Many Americans are watching the gains racked up in their pension accounts in the last five years wiped out in the past few weeks. And fretting that no one seems to know what to do about it. The president says that economy is just fine. The Congress says the president is detached from reality in this as in other matters, and retreats to a posh hotel to come up with a plan. Donald Trump says he knows what to do, and if given the chance, will make America great again, which he and fellow Republican wannabees propose to do by cutting taxes. Democrat Hillary Clinton says give me another lease on the White House and I will fix things by raising taxes – a piker, by the standards of her Socialist challenger, Bernie Sanders, with whom she agreed on over 90 percent of the issues that came before the Senate for votes when their service there overlapped. Republicans propose to repeal regulations they claim are stifling banks and making it difficult for small businesses to get credit, Clinton to tighten those regulations and tax risky banks to prevent "Wall Street", the district that is home to many of her supporters, from causing another financial meltdown, and to let banks fail rather than bail them out. Sanders would take an axe to the banks, and chop the big ones into smaller pieces. Capitalist buccaneer Trump supports government subsidies of ethanol, an Iowa product, while attacking government intervention in markets. Little wonder that Americans are confused as their savings shrivel because oil prices are plummeting, which economists chortled would be a good thing for them.
All of this matters not only here, but to other countries that recognize the importance of America to world order and global prosperity. Witness the fact that the mother of all parliaments took time from discussing whether Britain should remain in the EU or leave, its Trident should or should not tote nuclear missiles, whether to accept more immigrants, to debate barring Donald Trump from entering the UK. Trump says he has no desire to visit and knows that attacks by foreigners, even English-speaking foreigners, will only enhance his standing with many of his followers. Besides, it will be easier to hop over once he replaces his Boeing 757-200, a smaller corporate jet and two helicopters with Air Force One and an infinity of other aircraft. For now he is focused on the Iowa caucuses, only nine days away, and his battle with Texas senator Ted Cruz, with whom he is in a neck-and-neck race. Cruz, claims The Donald, might be disqualified from serving as president because he was born in Canada and therefor does not meet the Constitutional requirement of being a natural-born US citizen. Cruz says Trump is disqualified from running as a Republican because he supported the single-payer health care system being pushed by socialist Bernie Sanders, attended social events with Hillary Clinton, and is infected with "New York values" – wink, wink. Both are hoping for a win in Iowa, with Trump having a good week thanks to the endorsement of Sarah Palin, a one-time Cruz fan, and the Queen of the Tea Party, very popular in Iowa and in tea party circles around the country. Meanwhile, New Jersey governor Chris Christie waits to take the winner on in the soon-to-follow New Hampshire primary, where on the Democratic side Socialist senator Bernie Sanders leads Hillary Clinton in the polls. Sanders has overcome an early image as the mad old uncle released from the attic: his passionate campaigning and an appeal to the left of the Democratic Party is producing huge rallies and large contributions, while Clinton seems to have failed recent tutoring in prepared spontaneity, and is having difficulty persuading voters that she is not excessively economical with the truth after denying she handled security-sensitive materials on her private server, which a recent report by government inspectors says she did.
To call all of this sturm und drang would be to dignify what is a Punch-and-Judy show. But to conclude that this is all there is to the battles for the nominations of the two parties would be a mistake. Lurking beneath the surface of the television debates, in which immoderators specialize in prompting the candidates to attack one another, are serious proposals to attack the problems of such concern to voters that some 70 percent think America is on the wrong track: slow economic growth, rising income inequality, the stability of the banking system, a virtual stall in the increase in incomes of middle class families, the unavailability of affordable health care.
Debate on the latter centers around Obamacare, the president's legacy item that requires all Americans to purchase insurance or pay a fine, such insurance to be made available to the already-sick, and the insurer to offer only policies approved by government regulators. Socialist Sanders proposes to replace Obamacare with a British-style system of government-provided health care free at the point of use, funded by swingeing tax increases on upper-income families, a payroll tax on employers and an estate tax on the wealthiest Americans. Democrat Hillary Clinton, positioning herself as the candidate who will carry on the policies of Barack Obama, or at least the popular ones, proposes to correct the flaws in Obamacare – patients have lost access to their long-time doctors, insurance premiums are rising, doctors are refusing new patients. Most Republicans promise to repeal Obamacare and use tax relief and incentives to allow patients freedom to manage their own health care with doctors of their choice.
Tax plans differ every bit as widely. Most Republicans would lower personal and corporate income tax rates (the latter to 20 percent from 35 percent in the case of Jeb Bush), with Cruz proposing a flat 10 percent tax on individuals and to replace the corporate income tax with a 16 percent value-added tax, which he prefers to call a "Business Transfer Tax" in deference to conservatives' dislike of VAT because it lends itself to stealthy increases. Jeb Bush would in addition eliminate estate taxes and cap deductions "used by the wealthy", but preserve special breaks for charitable deductions. Clinton would reform the tax code by raising capital gains taxes on assets held for less than two years to 39.6 percent from an average of 28.6 percent for high earners, allowing George W. Bush's tax cuts on families earning more than $250,000 per year to expire, cutting taxes on the middle class and increasing special treatment of causes she believes to be in the national interest.
No surprise that all candidates claim that the stimulus provided by their proposed tax cuts and, in the Democrats' case spending on infrastructure, will so accelerate growth as to be self-financing. The spending will most likely stimulate growth. Doubt that and re-read your dog-eared copies of John Maynard Keynes. But self-financing tax cuts are the Holy Grail for which hard-line supply siders have long futilely searched. Most experts put the increased red ink flowing across the nation's accounts from proposed tax cuts in the range of $10 trillion. Bills to follow, probably for the next generation.
In almost exactly one year from today, a new president will be sworn in. History proves that other nations have a large stake in the nature of that choice. Will we be free traders or protectionists? Pursue a strong or weak currency? Take a strong or weak stand against terrorists? Once again prove to be a reliable ally? Which is why some wags are proposing that every person in the world be allowed to cast a ballot for the president of the United States.