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From the Conventions: Challenging Economic Times

AIR DATE: Thursday, September 4th 2008
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How will the next president impact your pocketbook?

"Challenging economic times" is a phrase you hear bandied about a lot during this election year. What does it mean to you? Are you unable to sell your house? Did you lose your job? Are you having difficulty paying your bills or buying your groceries? Or are you just a little more afraid than you used to be about saving for the future?

When you consider your vote for president, do you think about your country, your heart -- or your pocketbook? For many people the bottom line is the biggest factor in considering who should be next to head to the Oval Office.

When Barack Obama spoke at the Democratic National Convention last week he said: "I will cut taxes -- cut taxes -- for 95 percent of all working families, because, in an economy like this, the last thing we should do is raise taxes on the middle class."

Obama says his plan would provide tax cuts and spending to working families, seniors, homeowners and the unemployed. He'd eliminate capital gains taxes on start-ups and small businesses.

Fred Thompson, who ran against John McCain in the GOP primaries, countered Obama's statement when he spoke at the Republican National Convention last night. "Now our opponents tell you not to worry about their tax increases. They tell you they are not going to tax your family. No, they're just going to tax "businesses"! So unless you buy something from a "business", like groceries or clothes or gasoline ... or unless you get a paycheck from a big or a small "business", don't worry ... it's not going to affect you."

McCain says his plan would lower the corporate tax rate from 35 percent to 25 percent. He would double the child deduction from $3,500 to $7,000 and permanently repeal the alternative minimum tax.

Which plan makes more sense to you? Do you wish for more money in your pocket today? More jobs in the United States? More breaks for businesses? Or more financial help for your grandparents? When you think of the next president of the United States, what do you hope he'll prioritize when it comes to the economy?

GUESTS:

Photo credit: Shyb / Flickr / Creative Commons

Tagged as: 2008 election · business · convention

Very good post! keep up the good work.
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certpaper —
As the candidates describe their plans, I like Obama's - it gives tax benefits to small businesses without giving breaks to the big corporations that are posting record profits despite an economy that has been tightening down on individuals for the past several years.

Tax breaks for homeowners are a double-edged sword, though - they also give tax breaks to the super-rich, who really don't need them. If it were up to me, I'd limit the break to those who own only one home, and put a cap on the value of that home - say $750,000, which is enough to get a nice home in all but the most expensive areas of the country. If someone has a million-dollar house and can't make ends meet, I think they need to re-evaluate their priorities.

I'm not an expert in the housing market, so that number is really a wild guess. And I understand that the current housing market may mean that someone is stuck with a million-dollar house that they can't get rid of. But the housing slump won't last forever, and a tax code based around the slump would give extra benefits to those that don't need them during normal times.
Branan R —
I watched Palin last night. It was surreal, you just don't expect the face of evil to be pretty. She's a Grover Norquist, Karl Rove, Jack Abramoff, Bush/Cheney, Rush Limbaugh, Conservative Republican. She studied Poli Sci in college and she has become a professional prevaricating politician.

She advocates all of the policies that over the last seven years have brought us never-ending war, the biggest government in history, the biggest debt in history, the most big government interference in peoples private lives, the largest redistribution of wealth from the lower classes to the already wealthy, on and on.

The brazen dissembling was astounding and amazing. Just amazing.

Tom D Ford —
Last night's speeches were a dismaying reminder of how Bush and Cheney won four and eight years ago - rather than talk about the real issues, they distorted and lied about their opponents' positions. Barack Obama isn't suggesting a tax on all businesses - as you say above, he is actually proposing to eliminate the capital gains taxes on start-ups and small businesses, which are so critical to the nation's future and long-term strength.

He will raise taxes on businesses shipping jobs overseas - but who on earth is going to argue that that's not a good idea? Who wants to see jobs for Americans lost to countries who offer their workers lower pay and fewer benefits? I would call that truly un-American.

I strongly support Senator Obama's approach. He recognizes the challenges facing the middle class on a deep level as someone, unlike John McCain who has spent most of his life in that income bracket and below. He also understands that part of government is a social contract between those who have and those who don't. I would also argue that your questions at the end of your post are mis-leading - Obama is offering "breaks" or tax relief for all of those categories: businesses, seniors, and the middle class, in a way that will support the innovation brought by start-up companies and small businesses and create jobs, including in green technology, here in the United States.

