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kg_veteran · 10-11-2008, 11:15 AM

Barack Obama argues that his proposals to raise tax rates and halt international trade agreements would benefit the American economy. They would do nothing of the sort. Economic analysis and historical experience show that they would do the opposite. They would reduce economic growth and decrease the number of jobs in America. Moreover, with the credit crunch, the housing slump, and high energy prices weakening the U.S. economy, his proposals run a high risk of throwing the economy into a deep recession. It was exactly such misguided tax hikes and protectionism, enacted when the U.S. economy was weak in the early 1930s, that greatly increased the severity of the Great Depression.

We are very concerned with Barack Obama's opposition to trade agreements such as the pending one with Colombia, the new one with Central America, or the established one with Canada and Mexico. Exports from the United States to other countries create jobs for Americans. Imports make goods available to Americans at lower prices and are a particular benefit to families and individuals with low incomes. International trade is also a powerful source of strength in a weak economy. In the second quarter of this year, for example, increased international trade did far more to stimulate the U.S. economy than the federal government's "stimulus" package.

Ironically, rather than supporting international trade, Barack Obama is now proposing yet another so-called stimulus package, which would do very little to grow the economy. And his proposal to finance the package with higher taxes on oil would raise oil prices directly and by reducing exploration and production.

We are equally concerned with his proposals to increase tax rates on labor income and investment. His dividend and capital gains tax increases would reduce investment and cut into the savings of millions of Americans. His proposals to increase income and payroll tax rates would discourage the formation and expansion of small businesses and reduce employment and take-home pay, as would his mandates on firms to provide expensive health insurance.

After hearing such economic criticism of his proposals, Barack Obama has apparently suggested to some people that he might postpone his tax increases, perhaps to 2010. But it is a mistake to think that postponing such tax increases would prevent their harmful effect on the economy today. The prospect of such tax rate increases in 2010 is already a drag on the economy. Businesses considering whether to hire workers today and expand their operations have time horizons longer than a year or two, so the prospect of higher taxes starting in 2009 or 2010 reduces hiring and investment in 2008.

In sum, Barack Obama's economic proposals are wrong for the American economy. They defy both economic reason and economic experience.

Robert Barro, Harvard University
Gary Becker, University of Chicago
Sanjai Bhagat, University of Colorado
Michael Block, University of Arizona
Brock Blomberg, Claremont-McKenna University
Michael Bordo, Rutgers University
Michael Boskin, Stanford University
Ike Brannon, McCain-Palin 2008
James Buchanan, George Mason University
Todd Buchholtz, Two Oceans Fund
Charles Calomiris, Columbia University
Jim Carter, Vienna VA
Barry Chiswick, University of Illinois at Chicago
John Cogan, Hoover Institution
Kathleen Cooper, Southern Methodist University
Ted Covey, McLean VA
Dan Crippen, former CBO Director
Mario Crucini, Vanderbilt
Steve Davis, University of Chicago
Christopher DeMuth, American Enterprise Institute
William Dewald, Ohio State University
Frank Diebold, University of Pennsylvania
Isaac Ehrlich, State University of New York at Buffalo
Paul Evans, Ohio State University
Dan Feenberg, NBER
Martin Feldstein, Harvard University
Eric Fisher, California Polytechnic State University
Kristin Forbes, MIT
Timothy Fuerst, Bowling Green State University
Diana Furchtgott-Roth, Hudson Institute
Paul Gregory, University of Houston
Earl Grinols, Baylor University
Rik Hafer, Southern Illinois University Edwardsville
Gary Hansen, UCLA
Eric Hanushek, Hoover Institutions
Kevin Hassett, American Enterprise Institute
Arlene Holen, Technology Policy Institute
Douglas Holtz-Eakin, McCain-Palin 2008
Glenn Hubbard, Columbia University
Owen Irvine, Michigan State University
Mike Jensen, Harvard University
Steven Kaplan, University of Chicago
Robert King, Boston University
Meir Kohn, Dartmouth
Marvin Kosters, American Enterprise Institute
Anne Krueger, Johns Hopkins University
Phil Levy, American Enterprise Institute
Larry Lindsey, The Lindsey Group
Paul W. MacAvoy. Yale University
John Makin, American Enterprise Institute
Burton Malkiel, Princeton University
Bennett McCallum, Carnegie-Mellon University
Paul McCracken, University of Michigan
Will Melick, Kenyon College
Allan Meltzer, Carnegie-Mellon University
Enrique Mendoza, University of Maryland
Jim Miller, George Mason University
Michael Moore, George Washington University
Robert Mundell, Columbia University
Tim Muris, George Mason University
Kevin Murphy, University of Chicago
Richard Muth, Emory University
Charles Nelson, University of Washington
Bill Niskanen, Cato Institute
June O'Neill, Baruch College, CUNY
Lydia Ortega, San Jose State University
Steve Parente, University of Minnesota
William Poole, University of Delaware
Michael Porter, Harvard University
Barry Poulson, University of Colorado, Boulder
Edward Prescott, Arizona State University
Kenneth Rogoff, Harvard University
Richard Roll, UCLA
Harvey Rosen, Princeton University
Robert Rossana, Wayne State University
Mark Rush, University of Florida
Tom Saving, Texas A&M University
Anna Schwartz, NBER
George Shultz, Stanford University
Chester Spatt, Carnegie-Mellon University
David Spencer, Brigham Young University
Beryl Sprinkle, Former Chair Council of Economic Advisers
Houston Stokes, University of Illinois in Chicago
Robert Tamura, Clemson University
Jack Tatum, Indiana State University
John Taylor, Stanford University
Richard Vedder, Ohio University
William B. Walstad, University of Nebraska
Murray Weidenbaum, Washington University in St. Louis
Arnold Zellner, University of Chicago

