John Kerry's Economic Policy

[graupel]

Fresh out of the Wall Street Journal

 

Full Text (1770   words)

 

My Economic Policy

 

As I travel across this country, I meet store owners, stock traders, factory foremen and optimistic entrepreneurs. Their experiences may be different, but they all agree that America can do better under an administration that is better for business. Business leaders like Warren Buffett, Lee Iacocca and Robert Rubin are joining my campaign because they believe that American businesses will do better if we change our CEO.

 

Since January 2001, the economy has lost 1.6 million private-sector jobs. The typical family has seen its income fall more than $1,500, while health costs are up more than $3,500.

 

Today, American companies are investing less and exporting less than they were in 2000 -- the first time investment and exports have been down during any presidential term in over 70 years. At the same time, our trade deficit has grown to more than 5% of the economy for the first time ever, a troublesome and unsustainable development.

 

The economy still has not turned the corner. Over the last year, real wages are still down and even the jobs created in the past 12 months represent the worst job performance for this period of a recovery in over 50 years. Indeed, the total of 1.7 million jobs created over the last year is weaker than even the worst year of job creation under President Clinton, and below what is needed just to find jobs for new applicants entering the work force.

 

Forty-three months into his presidency, George Bush's main explanation for this dismal economic record is an assortment of blame and excuses. Yet what President Bush cannot explain is how the last 11 presidents before him -- Democrats and Republicans -- faced wars, recessions and international crises, and yet only he has presided over lost jobs, declining real exports, and the swing from a $5.6 trillion surplus to trillions of dollars of deficits.

 

While the private sector will always be America's engine for innovation and job creation, President Bush has failed to take any responsibility for missing opportunities to strengthen the conditions for investment, economic confidence and job creation.

 

When the economy needed short-run stimulus without increasing the long-run deficit, President Bush got it backwards, passing an initial round of tax cuts that Economy.com found had no effect in lifting us out of recession. He then passed more deficit-increasing tax cuts that Goldman Sachs described as "especially ineffective as a stimulative measure." When small businesses and families needed relief from skyrocketing health-care and energy costs, he chose sweetheart deals for special interests over serious plans to reduce costs and help spur new job creation.

 

With the right choices on the economy, America can do better. American businesses and workers are the most resilient, productive and innovative in the world. And they deserve policies that are better for our economy. My economic plan will do the following: (1) Create good jobs, (2) cut middle-class taxes and health-care costs, (3) restore America's competitive edge, and (4) cut the deficit and restore economic confidence.

 

-- Create good jobs. I strongly believe that America must engage in the global economy, and I voted for trade opening from Nafta to the WTO. But at the same time, I have always believed that we need to fight for a level playing field for America's workers.

 

I am not trying to stop all outsourcing, but as president, I will end every single incentive that encourages companies to outsource. Today, taxpayers spend $12 billion a year to subsidize the export of jobs. If a company is trying to choose between building a factory in Michigan or Malaysia, our tax code actually encourages it to locate in Asia.

 

My plan would take the entire $12 billion we save from closing these loopholes each year and use it to cut corporate tax rates by 5%. This will provide a tax cut for 99% of taxpaying corporations. This would be the most sweeping reform and simplification of international taxation in over 40 years. In addition, I have proposed a two-year new jobs tax credit to encourage manufacturers, other businesses affected by outsourcing, and small businesses that created jobs.

 

American businesses are the most competitive in the world, yet when it comes to enforcing trade agreements the Bush administration refuses to show our competitors that we mean business. They have brought only one WTO case for every three brought by the Clinton administration, while cutting trade enforcement budgets and failing to stand up to China's illegal currency manipulation. That not only costs jobs, it threatens to erode support for open markets and a growing global economy.

 

-- Cut middle-class taxes and health costs. Families are being increasingly squeezed by falling incomes and rising costs for everything from health care to college. But spiraling health-care and energy costs squeeze businesses too, encouraging them to lay off workers and shift to part-time and temporary workers.

