by Frank James
Sen. John McCain has gone after Sen. Barack Obama for the Democratic nominee's use of the words "spread the wealth" when the senator from Illinois explained his tax plan to Joe "the Plumber" Wurzelbacher.
I just happened to be reading over the weekend an interesting New York Times Magazine piece by writer David Leonhardt from August on Obama's economic philosophy and came across the phrase "spreading the wealth," a usage which predated Obama's Joe-the-Plumber encounter.
Obama is quoted using the words in the article. Instead they were used by a NYT magazine editor who wrote a subhead that appeared over part five of the article, a lengthy passage describing a key piece of Obama's plan, the idea that he wants to use the tax code to reverse some of the growing income inequality that has become more pronounced in the last decade which has seen the rich get richer as the middle class and the poor have seen their incomes stagnate.
The section of the article really provides a good understanding of Obama's concern that President Bush's tax cuts helped to accentuate inequality, especially since little to nothing was done to decrease the burden of the payroll tax on lower and middle-income Americans. Because of that increased payroll-tax burden, the tax code has become less progressive.
As Leonhardt explains, Obama wants to reverse the trend of growing inequality by providing credits to lower and middle income Americans that would offset some of those payroll taxes. Increasing taxes on the very rich would be the way he would partly pay for such credits.
The following lengthy excerpt explains what Obama wants to do.
V. Spreading the Wealth
The most tangible way that today's economy feels unfair is the lack of real income growth for most families. Earlier this year, when I interviewed Obama during the primaries, he was careful to say that he didn't think President Bush deserved all that much blame for the stagnant incomes of the current decade. Income growth for most families began to slow in the 1970s, and the causes of the great pay slowdown were complex. Obama didn't name them all, but a decent list would look something like this: new technologies that have made some blue-collar work obsolete; a slowing in the nation's educational attainment; the shriveling of labor unions; the increase in one-parent families, which are far less economically secure; and the rise of other countries that have huge low-wage work forces.
What Obama blamed the current administration for, he said, was aggravating these trends with the tax code. To a large extent, Obama's own economic agenda revolves around reversing Bush's tax policies and then going a bit further in the other direction. Here, more than in his regulatory approach, Obama stands on the left side of the Democratic Party, but not exactly in the traditional tax-and-spend ways.
It's helpful to start with a little history. When Reagan was elected, in 1980, tax rates on top incomes were so high that even liberal economists now say the economy was suffering. There simply wasn't enough of an incentive for rich people to start new companies or expand existing ones, because so much of their profits would have gone to the federal government. Someone making the equivalent of $5 million in 1980 -- in inflation-adjusted terms -- would have paid a combined federal tax rate of almost 60 percent, according to research by Emmanuel Saez and Thomas Piketty, two academic economists. (These calculations cover not only income taxes but also payroll taxes, capital-gains taxes and others.) Reagan, by the end of his second term, had cut this rate to about 35 percent. Clinton raised it above 40 percent, but the current President Bush has reduced it to 34 percent. So over the same period that the rich have been getting much richer before taxes, their tax rates have also been falling far faster than the rates of any other income group.
Dating back to Reagan, Republicans have packaged tax cuts on high earners with more modest middle-class tax cuts and then maneuvered the Democrats into an unwinnable choice: are you for tax cuts or against them? Obama, however, argues that this is the moment when the politics of taxes can be changed.
To do this, he is proposing tax cuts for most families that are significantly larger than those McCain is offering, along with major tax increases for families making more than $250,000 a year. "That's essentially a major part of our economic plan," Obama said. "But it's also a political message." Economically, he is trying to use the tax code to spread the bounty from the market-based American economy to a far wider group of families. Politically, he is trying to drive a wedge through the great Reagan tax gambit.
The Tax Policy Center, a research group run by the Brookings Institution and the Urban Institute, has done the most detailed analysis of the Obama and McCain tax plans, and it has published a series of fascinating tables. For the bottom 80 percent of the population -- those households making $118,000 or less -- McCain's various tax cuts would mean a net savings of about $200 a year on average. Obama's proposals would bring $900 a year in savings. So for most people, Obama is the tax cutter in this campaign.
