The Election and the Economy (Without the Jargon)

First of all, Perfectnumber is in way over her head here. Politics are confusing- who can possibly understand them? But then she realized that the average American has to at least somewhat understand them, if they want to vote.

Pictured: The average American's take on politics. Image source.

I am going to do my best to articulate what each side believes, and the assumptions about the nature of the world that lead to those beliefs, and what questions one would have to answer in order to determine which side has beliefs closest to one's own.

(If I miss any important facts, or get something wrong, tell me.)

Here we go! Today's election-related topic is: the economy.

Image source.

Obama's position:

Obama's plan focuses on tax cuts for the average American. He passed the American Recovery and Reinvestment Act, with tax cuts specifically targeted towards working families and small businesses. He believes the economy will benefit most when more money is going directly into the hands of American people, not a wealthy minority or enormous corporations.

Source: barackobama.com, and a lot of being puzzled and suspicious of any statistic related to politics.

Romney's position:

Romney believes that in order to improve the economy, businesses must be given the means to create more jobs. There are way too many government regulations on business- this is a huge burden- it is smothering the economy. Therefore, Romney plans to get rid of a lot of the regulations and bureaucracy, and cut taxes on businesses.

Source: mittromney.com, and a lot of sifting through biases and jargon until I finally figured out where he's coming from.

So all those ads I see, telling me to vote for Obama because Romney would have middle class families paying $2000 more or whatever- that's because Romney's plan does not directly target "middle class families" for tax cuts- it targets businesses. It all makes sense now.

Questions to consider:

So, Romney wants to remove a lot of regulations on business. What are "regulations"?

According to this page, there are 5 areas in which government regulates business:

1. Advertising (truth-in-advertising laws)
2. Employment and labor (for example, minimum wage)
3. Environmental (limits on pollution, etc)
4. Privacy (don't spread around customers' credit card numbers)
5. Safety and health (providing a safe, clean work environment for employees)

All of that seems very important to me. However, it may be the case that regulations have gone way too far, and there are so many small and relatively unimportant requirements that it holds back progress. This is Romney's position. Is it true? I don't know.

Which regulations does Romney want to get rid of? What practical effect would it have on employees, customers, and the environment? 

What are the current tax rates for different income levels?

Everyone is talking in terms of an increase or decrease and "tax cuts for the rich". What are the absolute numbers we're dealing with here?

According to wikipedia, a married couple filing jointly (I picked this case because everyone's been all about families in this election) pays an income tax of 10% on the first $17400, then 15% on the next bunch of income up to $70700, then 25% on the next bunch of income up to $142700, then 28% up to $217450, then 33% up to $388350, then 35% on any more.

OKAY that was a bunch of numbers in paragraph form. Not so useful. Take a look at this graph of household income in 2010, and then we'll try to make sense of the tax rates.

I recommend clicking here to see it bigger: Image source.

(I know this is "household income" and a household sometimes just has 1 adult rather than 2 filing jointly. I'm just trying to get some estimates. Calm down.)

15% of households earn $17400 or less, which puts them in the 10% tax bracket.

54% of households earn $17400 to $70700, which puts them in the 15% tax bracket.

15% of households earn $70700 to $142700, which puts them in the 25% tax bracket.

12% of households earn $142700 to $217450, which puts them in the 28% tax bracket.

4% of households earn more than that, which puts them in the 33% or 35% tax bracket.

(Used data from this table, which is from 2003 but is probably the pretty much the same as that graph. And I did the math quick and dirty.)

So as a voter, ask yourself if these tax rates seem fair. Should higher incomes be taxed at higher levels? If so, how much higher?

Who are these "middle-class" "working families"?

I once saw a study that said almost everybody considers themselves to be middle-class, even though a lot of them totally aren't. Both Obama and Romney are talking about all the wonderful things they plan to do to benefit "the middle class."

To me it seems like a sneaky political attempt to show they totally identify with you. Like when you take one of those personality tests, and at the end it tells you a bunch of incredibly vague statements, but they're worded so you don't realize they're vague- you think that personality test TOTALLY GETS you.

"Though at times you enjoy being the life of the party, you feel you also have a quiet, introspective side that your friends do not know." Image source.

So it's unclear to me who the supposed benefits to "the middle class" are really for.

Huge corporations are being portrayed as faceless, callous, uncaring, evil- let's take a look at this criticism.

I made this chart using this data from 2008, to show how many Americans are employed by small businesses and large businesses:

Blue: employees. Red: payroll.

So don't demonize the huge companies- they're employing 25%-50% of the workforce (depending on your definition of "large" vs "small" business). They're generating a huge chunk of the money floating around in the economy. We NEED them.

(Disclaimer: I know everything about math and nothing about politics or the economy. If I'm using the wrong numbers or interpreting them wrong, tell me.)

One more note- as a feminist, I have to mention how it's a bit suspicious that Romney wants to strengthen those who already have power (big businesses), with the idea that of course then they'll use their power to help out everyone else (by creating jobs). Because we all know that's how power and oppression work.

What is our goal for the economy?

What exactly are Obama and Romney aiming for here? What is the ideal picture of the American economy? A few ideas I have:

1. Everyone who is skilled and willing to work should be able to find a job that suits them.
2. Income levels, after tax, should be high enough to support people, so they never have to worry about basic needs like food, housing, health care, etc.

(Agree/disagree? What other things should be true of the economy? Decreasing the gap between rich and poor? Not allowing anyone with bad work ethic to get a "free ride"?)

This raises more questions about what "high enough" income means- does it mean supporting kids too? Minimum wage isn't enough to support a whole family- is that a bad thing? In setting wages, is the goal to give workers the amount they need to live on, or to give them an amount corresponding to the difficulty and skill required for that particular job?

How do jobs get "created"?

It seems like both Obama and Romney are relying on the assumption that if a company has more money, it will expand and "create jobs" (though Romney's plan is definitely way more dependent on this assumption). I suppose this is true... Does it have the same effect for both small and large businesses?

Also, there is fear of jobs "moving overseas"- particularly in the case of a large company expanding. (Why so much fear? It looks a lot like racism to me. Why are Americans more deserving of jobs? Okay, whatever, right now I'm just talking about what will benefit Americans economically.)

What causes the whole "move overseas" thing? Is it more likely that American jobs will be lost in this way under Obama or Romney? I don't know. This question is left as an exercise to the reader.

The main difference (as far as I can tell):

In Obama's worldview, many Americans are being oppressed by larger forces at work in the economy. There is inequality built into the system, and he wants to change that by directly giving American taxpayers more money, and therefore more control. If people just had more opportunities, they would work hard and be more successful- he intends to provide them with those opportunities.

In Romney's worldview, economic standing is earned through talent and hard work. People who have more money are the ones who are the most responsible and hard-working. Therefore, to improve the economy, successful companies should be given more tax breaks. They have shown they are the most deserving, the most likely to put that money to good use.

And now the voters can decide which they agree with. I've made my decision.