The Three E's, Revisited

First, I did not get to see tonight's debate. I was at a business dinner, so I don't know what happened, who "won" or anything otherwise salient at this point.

Instead, I want to review the candidates' economic plans, which they unveiled in the days leading up to the debate. First, Senator John McCain. He delivered a straight-forward six-point plan. (Tomorrow, I will try to do the same for Senator Barack Obama's plan.)

1. Eliminate taxes on unemployment benefits. (Wonderful idea. Have you ever tried to live on unemployment benefits? Not only is it impossible, in any state in the union, to try and set aside a quarter or so of these paltry payments for taxes is a ludicrous proposition. "A")

2. Guarantee 100% of all savings accounts for a period of six months. (I see what he is getting at here, trying to stem bank runs, and the idea may have some merit. But the federally insured deposit limit has already been raised from $100,000 to $250,000 per account. Anyone with more than that in savings simply has to break them up into individual accounts. If someone is that rich and too stupid to do it, I'd just as soon see them lose their money, if it comes to that. This is a bad idea. "F")

3. Cut capital gains tax in half for the next two years. (This might have appealed to middle class people before the current financial crisis, because the prospect of selling their homes or their stock market holdings was clouded by a capital gains penalty. But frankly, most of the value in those homes and investment accounts has disappeared. This is an outdated idea. "F")

4. Enabling people to write off stock losses quicker and with a higher limit. (This is straight-out a great idea, because the little people get hit far harder when stocks fall than big institutional investors. Of course, under this proposal, both would benefit. "A")

5. Cutting taxes on withdrawals from IRAs to 10 percent. ("A")

6. Instruct the Treasury to buy mortgages from people at risk of foreclosure, then re-negotiate the loans based on their homes' new values. (This is on the right track, but it lacks several critical components. One is holding the individuals who "bought" these homes accountable for their own lack of personal accountability. Another is to hold the real estate agents, mortgage brokers, and banks accountable for their (criminal) roles in the sub-prime crisis. So, in my view, an unconditional bailout for consumers does not float my boat. But, in the end, renegotiating these bad mortgages is a necessary evil, sadly, to fix what is wrong with our economy. "C")

Final grade: 3 A's, 1 C, 2 F's. GPA: 2.33 (C+).