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This Is What Democracy Looks Like

www.NationalView.org's Note From a Madman

October 14, 2008

 

Obama's Economic Plan and McCain's Trickle-Down Scheme

Senator Barack Obama came out with what one might call a comprehensive economic plan. The seven-page plan, which he detailed and released yesterday during a rally, includes not only the ends but the means by which he wants to get us there.

After hearing of and, presumably, reading Obama's plan, senator John McCain came out with his own economic plan. As usual, McCain the Reactionary, came out with something only as a response to something else - in this case, the something else was a response to Obama's plan.

It wasn't that Obama just beat McCain to the punch with his economic plan that makes me say McCain is, again, reacting instead of thinking ahead. History and McCain's web site offer the proof.

First, history: McCain has been for fixing things only after they have been broken, and they usually break with his help. Think of the war in Iraq and how he whole-heartedly supported it before admitting that "mistakes were made". Then there was the economy. McCain voted in lock-step (or is that goosestep?) with George W. Bush before trying to distance himself from the Bush policies he endorsed, and still endorse even as they are failing.

Finally, McCain's web site offers the final proof. As of today - the day after McCain announced his economic "plan", JohnMcCain.com offers only the same "plans" (if one could call them plans and not merely rhetoric) they offered days, weeks, and even months ago. The economic web page link under "Issues" sends the user to the "Jobs for America" page (http://www.johnmccain.com/Issues/jobsforamerica/). The links on that page refer to "ideas" dating back to "New Initiatives In The McCain Economic Plan" dated April 18, 2008 (http://www.johnmccain.com/Informing/News/PressReleases/1ad1df45-57a9-4bd4-b71f-9d5c011d14c5.htm).

It's apparent that McCain's new economic "ideas" are so new that they surprised his webmaster and possibly even many on his campaign staff.

The McCain plan offers up an additional $52.5 billion price tag for something that rehashes the same old ideas which the bush administration has been trying to get past Congress for some time now. it includes the Right Wing favorite of reducing (as a better choice than removing, at least not yet) the Capital Gains tax which gives his "base of haves and have mores" even more and a suspension of tax on unemployment insurance without extending the benefits, as Obama has proposed.

One wonders where the $300 billion to purchase mortgages at face value (penalizing us while rewarding the investors who, supposedly, "took the risk" in the first place). comes in.

McCain's economic plan, in other words, is just another targeted-to-the-rich trickle-down scheme which has failed us time and time again. Even the price tag is suspect: One wonders where the figure $52.5 billion came from when so many details have been left out. Perhaps they thought saying $50 or $60 billion would sound too phony, much like the plan itself.

Obama's plan is summarized below, and it incorporates ideas targeted to the group who really do fuel our economy when it's running well: The US middle class:

A New American Tax Credit: One of the extra taxes on all businesses is the 6.2 percent they have to pay towards their employees' Social Security insurance, a.k.a. the Payroll Tax. Both employer and employee pay the 6.2 percent (each) to a maximum of $6,200 per year (a cap of $100,000 salary at 6.2 percent, times two). Obama's Jobs Tax Credit will refund just about all which an employer pays towards an employee earning up to $50,000 per year to help offset the cost of a new employee to that employer.

Raise the small business investment expensing limit to $250,000 through the end of 2009: This provisions, an extension of an existing provision signed into law in 2003, increases and extends the amount of purchases by small businesses which they can immediately write off. It's purpose is to, again, stimulate small businesses to invest in their companies today and rewards them today rather than having them wait for years to realize their tax benefits.

Zero capital gains rate for investment in small business: This allows small business owners to invest in their companies and to keep and reinvest their profits directly back into their companies rather than have to fork over the dollars to the government. What makes this plan different from the Republican plan to completely remove capital gains as a tax is that it is targeted at small business allowing them to hire more people, pay off loans and expand their business in a time when expansion of successful businesses by responsible people is necessary.

Save one million jobs through immediate investments to rebuild America's roads and bridges and repair our schools: A proposed Jobs and Growth Fund will be set up with $25 billion to create what one can call public works projects. By setting a program such as this in motion, it is estimated that an additional one million jobs will be created. These jobs will replace the jobs lost in manufacturing (lost to outsourcing) and construction (lost to the horrific, greed run-amok housing crisis) as well as other fields. The object of this program is to put middle-class Americans back to work and getting them, by increasing their overall purchasing power, to circulate their newly earned dollars into our economy. Consider this a trickle-up philosophy where we target those in the middle to everybody's benefit.

Partner with America's automakers to help save jobs and ensure that the next generation of clean vehicles is built in the United States: Until we have a universal heath care system the US-made auto industry will have the added expense of providing health care to their retirees, and it's a good thing, too else there would be millions more without health care coverage today. That being said, it's necessary to get Detroit out of the big, profitable SUV mindset which they've been living in while imports take over our home auto market. This part of the Obama plan should include a provision which makes the proposed loans to automakers contingent on that employer providing health care and other union-type benefits to their employees who will be making these cars of the near-future.
And additional idea tacked on should be a small tariff on all vehicles not made in the USA; and a special emblem placed on each car manufactured showing its country of origin.

