Monday, August 18, 2008

1: The Economy

1: The Economy

What do I think?
I think Barack Obama will strengthen the US Economy. John McCain will hurt it.

Why do I think that?
Did you know that for the past 8 years, 2/3 of foreign companies doing business in America have paid zero dollars in federal income tax? In spite of making over 2.5 trillion dollars, they have paid nothing in federal income taxes. Lump the foreign businesses in with the domestic businesses that pay nothing, and 25% of big businesses in America have paid zero federal income tax for over 8 years.

McCain's campaign wants to decrease the corporate income tax. (This would benefit the five largest oil companies with 3.2 billion dollars extra income, let alone every other big business in America.) A reduction in the corporate tax would be very advantageous for the big companies, but have little impact on the average american or the US Economy. Consider the Bush aministration's policies. This past administration has favored continued corporate tax cuts to the point where now, 25% of big business in America pays absolutely zero federal income tax. And as a result, our economy was briefly on the brink of catastrophe. McCain supports this tax plan, and wants to further reduce the tax on big business. In spite of the fact that 25% of the big companies in America paid no income tax, he wants to further cut income tax obligations for big business.

The Bush administration has consistently failed to reign in the business ethics of Fannie Mae and Freddie Mac. Without going into details, let me just say that if Fannie Mae and Freddie Mac went under, it would mean pretty much utter catastrophe for the US economy. As a result, the US government cannot permit the insolvency of these private coprorations. Even though the two companies were bleeding financially over the past few years, it's CEOs were raking in hundreds of millions of dollars in bonuses. Then, when it became clear that Fannie Mae and Freddie Mac might go under, the US had to promise to cover their losses in order to stabilize the market. If the two companies went under, and they almost did, it would cost the US taxpayers 12 trillion dollars. To put it simply, the US taxpayers had to assume all the risk if Fannie Mae and Freddie Mac went under, while the CEOs were getting all the profits. As a result a few people reaped all the profits, while the risk behind those profits was sloughed off on the American tax payer. Privatized profits with socialized risks are a part of corrupt communist economies, not robust capitalist economies. John McCain supports these decisions by George Bush and promises to continue supporting Fannie Mae and Freddie Mac. McCain's economic policies are structured with such strong reliance on big business that will continue to result in privatized profits and socialized risks. (Big business makes all the money, and the tax payers cover the cost if something goes wrong.)

McCain advertisements routinely attack Obama's campaign claiming that Obama wants to increase taxes on the middle class. This is patently untrue. In one advertisement McCain claims that Obama wanted to increase taxes on people making $42,000 a year. That's true. He wanted single people making $42,000 a year to pay $15 more per year. However, even a single mother would have to make over $62,000 before she faced that increase. A family of four would have to make over $90,000 before facing the increase. In a spanish ad, McCain said that Obama's tax plan would increase taxes on families making more than $42,000. According to Factcheck.org, that was simply a lie. Obama's tax plan is patenly and deliberately misprepresented in McCain's advertisements. Obama's plan will reduce taxes on people making less than $250,000 a year, and will increase taxes on those making more than that. It will also increase taxes on many of the companies that paid no income taxes last year.

If Obama succeeds in bringing that money into the Federal Budget, he can help to subsidize some of the programs he hopes to subsidize. If he succeeds in this, it will mean more money in the pockets of the average American. If the average american has more money, more money will go into the economy. More money in the economy means a stronger dollar. A stronger dollar means lower gas prices. Lower gas prices mean more money in the american pockets. The circle goes on. The problem is that the average american does not see these connections, and McCain is not only failing to discuss them, it is down right lying about the Obama tax plan.

In the end, Senator McCain's proposed tax policies are good for business. Obama's tax policies are good for the American people. McCain's economic policies are bad for the country.

2 comments:

Tim 2 said...

Don't forget the ridiculous amounts of money we are spending in Iraq right now...that is not money we have, it is coming from somewhere...

America cannot afford to continue our culture of spend now pay later.

Everything is on credit...

Just to get the education we needed to do the things we wanted we needed to go into ridiculous debt.

I guess things cost what we are willing to bear. People are now so accustomed to taking out an exorbitant loan to buy a home, they don't even think, was there ever a time where things weren't bought and sold on credit?

Joshua said...

Yeah, and let's not forget that McCain doesn't want to necessarily end that war. Ugh.

Yay consumerism.