McCain launches new economic proposals in PA

A day after Barack Obama released new economic proposals, John McCain has done the same thing offering some policies aimed at stemming the current economic and financial issues burdening the country. McCain’s plan includes items such as guaranteeing savings for the next 6 months, buying shares in banks, and a handful of other proposals.

The report from Yahoo News:

BLUE BELL, Pa. – Republican presidential candidate John McCain on Tuesday proposed a $52.5 billion economic plan that would eliminate taxes on unemployment benefits and cut the capital gains tax while warning voters about taking a chance on Democratic rival Barack Obama.

“Perhaps never before in history have the American people been asked to risk so much based on so little,” McCain said of his opponent during a speech at a community college in this Philadelphia suburb.

McCain also promised that as president he would order the Treasury Department to guarantee 100 percent of all savings for six months. Such a guarantee, above the $250,000 now in force, would ease consumer fears of bank failures and restore “rational judgment to the choices of the market,” he said.

The Arizona senator, who trails in the polls on economic issues, said, “The moment requires that government act. And as president I intend to act, quickly and decisively.”

McCain said President Bush’s $250 billion plan to buy shares in the nation’s leading banks — which helped stocks soar on Monday — should be short-term and last only until the institutions are reformed and put on a sound footing again.

“When that is accomplished,” McCain said, “government will relinquish its interest in these private companies. We’re going to get the government out of the business of bailouts and equity stakes and back in the business of responsible regulation.”

More than 3.6 million Americans received unemployment benefits, according to the McCain campaign. If the government eliminated taxes on unemployment benefits, recipients would see an increase on average of nearly 10 percent, the campaign said.

McCain also called for cutting the tax rate on capital gains in half, down to 7.5 percent for two years. “This vital measure will promote buying, raise asset values, help companies and shore up the pension plans for workers and retirees,” he said.

McCain proposed lowering the tax rate on Individual Retirement Accounts and 401(k) plans to the lowest rate, 10 percent, on the first $50,000 withdrawn. The McCain campaign estimated it would affect 9 million people over the age of 60, but the biggest benefit would go to the highest income seniors.

Video from ABC News of McCain discussing his plan:

Sound off below..

  • Ok, so he wants to reduce taxes and guarantee savings.. Since McCain is adamant about keeping with the U.S War in Iraq, where is he expecting to get the money from?

  • Probably the same place Obama is getting the money from for his social and economic plans during his 16-month, or longer, “redeployment” of our soldiers in Iraq. Or wait, Obama wants to send them to Afghanistan so I guess he’ll need to find the money somewhere as well.

  • I didn’t mean to be crass with that statement. It’s just that the Republican talking point is lowering taxes, and the Democratic one is raising taxes. And there is no way that the cost of the troops in Afghanistan will come close to that in Iraq. Seriously, what is the plan? Is it simply to make more money (print it)?

  • I think both candidates have plans which includes aspects that are unrealistic. Plus, whichever one is elected, surely 90% of their plan will never pass since congress will water it down. If if Dems control congress with an Obama presidency, the GOP will hold it up and water it down.

    I don’t even think of either candidate’s plan as realistic since they will never be able to pass it all. They’ll compromise on somethings and get some concessions, however, the plan will look nothing like it does now, for either candidate.

  • Would be nice to see Obama and McCain make an effort and sit down and work something out together. Maybe not a plan both sides totally agree on, but at least be on the same page in some aspects.

  • Grey

    The idea is that cutting taxes on the wealthiest of Americans will cause them to invest more, which in turn expands the market and creates jobs for the people below them. Ideally, this would stimulate the economy and result in more revenue for the government, because although percent-wise taxes are cut, general economic growth results in a higher return. Same thing with guaranteeing savings- it’s a ploy for people to start investing again, and through it McCain is hoping to secure not short term gain but long term returns.

    Or at least I’m guessing that’s the case based on my understanding of general Republican economic theory.

    As to whether or not it works, I personally am not that idealistic about it. Unfortunately, theory doesn’t have ways of panning out well in real life, and it’s hard to argue trickle down theory when riches are abused and wealth distribution is so large.

    Anyways, that’s my two cents.

