There has been much said and written about both Republican John McCain's economic plan and Democratic nominee Barack Obama's vision for the American economy. Having listened to the ignorant pleas of the Right regarding the viability of tax cuts for the wealthy as a means to stimulate economic growth at a time of recession, I felt compelled to set the record straight with an article detailing the recent history of both economic approaches being espoused - complete with factual basis and supporting data.
The Republican Plan: John McCain (R-AZ)
You will find this plan very, very familiar to the current economics of President Bush and the Republican conservative base. It centers on the predilection that decreased taxes at the top of the wage scale will result in "trickled-down" dollars of wealth and benefits for those workers depending on compensation from executive decision-makers. This plan holds that decreased government regulation of anything fiscal is ideal as a means to encourage thriving private business job creation and expansion.
Below I have listed the unemployment rate from the beginning and end of George W. Bush's presidency i.e. January of 2001 and September of 2008:
January 2001: 4.0%
September 2008: 6.1%
*Source: http://bls.gov
The above data begs the following question: If "trickle-down" economics and accompanying tax cuts for the wealthy truly do create more jobs and wealth for the working class, why did unemployment rise a full 2.1% subsequent to the Bush $1.35 trillion tax cuts in 2001?
The woes for the working class do not end at the increased unemployment rate under this system of economics. Below is a graph detailing how Republican economic policies have affected Real Median Household Income through the year 2007:
*Source: epi.org/content.cfm/webfeatures_econindicators_income_20080826
In other words, all "trickle-down" economics and tax cuts for the wealthy have done is pad the pockets of the top wage earners - while at the same time choking the wealth out of the working class.
The Democratic Plan, Barack Obama (D-IL)
Obama's plan serves to roll back the Bush tax cuts for the wealthy and restore the tax equity that existed under President Clinton. You will remember that President Clinton's Omnibus Budget Reconciliation Act of 1993 was chided for its 'redistribution' properties of taxing those who would create jobs and handing 'welfare' to those who pay no taxes. The actual fiscal result of that economic public policy was somewhat different:
- Unemployment dropped from 7.3% in January of 1993 to 4.0% in January of 2001
- 22 million jobs were created during Clinton's presidency (By the way, just how did all those jobs get created with the increase in taxes assessed the wealthy in 1993?)
- Economic growth increased by an average of 4.0% per year during Clinton's presidency
- Increase in median family income by an average of $6,338 during the Clinton presidency
- Lowered inflation rate from 4.7% during George H.W Bush's term to 2.5%
- 7 million fewer Americans living in poverty at the end of Clinton's presidency than at the end of Bush Sr.'s term
- Record budget surpluses
*Source: http://clinton5.nara.gov/...
For an economic policy that was supposed to stifle economic growth and job creation, the Clinton tax reconciliation sure did succeed in producing the greatest economic period of prosperity that this country has ever experienced - and it did so in an equitable manner that did not simply reward the wealthy as Reagan and Bush Sr. had previously (and Bush continued to do subsequent to other Republican administrations), but also the working class that had been neglected for so many decades.
This is the message that Barack Obama, Joe Biden, and their legions of supporters need to repeat from now until Election Day. They need to relentlessly expose the canard of the success of the "trickle-down" economics that McCain is now parroting and remind America how terrific the economy was not so long ago under another Democratic President - Bill Clinton. Tax cuts for the wealthy have historically benefited one group of Americans: the wealthy. They do not create jobs. They do not produce better wages or health care benefits for workers. In fact, the economic policies of Republicans like McCain only result in increased power for those at the top of the scale and lack of wealth for the working class.
The Democratic Party message speaks to the success of the working class via tax equity, increased wages, the availability of health care, eliminated budget deficits, and the unlimited potential for success that we as a country experienced during the Clinton years. Those are the facts of these two parties' economic promises for America and their consequences for the nation. It is up to the Obama campaign to explicate those facts and make believers of any remaining working class voters who may be tempted to vote for the candidate of the affluent, John McCain, on Election Day.
http://democratictribune.com/...