If there is a theme to the Obama tax philosophy, it's that the tax code is not quite as progressive as you think it is. Most of the public discussion about taxes tends to focus on the income tax, which taxes the affluent at a considerably higher rate than anyone else. But the income tax doesn't take the biggest bite out of most families' annual tax bill. The payroll tax does. And even as the federal government has been reducing income taxes over the last few decades, it has allowed the payroll tax, which finances Social Security and Medicare, to creep up. That's a big reason that overall tax rates for the bottom 80 percent of earners have not fallen as much as rates for the affluent.
Obama's second-most-expensive proposal, after his health-care plan, is the equivalent of a $500 cut in the payroll tax for most workers. (It is actually a credit that is applied toward income taxes based on payroll taxes paid.) In a speech this month in Florida, he proposed that the cut take effect immediately, in the form of a rebate, to stimulate the economy. For most workers, it would be the first significant cut in the payroll tax in decades, if not ever.
The other way that he would cut taxes involves a series of technicalities. But since the campaign began, Goolsbee has been arguing that those technicalities offer one of the best glimpses of how Obama thinks about the tax code. Right now, several big tax breaks that sound broad-based -- like those for child care and mortgage interest -- don't always benefit middle-income and lower-income families. Another example is the Hope Credit for college tuition, a creation of the Clinton administration. Obama wants to more than double the credit, to $4,000. More to the point, he would make it "fully refundable." As a result, a family with an income-tax bill of $3,000 wouldn't merely have that bill eliminated; it would also receive a $1,000 check. Increasingly, the income-tax system becomes a way to transfer money to poor families.
All told, Obama would not only cut taxes for most people more than McCain would. He would cut them more than Bill Clinton did and more than Hillary Clinton proposed doing. These tax cuts are really the essence of his market-oriented redistributionist philosophy (though he made it clear that he doesn't like the word "redistributionist"). They are an attempt to address the middle-class squeeze by giving people a chunk of money to spend as they see fit.
He would then pay for the cuts, at least in part, by raising taxes on the affluent to a point where they would eventually be slightly higher than they were under Clinton. For these upper-income families, the Tax Policy Center's comparisons with McCain are even starker. McCain, by continuing the basic thrust of Bush's tax policies and adding a few new wrinkles, would cut taxes for the top 0.1 percent of earners -- those making an average of $9.1 million -- by another $190,000 a year, on top of the Bush reductions. Obama would raise taxes on this top 0.1 percent by an average of $800,000 a year.
It's hard not to look at that figure and be a little stunned. It would represent a huge tax increase on the wealthy families. But it's also worth putting the number in some context. The bulk of Obama's tax increases on the wealthy -- about $500,000 of that $800,000 -- would simply take away Bush's tax cuts. The remaining $300,000 wouldn't nearly reverse their pretax income gains in recent years. Since the mid-1990s, their inflation-adjusted pretax income has roughly doubled.
To put it another way, the wealthy have done so well over the past few decades, with their incomes soaring and tax rates plummeting, that Obama's plan would not come close to erasing their gains. The same would be true of households making a few hundred thousand dollars a year (who have gotten smaller raises than the very rich but would also face smaller tax increases). As ambitious as Obama's proposals might be, they would still leave the gap between the rich and everyone else far wider than it was 15 or 30 years ago. It just wouldn't be quite as wide as it is now.
But as the article indicates, Obama's economics are complicated. Because at the same time he wants to use the tax code to narrow the income gap, he has a belief in free markets that defies the socialist tag that many opponents, including Sen. John McCain and his running mate Sarah Palin have thrown at Obama in recent weeks.
And making matters more complex yet, Obama thinks President Ronald Reagan was right when it came to some things about the economy.
Another large excerpt:
Starting in the early 1990s, Obama spent 12 years at the University of Chicago, mostly as a senior lecturer on constitutional law. It was a part-time job that helped him make money while he began to build his political career. But it also happened to place him inside what is arguably the intellectual center of modern American economic conservatism, the home of Milton Friedman and the laissez-faire philosophy known as the Chicago School of economics. By all accounts, Obama didn't spend much time with Friedman's disciples at the law school. Instead, he became friendly with another crowd: liberals who had come to think that Friedman was right about a lot, just not everything.
