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March 27th, 2017

Insight

Clinton Economic Plan – Part 1

Bruce Bialosky

By Bruce Bialosky

Published August 1, 2016

Prior to Ms. Clinton taking the stage to tell us what her economic plan will be if she becomes president, there was a fascinating interaction that went on between Stuart Varney, host of Varney & Co. on Fox Business Network, and Gene Sperling, who has been the Director of National Economic Council and Assistant to the President under Clinton and Obama and an advisor to the Hillary Clinton campaign.  This discussion went on for about 30 minutes and was TV at its best, particularly if you are a political junkie.

Varney started by asking Sperling what is different about Clinton’s economic plan from the Obama plan. Sperling started with the mantra from the left: “Obama was not able to focus because he was dealing with a near great depression.” 

Fact:  The policies put in place to stem the recession of 2008-2009 were put in place by the Bush Administration.  The only thing Obama did was spend $900 billion on questionable projects that produced very little and grew the national debt.

Fact: The recession ended in June 2009.  It is now seven years later and by every measure we have stagnant economic growth averaging a meager 2%.  That is why Varney asked the question in the first place.

Opinion: The recession of 1981-1982 was worse than the one in 2008-2009.  The unemployment rate was higher (10.8%) in 1982 versus 10% in 2009.  Also the interest rates (prime) were topping out at 18% or higher versus about 3% in 2009.  It was really ugly back then.  So stop selling us the near great depression stuff. 

When asked again what Clinton is going to do, Sperling said:

  •          Modernize Infrastructure – I guess they missed the $900 billion spent by Obama to little end.
  •          Focus on Energy Efficiency – Hope that generates a lot of jobs to replace all the coal miners out of work.
  •          Focus on small businesses
  •          Everyone has a path up
  •          Debt-Free College

Everyone acknowledges that the business formation rate is the lowest in our recent history.  The reasons are always complex, but how about two simple ones: regulations have exploded under Obama and tax rates have gone up. 

As for debt-free college, this is something I told you would happen -- free college for all – an entitlement in the mind of leftists in the near future.   Here is a fact: 56% of college students graduate over a six-year period now.  Thus we would be paying for:

  •          44% who never graduate
  •          29% of those who graduate take more than the four years to finish
  •          About 35% of Americans are currently graduating from college, but we all know a large percent cannot get a job or one worthy of a college degree.  A recent study found 48% of college graduates had positions that did not require a college education.

So why are the rest of us paying for these people’s free college?

Sperling brought up the idea of raising taxes on the “rich.”

Varney turned to tax rates and stated “I am in the top 1%, I do very well indeed, I pay New York City income taxes, New York State income taxes and federal income taxes.  I pay 60% of my gross income in income taxes.  Do you believe I should pay more?”

Sperling did not answer and went on to speak about the Buffet rule which says everyone making over $1 million must pay at least a 30% tax rate because supposedly some rich people were not paying their “fair” share. 

Fact:  In 1969 the federal government tried to solve a similar problem and created the Alternative Minimum Tax (AMT) which now does not tax people making over a million, but over 4 million people with incomes down to $150,000 will pay this tax this year.  How about this for an idea Mr. Sperling, you repeal the original tax aimed at “rich” people and put in the new one?  That will never happen because the AMT brings in too much revenue.

Repeatedly Varney asked Sperling whether he thought the 60% was fair.  Repeatedly, Sperling came up with another new argument regarding who should pay taxes and that Hillary only wants to put a surtax of 4% on those making more than $4 million.  He never answered the question.

Sperling did state: “I believe it is ok for these people to pay more so we can ‘invest’ in jobs and debt-free college.”  There he goes again saying government “invests.”  Government does no such thing.  It spends the money provided by hardworking people on favored projects of the elected politicians.

Then Sperling came through with the truth. “We have not focused on expanding the income and the ability to consume of the hard-working middle-class families.”  Well who has not – you and President Obama?  What will be different when you’re advising Clinton?  Nothing that I can see, but we can dream can’t we?

Varney went back to Sperling and asked him what he believed was a fair top rate. 

Again he refused to answer the question. At that time Judge Andrew Napolitano who was sitting next to Varney jumped in and stated: “It is not just the Democrats, but some Big Government Republicans consider this money theirs and our income what they will allow us to keep.  That is the inverse of a legitimate moral transaction.” Nothing new there – just the truth. 

Let me boil down the competing economic plans: Hillary and the Democrats = punish, punish, punish.  Republicans = encourage, encourage, encourage.

The revolution is coming.

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Bruce Bialosky is the founder of the Republican Jewish Coalition of California and a former Presidential appointee.

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