Martin Feldstein and John Taylor reassure us:
And by maintaining strong control over the growth of government spending, Mr. McCain will bring the budget into balance. His long record of fighting against excessive government spending, his plans to veto earmarks and reverse the spending binge of the past few years, and his strong commitment to balancing the budget can make this goal a reality.
Here is the full article, hat tip to Greg Mankiw.
This article claims that goldfish are as smart as mice.
I’ve seen graphs (from the Obama camp?) that claim a lower future-deficit with Obama’s plan. What’s the best impartial call on that?
If we could go back in time, it would have been nice to have the Bush tax cuts have a sunset trigger in them, rather than an absolute sunset. In other words, insert something like, “these tax cuts will only sunset in 2010 if the federal budget deficit is greater than $100 billion for fiscal years 2008 and 2009.” That way congress and the president would have had the incentive to control budget deficits over the last years. Is the war or the tax cut most important? Is the prescription plan or the tax cut most important? Etc.
Does it even matter what McCain intends to do anymore? The election is over.
This article claims that goldfish are as smart as mice.
Excellent!
Flying puffins, roof access ladders, goldfish, mice. I missed those, especially the last few days….
Why are you assuming that health care cost decisions will be the major economic factor in an Obama presidency?
As far as I understand, it’s isn’t really up to him, is it? The track record thus far for the Dems in passing legislation hasn’t been particularly stellar.
Puffin is still my favorite.
Well, he did guilt me a little bit about the fate of my last goldfish.
I’m basically echoing a commenter higher up on the thread, but how are these projections affected by McCain’s expressed penchant for military intervention? For example, in Georgia? I didn’t see any mention of that in the Feldstein piece.
As for the intrade stuff, it seems to me that Obama now is in a good position to move Biden to Secretary of State in his planned administration and to pick an experienced female Veep candidate (Clinton, Sebelius, etc.). It would take care of the one unknown factor (will white women break for the ticket with the white female veep) while not causing him any harm. Especially since now he’d be operating from a perception of relative strength. Waiting until a Palin shows an unexpected strength or Biden an unexpected weakness (think Lazio in his debate against Clinton) could be too late.
Re Feldstein and Taylor, what I found interesting was teh sentence before the one quoted here. It said “Tax revenues will increase robustly over the next few years with Mr. McCain’s overall tax strategy as the economy grows — even with conservative economic growth assumptions.” Are the authors arguing that the McCain tax cuts will increase tax revenue?
I don’t know how smart goldfish are, but they have tetrachromat vision (ref: Neumeyer et al). That is, they can see far more colors than we can, similar to a human with normal trichromat vision seeing more colors than someone with red-green colorblindness. If goldfish used computers, RGB computer monitors wouldn’t do — it would have to be RGB + ultraviolet. Some freshwater fish can see both into the infrared and ultraviolet, but there’s conflicting information on the web about whether goldfish can see infrared.
There is some evidence that tetrachromat vision can occur in humans, but extremely rarely and only in females. Interestingly, “We humans are only prevented from seeing
ultraviolet light by the absorption of the pre-retinal media, especially the lens
(Wyszecki & Stiles, 1967).” (warning, PDF link). When Gattaca Corporation gets around to offering affordable designer babies, I know what I’m asking for.
“Re Feldstein and Taylor, what I found interesting was teh sentence before the one quoted here. It said “Tax revenues will increase robustly over the next few years with Mr. McCain’s overall tax strategy as the economy grows — even with conservative economic growth assumptions.” Are the authors arguing that the McCain tax cuts will increase tax revenue? ”
Posted by: Greg
We’re now in the *second* term of the *second* supply-side administration, with results opposite to what supply-siders predicted. I’m only surprised that they didn’t get the ‘Dow 36,000′ guy in.
http://www.econbrowser.com/archives/2008/09/extending_jgtrr.html – “the McCain plan implies a $4.2 trillion reduction in tax revenues. In other words, both tax plans imply a deterioration of the debt/GDP ratio relative to baseline, but the McCain plan implies a substantially larger deterioration [i.e., $1.3 trillion (45%) bigger]“
I am generally in favor of lower corporate tax rates and think McCain has credibility on holding down spending, but really : “corporate tax rate — now at 35% the second highest among all industrial countries”. Well, I suppose we shouldn’t expect anything better from campaign advisers, but the World Bank place the US firmly in the middle on overall tax burdens for a representative firm:
http://www.doingbusiness.org/ExploreTopics/PayingTaxes/?direction=Asc&sort=7
Is it just me, or is the point not that the goldfish and mice story is random, but rather that it represents a notion as equally unlikely as McCain ending the deficit?
Why does anyone even bother looking at McCain’s plan or take it seriously.
None of it will ever happen, since he will have a democratic senate and house.
The one thing that has been shown to slow the growth of government spending has been divided rule that keeps the two parties in check.
The question is not if McCain’s plan is better than Obama’s since neither will be inacted, but which dynamic is more likely to control spending Obama + >55 Dems in the Senate and a Dem House or McCain and >55Dems in the Senate and a Dem House.
On that score I think there is no question which is likely to perform better. With McCain in the Whitehouse there will be the kind of balance that we have missed under most of the Bush years (until recently) and that we enjoyed under most of the Clinton years. And the kind of balance that has produced fiscal responsibility and moderation.
Greg, if there is an increase in GDP, ultimately it will lead to higher tax revenue. It’s just a question of when.
This completely ignores the fact that McCain is far more likely to take us into a random military adventure (Iran?). As we’ve seen since 2003, this is a costly endeavor, far more costly than national health care. Military spending is still government spending. What about the studies that show there’s more GDP growth under Dems than Reps?
Whew! What a relief!
Posted by: Tyler Cowen:
“The best impartial call is that health care cost decisions
will overwhelm many other variables; that is for anything other
than the short run. If you just look at what is on paper,
the McCain tax plan has a higher projected deficit.”
I disagree; by now the best impartial call is to look at the history
of supply-side economics and the GOP’s actions. Especially since,
if McCain wins the presidency, this would undoubtedly doubly vindicate
Bush’s actions in his eyes; as Cheney said, “deficits don’t matter”.
Now, I’d put the odds strongly in favor of a fiscal disaster by the end of
the second McCain/McCain-Palin administration. This is because McCain has shown
even more recklessness and more arrogance/misjudgement than even
George W. Bush, while Palin was following the same path even as the mayor of a small town.
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