The Chicago School believes that markets -- that is, millions of individuals making separate decisions -- almost always function better than economies that are managed by governments. In a market system, prices adjust whenever there is a shortage or a glut, and the problem soon resolves itself. Just as important, companies constantly compete with each other, which helps bring down prices, improves the quality of goods and ultimately lifts living standards.
In its more extreme forms, the Chicago School's ideas have some obvious flaws. History has shown that free markets aren't so good at, say, preventing pollution or the issuance of fantastically unrealistic mortgages. But over the last few decades, as Europe's regulated economies have struggled and Asia's move toward capitalism has spurred its fabulous boom, many liberals have also come to appreciate the virtues of markets.
One of these liberals is Cass Sunstein, a prolific law professor who sometimes ate with Obama in the open, sunlit cafeteria off the lobby of the main building at Chicago's law school. Over sandwiches in that cafeteria this spring, Sunstein told me that he didn't think that Obama arrived at the law school as an old-style liberal or departed as anything like a Friedmanite. Yet Sunstein and other former Chicago colleagues I spoke with said they believed that Chicago had helped give Obama an intellectual framework for his instincts, at the least, and probably made him come to appreciate markets more.
Obama, when I asked him, agreed that his years surrounded by Chicago School thinking affected him. He tends to assign his motives to more intimate narratives, though, and he said that his grandmother, a high-school graduate who rose to become the vice president of a bank and was the family's main breadwinner, had the biggest impact. "She had to think very practically about, How do you make money?" he told me. "How does the system work? That led me to have an orientation to ask hardheaded questions. During my formative years, there was still ideological competition between a social-democratic or even socialist agenda and a free-market, Milton Friedman agenda. I think it was natural for me to ask questions of both sides and maybe try to synthesize approaches."
There is plenty of evidence that this synthesis isn't merely a part of a candidate's inevitable tack to the center for a general election. In Obama's memoir, "Dreams From My Father," he sympathetically recounts a conversation he had with a Kenyan farmer, in which the man complains both about rich people who won't pay their fair share of taxes and about burdensome government regulations on coffee growing. In Obama's second book, "The Audacity of Hope," he goes further: "Reagan's central insight -- that the liberal welfare state had grown complacent and overly bureaucratic, with Democratic policy makers more obsessed with slicing the economic pie than with growing that pie -- contained a good deal of truth."
The partial embrace of Reaganomics is a typical bit of Obama's postpartisan veneer. In a single artful sentence, he dismissed the old liberals, aligned himself with the Bill Clinton centrists and did so by reaching back to a conservative icon who remains widely popular. But the words have significance at face value too. Compared with many other Democrats, Obama simply is more comfortable with the apparent successes of laissez-faire economics.
Sunstein, now on the faculty at Harvard, has a name for this approach: "I like to think of him as a 'University of Chicago' Democrat."
It's more evidence that Obama isn't your father's Democrat.
Comments
John Mccain won't let the wealth spread. No sir. He will fight, and fight hard to ensure that the wealth is held is as few hands as possible. It's people like his wife who deserve to control even more wealth than they do already. Who do the little people think they are? Don't they know they exist to serve and obey their betters? John McCain knows that. John McCain will ensure that the rich get richer at the espense of everyone else. That's what he satnds for, that's why he is a great Republican. This is a country for the rich. John McCain is a candidate for the rich. He will protect us from the dirty grasping poor and middle class. He'll put those peons firmly in their place. After 8 years of McCain the rich will be richer. That's all that matters.
Posted by: Plutocrat | October 27, 2008 12:18 PM
Share the wealth is what it is, simply said,it's a plan that takes money from working people and give it to non-working people. No matter how Obama wants to dress it up, it's a wealth re-distribution plan. And yes, it sounds just like Karl Marx's mantra: " To each according to his needs, from each according to his ability".
