The presidential candidates are fighting hard for your vote, and the economy seems to be one of the top issues. To soothe jitters over an economically turbulent near future, Senator Barack Obama proposed a second economic stimulus payment, similar to the one proposed and passed by President Bush and Nancy Pelosi earlier this year.
It’s dubious whether these payments have a direct effect on the economy. They may make some people feel better about the economy—depending on whether they receive a check or they subsidize the benefit for others—which may be a self-fulfilling prophecy. It’s more likely that these proposals designed to boost the economy, which have a nasty habit of showing up in election years or when approval ratings are low (is it just coincidence?), are created more for their public relations benefit.
Similarly, Senator John McCain is calling for a federal gas tax “holiday.” The 18.4 cent national gas tax and the 24.4 cent diesel tax, under this plan, would be suspended between over the summer. Originally planned for the time between Memorial Day and Labor Day, McCain’s campaign website hasn’t updated this issue now that we have passed the first summer holiday.
Someone who believes that gas prices at the pump are determined by supply and demand would argue that lifting a gas tax would simply allow prices to rise up the chain.
Neither a second economic stimulus check nor a gas tax holiday will on its own affect the economy much. It would be great to see some real economic proposals presented by our presidential candidates—ideas whose implementation would provide jobs, manage real inflation, and encourage business innovation while this country learns how to deal with globalization of the economy—rather than gimmicks designed to attract potential voters.
Let’s face it, though, it makes no sense to choose a candidate based on their economic policy, something the Office of the President has little control over thanks to the numerous people involved with setting policy and economic cycles. I can’t imagine that anyone in this country is undecided between McCain and Obama, but the final decision should be based more on who you want appointing Supreme Court justices and who you want initiating military actions (something that used to be left up to the Congress). These are the modern major powers of the Presidency with lasting effects.
McCain resurrects call for gas tax holiday, CNN Politics, June 9, 2008
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10:05 am (reply)
18 cents on a $4 gallon only increases the time we stay reliant on foreign oil… thanks but no thanks
11:02 am (reply)
Vote for me in November. I won’t waste anybody’s time or money with this crap. I also promise not to invade anybody unless they really, really piss me off.
11:04 am (reply)
of course he’s proposing it again….its the only thing he can think of.
the republicans only push two things…..open up offshore/alaska drilling and a gas tax holiday. no progressive thought at all (well, its progressive in that it will make some of their oil/exploration friends wealthy).
meanwhile, Toyota is developing a better lithium ion battery to put in their hybrids and developing a plug in version of their electric cars.
why don’t our politicians promote innovation and progress? toyota will control the car market by 2010 is my guess and the american car companies and our government will still be trying to drill for more oil and figure out what to do with all the huge gas using SUV’s sitting on car lots…
4:06 pm (reply)
I completely agree. I think this is political pandering and will have no lasting effect on the price of oil or the price of gasoline. It would be interesting though to see if the government could actually live without taxing gasoline. I doubt most people realize that even at $4 a gallon gas taxes make up 5% of the total price.
I did find this thought of yours interesting:
“Let’s face it, though, it makes no sense to choose a candidate based on their economic policy, something the Office of the President has little control over thanks to the numerous people involved with setting policy and economic cycles.”
I would have to disagree, being the fact that the president has veto power over taxes and government spending as well as unusually large sway over both these items in regards to proposing budgets and signing trade agreements. Furthermore, Government spending is close to 20% of GDP and tax revenues are 19% or so of GDP and this clearly makes an economic difference.
I think the President is not the driving force behind the economy and takes too much credit and/or blame, but the President (like Congress) definitely has a substantial impact on the economy of the U.S. via taxes, spending, trade agreements, etc.
9:10 pm (reply)
I think there are plenty of economic studies that have shown stimulus payments do work…. if you give it to people who will spend it. The threshold has to be set lower than the last time, down from $75k to $40k maybe.
5:52 am (reply)
How does Mr. McCain plan to pay for his little war in Iraq if he keeps giving away tax money? There really is Hell to pay for.