368 Economics(6 Nobel Laureates) say Kerry's plans will screw up the economy

[whottt]

368 Economists Against Kerrynomics
The challenger’s policies would bring “a lower standard of living for the American people.”

By J. Edward Carter & Cesar V. Conda

Leading economists have a message for America: “John Kerry favors economic policies that, if implemented, would lead to bigger and more intrusive government and a lower standard of living for the American people.”

That was the conclusion released in a statement Wednesday by 368 economists, including six Nobel laureates: Gary Becker, James Buchanan, Milton Friedman, Robert Lucas, Robert Mundell, and — the winner of this year’s Nobel Prize in Economics — Edward C. Prescott. The economists warned that Sen. Kerry’s policies “would, over time, inhibit capital formation, depress productivity growth, and make the United States less compe ive internationally. The end result would be lower U.S. employment and real wage growth.”

Consider Kerry’s spending and tax proposals. Kerry claims he wants to balance the federal budget, but as the Washington Post pointed out last August, “Sen. John F. Kerry’s pledge to reduce record federal budget deficits is colliding with an obstacle that may be growing higher by the week: his own campaign commitments.” In fact, Kerry’s spending proposals would add an estimated $226 billion annually to federal spending. To put this in perspective, $226 billion is roughly equal to the gross domestic products of Greece or Sweden.

Kerry’s oft-repeated budget solution is to raise taxes on “families making over $200,000 on income earned above $200,000 to their levels under President Clinton.” This proposal would generate hundreds-of-billions of dollars over the next decade for the Treasury’s coffers. Kerry’s other proposed tax increases would generate billions more. Yet, these tax increases would offset only a fraction of Kerry’s new spending.

For instance, Senator Kerry’s government-run health insurance spending plan would by itself require a tax increase of more than $1 trillion. Two independent studies, one by the Lewin Group and another by the American Enterprise Ins ute, concluded that Kerry’s health insurance proposal would cost more than $1 trillion over the next 10 years. And that’s just one of Kerry’s spending proposals. To close the funding gap between all of his spending and tax promises, Kerry would have to raise taxes by an average of $1,431 for everyone who files an income-tax return.

The stark disconnect between Kerry’s spending and tax proposals is what prompted 368 leading economists to conclude, “Kerry’s stated desire to balance the budget and to boost federal spending substantially would almost certainly require far higher and broader tax increases than he has proposed.” And given Kerry’s voting record in the Senate — he has cast 98 votes for tax increases totaling more than $2.3 trillion throughout his legislative career — that is no idle threat.

It is no secret that John Kerry wants America’s foreign policy to be more like that of Germany and France. But perhaps even more disturbing, he has demonstrated that he wants to emulate their failed tax-and-spend economic policies, too. Over time, the consequences could be devastating. Consider the impact those policies have had on Europe. Germany and France once enjoyed standards of living comparable to those of the United States. Today, U.S. per capita GDP is 38 percent higher than that of Germany and 43 percent higher than that of France. Indeed, as economist Bruce Bartlett recently pointed out, “On average, Europeans only live about as well as those in the poorest American state, Mississippi.”

The 368 economists only briefly touched upon Kerry’s trade policies. As it happens, there is not much upon which to comment. Kerry has expressed a general reluctance to reduce trade barriers, and he has promised, if elected, to “review existing trade agreements.” His applause line is that he vows not to “sign any new trade agreements until the review is complete and its recommendations [are] put in place.” According to the 368 economists, “That's a prescription for political gridlock. Given the widespread benefits of unfettered trade, Kerry’s trade policies would harm U.S. producers and consumers alike.”

Finally, we have all heard John Kerry denigrate the present rate of job creation. Yet, according to latest Bureau of Labor Statistics employment report, 1.9 million jobs have been created since August 2003. And at 5.4 percent, the unemployment rate is below the average unemployment rates of the 1970s, 1980s, and 1990s.

We have also heard Kerry’s solemn vow to create 10 million new jobs during his first term as president. But you probably have not heard that the U.S. economy is likely to create about that many jobs over the next four years under current policy.

During the first nine months of 2004 — while Kerry was criticizing the pace of employment growth — payroll employment grew an average of more than 170,000 jobs a month. At that rate, the next administration would preside over the creation of roughly 8.2 million net new jobs. And yet, as Martin Sullivan pointed out in Tax Notes, Kerry has not presented one objective analysis to support his claim that his policies would create 1 million more jobs, much less 10 million more.

John Kerry has adopted the Walter Mondale approach to economics — increase taxes. Even advocates of Keynesian economics would not recommend raising taxes in the early stages of an economic recovery. Unlike Mondale, however, Kerry will wait until after the election to reveal all of the tax increases that will be required to pay for his government spending promises. Three hundred and sixty eight economists hope American voters will heed their warnings before it is too late.

[whottt]

Yup, if Kerry gets elected he's going to be Jimmy Carter part 2. Not only with the economy but with terrorists as well.


John Kerry, the wrong candidate in the wrong place at the wrong time.


Cmon's liberals...just bite the damn bullet and vote for Bush until Hilary runs...wouldn't you rather Hilary in 4 years than Kerry for 8? This guy is gonna suck.

