When I look at a candidate, I look first at electability. Is the candidate electable? That's the first thing I look for. If the candidate isn't electable, then what's the point of supporting him or her? They are a losing dog and there's no point in having a stake in their fate.
This might sound very cynical or depressing, in terms of the state of our politics, but it's true.
I don't know think I mentioned it in my previous posts, but perhaps I did on Twitter; I thought that Newt Gingrich would be a dark horse candidate. Of course, I didn't know that much about him. I just thought he performed well in the debates. My biggest qualm, at the time, was his utter disdain for the media.
A couple months later, it seems like he has leapt to the front of the pack.
This is mostly due to the fall of Herman Cain. Conservatives have been looking for a candidate that wasn't Mitt Romney. Newt Gingrich is just the latest cup of tea.
On a national level, against Barack Obama, I don't think he can stand tall. There are too many issues with him. There's the "consulting fees." There's the divorces. He's too easy a target for the Democrats. While the conservatives might be clamoring for a more conservative candidate than Romney, they're going to have problems standing up in a general election.
Herman Cain came under fire for his 9-9-9 plan at yesterday's debate. Cain did an extremely poor job defending the plan and I think Romney did the best job of dissembling it (at the end):
This morning, Arthur Laffer, one of the architects of the 9-9-9 plan, had an editorial defense in the Wall Street Journal:
By contrast, the three tax bases for Mr. Cain's 9-9-9 plan add up to about $33 trillion. But the plan exempts from any tax people below the poverty line. Using poverty tables, this exemption reduces each tax base by roughly $2.5 trillion. Thus, Mr. Cain's 9-9-9 tax base for his business tax is $9.5 trillion, for his income tax $7.7 trillion, and for his sales tax $8.3 trillion. And there you have it! Three federal taxes at 9% that would raise roughly $2.3 trillion and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax.
While this does address the math behind the plan, it doesn't address the concerns that the sales tax will be burdensome on the poor. It's a regressive tax, meaning it's going to have less impact on you the more money you make. It will affect the poor the most because their consume a higher percentage of their income.
Laffer does have the best argument for the plan though:
The whole purpose of a flat tax, à la 9-9-9, is to lower marginal tax rates and simplify the tax code. With lower marginal tax rates (and boy will marginal tax rates be lower with the 9-9-9 plan), both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs. Tax revenues will also increase enormously—not because tax rates have increased, but because marginal tax rates have decreased.
He believes that will stimulate upward mobility:
A static revenue-neutral tax change requires static winners and losers. And this 9-9-9 plan has made certain that even on static terms those below the poverty line will be better off—period. Once the dynamics take hold, many of those below the poverty line will find good jobs and thus will rise above the poverty line and start paying taxes.
I do believe he falls short on the sales tax:
Still, a number of my fellow economists don't like the retail sales component of the 9-9-9 plan. They argue that, once in place, the retail rate could be raised to the moon. They are correct, but what they miss is that any tax could be instituted in the future at a higher rate. If I could figure a way to stop future Congresses from ever raising taxes I'd do it every day of the week and twice on Sunday. Until then, let's not make the perfect the enemy of the good.
He's deflecting the focus of the argument. It's not about raising taxes. It's about creating the tax in the first place. While it may make up for the revenue, it also creates a new tax source which can be raised. Saying other taxes can be raised just as easily isn't a defense of the new tax plan.
After reading Laffer's defense of the 9-9-9, I feel better about the plan as a whole. However, I still have some very strong, lingering doubts. The sales tax is a huge concern because it's a new tax, a regressive tax, and a double tax. People often complain that capital gains are taxed twice by capital gains and by income tax. This is essentially what it's going to feel like when you have both state and federal sales tax when you buy something.
Quite frankly, I think the negatives still outweigh the positives. The sales tax being the most worrisome aspect, why doesn't Cain just ditch it and tax business and income at a higher rate (13.4%, using the numbers provided in the op-ed). It doesn't have the same ring as the 9-9-9 plan, but it certainly doesn't threaten the people's ability to consume. I expect that Cain will be further pushed on this in future debates. He's going to need a stronger defense on his own. Otherwise, he's just dust in the wind.
Ron Paul might not be talked about as a potential candidate for President, but he definitely has an important role as far as the conversation goes. No politician pushes small government and individual liberty like Ron Paul. He was on the forefront of the Tea Party movement, an epiphany that has had GOP candidates trying to find ways to appeal to this new segment of their electorate. Today, Ron Paul has pledged to drop a bomb on spending with $1 trillion in spending cuts:
Republican presidential candidate Ron Paul on Monday unveiled a plan to cut $1 trillion from the federal budget within one year by eliminating a handful of federal departments, including the Energy and Education departments.
He's the only one to propose a balanced budget:
"Ron Paul's plan is the only one that seriously addresses the economic and budgetary problems our nation faces," Jesse Benton, Paul's campaign chairman and a co-author of the plan, said in a statement. "It's the only plan offered by a presidential candidate that actually balances the budget and begins to pay down the debt."
I don't expect any other candidate to propose as drastic a change in government spending. Unfortunately, I don't expect him to get the attention he should get for this, at least in pushing the conversation forward in regards to spending cuts. I have no doubt that Paul would encourage positive discussion to getting the country back on track as far as the budget is concerned:
"The other candidates have not offered this," Paul said of his plan. "I don't believe they think it's very serious. They think they can just tinker around the edges, but the American people are ready for some honest thinking and some honest reforms ...
"Everything that's not explicitly in the Constitution should be up for grabs, and we should be able to cut it," Paul said.
The gauntlet has been thrown down.
As far as the viability of this proposal, I don't believe that he could make such drastic cuts. However, the extent of his cuts should push others to give more stringent proposals to cut spending. One of my main concerns is that he won't get enough airtime to actually make an impact. Clearly though, no one else is taking cutting government spending as seriously as Ron Paul.
I already examined the key message of Herman Cain's campaign with the 9-9-9 plan, finding it to be unsustainable, unreasonable, and unfair. Now, the Pizzaman has come under fire for what seems to be his first blunder:
Cain, at a campaign event in Tennessee on Saturday, defended the idea of building a barbed-wire fence along the border, "electrified, with a sign on the other side that says it can kill you."
While he may claim to have been joking, what makes the incident worse is this follow up comment:
The Republican candidate then dismissed criticism that he's being "insensitive," saying "what's insensitive is when they come to the United States across our border and kill our citizens."
That just comes across as generalizing and ignorant. Hispanics are unhappy with his remarks:
"Whether or not he made his comments in jest, Mr. Cain's words show a lack of understanding of the immigration issues our country is facing and a staggering lack of sensitivity. Surely, Mr. Cain understands the duty that candidates have to offer responsible policy proposals," he said in a statement. "Leave the comic routines to the professional comedians."
