no, i'm still not jumping in on the politics threads, but i read this today -- an article from a friend and respected economist in indiana (a very republican state, btw, though ashton's an economist, not a politician). in it he pares down the dem's economic plan. thought i'd toss it out there for informative reasons:
Democrats' Economic Plan
By Ashton Veramallay
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Democratic presidential candidate John F. Kerry has outlined an economic plan for the United States.
It would cost at least $1 trillion over 10 years, which would be funded from rolling back President Bush's tax cuts to the wealthy, cost savings, and economic growth. It has Clintonian overtones and is designed to make America stronger at home and respected abroad.
In the Kerry and Edwards book, "Our Plan for America," they stress that the great American middle class is being squeezed by declining incomes and the staggering costs that families are facing in education, health care, and energy.
The average American family is earning less than in 2000. Real median income for the nation remained unchanged between 2000 and 2003 for all types of family and nonfamily households. About 36 million people were below the poverty thresholds in 2003. One family goes bankrupt every 19 seconds, a one-third increase since 2000.
The opportunity to build a better future starts with a good job. More than 75 percent of the new jobs being created today are in low-wage industries, paying $9,000 or less. The Kerry strategy is to jump start the growth of high-paying jobs. It will reduce taxes for businesses that create jobs here in the United States, while eliminating tax incentives to move jobs overseas.
Specifically, the plan would:
Close the foreign tax deferral loophole that encourages companies to send jobs overseas.
Cut tax rates for 99 percent of taxpaying U.S. businesses by using the savings from ending deferral and offshore tax havens to cut corporate tax rates by 5 percent.
Jump start job creation with a New Jobs Tax Credit that will give manufacturers, other businesses affected by outsourcing and small businesses a break on federal payroll taxes for every new job created in America.
Eliminate capital gains for start-up investments in small business.
The plan will also catalyze the creation of new private investment corporations to give small and medium-sized manufacturers access to capital for expansion and job creation along with high-technology manufacturing "clusters" around research institutions.
The plan hopes to create 10 million new jobs in an environment of free markets, honest competition, entrepreneurial spirit and hard work.
In addition to jobs, the plan will restore fiscal discipline by cutting the budget deficit in half within four years. Specifically, it will:
Repeal President Bush's tax cuts benefiting those earning over $200,000 a year while expanding middle-class tax cuts.
Bring back "pay-as-you-go" budget rules that require Congress to come up with offsets to pay for new spending or tax cut initiatives.
Bring back tough caps on domestic discretionary spending, reinforced by mandatory across-the-board cuts so that total discretionary spending, outside of security and education, grows no faster than inflation.
The plan will lower taxes for 98 percent of families.In the 1990s, fiscal discipline created confidence in the economy, encouraged investment and job creation, and led to a record expansion. Following that tradition the plan not only aims at strengthening families in the middle class but also helps families to join the middle class. Toward this end, it will raise the minimum wage to $7 an hour by 2007 so that a family of four with a full-time worker would no longer be forced to raise their children in poverty. It will also strengthen the Earned Income Tax Credit and invest in lifelong learning so that workers of all skill levels can access education and training to move up.
The plan will also expand access to college and make it more affordable. This means a college opportunity tax cut for middle-class families and a new bargain with states provided they will keep tuition increases in line with inflation for the next two years.
The plan calls for affordable health care for all Americans. About 45 million Americans have no health insurance at all, and more than 80 million Americans went without health care coverage at some point in the last two years. The uninsured are more likely to file bankruptcy because of mounting health care bills, less likely to get regular check ups and less likely to detect a disease in its early, most treatable forms.
The plan gives all Americans access to the same quality health care offered to Congress. This is a good coverage at a reasonable cost with plenty of choices among private plans. The plan also aims to keep down spiraling health costs, including prescription drugs for seniors, quality care throughout Medicare in every part of the country, and medical malpractice insurance.
Finally, the plan calls for energy independence. It will end America's dangerous dependence on Mideast oil which is controlled by some of the world's most repressive regimes. This dependence poses a real threat to our national security, our economy, and our environment and inhibits our ability to provide moral leadership in the world.
Ashton Veramallay is professor of economics and director of the Center for Economic Education at Indiana University East.