Posted by: Ryan | October 27, 2008 12:51 PM
Here's what State Senator Barack Obama had to say about redistribution of wealth in 2001:
http://www.youtube.com/watch?v=iivL4c_3pck
Posted by: Just the Facts | October 27, 2008 1:16 PM
If being a Marxist is taking from richer Americans to share with poorer Americans, then George Bush is guilty of that as well (and McCain's plans too). The rich currently have a higher percentage of income taxed, and generally the country is OK with that. You can have an honest debate on tax policy, but to throw out terms like Socialist or Marxist is just admitting you can't win an real debate.
Posted by: Karl | October 27, 2008 1:21 PM
" To each according to his needs, from each according to his ability".
Posted by: Ryan | October 27, 2008 12:51 PM
More ignorance from the right. Why must they persist in out right lies? To give to the non-working? What BS.
Posted by: bill "Hussein" r. | October 27, 2008 1:33 PM
If they believe this is marxism...that would make them fascist.
Posted by: bill "Hussein" r. | October 27, 2008 1:49 PM
"We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community. … The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and … a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate."
This quote is from McCain's hero Teddy Roosevelt, said during his New Nationalism speech of 1910. But today's standards, TR is more 'socialist' than Obama.
And who said this?
"Here's what I really believe. When you are—reach a certain level of comfort, there's nothing wrong with paying somewhat more."
John McCain, at a town hall meeting during his 2001 run for president.
Posted by: incognita | October 27, 2008 2:04 PM
Either way you argue this, you can't simply spread the wealth so to speak. Some people work very hard to build a small business into something larger. Some people are entrepreneurs and for that reason those people deserve their wealth. Taxing lower income less and high income more is unfair. The only real way to make the system fair is to have a lower income tax or no income tax on everyone and a much higher sales tax.
No tax system proposed will work except fair tax. Our current system is broken and rips off everyone from the rich to the poor. The people with all of the money are already paying most of the tax as it is. They should not be taxed more. Taxing the middle class less won't help the middle class and won't fix the economy. It does nothing more than plug a mile wide leak with a piece of tape. Do some research, fair tax is the only answer. fairtax.org
Posted by: Nathan | October 27, 2008 3:16 PM
McCain has his interpretation of "spreading the wealth." Well, here's MY interpretation!
I am one of those hard working people he talks about, and I am tired of the fact that even though the productivity of the American worker steadily increases, our wages stagnate or decrease - while at the same time, the incomes of the richest in this country have increased to a point that is far beyond obscene.
When I was a kid, my dad worked for a company where everyone got profit sharing checks a couple times a year, and a nice Christmas bonus too. When's the last time you talked to someone who got a profit sharing check from their employer? Ten years ago? Twenty? Today, most people have never even heard of a profit sharing check because "profit" is something reserved for corporate executives and shareholders - NOT the rest of us.
All that new wealth that our increased productivity helped create goes straight into the pockets of CEOs and their fellow executives.
So yeah - damn straight - I want a redistribution of wealth!
McCain says "let's create new business and new wealth." Why? Just so we can have another batch of overpaid CEOs who get rich off their employees and pay them just enough to keep them from revolting?
I'll be the first to admit that the solution to this issue shouldn't have to involve taxes - people should just do the right thing. Unfortunately the rich and greedy don't tend to do the right thing. So if it takes a change in taxes to make things right, then so be it.
Posted by: David | October 27, 2008 4:01 PM
* * * * *
"You can have an honest debate on tax policy, but to throw out terms like Socialist or Marxist is just admitting you can't win an real debate."
