Hillary as VP? Chris Matthews makes the case

"Good luck, Barry" - Indonesia cheers Obama on

Reality Check: how will Obama pay for it all?

Barack Obama is pretty much bound to win the Democratic nomination at this point. There is nothing that Hillary can do about that. Her only chance is to win the popular vote and then appeal to the superdelegates, but she is too far behind to win the popular vote. Unless a tape of Obama tossing a puppy onto a bonfire or shooting a man in the back shows up on YouTube pretty soon, Hillary is toast.

It’s Obama versus McCain.

An Obama versus McCain race has a very scary side to it as the two candidates seem to be locked in a competition to determine who can drive the United States into bankruptcy the quickest.

McCain promises a war of indefinite length, breadth and expense. Almost anything that a liberal can propose sounds fiscally responsible in comparison to the advocacy of continual warfare without any defined limit, strategy or purpose. Meanwhile Obama has been promising everything to everyone. The GOP’s Obama Spendometer is at 874 billion for one term only and continues to rise almost every time Barack opens his mouth.

The way things are going, McCain can win this election easily. He just need to reassure the public that he will withdraw the vast majority of US troops from Iraq within two years and then make some kind of modest but meaningful commitment to healthcare reform. Then, he just needs to point to the mathematics: Obama cannot afford to keep his promises. McCain has already begun to modify and moderate his stance on Iraq.

When you go to Obama’s website and click for more information on his fiscal plan (bottom of this page), you are taken to a PDF file that has no additional information whatsoever. There is no plan there! Where are the numbers?

How will Obama raise the billions he has promised? One option is increasing the capital gains tax to fairer levels. There is reason to believe that such a strategy will not work, however-- those darned capitalists can simply wait out Obama’s term before cashing in:

Interestingly, the 1986 Tax Reform Act increased the capital-gains tax rate from 20 to 28 percent, but investors were given roughly three months before the tax increase was enacted into law. In turn, investors rushed to realize their gains before the higher tax rate kicked in, and capital-gains realizations remained depressed for nearly a decade thereafter with the higher tax rate in place.... Therefore, proposals to raise tax revenue from capital-gains tax increases will be scored as a net revenue gain to pay for new spending, but in reality, the tax revenue may not materialize, which will force tax increases elsewhere to pay for spending. Link.

Other ideas coming out of the Obama camp seem a little too nebulous to bet the ranch on:

Obama's campaign said he would pay for his proposals by closing corporate tax loopholes, cracking down on international tax havens and raising the top rate on capital gains and dividends. But the campaign did not say how much each of those proposals would generate. Link.

There is of course the option of raising income taxes on the wealthiest, but how much money will that really generate?

The federal government now takes 33 percent of taxable income above $200,000 on a joint return and 35 percent of income above $357,700. Both Democrats would raise those tax rates to 36 percent and 39.6 percent, respectively.

Even the Tax Policy Center (a think tank famously friendly to tax hikes and Democrats) estimates that raising the top two tax rates might bring in a mere $32 billion in 2010. That's 6 percent of the likely deficit - not a license to start a dozen new programs. Link.

Some ideas for Obama:

- Make no new promises
- Emphasize cost-cutting measures and Iraq withdrawal in the first two years
- Phase in capital gains tax increases slowly
- Increase spending gradually as money becomes available
- Aim to accomplish goals over an eight-year period, not four

I’m sincerely interested to know how Obama can pay for everything, so please drop some constructive suggestions (with real numbers if possible) in the comments.

Crossposted to Daily Kos

Disappointment: with victory in sight, Obama campaign goes negative

I find it both dumb and inexplicable that the Obama campaign continues to circulate the blatantly inaccurate anti-Hillary healthcare flier. Obama has three main things going for him: he gives great speeches, he has run an unprecedentedly positive campaign, and he has a set of proposals that are essentially the same as Hillary’s. So, why would he throw away one of the three main ingredients of his success? I guess it is simply that Obama is no exception to the rule that all politicians disappoint us sooner or later.

Obama knows that the essence of the flier is a flat-out lie – the accusation that Hillary will force those who cannot afford health insurance to purchase it against their will. This has been publicly pointed out to him. To continue to use the flier is indefensible:

At issue Friday was a flier - mailed in recent days to homes around the state - saying Clinton's health care plan would force "everyone to buy insurance, even if you can't afford it." Similar mailings distributed in other states have prompted a feud between the candidates and a testy exchange at a debate in Ohio this week.

Former Wyoming Secretary of State Kathy Karpan said the flyer was meant to scare the same people who would benefit from Clinton's plan.

"I think what was particularly troubling ... was the statement that Hillary Clinton would go after people's wages and force them to buy coverage they can't afford," said Karpan, a member of the Clinton campaign state steering committee. Link.

What Hillary actually proposes is pretty much the opposite of what Obama claims:

Senator Clinton’s plan will:

Provide Tax Relief to Ensure Affordability: Working families will receive a refundable tax credit to help them afford high-quality health coverage.

Limit Premium Payments to a Percentage of Income: The refundable tax credit will be designed to prevent premiums from exceeding a percentage of family income, while maintaining consumer price consciousness in choosing health plans. Link.