We must act now, or else we might do something sensible!

There's been a mad rush from both candidates to come up with a rescue plan for the economy. Some government capital investment - aka bailout - is needed to try and avert a disaster, that much seems apparent. I question the prudence of more stimulus and rescue plans though, especially ones that are thrown together in the coming weeks before the election, that will probably include 'sweeteners' like the first bailout bill did to make sure they pass. I wonder why McCain with his signature issue of earmarks and pork didn't say much about those. As everyone knows, there's no better way to change the course of an economic slowdown years in the making that is starting to hit full steam than a hastily designed plan made to appeal to the lowest common denominator right before a presidential election. God forbid that Americans accept that the economy will be slowing down for a fair length of time. We must come up with half-assed quick fixes, pronto! Any economist worth their salt knows that economic cycles are a thing of the past, endless growth is the new way of business. We have heard dire warnings from Paulson that 'economic growth might be slower' gasp! Slow growth! Stock up on your canned goods now!

Last week, after announcing the notion in the debate, McCain announced he wants to have the government buy up distressed mortgages, and do this at their face value instead of the actual market value of the homes. Another flagrant socializing of losses. He called it the McCain American Homeowndership Resurgence Plan. I would call it the McCain Presidential Campaign Resurgence Plan. While it is good to hear their ideas, acting on them would be extremely idiotic since the timing and content are based mostly on scoring political points to win the election.

Now this week he came out a rescue package to turn that economic frown upside down. McCain, displaying his non-maverickey allegiance to the right wing economic philosophy of corporate and wealthy giveaways to the detriment of everyone else and the nation as a whole, has some clearly poorly thought out ideas.

-John McCain Proposes That Withdrawals From Tax-Preferred Accounts - IRAs And 401(k)s - Should Be Taxed At The Lowest Rate - 10 Percent - In 2008 And 2009

Significantly lowering the tax rate on withdrawals from 401-k's and retirement plans. With a lack of capital a main driving force behind the current problems, doing this will make every Tom, Dick, and Hairy take as much money as they can out of these accounts during this temporary low tax period, thus creating a huge outflow of cash from mutual funds and the securities they own. Not to mention encouraging people to empty their retirement accounts and spend-spend-spend like the good little Americans they want you to be. While admittedly that would boost the economy with all that spending going on, it would do so at the expense of the life savings of all those seniors he proclaims he wants to help.

-John McCain Has Called To Suspend The Tax Rules That Force Seniors To Sell Their Stocks In The Midst Of The Most Grave Financial Crisis Of Our Lifetime
Not to bad

-John McCain Will Not Penalize Those Forced To Sell Off In Today's Tough Markets John McCain believes that we should increase the amount of capital losses which can be used in tax years 2008 and 2009 to offset ordinary income from $3,000 to $15,000.

People that are invested heavily in the stock market, and for god gnows what reason decide to sell those stocks, get a big tax break. Not likely to benifit the great majority of 'folks'. A shifting of the tax burden from the investor class to the wage earning class. Classic right wing tax policy.

-John McCain Will Strengthen Incentives To Save, Invest, And Restore The Liquidity Of Markets. John McCain proposes a reduction in the maximum tax rate on long term capital gains to 7.5 percent in 2009 and 2010.

People who in some way will manage to make money from stocks, now have to pay less, one half the regular amount, in taxes on them. See above.

Additionally, the money managers at hedge funds that everyone has come to love to hate in recent weeks, have been exploiting a tax loophole for a long long time that taxes their income, which they make from fees they charge, at said capital gains tax rate instead of the normal income tax rates most people pay. Someone honestly interested in helping out the middle class that gets paid lip service every four years might propose changing this loophole. What better time to do it than with huge public anger towards hedge funds? What was once politically impossible when the public was unintersted and Washington bought off now might be possible even probable. Instead, John McCain makes no mention of this (neither has anyone else in Washington) and is proposing to cut their already immorally low tax rates in half.

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America's Families Are Bearing A Heavy Burden From Falling Housing Prices, Mortgage Delinquencies, Foreclosures, And A Weak Economy. It is important that those families who have worked hard enough to finance homeownership not have that dream crushed under the weight of the wrong mortgage. The existing debts are too large compared to the value of housing. For those that cannot make payments, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages.

This proposal is not unique to McCain. People who made bad decisions or got snookered get some of their debt taken care of by Uncle Sam. People who bought responsibly get nothing, even if their property values have dropped too. While it is a good idea to help people facing foreclosure, this is not the way to do it. Many people have proposed allowing bankruptcy courts to restucture the interest plans of people's primary homes in bankruptcy. It's about the only debt right now that can't get restructured in bankruptcy. In the bankruptcy bill of a few years ago lots of people on the liberal side of things pushed for this. It never stood a chance of making it into that bill. Side note- people can currently do this with second homes while in bankruptcy, to keep their second homes, but not with primary ones.

Seems rash to do this and adjust the principal people owe right away without waiting to see what happens to the market and if prices come back up some amount. Why shift those paper losses inot real losses the government pays for so quickly. People that bought more than they can afford will lose it and should. People that got talked into adjustable rates that are balooning should get some help with better interest terms to stop unwarranted foreclosures. Less foreclosures is less depression of home prices is less negative equity.