Monday, June 2, 2008

Economists for McCain

Update: Also see our list of McCain's economic advisers.

A couple weeks ago I wrote to the economists who signed the letter in support of McCain's economic policies. Drawing upon Jonah's discussion of the biggest problems with the letter, I wrote a straight-forward message which I hoped would provoke some interesting back-and-forth. Alas, the Economists for McCain have ignored me, bursting my bubble of self-importance.

I console myself with the thought that this non-response partially reflects a generation gap. McCain's economists are mostly pretty old--one guy was on Eisenhower's Council of Economic Advisors--and less likely to have embraced the democratic salon of the Internet age. I know the intellectual style of this earlier generation: when they descend from the ivory tower, it's to make wise pronouncements, not to chit-chat with the masses.

(In fairness I should note that Gary Becker, who's older than his endorsee McCain by half a decade, has a blog, with comments!)

Anyway, here's the message I sent to each of the letter's signatories:

Dear Professor X,

I am writing regarding your letter in support of John McCain that was posted on Tyler Cowen's website. I am part of a group of economists who favor Barack Obama for the presidency and who have a weblog with discussion of economic issues in the campaign.

In the interest of promoting a serious dialogue on the differences in the economic approaches of the two candidates, I am hoping you will take the time to answer a few questions related to the letter.

Here are the questions:

1) Do you take seriously the $5.7 trillion in additional deficits over 10 years projected by the Tax Policy Center analysis of McCain's program? If not, why not?

2) Are you concerned about the long-term cost of a continued American military presence in Iraq?

3) Given the Supreme Court's previous rejection of the line-item veto, do you think a "constitutionally-valid line item veto" is possible, and if so, how?

4) What makes you say that there has been "explosive growth" of non-military discretionary government spending programs? This think tank analysis shows that the real growth rate of domestic discretionary spending 2001-2008 was 1.3%. By comparison, defense/security increased 9.1%, while SS/Medicare/Medicaid increased 3.8% As a share of GDP, domestic discretionary spending actually fell, from 3.1% to 2.8%.

I would also appreciate any other comments you have beyond the material in the letter regarding what motivates your support for Senator McCain. Please note that we may post your response on our weblog.

Warm regards,

Don Pedro
(Apologies for the pseudonym: unfortunately, I am subject to restrictions on political activity in my current position, and consequently for purposes associated with the weblog, I can't use my real name.)


PGL said...

Don - I saw this over at Mark Thoma's place and I appreciate the efforts at getting a real dialogue with the Economists for McCain. I can also appreciate the need for an alternative name as I live under this restriction as well.

PGL - Angrybear

Cetaceon said...

I am not an economist... so, help me out, here.

First, my understanding is that the CBO treats the AMT as currently contributing to revenue, although congress perennially suspends the AMT for most taxpayers. If that is so, then the McCain plan, in fact, would only clear up the fallacy of the AMT, right? If so, it seems specious to ding McCain on eliminating the AMT - especially when, as I understand it, Obama also intends to eliminate the AMT for most Americans.

Second, even the folks at the Urban Institute Tax Policy Center admitted in their “scoring” of the McCain proposals that GDP would rise as the tax monies went back into the economy. As I understand the policy effect of McCain’s proposed modifications of the R&D credit, and lower rates for businesses internationally is to keep those revenues in the US, invested here rather than outsourced. So, does your analysis allow for growth in GDP to raise tax revenues and offset such tax cuts at all? If so, how much?

Third, I am reading that Obama’s plans for new programs would add over $200 billion in spending, after assuming that the Bush tax cuts expire in 2010; so, the Obama plan is more than $200 billion in further spending in addition to (not continuing the Bush cuts/ending those breaks/allowing those cuts to expire… however one wants to spin it). And, like McCain, Obama intends to eliminate most of the AMT… So, for sake of argument, let’s say that on top of allowing tax rates cut by Bush to go back to where they were, Obama wants to spend another $250 billion plus, per year. He says that he won’t have to raise taxes to pay for this. How would that work - and I do not ask “how that is possible,” but more concretely “how will that work.”

Thanks for any response!

donpedro said...

I just saw your comment now. (This is an old post and I don't usually check the comments.) These are good questions and merit a detailed response, which I will put together in the next couple days. Thanks for reading!

Anonymous said...

You mentioned that the economists who support McCain are "old" several times. Why is that relevant to an economic policy analysis?

amy said...

The journal of Health Affairs did an analysis of McCain's and Obama's health policies. Why oh why haven't economic organizations stepped up with an analysis? I'm not looking for economists backing Obama or McCain, I want an analysis from a non-partisan organization. Maybe my google skills aren't up to par? If you know of any such analysis, I'd be very interested.