  • If the theory of cutting taxes to the wealthiest actually creates jobs then fair enough. But with jobs being shipped overseas to make more profit and more and more firms are cutting staff and installing machines to make more profit, then I don’t see how that theory works.

  • Babs

    First of all, Nate and Michael, I agree that neither should be able to implement all of their plans because of Congress. Normally that would be true. But take into account that Obama is openly touting that HIS plan may be implemented by his cronies in the lame duck session of Congress being scheduled by Pelsoi now. He’s already trying to get it in bill form and get it passed before the election. If that happens, it will be McCain who has an impossibly uphill battle should HE win the election. This should be a bigger fight in Congress than the bailout bill was, and hopefully Republicans are able to shoot him down.

    nzpudding, history shows that it is, in fact, the very people who Obama is targeting with higher taxes that create jobs. Think about it. The people he wants to give these tax rebates to are those who do not pay taxes to begin with. Where does the money come from for those rebates? The higher income tax bracket, or wealthiest as you call it, that employs everyone in the country. If that sector is penalized with higher taxes (already the corporate tax in the US is the second highest on the planet), it will simply narrow the employment roles and send more jobs overseas where labor and taxes are cheaper. Now, how can thata be good for the economy?

    Let’s throw in the energy proposals with this. Obama is against drilling and building nuclear plants. Let’s even set aside drilling, and just deal with nuclear plants. I have one 50 miles from me in my hometown in Alabama. Construction began in the 70’s. It immediately employed not 100’s, but 1000’s of employees in the construction, electrical, and engineering industry. Several members of my family were among those, and one – a professional electronic engineer – moved from Texas to work there, and retired there 22 years later a millionaire. Over the years, there was virtually NO unemployment in the area to speak of because the employment opportunities ranged from skilled to grossly unskilled workers who did no more than sweep the floors on shut downs for union scale wages. (That floor sweeper paid for half her college expenses to get her masters, by the way) Building these nuclear plants not only speaks to the energy crisis, it speaks in a huge way to JOBS. This is just ONE example of the benefits of a McCain administration.

    Obama wants to spends millions of dollars on training programs to teach workers a new skill. McCain can open up jobs that workers are ALREADY trained to do. Now, which makes more sense to you?

  • Grey

    Babs, I would have to disagree on a few counts- one is that history does not contain any solid evidence of the benefits of trickle down economics. The economy is something in which it is hard to really grasp cause and effect relationships- it’s hard to definitively say what works and what doesn’t.

    Second is your analogy of a nuclear plant. As much as I hate specific models for backing an argument, I’ll go off of it. One thing to note is that your model doesn’t take into account the decrease in jobs due to competition caused by the addition of nuclear power as a competitor. If it took over some of the energy market, chances are that some other energy company employees lost their jobs.

    Nzpudding- shipping jobs overseas and replacing workers do detract from domestic economic growth, but that would happen regardless of whether or not taxes were cut on the rich. Those business practices have to be deterred by another means.

  • Babs

    It’s interesting that people keep saying “the rich” and “the wealthy” in this scenario, as if the people who are in for the higher tax sit around poolside at the country club all day and sip mint juleps. This is the deception that Obama has deftly weaved in his web. And it is so false. It’s estimated that HALF of all small businesses will fall into this “rich and wealthy” category, and to call them literally “rich and wealthy” is a joke, and insulting.

    Grey, what other “energy market” do you think suffered? There was none. There were jobs added, more money being circulated into the area, businesses opened and thriving, and homes being built, cars being sold. There was no harm done to any other “energy market”. The purpose of nuclear plants is to ADD TO OUR ENERGY SUPPLY, not to put “other energy markets” out of business.

    No Grey, that wouldn’t happen regardless of a tax cut for the “rich” on a large scale average. Again, SMALL businesses constitute half of the sector Obama intends to raise taxes on – small businesses who now employ US workers. They will not be able to sustain their payrolls when another 25% tax hits their profits, and will likely lower their payrolls to compensate for the added tax burden. When a small business only has a 10% net profit margin, adding another 25% tax to its gross puts it out of business.

    Also, history DOES contain at least pieces of solid history in our country that the “spread the wealth” theory is disastrous. Increased taxes during a recession has a proven historical record of being a recipe for a depression.

