x Abu Dhabi, UAEWednesday 26 July 2017

How Obama and Romney's claims stack up

President Barack Obama and Republican rival Mitt Romney spun one-sided stories in their first presidential debate, not necessarily bogus, but not the whole truth. Here is a look at some of their claims and how they stack up with the facts:

ROMNEY on the failure of Obama's economic policy: "And the proof of that is 23 million people out of work. The proof of that is 1 out of 6 people in poverty. The proof of that is that 50 per cent of college graduates this year can't find work."

THE FACTS: The number of unemployed is 12.5 million, not 23 million. At the start of Obama's presidency, 12 million were out of work.

His claim that half of college graduates cannot find work now also was problematic. A Northeastern University analysis found that a quarter of graduates were probably unemployed and another quarter were underemployed, which means working in jobs that did not make full use of their skills or experience.

 

ROMNEY: "Gasoline prices have doubled under the president. Electric rates are up."

THE FACTS: He is right that the average price has doubled, and a little more, since Mr Obama was sworn in. But presidents have almost no influence on the global price of crude. The price of electricity has risen on the back of the price of natural gas but the increase - less than 1 per cent per year - is below inflation.

 

OBAMA: It's important "that we take some of the money that we're saving as we wind down two wars to rebuild America."

THE FACTS: This oft-repeated claim is based on a fiscal fiction. The wars in Iraq and Afghanistan were paid for mostly with borrowed money, so stopping them does not create a new pool of available cash that can be used for something else, like rebuilding America. It just slows down the government's borrowing.

 

OBAMA: "Over the last two years, healthcare premiums have gone up - it's true - but they've gone up slower than any time in the last 50 years. So we're already beginning to see progress. In the meantime, folks out there with insurance, you're already getting a rebate."

THE FACTS: Not so, concerning premiums. Mr Obama is mixing overall healthcare spending, which has been growing at historically low levels, and health insurance premiums, which have continued to rise faster than wages and overall economic growth. Premiums for job-based family coverage have risen by nearly $2,400 since 2009 when Obama took office.

 

OBAMA: "Gov Romney's central economic plan calls for a $5 trillion tax cut - on top of the extension of the Bush tax cuts, that's another trillion dollars - and $2 trillion in additional military spending that the military hasn't asked for. That's $8 trillion. How we pay for that?"

THE FACTS: Mr Obama was talking about the effect of Mr Romney's tax plan over 10 years, which is common in Washington. But Mr Obama's maths does not take into account Mr Romney's entire plan, which proposes to reduce income tax rates by 20 per cent and eliminate the estate tax. This would reduce federal tax revenues by $465 billion in 2015, which would add up to about $5 trillion over 10 years. However, Mr Romney says he wants to pay for the tax cuts by reducing or eliminating tax credits, deductions and exemptions. The goal is a simpler and more efficient tax code.

 

ROMNEY: "What would I cut from spending? Well, first of all, I will eliminate all programmes by this test, if they pass it: Is the programme so critical it's worth borrowing money from China to pay for it?"

THE FACTS: China continues to be portrayed by Mr Romney and many other Republicans as the poster child for runaway federal deficits. It is true that China is the largest foreign holder of US debt, but it only represents about an 8 per cent stake. China has recently been decreasing its holdings, according to the Treasury Department. Some two-thirds of the $16 trillion national debt is owed to the federal government, with the largest single stake the Federal Reserve, as well as American investors and the Social Security Trust Fund.