McSame Old Economy

Today, Sen. McCain talked on his least favorite subject: the economy.
In 2005, McCain confessed his lack of understanding for economic issues. "I'm going to be honest: I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated," he said.

What has he (or, more likely, his crack team of economic advisors) proposed?

Sen. McCain has a list of recommendations:

• Scrapping the 18.4 cent federal gas tax from Memorial Day to Labor Day
  of this year.
• A doubling of the tax exemption for dependents to 7000 from 3500
• Promising at some (unspecified) point to offer an alternative tax system
  with two rates and a "generous standard deduction."
• Extending the Bush tax cuts (which he opposed earlier this decade)
• Cutting the corporate tax rate from 35 to 25 percent
• Banning Internet taxes permanently

His lack of knowledge in the realm of economics shines brightly. When facing a receeding economy, with a growing population below the poverty line and the largest inequality the country has seen in decades, Sen. McCain proposes cutting corporate taxes from 35% to 25%. Who's "out of touch" with the American worker now?

His proposal to cut the gas tax puts a temporary band-aid on the issue and would be detrimental to the future of our economy. Most economists do not approve of such a plan. It would encourage an increase in driving. If McCain truly desires to free the American people from the strangle of the gas pump, he would invest the billions of dollars in revenue from the gas tax into R&D for renewable and sustainable transportation and energy. The gas tax also feeds directly back into repairing and building new infrastructure. Without the tax, reduced investment in infrastructure would severally bruise the construction industry that has already been devastated by the housing slump. Inversely, if construction were to see a boom from government investment, the resulting increase in jobs and wages would be a good jump start to the economy (much more effective than handing out $600 checks anyway).

McCain also wants to continue to dump billions of dollars into Iraq for years to come. So where will he generate this revenue? The short answer, he won't. McCain will continue to drive up our country's sky-rocketing deficit. However, to be fair, I will highlight the ONE additional revenue generating plan he has proposed:

• Forcing affluent seniors to pay higher premiums if they join Medicare"Part D," which provides subsidized drug benefits (this phased-in fee hike would target seniors earning 80 000 per year or more, per a McCain spokesperson. McCain himself does not specify income level which would be impacted.)

Sen. McCain is dreaming if he thinks a chunk of senior citizens paying higher co-pays for their prescription drugs will balance out the 30% reduction in corporate taxes while continuing a $9 billion per month war in the face of a $9 trillion national debt.

The NY Times' Michael Cooper has more:

One of Mr. McCain’s tax proposals would take effect even before the Republican Convention: he called on Congress to suspend the 18.4 cent a gallon federal gas tax from Memorial Day until Labor Day. Mr. McCain said that doing so would provide “an immediate economic stimulus,” but some environmentalists said that the change might encourage more people to use their cars, while Mr. McCain has made combating global warming central to his campaign.

...

An analysis by the Center for American Progress Action Fund, a liberal think tank, estimated that the overall cost of Mr. McCain’s tax cuts would be three times as much as the $100 billion he estimates that he can save. And they questioned whether his programs would really save $100 billion a year.

...

Neera Tanden, the Clinton campaign’s policy director, called the McCain plan “a corporate lobbyist’s dream.” She said that Mr. McCain had proposed “an economic policy that Americans simply cannot afford,” based on corporate windfalls and tax cuts for the wealthy, and that ExxonMobil, which recently reported record profits, would get a $1.4 billion tax cut under the McCain plan.