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Barack Obama’s Economic Policies

August 6th, 2008 Leave a comment Go to comments

From Obama for
President
website, here are some of his economic policies, with my
commentary.

* Provide Additional Tax Rebates to American Workers: The economy
has continued to weaken significantly, despite congressional action to
provide immediate tax rebates to American consumers. Stimulus: $20
billion.

Good. Taxes are tending to increase, so cutting them is good, even if
the tax cut is called a rebate.

* Establish a $10 billion Foreclosure Prevention Fund: Given the
downturn in the economy, Obama is calling for immediate creation of
his Foreclosure Prevention Fund that will dramatically increase
emergency pre-foreclosure counseling, and will help families facing
foreclosure to responsibly refinance their mortgages or sell their
homes. Obama’s plan will not help speculators, people buying vacation
homes or people that falsely represented their incomes. It is meant to
help responsible homeowners through this difficult period. Stimulus:
$10 billion.

Bad. People who are overextended are given plenty of time by their
banks, who lose money from foreclosures. The industry of reckless
lending should not be subsidized this way.

* Provide $10 billion in Relief for State and Local Governments
Hardest-Hit by the Housing Crisis to Prevent Cuts in Vital Services:
Because of the housing crisis and the weakening economy, many state
and local governments are facing significant revenue shortfalls.
Barack Obama believes that in the areas hardest-hit by the housing
crisis we should provide immediate, temporary funding to state and
local governments so that the decline in property values does not
cause them to slash critical public services and cut vital
infrastructure spending. Stimulus: $10 billion.

Bad. Localities can raise their own taxes if they want to, rather
than using national taxes.

* Extend and Expand Unemployment Insurance: Barack Obama believes
we must extend and strengthen the Unemployment Insurance (UI) program
to address the needs of the long-term unemployed, who currently make
up nearly one-fifth of the unemployed and are often older workers who
have lost their jobs in manufacturing or other industries and have a
difficult time finding new employment. Expanding UI is one of the most
effective ways to combat economic turmoil; every dollar invested in UI
benefits results in $1.73 in economic output. Obama is calling for a
temporary expansion of the UI program for those who have exhausted
their current eligibility. Stimulus: $10 billion.

Bad. We shouldn’t encourage people to stay unemployed.

* Provide a Tax Cut for Working Families: Obama will restore
fairness to the tax code and provide 150 million workers the tax
relief they need. Obama will create a new “Making Work Pay” tax credit
of up to $500 per person, or $1,000 per working family. The “Making
Work Pay” tax credit will completely eliminate income taxes for 10
million Americans.

Bad. We’ve already done too much of this. It’s good for everyone to
contribute at least a little in income tax. Also, this plan does
exactly what the Earned Income Credit is supposed to be doing
already.

* Eliminate Income Taxes for Seniors Making Less than $50,000:
Barack Obama will eliminate all income taxation of seniors making less
than $50,000 per year. This proposal will eliminate income taxes for 7
million seniors and provide these seniors with an average savings of
$1,400 each year. Under the Obama plan, 27 million American seniors
will also not need to file an income tax return.

Bad. Why should old people get a special tax break?

* Simplify Tax Filings for Middle Class Americans: Obama will
dramatically simplify tax filings so that millions of Americans will
be able to do their taxes in less than five minutes. Obama will ensure
that the IRS uses the information it already gets from banks and
employers to give taxpayers the option of pre-filled tax forms to
verify, sign and return. Experts estimate that the Obama proposal will
save Americans up to 200 million total hours of work and aggravation
and up to $2 billion in tax preparer fees.

Good idea.

* Fight for Fair Trade: Obama will fight for a trade policy that
opens up foreign markets to support good American jobs. He will use
trade agreements to spread good labor and environmental standards
around the world and stand firm against agreements like the Central
American Free Trade Agreement that fail to live up to those important
benchmarks. Obama will also pressure the World Trade Organization to
enforce trade agreements and stop countries from continuing unfair
government subsidies to foreign exporters and nontariff barriers on
U.S. exports.

* Amend the North American Free Trade Agreement: Obama believes
that NAFTA and its potential were oversold to the American people.
Obama will work with the leaders of Canada and Mexico to fix NAFTA so
that it works for American workers.

Bad. He’s a protectionist.

* Improve Transition Assistance: To help all workers adapt to a
rapidly changing economy, Obama would update the existing system of
Trade Adjustment Assistance by extending it to service industries,
creating flexible education accounts to help workers retrain, and
providing retraining assistance for workers in sectors of the economy
vulnerable to dislocation before they lose their jobs.