 

Under my plan, the tax cuts would be extended and made permanent for 98% of Americans. In addition, I support new tax cuts for college, child care and health care -- in total, more than twice as large as the new tax cuts President Bush is proposing.

 

I have proposed a health plan that would increase coverage while cutting costs. It builds on and strengthens the current system, giving patients their choice of doctors, and providing new incentives instead of imposing new mandates.

 

My health plan will offer businesses immediate relief on their premiums. By providing employers some relief on catastrophic costs that are driving up premiums for everyone, we will save employers and workers about 10% of total health premiums.

 

Our hospitals and doctors have the best technology for saving lives, but often still rely on pencil and paper when it comes to tracking medical tests and billing. As a result, we spend over $350 billion a year on red tape, not to mention the cost of performing duplicative or redundant tests. My plan will modernize our information technology, create private electronic medical records, and create incentives for the adoption of the latest disease management.

 

And I won't be afraid to take on prescription drug or medical malpractice costs. We will make it easier for generic drugs to come to market and allow the safe importation of pharmaceuticals from countries like Canada. Finally, we will require medical malpractice plaintiffs to try nonbinding mediation, oppose unjustified punitive damage awards and penalize lawyers who file frivolous suits with a tough "three strikes and you're out" rule.

 

This plan will make our businesses more competitive by making our health care more affordable.

 

-- Restore America's competitive edge. America has fallen to 10th in the world in broadband technology. Some of our best scientists are being encouraged to work overseas because of the restrictions on federal funding for stem-cell research. President Bush has proposed cutting 21 of the 24 research areas that are so critical to long-term growth. We need to invest in research because when we shortchange research we shortchange our future.

 

My plan would invest in basic research and end the ban on stem-cell research. It would invest more in energy research, including clean coal, hydrogen and other alternative fuels. It would boost funding at the National Science Foundation and continue increases at the National Institutes of Health and other government research labs. It will provide tax credits to help jumpstart broadband in rural areas and the new higher-speed broadband that has the potential to transform everything from e-government to tele-medicine. I would promote private-sector innovation policies, including the elimination of capital gains for long-term investments in small business start-ups.

 

To ensure we have the workers to compete in an innovation economy, we need more young people to not only enter but complete college, we need more young women and minorities to enter the fields of math and science, and we need to make it easier for working parents to get the lifelong learning opportunities they need to excel at both their current and their future jobs.

 

-- Cut the deficit and restore economic confidence. When President Bush was in New York for the Republican convention, he did not even pay lip service to reducing the deficit. His record makes even Republicans wary. From missions to Mars to a pricey Medicare bill, President Bush has proposed or passed more than $6 trillion in initiatives without paying for any of them. The record is clear: A deficit reduction promise from George W. Bush is not exactly a gilt- edged bond.

 

Americans can trust my promise to cut the deficit because my record backs up my word. When I first joined the Senate, I broke with my own party to support the Gramm-Rudman-Hollings deficit reduction plan, which President Reagan signed into law. In 1993, I cast a deciding vote to bring the deficit under control. And in 1997, I supported the bipartisan balanced budget agreement.

 

I will restore fiscal discipline and cut the deficit in half in four years. First, by imposing caps, so that discretionary spending -- outside of security and education -- does not grow faster than inflation. If Congress cannot control spending, it will automatically be cut across the board. Second, I will reinstitute the "pay as you go" rule, which requires that no one propose or pass a new program without a way to pay for it. Third, I will ask for Congress to grant me a constitutionally acceptable version of line-item veto power and to establish a commission to eliminate corporate welfare like the one John McCain and I have fought for.

 

I am not waiting for next year to change the tone on fiscal discipline. Every day on the campaign trail, I explain how I pay for all my proposals. By rolling back the recent Bush tax cuts for families making over $200,000 per year, we can pay for health care and education. By cutting subsidies to banks that make student loans and restoring the principle that "polluters pay," we can afford to invest in national service and new energy technologies. My new rules won't just apply to programs I don't like; they will apply to my own priorities as well.

