Thursday, November 8, 2012

Where We're Going, and Where We Won't

Now that the election is over, lets take stock of where we go from here. For starters, Obama won (incase you missed it.) That is to imply that Romney lost, so we'll start there.

On the positive side, it looks like we'll be able to avoid a trade war with China. It never did make sense to "get tough with China" for doing nothing in particular. They exported us goods they can produce in the least-cost way? They pegged their nominal exchange rate to the dollar (like most countries did prior to 1971, and many others still do). They save a large portion of their national income, and invest a portion of that in US Treasury Securities? Someone stop me from swooning.

His tax policy never was coherent, but there were elements of it I liked. I loved the idea of eliminating capital gains and capital income taxes for families earning less than $200,000. Also, lowering tax rates for corporations and other firms while eliminating some deductions is a good idea, albeit one Romney never specified definitively.

Now to the victor. Obama's victory means, most importantly, that we will be spared any risk of the Paul Ryan spending-cut slaughterhouse I dreaded so severley. Obama will keep steady, if not increase, spending on medical and science research, alternative energy, and education and preventative medicine for the extremely poor. These are things that will make us all richer in the long-run, even the subsidies for the poor- Medicaid for poor kids now means less chronic heart disease ect. when those kids hit middle age.

I wish Obama would move to overhaul the tax system in a way he probabily will not. He has expressed interest in cutting corporate tax rates down to 28% from 35% presently. If we did that, and raised top income rates to 39.% from 33%, I would be pleased- businesses would face lower taxes with total revenue taking less of a hit. But I doubt either will be enacted.
There's more to say, but that's all for now.

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