I don't know how many Latino voters Cain has alienated, but this is a significant slip up. Whether you're Latino or not, you're going to have questions about Cain's character and ability to have diplomatic relationships with the Latin countries.
It isn't just the Hispanics who are unhappy with Cain. African Americans are not fans, to say the least:
Largely located on the lower rungs of the American socioeconomic ladder, most black Americans appreciate sources of opportunity and power that Cain despises: unions, governmental support for the needy, a robust, government-supported full-employment policy, the public provision of health care. His worry, remarkably, is that America is too egalitarian. His signature policy -- the 9-9-9 tax reform proposal -- would institute a regressive consumption tax nationally and starve Social Security and Medicare. It would redistribute income upward. No wonder blacks overwhelmingly repudiate him and his tea party allies.
And he thinks he can win a third of the black vote. Doesn't this reek of ignorance? You can't just bank on anti-Obama sentiment. His policies and plans are going to be detrimental to that community. As a result, Cain seems out of touch.
“The problem is not the responsible drinker,” Cain wrote in one letter to the editor.” It is the alcohol-abuser who gets behind the wheel of a car. In fact, according to the National Highway Traffic Safety Administration, two-thirds of all alcohol-related fatalities are caused by drivers with a BAC of 0.15 or higher.”
I'm sure there are plenty of families who have lost loved ones that would repudiate that statement.
Herman Cain has done a lot to emerge as a contender, but there are still many things that keep him from being a legitimate candidate for President. I think the number one thing is his electability and his complete alienation of certain segments of the voting public. This is an election that the GOP could easily win, especially with this struggling President. However, you can't take chances in being represented by a controversial candidate. To win this election, you need someone that will appeal to those that are frustrated with Obama. Herman Cain is not that guy.
When it comes to the presidential election, faith always seems to play a large part in the race. Christianity is the name of the game and outsiders are viewed through a wary eye. We saw this happen last election when Barack Obama's faith was called into question. For Mitt Romney, it's something has had plague him his entire career and something he has been forced to downplay.
While many misguidedly govern by faith, the main appeal of faith seems to be a person's character. I don't think that's exclusive to Christianity. You can tell a lot about a person's character by their devotion to their faith.
This has come to a head because Rick Perry's camp has been on the offensive:
The Daily Beast has obtained a series of e-mails that show an influential evangelical activist with close ties to the Perry campaign stressing the political importance of “juxtaposing traditional Christianity to the false God of Mormonism,” and calling for a “clarion call to Evangelical pastors and pews” that will be “the key to the primary” for Perry.
This would represent a low point in politics, but like I said, it's nothing we haven't seen before. Obama's faith was questioned last election. Romney is actually a mormon and there are a lot of misconceptions of the religion. Fortunately, there are other people, like Joe Lieberman, who have spoken out for him:
Now we have two Mormon candidates running for president, and one of them, Romney, may well be the Republican nominee. Once again the promise of religious freedom enshrined in our Declaration of Independence and in our Constitution will be tested, along with our Founders' dream that America would be a shining city on a hill where religious freedom, diversity and tolerance thrive. And once again, a barrier may be broken.
My experience in 2000 gives me great confidence that the American people will again reject any sectarian religious tests for office and show their strong character, instinctive fairness and steadfast belief in our Constitution. That truly is the American way.
That doesn't sound like a ringing endorsement of the man himself, but it does provide a sentiment that we judge our president by his character and not by his religion. Regardless, it seems like the Mormon Church has helped define Romney as a person:
“He told me that, as human beings, our work isn’t measured by taking the sum of our good deeds and the sum of our bad deeds and seeing how things even out,” recalled Mr. Clark, now 37, sober and working as a filmmaker in Utah. “He said, ‘The only thing you need to think about is: Are you trying to improve, are you trying to do better? And if you are, then you’re a saint.’ ”
Romney has long been a prominent figure in the Mormon Church and the biggest in the Boston community for so long. As a result, he has shown a lot of leadership and responsibility, even having a large part in the building of a church. For better or worse, he's taken it on himself to be a member of his community and support others:
If Mr. Romney, who no longer holds an official church title, seems overly polished or wooden on the campaign trail, his defenders say that is just how he is, reserved yet caring. “He’s always been that way, that’s his demeanor,” Mrs. Oparowski said.
While there may be many questions about Romney's religion, I don't think there should be questions about Romney. I do believe the "Mormon issue" will be played out in the coming weeks, but I don't think it will be what defines the election, though it may define Romney's campaign. While at times the man seem distant, Romney does care, and I believe he want dearly to help this country get back on track. Otherwise, why would he run again?
Rick Perry's wife recently contended that Rick Perry has been brutalized for his faith by the media:
It's been a rough month. We have been brutalized and beaten up and chewed up in the press to where I need this today...We are being brutalized by our opponents, and our own party. So much of that is, I think they look at him, because of his faith. He is the only true conservative – well, there are some true conservatives. And they're there for good reasons. And they may feel like God called them too. But I truly feel like we are here for that purpose.
This seems a bit misguided because, in my opinion, doubts about Perry's campaign have been warranted by his poor turnouts at the debates and his lack of substantiative plans for America. There was also the "niggerhead" fiasco.
"My son had to resign his job because of federal regulations that Washington has put on us," Mrs. Perry said while campaigning for her husband in South Carolina, after a voter shared the story of losing his job.
"He resigned his job two weeks ago because he can't go out and campaign with his father because of SEC regulations," she continued, referring to the Securities and Exchange Commission. "He has a wife... he's trying to start a business. So I can empathize."
"My son lost his job because of this administration," she said a few minutes later.
According to several reports, Perry’s son, Griffin worked as an investment banker at Deutche Bank before voluntarily resigning his job two weeks ago to work on his father’s presidential campaign. SEC regulations stipulate that it’s illegal to be an investment advisor and work on a campaign.
I don't know how you can blame that on the current administration. Unless it was a product of recent campaign reform, it has nothing to do with the current administration. Obama has been blamed for so many things that have not been true, particularly by the Perry and Bachmann camps (the candidates especially). Anita Perry needs to get a clue.
Anita Perry is speaking out for her husband because he is struggling. He needs something to get him going. He's lost ground and is losing more ground. He has to have some element to pick him up. Anita Perry's speaking out might hurt the Texas Governor though:
Mrs. Perry insists that her husband is authentic and went so far as to suggest that his opponents aren't. She'll have a hard time convincing Herman Cain's fans of that. And while the idea of a religious "elect" or chosen people may be part of some Christian theologies, most voters aren't likely to subscribe to the belief that Mr. Perry has been handpicked by God. Voters tend to like picking the candidates themselves.
“We are going to participate whenever and wherever they are,” said Robert Black, a Perry campaign spokesman.