 

Cleaning up President Bush's fiscal mess will not be easy, but to ensure a strong and sustainable economic future we have to make the tough choices to move America's growing deficits back in the right direction.

 

On Nov. 2 we will have a national shareholders meeting. On the ballot will be the choice to continue with President Bush's policies or return to the fiscal sanity and pro-growth polices that proved so successful in the 1990s. You will choose.

 

---

 

Mr. Kerry is the Democratic Party's candidate for president.

 

[JoshK]

On a side note...why do all the republicans that vote R for financial reasons do that? Since LBJ democratic presidential economies have performed over twice as well. Further, the best economic growth is seen under D presidents and D houses. R+R results in teh weakest growth.

[Lars]

"I am not trying to stop all outsourcing"

"a tax cut for 99% of taxpaying corporations"

 

sounds like kerry is flip-flopping again.

it would be interesting to know where he gave that speech.

[Fairweather]

Hasn't Heinz inc. has outsourced almost 70% of its workforce in recent years?

[JoshK]

Does claiming "mission accomplished" then saying "we have a lot more work to do" after another 600 dudes get killed count as flip-flopping too? THe flip-flopping thing is so stupid. Political motivations, opinions, etc. change just as the issues do. Go spend some time and I'm sure you could find just as many examples of your stupid "flip flopping" with Bush or any other politician.

[Greg_W]

Kerry wants to cut all these taxes and shit, but he wants to subsidize all this healthcare shit. Where's that money coming from? He's cutting taxes, but rolling back Bush's tax cut? How's that working?

 

I heard this morning that the US economy has seen 11 quarters of growth and the unemployment rate is the same as it was in '96, when the Clinton folks said the economy was booming (from an economist at the Heritage Foundation). I'm a middle-class American and I haven't lost $1500, nor are my healthcare costs going up. I think he's using some funny math on his stats.

 

All his big pie-in-the-sky plans are nice, but when he goes to Congress it'll be a different tune.

[Jim]

Count yourself among the lucky few that have health care and who's costs have not been going up.

[Greg_W]

You make your own luck, Jim.

[Jim]

Here we go again. Besides limiting your provider visits, what exactly do you think you're doing to hold down your health cost premiums. Do you work for a company or are you self-employed? If self employed then your premiums have surely gone up. And the vast majority of working folks have seen their costs go up. So what exactly do you do for a living and what wise choice have you made that your employer hasn't raised your health care costs in the last 5 years say? You never need to go to the doctor, don't have health insuranace, don't have family that need a medical visit ever? I think you pulling our collective chain again.

[Greg_W]

Yes, I do keep my provider visits down. How do I do this? By CHOOSING to live a healthy life. Think about how many people have to visit doctors due to lifestyle choices; I'm talking about daily lifestyle choices. I work for an employer who covers my premiums. How did I achieve this? By making my own luck, plain and simple. I've worked hard at creating a career and have made many connections in my given industry. This isn't rocket science, and I'm not chestbeating; it's simple common sense: make yourself attractive to employers for your own betterment.

 

Since you brought up the "collective", I'll comment on collectivism. It's not my job to pay for your health insurance, and I am deeply offended by people who think that it is. Why is it the role of Federal Government to be a HEALTHCARE PROVIDER? Just because you chose to get knocked up at 16 or not study in school or whatever other reason makes you unemployable or under-employable, doesn't mean you can sponge off of my labor.

[Jim]

Then you're employer is paying more for your health costs dude. If the current system is so great why do we pay so much more than other contries for LESS care?

 

In 2001, health care spending in the United States was $1.4 trillion, up 8.7 percent from 2000. (“Highlights from Health Tables and Chartbook,” Health, United States 2003, National Center for Health Statistics, Centers for Disease Control, http://www.cdc.gov/nchs/products/pubs/pubd/hus/highlits.pdf)

 

The United States spends a greater percent of gross domestic product on health care than any other major industrialized nation. In 2001, the United States spent 14.1 percent of the GDP on health care. (“Highlights from Health Tables and Chartbook,” Ibid.)

