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Column: Obamanomics Tops McCain's Plan, Despite Flaws

This story was written by Clint Waltman, Daily Nebraskan

Democratic presidents are better for the economy.

Blunt, bold and true.

According to the most recent Gallup poll, the economy has unsurprisingly become the undisputed top issue on voters' minds. As of Oct. 29, 55 percent of voters found it extremely important. This number is the highest Gallup has found for any issue's importance since 1996.

If United States citizens want to act in accordance with their values and improve the dire and pressing financial situation in which America currently finds itself, they should follow expert guidance. There is no better place to get expert guidance than from the nation's leading economists.

A poll in The Economist magazine of 523 U.S. economists indicated 66 percent intend to vote for Barack Obama, while only 28 percent plan to vote for John McCain.

In a New York Times column, Princeton economics professor and former Vice Chairman of the Federal Reserve Alan S. Blinder recounts and analyzes the United States' historical economic growth by means of gross national product.

From the period of 1948 to 2007, he reports, the gross national product rose 1.64 percent under republican rule. It rose 2.78 percent under democratic presidents.

The layperson can already surmise what the presidencies of Obama and McCain would entail, and it's clear Obama will continue the trend. According to Blinder (and confirmed by the candidate's Web site), McCain plans to continue the oh-so-successful Bush-era tax cuts for the affluent if he wins the election. Obama would give tax cuts to the poor and middle class and repeal the generous Bush tax gifts to the wealthy.

While preferable to McCain's plan, Obama's plan for the economy -- "Obamanomics" -- is dense and eclectic.

On the positive side are the aforementioned tax cuts, as well as simplifying the tax bureaucracy for working Americans, according to his Web site. Obama would eliminate all capital gains taxes on start-up and small businesses to promote job creation and innovation. Of course, his economic ambitions are inseparably tied with other projects like a move towards more universal health care, the creation of green energy jobs and doubling foreign aid.

And then the astute American naturally has to wonder how the hell he's going to pay for all of this. Some of the revenue will likely come from fewer military expenditures; by pulling out of a frivolous war in the Middle East and repealing the aforementioned Bush tax cuts. The rest will come from the likely increase in debt financing. Yes, the current $10.5 trillion debt will not likely subside any time soon.

Almost paradoxically, Obama will need to expand the economy to such a point where the national debt could be paid off down the road by the new revenue created by increased government spending.

It's unlikely that Obama will stumble upon something as innovative as the Internet -- that alleviated the national debt during the Clinton years -- but who knows what new markets that new technology will bring.

Obama's economic plan is certainly not without flaws, however. He intends to provide a $50 billion dollar emergency jump-start to prevent job loss, probably an ineffective tactic.

Similar "boost" actions have been met with reservation by economists in the past. The problem with these plans is they take a long time to implement -- sometimes as long as six or nine months. As appealing as $50 billion dollars of relief is, by the time it is distributed, the recession may be over.

Despite its flaws, Obama's plan for the economy makes McCain's plan look like extra houses on Baltic Avenue. Besides continuing the lower-class crushing tax cuts of the Bush Administration,the maverick senator's own Web site details his plan to enact a one-year freeze on domestic spending, including such venues as research, science and technology.

With investment in research and development way down under the Bush-Cheney rule already, such cuts by McCain will likely pave the way for India and China to become the major world innovators, hurting the United States long-term.

Furthermore, McCain's fetish with earmark spending is ridiculous. Earmarks -- pet spending projects lawmakers seek for their districts and states -- appear problematic on the surface. Although very frequently for community benefits such as grants for local hospitals, water and sewer funds, and non-profit organizations, they seem to have the potential to get out of control.

McCain certainly has made quite a ruckus in the past on what he believes is wasteful government spending of taxpayer dollars, but earmarks, simply put, do not add up to very much. In fact, the Office of Management and Budget of the U.S. government reported that earmark spending in 2008 made up less than .59 percent of the Federal budget.

To imply that McCain's opposition to earmarks reflects sound fiscal policy is irresponsible. The issue should be at most a bullet point, not a cornerstone of his economic plan.

Furthermore, one has to consider the kind of spending McCain intends to do, including continuing the Iraq war as long as necessary, as well as the lack of revenue which will result from continuing the Bush tax cuts. Such a financial drain is comparable to claims against Obama's spending, but while both campaigns will spend large amounts of money -- McCain's financial plan will only favor the affluent and perpetuate a seemingly endless war.

If government spending is wrong, Americans might as well vote right on Nov. 4 and favor health care, green energy jobs and education.

Trust the democrat this time.

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