*
Posted by: Karl | October 27, 2008 1:21 PM
*
That's simply untrue Karl. Obambi's tax policy isn't what earns him the label "socialist." It's what he plans to do with increased tax revenues that earns him that distinction. Raising taxes for the purpose of paying for government functions is not generally considered socialism. But creating new wealth redistribution programs to be funded from increased taxes does, in fact, constitute socialism. Not only does Barack Obambi plan to keep in place every last wealth redistribution program currently run by the federal government, he plans to implement more wealth redistribution programs. His national health care program represents just one such program. One of its components sets up a Medicare-like program for people who can't afford health care insurance and do not otherwise qualify for another government subsidized health care program like Medicare or SCHIP. So, not only will we have to pay for our own health care insurance, we will have to pay for a welfare-state health care system as well. Obambi is also in favor of yet another $300 billion "stimulus package" made up of money the federal government doesn't have to spend. He also showed up and voted in favor of the $850 billion bailout boondoggle - which is the biggest and most foolish piece of corporate welfare ever conceived. In addition, he has yet to tell us how he plans to rein in the finances for that mother of socialist welfare state programs - Social Security - before it either kills us or goes bust. So you can go ahead and believe he doesn't believe in collectivization and use of the federal government as a controlling center for wealth distribution and redistribution (which is essentially the definition of socialism) but the most obvious, publicly available information already proves you wrong. Own it, Karl.
Posted by: John W. | October 27, 2008 4:05 PM
President Clinton's policies also spread the wealth. The poor got richer, the middle-class got richer, and yes, the rich got richer. I'll take that anyday. We tried it the Republican's way the last 8 years - it didn't work.
Posted by: Paul | October 27, 2008 5:06 PM
John W.,
Crack open a book and re-read the definition of Socialism.
Posted by: jo | October 27, 2008 5:26 PM
There is no way, I believe, with our current tax code that there could ever be equality amongst classes so long as there is a convoluted tiered tax system. No one will ever think all are paying their fair share so long as there are so many loopholes and right offs. I am 34 years old and have forever thought a flat tax is the only way to stop this class envy. I mean if personal income was 10% (you make $1,000 gov gets $100, you make $10,000 gov gets $1000 and so on) and a corporate of say 15% with out any tax code loopholes at all to the point of the IRS being 1/10th the beast that it is, then no one could say " I should pay less and he/she more”. Then “we the people” tell these fat cat political types "here is your budget make it work that is how everyone else lives." We need to stop fighting each other over which political clown fest we endorse and start taking care of ourselves and each other so that the government can remember it works for us not the other way around. The only right we have in this country is to fail or succeed by our own merit. Nobody owes any of us anything and so long as the country is sub-divided into tax groupings we will forever be pointing class envy fingers away from ourselves. I don't make enough to see any big difference either way so this is my 2 pennies.
Posted by: axiom | October 27, 2008 7:20 PM
What Obama’s 2001 NPR interview does is provide historical context to his recent stump remarks to Joe the Plumber—establishing not a slip of the tongue but an abiding political philosophy to redistribute wealth.
Moreover, to increase taxes to fund government programs is one thing, but to raise taxes on the upper middle class in order to send $10,000 checks to Americans who owe no taxes is quite another. It is called socialism, and America has fought wars to prevent the proliferation of this political philosophy.
Posted by: Stephen G. | October 27, 2008 8:26 PM
[This is a redo because my first reply to jo got censored.]
* * * * *
Posted by: jo | October 27, 2008 5:26 PM
*
I know perfectly well what socialism is, jo. Socialism consists of any government operation that combines: (1) collectivization of the population; with (2) either control of the means of economic production, or use of the government to collect and redistribute wealth. It doesn't have to be the Marxist brand or be administered by a totalitarian state before it gets the label socialist. A government can, in fact, practice socialism in part. The whole point of socialism is to enforce social equality regardless of whether it is accomplished by total control over the economy or through periodic confiscation of property by the government. In fact, the latter method is practiced by the "continental socialists" in Europe - France, Denmark, Sweden and Germany - to name a few, which use wealth and benefit redistribution in lieu of nationalizing all industries. The difference between us and the Europeans is that they make no bones about the fact that what they are doing is socialism. So, please, if you can't see the socialism in Obambi's political philosophy, I am sorry for you. But, in any event, don't try to buffalo me or deceive others by suggesting that I got the definition wrong.
Posted by: John W. | October 27, 2008 10:11 PM
The National Journal found BO the most liberal Senator in 2007 and that includes the Socialist Senator from Vermont - Bernie Sanders. If you are more liberal than a socialist, just what would that make you?
