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Monday, September 8, 2008

O'Reilly Vs. Obama II: The Economy

Tonight, Bill O'Reilly faced off with Barack Obama over the economy. O'Reilly's initial point was that tax receipts grew under the Bush administration by 20%. Obama conceded that the economy grew and then said this.

you know there are lies and there are statistics

Ironically enough, he then cited his own statistic. Obama countered that wages for "ordinary Americans" dropped under the Bush administration. O'Reilly countered by pointing out that he believed that this stat that he was using occurred mostly because so many immigrants, most of them illegal, entered the country and they skewed the statistic. Interestingly enough, Barack Obama simply said that he disagreed with this and moved onto his point.

In my opinion, the reason that wages are down is because Bush inherited an economy that faced the perfect storm of downward pressure. The stock market had just lost three trillion dollars between March and December of 2000 (in paper losses). About one million jobs were lost immediately following 9/11, and finally Enron began a domino effect of disclosures of fraud in the 1990's.

If you look, taking away the first two years, wages grew just fine under Bush. This is extremely important because on the one hand he says that statistics can lie and on the other hand, he uses a dubious statistic. A statistic for which both O'Reilly and I have a plausible explanation besides bad policy from Bush.

If his assumption is based on a faulty statistics, then his conclusions are based on a faulty assumption. His assumption is that the economy grew under the Bush administration but that growth was overweighted exclusively in the top one tenth of one percent.

As such, he wants a fairer system where the top 5% get a tax increase but the bottom 95% get a tax break. Now, O'Reilly didn't clear this up, but I believe that Obama even wants to give a tax break for those that pay no taxes. In fact, while some people's taxes go up, some other people will get tax credits.

Then, O'Reilly calls this class warfare. Obama said that 95% of people getting a tax cut is not class warfare. Of course, it is. The middle class is always larger than the upper class. When one tax bracket gets a tax increase while another gets a tax credit, because they already pay no taxes, what do you call that if not class warfare?

On social security, O'Reilly's biggest beef was that his added tax on incomes over $250,000 would go to infinity. Obama denied it would go to infinity but wouldn't commit to a number. In my opinion, O'Reilly missed the biggest fault of this tax increase. Social Security is a tax where the taxes that are taken from you are credited to you when you begin to collect and then it maxes it out at just over $100,000. This new tax would be paid to one taxpayer and be credited to another. Obama justified the tax by pointing out that it is the best of bad options. (compared to raising taxes on everyone, cutting benefits, raising the retirement age, etc.) He then catalogued a series of things people need to pay for like college, health care, bills, and infrastructure as if raising the social security tax on anyone making more than $250,000 would pay for all of this. Again, O'Reilly didn't point out the fallacy of that point.

The last topic was spending. Obama pointed out that the debt has gone up $4 trillion dollars under Bush. O'Reilly pointed out, correctly, that this was due to the GWOT and out of control spending. Again, he pointed out tax receipts went up 20% under Bush. Now, suddenly Obama was doubting this statistic. Obama's fallacy here is that raising taxes means raising tax receipts. In this case, the numbers don't lie. After Bush's tax cuts, tax receipts went up 20%. He proposes to increase spending and says that raising taxes will pay for it. Of course, the Bush years prove that is at least not a guarantee. O'Reilly never challenged him on this fallacy either.

I think that Obama performed well, however, again, I think that O'Reilly left a lot that could have been asked out there unchallenged.

Also, here is part 1, part 3 and part 4

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