100 ECONOMISTS WARN THAT WITH CURRENT WEAK FINANCIAL CONDITIONS BARACK OBAMA'S PROPOSALS RUN A HIGH RISK OF THROWING THE US ECONOMY INTO A DEEP RECESSION

ARLINGTON, VA -- Today, McCain-Palin 2008 released the following statement signed by 100 distinguished and experienced economists at major American universities and research organizations, including five Nobel Prize winners Gary Becker, James Buchanan, Robert Mundell, Edward Prescott, and Vernon Smith. The economists explain why Barack Obama's proposals, including "misguided tax hikes," would "decrease the number of jobs in America." The prospects of such tax rate increases under Barack Obama are already harming the economy. The economists conclude that "Barack Obama's economic proposals are wrong for the American economy." The proposals "defy both economic reason and economic experience."

The full economists' statement on Barack Obama's economic proposals and a complete list of economists who support it follows:

Barack Obama argues that his proposals to raise tax rates and halt international trade agreements would benefit the American economy. They would do nothing of the sort. Economic analysis and historical experience show that they would do the opposite. They would reduce economic growth and decrease the number of jobs in America. Moreover, with the credit crunch, the housing slump, and high energy prices weakening the U.S. economy, his proposals run a high risk of throwing the economy into a deep recession. It was exactly such misguided tax hikes and protectionism, enacted when the U.S. economy was weak in the early 1930s, that greatly increased the severity of the Great Depression.

We are very concerned with Barack Obama's opposition to trade agreements such as the pending one with Colombia, the new one with Central America, or the established one with Canada and Mexico. Exports from the United States to other countries create jobs for Americans. Imports make goods available to Americans at lower prices and are a particular benefit to families and individuals with low incomes. International trade is also a powerful source of strength in a weak economy. In the second quarter of this year, for example, increased international trade did far more to stimulate the U.S. economy than the federal government's "stimulus" package.

Ironically, rather than supporting international trade, Barack Obama is now proposing yet another so-called stimulus package, which would do very little to grow the economy. And his proposal to finance the package with higher taxes on oil would raise oil prices directly and by reducing exploration and production.

We are equally concerned with his proposals to increase tax rates on labor income and investment. His dividend and capital gains tax increases would reduce investment and cut into the savings of millions of Americans. His proposals to increase income and payroll tax rates would discourage the formation and expansion of small businesses and reduce employment and take-home pay, as would his mandates on firms to provide expensive health insurance.

After hearing such economic criticism of his proposals, Barack Obama has apparently suggested to some people that he might postpone his tax increases, perhaps to 2010. But it is a mistake to think that postponing such tax increases would prevent their harmful effect on the economy today. The prospect of such tax rate increases in 2010 is already a drag on the economy. Businesses considering whether to hire workers today and expand their operations have time horizons longer than a year or two, so the prospect of higher taxes starting in 2009 or 2010 reduces hiring and investment in 2008. In sum, Barack Obama's economic proposals are wrong for the American economy. They defy both economic reason and economic experience.

Robert Barro, Harvard University
Gary Becker, University of Chicago
Sanjai Bhagat, University of Colorado
Michael Block, University of Arizona
Brock Blomberg, Claremont-McKenna University
Michael Bordo, Rutgers University
Michael Boskin, Stanford University
Ike Brannon, McCain-Palin 2008
James Buchanan, George Mason University
Todd Buchholtz, Two Oceans Fund
Charles Calomiris, Columbia University
Jim Carter, Vienna VA
Barry Chiswick, University of Illinois at Chicago
John Cogan, Hoover Institution
Kathleen Cooper, Southern Methodist University
Ted Covey, McLean VA
Dan Crippen, former CBO Director
Mario Crucini, Vanderbilt
Steve Davis, University of Chicago
Christopher DeMuth, American Enterprise Institute
William Dewald, Ohio State University
Frank Diebold, University of Pennsylvania
Isaac Ehrlich, State University of New York at Buffalo
Paul Evans, Ohio State University
Dan Feenberg, NBER
Martin Feldstein, Harvard University
Eric Fishe, California Polytechnic State Universtity
Kristin Forbes, MIT
Timothy Fuerst, Bowling Green State University
Diana Furchtgott-Roth, Hudson Institute
Paul Gregory, University of Houston
Earl Grinols, Baylor University
Rik Hafer, Southern Illinois University Edwardsville
Gary Hansen, UCLA
Eric Hanushek, Hoover Institutions
Kevin Hassett, American Enterprise Institute
Arlene Holen, Technology Policy Institute
Douglas Holtz-Eakin, McCain-Palin 2008

Glenn Hubbard, Columbia University

Owen Irvine, Michigan State University

Mike Jensen, Harvard University

Steven Kaplan, University of Chicago

Robert King, Boston University

Meir Kohn, Dartmouth

Marvin Kosters, American Enterprise Institute

Anne Krueger, Johns Hopkins University

Phil Levy, American Enterprise Institute

Larry Lindsey, The Lindsey Group

Paul W. MacAvoy. Yale University

John Makin, American Enterprise Institute

Burton Malkiel, Princeton University

Bennett McCallum, Carnegie-Mellon University

Paul McCracken, University of Michigan

Will Melick, Kenyon College

Allan Meltzer, Carnegie-Mellon University

Enrique Mendoza, University of Maryland

Jim Miller, George Mason University

Michael Moore, George Washington University

Robert Mundell, Columbia University

Tim Muris, George Mason University

Kevin Murphy, University of Chicago

Richard Muth, Emory University