Tuesday, October 21, 2008

On the Economy

After a discussion with a friend of mine yesterday, I got to thinking about economic politics. He was hesitant about Obama's economic plan, and I was trying to convince him of its soundness. After a while we agreed that the matter was complicated, and that something needed to be done. But before we came to that, he offered up some of the GOP's tried and true talking points.

Look, I'm a fan of the free market. For the most part it does its job well, rewarding good business activity, and punishing poor business activity. Although it has some glaring weaknesses (health care, education, environment, workers rights), it is much better than state run disasters such as the U.S.S.R.

The people of the United States like thinking this is a nation built on meritocracy, that it matters more what you do than what your father did. We have been raised to believe that with some hard  work, common sense, and a little luck and ingenuity we could succeed. 

But it is becoming harder and harder to achieve the American Dream. The discrepancy between the rich and poor has been growing steadily since the Reagan/Bush era, with only a temporary respite during the 90s. In fact, of the Organization for Economic Cooperation and Development nations, only Mexico and Turkey have a worse rich/poor discrepancy during this decade. The poor get poorer and the rich get richer, while the ever shrinking middle class struggles to hang on to what they have.

We have many issues facing our country, many problems to solve. But we will never solve them unless we move past the outmoded arguments of the past. 

Barack Obama's tax plan is a fair one. In exchange for a little higher taxes for the wealthy, 95% of the country will see their tax burden become lower. This total includes all but about 1% of small business owners, who will also see some other significant tax breaks. Joe the Plumber (who has been revealed as nothing more than a GOP shill) and his $40,000 salary would benefit significantly under Obama's plan. As the $250,000 would be net income from a small business, not revenue, it is very likely that he could still benefit once he bought his business.

In response to this, the GOP has brought out their old line of attack that has been around since at least 1980. Namely, that the poor are lazy welfare queens driving gold Cadillacs over the backs of the hard-working and earnest rich folk. This seems to play well with the low information working class voters, who have much more in common with the poor than the rich. 

The idea that there is an epidemic of women gaming the system to live high on the hog off of welfare is nothing but a urban myth. Using the obvious shortcomings of the welfare program, Reagan was able to turn people against the poor, and make them weary of any program meant to help those who live at the bottom of the economic ladder.

While there are certainly some poor people who do try to game the system (as if there aren't wealthy people who do the same thing), the vast majority of poor people are hard workers. They have to be, as the national welfare system was essentially scrapped by President Clinton and the GOP Congress in 1996. Many work two or three jobs, trying to keep up with their bills and give their children the best job possible. Despite the fact that they don't pay taxes, the extra money they will earn as a tax credit from Obama's plan could go far in feeding or clothing their children. 

So what is the solution? Clearly, the "trickle-down" philosophy of the Reagan/Bush/McCain Republicans is not working out for those on the bottom, even if it has helped those on top. Just as undesirable is a return to the bureaucratic mess that was the welfare state in the 1970s. Somehow there has to be a way we can combine the best of the free market with the best of pro-active government action. 

Whatever the solution, it is certain that Republicans and Democrats, young and old, rich and poor, should be involved. No matter our political leanings or wealth, this is our country, and it is about damn time we started taking responsibility for it.  Barack Obama has shown more promise in regards to bringing us together to solve these issues. This is one of many reasons why I am supporting him in his bid for the President of the United States.

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