It's time to hold the McCain campaign and all of its surrogates accountable to the truth. Governor Palin's speech was particularly eggregious in this regard: as the AP is reporting, Senator Obama has more experience as an elected official, including almost four years as a U.S. Senator, and has passed many pieces of strong legislation, including bi-partisan bills with Senator Luger, a Republican. Can we please focus on the issues at stake?
changer —
The 'Regan revolution' set out to undo the New Deal - and it worked. We are now seeing the consequences of this: the second comming of the robber baron era.

It seems to me that a new version of the New Deal would be a win/win here: our infrastructure is failing, and bridges rebuilt in America would have to be built by Americans - you cant put that stuff on a boat and ship it over. The wages spent would stay in this country.

We need someone with the stones to re-implement tarrifs on imports - that will kick start manufacturing here (assuming we remember how to make stuff)
Chad Balcom —
I'd like to see the government stop intervening in the housing market. We need to let the free market work. Home prices need to come back down in line with incomes. Washington politicians seem to think that falling prices are a problem when in fact they are the solution. Prices are still too high and this is having a dampening effect on the economy as it means that people have to devote too much of their income to housing.
skeptictank —
Your "Free market" created the housing problems.

Tom D Ford —
Fair enough. However, home prices have been distorted (mostly upward) by lots of different government programs. Tax deductions for mortgage interest. The changes to the tax laws in the late 90's that made more capital gains on homes untaxed.

Also, the repeal of the Glass-Steagall banking act in 1999 allowed banks to get involved in all manner of investment schemes (and financial "engineering" ) that weren't allowed under that Depression-era law.

Currently, the US government either explicitly or implicitly is involved in about 90% of home sales: Fannie Mae & Freddie Mac have distorted home prices for years now (implicit guarantee that might go explicit soon) and FHA is now involved in about 15% of all loans.

Let's get back to sane lending practices: 20% down, and the house shouldn't cost more than 3X income.
skeptictank —
Very good response, well thought out and well written and I agree with you on all of your points.

I believe that sane lending requires well crafted and enforced regulations, which of course is anti-"free market". Markets need to be regulated in order to approach the maximum freedom and benefit for all instead of a wealthy few.
Tom D Ford —
it's my understanding that one of things creating high oil prices is lack of refineries, not lack of drilling. it doesn't matter how much you pull out of the ground if there aren't enough refinery.
clint c —
Yep. Ken Lay of Enron advised the Cheney Secret Energy Task Force, and they learned his lessons well.
Tom D Ford —
The McCain supporter is not being honest about the recent reduction in gas prices. It has been reported that demand for fuel is down by about 2%. Almost every expert that agrees that this is what is responsible for the reduction of fuel prices. As for McCain's proposal's health care scheme, according to most analysis in the press, it is liken to 401k vs. an actual pension. I think we all know how that has turned out for most American worker.
troygarcia10138 —
I always hear of trickle down economic policy. Do the rich really invest and grow their businesses in the absence of increased demand? Trickle up economics seems a more efficient stimulus! Putting more money in the pockets of the middle and working class is the surest way to increase demand.
jamesjng —
We've got a $10Trillion debt. Can we stop promising tax cuts and tell the truth: we can't afford to cut taxes at this point.

I do plan to vote for Obama, but I am disappointed at his pandering with promises of tax cuts.
skeptictank —
Taxes pay for the services that government provide like public safety, education, the roads we use and many others. Taxes were also used to pay for war. Notice I used "were." For the first time in our Nation's history, we are in a war that is being paid for "on credit" by wracking up debt and squeezing budgets of the states and many services that communities need.

I think we need to be more thoughtful about and less frightened of taxes. Do you drive on paved roads? Do you use public transportation? Have you ever had to call emergency services? Do your children or your neighbor's children go to public school? Do you go to a public library? Have you or someone you know had to go to a county health clinic?

Tax cuts that Bush implemented and McCain wants to keep have put this country into an economic crisis. We now have a huge deficit and as a result a shrinking budget for the much needed services.

I certainly am not comfortable with continuing that trend. I will be voting for Obama and I will also be voting for candidates, like Jeff Merkley for Senate who will support Obama's agenda in Congress.


