The American Economic Pie

Transcript:

This election has gone on way too long, with way too many details. We have tax cut proposals, health care proposals, Wall Street bailout plans, mortgage bailout plans and who knows how many other schemes to spend your money. It is so complicated that we’re all tempted to throw up our hands!

The candidates’ proposals are so detailed, that it’s hard to see the forest for the trees. That’s why it is so important to take a big step back so you CAN see the forest, and get a sense of the big picture that each of the candidates is painting.

The one thing we’ve all learned – the hard way – in the last month is that you can’t keep the party going forever. Americans have borrowed too much money for the last twenty years, as individuals, as businesses and as a government. We’ve bought things on credit – be it houses, stocks, flat screen TV’s, or government programs. We’ve been on a spending binge. And, like all binges, eventually you wake to face reality – usually with a whopper of a hangover.

The second thing we’ve learned is that if something seems too good to be true, it probably is. Haven’t you asked yourself in the last year or so, how could home prices could keep going up? How you could have such constantly rising 401K plan without having to add much to it? How 20 somethings on Wall Street could be making such huge salaries right out of college? How borrowing money could be so easy?

Didn’t we all have a nagging thought, buried in the back of our minds, that there was something unreal about it all? That nagging thought was your common sense telling you that something didn’t add up. But it turns out that common sense isn’t so common since most of us didn’t heed it. My favorite was when my one year old was sent a credit card, addressed to her, offering a program so she could charge now but pay nothing back for months. Right.

So the party’s over. And we have two very different presidential candidates – each of whom promises to get us out of this mess by cutting taxes and increasing programs. But how can we pick out way through this maze of programs and promises? Do either of their programs make sense?

After analyzing the candidates proposals for health care, social security, taxes, and economic stimulants, I’ve concluded that when you strip away all the mind-numbing specifics, all the spin and fancy talk, McCain and Obama have two opposing philosophies about America’s economic pie– how big it is and who gets how much of it. Both candidates want to increase the size of the pie. Both want to change who in our society gets what sized pieces of the pie. But they approach it from different angles.

In simple terms, McCain is more concerned with growing the pie, rather than the size of the pieces. He favors policies that encourage the private sector of the economy to grow. His proposals favor small business, where the majority of new jobs come from. His tax policies reward investment in new technologies, building new companies and creating new jobs. Although he doesn’t say it this way, he figures that if the pie is big enough, everyone gets a decent sized piece. He doesn’t believe in giving everyone the same sized piece, but rather a piece reflective of their overall contribution to growing the pie. He is a free market conservative.

Obama is more concerned with the size of the pie pieces, rather than the size of the pie as a whole. As he said to Joe the Plumber, he wants to spread the wealth around. He favors more government aid to the lower classes – in health care and tax refunds. He wants to use government programs – taxes, rebates, mandatory programs – to make sure everyone gets a more equitable size of the pie. He calls this a trickle up plan – that if the lower classes have a bigger piece of the pie they will stimulate the economy to grow. When questioned whether these policies will shrink the pie, he dismisses the very thought. He is a big government liberal.

Now it’s up to you to decide. Do you think it is more important to grow the pie in hopes that everyone gets a bigger slice down the road? Or that it matters more that everyone gets a more equitable slice right now? Or that bad as things are now, they would be even worse if the pie shrinks. Those aren’t easy decisions, but then again, these aren’t easy times.