The Economic Views of Presidential Candidates

By Clint Kennedy
Basic Economics Today


The following summaries paraphrase from the candidate web sites and for President Obama, the White House web site.

More candidates may be added to this page.

Obama vs Romney as of May 13, 2012 +1.4%
RealClearPolitics.com

It's Romney vs. Obama!  Romney appears to be a long shot, simply because the Democrats are willing to tax the rich!    

Obama Job Approval as of May 13, 2012: 48.0%
Congressional Job Approval as of May 13, 2012: 14.6%
Congress is very unpopular!  Everyone knows their futile arguing costs us too much!   


President Obama

President Obama has financial reform as priority.  In order to prevent another major collapse of financial institutions Obama has signed legislation that protects consumers and holds financial institutions more accountable.  Financial firms need to be more closely monitored and risky investments reduced.  More financial legislation is proposed.  Bailouts should not fall on the tax payer.  There will be federal oversight of mortgage lending to prevent unfair practices.  Obama has signed legislation that protects consumers from various credit card interest rate increases and excessive overdraft fees.  Savings should be channeled to finance future innovation.  The Obama Administration supports investment in innovation.  As part of the Recovery Act there has been significant government funding of the National Science Foundation, the Department of Energy’s Office of Science and the National Institutes of Health (The White House, n.d.).  In support of entrepreneurs there have been governmental capital contributions, no capital gains tax for 2011, and other tax breaks for small businesses.   

Strengths

Strengths of the Obama policies are the clear understanding of the real affects of the recent financial collapse on the average American citizen.  There has been a devastating decrease in assets, including real estate equity, and loss of jobs.  The key to American prosperity is through innovation and the tax breaks are beneficial. 

Weaknesses

There are improvements that can be made based on economics.  The redirection of savings to innovative investment is critical.  Major corporations need improved tax structure to redirect vast executive share payouts or call options to a savings form that can be invested.   Oversight must be increased only to the point where marginal costs equal marginal benefits.  The Federal Reserve has already outlined improvements for mortgage processing.  Federal government and Federal Reserve oversight duplication needs to be avoided.  The American worker and tax payer is always the last protector of all US Assets.  The need for bailouts has to be prevented.  The legislation that requires less risk in investment will support more stabile investment companies.

Whitehouse.gov (n.d.)  Retrieved September 15, 2011 from http://www.whitehouse.gov/issues/economy


Mitt Romney

Mr. Romney gives the following economic initiatives: reduce taxes and cut government wasteful spending, support companies for global competition, maintain free trade, reduce healthcare costs, entitlements, and dependence on foreign oil, and support education and training.  In order to aid business growth, bureaucracy and regulation must be cut and union influence reduced.  “We must reassert American leadership in international negotiations, follow through on commitments we have already made, and push aggressively for advantageous new agreements” (Romney, n.d.).

Strengths

The view that American companies must grow and compete globally is vital for the US economy.  American government and corporate leadership must negotiate effectively with free trade in mind.  They must be a part of selling American goods and services to other countries.  Replacing bureaucracy with business research and development would be a huge improvement.

Weaknesses

Government cuts in spending and government layoffs are contributing to decreased GDP growth and higher unemployment.  A transition of government to private sector spending must be well timed and take place as companies are hiring.  Government transfer payments including social security and unemployment insurance provide a necessary buffer from economic contractions and allow consumers to keep spending and companies to keep producing.  Without unions there would be many more workers without benefits and working for a minimal wage.


Romney (n.d.). Mitt Romney, Retrieved September 20 from http://www.mittromney.com/


Herman Cain

The 9-9-9 Plan consists of a 9% business flat tax, a 9% individual flat tax, and a 9% national sales tax.  The 9% business tax is on the "gross income less all purchases from other US located businesses, all capital investment, and net exports" (Cain, n.d.).  The 9% individual flat tax is on gross income less charitable deductions.  The 9% National Sales Tax "replaces taxes already embedded in selling prices" (Cain, n.d.).  Cain represents decreased taxes, decreased government spending and decreased government intervention and regulation.

Strengths

Removing taxes on funds that are used for capital investment is very beneficial.  The tax code would be greatly simplified and expenses from the IRS from collections, accounting firm charges, etc. would be greatly reduced.   

Weaknesses

Cain has already had to offer a 9-0-9 plan for lower income households.  The removal of a progressive tax system is grossly unfair.  The progressive tax system charges higher tax rates for higher incomes.  Families with incomes under $50,000, who can barely make expenses meet, should not be paying the same tax rate as families making $1 million a year.  The 9% sales tax is an additional expense for middle income and lower income families to pay.  Higher income families save more and would pay proportionally less of the sales tax, where as families with low incomes spend all of their income on necessities and would pay the full 9%.  A Black American presidential candidate proposes higher costs for Black Americans, many of which live in lower income housing.  This is callous!

Cain (n.d.). Herman Cain, Retrieved 10/23/11 from http://www.hermancain.com/999plan


Newt Gingrich

 
The following is from Newt Gingrich’s “Jobs and Prosperity Plan” (Gingrich, 2011).  The tax rates that Congress extended two years ago should be made permanent.  In addition, eliminate the capital gains tax, reduce corporate income tax to 12.5%, allow 100% expensing of new equipment, and end the death tax.  A flat tax of 15% would be optional with a new personal deduction of $12,000 for each American.  “Strengthen the dollar by returning to the Reagan-era monetary policies that stopped runaway inflation and reforming the Federal Reserve to promote transparency” (Gingrich, 2011).   Deregulate by repealing the Sarbanes-Oxley Act, repeal the Community Reinvestment ACT, repeal the Dodd-Frank Law,  Break up Fannie Mae and Freddie Mac, replace the Environmental Protection Agency, improve efficiency of the Food and Drug Administration, remove regulations on energy companies, repeal Obamacare, reform entitlement programs.