B.E. Stone —
Isn't it rather simplistic to talk specifically about the candidates' tax policies, which represent the income revenue of the federal government after CONGRESS implements changes to the tax code, without comparing their proposed code change(s) to the specific budgets each candidate will submit to Congress.

anotherskeptic —
I have to respectfully disagree with your commenter about why oil prices are going down. It has everything to do with lowering demand. Every month we have been driving less by billions of miles according to AAA. With reduced demand the price has been dropping. It is also foolish to not work on efficiency first. Every American car is available in a diesel model in Europe which get much better fuel mileage some cars like the Ford focus diesel get 50 mpg just like many VW's that have been sold here. Tax breaks helping people get into these new cars and dumping their gas guzzlers will give us a huge reduction in import oil. This can be done in less than two years and is immediate. Drilling for more with out efficiency is stupid.
solarmike —
Not only are diesel engines more efficient, but they can run on recycled-vegetable-oil biodiesel. I think biofuels in general are a long-term dead end (we should be aiming for good batteries, and a sustainable grid), but recycling fry oil and blending it in with our diesel fuel is a way to drop a few cents off the cost of fuel, and reduce emissions by a small amount.

It's unconscionable to disrupt the food supply for fuel, though.
Branan R —
A $5000 Tax Credit does a poor person NO Good... A tax credit is only good if you pay $5000 in taxes!

Yes... You should tax the rich. Our economy is what allowed them to make all that money... They need to Give Back!
old man arthur —
I have a small remodeling company in Portland. Every year at tax time, I look at the bottom line and can't belive how hard I work for so little. It is disheartening. I would like to see the "Earned Income Tax Credit" go up. I wonder if I would be better off on welfare, but I'm too proud to check it out.
skate210 —
For any interested in a good synopsis of the healthcare plans, the New England Journal of Medicine recently published this:
http://content.nejm.org/cgi/content/extract/359/8/781

And the NYT published a good article explaining Obama's economic roots:
http://www.nytimes.com/2008/08/24/magazine/24Obamanomics-t.html?pagewanted=1

The McCain supporter is being very disingenuous when he talks about $5k healthcare tax credit. McCain wants to tax (currently tax-exempt) employer insurance spending, and then turn around and give a $2.5K tax credit that is not indexed to healthcare costs to the tax payer. Very shameful for a PhD that should subscribe to academic honesty.
trackmanatISU —
Your Cheap-Labor Conservative guest is about creating low wage jobs and destroying the middle class.

No thanks!
Tom D Ford —
I'd like to hear how Obama's and McCain's tax proposals will affect your program's commentators directly, in order to determine whether they might have a conflict of interest.

For example, someone who makes over 250K per year of course would be opposed to Obama's plan for tax relief for anyone who makes less than that.
jookyg —
Saying "We created 100,000 jobs" is almost meaningless if those jobs don't pay enough for even a single person working just for their own survival.

Job creation on it's own can't be the priority - creating good jobs is what we should focus on.
Branan R —
Agreed... If someone like me loses a job that pays $16.88/hr and has to take a job that pays $8.50/hr, he still Has a Job... Just not a very good one. [BTW I am a single male]

But, when a man loses a job making Union wage, and has to go to the Labor Ready to feed his family, That is "good economic times" for the Right. When a company lowers it's costs by cutting jobs, and the people running it are making Millions, something is wrong.
old man arthur —
I worked for a company that hired laborers from Labor Ready and the amount Labor Ready gets paid compared to what the laborer gets is outrageous. If you get $8.50/hr Labor Ready is getting something like 18 to 20 dollars/hr to pay you out of.

I'd encourage you to join the Laborers Union or some craft like Carpenters or Masons Union, they'll fight for you when nobody else will.
Tom D Ford —
I listened to the speeches last night and noticed a common theme that seems to perpetually permeate Republican economic comments. When they oppose tax increases, they really mean tax increases to big business CEOs and companies but they don't say that. I am middle class just scraping by with two jobs and a decent salary. However, the cost of gas & groceries just blow me out of the water. I don't know how larger families do it. Then I hear that the health insurance CEOs get $1 million bonuses last year but scream about the high cost of health care (of which I am both a provider & consumer). Then I look at how those same insurance companies discount my reimbursement for health care provided to clients by 30%. So where is the money going from the insurance premiums that my clients pay or their business owners pay and the discounted reimbursement for my services? Obviously that bonus check has to be paid. Why doesn't that CEO feel the pinch from the recession as well as we little folks? Why do the oil companies still make a big profit while my cost to fill up my tank increases? Shouldn't the companies share the burden of costs?
bejail —
I can't imagine how investing in new energy, and taxing the ultra-rich can be "job killers." What has "killed" jobs in this country are corperations shipping jobs overseas and squeezing the workforce here (like by hiring 30 million desperate illegals.) "Free trade", not taxing imported goods has been a job killer, not raising the min wage has been a quality of life killer, not taxing corperations has been the biggest economy killer. All Republican policies that McCain and Co. intend to perpetuate.
shgirl —
The audio snippet from the pro McCain person saying that what Obama wants to do with taxes is a redistribution of wealth, "right out of the books of Karl Marx".
What about the redistribution of wealth that Bush/Cheney did with tax cuts for the benefit of the richest 10%? The same tax cuts that McCain wants to make permanent?
Obama is painted as a commie for not wanting to keep all the benefits for the wealthy.
Hello--more money for the bottom 90% of the population means more money gets spent by more people. Good for the economy...

gleepark —
Grover Norquist said he wanted to drown the US Government in a bathtub, well his Conservative Republican policies are drowning our government "of the people, by the people, and for the people" in debt.

