(SOURCE: http://www.ravibatra.com/obamamccain.html)
Recently, I made two YouTube Videos about the American Economy and the Presidential Candidates.
McCain Vs. Obama on the Economy and American Economic Debt and Deficit
Here are the Transcripts:
McCain vs. Obama on the Economy
by
Ravi Batra
Table 1: Increase in Family Income
Bill Clinton (1993-2000) $8,600
G W Bush (2001-2006) - $990
| President | GDP Growth | Job Creation | Manufacturing Jobs |
| Clinton (1993-2000) | 3.7(%) | 23 million | 450,000 |
| Bush (2001-2007) | 2.8(%) | 5 million | - 3.2 million |
Source: Economic Report of the President, 2008
Table 2: Trust Fund Data: Tax Rates for Self Employed Persons
Year | Tax Rates (in percent) |
1981 | 9.3 |
1982-83 | 9.35 |
1984 | 14 |
1985 | 14.1 |
1986-87 | 14.3 |
1988-89 | 15.023 |
1990 and later | 15.3 |
Source: Social Security administration: www.socialsecurity.gov
Thank you Dick for your introduction. I am an economist by profession and an independent voter. In the past I have voted for the Democrats, independents and Republicans in elections, and I feel I can take an objective look at the economic plans offered by John McCain and Barack Obama, especially their tax policies. I will use facts from this book to form my opinion. This book is called The Economic Report of the President, and appeared in early 2008.
Please take a look at Table 1. First, under Bill Clinton family income soared by $8600, and under Bush it has actually declined by $990. This information is on page 266 of the president’s own report. Second, under Clinton more than 23 million jobs were created and only 5 million under Bush. This information appears on page 280 of the president’s report.
Why is job creation so strong under Bill Clinton and very poor under George Bush? After all, GDP growth under the two presidents is not that much different—3.7% vs. $2.8%. So the economy expands under both presidents, yet Clinton created 23 million jobs while bush only 5 million. And with manufacturing, Clinton generated almost half a million jobs, whereas bush has actually destroyed over 3 million such jobs. What is the problem?
There are two reasons. First is outsourcing. Because of Bush’s tax relief to corporations that ship jobs overseas, American multinational companies now mostly hire workers abroad; so American output still rises but few jobs are created at home. Thus, one reason for poor job creation under Bush is the vast growth in outsourcing.
The other reason is a huge rise in taxes on small business. The Republicans are right when they say raising taxes kills the economy and jobs, but they forget that they are the ones who raised such taxes. This perhaps comes as a shock to you. “ What! The Republicans raising tax rates, and that too on small business?†Nobody would believe that. Aren’t they the party of tax cuts? They are, indeed, but only for the wealthy. They have crippled the small business person with the largest tax rise that occurred on self employment under President Reagan. Please take a look at Table 2.
As you can see, in 1981, when Reagan became president, the self-employment tax was only 9.3 percent and remained more or less the same until 1983. It jumped to 14 percent in 1984, and kept rising until 1990, when Bush senior was the president. So such a giant rise in the self employment tax occurred under the watch of Republicans. This information comes from the Social Security administration.
There is something else you should know. The tax increase was proposed by a commission headed by Alan Greenspan, John McCain voted for it in 1983, and Reagan signed it into law. All of them were prominent Republicans. How strong was this tax rise? It rose from a factor of 9 to 15 or by 66%. Can you even imagine a 66% tax rise? Such a vast tax increase has to kill the jobs machine that small businesses are.
Historically, I find that in general the Democrats create jobs, while the Republicans destroy them. President Hoover, who created the Great Depression, after all, was a Republican. Then how come the Republicans are known as a party of tax cuts? Yes, they indeed cut taxes for the rich, but they have raised taxes on the middle class ever since 1983. And now they are also the party of outsourcing that is further killing American employment.
John McCain wants to cut taxes for corporations and the rich again, but says nothing about the huge self-employment tax that he voted for. Obama wants to cut income taxes for the middle class while raising them on the wealthy.
