At 4:35pm EDT, the Federal Reserve cut overnight interest rates by one-half of one percent. During a week of other heavy financial promises in the form of corporate tax cuts from Senator McCain, lower federal income taxes from Senator Obama, and the possibility of a second stimulus package from Treasury Secretary Henry Paulson and the 110th Congress, stockholders seemed to shrug at the lending reduction, with the Dow Jones Industrial average finishing the day seventy-four points lower than where it started.
Financial markets’ apparent indifference could have resulted from an overwhelming fear in the future health of the American economy, but it could just as easily have been the product of a now growing acceptance that Congress and the Federal Reserve are going about their financial interventions all wrong; the crisis on Wall St. was the result of an economy built on unsupported borrowing—subprime mortgages, corporate loans, and government deficits—and the solution lies not in cheaper interest rates and easier credit; Americans can’t afford to borrow themselves out of a recession they borrowed themselves into.
And yet that is exactly what Mr. McCain and Mr. Obama are pledging to do. Mr. McCain stands by his recent assurances that he will extend the Bush tax cuts, set to expire in 2010, and maintain support for spending on defense and on continued involvement in Iraq. Mr. Obama, on the other hand, has yet to renege on an income tax decrease proposal for 95% of American’s, though Senator Biden hinted yesterday that the percentage may be smaller. The general justifications of Mr. McCain and Mr. Obama for substantial—and unrealistic—tax reductions, is that present economic times, with the global and American economies teetering on recession, are not appropriate ones to raise taxes. Nonetheless, with America’s Social Security and Medicare systems near defaulting, and the national debt reported to have surpassed $10 trillion today for the first time in history, now is probably not the time to cut taxes.
If you refuse to support tax decreases, your presidential vote is relatively meaningless. Not only do the both of the two major party nominees agree that taxes need to be reduced, they agree, for the most part, on the magnitude by which taxes ought to be decreased. And if the comparison Former Tennessee Senator Fred Thompson drew on at the Republican National Convention—that America’s tax base is analogous to a bucket of water—is a correct one, it doesn’t much matter whose tax proposal you support.
The truth that neither Mr. McCain nor Mr. Obama will admit, is that the presidential candidates completely lack the power to shape the budget. All bills regarding taxes are required to originate in the House of Representatives and get passed by a majority there in addition to in the Senate. Other than the right to veto potential legislation, the president has no legal authority over taxes. Until a candidate can raise sufficient funds to bribe both Houses of Congress, that’s the way it will stay.
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WE DO NEED TAX CUTS NOW!!
Isn’t it amazing how stupid the American people are? They have no conception of how our government works, therefore they can’t cut through the BS slung by all political candidates. Those women who refuse to vote for McCain because they believe Sarah Palin will overturn Roe V. Wade for example. As if any vice-presidential candidate had such power! Even if she were president and could nominate justices to the supreme court, no democratic controlled senate would ever confirm any justice, even if the justice were a moderate, that would vote to overturn Roe V. Wade.
Why don’t our political candidates actually educate the American People about how government works while they campaign and campaign on real issues that they can actually affect?
You are 100% correct on tax policy. Unfortunately, as long as the American people remain ignorant and uninformed and scared and form their opinions based on media-packaged soundbites, we’ll never get past the meringue on the dessert table and actually deal with meaty issues that face our country.
@ David
You make an excellent point about how much the president can actually do alone. Checks and balances are a beautiful thing. Unfortunately, most Americans don’t understand the way things work and prefer to believe that their candidate has a magic wand.
@ Matt
You asked “Why don’t our political candidates actually educate the American People about how government works while they campaign and campaign on real issues that they can actually affect?”
The answer is because an ignorant electorate is easier to influence because they don;t know the difference. I remember listening to Ross Perot in 1992 claiming that when he’s elected President lobbyists will become a thing of the past and end up in the Smithsonian. Sure.
It’s almost over. Thank God.
RHM
How can you resent Obama and McCain for being good at marketing? Isn’t that important for a president?