CAMPAIGN'92
1.
UNIVERSITY DAILY KANSAN
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Clinton favors investment
By Mark Martin Kansan staff writer
Gov. Bill Clinton wants to spend his way out of the recession.
By increasing spending in areas such as education and roads, Clinton says he can bring the country out of the economic woes that 12 years of a Republican presidency has caused. And many economic experts think his policies may have a better chance of working than the plans of President Bush or Ross Perot.
"Bill Clinton is taking a traditional Keynesian approach, which means pumping the economy with money," said David Burress, assistant professor of economics. "He wants to spend our way out of this recession. That can work."
Clinton's investment proposals include:
Creating a Rebuild America Fund, which would spend $20 billion a year to improve the United States' infrastructure, such as improving highways and bridges and investing in high-speed rail lines.
Monday, October 26, 1992
Setting up community banks in inner cities. The banks would then give loans and advice to small businesses. Clinton would include tax incentives to help businesses set up in inner cities and for long-range business investments.
■ Scrapping the current welfare system and pay child care and education costs for up to two years for those currently on welfare. Many argue that these plans are vague and would not reduce welfare costs or red tape.
To offset these investment plans, Clinton says he can increase government savings by cutting military spending by more than $30 billion through 1996, increasing taxes on the wealthiest 2 percent and cutting 100,000 federal jobs as well as White House and Congressional staffs by 25 percent each.
ANALYSIS
fewer jobs in Washington, D.C. And then there's the deficit.
But these cuts could mean unemployment. Many in the military wonder whether Clinton's proposals to turn defense jobs into civilian jobs will work. Cuts in government mean
In Clinton's campaign book, "Putting People First," he also vows to cut the country's budget deficit in half by 1996.
However, Burress said, "Clinton's numbers only work if there is a very good economic growth rate during his term. It's a very optimistic budget."
Clinton points out that in Arkansas, his economic policies have increased jobs and productivity. Arkansas ranked second in the country in job growth in 1991, the year that the National Governor's Association voted him the most effective governor in the country. But many of the jobs he created were low-income jobs in industries such as construction.
Despite numerous other issues, voters probably will vote on the economic policy differences between the candidates, said Allan Cigler, professor of government.
"You have a free market president like Bush versus a more interventionist president, like Clinton would be," he said.
Perot seeks deficit cure
By Christine Laue Kansan staff writer
Ross Perot says that he has the cures to the national disease and that the first and foremost cure is balancing the budget.
"Until you get the deficit reduced, you're stagnant," said Dede Bick, volunteer for Northwest Kansans for the American Red Cross, spending money on paying the interest."
But some economists and political scientists say his plan for healing the U.S. economy might work in the long run but would worsen the current recession in the short run.
"It's the wrong medicine for a recession," said David Burress, assistant professor of economics. "Raise taxes and lower expenditures in the middle of a recession and life will get worse." Perot says the government must reduce spending and generate revenues. His plan to eliminate the $4-trillion debt includes:
Cutting 15 percent from federal departments to save $108 billion over five years.
- Increasing the gasoline tax 10 cents a gallon each year for five years to raise approximately $158 billion and increasing tobacco taxes to raise $18 billion over five years.
- Controlling rising costs of entitlement programs like Social Security, government retirement, Medicare and Medicaid.
Allan Cigler, professor of government, said Perot was using an invest-in the-future strategy that would not help the current recession if implemented in the four and five years Perot suggests.
"If we do Perot's program we can raise enough bucks to balance the economy probably, assuming that the economy doesn't get any worse," Burress said. "But as you adopt Perot's program, the recession will get worse."
"If you reduce the deficit drastically, it's going to put people out of work," Cigler said.
research at the American Institute for Economic Research, a national nonprofit institute, agreed that under Perot's plan unemployment would increase because of the sudden decrease in governmental spending and increase in taxes.
"It sounds like he wants to do too much too quickly," Lynch said.
Kerry Lynch, assistant director of
Perot's plan calls for the deficit to be eliminated by 1998.
But Burress said the deficit was a long-range problem and did not pose an immediate threat to the United States. The real nature of the deficit problem is that if the United States continues to run up the deficit, it is running up the interest on that debt.
"Then we have to spend a higher and higher fraction of taxes to pay it off again," Burress said.
The ever-increasing interest is central to Perot's argument for reducing the deficit. Cigler said that although Perot's plan might be criticized for being bad for the economy in the short term, his focus on it had helped focus the election on economic solutions.
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ATTENTION STUDENTS
If you are interested in any of the following options for Spring 1993, forms will be available outside the Enrollment Center October 26-November 19,8 a.m.- 5 p.m., and November 20, 8 a.m.-4:30 p.m.
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