The economy and our future

My latest nightmare might not be far off: It’s the year 2011. Income inequality has reached new heights. The unemployment rate is at 14 percent. The world is still recovering from President John McCain’s nuclear attack on Iran. Rumors about the President’s failing health are confirmed true. Vice President Sarah Palin doesn’t blink. “I am ready,” she proclaims. The Republican Party cheers.

I believe this is, without doubt, the most terrifying Republican ticket in modern times, and why a Democratic victory is so essential. College students across the country are understandably worried right now by the state of the economy. Graduating seniors are troubled by dismal job prospects and student loan debt. The outcome of the presidential election will certainly affect the futures of everyone, young and old, but for young people, it is critically urgent.

Sen. Barack Obama’s message of change, relief to middle class families, and changes in the tax code, continues to resonate with young people. The last eight years have made it apparent that tax cuts for the wealthy do not necessarily trickle down to everyone else. Yet the call for lower taxes and less government has been a compelling message for the Republican Party, and it may still sell politically come election day. But why should Americans, especially college students, continue upholding this economic philosophy?

Sen. McCain’s economic vision, as he has laid it out on the presidential campaign trail, amounts to a third Bush term, with an estimated additional $3.4 trillion in tax cuts largely directed at corporations and the most affluent. For three decades now, the government has deregulated industries, embraced free-market policy and above all, cut income taxes. In spite of this, economic growth has not translated into better living standards for most Americans. Instead, the benefits have flowed mostly to a small population at the top of the income distribution. Meanwhile, only one party is applying the lessons of history to the nation’s current economic turmoil.

Obama’s proposal would repeal a portion of President Bush’s tax cuts for families making more than $250,000 a year. His plan would leave their tax rates where they were in the 1990s, according to an editorial in the Wall Street Journal by Obama’s economic advisers Jason Furman and Austan Goolsbee.

By restoring fairness to the tax code, the Obama plan would cut taxes for 95 percent of workers and their families with a tax credit of up to $500 per person or $1,000 for working couples. In addition, Obama is proposing tax relief for lower-middle-income seniors, homeowners, the uninsured, and families putting a child through college. He is also pushing a $4,000 tuition tax credit for college students. The real kicker, though, is that it would be “fully refundable,” according to Obama’s Web site. So for those of us who don’t plan on winning the lottery any time soon, Obama’s tax proposals are more beneficial to the majority of Americans.

In contrast, McCain’s cut-all-the-taxes-and-blow-up-the-deficit fiscal policy basically leaves the middle class behind. The Tax Policy Center, a non-partisan joint venture of the Urban Institute and Brookings Institution, highlights a series of striking comparisons: For those households making $118,000 or less (the bottom 80 percent of the population), McCain’s various tax cuts would bring a net savings of about $200 a year on average. Obama’s proposals would allow for $900 a year in savings.

Perhaps the biggest way that today’s economy feels unfair is the lack of income growth compared to rising costs. That’s why Obama wants to give people a large sum of money to spend as they wish. McCain’s plan, by exaggerating Bush’s tax philosophy, will not result in anything different than what the Bush years have given us: an enormous deficit, the most pronounced income inequality since the 1920s, and the recent financial crisis. As the U.S. Census Bureau has shown, most families are still making less than they were in 2000 after inflation. Hence, laissez-faire capitalism hasn’t delivered nearly what its advocates promised.

Evidently, the Bush administration and the McCain campaign do not share concern for these challenges. One major criticism of Obama’s plan by the McCain campaign has been that tax increases on the rich would kill jobs and stifle economic innovation. This argument proved to be wrong. When President Bill Clinton increased taxes on upper-income families in 1993, his critics predicted that he would wreck the economy. As we now know, the Clinton administration produced the longest sustained economic expansion in American history, 23 million new jobs and a surplus. Bush, in true Republican fashion, immediately cut upper-income tax rates, and the results were much less successful. The deficit returned and the country’s wealthiest families enjoyed generous tax relief at the expense of middle-class taxpayers.

It’s not surprising that McCain claims the fundamentals of our economy are strong. His economic adviser, Phil Gramm, sponsored the deregulation law that led to record foreclosures and the worst economic crisis since the Great Depression. Among the many economic woes facing Americans, young people will shoulder most of the burden as their future ability to borrow money for new homes or pay off college loans becomes increasingly difficult. Young voters and college students nationwide mustn’t buy into the tax-cutting mania perpetuated by Republicans. So vote for your future, make history and elect Senator Barack Obama our next president. 

n      By Audra Glover

Comments

By Jamie Holts on October 11th, 2008 at 12:57 pm

I found your site on Google and read a few of your other entires. Nice Stuff. I’m looking forward to reading more from you.