Massive bailouts, foreclosed homes, jaw-dropping gas prices, chaos on Wall Street. These are just a few signs of the U.S.'s struggling economy. As America enters the next chapter of its history, what impact will an Obama administration have on our economic future?
Jason Furman, Economic Advisor
Senator McCain's pro-growth tax policy is the same as President Bush's pro-growth tax policy. The only problem is that the only growth either of them have or will produce is to the federal deficit. When it comes to the economy the result will be to reduce growth.
Well-designed tax cuts that are paid for without increasing the deficit can increase economic growth. That is indeed the case with many of the tax cuts Senator Obama is proposing, including tax cuts to reward work, increase savings, and subsidize a college education -- all paid for by rolling back some of the Bush tax cuts for families making over $250,000 and reforming corporate taxes.
But when tax cuts are poorly designed and increase the deficit, the result is to reduce national savings. This in turn means less money to invest in America -- and more borrowing from abroad. Either way, the result is to lower national income.
Some evidence for this comes from independent analysis by Congress' nonpartisan Joint Committee on Taxation (see Table 3 which shows that in 4 out of 5 cases unpaid for tax cuts shrink the size of the economy), a summary of this evidence I wrote a few years back, and the nonpartisan Tax Policy Center's analysis finding that the McCain plan adds $3.4 trillion to the deficit (see Table R-4).
Next Argument
4
3
5
2
1
1
1
2
3
1
1
1
1
11
5
4
6
4
3
4
3
3
4
4
3
Biweekly updates on new debates and experts
Please check your email to confirm your subscription.
© 2008 Opposing Views, Inc. All Rights Reserved.
Opposing Views, Inc. is not responsible for the content posted on this website. Please view full disclaimer under Terms
Expert Verified
Link