Recession Politics
Although Senator John McCain seems to understand that the US budget has to be balanced, meaning that the federal government has to spend significantly less than it has done for the last couple of years, he seems to forget that one actually needs a plan to accomplish this.
He has set ‘responsible goals’ (extending the Bush tax cuts and add others, including a significant corporate-tax-rate cut, which would subtract about $300 billion, balancing the budget by cutting spending, etc.), but when asked how to reach them, McCain does not know the answer. He proposes to cut ‘little things, the so-called earmarks that our legislators put in to provide funds for museums commemorating the harmonica and to build bridges to nowhere.’
That’s all quite important, but it would not save more than $20 billion per year. That’s not even remotely enough if one truly wants to balance the budget. Bob Bixby of the deficit-obsessed Concord Coalition goes even further by saying that McCain’s plans will not only fail to balance the budget (and destroy the deficit), but will achieve the opposite: “His budget would actually move things in the opposite direction, away from balance.”
At the same time, Barack Obama does not even mention balancing the budget. He and his economic advisers believe that the government should be more not less active. They can find some money for their planned programs, but not enough. He wants to invest in several areas. Infrastructure, education, health care, and more. As Obama and his supporters would say, they believe that the US government should be ‘part of the solution, not of the problem.’ To conservatives this means that the government should spend considerably less, to them, however, it means the opposite; more involvement, more spending. A new, modern New Deal.
One wonders whether there is a need for such a change. America obviously has problems, and the economy needs real reforms, but overall, the American economy tends to be strong. Especially in the 1990s, more people than ever before were involved, and were improving their lives. This trend has continued under Bush. There are problems, especially with regards to energy and other issues, but the situation does not call for such extreme measures as in the 1930s.
Perhaps the best course to follow is the one set out by Bill Clinton, during his administration in the 1990s. He presided over a tremendous economic growth, but being fiscal responsible. The government was more active than American conservatives were willing to support, but less active than what American progressive had in mind. The overall idea seemed to be that the economy should be left as free as possible, determining its own growth, and the speed of it.
If such an approach is choses, it would probably mean that there would be no big plan to become ‘energy independent.’ Then again, independence can never be achieved anyway. Additionally it could very well be argued that the best way to accomplish less dependence is by taking it slowly. A grand project would probably cost more, and be less effective than gradual change forced upon individuals, businesses and governments by changing circumstances, not by the ideals and dreams of some leaders.
I don’t really think either candidate has a plan. One huge money saver would be ending the war in Iraq, which could hopefully draw down by the end of term 1.