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Two Princeton Profs, 10 Alums Sign McCain Statement Calling Obama's Economic Plan 'risky'

This story was written by Reilly Kiernan, The Daily Princetonian

A hundred economists, including two Princeton professors and 10 alumni, have signed a statement issued by the campaign of Sen. John McCain, R-Ariz., on Tuesday, calling Sen. Barack Obama, D-Ill.s, economic proposals risky.

The statement attacks Obamas proposals to raise taxes and hinder international trade agreements.

Obamas proposals will run a high risk of throwing the economy into a deep recession by slowing down trade and investment and having a negative impact on American businesses and consumers, the statement explains.

According to the Illinois senators website, Obama will ask the wealthiest 2 percent of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility.

Though his proposals will raise taxes on the wealthiest Americans, the site notes that no family will pay higher tax rates than they would have paid in the 1990s.

The statement also says that Obamas plans to increase taxes on dividends and capital gains would reduce investment and cut into the savings of millions of Americans.

Criticizing Obamas suggestion that he could postpone increasing taxes until his second year in office, the statement said such a policy would not prevent harm to the economy.

In sum, Barack Obamas economic proposals are wrong for the American economy, it concludes.

Economics professor Harvey Rosen, who signed the statement, declined to comment, stating in an e-mail, Although I am an adviser to the McCain campaign, I have not been deeply involved, and have not been giving any interview[s].

Economics professor Burton Malkiel GS 64, who also signed the statement, could not be reached for comment.

Chester Spatt 75, a finance professor at the Tepper School of Business at Carnegie Mellon University and one of the Princeton alumni to sign the statement, noted his belief that Obamas positions on free trade would be harmful to the economy.

I feel that free trade is incredibly important to our market and that low taxes are very important, he said. Those are very central issues to our economy.

According to Obamas Web site, he will pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.

Michael Porter 69, a Harvard Business School professor who signed the statement and identifies himself as a centrist, said in an e-mail that he believes The statement opposing Obamas economic thinking is clear and stands on its own.

But he explained further that Obamas economic ideas are not pro-growth nor focused on wealth and job creation. Instead, they are more about redistribution, protection, and trading off economic success for other social agendas.

While many of Obamas ideas are well meaning, economists know that they have not worked elsewhere in the world and will not work in America, Porter said.

Without a competitive economy, progress on social issues will stall, he added.