  • Grey

    Babs,

    1. On energy- Greater supply of a good leads to a decreased demand for similar goods. Decreased demand means less revenue for those other goods, who either have to cut their prices to stay competitive or lose customer base. I’m not sure how you’re trying to argue against this simple truth.

    2. On my remark to Nzpudding, I have no idea what you’re trying to argue. Are you trying to make the case that the hiring of US workers by small business owners offsets outsourcing? I don’t even want to begin to bother tearing that argument to pieces- it’s so flawed I wouldn’t know where to begin. If you really need me to explain why that’s so incredibly wrong, I will do so, but otherwise, I suggest that you stop this argument right here.

    3. Also, in terms of history showing that “spread the wealth is disastrous”, I’ve personally come to the conclusion that there’s no real validity to that argument. Instances that most advocates of that theory use to support that argument are often stilted and biased. Even when people pull up events in which “socialist” ideas seemingly have poor results, it’s hard to argue that the failure is a result of the ideas themselves- there could be problems in execution of the ideas, exploitations due to poor regulation- a myriad of causes exist for the failings of such systems. To try claim a singular mentality is solely responsible for the breakdown of a system is… narrowminded. Still, argue what you will.

  • Babs

    Grey,

    I’ll assume you’re against domestic drilling and nuclear energy and leave it at that. My points are valid. If building more nuclear plants here in the US means less foreign energy then I’m all for it. The added bonus of thousands of jobs is the icing on that cake.

    The point I’m making with pudding is a very personal one. In case you didn’t read my last commentary I AM a small business owner, and I damn well know what I’m talking about. As to your suggestion that I stop the argument, never. It is MY livelihood at stake here. I may go into that night, but it won’t be quietly.

    Your number 3 is just coffee table talk. “Spreading the wealth” is socialism, and socialism doesn’t work for those of us out here that will be the victim of it.

  • Babs,

    I’m all for drilling and nuclear power, so we agree on that. Obama makes the argument though (and quite a valid one) drill in the areas you have permission to first.

    I would like to know though how you’d specifically be a victim of socialism?

  • Bill Hedges

    America has gone through the longest BULL MARKET. I give the credit to Regan economics. Today, if not for sub-prime, it still might be going up.

  • Bill Hedges

    Babs–Oil is going to be needed for the cars we now drive and are being built today for a long, long time. America can not afford our oil money leaving our shores. Alaska oil is about 25 % of all oil produced in America. Which could be lost. Not because they don’ have lots of oil. But because not enough oil to keep the oil pipe line flowing. Oil flowing now is less than 100 %. The bad oil company must jump many loops to just drill. First they must bid and win lease rights to public land section. After paying fees, they must ask regulator for rights to drill. Years pass as their case comes to consideration. When approval is reached. Then certain legal action for years occurs. Oil bad guys search using equipment to find oil. Considersion is considered as to volume of oil, access, etc. Finially if all the hurdlies go though, drilling occurs. This time of lease is limted to so many years. If lucky one in 4 holes discovers a healthy amount of oil to produce. The total cost for bring this possible oil is enormance. With the profits, if there are profits, some go to buy stock back, which will be sold later when funds are needed. New equipment, wages, repair, pipe lines, etc. What is left is paid in devidens. Stock-owners. The investors who backed the drilling for the oil. Retirement plans own stock in oil companis and recieve these money. Part of my retirement check is coming from oil profits..You see the bad person who recieves the oil profits include me…Oil is a finite product. We must exspand our energy sourses. Techology is creating new and better methods. A colorado company has a wonderful hope. You may know hydrgen cars create no pollution. True, but making the fuel does pollute. Coal is used to make this fuel. British Patrolium and General electric make this fuel in a plant they built in California. Their answer to the pollution was to place it in undergrouns old oil holes. Thus no pollution released in air. Great answer. However, soon new tech. can gives us a revolutionary break-though. Hydrogen fuel created from the wind. A wind turbine making hydrogen fuel. No pollution. Period. Wind turbines can be placed all across America. Providing energy for hydrogen car. My retirement plan will own stock in these companies. My retirement plan may soon be taxed..