Some of the other Republican candidates are boycotting the Nevada caucus because they moved up their primary. While it is disappointing that Nevada moved up their primary, it's important that the people get to hear what the candidates say and have a say themselves in which one represents them. This is a good move by Perry, in a campaign that has been closer to lackluster than spectacular.
"Right here in Pennsylvania, and across the state line in West Virginia and Ohio, we will tap the full potential of the Marcellus Shale and create another 250,000 jobs," he said in unveiling a major piece of his overall economic plan.
Does this sound familiar? Sounds like Texas, don't it:
Even in Texas, the industries classified by the US Labor Department as "oil and gas extraction" and "mining support" account for just about 2 of every 100 jobs. But jobs in basic industries like mining or manufacturing typically help sustain many other jobs throughout a local economy. And over the past decade, Texas has seen energy jobs rise as a share of its economy.
Compared with Texas, other states appear to have plenty of room to grow. In the other 49 states collectively, the "oil and gas" and "mining support" industries account for less than 0.3 percent of all jobs. Those totals don't include some other energy-related jobs, such as in coal mining or renewable sources.
We've heard this type of plan before from Bachmann and Gingrich. The problem is the plan might be unattainable. A lot of these aren't promises, they're wishes that would need congress's approval:
“It’d be very difficult for an administration to walk back these regulations by itself,” says Case Western University law professor Jonathan Adler, who’s no fan of the rules. The EPA, after all, is required to regulate carbon by the Supreme Court. Perry’s administration could try to overturn the agency’s “Endangerment Finding,” a scientific document arguing that carbon-dioxide poses a threat to human health and welfare. But given the solidity of climate science — and the fact that the EPA has been warning about global warming for the past 15 years — that’d be a hard sell in the courts. If Perry wanted to junk air-pollution rules, he’d need Congress.
I think overall, this plan falls short because much of it is out of the President's control. Just like the tax code and other initiative. The United States is not Texas and not every state has energy supporting industries. You can't rely on that. To go further, it's not going to make up for what Perry is produced so far. For the most part, I think candidates are judged by their substance. You do have to have the presidential look and composure. Perry has finally brought substance, but I don't think it makes up for everything else. His campaign is misfiring all over the place, and I don't know if he can correct that. He dug a hole for himself and there might not be a way out.
Since I made this post, introducing Herman Cain as a potential to Romney and Perry, Cain has skyrocketed up the GOP presidential polls:
The public is doing just that. In recent national polls, following impressive debate performances and straw poll wins that caught the political establishment by surprise, Cain has suddenly risen to the top of the pack, running almost even with former Massachusetts governor Mitt Romney.
But as I suggested before:
If he really wants to make a run for this, he will aim for the transparency necessary to be a viable candidate. Until then, Herman Cain will be a bump in the road for the front runners. You cannot ignore potential skeletons in your closet and run for president. You will have people make you reveal that information as you rise a legitimate candidate. You should do your best to be prepared.
In the most recent debate, the pizzaman's 9-9-9 plan came under fire, and the media has started taking a deeper look into it:
But note that we said the “9-9-9” would happen eventually — and then only temporarily. That’s because it is only the second step of a planned three-step process. The first step would cut individual and corporate tax rates to a top 25 percent rate (down from a current high of 35 percent). Then the final step would replace all of the taxes — even the 9s — with a national sales tax, known by proponents as a “Fair Tax.”
(As denizens of Washington, we find this three-step process to be highly dubious. It takes years, even decades, to fundamentally overhaul the tax code. Herman Cain is going to do this three times in his presidency? But we digress.)
Other than the clear difficulties that he would have in trying to overhaul the tax code, there are other issues involved with revenue, but particularly in the tax rate of the people who can afford it the least:
On top of that, Cain would introduce the new sales tax, which would affect lower and moderate-income people who spend most of their income on purchases, not savings and investments. Depending on how you do the math, people now paying zero or negative taxes might be faced with a 27 percent tax on income.
In other words, while on paper Cain is promising a tax cut, in reality tens of millions of lower-income Americans would face tax increases.
His proposal seems unsustainable, unreasonable, and unfair. He's essentially going to cut into pockets that have nothing in them. There's a lot of danger in fiddling with the numbers and it seems as though his numbers are vastly different than those of others who've looked at his plans. On the whole, it looks like a plan that would reduce taxes on many individuals, but the his plan would also negatively affect those that have the least and have been most affected by the financial crisis and the consequential recession.
Then, why he's been so high in the polls? This has been his one draw, his one big plan, and it just doesn't add up. How are people saying that they're going to vote for him?
I'm not going to just write off Cain. He's clearly polling well and there's reason to believe he's a legitimate contender to Romney with those numbers. I just look at the actual facts, what he actually brings to the table, and I just don't see what his supporters see. I just don't see him being able to accomplish effectively what he's promising to bring forth.
The latest GOP debate on the economy took place in New Hampshire earlier tonight. It displayed a change from the direction of previous debates. Herman Cain played a much larger role. The Pizzaman has seen his poll ratings rise rapidly in the wake of his performance in the previous debate and his victory in the Florida straw poll. His larger role seems to have come at the expense of Texas Governor, Rick Perry, who has fallen from the graces. Perry underwhelmed again and seemed widely ignored by the other candidates. He also made no attempts to take control of the debate or issues, which may or may not have been a bad thing, given his previous mediocre performances.
The key thing about Perry is that he still hasn't fully released his economic plan:
Mr. Perry is set to deliver his first major policy speech of the campaign on Friday in Pittsburgh, on energy and jobs. When pressed for specifics, he said, “I’m not going to lay it out all for you tonight.” Asked about Mr. Romney’s lengthy economic plan, he said, “You know, Mitt’s had six years to be working on a plan. I’ve been in this for about eight weeks.” Asked if he might accept a budget compromise that could involve raising revenue, as President Ronald Reagan did, Mr. Perry suggested that he would not.
The problem with this is that he comes across as unprepared. This was a debate on economics and Perry is withholding his plan for campaign speeches? Please. You're on a national stage in an important primary state, you have to deliver the goods. I have no idea who is running Perry's campaign, but they have failed miserably.
In the meantime, Cain has received the most attention from the other candidates:
Later, when Jon M. Huntsman joked that Mr. Cain’s 9-9-9 tax plan — which calls for reducing the individual and corporate income taxes to 9 percent and introducing a 9 percent national sales tax — sounded more like the price of pizza, Mr. Cain shot back that it “didn’t come off a pizza box, no.”
Bachmann said Cain’s plan wasn’t a jobs plan, but a proposal that would give Congress “a pipeline in a sales tax.”
“When you take the 9-9-9 plan and you turn it upside down, I think the devil is in the details,” she said.
Cain is convinced that his simple tax code will spur economic growth, but there are just too many concerns with it. It's also the only thing he has brought to the table thus far in terms of getting this economy going. As I've said in the past, the flat tax won't work because it'll put an immense burden on the poor who can barely make ends meet as things stand now. A flat tax will reduce their purchasing power and they will have to make tougher decisions about their consumption. Broadening the tax base has a similar effect.