 

The United States spends more on health care than other industrialized countries; as a percentage of 2001 GDP, the United States spent 13.9%, Germany spent 10.7%, Canada spent 9.7%, France spent 9.5%, and Sweden spent 8.7% on total health care spending. (David Walker, “Health Care System Crisis: Growing Challenges Point to Need for Fundamental Reform,” presentation to the General Accounting Office Health Care Forum, 13 January 2004).

 

Although the United States spends more money than many countries, it does not always offer more health care resources than other countries. In 2000, Canada, Germany, Sweden, and the United Kingdom all had more nurses per 1,000 residents than the United States; Germany, Sweden and France had more physicians; and Canada, Germany, the United Kingdom and France had more beds for acute care patients. (Walker, Ibid).

 

Despite its higher levels of health care spending, the United States has a higher infant mortality rate that the United Kingdom, Canada, France, Germany, Sweden, and Japan. (Walker, Ibid).

 

Americans’ average annual out-of-pocket expenses for health care rose 26% between 1995 and 2001, to $2,182. (Bureau of Labor Statistics)

[willstrickland]

Bob Rubin's fingerprints are all over this policy, I'd wager he wrote most of it.

 

Personally, I don't fnid the unemployment rate especially high in a historical context however...

 

Much of the so-called "natural" unemployment rate, which economist put variably around 4-6% is due to inherent shifting of employees within the market. Advances of technology for the recruiting/hiring process should tighten up this process and reduce the natural rate. That's just IMO, but I think the acceptable rate should be less than it was 15 years ago, or even 10 years ago.

 

Also consider the nature of the jobs created within the last several years as the rate has declined. They are not particularly good jobs for the most part. I think you can intuit this through the median income numbers.

 

Outsourcing is a extremely complicated issue and we had better adopt a stance of learning how to profit from it rather than fight it. The fact is, it is going to happen. However, we should not be giving tax incentives that favor it, nor should we be giving China carte blanche to artificially manipulate their currency which is contributing to our trade defecit. In the end we cannot control whether they decide to float it,but we should definitely be putting pressure on them to do so.

 

I don't buy some of the optimistic numbers in the article, but I do agree with the overall tenor. I think Rubin is a pretty clear thinker and a decent policy maker, although some of what he advocated in Clinton's terms (which was not adopted) were a little off base...but hindsight is always clear.

[Greg_W]

Jim;

 

America also has a massive number of fat, unhealthy people; why this is, I don't know. From my experiences in Germany and Austria, they have a healthy mindset about living (i.e., they walk, ride bikes, hike, etc.).

 

How do these statistics account for the massive subsidization by these foreign countries? Isn't this data also skewed by the fact that these governments set the fees that they will reimburse physicians for seeing patients? For example, in Canada doctors are paid a certain amount for a certain quantity of patients each day. Above this quantity, they are paid less; so, it's a stepped reimbursement schedule.

 

Could it be that these countries with more nurses and less doctors rely on nurses and nursing assistants to carry out work that the U.S. relegates to physicians?

 

A 26% increase in 6 years is about 4.3% per year. I don't know what inflation was for those years, but I usually put it around 3.5%, on average. So, it rose slightly faster than inflation, but there could be reasons for that.

 

Greg_W

[cracked]

[Jim]

Greg,

 

I agree with some of your points. I think that American's health issues and need for the greatest technology fix for medical care is driving some of the problem. On the other hand if people actually had access to health care then they would likely be healthier.

 

Some of this is just common sense though. If you have 150 different insurance companies, all making a profit as middle man, why not consolidate and save money? I know, you don't want to create a bureaucracy. But we have one now it's just making money off us via insurance companies.

 

Blue Cross of Conn. has more administrators than the entire Canadian health system. So what exactly are we saving? You are subsidizing health care for the poor now thru higher health care costs. Either you are paying it directly or your employeer is. That means less money in your pocket either way. We are so stuck in the profit trench here. The only industrialized country w/o national health care and we're towards the bottom of the list in health.