Bad. Boondoggle spending.

* Invest in our Next Generation Innovators and Job Creators: Obama
will create an Advanced Manufacturing Fund to identify and invest in
the most compelling advanced manufacturing strategies. The Fund will
have a peer-review selection and award process based on the Michigan
21st Century Jobs Fund, a state-level initiative that has awarded over
$125 million to Michigan businesses with the most innovative proposals
to create new products and new jobs in the state.

* Double Funding for the Manufacturing Extension Partnership: The
Manufacturing Extension Partnership (MEP) works with manufacturers
across the country to improve efficiency, implement new technology and
strengthen company growth. This highly-successful program has engaged
in more than 350,000 projects across the country and in 2006 alone,
helped create and protect over 50,000 jobs. But despite this success,
funding for MEP has been slashed by the Bush administration. Barack
Obama will double funding for the MEP so its training centers can
continue to bolster the competitiveness of U.S. manufacturers.

Bad. This is fascist industrial policy, the kind that was widely
ridiculed in the 1980’s. The government shouldn’t be funding private
investment.

* Invest In A Clean Energy Economy And Create 5 Million New Green
Jobs: Obama will invest $150 billion over 10 years to advance the next
generation of biofuels and fuel infrastructure, accelerate the
commercialization of plug-in hybrids, promote development of
commercial scale renewable energy, invest in low emissions coal
plants, and begin transition to a new digital electricity grid. The
plan will also invest in America’s highly-skilled manufacturing
workforce and manufacturing centers to ensure that American workers
have the skills and tools they need to pioneer the first wave of green
technologies that will be in high demand throughout the world.

Okay.

* Create New Job Training Programs for Clean Technologies: The
Obama plan will increase funding for federal workforce training
programs and direct these programs to incorporate green technologies
training, such as advanced manufacturing and weatherization training,
into their efforts to help Americans find and retain stable, high-
paying jobs. Obama will also create an energy-focused youth jobs
program to invest in disconnected and disadvantaged youth.

Bad. Industrial policy again.

[To be continued]

* Boost the Renewable Energy Sector and Create New Jobs: The Obama
plan will create new federal policies, and expand existing ones, that
have been proven to create new American jobs. Obama will create a
federal Renewable Portfolio Standard (RPS) that will require 25
percent of American electricity be derived from renewable sources by
2025, which has the potential to create hundreds of thousands of new
jobs on its own. Obama will also extend the Production Tax Credit, a
credit used successfully by American farmers and investors to increase
renewable energy production and create new local jobs.

Terrible idea, and rotten economics.

Barack Obama believes that it is critically important for the United
States to rebuild its national transportation infrastructure – its
highways, bridges, roads, ports, air, and train systems – to
strengthen user safety, bolster our long-term competitiveness and
ensure our economy continues to grow.

* Create a National Infrastructure Reinvestment Bank: Barack Obama
will address the infrastructure challenge by creating a National
Infrastructure Reinvestment Bank to expand and enhance, not supplant,
existing federal transportation investments. This independent entity
will be directed to invest in our nation’s most challenging
transportation infrastructure needs. The Bank will receive an infusion
of federal money, $60 billion over 10 years, to provide financing to
transportation infrastructure projects across the nation. These
projects will create up to two million new direct and indirect jobs
per year and stimulate approximately $35 billion per year in new
economic activity.

Infrastructure is what a lot of our porkbarrel spending has been about. This Bank would have huge patronage power and would undoubtedly be corrupt, just like Democrat-led Fannie Mae and Freddie Mac.

* Invest in the Sciences: Barack Obama supports doubling federal
funding for basic research …

* Make the Research and Development Tax Credit Permanent: Barack
Obama wants investments in a skilled research and development
workforce and technology infrastructure to be supported here in
America so that American workers and communities will benefit. Obama
wants to make the Research and Development tax credit permanent so
that firms can rely on it when making decisions to invest in domestic
R&D over multi-year timeframes.

I do like that.

* Deploy Next-Generation Broadband: Barack Obama believes we can
get broadband to every community in America through a combination of
reform of the Universal Service Fund, better use of the nation’s
wireless spectrum, promotion of next-generation facilities,
technologies and applications, and new tax and loan incentives.

I don’t know much about that.

* Provide Tax Relief for Small Businesses and Start Up Companies:
Barack Obama will eliminate all capital gains taxes on start-up and
small businesses to encourage innovation and job creation. Obama will
also support small business owners by providing a $500 “Making Work
Pay” tax credit to almost every worker in America. Self-employed small
business owners pay both the employee and the employer side of the
payroll tax, and this measure will reduce the burdens of this double
taxation.

