Obama vs.Romney Economic Plan
Americans are set to go for the presidential elections in November this year. The incumbent democratic President Barrack Obama is seeking for re-election into presidency. He is pitted against the former Massachusetts governor and republican presidential aspirant Milt Romney. This time round Obama faces stiff competition from the republican aspirant. In fact, a poll showed that Milt Romney is ahead of president Obama in popularity. This time Obama seems to have lost vigor, energy and charisma that characterized him in the 2008 polls where he trounced over the then republican presidential hopeful John McCain. This is evident by his apparent lackluster debating session where Romney displayed excellent skills in the debates. Presidential debates in the US are very critical and vital for success of any presidential candidate, (Hungerford, 2010). This results from the fact that the US being a developed democracy issue based politics is so much rooted in the election campaigns. Also most of American citizens are well learned and are aware of their rights and this puts immense obligations on those seeking elective posts to practice the right and issue based politics.
In the recent years the American economy has been slowly declining. In fact, the emerging economies like China, India, Brazil and South Korea have threatened the global arena because of their dwindling economies. The economy has been faced with slow economic growth. This trend has worried many American citizens and it has made the revitalization of the economy to be a central issue in the manifestos of both president Obama’s re-election campaign, as well as Mitt Romney’s campaign. The economic plans that each presidential aspirant has for the United States are discussed below.
PRESIDENT OBAMA’S ECONOMIC PLANS
Once re-elected president Obama has planned to put on course the following economic plans in order to restore the US economy back on track and in the world politics. First, he has planned to reduce the budget deficit for this fiscal year to below 3% of the size of the economy. He has vowed to stop the debt from growing faster than the Gross Domestic Product of the US. To achieve this goal Obama’s administration has cut down the federal spending significantly. This is because budget deficit arises when the government’s spending exceeds its receipts from taxes. He has said that all federal spending, except of interest owned on the country’s debt, would be paid from federal revenue.
Secondly, he will establish a fund to help families avoid foreclosure. Due to slow economic growth many Americans who have taken mortgages in the financial institutions have found themselves unable to repay their mortgage. This makes many families face the risk of foreclosure. Obama has called for establishment of short and long term programs to help responsible home owners facing foreclosure. It will help people stay in their homes and renegotiate with their leaders to allow families facing foreclose to refinance their mortgages loan obligations or sell their homes.
Thirdly, his administration has planned to extend and expand the unemployment insurance program which seeks to address the needs of the long term unemployed people who currently make up nearly a fifth of the unemployed and are often older workers who have lost their jobs in industries and have hard times meeting their needs as well as getting new jobs. This insurance provides them with additional assistance in time of economic distress. This move ensures that consumer spending in the economy remains at healthy and acceptable levels.
Fourthly, he emphasizes on technologies and innovations. The federal government shall increase budgetary allocation for research, technologies and innovations for companies and institutions of higher learning. The net effect would be creation of the job opportunities as well as cutting edge products (Holland, 2012). Obama notes that emergency of new production processes and systems through improved technology in manufacturing industries would give creation of significant job opportunities for Americans.
Fifth, he also proposes tax cuts for Americans, especially the middle class American families. This is because the refundable income tax credit will provide a direct relief to them, and more so, it will put money into their pockets for their consumption. He wants to renew tax cuts, except on incomes higher than $ 250,000 dollars, arguing that the rich should be taxed, so that the government revenue streams can increase (David, 2007). The regressive tax system has been found to oppress the poor as the millionaires continue living on the first lane comfortably.
Sixth, his administration will emphasize on the investment in innovation and manufacturing jobs in the clean energy market. Preservation of the environment has been top on the world agenda. The issue of the climate change cannot be over-emphasized, and as a major emitter of the greenhouse gases, Obama’s government has planned to cut the industrial emissions by 50% by the year 2050. Investment in clean energy will go a long way in creating job opportunities.
ROMNEY’S ECONOMIC PLAN
Mitt Romney also came with his plan to kick start the US economy. First, like Obama, he has also promised to cut the budget deficit. He has blamed Obama for the growing budget deficit, since he took over power in 2008 terming it as unprecedented since the economic recession of 1930s.
He claims that since Obama took over, the US deficit has grown substantially with increase of the federal spending from 3.5 trillion dollars to a projected 5.6 trillion dollars in next decade. He has planned to cap government spending at 20% of GDP and balance the 2020. He ruled out raising taxes; so he would do this by cutting spending, excluding defense spending.
Secondly, he plans to repeal the Obama’s Medicare. Romney insists that the Obama’s Medicare is too costly for American economy and it is to be blamed for the growth in the government spending and consequent budget deficit since Obama implemented medical plan. Romney plans to pursue policies that give each state the power to craft its own health care plan that is best for its own citizens. The federal government role will be to help the markets to work by providing conducive environment for fair competition.
Thirdly, he advocates for increased investment in domestic energy. He believes that there exists huge deposit of oil in the USA and by giving the US energy independence would make it less susceptible to the petroleum-producing nations (Michael, 2012). The domestic energy would lower the cost of fuels and consequent production cost for American companies making them have more income. This will help them create employment opportunities. He advocates for rapid issuance of drilling permits to oil firms.
Fourth, he has promised to reduce corporate income tax by 25%. This will encourage foreign direct investment into the United States. The result will be increased job opportunities for the unemployed Americans citizens. Reduced taxes will also make most company obtain huge profits and plough it back in the economy, and as a result more jobs will be created.
In conclusion, the two aspirants have better economic plans but take issue with some of the plans that have put forward. For instance, scraping medical care by Romney will have adverse effects to older Americans since they have low income streams and are highly prone to old age diseases, hence the Obama’s Medicare is of great importance to them.
As for Obama, establishment of a fund to aid families to avoid foreclosure is not practical, since financial institutions have independence to deal with their customers as per financial contracts agreed. Otherwise the two aspirants have found economic plans for the United States of America but whoever has the best plans shall win the confidence, and consequently the votes of the American people.
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