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augustlan's avatar

Are economists equally split on Obama's fiscal policies?

Asked by augustlan (46609 points ) September 27th, 2012

I mentioned on Facebook today that many, many, economists have said that Obama’s fiscal policies are better for the economy than Romney’s would be. Someone replied that there are just as many economists with the opposite perspective. Is that the case? Or is this an unfounded belief along the lines of “just as many scientists don’t believe in global warming”? Perception or fact?

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11 Answers

laureth's avatar

While it may be more or less split, my advice is to take a look at the rest of the economic philosophy of the economists who believe each way.

Some economists treat economics as a science. By this, I mean they observe, measure, form hypotheses, test them (as well as we are able, since there aren’t two earths with one for a control), and try to learn from these. If the real-world result of a natural economic experiment is different from what they predicted, they go back and try to see what went wrong, and refine their ideas based on economic reality.

And some economists treat economics as an ideology. They tend to say things like “it is too complex to measure,” or come up with a bunch of ideas about how the world “should” work and adopt those ideas without really testing them, perhaps because they believe testing economic ideas is impossible. When reality doesn’t match the predictions of ideological economists, it doesn’t faze them very much.

From what I have seen, the economists who treat economics as a science favor policies such as Obama has espoused, and the economists who treat economics as an ideology favor the sorts of policies Romney espouses.

wundayatta's avatar

Frankly, I don’t see how you could determine this. You’d have to conduct a survey of economists, which would be a lot like trying to herd cats. I don’t even know if you could get an acceptable definition of an economist.

I’m afraid that this is another war of rhetoric, with no facts to be checked.

Qingu's avatar

I seriously doubt it’s split. I am reminded of “teach the controversy” about evolution and global warming.

There are always some ideological hacks in any branch of science. Economics probably has more than its fair share of hacks. But you can still read what they write. And it’s not like the Republican party has an “equal split” of scientists on any of their other positions.

Everything Obama has done in fiscal policy, and everything the Fed has done in monetary policy, is mainstream economics. It’s stuff that both Republicans and Democrats have done in recessions for ages.

Pandora's avatar

I think it doesn’t matter either way. In the end it comes down to what people can afford to pay the government to keep our roads and commerce going. You have the rich that keep getting richer and pay less and keep funds abroad.
Then you have the poor who may not have money for food for their kids but can always pay 25 dollars a week for a manicure.
Then you have your middle class who can pay all his bills and must have that 500000 home but is scratching by because they can only afford a 250, 000 dollar home because of the humvee he has parked in his driveway. He is barely making it by but he thinks its ok. Until he losses his job to someone younger or someone abroad who will do the job for less.
Finally. You have the government who has a ton of overseers to decide what projects to cut only to find that none get cut because they aren’t qualified.
Then you have companies who milk the government for every cent they can instead of really offering fair prices for their labor, and they are not paying their workers all that extra green.
So I don’t blame the mess we are in, in our government so much as rather the people in this nation who have to have what their neighbors have plus some extra, no matter who gets screwed in the process. Which just so happens to be everyone living in that back yard.
So my point is, until we as a nation get our act together, we will remain in the red.
Till we as a nation realize our individual contribution to this deficit and stop pointing fingers at who is at fault and who should fix it. Then the economy will remain as it is or worsen and I don’t think Obama or all the king horses (romney) can put it together again.

Blackberry's avatar

This is just an anecdote, but from what I’ve read, the economics are not a black and white field. You will have people from both sides debating as such.

marinelife's avatar

Here are the facts:

“A February survey of leading economists from the University of Chicago Booth School of Business found overwhelming agreement that the 2009 stimulus helped stave off job losses. In other Chicago Booth surveys, no respondents said lowering income taxes would lead to so much income growth that, five years later, tax revenue would have increased, and respondents disagreed with the idea that raising taxes on the wealthiest Americans would be enough to substantially reduce budget shortfalls.

“The best plan would deal with short-run issues—but do so in the context of stabilizing the public debt-to-GDP ratio,” said William Longbrake, executive-in-residence at the University of Maryland Robert H. Smith School of Business. The ideal program would have a ratio of about $2 of spending cuts for every $1 of tax increases, Longbrake said, along with a short-term spending plan to boost the economy right away.”

National Journal

Qingu's avatar

@marinelife, worth noting that UChicago’s Booth school is considered pretty conservative to begin with. It’s the lair of Milton Friedman and so-called “freshwater economics.”

Jaxk's avatar

There’s little question that we have economists on both sides of this argument. But the idea that we have no history to help to show what works and what doesn’t is ludicrous. We have lowed taxes during a recession under Kennedy, Reagan, and Bush. Each time the economy has recovered, unemployment declined, and government tax revenue increased. And it has happened rapidly. Only once that I am aware of, have we both reduced spending and raised taxes. That was in 1937 and we immediately went back into recession. It is the worst possible scenario.

Now I will grant that the economy is huge and has many moving parts. we do however, have some history to gauge what works and what does not. Ignoring that history or trying to say, ‘this one is different’ is dangerous at best. The CBO is telling us that if we don’t do something about the fiscal cliff we are facing (higher taxes and lower spending) we will drop right back into recession next year. This is the plan Obama intends to pursue. We have history to tell us what will happen. It will show us the way out if we look at it.

Qingu's avatar

@Jaxk, lot of dishonesty as usual.

Obama cut taxes for 95% of Americans. The only taxes he’s raised are things like extra taxes on tanning salons and other trivial sin taxes.

Obama doesn’t “intend to pursue” the fiscal cliff, as you know perfectly well. He’s made it abundantly clear he doesn’t want the Bush tax cuts to expire for anyone except the richest Americans. He doesn’t support the spending cuts either. And Republicans voted for it too. The cliff is supposed to be a sword hanging over both sides’ heads if they don’t negotiate.

But you knew all that already, didn’t you?

In any case, I’m glad to see you finally support increased spending in a bad economy though. Or do you? Let me guess, you do when it’s a Republican, but not with Obama.

Qingu's avatar

You know @Jaxk, the more I think about your answer, the more disgusted I am.

You are advocating (correctly) the mainstream economic view: in a recession, government should cut taxes and increase spending.

Obama has done precisely this for the past four years.

Republicans in Congress, on the other hand, have blocked further spending proposals (his jobs act), and they’ve just barely approved tax cuts for the working and middle class, with strings attached. Republican governors across the country have slashed spending, with the Republican establishment’s blessing.

So why have you done nothing but whine about Obama’s economic policies on this site for years, without saying squat about how Republicans are the ones messing it up? That’s a rhetorical question, obviously.

What a joke.

augustlan's avatar

Thanks for finding the survey, @marinelife. Exactly what I was looking for.

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