This sounds like a good tax cut.

* Create a National Network of Public-Private Business Incubators:
Barack Obama will support entrepreneurship and spur job growth by
creating a national network of public-private business incubators.
Business incubators facilitate the critical work of entrepreneurs in
creating start-up companies. Obama will invest $250 million per year
to increase the number and size of incubators in disadvantaged
communities throughout the country.

Sounds like pork to me.

Obama will strengthen the ability of workers to organize unions. He
will fight for passage of the Employee Free Choice Act. Obama will
ensure that his labor appointees support workers’ rights and will work
to ban the permanent replacement of striking workers. Obama will also
increase the minimum wage and index it to inflation to ensure it rises
every year.

All bad. He wants to support unionized workers at the expense of poor workers who might compete with them.

* Ensure Freedom to Unionize: Obama believes that workers should
have the freedom to choose whether to join a union without harassment
or intimidation from their employers. Obama cosponsored and is strong
advocate for the Employee Free Choice Act, a bipartisan effort to
assure that workers can exercise their right to organize. He will
continue to fight for EFCA’s passage and sign it into law.

I don’t know this bill, but unionizing already has lots of protection, since the 1930s.

* Fight Attacks on Workers’ Right to Organize: Obama has fought
the Bush National Labor Relations Board (NLRB) efforts to strip
workers of their right to organize. He is a cosponsor of legislation
to overturn the NLRB’s “Kentucky River” decisions classifying hundreds
of thousands of nurses, construction, and professional workers as
“supervisors” who are not protected by federal labor laws.

I don’t know this decision, but my guess is that he wants to force all these people to join unions against their will.

* Protect Striking Workers: Obama supports the right of workers to
bargain collectively and strike if necessary. He will work to ban the
permanent replacement of striking workers, so workers can stand up for
themselves without worrying about losing their livelihoods.

If a worker decides his employer is not paying him enough and goes on strike, why shouldn’t the employer be allowed to hire someone else who would be happy to get that wage?

* Raise the Minimum Wage: Barack Obama will raise the minimum
wage, index it to inflation and increase the Earned Income Tax Credit
to make sure that full-time workers earn a living wage that allows
them to raise their families and pay for basic needs.

Bad economics.What he really wants is to get those workers fired so union workers who pay him big campaign contributions will be hired instead.

* Create a New FHA Housing Security Program: Barack Obama strongly
supports the efforts of Senate Banking Committee Chair Chris Dodd
(D–CT) to create a new Federal Housing Administration (FHA) program
that will provide meaningful incentives for lenders to buy or
refinance existing mortgages and convert them into stable 30-year
fixed mortgages. This plan provides an important federal backstop –
not a bailout – to this growing national problem. Neither lenders nor
homeowners would receive a windfall from this plan.

I don’t know that bill.

* Create a Universal Mortgage Credit: Obama will create a 10
percent universal mortgage credit to provide homeowners who do not
itemize tax relief. This credit will provide an average of $500 to 10
million homeowners, the majority of whom earn less than $50,000 per
year.

* Ensure More Accountability in the Subprime Mortgage Industry:
Obama has been closely monitoring the subprime mortgage situation for
years, and introduced comprehensive legislation over a year ago to
fight mortgage fraud and protect consumers against abusive lending
practices. Obama’s STOP FRAUD Act provides the first federal
definition of mortgage fraud, increases funding for federal and state
law enforcement programs, creates new criminal penalties for mortgage
professionals found guilty of fraud, and requires industry insiders to
report suspicious activity.

* Mandate Accurate Loan Disclosure: Obama will create a Homeowner
Obligation Made Explicit (HOME) score, which will provide potential
borrowers with a simplified, standardized borrower metric (similar to
APR) for home mortgages. The HOME score will allow individuals to
easily compare various mortgage products and understand the full cost
of the loan.

* Create Fund to Help Homeowners Avoid Foreclosures: Obama will
create a fund to help people refinance their mortgages and provide
comprehensive supports to innocent homeowners. The fund will be
partially paid for by Obama’s increased penalties on lenders who act
irresponsibly and commit fraud.

* Close Bankruptcy Loophole for Mortgage Companies: Obama will
work to eliminate the provision that prevents bankruptcy courts from
modifying an individual’s mortgage payments. Obama believes that the
subprime mortgage industry, which has engaged in dangerous and
sometimes unscrupulous business practices, should not be shielded by
outdated federal law.