Strengths

Gingrich is strong speaker who clarifies issues well.  He accurately identifies areas of weakness.  Preventing tax increases is essential to allow stronger growth to occur.  Companies can’t invest and consumers can’t spend when their income is removed.  Reducing taxes on company income would be beneficial.  Government waste is occurring and removal of inefficient policies would be effective.  

Weaknesses

Gingrich appears too far to the right and loses votes that a more moderate approach would gain.  This weakness makes him an unlikely threat to win.  His plan is basically a massive overhaul, which in a time when Congress can hardly agree to pass anything will again have limited appeal.  Tax breaks for companies that are hiring would directly deal with our most significant problem, high unemployment.  Runaway inflation is not occurring, therefore this Reagan style monetary restraint policy isn’t needed.  On the contrary, as much spending is needed as possible, even if modest increases in inflation occur.  Stagnation is more of a threat than high inflation.



Rick Perry

Governor Perry of Texas is for “controlled” spending and cutting taxes.  He balances the budget by cutting spending.  In Texas he cut taxes on small businesses and cut property taxes.  “He established incentive funds to encourage employers to create jobs” (Perry, 2011).  Perry will remove EPA regulations and increase state powers to regulate the environment.  He would increase energy exploration.  “He invested billions of dollars more in education in Texas” (Perry, 2011).  Perry announced a flat tax plan of “20 percent on individual and corporate income, down from the current 35 percent rate, and eliminate taxes on capital gains, estates, and dividends.” (Boston.com, 2011)

Strengths

The incentive funds which induce hiring by employers are strong.  High unemployment is at the heart of America’s economic dilemmas.  Rewarding companies for hiring would cause even more hiring to occur.  It would also reduce the cost of having more employees.  Having more employees means more consumers with greater incomes, spending and increasing demand.  Perry’s record in Texas is impressive, improving employment while balancing the budget with reduced spending.  Spending on education improves long term output and standard of living.  

Weaknesses

The private sector has had increases in hiring while government hiring has been reduced.  Further cuts in government spending would only exacerbate the unemployment rate with more government layoffs.  The flat tax at 20% would be unjust for lower income households.  Perry’s recommended tax cuts for dividends and estates would contribute even more to income disparity.  Deregulating EPA regulations and allowing coal and oil plants to pollute even more is simply ignorant of the long term impacts on the environment and the world we live in.

Levenson, M (October 25, 2011).  Perry announces flat-tax plan.  Boston.com.  Retrieved
November 5, 2011 from http://www.boston.com/Boston/politicalintelligence/2011/10/perry-announces-flat-tax-plan/GN1TYFhEFBG3jUZlnERZEO/index.html

Perry, R (n.d.). Rick Perry: The Right Leader for Tough Times.  Perry President.  Retrieved November 5, 2011 from http://www.rickperry.org/



Michele Bachman

Ms. Bachman does not have a web page yet for her presidential campaign?! Her web page for Congresswoman, 6th District of Minnesota has an issues pull down menu but does not list economics. She does list taxes, wasteful spending, health care reform, and others. The following summarizes the economically significant content from those issues.

Bachman believes the Federal government spends too much. She supports legislation to disclose to the American public the government's "long-term, unfunded spending obligations." Taxes should be cut for middle class working families. Estate taxes and capital gains taxes, the death tax, and other taxes should be reduced. Regulation should be reduced on companies. Association Health Plans should be created for small businesses to join together and bargain with health insurance companies. As bargaining units the smaller companies can reach the economies of scale and reduced costs that the major corporations have. The federal tax code must be simplified for efficiency.

Health care should be available to all US citizens. Competition and individual choice is the means to achieve it. Bachman's bipartisan legislation in the Health Care Freedom of Choice Act would make health care expenses 100 percent deductible. Frivolous law suits on doctors must be prevented to reduce overall health care costs. There should increased domestic supply of energy and reduced regulatory costs for American energy companies.

Strengths

Government spending must be productive. Wasteful spending should be replaced with private investment by companies. Tax cuts are a vital stimulus. Health care spending tax deductions are strong. Capital gains tax cuts are good as long the capital is reinvested in the company. Regulations, such as pollution restrictions, should only be imposed to the point where marginal costs equal marginal benefits. See the book Basic Economics Today for more explanation on this topic. Health care needs to be available to all Americans to reduce overall costs. This is another complicated topic discussed in Basic Economics Today. Enabling smaller companies to bargain collectively with insurance companies would reduce costs effectively. All frivolous law suits need to be eliminated. This is a great cost to the American economy.

Weaknesses

Reduction in estate taxes does not really benefit the majority of Americans, who especially now do not have much estate worth. Bachman represents the wealthy with this tax cut. The death tax elimination would also be in the interest of the wealthy. The passing of asset ownership through wills requires significant legal maneuvering to minimize taxes for the wealthy. An economic outline for how to deal with restoring equity in houses and how to get companies growing and hiring is not addressed. These two economic issues are the biggest hurdles that America is facing.

Bachman, M. (n.d.). Congresswoman Michele Bachman, retrieved July 21 from
        http://bachmann.house.gov/

Copyright © October, 2011