We all hate taxes, but like death they are inevitable. No government can live without them. But there are good taxes and bad taxes. Bill Clinton raised taxes on those who can afford to pay them, while John McCain voted to raise taxes on the middle class. Clinton created more jobs than Reagan, Bush I and Bush II combined. History shows that Obama’s middle class tax cut will create millions of new jobs and raise family income, while McCain’s tax cuts for the wealthy will do what such cuts have done under George Bush—they will destroy millions of manufacturing jobs, and reduce family income even more. My humble request to Mr. McCain is this: please reconsider your giant tax increase for the middle class. My humble request for Mr. Obama is to add a small cut in the self-employment tax to his plan, from the current 15.3% to 12% over two years. After all, small businesses don’t outsource jobs; they create them.
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The Next Video:
Debt and Deficit: McCain, Clinton and Bush
By
Ravi Batra
September 23, 2008
Table 1: Poverty Rise under Various Presidents; 1980-2008
President ..............................Jump in Poverty Figures
Reagan...................................+3 million
Bush I......................................+ 6 million
Clinton......................................- 6 million
Bush II....................................+ 5 million
Source: The Economic Report of the President, 2008.
Figure 1: Federal Deficits—Reagan, Clinton and Bush
Source: Global Policy Forum
Figure 2: National Debt since WWII
Source: zfacts.com, and The Economic Report of the President, various years.
Figure 3: Our Federal Debt Today
Source: MarkTaw.com
Hello friends. It is now well known that the federal deficit and debt have been getting out of hand over the last 30 years. It all started under President Reagan when he decided to slash the income tax drastically, while raising the tax rates on the middle class. The top-bracket tax rate fell from 70% in 1980 to 28% by the end of Reagan’s second term in 1988. At the same time the self-employment tax soared from a factor of 0.9 to 0.15. Thus the self- employed small businesses saw their tax rate jump by 66%--yes indeed 66%. That is why, you see, Reagan transferred the tax burden from the wealthy to the middle class, because I believe that small business persons belong to the middle-income group.
Incidentally, John McCain voted for the vast rise in the self-employment tax in 1983. This was his first major vote, and he used it to raise this middle-class tax by as much as 66%. I repeat this figure because I don’t understand how McCain did this and still claims that he has been a friend of small business people. If you don’t believe me, just look at federal archives for 1983.
What did Reagan’s policy of tax-transformation do to the federal budget deficit and debt? Of course, they both soared. Reagan and his advisers had foreseen a sharp fall in the deficit, but Reagan’s vice president, George H. W. Bush, who had earlier called such policy voodoo economics, knew better. His warnings came true. As the deficit soared, GDP growth fell below the historical norm, and poverty began to rise.
Then came Bill Clinton in 1993, and he raised the income tax rate to slash the deficit, which fell sharply, while GDP growth went up. So poverty figures began to fall under Clinton. The moral of the story is that when the income tax rate fell, the deficit and poverty rose, and when it went up, the deficit and poverty fell. History shows that high income tax rates are good for the economy, while high middle class taxes cripple small business and hence the economy.
No government can live without taxes, but the Democrats tax those who can afford to pay them, while the Republicans tax the poor and the middle class. I prefer the Democratic way, because it is not only fair, it is also good for the economy.
Bush II, the current president, repeated Reagan’s folly and cut the income tax rates again. So the results are the same. While both the federal deficit and debt have soared, poverty is back to where it was under Bush I. Please take a look at Table 1. From 1980 to 1988, the number of people living below the poverty line went up by 3 million under Reagan, and then another 6 million by 1992 under Bush I. Clinton slashed poverty figures by 6 million, and now Bush II has brought them up again by 5 million.
So now the federal debt and deficit are out of control. Please take a look at some charts. Figure 1 shows how it all started, how the deficit jumped from Carter to Reagan, then fell under Bill Clinton and now is sky-rocketing.
Figure 2 reveals how our debt fell under every president from Truman to Carter, and then started to rise under Reagan, fell again under Clinton, and is now sky-rocketing. Finally figure 3 displays where our federal debt stands from 1940 till today. It has grown tall, taller and the tallest—at close to $10 trillion today. It cannot go on like this forever. The Bush borrow-and-spend policies must be reversed before the economy collapses.
While Obama’s support levels have not increased much in recent weeks, a growing percentage of his backers now say they support him strongly. Currently, 74% of Obama voters say they support him strongly, up from 65% in mid-September. A much smaller majority of McCain backers (56%) say they support him strongly, which is largely unchanged from mid-September.