Saturday, September 6, 2008

Swift Boat Economics

That's the term Dean Baker uses to describe the McCain campaign's attempts to convince people that Obama's tax program would reduce growth:

Of course, there's no truth to Senator McCain's Swift boat economics. During the eight years of the Clinton administration, when rich people paid the same tax rates proposed by Senator Obama, the private sector added 15.8 million jobs. By contrast, in the seven years and six months of the Bush administration, when rich people paid the Bush-McCain tax rates, the private sector has added just 3.5 million jobs. And, it is losing jobs at the rate of almost 100,000 a month as President Bush prepares for retirement.

While job growth is probably the most important measure of the economy's health, almost every other measure also showed that the economy performed better with the Clinton-Obama tax rate than the Bush-McCain tax rate. The real wage for the typical worker rose by 6.6 percent in the Clinton years. By contrast, wages have risen by just 1.0 percent in the Bush years and are now falling. At the current rate of decline, real wages will be lower In January of 2009 than when President Bush took office in 2001. The typical family's income rose by 15.3 percent under Clinton, it fell by 1.6 percent under Bush.

In short, it is easy to show McCain's ad is utter nonsense. The economy had its most prosperous period in 30 years with the tax rates Obama is proposing. President Bush then cut taxes for the rich, and the economy turned in its worst performance since the Great Depression.
But the Swift boating is really even more insidious than Dean outlines. The McCain-Palin campaign is telling people that Obama would raise everyone's taxes. Here's what McCain adviser Steve Schmidt told Katie Couric: "Obama wants to raise everybody’s federal taxes."

This claim is categorically, unarguably false. It is because of blatant lies like this that half of Americans believe Obama will raise their taxes.

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