What Can They Say This Time?

The third Presidential debate will be held tomorrow.  As the third in the series of three (plus the Vice President candidates debate), what can the candidates say that they have not said in the first two?  A safe bet is neither one will tell Americans the extent of the quandary facing either man who becomes the next President.

The quandary is quite simple to state.  In a globalized world where manufacturing is diffused among a broad array of low wage countries, how can the US generate economic growth quickly, either at all, or without increasing the deficit (and debt) a great deal more?  Most all manufactured goods can be produced to the highest quality standards and at costs far lower than within the US.  How can the US afford to invest in creating workplace jobs with a $1 trillion deficit and a $16 trillion debt?

One could argue, although neither candidate is, that even with the current $16 trillion debt, the US could tolerate increasing the annual $1 trillion deficit, say to $1.5 trillion for a year or two, if that would generate growth.  Unfortunately, political wisdom is that the deficit and the debt must come down.

So here is the bind.

The current deficit is more than 50% tied to entitlements.  How can the country deal with the deficit and debt and not deal with Medicare/Medicaid and Social Security?  How can the country not also deal with tax policy if only on a fairness basis.

Mitt Romney says, I will cut taxes, not increase the deficit, and jobs will come as the economy grows.  President Obama says jobs are growing already and he will not allow steps that hurt the middle class as he deals with the deficit.

Romney’s proposals are unsupported by details and by simple logic seem destine to fail if they were ever implemented… What?  What is meant by “if they were ever implemented”?

Romney’s plan certainly involves lower taxes (and I believe he will try) and even more generous tax breaks for the already wealthy (and I believe this will be the center point).  Congressional passage might prove difficult, however.  Romney’s plan to lower taxes and not raise the deficit will surly run amok when reality sets in that demographics and the cost of health care will translate into higher Medicare and Medicaid costs.  If the predicted battle over taxes was not explosive enough, any action by the GOP to cut entitlements while trying to lower taxes, will be even more explosive.  What’s left?

You guessed it.  The deficit and debt will increase despite Romney’s words.

Should President Obama win, he might allow the Bush tax cuts to expire and then try and negotiate a grand bargain…  say lower middle class taxes coupled with some benefits for the rich and some changes to entitlements.   Political realities will just as surely come to the fore.  Chances are that no bargain can be struck, the President will be facing an extremely tough choice.

Should he allow the Bush tax cuts to expire for everyone, or allow them to remain in place for everyone?

Increasing taxes on everyone will produce political dynamite in 2014.  The GOP could then take control of Congress.  This is an outcome Democrats do not want.  So does that mean President Obama will cave on the Bush tax cuts?

If he does, then the domestic economy and deficit/debt will look much the same as with Romney’s plan and likely actions.

Sifting through all of this, a rational voter should realize the economy will most likely be the same regardless of which candidate wins.  The deficit and the debt will remain uncontrolled.

There could be differences, however, in the areas of foreign policy and the web of social issues.

From the George W Bush years, voters have recent evidence of what a neoconservative foreign policy is like and its consequences (two unfunded wars leading no place).  With respect to social issues, despite recognizing the strong opposition from certain groups, there should be no confusion on which side of history these issues stand.

Mainstreaming homosexual orientation, protection of all women’s rights, and accepting that no other solution to undocumented aliens exists other than a comprehensive plan which includes citizenship could be impacted by the next President.

I would not expect President Obama to be aggressive in any of these issues.  By the same token, he would not be expected to step in the way.  The GOP, on the other hand, with its Tea Party and Evangelical wings will be under continued pressure to delay efforts if not reverse the existing situations.

The veto and appointments to the Supreme Court (should they occur) are tools these candidates could use.  I wonder whether either will raise these clear differences and explain how they would use them?  That would be something new.

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2 Comments on “What Can They Say This Time?”

  1. J. Palmer Says:

    Good analysis. Don’t forget that Obama already caved once on extending the Bush tax cuts for the rich in order to pass his payroll tax cut for all Americans. The Republicans might see that as a sign of weakness the next time around.


    • JP, agree with you… but the President has experienced the “no way, no how” GOP negotiating strategy once and found reason does not prevail. My bet is that he would let the Bush tax cuts expire, and then argue for middle class tax cuts if reelected. If Romney wins, Obama would still let the Bush cuts expire and then let Romney figure it out knowing there is a Democratic filibuster possible in the Senate.

      We shall see…


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