The Republican Debate: Ignoring Tax Realities and Tackling the Fed

There’s no doubt about it – the first Republican debate didn’t cover much aside from ego-baiting between the candidates. And now that the third debate has passed – which was supposed to cover financial policy – we haven’t gotten much extra information. Several of the candidates talked about tax plans and regulating the Federal Reserve, but most didn’t elaborate on how they would do so, or flatly denied any issues with their plans when the numbers didn’t add up. Conversation often veered into completely unrelated topics, no thanks to moderators who have been broadly criticized for their trivial questions and basic inability to control the course of the debate.

There’s some cause for hope, in the simple sense that the candidates are now at least talking about financial issues. However, hammering out specific plans of action that take the realities of our system and its existing problems into account will be difficult when candidates are only looking to score another “hit” on one another. And viewers often aren’t fact checking, something that clearly frustrated Ohio senator and candidate John Kasich, who labeled the tax plans of some of his rivals “a fantasy.” That didn’t stop them from making a stronger showing in the debate than he did – numbers or no numbers.

On the topic of the Federal Reserve, however, Ted Cruz and Rand Paul both called for an overhaul of the system. Cruz went on to call for greater accountability for the institution and to register his concern about the Fed’s influence on inflation. “I think the Fed should get out of the business of trying to juice our economy and simply be focused on sound money and monetary stability, ideally tied to gold,” Cruz said. Rand Paul suggested legislation that would assess the Fed’s monetary policy making.

Ted Cruz
Image courtesy of REUTERS/BRIAN C. FRANK

Financial analyst Dawn J. Bennett points out the fact that the Fed has been avoiding raising interest rates, citing the potential breakdown of interbank lending. Bennett deems this interference unhealthy for the system, and Cruz clearly agrees. He criticizes high inflation rates and how they are making it difficult for average people to get by, something that raising interest rates at the Fed might actually control.

These ideas are a start, and a welcome one, at addressing a topic that has been largely ignored by the candidates thus far. However, whether these plans would receive the support they need to be effective is another question. And the specifics of their policies would have to be ironed out.