Obama's Economic Plan, Healthcare, The Recession, Reagan & The Middle Class

Obama for the win

Welcome to Obama FTW: your source for political news regarding our current president. Here you will find facts and trends that are common knowledge among mainstream economists and policy wonks but are lost in the noisy partisan bickering.

Obama Economic Plan 2013

President Obama has summarized his economic and job-building plans into 27-points, which can be seen here (PDF). Also, Business Insider has an overview of the 27 points here. This jobs plan includes boosting manufacturing (which includes getting tougher on China), producing American-made energy, and College affordability. This 3-pronged approach covers our economic short, medium and long-term interests.

To be clear, Obama has had a jobs plan for some time. Unfortunately it’s easy to lose sight of this in the midst of the 24-hour news cycle which often focuses on talking points and controversies over substance. But now they've been packaged together and condensed into a single document. On average, economists favor Obama’s economic plan to Romney’s and believe Obama is simply better for the economy.

Here is some more information on Obama’s Economic & Jobs Plan:

Obama’s Economic Plan for 2012, 2013 and beyond. A little bit about the plan:

Boosting Manufacturing

Tax Reform
Trade Enforcement
Rebuilding America

American-Made Energy

An All-of-the-Above Strategy
Committing to Clean Energy
Developing More American Oil and Natural Gas

College Affordability

Reforming Student Aid
Race to the Top for Higher Education
First in the World Competition
Better Information for Families
Additional Federal Support

Obama Jobs Plan 2013

Obama has also recently reintroduced the American Jobs Act (filibustered by Republicans in late 2011). The plan has received appraisals from independent private sector agencies like Moody’s Analytics who forecasted the jobs plan would create up to 1.9 million jobs and Macroeconomic Advisers whose estimate was 1.3 million jobs.

The American Jobs Act (PDF)

Tax Cuts to Help America’s Small Businesses Hire and Grow
Putting Workers Back on the Job While Rebuilding and Modernizing America
Pathways Back to Work for Americans Looking for Jobs.
Tax Relief for Every American Worker and Family

Obama explaining his jobs plan

Paying for the American Jobs Act

The American Jobs Act would be paid for by slightly raising taxes on millionaires (this is largely based on Warren Buffett's "Millionaire Tax"). This is a reasonable method considering the lowered tax burden on the wealthy and the concentration of wealth that has occurred over the last 30 years. The GOP economic plan has been a failure, but their alternative is a more extreme version of the same failed economic policies of the last 30 years. And while private sector analysis of Obama's jobs plan has been positive, the same analysis shows that Mitt Romney's jobs plan will be a failure.

wealth disparity united states - rich and poor

taxes on the wealthy

Timeline of Obama’s Jobs Plan: The American Jobs Act

9/8/11 – Obama introduces his jobs plan: the American Jobs Act
9/8/11 - Macroeconomic Advisers predicts the American Jobs Act would create 1.3 million Jobs
9/9/11 - Moody’s Analytics states the American Jobs Act would create 1.9 million Jobs
10/13/11 – Republicans filibuster the jobs plan
6/7/2012 – Romney claims Obama has no obs plan
6/12/2012 -Mark Hopkin, a senior adviser at Moody's Analytics claims Romney's Jobs plan “would push us deeper into recession and make the recovery slower.”

A quick note on irony: While Mitt Romney continues to criticize Obama for jobs lost under his first few months in office, a video of Romney defending his jobs record as Massachusetts governor actually provides a rebuttal to his own arguments.

The Middle Class and Income Inequality

The increasing disparity in income has gained more attention over the last couple of years. The video below was intended to become a TED talk but was taken off the table to avoid political backlash. Nick Hanauer has created several companies and explains that companies don’t “create jobs” so much as react to demand for products (meaning, it’s demand that creates jobs). The increasing disparity in income is hurting job creation as the middle class is less and less able to afford to buy the products and services that would result in job creation.

The data certainly vindicates Hanauer's assessment. There is no evidence that tax cuts on the wealthy create jobs. In fact, it would appear that job creation is higher when the top earners are taxed at a higher rate.

As you can see from below, the top marginal tax rates, as well as corporate and capital gains taxes (the source for income for the ultra wealthy) have all been significantly reduced over the last few decades. Job creation and GDP growth has actually been slower since.

Obama Tax Plan 2013 - Facts and Myths

Myth: The wealthy sre straddled in taxes. Taxing them more is socialist.
Fact: Taxes on the top earners are at near historical lows

obama - taxes on the wealthy

Myth: Taxing the wealthy will punish job creation
Fact: Job creation was actually higher under the old, higher tax rates

obama jobs plan

Myth: Taxing the wealthy will slow economic growth
Fact: GDP hasn't grown any faster under these lower tax rates

capital gains and gdp growth

unions and the middle class

Watch this video where Nobel Prize winner Paul Krugman explains the creation and virtual extinction of the middle class and increase in income inequality here. If you want more than this cliff notes version, buy his book, The Conscience of a Liberal.