Heritage Looks at the McCain and Obama Plans

by cactus

Heritage Looks at the McCain and Obama Plans

Its that time again. Heritage looks at the McCain and Obama plans and tells us which one is best. (This particular report is authored by William W. Beach, Karen Campbell, Rea Hederman, Jr., and Guinevere Nell.) Heritage being Heritage, I don’t think I have to tell you how it comes out, but these two quotes are a good overview:

Total employment grows an average of 915,800 jobs under Obama, and by 2,126,000 under McCain.

Increases in gross domestic product (GDP) under McCain are, on average, nearly three times higher than under Obama.

The report is chock full of numbery goodness, but basically Heritage lets us know that things are going to be much better under McCain than under Obama. Good enough for me. So I was all set to vote for McCain when I remembered something. See, I remember running some numbers eight years ago to try to figure out how the economy would do under either major candidate, and then coming across their study looking at the Bush and Gore plans. I remember being shocked at how different their conclusion was from mine.

A few highlights from their study….

Heritage told us that fiscal year 2000 real GDP at 9,330.7 billion (in 1996 dollars), and estimated that under a Bush administration, by the end of fiscal 2008, that is, end of Q3 of 2008, it would be at 11,720 billion. That amounts to a real GDP growth rate of 2.9% a year. Checking in with the BEA, we find that the real GDP grew by 2.2% a year between 200Q3 and 2008Q3. The difference may not seem like that much, but it is the difference between real GDP doubling in 25 years or doubling in 32 years. Give it a revision or two, and my guess is that 2.2% figure is going to drop by just enough to put GW dead last when it comes to growth rates among Presidents since Ike took office. (Right now GW just inches past his father.)

Heritage also told us that there would be an increase from 132,092,000 jobs at the end of fiscal year 2000 to 146,281,0000 jobs at the end of fiscal 2008, for an increase of 1.28% a year in the number of jobs. This one’s a bit baffling – the BLS tells us that the employment level was 136,790,000 at the end of Q3 of 2000. (Perhaps a number of jobs had several people in them in Heritage’s model?) By Q3 of 2008, the figure was 145,310,000, for an increase of 0.76% per year in the number of jobs. (By contrast, under Bill Clinton, the figure was 1.77% a year.)

But the most comical part, the part that told me eight years ago that Heritage couldn’t possibly be serious was the part of the model dealing with fiscal responsibility. For instance, they tell us that the real debt held by the public would be about 8.3% of GDP right about now, having shrunk from 36.6% of GDP in 2000. (The actual Q3 of 2000 figure was 35.1%.) Of course, its tough to conclude that promises of tax cuts plus increases in military spending were going to produce a shrinking debt. Tough, unless, you believe, as the Heritage folks apparently still do, that cutting taxes will produce increases in tax revenues.

BTW… Heritage’s comparison of Bush and Kerry is here. They seem to have gone out of their way to make it opaque – to figure out their predictions you have to work backwards from the CBO “baseline” prediction, but essentially, a Bush victory was gonna be a good thing, a Kerry victory, not.

I may have missed it, but I’m not sure they put out a Dole Clinton comparison. Here’s their look at the options in 1992. Here they were in 1993, with a paper entitledTaxes, Spending, Gimmicks, and Snake Oil: Why Bill Clinton’s Budget Is Bad for America, explaining how Clinton’s budget plan was going to destroy jobs, slow economic growth, and make the deficit explode.

After reading through the Snake Oil paper, my head hurts too much to go look for a Bush Dukakis report, or anything else, so back to the here and now. Now, at this point, my time is really limited. I have seen enough of Obama’s plan to get a bit of a chuckle, and enough of McCain’s for the hair to stand up on the back of my neck, but I don’t really have the time to run numbers. Unlike the folks at Heritage, I’m not getting paid for this. Still, it is kind of unsporting to criticize these, er, people without putting down my own guess. Fortunately, Heritage’s track record makes it very, very easy. So here are my guesses about what will happen if either candidate wins:

If Obama wins – what Heritage says to expect in case of a McCain victory.
If McCain wins – what Heritage says to expect in case of an Obama victory.

Feel free to call me on my forecast four years now. Even if the folks at Heritage don’t realize it, I do: the intertubes never forget.
by cactus