I don't want America to be the of France and other terrorists.

C'mon guys, don't up the country with Kerry. Seriously...Besides, if Kerry gets elected you guys won't want to about him as much....and everyone knows a liberal isn't happy unless they're unhappy.

Dan you'll have conspiracy theory withdrawl without W. Michael Moore will go broke without W.

Do the right thing.

[FromWayDowntown]

Yup, if Kerry gets elected he's going to be Jimmy Carter part 2.

Pundits said the same things Clinton in 1992 (I should know, because I was parroting their analyses).

Man, I remember how the economy really sucked in the 1990's.

[Marcus Bryant]

The difference is that Clinton was much more willing to sell out his political base than Kerry. Clinton pushed for NAFTA and worked on developing a good relationship with the Fed. As for fiscal discipline, that was forced on him by a GOP congress who was actually committed to acting like a GOP controlled congress when it came to limiting spending growth (unlike today). The best argument Kerry can put forward for his candidacy is gridlock.

Clinton's role in the economic boom of the 1990s was marginal at best. The significant positions he did take ran counter to the conventional positions of his own party.

As we unfortunately found out a large portion of the economic boom of the 90s was tied to an unsustainable rise in equities. One problem which the next presidential administration may face is the popping of the asset bubble in residential real estate.

[JohnnyMarzetti]

4 years of fiscal responsibility will be a great change from this administrations spending habits.

[travis2]

Which is exactly what you won't get from Kerry.

[Marcus Bryant]

The only fiscal responsibility in a Kerry administration would be forced upon him by a Republican Congress which was acting like a Republican Congress again.

[CommanderMcBragg]

They need to act like a republican congress now.
Why wait for Kerry?
And beside, Bush has never seen a spending bill he hasn't liked.

[Marcus Bryant]

You're criticizing Bush for not spending more? or less?

[CommanderMcBragg]

How can you even ask that question?

[Marcus Bryant]

Oh ok.

[CommanderMcBragg]

That's what I thought.

[Marcus Bryant]

Oh ok.

[FromWayDowntown]

The only fiscal responsibility in a Kerry administration would be forced upon him by a Republican Congress which was acting like a Republican Congress again.

Which seems, from President Bush's words, to be the only chance for fiscal responsibility in a second Bush term as well. During the second debate, Bush referred to Kerry as a "tax and spend liberal," but did so only after stating directly that he intended to spend whatever it took to satisfy his agenda(s) -- does that make Bush a "spend and spend conservative"?

I guess the difference is that Kerry might be inclined to raise some money to offset what he spends. Such a poorly-devised economic strategy. . . .

[Marcus Bryant]

Sure. With the difference being that a Bush administration might actually follow through on addressing the looming fiscal crises in Social Security and Medicare, whereas a Kerry administration could never go along with that. I don't see Kerry as being as politically flexible as Clinton.

The initial point of this thread was that Kerry's plans are not desirable, with the assumption being that they were all implemented.

[FromWayDowntown]

With the difference being that a Bush administration might actually follow through on addressing the looming fiscal crises in Social Security and Medicare, whereas a Kerry administration could never go along with that.

Since Kerry's campaign hasn't addressed either of those issues, I presume. I find it curious that the right is so steadfast in downplaying Kerry's offered plans and rationalizing that things might get better because President Bush might change the way that his administration deals with fiscal matters. What interest does a lame duck presidency, with a vice president who lacks any identifiable Presidential aspirations, have in actually addressing the problems that have been created during the first term.

The initial point of this thread was that Kerry's plans are not desirable, with the assumption being that they were all implemented.

Right, and my initial point of response was simply that the same type of analysis existed with respect to the plans offered by Bill Clinton in 1992. And what of "voodoo economics?" My sole point is that pre-election demogaugery tends to polarize viewpoints and that apocalyptic projections and doomsday naysaying are often shown to be misplaced by the actual passage of time and the implementation of moderated policies.

[Marcus Bryant]

Since Kerry's campaign hasn't addressed either of those issues, I presume.

Status quo is the Kerry position as I understand it.

I find it curious that the right is so steadfast in downplaying Kerry's offered plans and rationalizing that things might get better because President Bush might change the way that his administration deals with fiscal matters. What interest does a lame duck presidency, with a vice president who lacks any identifiable Presidential aspirations, have in actually addressing the problems that have been created during the first term

Because apparently there was an inordinate interest in doing what it took to be re-elected. Without the desire to make certain policy decisions with the electoral process in mind, the administration can actually make the tough choices that need to be made.

Right, and my initial point of response was simply that the same type of analysis existed with respect to the plans offered by Bill Clinton in 1992. And what of "voodoo economics?" My sole point is that pre-election demogaugery tends to polarize viewpoints and that apocalyptic projections and doomsday naysaying are often shown to be misplaced by the actual passage of time and the implementation of moderated policies.

SS and Medicare are on a fast track for fiscal disaster today. That's a matter of fact.

[mysterious_elf26]

How many times have economists been right? Hardly ever. I'm tired of the many times they say the economy is recovering only to see another few hundred jobs cut. Never trust economists. Beside's they said the same thing for Bush's plan too.