Simple can be good, but simple won't necessarily work.
“I have had the experience in my life of taking on some tough problems,” Romney said. “And I must admit that simple answers are always very helpful but oftentimes inadequate. And in my view, to get this economy going again, we’re going to have to deal with more than just tax policy and just energy policy, even though both of those are part of my plan.”
His approach seems much more pragmatic and with a stronger expectation of what Washington is going to be like. Cain, Perry, and Bachmann have all portrayed themselves as somewhat of Washington outsiders, but their problem is that they don't know how Washington works. Romney has the experience of working with liberals in Massachusetts and had to work with them to accomplish some of his initiative, which is what it's going to be like in DC. This is not even getting into his private sector experience.
We've already had like 4-5 debates and doesn't appear like a new candidate is going to enter nor does it appear that further debating is going to change the landscape of the primaries. Right now, it's pretty clear who should be the nominee and it isn't even close. In the long term, you have to look at the person who makes the most sense; this time it's Mitt Romney.
Over the last week, we've seen increased speculation and encouragement for New Jersey Governor, Chris Christie, to enter the GOP race. We've also seen the emergence of Herman Cain after his win in the Florida Straw Poll. We also had this drop this week: Once again, the poll numbers are in and Rick Perry has dropped:
Among announced candidates — without Christie or Palin in the race — Romney leads with 25 percent, which is identical to his support from a month ago. Perry and Cain are tied for second with 16 percent, numbers representing a 13-point drop for Perry and a 12-point rise for Cain since early September.
What may be worse is that his core support seems to be eroding:
The falloff for Perry against other announced candidates has been particularly steep among those aligned with the tea party movement. In early September, Perry had a 3-to-1 advantage over any other candidate among those “strongly” backing the tea party, but his supported has plummeted from 45 percent to 10 percent in this group.
Conservatives aren't happy with the Texas Governor either:
Among all conservatives, Perry’s support has been sliced in half, from 39 to 19 percent. Some of his decline may stem from shaky debate showings: A majority of Republicans and GOP-leaning independents who have watched recent debates say the more they hear about Perry, the less they like him.
I pretty much said the same exact thing in a recent blog post. It's worth checking out this graphic that shows how fast Perry's support is finding its way to other candidates, mainly Herman Cain. However, it's probably most relevant to see how he compares to Mitt Romney, the current front runner:
Romney has big – 20-point – advantages over Perry on two important questions: experience and electability. When asked who has the better experience to be president, Romney wins 50 to 30 percent.
Perry's struggles are being documented by the media. Some have questioned the Drudge effect:
Drudge's editorial decisions replace Perry's message of solid, inspirational, conservatism with an inept, flagging candidate. And while Drudge doesn't exert the broad influence over the scattered media landscape that he did over a more concentrated media five or 10 years ago, he still wields immense power, particularly in shaping the narrative of the right. He has helped chip away at Perry's image to hundreds of thousands of conservative readers daily, just for starters.
Blogs definitely have a big say in shaping narrative, but Drudge has to be one of the biggest. Many people go to his site as a source to finding links to news articles. Sometimes people just read his headlines without reading the articles. It's definitely been a factor, but hasn't Perry just done poorly himself?
Christian Science concludes what we've already heard about Perry, he doesn't wear well:
What happened in mid-September? That’s when debate season got rolling. Whether voters watched the debates or not, they appear to have heard much about Perry’s poor performances. It is also possible that publicity about Perry’s description of Social Security as a “Ponzi scheme” has taken a toll on his support.
The hits keep coming.
My interest in Perry sputtered rapidly since he entered the race. His first speech was open, honest and spoke to the ideals that America should live up to. Unfortunately, he has shown that he might not have the qualities to be the President of the United States. We have already elected a great orator into office. We need someone who will get things done. It's not the flubs which have undone Perry, it's his ability to achieve. I think people have realized that his potential is much lower than initially expected and the voters are flocking to other candidates.
Rick Perry is done as far as I'm concerned, and I would like to see Herman Cain get more feature time in the debates. We deserve to see more of a candidate that actually has broad appeal through out the party.
Although Chris Christie did not discuss a potential bid for the Republican nomination for President, it did not stop people from asking him: The guy appears to be very charismatic and you can see why so many people want him to run for President. I wholeheartedly agree with him that if you are going to run for President, you have to be up for it. It's a taxing job and you heart has to be in it.
That hasn't stopped important figures from urging him into the race:
The renewed consideration about a White House run came after prodding this week from some Republicans he idolizes, including former First Lady Nancy Reagan, former Secretary of State Henry Kissinger, and former President George W. Bush, sources said.
The people want him in the race and other leaders want him in the race, what's holding him back? Even Romney says it would be fun to have Christie in the race:
"Chris is a great friend, a great guy, a colorful character," the former Massachusetts governor said Wednesday at a campaign event in Manchester, N.H. "Who knows? Maybe he'll get in. I think it'd be fun if he got in."I
That sounds wrong coming from a potential competitor right? May be it's more a sign of the weakness of the current crop of candidates. The voters seem undecided. Romney, who is the current favorite, has not won any of the straw polls thus far. Rick Perry, the other frontrunner, hasn't won either. There is a lot of indecision between the Republicans, and that's because one candidate hasn't risen above the others. The GOP is hoping so: An old Northeast Republican Moderate eh? I like the sounds of that, but don't we already have one of those? What makes Christie different from Mitt Romney? I don't know.
The other main question is whether it's too late. He still has some time:
Late October appears to be the latest someone could get in, gear up, and run in the early states, given all the requirements and needs of a campaign.
It would be best if he announced sooner rather than later to meet all the deadlines. Campaigning is another story.
Ultimately, it's about who raises fervor within the party and rejuvenates and unites a divided party. It appears that Christie could be that guy. The best candidate, Mitt Romney, has never garnered enough enthusiasm. Interest in Perry cooled down just as fast as it heated up. The rest of the candidates don't seem to be legitimate contenders. Christie will either win the race or make it abundantly clear who should win the race.
I've been meaning to write about Herman Cain for a while. As a black Republican businessman, he seemed out of place in the Republican Presidential race, but he always spoke with precision and confidence. Even before his Florida straw poll victory, I thought he was making a strong run as a potential Vice Presidential candidate. Needless to say, I learn more about an issue or a person when I write about them and I have to do the research.
So let's start off with a little background; unlike the rest of the candidates, Herman Cain has no experience in political position. He's a career businessman:
Cain, 65, grew up in Georgia and graduated from Morehouse College. He became a turnaround artist, rescuing the Burger King outlets of Philadelphia. From there, he went to Omaha, where in 1986 he took over and stabilized Godfather’s Pizza with clever advertising and aggressive downsizing.
