Wednesday, January 2

:: Vive la Difference!

A comparison of the Clinton and Obama economic plans is... interesting!

God bless New York Times reporter David Leonhardt. His article, "Democrats: More Than Healthcare," gives us useful information on a substantive issue.

Leonhardt distills a philosophical difference in the economic proposals of each candidate. In his words, Mrs. Clinton prefers, "programs to encourage specific kinds of behavior, like tax breaks for college tuition, health care and retirement savings."
[Mrs. Clinton] believes in the promise of narrowly tailored government policies, like focused tax cuts. She has more faith that government can do what it sets out to do, which is a traditionally liberal view. Yet she also subscribes to the conservative idea that people respond rationally to financial incentives.
Mr. Obama, on the other hand, draws on behavioral economics, which "consider[s] an abiding faith in rationality to be wishful thinking. To Mr. Obama, a simpler program — one less likely to confuse people — is often a smarter program."

Leonhardt compares the each candidate's take on retirement savings:
[Mrs. Clinton's] retirement tax credit, for example, would match the first $1,000 saved by couples making less than $60,000. For those making from $60,000 to $100,000, the match would be 50 cents on the dollar. To Mrs. Clinton, these policies are more efficient than old-style bureaucracy and less expensive than across-the-board tax cuts.

[Mr. Obama's plan] would instead require companies to deduct money automatically from their employees’ paychecks and place it in a savings account the employee owned. Employees could opt out of the program. But if they did nothing, they would end up saving money. It’s an idea that comes directly from academic research showing that savings rates have jumped when individual companies have adopted such plans.

I bet Mr. Leonhardt will catch all hell for not including Mr. Edwards in his article, even though he has corresponding information about his economic plan here. The next article in this series will look at the Republican frontrunners... Leonhardt had better start battening down the hatches if he plans to exclude Ron Paul.

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