Obama/Biden and Romney/Ryan Issues

Election Economics: What To Know For The First Presidential Debate

Oct 1, 2012 • Behavioral Economics, Economic Debates, Economic History, Economic Thinkers, Government, Households, Innovation, International Trade and Finance, Labor, Macroeconomic Measurement, Money and Monetary Policy, Regulation, Thinking Economically, Uncategorized, US Presidential Election • 203 Views    No Comments

Presidential debate moderator Jim Lehrer said there would be six 15-minute segments in the first presidential debate on October 3rd. Devoting the entire first half to “the economy,” he will also cover healthcare, the role of government, and “governing.”

Like the candidates, let’s do some prepping.

The Economy:

In an excellent NY Times column, James Stewart asks, “Are Americans Better Off?” His answer initially takes us to the basic economic yardsticks that EconLife Election Economics looked at last week: GDP, unemployment, household income and inflation. Tepid, all are slowly improving but close to where they were when Mr. Obama entered office (except the inflation rate which has been low).

How affluent we feel--the wealth effect–is a different story. As Mr. Stewart points out, it all depends on who you are. Those who have more feel richer and more secure because stock markets are up, household debt is down, and home prices have started to rise. However, bombarded by foreclosures, student loans, auto loans and unemployment, the less affluent are not feeling better. Add to that anyone living on interest from treasuries and other securities with a “0″ return and you get many people who are not feeling better off.

Where are we? I hope that each candidate will explain whether we are better off.

Healthcare:

Statistics about US healthcare are tough to pin down when you challenge, defend and predict the impact of the Affordable Care Act of 2010. For example, you could judge healthcare on the basis of mortality rates. However, people disagree about mortality rates because the numbers you select depend on whether you look at the causes of death. With many statistics, equally defendable alternatives are probably feasible.

We can be sure, though, that as the average age of our population ascends, Medicare, Medicaid and Social Security will be increasingly stretched. I mention Social Security here because demand for its disability benefit has been soaring.

Where are we? I hope that each candidate will convey the daunting challenges we face because of increasingly inadequate revenue for government programs that relate to health care.

For more detail, you can look at 2 Election Economics posts, Assessing the Quality of Current US Healthcare and Our Aging Population.

Role of Government and Governing:

Here we have the great divide. Whether looking at taxes, healthcare or financial regulation, there is an ideological split. The Keynesian side says government, through taxation and regulation can perpetuate economic health and fairness. By contrast, the Adam Smith/Hayek/Friedman perspective says economic prosperity and US freedom depend on the incentive to benefit from hard work, education and entrepreneurship.

Where are we? I hope that each candidate explains and presents the implications of his economic philosophy.

EconLife presented more detail about Keynesian economics here, and the Hayekian view, here.

A final thought: Most articles about the presidential debates focus on “turning the tide,” Janet Brown, the person who organizes the debates, practicing, what to call the president, what each candidate needs to achieve. You see that sadly, few articles are preparing us for content.

Sources and Resources: My thanks to James Stewart for his ideas about being better off and to the LA Times, as the only news source I could locate with an outline of debate topics.

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