The articl has this inaccuacry - tax rates in 1988 at the end of President Reagan's terms was 28%, not 35%, and at the time medicare was capped. The current tax rate under President Bush is 35% plus the 2.9% for medicare.
Also, as you can see on the attached link, the rich have been paying an increasing share of the income taxes in this country
http://www.ntu.org/main/page.php?PageID=6
Another lie from the Obama campaign staff - the NYTimes
Posted by: Terry | October 27, 2008 10:42 PM
Note to webmaster: It's really hard to read large quantities of bold type. WHY DON'T YOU ALSO SET IT IN ALL CAPS WHILE YOU'RE AT IT?
Posted by: AMP | October 27, 2008 11:06 PM
Speaking of democratic economic plans - get a load of this one. Be afraid, be really afraid!!!
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081012/REG/310139971
Thie is what a REPO (REid-Pelosi-Obama) administration would look like.
Posted by: Terry | October 27, 2008 11:10 PM
Since the "Bush" tax cuts for the top 5% trickled down to workers in China, India and Mexico, etc. instead of creating new jobs here at home, the proverbial "trickle down" spigot has been closed tighter with each American job moved to other countries. As American jobs (and the paychecks that go with them) were spread around the globe, the current and future wealth of Americans was lost. Asking the top 5% to invest their tax cuts in American jobs is not asking too much. Continued practice of "Spreading the wealth " of American workers to Chinese workers will raise the living standard in China but will lower the standard of living here. With jobs being cut/outsourced instead of created here at home, where will the increase tax revenue come from to offset the huge tax breaks for the wealthy "job creators"? Reaganomics only works when the wealthy invest their tax cuts in American jobs. More jobs = more income = more consumer spending = more jobs = more tax revenue. A win/win situation.
Posted by: j. thompson | October 28, 2008 2:39 AM
John W
Sounds to me the real socialist in this election is John McCain. His plan to have the federal Government buy up individual mortgages will be a monumental act of colectivism and will put far more control of the economy in government hands than anything oBama is proposing. Tie that together with his strong support of Bush's plan to buy into the largets players in the banking system, and I think he wins the Socialist label far more than Obama.
I think you are attacking the wrong guy. Either that, or you're just another Republican schill trying to scare people and divert attention from what McCain is really about.
Posted by: BCT | October 28, 2008 7:50 AM
J Thompson,
There might be more investment in US corporations if teh corporate tax rate was not 35%. John Mccain has it correct to lower the tax rate to 25%, while Obama wants to make taxes even higher for corporations. Higher taxes, higher corporate costs, lower ROIs, less jobs, and higher cost to consumers.
Posted by: Terry | October 28, 2008 7:54 AM
Do you think the person making $12,000 and the one making $12 million a year should pay the same tax rate? If not, then you are for "spreading the wealth around."
As long as we've had income taxes, the rich have paid higher rates than the poor. In fact, most of the time the rich's rates have been much higher. Certainly in the 1950s, 60s and 70s, and long before, the top brackets were far higher.
In the last 25 years tax rates for the riches have been cut more than in half. Obama proposes to raise the two top brackets back to where they were in the 1990s -- to raise them from 33% and 36% to 36% and 39%. Still far lower than they were, say, in the 1950s.
So if Sarah Palin is right that this is socialism, then the U.S. was way socialist under President Eisenhower in 1954, when the top tax bracket was 90 percent.
Posted by: Independent | October 28, 2008 8:37 AM
"So, not only will we have to pay for our own health care insurance, we will have to pay for a welfare-state health care system as well. Obambi is also in favor of yet another $300 billion "stimulus package" made up of money the federal government doesn't have to spend" - John W
John - do you honestly believe that you and I aren't already paying for those without insurance? Have you seen your health care benefits shrink while your premiums increase? With the economy in its current state, who will pay for the alarmingly large number of newly unemployed when they get sick?
McSame wants to open the healthcare industry to the same de-regulation that just melted down Wall Street. Give you a $5000 check that will be taxable income, so you'll get $3800 to buy your own healthcare?
