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The Debate
Jesse Richman, 10/2/2012

Writing for National Journal, Jim Tankersley raises what he terms "The Only Debate Question that Matters" of "Why aren't you serious about trying to solve the jobs crisis?" in a forceful way.  Tankersley notes that neither candidate has a jobs plan that can credibly be claimed to be up to the scale of the jobs challenge. 

To Obama he proposes that Jim Lehrer should ask:

“President Obama: Your plan centers on spending more on infrastructure, education, and clean energy. You propose spending $200 billion on infrastructure projects, over six years, and promise that spending would ‘support’ 1 million jobs. You promise another 600,000 jobs by decade’s end from expanded natural-gas production. Mr. President, with all due respect, where will the other nine million jobs come from?"

To Romney he proposes the following question:

“Governor Romney: Your plan would cut income tax rates and eliminate some tax deductions. You say this would create 12 million jobs. But the federal government cut tax rates in 2001 and 2003 — reductions designed by some of your top economic advisers — and we ended up with the worst decade of job growth in American history even before the Great Recession came along. Today, marginal rates are lower than they’ve ever been in America. Why, governor, should we expect your tax cuts to deliver job growth that the Bush tax cuts did not?"

These are important questions.  And they are questions that neither candidate seems equipped to answer.  Tankersley suggests that in part this is because neither candidate is innovative in his approach to the challenges.  Both are running on a platform appropriate to 1980 or 1988.

“A follow-up, for both of you: Where is the creativity in your jobs plans? What will you try that is new or different from doctrinaire conservatism or liberalism? Where is the boldness Americans demand to solve the greatest unemployment crisis in two generations?"

How will the winning candidate answer this question?  By breaking new ground.  Here is what I would like to hear.

"The United States didn't get itself into the current economic predicament overnight.  We over-borrowed and over-invested in housing.  We ran up our national and personal debt without buying investments with enduring value in exchange.  Now we suffer the consequences.  To recover economically, we need to change course in important and challenging ways.  Here are two such ways.

1. We need to take our international balance of payments seriously.  For decades we have borrowed from abroad to finance consumption.  No more.  Immediately after inauguration I will move to balance trade by implementing the scaled tariff.  Our trade deficit with China alone costs American workers 2.7 million jobs over the last decade, and that doesn't include the millions more who lost indirectly when local economies were decimated by plant closures. 

2. We need to take our budget deficit seriously.  To balance the budget we need to gradually raise taxes and cut spending.  As we raise taxes and cut spending, we should do both with an eye toward increasing the return from government spending, and diminishing the economic distortions of government tax policies. The bipartisan deficit reduction plans put forward over the last several years share some of these characteristics.  It is time we took these plans seriously, and as President I will make sure that Congress takes up and passes such a plan.  

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Comment by Jeff Paetkau, 10/8/2012:

Isn't the rate of job growth obviously slower in a high-employment economy (such as during the majority of the Bush Presidency and when Romney served as MA governor)?  What impact did the Bush tax rate cuts have on revenue and the unemployment rate?  Why automatically assume that lower tax rates lower revenue?

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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]