His massive debt prevents us from investing in our human capital, prevents us from caring for our fellow man, prevents us from making sure our children have good preventive healthcare, prevents us from investing in our infrastructure, prevents us from quitting our addiction to Oil, on and on.

Tom D Ford —
I don't see either party offering a reasonable economic / tax plan.

You can't cut taxes with our deficit issue and lapsing needs for infrastructure maintenance.

You can't rebalance the tax burden from the middle class to business when the country's business policies are failing, and the proposed policies will further restrict investments. Businesses are extremely burdened as your CPA caller stated. (It is much safer to simply be an 'employee')

NEITHER PARTY is addressing the changing demographics and employment issues.

i.e.... Fewer people working, much lower wages, low industrial or tangible asset production yet greater needs for community and heath services for the retired / destitute. (Service economy is largely fueled with 'discretionary spending', which will not get spent in a severe economic downturn, and can't readily be 'exported')

I would vote for a dose of 'reality', which we don't have offered, yet...

Politics is definately showing its mettle in "emptiness". Void of handling or addressing any 'real' issues.

Its time to 're-engineer' US politics AND policy and get off the debating of issues which are not going to get resolved or stand to move us forward as a country. Trouble lies ahead in our world prominence, trade, leadership, security, and quality of life. Neither of our flag waving parties is addressing core content and offering rational solutions
jwswamp —
Yes. Both parties have gotten too Conservative. We need to take this country back to the moderate center.
Tom D Ford —
I agree...neither party does it for me...and none of the candidates do either.
I see business as usual on both sides of the aisle. I see Congress as one party AGAINST the welfare of the working folks of this country. I have written countless letters on various current issues to elected officials and I receive in return insulting, condescending form letters that say nothing about the issues I was trying to address. The TV ads are aimed at a 3rd grade mentality and say nothing of value.
Hubertg —
McCain's plan is just more tax breaks for the wealthy and their corporations. I am continually amazed that any thinking person could believe that McCain is anything other than Bush/Cheney light. His support for the Iraq war is a classic example.

Their frustration over the inability to do anything about the rising tide of religious extremism, especially that which opposes our own form of it (Evangelistic Christianity) coupled with the motivation to enhance the financial positions of the petro-chemical and military/industrial entities were, I am convinced, prime movers in our imperialist invasion of the weak sister of the Middle East.

Bush/Cheney/McCain have systematically squandered American wealth, lives and reputation. If Clinton had done what they have done he would have been accused of treason. The money wasted in Iraq could have done everything McCain now promises to do for the working class and nobody would have had to die.

The "My country, right or wrong" type of patriotism espoused by McCain and the Republicans is a farce. I almost choked when I heard him tell the party faithful to take off their "Republican Hats" and put on their "American Hats".
We Democrats don't have to change hats or anything else to be Americans, except for the administration in Washington, that is.
rmace@q.com —
Again, we hear the same mumbled economic explanation for high gas profits from the mouths of Republicans, and this time from a Stanford Professor.
a
But this is NOT the complete answer--it is not simply an issue of supply and demand. The oil companies keep feeding us this, and it is time to call them on it. Because it is not just an issue of increased demand.

Increased demand, partnered with an artificial limit of supply (closing down of oil refineries, putting all the money into profits and not development) leads to higher gas prices. But the oil companies could increase refining capacity and put more money into developing new technologies.

But they won't as long as we have gov't officials handing them land and resources that belong to US, THE PEOPLE.

So, please, the next time someone tries to pull the supply and demand wool over your eyes, you must ask harder questions and really press them in it.

If a business shifts all of its earnings into profits, it is running a very short-sighted business. That is their problem, not our nations, not we the people who are not shareholders.

Drilling the oil now will not benefit us for at least 10 years--and it will take more energy to get the oil out of the ground then you will actually get. This is just a hand off to big oil, it has nothing to do with helping out average Americans (unless of course they own some stock in an oil company).

Plus, the oil will only become more valuable as time goes on.
laura23 —

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