ART OF THE POSSIBLEBy Joseph Kendzierski
Can we spend our way into stability?
President Obama’s economic plan is based on the idea that some are more responsible than others.
Calling for expiration of the Bush-era tax cuts for households earning over $250,000 and lowering taxes for manufacturing companies, Obama’s short-term plan includes stimulus spending and some tax cuts, but in the long-term spending would be cut and taxes raised for the wealthy.
December marks the expiration of tax cuts for households earning more than $250,000.
According to the Congressional Budget Office, if these cuts are allowed to expire they will add approximately $42 billion to the federal budget next year alone.
Over the next 10 years, they could add roughly $1 trillion in increased revenue and saved interest payments.
In his speech at the 2012 Democratic National Convention, Obama said, “After a decade of decline, this country created half a million manufacturing jobs. And now you have a choice: We can give more tax breaks to corporations that ship jobs overseas, or we can start rewarding companies that open new plants and train new workers and create new jobs here.”
By incentivizing the domestic manufacturing sector, Obama hopes to create new jobs, which could help bolster regional economic stability. Obama laid out his plan to do just this in his 2011 speech on the American Jobs Act.
Obama proposed a tax break of $4,000 for every manufacturing company that hires someone who has been unemployed for at least six months.
Short-term stimulus spending and temporary tax cuts play a significant role in Obama’s proposed economic plan.
Including $50 billion on transportation infrastructure projects such as roads, highways and railroads, the stimulus-spending plan would create more jobs, increase education investment, increase Pell Grant funding and expand job-training programs across the U.S.
How would we survive in the long term? Obama recognizes that deficit spending isn’t sustainable. We, as a country, must be willing to cut spending and raise taxes.
Obama proposed reducing discretionary spending to even lower levels than it has already reached. The CBO reported that Obama has achieved the lowest level of discretionary spending since former President Dwight Eisenhower.
All in all, Obama’s economic plan reflects a balanced approach. By reducing unnecessary spending and strengthening spending on programs that have proven to add to the economy, Obama reflects a philosophy that government plays a role in ensuring that America takes care of its citizens and global obligations.
However, neither Obama’s nor Romney’s economic plan touches on the largest category of spending: defense. If neither candidate is willing to truly examine the entire budget to see where we can cut spending, I have to remain pessimistic.
With defense spending accounting for roughly 20 percent of the federal budget, it seems illogical for this one category to bear no scrutiny.
This is a percentage equal to that of Social Security, Medicare and Medicaid combined. U.S. defense spending equals that of 25 other countries combined.
Though it may be too late for the upcoming election, it’s vital for the American public to demand a reprioritization of spending.
It may be politically popular to offer tax cuts to the populace or to increase funding for schools, teachers and police, but these things are too often the first things to go when the next round of austerity forces hard decisions to be made.