagan took office, the percentage of debt relative to GDP was at 33%.  In his 8 years as President, he managed to grow the debt to 51.9% of GDP, a 64% increase.  Since 1989, the only period during which the debt decreased occurred under the Clinton administration.  By the time Clinton left office, debt as a percentage of GDP dropped 10%.

…”growth in the size of Government (under Bush has been) larger than any time since the Great Society.”  What he didn’t say was that revenue during the Johnson years exceeded spending.  As McGourty shows, all Democratic Administrations from Johnson forward took in more in revenue than they spent.  The reverse is true for all the Republican administrations since 1969.  Under Nixon, Ford, Reagan, Bush I and Bush II spending exceeded revenue.  McCain should be citing the Great Society, or the Clinton administration as a model for responsible fiscal policies.

On the point of  “failure to both enforce and modernize the [financial] regulatory agencies that were designed for the 1930s and certainly not for the 21st century” remember that McCain has been against regulatory policies his entire career, even saying he is “fundamentally a deregulator.”  But now, amid turmoil, McCain turns to regulation.

And finally, he bashed Bush for “failure to address the issue of climate change seriously.”  What has McCain done for climate change?  His first order of business was to select a running mate who believes the human impact on global warming is overstated.  In an article on Bloomberg.com Edward Chen points out that McCain has made global warming a priority, but his voting record on environmental issues has been abysmal – voting for pro-environment legislation only 25% of the time.  He favors reducing carbon dioxide emissions by 65%.  For the record, Barack Obama’s plan calls for reducing emissions by 80%.  Which plan takes a more serious approach to global warming?

McCain is no Bush – ok, I’ll give him that, even though his voting record suggests otherwise.  But he wants to be compared to Ronald Reagan, so here is what we could expect were McCain to fashion his policies after his hero: massive defense and deficit spending; a ballooning national debt; a dismissive approach to environmental concerns – a la Sarah Palin – see Reagan on the Environment; more deregulation and questionable foreign policy dealings – remember the Iran-Contra affair?

Who is McCain?

McCain Sways Few at Belmont U

I confess to not having watched the full debate last night.  I would have watched, but got too busy with work and had to turn it off.   I did read the full transcript of the debate, or I should say “town hall” meeting, but to be honest, what I read and what little I saw, disappointed me.  I was hoping to learn something new, anything – maybe a few details about an old proposal, but what I read was more of the same stuff rehashed from the first debate.  Given the state of the economy and the urgent need for leadership, I expected more.  Maybe the format was wrong, or the questions too general.  No matter, round two won’t have much impact on the undecided voter.

In this town hall style meeting, the candidates got some softballs tossed from the audience.  Alan started off with a question about the economy.  Obama had the better response.  He issued the standard attack on McCain’s support for failed policies and mentioned an intriguing civilian works project that sounded very much like FDR’s CCC. He argued that we needed to fix our energy system, but failed to say how, though he would provide some details later.  McCain said we had to end our dependence on foreign oil and “stop sending 700 billion a year to countries that don’t want us very – like us very much.”  He botched the response, but there is truth to the assertion that countries don’t always want the US meddling in their affairs.  The country we set out to “liberate” resents our presence.  And the point McCain was trying to make – that we are not much liked by oil exporting countries, unfortunately applies to other countries around the globe.  Look at the mess Wall Street and deregulating politicians have made of the US economy and the impact this has had on global markets.

McCain decried the national debt, but failed to mention that his hero, Ronald Reagan, laid the foundation for massive and unprecedented deficit spending that has since spiraled out of control.  Under Reagan, The US National Debt increased 200% from 1 trillion to 2.6 trillion.  Clinton got spending under control in the 90’s, cutting the growth rate on the national debt to just 1/3 of 1 percent borrowing 18 billion in his last year in office.  With Bush the younger, the national debt ballooned.  GW Bush borrowed 133 billion in his first year in office.  “My friends”, McCain’s plan, far from sane, offers more of the same – massive tax cuts across the board that disproportionally favor those who are not in need.

On the question of the next Treasury Secretary, can we dispense of the notion that a billionaire can serve in the best interests of the Middle Class?  Warren Buffet – I’d rather it be Jimmy Buffet.  Better yet, Bruce Springsteen, the Boss; now that’s a name that could calm nervous investors and restore confidence in our markets.

What’s eating John S. McCain?  He was a little snarky and abrasive, didn’t you think?  When responding to the question of who should be Treasury Secretary, McCain said to Tom Brokaw, “not you”.  And later he referred to Obama as “that one”, while constantly addressing viewers as “my friends” exactly as Ronald Reagan did in many of his addresses.

Did anyone get what McCain meant by “we’re the best exporters and the best importers”.  Best exporters of what, jobs?  Best importers, of what, international brain power to fill the void caused by the lack of investment over time in the hard sciences?

McCain’s worst moment came when he refused to prioritize the issues of health care, energy and entitlement reform.  He said we can do all at once.  I thought he was supposed to be a straight shooter.  Wait, I guess that would be S. Palin.  I don’t know anyone who believes it is possible to simultaneously work on three priorities.  But didn’t McCain invent the Blackberry, the ultimate multitasking tool?  Obama set his priorities as energy, health care, and education.  These are not mine, but at least he has priorities.

McCain also fumbled a question about what sacrifices Americans should make.  He said we need a spending freeze across the board – except for defense, Veterans Affairs, and other vital programs.  Explain to me how this is an across the board sacrifice?  I don’t think McCain’s hand was “firmly on the tiller”  when he said “the security of our young men and women who are serving in the military are my first priority, right after our nation’s security.”  I don’t think that came out right, but if it did, that’s twisted, if you ask me.  Maybe this is the way a military mind works, but I don’t think you have to put country ahead of people – can’t we agree that people are country?

McCain ended the night with a nostalgic reference to himself in the past tense “…when times are tough, we need a steady hand at the tiller and the great honor of my life was to always put my country first.”  I think it’s time to retire the tired slogan and the cryptic naval metaphor.  Do you know what a tiller is?  I had to look it up.  If you don’t know, it’s the lever for moving the rudder to steer a boat; interesting, but all that came to my mind was the steady hand taking cash out of the register till.  Does he focus group any of this stuff?

McCain’s performance was anything but steady.  Obama on the other hand, had another solid debate round. McCain should feel relieved that he only has to face Obama once again.   Round 2, Obama.

Obama: A

McCain:  C-

Read the complete transcript of the second presidential debate and judge for yourself.