Harvard Debates the US Economy

The Harvard Political Union hosted a debate this past week between the Democrats and Republicans concerning the state of the US economy. The debate suggests that the political platforms of representatives from the Harvard Democrats and Republicans Clubs are very much aligned with those of the national parties. Despite opposing viewpoints, these young aspiring politicians found the arena at the Institute of Politics filled with much more compromise and much less pressure.
The debate focused on three issues of the current economy crisis: infrastructure, jobs, and the national deficit. Each side was given three questions and the opportunity to present their arguments, challenge their opponents’ statements, and rebut.
Question 1: The American Society of Civil Engineers recently gave our infrastructure a D; however, our national deficit is above $14 trillion. Is this the right time to focus our spending on infrastructure?
The Democrat’s argument defended spending as the second most effective method of creating jobs. Will Poff-Webster ’14 of the Harvard Dems pointed to the statistic that for every year we fail to fix infrastructure, the future cost of repair is set to increase by $30 billion. They argued for infrastructure spending as an effective way of allocating money because it attacks the problem of unemployment and improving the efficiency of the transportation of goods.
In response, Harvard Republican Club representative Rajiv Tarigopula ’14 made a compelling argument against the original Keynesian theory of economics. According to Tarigopula, the increase in government spending for the purpose of creating jobs is great in theory, but when “transferred from the blackboard to actual public policy, there [is] a gap between theory and practice.” Furthermore, the Republican Club argued that the Stimulus Plan is slow and ineffective in implementation. A good portion of the money given to each agency has not been spent, and Speaker of the House John Boehner criticized that the package “hasn’t provided the immediate jolt to the economy and the new jobs that Washington Democrats promised.”
What the Harvard Democrats and Republicans stated in this debate is not so far off from what the candidates in the current presidential election have highlighted.
Mitt Romney has emphasized the failure of the stimulus plan in jolting the economy out of the recession. He views infrastructure as “good for jobs and for the foundation of our economy, but it’s not a short-term, quick fix, put in a few million dollars or a few billion dollars.”
In 2010, President Obama announced a plan to renew and expand infrastructure as a way of creating direct decrease in unemployment and investing in future growth. The White House released a statement informing the public that “The President will work with Congress to enact a new up-front investment in our nation’s infrastructure – an investment that would help jump-start additional job creation, while also laying the foundation for future growth.”
Candidate Michelle Bachmann voted down the American Recovery and Reinvestment Act in 2009, and worked to lower the infrastructure spending contained in the package. During a campaign tour to Waterloo, Iowa, Bachmann told workers that her plan to revive the economy included “lower taxes, less government spending, and fewer government regulations.”
This disagreement set the stage for the next question, posed by the event’s moderator and IOP director, Trey Grayson.
Question 2: How do we increase jobs in the US? How do we keep jobs from going overseas?
On this question, the Republicans stood for the agenda of open trade and a free market. Tarigopula stated that it is “common knowledge that businesses have been outsourcing jobs because the United States has an unfriendly corporate environment.” The Republicans further explained that keeping corporate taxes high will not solve the problem of jobs going overseas, but will make it worse. Their plan of attacking the 9.1% rate of unemployment is through creating a more business friendly approach to tax policy.
Moreover, the Republicans commented that the Occupy Wall Street movement “failed to recognize that corporations drive jobs and decrease unemployment.” The debaters proposed the decrease in corporate tax rates because “when corporations have capital, they can expand and grow, consequently decreasing the unemployment rate.” The Harvard Republican Club representatives stated, “It’s not unfair that when GE lost billions of dollars that they paid no taxes, because those loses cut into their profits.”
The Harvard Democrat Club rebuttal from Matt Shuman received snaps from many members in the audience. “This corporation lost money so they no longer have to pay taxes? Everyone lost money in the recession and they don’t get any tax breaks. I don’t see how we can pity corporations when they created the problem of the economic downturn in the first place, and now we’re forcing the middle class to pick up the bill.”
In the national debate, Republican Rick Perry has argued for a flat rate tax of 20%, effectively giving large tax breaks to corporations at the top. Like the Harvard Republican representatives, Perry believes that corporate tax breaks will “unleash growth” and “stimulate private spending”, the two essential aspect of job creation.
During a news conference in February, President Obama states that giving tax breaks to corporations do not make us more competitive. He proposes the solution of “tax increases to multinational corporations that ship jobs overseas and on increases on the oil and gas industry” as a way of keeping jobs here in the United States. Additionally, along with increased taxes on companies outsourcing, Obama suggests higher government spending in the form of a stimulus package as a method of creating jobs and decreasing the rate of unemployment.
Question 3: When is the most appropriate time to reduce the deficit?
The Dems argued for long term goals rather than implementing immediate cuts when our country has not yet escaped the economic recession. They advocated for investments in education and green technology: “We have human capital and intellect. We can only create this innovative economy through government support.”
The Republicans disagreed, arguing that the time to reduce the deficit is now. “We need to cut inefficient spending rather than take money from corporations.” The growth of companies and businesses will reflect well on the economy because corporations are the source of jobs and increased employment.
The deficit debate in the past year demonstrated political deadlock and the reluctance of both national parties to cooperate. While both sides in the Harvard debate agreed with many of the national party platforms, they were much more willing to compromise. In their respective concluding statements, the Democrats suggested a compromise in entitlement spending, and the Republicans agreed to do the same concerning defense spending.
This situation is reflective of the increased pressure on elected officials to remain loyal to their constituents and political party. In order to receive funding and votes, candidates often face deadlock because compromising could imply loosing supporters. However, this debate demonstrated that despite opposing viewpoints, politicians will play a more active role in impacting the lives of their constituents when willing to merge ideologies to pass legislation. The Harvard debate was not representative of what happens on stage during presidential elections, but may very well serve as a model for future conversations.