Doesn't this 'socialist' argument work against McSame if he voted for the bailout and government ownership of previously private banking institutions? Or is he still the great De-Regulator?
Posted by: The original Karl | October 28, 2008 9:28 AM
* * * * *
Posted by: The original Karl | October 28, 2008 9:28 AM
*
Karl,
.
1. Yes, we are paying for all those people anyway. The answer, however, isn't to make it official by enshrining it in a new socialist edifice in the federal government. The answer is to hunt down all the insurance companies guilty of price gouging. As of now, only 38 cents out of every dollar spent on health insurance ever make it to the service providers. The insurance companies eat the rest. There has to be something wrong with that.
.
The high prices charged by these companies are the reason the federal government pays out so much in Medicare and Medicaid benefits. This is why (apart from any considerations of socialism) I have always believed that including unregulated insurance companies in any health care plan is totally foolish. Democrats in the California Legislature thought so too. They refused to pass a Massachusetts-style health care plan because they knew one small price change could put the State billions of dollars further into a hole. Indeed, forcing everyone into the health care market without controlling excessive profit taking doesn't provide health care. It merely puts the government in the role of beating the drums to drive the game (us) into the hunters' nets.
.
2. I'm not convinced by the rhetoric that deregulation of the banking system played any material part in the current economic crisis. I rather believe it was caused by the Federal Reserve Bank's actions in keeping its lending rates low for so many years which, in turn, provided the means and the moral hazard for banks to engage in irresponsible lending. All the same, for the reasons initially stated, I agree with you that deregulation of the health care insurance industry is a foolish move. I don't believe anyone can reasonably be expected to afford health care insurance once everyone is forced into the market at the mercy of an unregulated health care insurance industry. My only wish is for people to be more able to purchase health care from out-of-state providers - which would create greater competition in pricing and give the federal government a vastly more legitimate (read constitutional) reason to regulate them.
.
3. Yes, Karl, the socialist argument does work against John McCain because he voted in favor of the bailout. I never said it didn't. That's one of the reasons why I'm not voting for either McCain or Obambi.
Posted by: John W. | October 28, 2008 11:52 AM
To Terry, If the tax cuts for corporations to 25% (11% lower than the current individual rate) had been successful in doing all the great things for the economy you list in your comment, then why have we lost millions of jobs in the last 8 years. Why has the market gone from 11400 on the DOW in 2000 to 8100 today?
--Indisputable fact of life.
When in your business, you lay off enough American workers and send their jobs (and paychecks' to China) you will eventually reach a tipping point where your customers purchasing power is reduced to a point where he or she can no longer afford the product you manufacture.
When that happens your former workers lack of income will result in fewer sales of consumer goods, lower volume and profit for business triggering more job cuts and more tax revenue lost.
Oh wait that has already happened hasn't it? Don't believe me? Then you can ride down to your local car dealership and stroll among the hundreds of SUVs and pick-up trucks collecting dust. Hurry thoughcause some of the country's largest dealership are going out of business.
Posted by: j.Thompson | October 28, 2008 12:19 PM
Thompson,
The economy has grown during the past 66 months, it is not until recently that the economy has slown. Did the economy just run its economic cycle or was the slowdown brought about by a democratic congress?
A reduction of the tax rate from 35% to 25% is a 29% reduction in the tax rate. - Fact of life.
The DJ has lost that amount (whiole Harry and Nancy led Congress) due to the credit crisis, not tax law.
The SUV's and Pick-up trucks are on the lot due to the recent oil price surge, which has dropped down into the low 60's. Jobs have been outsourced across the ponds for years - this is not a Bush administration phenomenon. Why do the jobs go overseas - high domestic costs - including income taxes - glad you make my point.
If you think higher taxes will generate more jobs - please prove it with accepted economic theory.
For those of you who still believe that "spreading the wealth" is the way to go, the Pilgrims learned this lesson 400 years ago
http://forum.isi.org/eve/forums/a/tpc/f/3830054552/m/1850052092
Posted by: Terry | October 28, 2008 1:24 PM