[scott_harpell]

Then you're employer is paying more for your health costs dude. If the current system is so great why do we pay so much more than other contries for LESS care?

 

In 2001, health care spending in the United States was $1.4 trillion, up 8.7 percent from 2000. (?Highlights from Health Tables and Chartbook,? Health, United States 2003, National Center for Health Statistics, Centers for Disease Control, http://www.cdc.gov/nchs/products/pubs/pubd/hus/highlits.pdf)

 

The United States spends a greater percent of gross domestic product on health care than any other major industrialized nation. In 2001, the United States spent 14.1 percent of the GDP on health care. (?Highlights from Health Tables and Chartbook,? Ibid.)

 

The United States spends more on health care than other industrialized countries; as a percentage of 2001 GDP, the United States spent 13.9%, Germany spent 10.7%, Canada spent 9.7%, France spent 9.5%, and Sweden spent 8.7% on total health care spending. (David Walker, ?Health Care System Crisis: Growing Challenges Point to Need for Fundamental Reform,? presentation to the General Accounting Office Health Care Forum, 13 January 2004).

 

Although the United States spends more money than many countries, it does not always offer more health care resources than other countries. In 2000, Canada, Germany, Sweden, and the United Kingdom all had more nurses per 1,000 residents than the United States; Germany, Sweden and France had more physicians; and Canada, Germany, the United Kingdom and France had more beds for acute care patients. (Walker, Ibid).

 

Despite its higher levels of health care spending, the United States has a higher infant mortality rate that the United Kingdom, Canada, France, Germany, Sweden, and Japan. (Walker, Ibid).

 

Americans? average annual out-of-pocket expenses for health care rose 26% between 1995 and 2001, to $2,182. (Bureau of Labor Statistics)

 

Jim those numbers are all fine and dandy... but have you ever been to a canadian hospital? Fuck stats, I have been in a canadian hospital and I thought myself more capable of taking care of my injuries than those in the ER.

[cj001f]

How do these statistics account for the massive subsidization by these foreign countries? Isn't this data also skewed by the fact that these governments set the fees that they will reimburse physicians for seeing patients? For example, in Canada doctors are paid a certain amount for a certain quantity of patients each day. Above this quantity, they are paid less; so, it's a stepped reimbursement schedule.

GregQ-

Those statistics show the total amount of money spent on health care in the economy as a whole. That includes government & private sector expenses.

Whether it's paid by the state or private sector medical expenses are a drag on growth.

 

As for stepped reimbursement - that's better than medicare, medicare is a flat rate based on the county classification.

[Greg_W]

Jim;

 

Access to healthcare does not change the mindset to live in a more healthy manner. It's choice and lifestyle that drives health (with the absence of genetic issues).

 

Hmm...consolidate to one with no competitors? What drives the incentive to provide better care than the other guy? Competition is what creates inovation, improvement, and better services.

 

I would say that not having national healthcare and level of health are not related. Besides, without national healthcare, we have created an environment of innovation in internal medicine, sleep medicine, cardiology, etc.

[Greg_W]

How do these statistics account for the massive subsidization by these foreign countries? Isn't this data also skewed by the fact that these governments set the fees that they will reimburse physicians for seeing patients? For example, in Canada doctors are paid a certain amount for a certain quantity of patients each day. Above this quantity, they are paid less; so, it's a stepped reimbursement schedule.

GregQ-

Those statistics show the total amount of money spent on health care in the economy as a whole. That includes government & private sector expenses.

Whether it's paid by the state or private sector medical expenses are a drag on growth.

 

As for stepped reimbursement - that's better than medicare, medicare is a flat rate based on the county classification.

 

This may or may not bolster my argument regarding the State setting reimbursement amounts. If they set them low, then they spend less. See? I don't know this is the case, I'm just throwing out ideas.

