Obama promises to revive U.S. economy

Tuesday 29th July, 06:17 AM JST

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Betzee at 04:12 AM JST - 30th July

If the problem is the weak U.S. economy how will burdening citizens and businesses with more taxes strengther the economy?

We're going to have to raise taxes in order to cut our borrowing which is part of the reason the dollar has sunk so low and, in the process, driven energy prices up.
Betzee at 04:13 AM JST - 30th July

I just think that it doesn't make sense to burden and dis-incent the very people and organizations that are needed to produce more wealth.

Too much of the wealth generation during the past eight years has been on paper. That's a major part of the problem.
sdmsec at 04:25 AM JST - 30th July

Suge asserts: Only Bush then McCain can save us. They are experts on the economy and are both honest guys.

If they're experts on the economy I guess that makes me a genius. Actually, for all I know they may be experts. However, that would mean that they're doing what they're doing on purpose which would make it fraudulent and criminal.

Suge asserts: Obama would decimate the economy

I agree with you 100% here. However, if Sen Obama were to draw back from many foreign interventions we'd see a short-term boost to the economy. The decimation of our economy would show up long after his term is over as social programs that hang like a millstone around our children's and children's children's necks.

There isn't an electable party left that in action supports the Constitution or the ideals of small, distributed government.
Surge at 04:50 AM JST - 30th July

sdmsec; Conservative and you don`t trust Bush and McCain To carry on our countries growth?

These guys serve us to the best of their abilities, McCain has sacrificed so much for his country.

Our government is the most generous on earth, FACT!!!

We are obliged to help promote freedom, and we do that wherever possible, with the minimum lose of life.

I suggest you start viewing FOX news and gain a more balanced view on the current adminstration.
sdmsec at 04:55 AM JST - 30th July

Betzee,

Thanks for your responses. I've recognized that you try to give reasoned explanations when you post, and I appreciate that - even though I often disagree with you.

We're going to have to raise taxes in order to cut our borrowing which is part of the reason the dollar has sunk so low and, in the process, driven energy prices up.

I agree with you that we desparately need to stop going deeper into debt. I agree that the dollar is headed to the toilet. However, I think we can begin to not only balance the budget but to *pay down the debt *by simply cutting out foreign aid completely followed by eliminating social programs over time (10 years maybe?). We need to ween people off of government dependence in all its forms.

Too much of the wealth generation during the past eight years has been on paper. That's a major part of the problem.

I'm not sure how this relates or refutes my claim that increased taxes will burden and dis-incent the very people needed to generate wealth. The bottom line being that nothing will generate "real" wealth (as opposed to paper wealth) except producing something with "real" value. That's what entrepreneurs (sp?) and businesses do.
Betzee at 10:36 AM JST - 30th July

If the problem is the weak U.S. economy how will burdening citizens and businesses with more taxes strengther the economy? The government doesn't produce wealth - they just re-distribute it. We need business and industry to be stronger if we expect the U.S. economy to be stronger.

As any neoclassical economic textbook will also tell you, a government which doesn't balance its books runs deficits. And deficits eat into future wealth.

But all that doesn't really explain much without reference to the specific context of our current problems. When GWB came into office, his first priority was a tax cut. This would stimulate investment and create jobs as our economy entered a recession. Well, the recovery turned out to be jobless (the reasons for this are debated) and the Fed left interest rates low. This led to too much cheap credit and too many investors, including homeowners, lost all sense of risk. Meanwhile the GWB administration kept trumpeting the "great economy" so people would forget about Iraq.

It was easy to sign off on the war, no sacrifice was asked of most Americans. The Iraqi oil would pay for everything. When that did not prove to be the case, GWB was not in a position to ask for a tax increase. Instead he borrowed heavily to finance the ongoing conflict which has now exceeded his estimates by a factor or 10 as reflected in his 5 trillion dollar contribution to the national debt.

After it became apparent how much bad lending had fueled the inflated book value of assets, the American banking system looked kind of wobbly. Yet Uncle Sam had no choice but to bail it out since foreigners had invested, motivated in part by American government guarantees. (America wouldn't have to rely on foreign lenders so heavily we saved more. But this goes against the consumerism which had engulfed our society.)

Government entitlement spending also goes mainly to the elderly who are no longer in a position to work. Many do depend on their social security checks (and Medicare of course). As we live longer, and the baby boom generation approaches retirement, the problem will become more pronounced.