By the early 1990s, Cain had started to transition out of day-to-day management at Godfathers and delve into politics. In 1992, he was appointed to the Federal Reserve Bank of Kansas City. In 1994, he became head of the National Restaurant Association, a post he held for five years.
He's a turnaround specialist, something he's highlighted in all the debates. The US is in need of a turn around, and he feels he's the best man for the job. This isn't the first time he's run for office. He ran for President in 2000 and he ran for Senate in 2004. Despite those failures, he left an impression:
But despite his lack of political success, he managed to attract the notice of a radio executive with his rich, booming voice. His campaign manager became his producer. He trademarked the expression “The Hermanator Experience.”
The two main talking points of his campaign have been the 9-9-9 tax plan he wants to institute and the Chilean social security model he wants to implement.
Most economists agree that a national sales tax would raise the relative tax burden on low- and middle-income earning taxpayers. "The main reason is that low- and middle-income households consume more of their income than high-income households do," said William Gale, senior fellow for economic studies at the Brookings Institution. "Another way of saying that is high-income households save more of their income than low-income households do."
Basically, if all people consume the same amount of taxable goods and services, if you have a lower income, whatever is taxed is going to be a higher percentage of income.
His whole system will make the lower classes pay more while the upper classes pay less. Now, I've already said that taxes need to be lower for the US to be competitive, but I don't think it makes sense to increase taxes on people who already are having trouble making ends meet. Yes, you want a society that encourages economic advancement, but you also need a minimum standard of living across the board. This is the United States where we tout our economic opportunity and high standards of living. Instituting a national sales tax is a straightforward attack on the lower classes.
But while the reform's supporters argue it has been a major success story, officials both inside and outside Chile now increasingly question whether the high costs and modest investment returns have doomed Piñera's original promise: a decent retirement income for workers at a savings for the government.
Social Security has come under fire because of the uncertainty surrounding its future. The government has misappropriated funds, so this would be another way of protecting individuals. The problem is that it doesn't provide enough income for the retired:
A recent report by the Chilean government brought more grim news, forecasting that as many as half of all workers won't be able to save enough to receive the minimum pension when they retire—even after paying into their accounts for 30 years—and will therefore rely on government subsidies. More than 17 percent of Chile's retirees now continue working because they can't afford to live on their pensions, according to that study, and another 7 percent want to work, but can't find jobs.
Despite this, the model has been praised and used as the basis of models in other countries. I think it is important that someone takes a greater look into this and challenges Cain in the next debate. He can't tout a program that doesn't get real results. Praise is one thing, results is the real thing.
Here’s the problem: To finance benefits at promised levels for those 55 or older, we would need to continue to collect payroll taxes from today’s working-age population. However, we would also propose to divert a significant share of those payroll tax into personal accounts. In effect, we would be trying to spend the same dollar twice, and we would do it trillions of times.
This doesn't seem like a worthy endeavor considering our country's tricky financial situation.
One thing is for certain, he is very confident: And he'll need it because his Florida win has brought him under fire as people begin to think whether he is a viable candidate for Presidency or not. It's uncertain whether his tax plan will work:
"I don't understand how the 9-9-9 plan -- which includes both a national sales tax and an income tax while purporting to repeal the 16th Amendment at some point -- can be taken seriously by anyone who feels we are already overtaxed," said Andrew Nappi, director of the Florida 10th Amendment Center.
And has it been vetted:
Zimmermann, a Romney supporter, said, "I don't know anyone who has vetted the 9-9-9 proposal and confirmed it as a viable plan."
Top aides in Iowa and New Hampshire quit earlier this year, saying Cain wasn’t taking the early states seriously. One former staffer recently alleged that staff members tried to cover up the role of a gay campaign adviser. He refuses to name the economic advisers who helped come up with his plan. In May, Cain said he couldn’t talk about foreign policy until elected.
That makes me believe that he hasn't taken himself seriously up to this point. If he really wants to make a run for this, he will aim for the transparency necessary to be a viable candidate. Until then, Herman Cain will be a bump in the road for the front runners. You cannot ignore potential skeletons in your closet and run for president. You will have people make you reveal that information as you rise a legitimate candidate. You should do your best to be prepared.
Now that Cain has one Florida, he best be prepared. He's been shooting for the stars; now the stars will be shooting back.
When I heard him talk about this last night, I wasn't sure he understood how what he was saying was coming across. He keeps referring to it as "sex" but I thought he meant to say "sexual orientation" given the context of what he was saying.
GOProud said in a statement that Santorum "disrespected" men and women in uniform with his response to Stephen Hill's question about whether any of the presidential candidates would "circumvent" the repeal of the "don't ask, don't tell" policy.
He seems to be the only one that's still against DADT:
What's remarkable about Santorum's position on "don't ask, don't tell" -- which formally ended this past week -- is not necessarily his keenness to judge the post-DADT environment for formerly closeted soldiers. It's that, on this matter at least, he is increasingly the lone culture warrior in the GOP presidential field. Following the debate, no other candidate or campaign offered support for a reinstitution of the law.
Herman Cain said this:
On a personal level, Cain added: "I have no problem with [gays serving openly]. The first order of business should be to do their job. As long as they do their jobs I think people in the military will be fine with that. It is when it becomes a distraction and you have got to spend a lot of time creating special situations, this is what I disagree with."
“That brave gay soldier is doing something Rick Santorum has never done -- put his life on the line to defend our freedoms and our way of life,” the group said in a statement attributed to Christopher R. Barron, the group’s chairman of the board, and Jimmy LaSalvia, its executive director. “It is telling that Rick Santorum is so blinded by his anti-gay bigotry that he couldn't even bring himself to thank that gay soldier for his service. Stephen Hill is serving our country in Iraq, fighting a war Senator Santorum says he supports. How can Senator Santorum claim to support this war if he doesn't support the brave men and women who are fighting it?”
Santorum has tried to paint himself as the top supporter of the military in this race. He had to differentiate himself from the rest of the candidates. However, as he fired that gun, it appears the recoil has caused him to hit himself in the face. I still think he somewhat misspoke, but you have to watch what you say in the public setting and you can't be as aggressive as he was in trying to take a stand when you're not sure of your words.
When I first heard Rick Perry declare his candidacy, I was excited. It meant new blood in the race; someone different who could inject life into the GOP. The more I've seen of him, the more I am unimpressed with him as a person and as a leader.
I'm not the only one that think so: While he established himself as the frontrunner, those days were numbered as he quickly has lost ground as a result of the last two debates. I can't really explain it because he has a good enough record where he really has a chance. Time and time again he seems unprepared in the debates. He's getting hammered on Social Security. He's getting hammered on crony capitalism. He's getting hammered on immigration. If he had been prepared, he would withstand the attacks, but he's just taking the hit. He's campaign has taken a hit.