[cj001f]

I would say that not having national healthcare and level of health are not related. Besides, without national healthcare, we have created an environment of innovation in internal medicine, sleep medicine, cardiology, etc.

 

The question is whether this innovation has resulted in a greater level of health, not higher profits for the providers. Statistically the results aren't that obvious.

[Jim]

Jim;

 

Access to healthcare does not change the mindset to live in a more healthy manner. It's choice and lifestyle that drives health (with the absence of genetic issues)

 

Some it is choice some is economics. If you can't afford health care because your employer does not provide it (because he can't afford to) you tend to avoid the doctor for minor things that could be nipped in the bud.

 

It's certainly proven that folks with access to prenatal care have healthier babies. When the kid does get really sick they end up at the hospital and your paying for it anyway. Your darwinian view of society strikes me as odd.

[scott_harpell]

Jim statistics also don't take into account that Americans are much less healthy then Canadians overall (obesity, heart disease etc.). I use the Canadian example because it i the one I have experience with.

[willstrickland]

The question is whether this innovation has resulted in a greater level of health, not higher profits for the providers. Statistically the results aren't that obvious.

 

I think this argument is lacking. The innovation has certainly made a difference in the ability of doctors to treat condiditions. The fact that health levels have not increased is due IMO to the fact we as a nation are on a downward spiral of poor lifestyle choices.

 

We make a big production out of changing the FDA's "food guide pyramid". Gimme a break! Nobody uses this kinda BS to decide what to eat. They indulge in what tastes good that they can afford. Do you ever see the president or senators on TV telling people "put down the bon bons, get off your fat ass, and go for a walk. Bike to work, go run around with your kids, walk to the corner store".

 

Can you imagine if Bush were to televise his daily workout.

"Weightlifin' with W! Everyday at 7am Eastern Std time on CBS!" Have GWB on there all like "Now I want all you do this with me. Jumping jacks, on my count. Ready, exercise.One-two-three-ONE, one-two-three-TWO!"

 

Maybe Schwartzenegger will hook it up? "Ok I want you to put 400 pounds on the baaahhh. You girlie man democrats can use 350. Now grasp the baahhh and explode from your glutes. DEADLIFT THAT WEIGHT YAAAAHHH!!!! Guud!"

 

During the workouts they could talk sense to the people. "Decrease your consumer debt. Don't buy more than you can afford. Volunteer for a charity. Spend time with your kids"

 

We have so glorified work, that we slave away until we are too mentally exhausted and sleep deprived to exercise, and too time-starved to cook healthy food. Add the stress levels from consumer debt, job security, commute traffic...we're on an unsustainable path. We like to think of ourselves as the most efficient workers...not true! The euros are just as productive, they just choose to work less.

 

I do believe that the administrative costs of health care are excessive, and I am surprised and a little skeptical when I hear stats that say the public sector is more efficient in administration costs than the private sector.

 

I also have a problem with people who abuse themselves for their entire life and then feel entitled to publicly funded care for preventable illness. Hello! You fat fuck, if you hadn't eaten Burger King eight tiems a week for forty years you probably wouldn't need that quadruple bypass on the public dime.

[jjd]

On a side note...why do all the republicans that vote R for financial reasons do that? Since LBJ democratic presidential economies have performed over twice as well.

 

By what measure? The average quarterly growth rate in GDP under Republicans is 0.755% (3.021% annualized), while it is 0.885% (3.540% annualized) for Democrats. The differences are not statistically significant. I would be happy to send you the Excel spreadsheet I used for these calculations, if you wish.

 

Both of our main choices in this election are awful - neither has a clear economic policy. They'll both find ways to erode our personal freedoms even more. If you believe John Kerry is the candidate for "fiscal responsibility," I can offer you a great deal on ocean front property in Kentucky. If you believe we'll somehow be safer under George Bush, I could sell you a couple of Abrams tanks. These guys are both a couple of clowns and the next four and a half years will be more floundering around, slipping farther toward the black hole of socialism no matter who is in office.

[scott_harpell]

called out bitch! betta represent!