* Create a Credit Card Rating System to Improve Disclosure: Obama
will create a credit card rating system, modeled on five-star systems
used for other consumer products, to provide consumers an easily
identifiable ranking of credit cards, based on the card’s features.
Credit card companies will be required to display the rating on all
application and contract materials, enabling consumers to quickly
understand all of the major provisions of a credit card without having
to rely exclusively on fine print in lengthy documents.

* Establish a Credit Card Bill of Rights to Protect Consumers:
Obama will create a Credit Card Bill of Rights to protect consumers.
The Obama plan will:
o Ban Unilateral Changes
o Apply Interest Rate Increases Only to Future Debt
o Prohibit Interest on Fees
o Prohibit “Universal Defaults”
o Require Prompt and Fair Crediting of Cardholder Payments

* Cap Outlandish Interest Rates on Payday Loans and Improve
Disclosure: Obama supports extending a 36 percent interest cap to all
Americans. Obama will require lenders to provide clear and simplified
information about loan fees, payments and penalties, which is why
he’ll require lenders to provide this information during the
application process.

* Encourage Responsible Lending Institutions to Make Small
Consumer Loans: Obama will encourage banks, credit unions and
Community Development Financial Institutions to provide affordable
short-term and small-dollar loans and to drive unscrupulous lenders
out of business.

* Reform Bankruptcy Laws to Protect Families Facing a Medical
Crisis: Obama will create an exemption in bankruptcy law for
individuals who can prove they filed for bankruptcy because of medical
expenses. This exemption will create a process that forgives the debt
and lets the individuals get back on their feet.

* Expand the Family and Medical Leave Act: The FMLA covers only
certain employees of employers with 50 or more employees. Obama will
expand it to cover businesses with 25 or more employees. He will
expand the FMLA to cover more purposes as well, including allowing
workers to take leave for elder care needs; allowing parents up to 24
hours of leave each year to participate in their children’s academic
activities; and expanding FMLA to cover leave for employees to address
domestic violence.

* Encourage States to Adopt Paid Leave: As president, Obama will
initiate a strategy to encourage all 50 states to adopt paid-leave
systems. Obama will provide a $1.5 billion fund to assist states with
start-up costs and to help states offset the costs for employees and
employers.

* Expand High-Quality Afterschool Opportunities: Obama will double
funding for the main federal support for afterschool programs, the
21st Century Learning Centers program, to serve a million more
children. Obama will include measures to maximize performance and
effectiveness across grantees nationwide.

* Expand the Child and Dependent Care Tax Credit: The Child and
Dependent Care Tax Credit provides too little relief to families that
struggle to afford child care expenses. Obama will reform the Child
and Dependent Care Tax Credit by making it refundable and allowing
low-income families to receive up to a 50 percent credit for their
child care expenses.

* Protect Against Caregiver Discrimination: Workers with family
obligations often are discriminated against in the workplace. Obama
will enforce the recently-enacted Equal Employment Opportunity
Commission guidelines on caregiver discrimination.

* Expand Flexible Work Arrangements: Obama will create a program
to inform businesses about the benefits of flexible work schedules;
help businesses create flexible work opportunities; and increase
federal incentives for telecommuting. Obama will also make the federal
government a model employer in terms of adopting flexible work
schedules and permitting employees to request flexible arrangements.

* Housing: In the U.S. Senate, Obama introduced the STOP FRAUD Act
to increase penalties for mortgage fraud and provide more protections
for low-income homebuyers, well before the current subprime crisis
began.

* Predatory Lending: In the Illinois State Senate, Obama called
attention to predatory lending issues. Obama sponsored legislation to
combat predatory payday loans, and he also was credited with lobbying
the state to more closely regulate some of the most egregious
predatory lending practices.

* American Jobs: Barack Obama introduced the Patriot Employer Act
of 2007 to provide a tax credit to companies that maintain or increase
the number of full-time workers in America relative to those outside
the US; maintain their corporate headquarters in America; pay decent
wages; prepare workers for retirement; provide health insurance; and
support employees who serve in the military.

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  1. Carol
    September 17th, 2008 at 20:19 | #1

    Obama has been way ahead of the “game” regarding the illegal and irresponsible way the Mortgage Industry operates.

    I wish he would use more campaign time to let the voters know more about his suggested policies…

    Carol.G

  2. dougbaker
    August 16th, 2008 at 12:15 | #2

    Hey Eric,

    What a fascinating blog, this post in particular. I love the line, “The industry of reckless lending should not be subsidized this way.” Right on!

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