The most telling moment Thursday evening was a botched attack on top rival Mitt Romney for Romney’s move during his political career toward more conservative stances in a number of issues, an attack that obviously had been readied in advance.
But Perry blew the delivery, offering instead a muddled stew of lines about Romney’s positions on abortion and healthcare, leaving the audience at the Fox News/Google debate in Orlando, Fla., and the audience at home unsure where Romney stood now or Romney stood then. (Of course, Romney’s critics would maintain that has always been the case.) It allowed Romney to close his portion of the debate decisively, while making a case that Perry didn’t seem to have a grasp of the issues.
The lack of preparation has reflected poorly on him. It would be easy to compare him George W. Bush, but that might be unfair to Bush at this point. Perry is just weak:
Perry arguably let Santorum push him around on border issues, as well, where Perry’s expertise should be unchallenged. Instead, Santorum hammered Perry on providing college tuition aid to the children of illegal immigrants and mocked him on border security. In another answer, Perry misspoke, saying Medicaid when he meant Medicare.
May be debating is just not his thing. However, as a President, you need to be multidimensional. There's also the fact that Perry has repeatedly stated that he wants to have a conversation on the issues, yet in the debates, he has repeatedly shied away from such discussion.
Don't even get me started on that smile. But that has more with the "look," which when all is said and done isn't important if a man (or woman) is capable. However, if a man is capable, he most certainly look Presidential, right? It's the stupidest thing to judge a potential President on looks, but people do do it. But is this a Presidential look? The aura of that first speech is lost. This is no secret:
When former senator Rick Santorum started to push Perry on his illegal immigration record, Perry made the mistake of asking Santorum whether he had been to the border. Of course, the former two-term senator has. Lots of members of Congress have. (And you don’t ask questions like that unless you’ve got a pretty good idea about the answer.)
That was symptomatic of Perry’s problems Thursday night. While he tried to recover from the attacks on himself by leveling his own attacks on the other candidates — mostly Mitt Romney, of course — he showed himself to be pretty inept at the art of the attack.
Whether or not debate is an important part of being president, it will be an important part of the election. If he does get past the attacks from Romney, Bachmann, Santorum, and the rest of the GOP Presidential hopefuls, he will have to go toe-to-toe with Obama. Now, that might be easier considering Obama has struggled on issues which Perry has succeeded. However, Obama has already once been elected President. He can do it again.
Perry needs to step up his game, or step down from his candidacy.
Mitt Romney continues to get attacked over his lackluster jobs record as governor. From a pure numbers perspective, he probably should be bashed. However, when you consider what he did compared to his predecessors and his successors, he looks favorabley compared to someone like Rick Perry:
Romney was right. Employment numbers from the Bureau of Labor Statistics show that the number of jobs in Texas grew nearly 3 percent annually while Ann Richards was governor and about 5 percent per year under Bush. Over Perry's 11 years as governor, job growth has averaged less than 2 percent per year.
With the favorable jobs market of Texas, Perry's growth rate has lagged behind both Bush and Richards. What does that say about Perry? As governor, Romney was in charge of turning around Massachusetts. He did it with a democratic legislature, something that Perry hasn't had to deal with. He had to deal with a bad credit rating, which he helped improve. He had to deal with the democratic healthcare legislation, which now ironically bare his name, RomneyCare. All of the potential issues that a future President of the United States is going to deal with, Romney has already faced.
Despite challenges, Romney produced results. Were they the best results in the country? Absolutely not. But given the circumstances, Romney was an effective governor.
If you were watching the Tea Party Debate last night, then you missed a great football game. Yes, I spent the evening basking in the glow of my television as two Michigan quarterbacks threw for a Monday Night Football record amount of yards. I flipped over to the debate for may be ten seconds and heard Herman Cain speak, but I missed the majority of the action.
I don't know how many of you missed it, but I'm going to review the main talking points.
Social Security: Mitt Romney attacked Rick Perry for calling it a Ponzi Scheme:
In the debate, Romney chided Perry for referring to Social Security as a "Ponzi scheme" and vowed to protect the program. Romney called such language "over the top" and said that Perry wrote in his book "Fed Up!" that the entitlement program is unconstitutional.
Rick Perry responded by saying that Romney was using the term to scare seniors. While that may be true, Perry did say that in his book. What's more important to me is that Romney is taking the offensive. My big knock on him has been that he is not very assertive in the debates. He seemed to really leave his mark last night.
I expect him to show that he is serious about being president and taking control of the Republican primaries.
For too long, politicians have been afraid to speak honestly about Social Security. We must have the guts to talk about its financial condition if we are to fix Social Security and make it financially viable for generations to come.
So basically, he says we should talk about it, but doesn't give a solution. He didn't provide a solution last night either. He will continue to get pounded on this and other matters of entitlement reform until he comes up with a proper plan for making Social Security financially viable.
HPV: Perry also continues to be attacked for making young girls get HPV vaccinations. Michelle Bachmann has been the most offended by this:
"To have innocent little 12-year old girls be forced to have a government injection through an executive order is just flat out wrong," Bachmann says in her e-mail requesting donations, titled "I'm Offended.
Perry has been weak in defending himself. The thing Republicans seem most offended by is the fact it was passed through an executive order rather than through the legislature.
It's an effort to help these young women healthy. I don't see how you can't strongly defend yourself against that.
Regardless, it does bring into question Perry's values. He has admitted that he would have liked to have gotten it through the legislature, but there's also questions of chrony capitalism in this matter. Bachmann again:
She returned to that line of attack on NBC’s "Today" show. “It’s very clear that crony capitalism could have likely been the cause” of the HPV vaccination program. She ripped Perry for deciding to implement the program through a 2007 executive order.
Crony capitalism or not, I don't know how big an issue is. Yeah, it has brought into question Perry's character, but there are other flaws with Perry related to bigger issues.
Immigration: While I don't see this as being a huge issue, Perry also came weak on immigration:
Third, immigration. In Texas, Perry has extended in-state, taxpayer-subsidized tuition to the children of illegal immigrants. It's a sensible policy, as it brings them into the fold and gives them the opportunity to improve their lives and contribute to the wider economy. But his opponents slammed Perry hard for a policy they called "amnesty." Romney was straightforward in stating what is, for most conservatives, gospel: This is a nation of laws, and we follow the laws.
As a border state, Perry should have a stronger opinion or more connected policies regarding immigration, but he failed once again. Even Jon Huntsman ripped him on it:
Even Jon Huntsman, when he wasn’t making baffling jokes about Kurt Cobain, told Perry his claim that he couldn’t secure the border was “pretty much a treasonous comment.”
"What we did in the state of Texas was clearly a states right issue. And the legislature passed with only four dissenting votes in the House and the Senate to allow this to occur," he said. "We were clearly sending a message to young people, regardless of what the sound of their last name is, that we believe in you. That if you want to live in the state of Texas and you want to pursue citizenship, that we're going to allow you the opportunity to be contributing members in the state of Texas and not be a drag on our state."