A tax cut for 95 percent of workers and their families - plus seniors: A $500 (single) or $1,000 (family) tax check mailed to a targeted middle-class will inject money directly into our economy. It's only a start but, unlike the too late to help Bush rebates of this past year, it could help many pay for Christmas and holiday gifts just as their credit card bills arrive.

Extend unemployment insurance benefits and temporarily suspend taxes on these benefits" Unemployment benefits have become the sole income for some American families who live hand to mouth as one, or both parents look to replace their recently lost jobs. Extending these benefits is a no-brainer, but one that President Bush refused to do until very recently, saying things like those without jobs will soon have them.
They didn't.
In a time when such a high percentage of working age Americans remain unemployed, this is the temporary means necessary to keep many of them going until the economy picks up.

Penalty-free hardship withdrawals from IRA's and 401(k)s in 2008 and 2009: This would allow, on a percentage basis, families to tap their retirement fund dollars (those lucky enough to have retirement-fund dollars, that is) to a maximum of $10,000 without the usual taxes or ten percent penalty for early withdrawal.
This goes beyond the obvious benefit as many will find jobs - albeit not as good as their former jobs - without health care or suitable salaries initially. The money they take out can pay for things such as health care insurance while we fix that issue.

Instruct the Treasury to allow seniors to delay required withdrawal from 401(k)s and IRA's: This is a no-brainer. The last thing we need is people in the latter years being forced to remove money from the troubled markets at a major loss. Allowing them to keep their money in these accounts makes it possible for them to realize the profits which these past few weeks have seen diminished.

Funds to Counteract High Heating Costs this Winter: Keep LIHEAP funded and make sure people can heat their homes. Yet another no-brainer.

Instruct the Secretaries of the Treasury and Housing and Urban Development (HUD) to use their existing authority to more aggressively modify the terms of mortgages: Force banks to rework loans to market value. This will allow people to stay in their homes; keep other home prices stable; and help stem the tide of the sub-prime lending crisis.

Reform the bankruptcy code to assist homeowners and remove legal impediments to encouraging broader mortgage restructuring: Allow bankruptcy judges the power to restructure the loans of people who will still need to live someplace even after they file for bankruptcy. Will so many Americans filing for bankruptcy protection, and so many homes being put in foreclosure, the law prohibiting judges from restructuring loans is not only wrong, but out of date.

90 day foreclosure moratorium for homeowners that are acting in good faith: Even though there comes a time when a foreclosure might happen, a 90 waiting period during which homeowners are making some sort of payment should be standard. This, along with restructuring loans, could keep many Americans in their homes; keep those homes from diminishing in value; and keep them looking as a part of the neighborhood rather than a blight on it causing home values to fall.

$25 billion in State Fiscal Relief to Help Avoid Painful Property Tax Increases: It's simple - as jobs are lost and the dollar is worth less, states need to gather funds to operate. This is a simple shot in the arm that doesn't tax the homeowner, which many state's do as their last gasp for cash.

Universal mortgage tax credit for homeowners: A ten percent targeted refundable (cash) tax credit to homeowners who don't itemize their taxes.

Be prepared, if necessary, for broader assurances for credit to banks: Because the Bush economy ain't over til it's over.

Extend asset purchases to unfreeze other critical sectors: Extend the purchasing power of the bailout bill to individual mortgages, student loans, car loans, loans for multi-family dwellings and credit card loans to include everyone who might need help.

Make credit available to small businesses and state/ local government: Municipalities have been hurt more than just about any one sector of government, and many times, they have no one to turn to except for the homeowner. By allowing them to take part in these temporary loans, they can keep the burden off the taxpayer and allow them to invest back in their small businesses, home improvement, or just buy the staples they need to live. When dollars go out of the federal government, they also go out of the states government. and when the state suffers the pain is transferred to the local governments, in most cases, not proportionately. These loans will help ease that burden.

-Noah Greenberg


Term Limits

The debates and every snippet of McCain's rallies have made me certain of one thing: if we don't start demanding TERM LIMITS this country is going to break into smaller and smaller pieces. When McCain talks about all the bills he voted for or against that really crushed the economy (i.e., deregulation) and taken us to an unnecessary invasion, I sit and scream at the TV "TERM LIMITS" - we should not have the same crazy old farts in control of this country for 25 years. The world changes but these crazy old geezers don't. I think we should be outraged that McCain has been in Congress so long and helped so abundantly with the financial crisis we are in now.

-Sheila Burleson


In response to the origin of "Maverick", Ole Pertet offers this take on the 1988 Vice Presidential debate between Dan Quayle and Lloyd Bentsen:

Senator McCain, I knew Sam Maverick, and you're no Sam Maverick.


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-Noah Greenberg