10-11-2008, 11:15 AM	#177
kg_veteran Old School Balla Join Date: Oct 2001 Posts: 13,097	Barack Obama argues that his proposals to raise tax rates and halt international trade agreements would benefit the American economy. They would do nothing of the sort. Economic analysis and historical experience show that they would do the opposite. They would reduce economic growth and decrease the number of jobs in America. Moreover, with the credit crunch, the housing slump, and high energy prices weakening the U.S. economy, his proposals run a high risk of throwing the economy into a deep recession. It was exactly such misguided tax hikes and protectionism, enacted when the U.S. economy was weak in the early 1930s, that greatly increased the severity of the Great Depression. We are very concerned with Barack Obama's opposition to trade agreements such as the pending one with Colombia, the new one with Central America, or the established one with Canada and Mexico. Exports from the United States to other countries create jobs for Americans. Imports make goods available to Americans at lower prices and are a particular benefit to families and individuals with low incomes. International trade is also a powerful source of strength in a weak economy. In the second quarter of this year, for example, increased international trade did far more to stimulate the U.S. economy than the federal government's "stimulus" package. Ironically, rather than supporting international trade, Barack Obama is now proposing yet another so-called stimulus package, which would do very little to grow the economy. And his proposal to finance the package with higher taxes on oil would raise oil prices directly and by reducing exploration and production. We are equally concerned with his proposals to increase tax rates on labor income and investment. His dividend and capital gains tax increases would reduce investment and cut into the savings of millions of Americans. His proposals to increase income and payroll tax rates would discourage the formation and expansion of small businesses and reduce employment and take-home pay, as would his mandates on firms to provide expensive health insurance. After hearing such economic criticism of his proposals, Barack Obama has apparently suggested to some people that he might postpone his tax increases, perhaps to 2010. But it is a mistake to think that postponing such tax increases would prevent their harmful effect on the economy today. The prospect of such tax rate increases in 2010 is already a drag on the economy. Businesses considering whether to hire workers today and expand their operations have time horizons longer than a year or two, so the prospect of higher taxes starting in 2009 or 2010 reduces hiring and investment in 2008. In sum, Barack Obama's economic proposals are wrong for the American economy. They defy both economic reason and economic experience. Robert Barro, Harvard University Gary Becker, University of Chicago Sanjai Bhagat, University of Colorado Michael Block, University of Arizona Brock Blomberg, Claremont-McKenna University Michael Bordo, Rutgers University Michael Boskin, Stanford University Ike Brannon, McCain-Palin 2008 James Buchanan, George Mason University Todd Buchholtz, Two Oceans Fund Charles Calomiris, Columbia University Jim Carter, Vienna VA Barry Chiswick, University of Illinois at Chicago John Cogan, Hoover Institution Kathleen Cooper, Southern Methodist University Ted Covey, McLean VA Dan Crippen, former CBO Director Mario Crucini, Vanderbilt Steve Davis, University of Chicago Christopher DeMuth, American Enterprise Institute William Dewald, Ohio State University Frank Diebold, University of Pennsylvania Isaac Ehrlich, State University of New York at Buffalo Paul Evans, Ohio State University Dan Feenberg, NBER Martin Feldstein, Harvard University Eric Fisher, California Polytechnic State University Kristin Forbes, MIT Timothy Fuerst, Bowling Green State University Diana Furchtgott-Roth, Hudson Institute Paul Gregory, University of Houston Earl Grinols, Baylor University Rik Hafer, Southern Illinois University Edwardsville Gary Hansen, UCLA Eric Hanushek, Hoover Institutions Kevin Hassett, American Enterprise Institute Arlene Holen, Technology Policy Institute Douglas Holtz-Eakin, McCain-Palin 2008 Glenn Hubbard, Columbia University Owen Irvine, Michigan State University Mike Jensen, Harvard University Steven Kaplan, University of Chicago Robert King, Boston University Meir Kohn, Dartmouth Marvin Kosters, American Enterprise Institute Anne Krueger, Johns Hopkins University Phil Levy, American Enterprise Institute Larry Lindsey, The Lindsey Group Paul W. MacAvoy. Yale University John Makin, American Enterprise Institute Burton Malkiel, Princeton University Bennett McCallum, Carnegie-Mellon University Paul McCracken, University of Michigan Will Melick, Kenyon College Allan Meltzer, Carnegie-Mellon University Enrique Mendoza, University of Maryland Jim Miller, George Mason University Michael Moore, George Washington University Robert Mundell, Columbia University Tim Muris, George Mason University Kevin Murphy, University of Chicago Richard Muth, Emory University Charles Nelson, University of Washington Bill Niskanen, Cato Institute June O'Neill, Baruch College, CUNY Lydia Ortega, San Jose State University Steve Parente, University of Minnesota William Poole, University of Delaware Michael Porter, Harvard University Barry Poulson, University of Colorado, Boulder Edward Prescott, Arizona State University Kenneth Rogoff, Harvard University Richard Roll, UCLA Harvey Rosen, Princeton University Robert Rossana, Wayne State University Mark Rush, University of Florida Tom Saving, Texas A&M University Anna Schwartz, NBER George Shultz, Stanford University Chester Spatt, Carnegie-Mellon University David Spencer, Brigham Young University Beryl Sprinkle, Former Chair Council of Economic Advisers Houston Stokes, University of Illinois in Chicago Robert Tamura, Clemson University Jack Tatum, Indiana State University John Taylor, Stanford University Richard Vedder, Ohio University William B. Walstad, University of Nebraska Murray Weidenbaum, Washington University in St. Louis Arnold Zellner, University of Chicago __________________ The Official KG Twitter Feed Last edited by kg_veteran; 10-11-2008 at 11:16 AM.