I'm not quite sure how well that's going to fly, especially with Tea Party voters. Anything that suggests providing subsidies is a hot button issue. Giving these benefits to illegal immigrants is, as Bachmann put it, "not the American way."
Also notable was Rick Santorum's flub:
Former two-term Pennsylvania Senator Rick Santorum suggested that Perry's support for the Texas DREAM act was a ploy to attract Latino voters.
"What Governor Perry's done is he provided in-state tuition for -- for illegal immigrants. Maybe that was an attempt to attract the illegal vote -- I mean, the Latino voters," Santorum said, quickly correcting his flub.
I don't think attacking a race of people is a good idea, Mr. Santorum.
Jobs: Romney finally made a strong case for Perry's record:
It's easy to do well when you have everything going for you. In Massachusetts, which is one of the most liberal states, Romney didn't have a lot going for him. He had a democratic state senate. He had high taxes. There were jobs leaving the state. There were a lot of things going to the other way.
Romney is correct that Massachusetts was losing jobs month after month for nearly a year before he took office. Those losses stabilized in his first year, and the state then began to see job growth. According to BLS statistics, over the entirety of Romney's term in office, the ranks of Massachusetts' employed went from 3,224,600 to 3,270,400. That’s a 1.4 percent increase. However, that was far slower growth than the national average, 5.3 percent. In fact, as Perry and Huntsman correctly pointed out at the debate, Massachusetts ranked 47th in job growth over the length of Romney's term. The only states that did worse: Louisiana, Michigan and Ohio.
So what's the difference between the rate at which Massachusetts was losing jobs and the job growth that Romney had? Are we not talking turn around? Or are we just focusing on job growth?
Isn't this a legitimate question to see whether he did turn things around even if at a slow pace?
General Impressions: It sounds like Perry is losing his lead or he's suffering from being the front runner at the moment. As the front runner, he is taking the brunt of the crossfire from his opponents. He has a target on his back and the rest of the candidates, even Michelle Bachmann, are hitting it.
The most important thing to me was to see Mitt Romney actually take control and assert himself. He took command and showed that he is passionate about wanting to be president. He showed them that he means serious business. That's what stood out to me.
The rest of the candidates aren't legitimate contenders to me. Bachmann is this year's Sarah Palin. Ron Paul still isn't a viable mainstream candidate. Rick Santorum isn't really making any headway. I've been very disappointed with Jon Huntsman who has yet to be in bloom.
As the candidates continue to debate, we'll learn more about how things are going to turn up. It seems now that there are two horses with the rest nipping at their heels.
Ron Paul always seems to not be taken seriously. It's unfortunate. After all, he's the one who said governments should have less influence on people's lives. He campaigned hard on it in 2008. Now, it seems everyone else is capitalizing on his original message. He continues to be forgotten:
The media's ignoring of Ron Paul hasn't gone unnoticed in the mainstream media either:
By now, pretty much everyone agrees Ron Paul was ignored by the media following his second place finish in the Ames straw poll on Saturday. Whether or not the media blackout was justified due to his less-than-favorable campaign prospects is subject to debate.
So what are Paul's prospects? We can judge some of it by his ability to raise money right? Well, he's cash:
Rep. Ron Paul (R-Texas) raised $1.8 million in 24 hours on Saturday and Sunday, a major online "money bomb" timed to coincide with his 76th birthday. This is the fourth time Paul has raised more than $1 million in a day this campaign cycle, and a signal that he will have the money to compete as long as he wants for the Republican presidential nomination.
Paul is still behind Romney and Perry as far as raising money, but the man is raising more money than Michelle Bachmann at this point. He's not going away. And with all that money, he should not go away quietly.
On the ballot Romney remains in a strong position. He leads all candidates with 36% of the vote. However, Perry, making his first appearance in the NH Journal poll, debuts with a strong 18%. Ron Paul continues to impress despite relatively little media attention with 14%. And Bachmann earns 10%. All other candidates were in single digits.
So despite the lack of media attention, Paul continues to raise money and do well in the polls. You've got to still wonder why no one's considering him a serious contender. Is the media attention the only thing keeping him from being a serious contender.
Yet we see all these other candidates that seemingly have no chance getting media attention. Rick Santorum continues to get attention, despite finishing a distant fourth place. Even Jon Huntsman is getting more attention than Ron Paul. What's the deal with that:
Huntsman is challenging orthodoxies of thought that afflict the GOP alone, and taking positions that reflect the conventional wisdom in the media: evolution is a fact, so is climate change, and the debt ceiling had to be raised. In contrast, Johnson and Paul are challenging orthodoxies of thought that are bi-partisan in nature and implicate much of the political and media establishment.
Even more worrying is the fact that not only is Paul getting outshined in media coverage by his fellow candidates, but also by the potential Presidential candidates.
The Tea Party is using a radio blitz for Sarah Palin. Everyone under the sun are waiting for a Paul Ryan or Chris Christie to throw their hat into the race.
It's unbelievable.
In many ways, by not giving Ron Paul fair time or attention, he is becoming a forgotten man in this race. However, the extent to which people are going to ignore him is ridiculous. Palin, Ryan, and Christie aren't even in the race, and attention should not focus on them until they decide they want to serve our country. Huntsman and Santorum are not campaigning nearly as well as Paul, yet they are both getting the mainstream treatment. Whether you like Ron Paul or not, you should agree his voice should at least be heard. The media blackout on Ron Paul is anti-American.
One of the top challenges for any Republican candidate for President is to win the Tea Party vote.
The Tea Party is a grassroots movement that may or may not be misunderstood. When it first emerged, the protests seemed silly because there seemed to be racially motivated, particularly in the way they tried to convince the public that Barack Obama was born outside the United States:
"Given how much sway the Tea Party has among Republicans in Congress and those seeking the Republican presidential nomination, one might think the Tea Party is redefining mainstream American politics," Campbell and Putnam write. "But in fact the Tea Party is increasingly swimming against the tide of public opinion: among most Americans, even before the furor over the debt limit, its brand was becoming toxic."
In spite of this, it has continued to gain political influence amongst Republican presidential candidates.
Rather than discuss the movement, I would like to address in regards to their Tea Party politics.
Michelle Bachmann has been championing herself as a Tea Party Republican, particularly in highlighting her recent voting record in light of the debt crisis. However, she was burned in Friday's Wall Street Journal for some of her stances:
If Mrs. Bachmann is worried that Mr. Ryan's reforms would not address her concerns, then there are other approaches to choose from. But she has declined to offer or endorse any, expressing only vague support for a small increase in the retirement age and greater means testing—neither of which would make a real dent in Medicare's growth, since neither would reform the grossly inefficient payment system that causes costs to explode throughout the health sector. An asterisk is not enough.