There are issues where reasonable people can disagree. Should the dollar be strong or weak? Many thought it was too high under Clinton and depreciation was in order. This would help our exports. In fact we export very little and one factor which has encouraged out-sourcing of jobs is our employer-paid health care system. GM spends more on employee health care than steel, for example. Is this a greater factor in where to locate its plants than the value of the dollar? Well, I think so....
Betzee at 10:55 AM JST - 30th July

To understand our present circumstances. I've studied the Nixon presidency closely. He was one of the most interventionist presidents we've had in recent times despite the fact he was able to swing the country to the right so soon after Barry Goldwater had failed.

He had no choice; he had to pay for both entitlements like social security and the Vietnam War (we couldn't very well hit the Chinese up back in those days) until we arrived at "peace with honor."

I would like to see some sort of legislation that makes it impossible to fund a conflict that exceeds a year on borrowed money. If it's worth paying for, then let's pay for it now. Don't defer the cost to future taxpayers to whom the defense "well you wish Saddam was still in power" will mean nothing.
Surge at 10:59 AM JST - 30th July

Obama cannot help the economy, no skills at all.

A dream ticket to boost the economy would be McCain and Neil Cavuto.

The stock market would go up 10% the first week of being elected.
Sarge at 01:24 PM JST - 30th July

Surge - "dream ticket to boost the economy would be McCain and Neil Cavuto"

Nah, Neil's got too many health problems. The ticket already has enough health problems with McCain on it.
sdmsec at 03:30 PM JST - 30th July

Betzee,

I appreciate the analysis, and I agree with it.

Perhaps I didn't make it clear earlier that I agree we need a balanced budget (or better yet a surplus to allow paying down the federal debt). I think it would be much more productive to achieve these goals by eliminating foreign aid altogether (including the Iraq war) than by raising taxes (for reasons I've stated earlier).

Anyhoooo... I've also wondered about the tenuous link between employment and health insurance - what is the relationship really? I can't quote a reliable source, but I've read somewhere that the government pretty much dictated that companies of a certain size had to offer health insurance to employees - creating the HMO boom. It's no wonder that we've lost personal freedom in our healthcare once the responsibility was removed from the individual and placed in the hands of an organization.
Betzee at 09:56 PM JST - 30th July

Anyhoooo... I've also wondered about the tenuous link between employment and health insurance - what is the relationship really? I can't quote a reliable source, but I've read somewhere that the government pretty much dictated that companies of a certain size had to offer health insurance to employees - creating the HMO boom. It's no wonder that we've lost personal freedom in our healthcare once the responsibility was removed from the individual and placed in the hands of an organization.

HMOs were supposed to the the market solution to all the problems which nearly brought us national health care in the early 1990s. Yet they have many of the same problems of national health care systems. Doctors have no financial incentive to specialize. Sooooo, if you need a specialist, you may have to pay out of pocket.

Premiums have been rising and some people (not everyone) link this to the poor job market. Businesses aren't going to take on anybody whose employment can't justify the company health care package.

For a business which outsources jobs, it will probably have to pay into the host country's health care system. But in the cases of India and China, it's much cheaper because they do far less for their citizens than their American workers expect from our health care system.
sdmsec at 01:34 AM JST - 31st July

Amen. It seems like the healthcare industry would be greatly simplified, more free, and less expensive if we just went back to paying for routine stuff out of our own pockets and purchase insurance for catastrophic medical events.
Betzee at 09:34 AM JST - 31st July

The legacy of GWB's victory is that you've got to offer a tax cut to get elected. McCain, who initially did not support the Bush tax cuts, now wants to make them permanent. Obama, by contrast, wants to give tax relief to working families.

The real lesson should be tax cuts are often based on fuzzy math, or unrealistic revenue projections, which leave the government even deeper in the hole. This is how we ended up where we find ourselves.
helloklitty at 10:56 PM JST - 31st July

zurcranium says: Hoover was a republican and one of the models for the bush trainwreck administration.

so why is Obama modeling his economic policies after Hoover's?
WilliB at 11:22 PM JST - 1st August

A tax-and-spend dogmatics claimst to "revive the economy". That is so ludicrous one could not make it up. No nation has ever taxed itself to wealth. None. Ever. Never.