Political Point-Counterpoint: McCain’s economic plan shows promise

In the wake of the economic bombshell that burst on Wall Street this past week and resulted in a… In the wake of the economic bombshell that burst on Wall Street this past week and resulted in a $700 billion government bailout of several prominent financial and insurance houses, Americans are left wondering what their vote in November can do to change the precarious economic state in which we find our country. Unfortunately, neither Sen. Barack Obama nor Sen. John McCain have the answers that can restore confidence in the economy and deliver us from an impending recession. I don’t want to sound too bleak, but the idea that one man and one administration can bring prosperity to a country of 300 million inhabitants is simply unrealistic. But in focusing on what the next president can specifically do to bring back long-term economic stability to the United States, voters need to approach the current economic crisis with foresight. What does each candidate guarantee as a part of his economic plan, and how will that bring us a sound economy five, 10, 20 or 50 years down the road? Obama promises on his Web site more welfare, including a universal health care system and a $1,000 annual rebate to American families to help pay for gas at the pumps. He says that he will create five million ‘green’ jobs by investing $150 billion over 10 years in alternative energy development. He will tighten government regulation of Wall Street and renegotiate the North American Free Trade Agreement. He will also provide some 10 million homeowners with a credit to help pay for their mortgages. This economic plan amounts to the same special-interest politics that Obama has so vehemently decried throughout his campaign. Obama goes through a laundry list of beleaguered groups of Americans and offers each of them some sort of government handout. It is as if Obama will draw out his magic wand and simply solve rising health costs, the national energy crisis, the financial collapse of Wall Street and the housing debacle by dishing out money to all parties involved. Unfortunately, the federal government is running its books in the red (see the federal budget deficit) in just the same way that the companies that recently declared bankruptcy on Wall Street had been doing prior to the most recent bailout. It appears to me that the crisis we are experiencing is more systemic than Obama would like to admit. Corporations created by the government, such as Fannie Mae and Freddie Mac, are at the heart of the mortgage-lending fallout we are now trying to control. However, it is Obama’s conviction that we need to create more of the same kind of entitlements that have led to our current situation. More government institutions with unforeseeable budget demands will only hasten the occurrence of our country’s next economic breakdown. Therefore, it is essential that we avoid temporary and simple-minded solutions to long-term problems. McCain’s economic plan is less vigorous than Obama’s, and for this reason it is more desirable at the juncture where we currently find ourselves. Instead of promising to create more institutions and increasing those that already exist, and thus leaving us with even more liabilities down the road, McCain proposes important, but less sweeping, economic reforms. He says that he will try to reign in Wall Street with tighter regulations, but he will also lower corporate taxes to keep jobs in America before they are shipped abroad. He promises to promote energy exploration in the United States to help make us energy-independent, while still creating jobs at the same time. I cannot say that I wholeheartedly endorse either of the candidates’ plans, but I will say that if Obama has the opportunity to implement his, then Americans will be left with more government entitlement programs to fund through taxation, as well as more burdensome federal budget deficits down the road. As we are witnessing firsthand, it is impossible to maintain a balanced budget while maintaining these socialized programs that promise to put an end to any particular need that groups in society may have. The budget deficits that they cause invariably lead to inflation and drastic measures taken by the Federal Reserve to provide easy credit to slumping American businesses. The upside of McCain’s plan is that it will not build up more government superstructures that will inevitably topple over and leave us in situations similar to the present. His plans for reform are not ideal, but at least they do not embody the pretentious attitude that suggests that merely tossing money at people will solve their struggles in a complex economy. E-mail Bart at bdw12@pitt.edu.