Is Obamanomics Conservative or Revolutionary?

Hello all,

Interesting article i came across ... some of this stuff i didn't even know about ...

There are two ways to see Obamanomics.

The first, much preferred by the White House, is as a set of initiatives so modest as to hardly merit a raised eyebrow. Yes, steps must be taken to deal with the current economic crisis. But assuming the economy recovers next year, Obama's budget projects that government spending by the end of the decade will drop to around 22.5 percent of GDP, which is about where it was under Reagan.

What about those tax hikes on the wealthy? Obama merely restores the top two marginal income tax rates to what they were in the 1990's, the capital gains rate to its lowest level during that same prosperous decade, and the rate on dividends to a level even lower than it was in the 1990s. And even these modest reversions to the 1990's will affect only the wealthiest 3 percent of Americans, and not until 2011. Ninety-seven percent of small businesses won't pay a dime more. True, the very rich won't be able to deduct quite as much as they can now for their mortgage interest and charitable donations, but this is hardly revolutionary, either. In fact, it's another throwback - to the limits in place under Ronald Reagan. All told, taxes are projected to total 19 percent of GDP by the end of the decade. That's even lower than it was in the late 1990's.

This part brings up some odd relationships between obama and reagan ... i guess i never imagined the possibilities that his ideas towards taxing and spending were already implemented at another time ...

But isn't universal health care itself a pretty radical step? Not according to this view. The other half of what's needed to pay for universal health care will come from health-care savings that are also necessary to keep the current big health-care entitlement programs - Medicare and Medicaid - affordable. It's just common sense: Allow government to use its bargaining leverage under Medicare and Medicaid to lower drug prices, strengthen Medicare pay-for-performance incentives, and institute better disease management, prevention, and health information technologies.

What about the environment? Isn't cap and trade a huge deal? Not at all. Instead of heavy-handed regulation, it's a market solution to the problem of global warming. Government merely sets an overall cap on the amount of carbon dioxide to be allowed into the atmosphere, which drops annually, and then requires firms to bid for permits to pollute within that overall cap. Firms can buy and sell permits to each other; they can innovate to reduce pollution even further. Such a system will generate enough revenues to give 95 percent of Americans a yearly refundable tax credit of $400, and also finance research and development of renewable energy and a modernized electricity grid.

This also brings up some interesting points ... the numbers are interesting and i think these are good points ...

But there's another way to view Obamanomics - as an economic philosophy exactly the opposite of the one that's dominated America for more than a quarter century.

The basic idea of Reaganomics was that the economy grows from the top down. Lower taxes on the wealthy make them work harder and invest more, and the benefits trickle down to everyone else. Rarely in economic history has a theory been more tested in the real world and proven so wrong. In point of fact, nothing trickled down. After the Reagan tax cuts, increases in the median wage slowed, adjusted for inflation. After George W. Bush's tax cuts for the wealthy, the median wage actually dropped. Meanwhile, most of the income went to the top. In 1980, just before the Reagan revolution, the richest 1 percent took home 9 percent of total national income. But by 2007, the richest 1 percent was taking home 22 percent.

Obamanomics, by contrast, holds that an economy grows best from the bottom up. Obama's program increases taxes on the top, and uses the proceeds to raise the living standards of average Americans by giving them lower taxes, better schools, and more affordable health insurance. That may not seem very radical, but compared to the last quarter-century it's revolutionary.

Reaganomics didn't believe in public investment, except perhaps when it came to the military. Everything else was considered government spending, which was assumed to be wasteful. Hence, the cuts (adjusted for inflation) during Reagan, Bush I and Bush II in education, job training, infrastructure, and basic research and development. And the reluctance to expand health insurance except when it came to corporate welfare for the pharmaceutical industry.

But Obamanomics is committed to these forms of public investment. And there's good reason: In a global economy, capital moves to wherever it can get the best deal around the globe. That means capital and jobs go to nations that can promise high returns either because labor is cheap and taxes and regulations low, or because labor is highly productive - well-educated, healthy, and supported by modern infrastructure.

Article Here
Original Post Here

I honestly don't know what to think i'm kind of on the fence because both points of view bring up good supporting points ... what do you think?

[edit on 14-3-2009 by baseball101]

i consider obama's economic plan much more conservative (if you judge conservatism on how conservatives themselves act)


here's what i mean:

Conservatives "boo" these types of things when democrats do them while they're in power, BUT

when a conservative is in power, what do we do?

WAR!

"War stimulates the economy" "world war 2 stopped the depression" etc etc

As far as the economy, wall street, money, etc etc, goes, there is absolutely zero difference between what Bush did with Afghanistan and Iraq, and what Obama is doing with the economy.

They both spent tons of money, but Bush's spending was "okay" but the conservatives because 1.) Bush is a republican 2.) We went to war

But Obama's spending isnt okay, regardless that it's the SAME THING.

Government spending is Government spending.
Liberal/Conservative are just fighting words used to add some old school W.W.F. style flare to things to create sides and help keep powerful people in power.

Oh boy! You may have just opened a can of worms! How dare you post articles comparing Obama to Reagan?

I keep trying to tell people that he snagged his top econ advisers from the University of Chicago -- the Mecca of fiscal conservatism.

The Republicans made a last ditch effort to win the election by chopping and pasting a 2001 interview with Obama to make him sound like an "evil Socialist," and their followers ate it up without ever listening to the original source -- in which he actually criticized going through the courts to achieve redistribution of wealth.

When Hillary's supporters jumped on the McCain bandwagon, it was because they viewed McCain as MORE liberal.

And all of this spending that's going on? It would happen under any President because they're scared to death of what's coming economically. The only difference would be that Republicans might use more corporate tax cuts, and a CBO report has clearly stated that corporate tax cuts don't work.

And last but not least: government spending and extension of presidential power has historically increased under Republican presidents. The GOP isn't the "party of small government," folks! They're conning you.

Oh yeah, and WWII didn't end the Great Depression. War isn't good for an economy. The Depression didn't end until several years after the War, when a few New Deal laws were lifted, and the transistor was invented.

[edit on 20-3-2009 by theWCH]

The idea of bottom-up prosperity is neither socialist-radical nor Reagan-conservative. It has been part of the liberal philosophy since Roosevelt. It was practiced in the 1950's and 60's, when liberals and conservatives in Congress were both agreed on many things.

The very rich and corporations--yes, corporations (heavens to Betsy, Ronald Reagan!)--were taxed at a much higher rate than they were under Reagan or even
Clinton, who was for all practical purposes Republican Lite. Eisenhower, a Republican, was president during much of this time--Republicans in general were more liberal than they have been since Barry Goldwater.

At the same time, wages at the bottom of the economic scale were steadily increasing, thanks in part to the labor movement, and these increases pushed up wages for the middle class and so on. With an ever-growing middle class (it wasn't shrinking, as it is now) there was greater widespread prosperity throughout the population, which kept the economy humming through consumer spending.

So "Obamanomics" isn't entirely new. Large parts of it have been around for a long time.

For more information on the economics of this period, and liberal economic theory in general, read "The Conscience of a Liberal" by economist Paul Krugman
(New York: W. W. Norton & Co. , 2007)