The problem is that while the Tea Party has admirable political goals, its politicians may not have the spine to get things done. Providing concrete policies is an important factor:
A posture of bold fiscal conservatism is simply not compatible with timid evasions on Medicare reform. The combination may be politically convenient, but it is substantively incoherent. And it's not just Mrs. Bachmann who has done this—most of the GOP presidential candidates have as well. Virtually every speech they give is laced with promises to tame our deficit and debt, to scale back the size, scope, reach and cost of government. Yet they have little to say when it comes to fixing the fundamental structure of our health entitlements. They want to will the ends but not the means to those ends. And that just won't do.
You can't shy away from strength. By dodging concrete policies, you're building uncertainty for your campaign. One of the main criticisms of Obama was that he didn't provide concrete policies. I think a 2012 candidate will have to provide a much stronger stance on the issues.
The activists and enthusiasts were much more likely to express doubts about a Perry candidacy. Many were dissatisfied with his time as governor and doubted the authenticity of his conservative credentials.
These are the two "front-runners." I discount Mitt Romney only because I think his religion will be an issue and his spotty record is something that he won't defend. Romney is a smart guy, but he's not charismatic and he's not outspoken. I think he genuinely wants to be President and probably would do a good job if elected. However, he lacks those two traits which are prime on the campaign trail. Oh, and he's definitely not a Tea Party favorite.
Interestingly, the two candidates that would probably most appeal to the Tea Party are not even in the race.
And let me tell you what the truth is. What's the truth that no one is talking about-here is the truth that no one is talking about: you're going to have to raise the retirement age for social security. Oh I just said it and I'm still standing here! I did not vaporize into the carpeting and I said it! We have to reform Medicare because it costs too much and it is going to bankrupt us. Once again lightning did not come through the windows and strike me dead. And we have to fix Medicaid because it's not only bankrupting the federal government, it's bankrupting every state government. There you go. If we're not honest about these things, on the state level about pensions and benefits and on the federal level about social security, Medicare, and Medicaid, we are on the path to ruin.
Christie is mulling a run as is Paul Ryan, who brought us the Path to Prosperity:
No one person or party is responsible for the looming crisis. Yet the facts are clear: Since President Obama took office, our problems have gotten worse. Major spending increases have failed to deliver promised jobs. The safety net for the poor is coming apart at the seams. Government health and retirement programs are growing at unsustainable rates. The new health-care law is a fiscal train wreck. And a complex, inefficient tax code is holding back American families and businesses.
Both of these candidates fit the Tea Party agenda so far as cutting government spending and reducing taxes. More importantly, they have a strong record for entitlement reform. They have a strong stance against it and would provide the spine that the Republicans that the other candidates lack.
While the Bachmanns and the Perrys may have the charisma to appeal to the Tea Party supporters, they lack the record to bring about changes the Tea Party activiists can get behind. There's hope that one of these men will run for the presidency. However, until then, the Tea Party activists will have to settle for less.
On my Twitter, I tweeted that if there's anything you're unsure about or you want to learn about, you should let me know. A lot of my own posts start that way. I look at things that are in the news that I want to learn more about, so I research them. I try to apply it to what's going in the world, why it's important etc.
Entitlements are like government handouts..Welfare, Medicare, and social security are all considered entitlements. The entitlements make up about 56% of the federal budget, so most conservatives believe that they should be reformed.. like raising the age to claim Social security.
So as one would suspect, they have to do with spending initiatives.
With the deficit crisis, entitlement reform has been in the news a lot lately. The cost of a lot of these programs are spiraling out of control and making it hard to control the deficit. Some legislators believe that these costs must be controlled in order to give our country a chance at financial survival.
"There have been times when our side, when Democrats aren’t always as flexible as we need to be," Obama said. "Sometimes I do get frustrated when I hear folks say, 'You can't make any changes to any government programs.' Well, that can't be right."
This isn't a soft issue. This is something that is going to challenge many people's political ideologies and go against what they stand for. Obama has been a champion of liberal doctrine, but he understands that this is a growing issue:
"We will not be able to sustain that program no matter how much taxes go up," he said in late July. "I mean, it's not an option for us to just sit by and do nothing."
You cannot keep raising taxes to make these things happen. You're taking away the competitiveness of the country if you're taking everything from people and giving it back in the form of entitlements.
These entitlements are a cost driver and are one of the main reasons that the US recently had it's credit downgraded:
"The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest," Beers said.
So the people responsible for downgrading our debt are cognizant of the fact that entitlements are going to continue to be an issue going forward.
So what's the significance of this?
Well, the debt crisis has created uncertainty and volatility in the markets. There are worries about a potential default in the future. Companies aren't hiring. Much of the problems associated with economic worry are tied to growing debt problems, so tackling and controlling entitlements are going to be one of the top issues of the next election. While the economy will most likely be the top issue, one of the paths to bettering the economy should come through reducing the deficit and reducing uncertainty.
Paul Ryan has been one of the most outspoken politicians on entitlement reform:
Ryan added that he's willing to discuss tax reforms in a way that would promote economic growth and job creation, including addressing "special interest-driven loopholes," but qualified any reforms by adding, "if you're just raising revenues to chase ever high spending, that's not good policy."
Ryan said ultimately the U.S. has to fix its entitlement system.
"The president just created two brand new health care entitlements, expanded Medicaid, a third, and then put this new rationing board in charge of Medicare," Ryan told "Fox News Sunday." "So they're unwilling to open up and restructure these entitlements, which according to S&P are the primary drivers of this debt."
Wall Street agrees:
Bill Miller of Legg Mason Capital Management, who appeared with Ryan, said the markets are looking to see a "reduction in uncertainty," which means both fundamental tax reform and changes to the entitlement structure.
"Discretionary spending doesn't matter at all in this thing except that it'll be a little bit of a drag on the economy. It's pro-growth policies and fundamental entitlement reform, especially on health care, that are the key things for to our long-term fiscal health and therefore the long-term confidence in the markets toward our country," Miller said.
The debt crisis is a top down concern for the markets and for the economy. If we address this debt crisis through entitlement reform, we can help ensure the fiscal safety of our country and work towards suring up our markets' confidence.
So while the election will focus on the economy, entitlement reform should come up. Ryan is one of the most outspoken politicians on entitlement reform and if he decides to run, I will surely profile him. Regardless, his Path to Prosperity will be a topic of discussion.
The question is whether the rest of the candidates take his cue and make it a primary talking point or they try to focus solely on the economy without tackling the debt issue, attacking each others' records and Obama's record. In the meantime, it will be interesting to see if Obama follows through on what he has already said. If he does make the move and extend his hand to implement entitlement reform, will that give him a leg up in the race? These questions will be answered in the weeks or months to come.
