During the last several weeks, I have tried to hold conversations on the Presidential election. However, it seems that people are still in the dark as to the individual stances of the candidates, staking their viewpoints solely on misconceptions handed down by various media outlets and generic, liberal interpretations of stances on issues according to the respective candidate's party, particularly in terms of economics. Let there now be light where there was once darkness. I will address McCain's current economic stance first and Obama's second simply due to alphabetic organization.
If you have been reading my blog, this may seem like a shift away from the usual theme. Deal with it, read on, and learn something.
McCain's Economic Policy Paper
On dealing with the bank closings, McCain doesn't want to help failing companies, but rather homeowners. The primary tool of this will be loans provided from the Federal Housing Administration. For students, McCain wants to extend the loan security for student loans..
McCain also has plans to balance the budget, citing Clinton's similar feat in the mid 90s. This would require limited or no additional spending, removal of earmarks, and an intense scrutiny of current government spending.
In terms of taxation, business taxes would be rolled back, as well as government imposed mandates on insurance. Research and development would benefit by qualifying for a tax credit. A big notable is lowering the estate tax, while providing for a $10 million exemption. McCain intends to suspend the gas tax during the summer.
McCain fully supports globalization and an increase in free trade through multilateral and bilateral agreements, similar to NAFTA and the WTO. In the spirit of reducing barriers to trade, he wants to remove tariffs on sugar-based ethanol remove corn-based ethanol mandates (this is probably referring to minimum production/investment). To deal with shifting jobs in respect to increase competition, McCain wants to bolster access to student education and workforce reeducation, including improved unemployment systems to facilitate the process.
Obama's Economic Policy Paper
Obama's approach to the banking and mortgage crisis deals with legislating a fund to prevent mortgage collapses. Simultaneously, he wants to institute new regulation regarding mortgage fraud. For banks, he wants to remove the ability for banks that file for bankruptcy under Chapter 13 to modify mortgage terms. Over the entire industry, Obama touts a more transparent system, citing EU actions for support.
Obama also wants to make some changes to tax methodology. First, he wants to simplify the tax filing system into something that can be done quickly, without an accountant. He also plans to increase tax credits for college payments and child and dependent filings. For mortgage interest deduction, he wants to expand them to all tax payers, not just those that itemize.
For seniors, Obama wants to remove taxes on those that make under $50,000 a year. For low-income families, he also has a plan to promote investment by matching certain amounts that they invest in retirement plans. For those currently without access to retirement plans, Obama wants to institute retirement plans for all people and automatically enroll them in it, allowing for employees to opt-out if they wish.
Obama also plans to grow manufacturing, through providing tax assistance (the assistance isn't defined) and loan programs. Part of this program includes job training that incorporates clean technology.
Trade programs in Obama's policy follow fair trade rather than free trade.
Technology also seems to be a priority, with Obama supporting an increase in investment and making the research and development tax credit permanent.
Analysis
First off, I would like to state that Obama's policy outlines are better defined than McCain's. This really contradicts much rhetoric about Obama having vague policy measures, opting for egalitarian speech instead.
McCain wants to balance the budget, which Obama has not promised to do. However, while McCain claims to support the individual in terms of tax relief, it seems Obama's tax credit ideas are more flushed out to help citizens. If McCain wants to balance the budget, he cannot hope to cut the spending that he states he wishes to - a one-year moratorium on spending sounds close to impossible. He cannot hope to cut the government's income while attempting to balance the budget either.
Obama, on the other hand, has no commitment to balance the budget, which is a bit worrisome. His promotion of fair trade over free trade does adhere to good ideals to preserve worker's rights and good environmental protection, but it also maintains questionable barriers to trade. This is partially due to "fair" trade not being defined by the market, but by what people believe their product is worth. This leads to all sorts of inefficiencies and possible methods of corruption.
Both candidates have goals to increase market transparency and help out homeowners caught in the mortgage crisis. While McCain stops most of his citizen's benefits at this point, Obama goes a step beyond, citing specific pension and tax credits for individuals. These are clearly outlined in his policy, while McCain's initiative to help students is vague at best.
Between the two candidates, it is clear that McCain is a supply-sider. Obama approaches the matter from another end, helping individuals to cope with the market. This highlights a fundamental aspect of Obama's campaign - he wants to specifically help the disadvantaged. While his actions may be well-meaning, they may not actually help poorer individuals who depend on free trade to lower their daily costs.
Obama also wants to promote manufacturing jobs, which is very strange. The US has a high-tech service oriented marketing, moving away from the manufacturing jobs of the past. Obama's protection of these industries doesn't help these people, it just pushes them further into a job that requires protectionism to survive and will eventually hurt the US economy.
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