Reflections after a Presidential Debate
After listening last night to crazy Uncle Ned going on and on at Thanksgiving, I wondered what kind of an alternate universe he inhabits. So let’s talk about the real world and recent economic and political history for a moment.
President Bill Clinton actually increased taxes on the wealthy and presided over a booming economy, expanded health coverage for children and responsibly managed the federal budget leading to a budget surplus later in his Presidency. President George Bush the second cut taxes on the wealthy, started two wars in the Middle East but never paid for them, and presided over the greatest economic melt down since the Great Depression. President Barack Obama increased taxes on the wealthy back to their Clintonian levels, dug the nation and its government out of the worst economic crisis since 1929, covered most Americans for their health care costs, increased employment dramatically and reduced poverty at historical rates. Yes, we are still hurting, yes people are left behind, yes there is income inequality, but the direction has been good.
President Ronald Reagan cut tax rates back in 1981, helping to boost the US economy. But he cut them far too deeply such that he, President George Bush the first and President Bill Clinton had to increase taxes to stabilize the federal budget. This summer President Reagan’s Treasury undersecretary Bruce Bartlett pointed out that the economic conditions (high inflation, high unemployment, high interest rates and stagnant economic growth) warranted slashing the high income tax rates (then 70%) in 1981 are completely absent in today’s economy. http://capitalgainsandgames.com/blog/bruce-bartlett/2343/why-reagan-tax-cut-worked-1981-and-why-it-wouldn%E2%80%99t-work-today . “Today, by contrast, income tax rates are at a historical low – the top tax rate is just 35 percent and revenues are less than 15 percent gross domestic product versus 19.6 percent in 1981. The average federal income tax rate on a median family is less than 5 percent and its marginal rate is 15 percent. Inflation is nonexistent and the federal funds rate is close to zero.”
The US economy is growing a lot faster than Europe or Japan, and we are still the global leader for innovation and productivity. http://www.cbsnews.com/news/us-workers-worlds-most-productive/ Manufacturing over-all is returning to the US, not leaving. http://www.marketwatch.com/story/us-flips-the-script-on-jobs-reshoring-finally-outpaced-offshoring-in-2014-2015-05-01 The real issues for US manufacturing jobs are robotics, and the workforce challenges of working with robots, not Mexico.
To meet the challenges of tomorrow, we need an ever more educated workforce and our students’ performance in educational systems needs to improve. http://www.greatschools.org/gk/articles/u-s-students-compare/ These are not the same old jobs from the 50’s, and the need is for a highly skilled flexible workforce for today and tomorrow. Schools need to attract and retain good teachers; the school unions and school districts need to learn from the most successful charters rather than seek to dismantle them.
Infrastructure is one of the few issues on which Trump and Clinton agree. The World Economic Forum recently ranked the US 11th, but many of the higher ranked countries were quite small and compact (e.g. the Netherlands, Singapore and Hong Kong), none matched up with the vast geography of the US. Our infrastructure problems are not in the airline industry, as Mr. Trump believes, rather they are in mobile phone access and in railroads. http://www.businessinsider.com/wef-countries-best-infrastructure-world-2015-9/#11-united-states-1
Not very much discussed last night were some very real problems: growing income inequality and homelessness. We have severe and growing income inequality. http://www.csmonitor.com/World/2014/0129/Income-inequality-How-does-the-US-compare-to-other-countries/US-in-global-context We have a serious homeless problem in this country. Mr. Trump proposes to increase income inequality by cutting tax rates for the very wealthy and cutting federal spending for health care and social services to the working poor, while Secretary Clinton proposes to close some of the tax shelters and income tax loopholes most commonly used by the very wealthy to avoid federal taxation and to strategically expand some public programs. See http://crfb.org/papers/promises-and-price-tags-preliminary-update and http://crfb.org/papers/promises-and-price-tags-fiscal-guide-2016-election
Prepared by: Lucien Wulsin
Dated: September 27, 2016