John Irons's Blog


Economic News, Data and Analysis

Economic Plans

Obama and McCain have recently laid out their economic plans; and, I suspect, they will be revisiting the issues of jobs, energy, etc., throughout the election season. There is a stark contrast between the two candidates’ approaches across the board.
I would urge people to read through each of the plans (see below) and not rely exclusively on media reports.
I will have more to say about the policies of the two sides in coming weeks, but I first wanted to flag an important issue in evaluating the two sides….
It would be nice if we could take stated policy positions at face value (as posted on the website, for example): and assume that these are the policies that the candidates would try to implement if elected. However, from what we have seen so far, it will be very difficult to take seriously much of the rhetoric coming from the McCain side.
A key example (thought not the only one) is on THE core issue for McCain:
McCain claims he will balance the budget by 2013 while passing an additional $200 to $300+ billion/year in tax cuts (with a good chunk for corporations) over and above Bush, and on top of a projected $443 billion deficit. McCain promises to make up the gap by unspecified earmarks cuts, unspecified cuts to Social Security, Medicare, and unspecified cuts to domestic spending.
Until the campaign gets specific on what these cuts will be (about $650 to $750 billion worth per year), there is simply no “there” there: this policy is simply not internally consistent or credible.
To get a sense of the magnitude of the necessary cuts consider that, even according to the Heritage Foundation, cutting all earmarks would save just $9 billion. Eliminating Medicare entirely would still leave a $200 billion hole.
Until there are details on fiscal policy, McCain’s approach is simply fantasy. And this then throws into question his stated plan to throw $2 billion to subsidize coal plants, or to implement any energy policies, etc.
This is not the usual budget trickery, but a huge, huge gap between campaign policy and economic reality.
Here are the links to the plans.


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