Obamanomics

Reading the nytimes piece, I’m still baffled. When you read how obama will cut taxes for middle class and poorer families it sounds great. But the author doesn’t ever question the concept of ‘paying for tax cuts’ with a program that obama acknowledges may never raise govt revenue.

The author points out that the disparity between rich and poor is greater than 30 yrs ago. There seems to be an implied and unspoken argument that this gap is at the expense of poor people.

Are we saying that if a class of people can earn more money we are against it even if it doesn’t hurt the other classes? Why isn’t this communism? Make sure everyone is equally poor.

Is there any example in history of successful wealth ‘redistribution’? It feels like its vogue for rich people to come out in favor of higher taxes, the ultimate sign that you are a true american. What happened to sacrifice for shared goals? Are we really saying sacrifice so everyone feels better even if it never helps them live better?

I feel like we are in the middle of an ayn rand novel.

What bothers me most about articles like this, is the assumption that the govt can effect the economy. Are we really giving clinton the credit for the 90’s boom? That’s like crediting roosevelt for the car.

the 90’s was about productivity gains from IT and internet. This caused massive high value job creation as well as american wealth creation. The deficit was wiped out under clinton because of huge tax revenue. Nothing to do with tax cuts or raises or who was secy of treasury or even alan greenspan.

The author laments how avg americans haven’t seen their std of living go up in the past decade. Well, its not a god given right. It comes from innovation and its pretty tough to exceed the prior decade.

And the idea that warren buffet is a big proponent of wealth redistribution is just weird, ‘tax the heck out of people at the end and just redistribute it’. Where did that come from?

I’m impatiently waiting for our leaders and the reporters covering them to engage in a useful dialog. What is their vision for america in 20 yrs and what policies today will enable that. So far it sounds like obama’s is more about wealth equality than the economic growth for many.

4 thoughts on “Obamanomics

  1. I think it’s a question of fairness and long term viability of this country. The US economy has a long-term GDP growth rate of 3% so on average we are all getting 3% more efficient at making whatever widgets we make each year. The question (to me at least) is how should that 3% be distributed. Should it be spread widely with maybe a little be more to those working a little harder? Or should it all go to a couple hedge fund managers? If it all goes to the hedge fund managers (which is basically what has been happening the last 20 years) why should the rest of us bother working “a little smarter” each year? And what happens if this continues another 20 years? Will the US still be perceived “the land of opportunity” if the wealth distribution map is indistinguishable from a third world autocracy?

  2. staying out of the fray re: republicans vs democrats, i’d like to see us get to a modest compromise where we combine some kind of democratic “safety net” for people below a certain income level with republican “marginal incentives” for greater income generation & investment.
    imho, best way to do this is to work on getting to a flat tax rate @ ~20-25% (or 15% if you could make it happen, but i doubt you could make it that low), combined with deductions on low-end so it’s not regressive for folks making less than $25K.
    at the same time, simplifying capital gains & making it the same as taxes on income would make it more likely that people don’t play games with investment capital. again, i think if you could get to 20% flat on capital gains (or perhaps 15% for long-term, 25% for short-term) you could possibly get it to fly.
    one way to get to flat tax on the income side is to just let the AMT calc become the flat tax rate. over time, we’re getting pretty close already.
    in summary: using tax policy to modify human behavior is fun & all that, but ultimately it’s too tempting to screw around with all sorts of pork-barrel politics and other social engineering (witness home ownership incentives helping to create problems with unsustainable housing market prices).
    get to flat tax rates, on both income & investment. provide some level of income tax-free, below a certain # (roughly $25K) that people can get by on.
    then let the market take care of everything else.

  3. it is tempting but foolish to seize upon one economic factor to manipulate and assert that there will be desirable results.
    the economy is an ecology that is badly out of whack. a lot of the variables need to be adjusted, or even radically changed.
    candidates have to make pledges, offer plans, but rarely do they have the time to develop and effectively communicate what these comprehensive plans might be.
    and then some just don’t have either the values or the brains to draw the correct conclusions.
    i am anti-electoral politics, but the choice between Obama and McCain seems to be pretty clear to me. Vote for McCain and get more of the same. Obama represents the possibility of new directions.

  4. Dear Mark,
    You’re wrong on Clinton and the Internet.
    Actually AN AWFUL LOT OF CREDIT should go to Clinton and Gore, regardless of how much fun the republicans make of Al Gore.
    The privatisation of the Internet happened in 1993, under the Clinton administration, precisely it was the vision of Clinton and Gore that opened up the opportunity to a massive creation of wealth in such a short period of time.
    http://www.nsf.gov/news/news_summ.jsp?cntn_id=103050
    According to Robert Longley, “Clinton and Gore were responsible for pressing almost all federal agencies, the U.S. court system and the U.S. military onto the Internet, thus opening up America’s government to more of America’s citizens than ever before.
    It doesn’t look like a small accomplishment to me.
    cheers,
    vruz

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