In the first post-recession presidential election, the economy has been the major issue at hand and on American’s mind. This is no secret as the economy represents a broad ranging mechanism that affects everything from unemployment to the price we pay for gas. Because so many of us are unemployed, paying off student loans, or cursing the gas pump, it is no surprise that the term concerns us.
The campaigns were also, to no surprise, privy to this. According to a recent New York Times infographic, the words economy, tax, and jobs were among the most frequently used by both parties. With that in mind, the presidential election comes down to the choice between two economic road maps: one playing up taxes and austerity, the other relying on trickle down economics and tax cuts, but which shows the most promise?
Looking at the pseudo-specifics, the Republicans intend on employing a 20% tax cut across the board of income brackets. Tax cuts would not seem a proper tool to close a deficit, however, Romney says that he will be eliminating deductions for every tax cut, therefore closing the gap. The problem we run into here is that Romney, when pressed, has yet to identify these tax breaks he intends to close. In an interview with NBC’s Meet The Press, anchor David Gregory was unable to get a definitive answer out of him that would give Americans some context for how this would work.
On the other side, a complete 180 degrees away, are the Democrats. Obama has not proposed tax cuts, rather he would keep the tax rates where they are for those making under $250,000 per year and raise the rates for those in the upper brackets. The hike would reinstate the rates as they were under the Clinton era, thus eliminating any remnants of the infamous Bush era tax-cuts. The red flag that is raised here is whether or not they will commit to doing this. During Obama’s first two years, the democrats controlled the senate; they had the opportunity and passed it up. However, that was two years ago when we were in a deeper recession and raising the taxes would have been politically suicidal. Now we have a climate where the majority of the Americans, those 99%, are fed up with the wealthy getting special treatment and are impatient for something to happen.
Getting to the bottom lines, according to Bill Clinton, and a handful of other noted analysts, the arithmetic (a favored term from Clinton’s DNC speech) being employed by the Republican Party doesn’t add up- there is no way that the increased revenue for loophole closures will supplement the 20% tax reduction, thus leaving a deficit gap, which many analysts and commentators believe will adversely affect the middle class. So while Americans might not be better off now than they were 4 years ago when President Obama took office, they are better off than they will be 4-8 years down the road if Romney takes office.
The other issue and major offender in the deficit we must look at is healthcare. Both sides know that the system is broken and both offer differing roadmaps of reform to reduce its financial impact. Simply put, Obama puts government experts in charge of controlling costs while the Romney/Ryan approach would give individuals control without expanding access.
The Republican plan would create a system where Medicare is privatized and its recipients would receive vouchers provided by the government to purchase insurance. The idea here is that the deficit would be lowered because the use of general tax revenue to finance healthcare would be dissolved. Their plan partially hinges on the idea that this system would encourage competition amongst insurance companies, thus driving down costs. This would theoretically enable those on social services to receive benefits similar to those they receive today without increasing their out-of-pocket costs.
Democrats have been particularly quick to criticize this model of competition because it has not worked in the past. One reason for this is that, unlike Medicare, insurance companies operate for a profit and will therefore not be keen to jeopardize profit margins.
The Democrats then favor Obamacare, which would emphasize preventative care in hopes of stopping expensive health issues before they happen. To do this, Obamacare has largely eliminated co-pays for seniors, mandated health insurance for everyone, and offered incentives to employers (and employees) who partake in a healthier lifestyle. It would operate on a unified model where everybody must be insured, therefore preventing issues before they start. This would also spread the risk amongst everyone, rather than raising premiums for those who already pay for insurance.
An issue we find with Obamacare is that is largely partisan and inspires a lot of dissention across the congressional floor. Many also question the ability of Obamacare to actually reduce the costs of healthcare. It is clear that this will not be an easy or painless process. However, we can postulate that this model would be effective because it works in many European countries. The old adage that an ounce of prevention is worth a pound of cure is the keystone of health care reform.
The overall, engrossing theme behind these issues is the recession and each side has their own interpretation. To the Democrats, the recession is the result of 8 years of Republican policies and the expectation that Obama could have fixed what Bush left him in four short years is absurd. They used it as an opportunity to urge Americans to give him a realistic amount of time to fix it. As Clinton put it when speaking on behalf of the Republicans, “We left him a total mess. He hasn’t cleaned it up fast enough, so fire him and put us back in!”
The Republicans took their shot and framed the economy as a failure of democratic policy on every front. They ceded that while Obama had tried, he had ultimately failed and failure must not be tolerated.
Now that the terms have been laid, Americans must decide who will be left behind, the 99% or the 1%?
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