McCain Campaign Press Release - Economists Statement on Barack Obama's Risky Economic Proposals

100 Economists Warn That With Current Weak Financial Conditions Barack Obama's Proposals Run A High Risk Of Throwing The US Into A Deep Recession

100 ECONOMISTS WARN THAT WITH CURRRENT WEAK FINANCIAL CONDITIONS BARACK OBAMA'S PROPOSALS RUN A HIGH RISK OF THROWING THE US ECONOMY INTO A DEEP RECESSION

ARLINGTON, VA -- Today, McCain-Palin 2008 released the following statement signed by 100 distinguished and experienced economists at major American universities and research organizations, including five Nobel Prize winners Gary Becker, James Buchanan, Robert Mundell, Edward Prescott, and Vernon Smith. The economists explain why Barack Obama's proposals, including "misguided tax hikes," would "decrease the number of jobs in America." The prospects of such tax rate increases under Barack Obama are already harming the economy. The economists conclude that "Barack Obama's economic proposals are wrong for the American economy." The proposals "defy both economic reason and economic experience."

The full economists' statement on Barack Obama's economic proposals and a complete list of economists who support it follows:

Barack Obama argues that his proposals to raise tax rates and halt international trade agreements would benefit the American economy. They would do nothing of the sort. Economic analysis and historical experience show that they would do the opposite. They would reduce economic growth and decrease the number of jobs in America. Moreover, with the credit crunch, the housing slump, and high energy prices weakening the U.S. economy, his proposals run a high risk of throwing the economy into a deep recession. It was exactly such misguided tax hikes and protectionism, enacted when the U.S. economy was weak in the early 1930s, that greatly increased the severity of the Great Depression.

We are very concerned with Barack Obama's opposition to trade agreements such as the pending one with Colombia, the new one with Central America, or the established one with Canada and Mexico. Exports from the United States to other countries create jobs for Americans. Imports make goods available to Americans at lower prices and are a particular benefit to families and individuals with low incomes. International trade is also a powerful source of strength in a weak economy. In the second quarter of this year, for example, increased international trade did far more to stimulate the U.S. economy than the federal government's "stimulus" package.

Ironically, rather than supporting international trade, Barack Obama is now proposing yet another so-called stimulus package, which would do very little to grow the economy. And his proposal to finance the package with higher taxes on oil would raise oil prices directly and by reducing exploration and production.

We are equally concerned with his proposals to increase tax rates on labor income and investment. His dividend and capital gains tax increases would reduce investment and cut into the savings of millions of Americans. His proposals to increase income and payroll tax rates would discourage the formation and expansion of small businesses and reduce employment and take-home pay, as would his mandates on firms to provide expensive health insurance.

After hearing such economic criticism of his proposals, Barack Obama has apparently suggested to some people that he might postpone his tax increases, perhaps to 2010. But it is a mistake to think that postponing such tax increases would prevent their harmful effect on the economy today. The prospect of such tax rate increases in 2010 is already a drag on the economy. Businesses considering whether to hire workers today and expand their operations have time horizons longer than a year or two, so the prospect of higher taxes starting in 2009 or 2010 reduces hiring and investment in 2008.

In sum, Barack Obama's economic proposals are wrong for the American economy. They defy both economic reason and economic experience.

Allan Meltzer, Carnegie-Mellon University

Amy Jocelyn Glass, Texas A&M University

Anna Schwartz, NBER

Anne Krueger, Johns Hopkins University

Arlene Holen, Technology Policy Institute

Arnold Zellner, University of Chicago

Barry Chiswick, University of Illinois at Chicago

Barry Poulson, University of Colorado, Boulder

Bennett McCallum, Carnegie-Mellon University

Beryl Sprinkle, Former Chair Council of Economic Advisers

Bill Niskanen, Cato Institute

Brock Blomberg, Claremont-McKenna University

Burton Malkiel, Princeton University

Charles Calomiris, Columbia University

Charles Nelson, University of Washington

Chester Spatt, Carnegie-Mellon University

Christopher DeMuth, American Enterprise Institute

Dan Crippen, former CBO Director

Dan Feenberg, NBER

David Spencer, Brigham Young University

Diana Furchtgott-Roth, Hudson Institute

Douglas Holtz-Eakin, McCain-Palin 2008

E. Philip Howrey, University of Michigan

Earl Grinols, Baylor University

Edward Prescott, Arizona State University

Enrique Mendoza, University of Maryland

Eric Fisher, California Polytechnic State University

Eric Hanushek, Hoover Institutions

Eugene Fama, University of Chicago Graduate School of Business

Frank Diebold, University of Pennsylvania

Gary Becker, University of Chicago

Gary Hansen, UCLA

George Shultz, Stanford University

Glenn Hubbard, Columbia University

Harvey Rosen, Princeton University

Houston Stokes, University of Illinois in Chicago

Ike Brannon, McCain-Palin 2008

Isaac Ehrlich, State University of New York at Buffalo

J. Edward Graham, University of North Carolina Wilmington

Jack Tatum, Indiana State University

James Buchanan, George Mason University

James Smith, The University of North Carolina

Jim Carter, Vienna VA

Jim Miller, George Mason University

John Cogan, Hoover Institution

John Makin, American Enterprise Institute

John Taylor, Stanford University

June O'Neill, Baruch College, CUNY

Kathleen Cooper, Southern Methodist University

Kenneth Rogoff, Harvard University

Kevin Hassett, American Enterprise Institute

Kevin Murphy, University of Chicago

Kristin Forbes, MIT

Larry Lindsey, The Lindsey Group

Lester Telser, University of Chicago

Lydia Ortega, San Jose State University

Mario Crucini, Vanderbilt

Mark Rush, University of Florida

Martin Feldstein, Harvard University

Marvin Kosters, American Enterprise Institute

Meir Kohn, Dartmouth

Michael Block, University of Arizona

Michael Bordo, Rutgers University

Michael Boskin, Stanford University

Michael Moore, George Washington University

Michael Porter, Harvard University

Mike Jensen, Harvard University

Murray Weidenbaum, Washington University in St. Louis

Owen Irvine, Michigan State University

Paul Evans, Ohio State University

Paul Gregory, University of Houston

Paul McCracken, University of Michigan

Paul Rubin, Emory University

Paul W. MacAvoy. Yale University

Phil Levy, American Enterprise Institute

Richard Muth, Emory University

Richard Roll, UCLA

Richard Vedder, Ohio University

Rik Hafer, Southern Illinois University Edwardsville

Robert Barro, Harvard University

Robert King, Boston University

Robert Mundell, Columbia University

Robert Rossana, Wayne State University

Robert Tamura, Clemson University

Sanjai Bhagat, University of Colorado

Steve Davis, University of Chicago

Steve Parente, University of Minnesota

Steven Kaplan, University of Chicago

Ted Covey, McLean VA

Tim Muris, George Mason University

Timothy Fuerst, Bowling Green State University

Todd Buchholtz, Two Oceans Fund

Todd Milbourn, Washington University in St. Louis

Tom Saving, Texas A&M University

Valerie Ramey, University of California, San Diego

Vernon Smith, 2002 Nobel Laureate, George Mason University

Will Melick, Kenyon College

William B. Walstad, University of Nebraska

William Dewald, Ohio State University

William Poole, University of Delaware