[ajmccarrell]

Originally Posted by GoS

Tell me if I am not understanding you here, but you seem to think McCain continuing Bush's policies will fix this problem. How exactly would that work? If Bush's policies made this problem, then made it worse, when are they suddenly going to make it all okay again? Obama can say what he will do EXACTLY (which McCain cannot) and where he will get the money do the things we will do (again, McCain has not, probably because he cannot). McCain himself said that the fundamentals of the American economy are the workers, Obama's tax plan will give them tax CUTS where McCain will give them INCREASES. Won't that help them a bit? And Obama will raise taxes for the rich, who do not need tax cuts. The only reason McCain can say Obama will raise taxes is because McCain's taxes will be going up, a fact which does not make him happy.

Lets' get a few things straight. #1. The president does not control the economy and a candidate can make all the promises he wants to about fixing the economy but the plain and simple truth is that they cannot. #2. They can only set tax policy, which either constricts or loosens the flow of cash. #3. I don't agree that Bush's policies did this in the first place, I'm not so stupid as to blame the president for everything that goes wrong. I didn't waste 6 years of my life in college studying business and economics to completely disregard it and assume that the president controls markets. #4. The people who control the economy are just that; the people. The economy is measured by GDP, which is the summary of all domestic spending activity. If we stop spending money, the economy tansk, if we spend money, the economy does well. That basically sums up the VERY BASIC mechanics of the economy. #5. The problem we are having is because of personal greed on the part of both homebuyers and of lenders, as well as lax regulation that allowed mortgages to be traded as securities. Here's how this worked step by step: a. lenders found ways to get people loans that otherwise should not have had them such as jumbo loans 0 down financing, etc, b. stupid consumers who could not budget signed on the dotted line without considering the consequences, c. this continued for the last 15 years and started a housing supply shortage to the point where housing prices were bid up to ridiculous levels and appreciation was at historic levels, d. banks started buying these mortgages and trading them on the markets as investments which set up chain reactions of profits everywhere, e. as people started running out of money because their low introductory rates expired, the banks started calling the loans and prices fell, as there were no longer enough qualified buyers who were willing to pay inflated prices and housing values fell dramatically, f. the banks had to suddenly start coming up with the cash for the loans that were defaulted on while their assets (the homes themselves) were now worth pennies on the dollar and the banks started collapsing because they no longer had enough in assets to secure their liabilities. This was a complete market problem and a failure of the banking regulations. The president is not solely responsible, but this bonanza started long before Bush was even president. It took 15 years to happen.

I have continually cited here and elsewhere that Obama cannot even begin to pay for his plans. For one, there is a diminishing returns effect on any tax increase, because business slows down. Raising taxes on the segment he plans to will make life harder for everyone else, because tax increases on any segment are passed down to the next few tax brackets by way of higher prices and lost opportunity. If you look up a term called "price elasticity" you will see that taxes play into this as well. A tax increase put on any segment is then passed along to the poorer brackets by way of higher prices. Conversely, when you cut taxes, people are more likely to invest and create jobs. Obama really needs a basic econ course. Everything he has suggested would make today seem like the good 'ol days. Simply raising taxes and closing loopholes will only work, "Ceteris paribus" meaning all things remaining equal. However, because of the inherent inefficiencies we see in the medicare system, the same thing will happen to the Obama health care system. One major reason why health care costs are so high is because Medicare is willing to pay $200 for a foam pad and $80 for a metal cane, as suppliers know they can charge whatever they want to because the government won't negotiate. This is a very basic function of supply and demand. If Obama had his way, his $150 Billion dollar health care plan would rise exponentially, because it increases the demand curve, while doing nothing to stifle price increases due to increased demand. It is painfully shortsighted. In addition, raising taxes on people who are employers will increase dependancy on the government for medical care, as employers will use the omney they are spending on your benefits to pay for their tax increases. The costs will then continue to rise and instead of 40 million in uninsured, we would see maybe 100 million uninsured and taxes would have to go up yet again to pay for it and the cycle gets worse, or we increase deficit spending and the national debt to pay for it, which lowers the value of the dollar and imports (since most of the manufacturing companies are already gone, or will leave after the tax hikes) will be vastly more expensive and the cost of living will rise further. We will then be in a full fledged depression and not just a recession. Anyway, this is a lot to digest, so if you have more questions, feel free to ask. In short, you would be living on "hope & change" and you might have to eat it too.

One last note, a fundamental fact is that I have never been hired by a poor person. By making the rich pay more in taxes, you chase companies overseas where taxes are lower, as well as limit opportunities for raises and new jobs. I have worked for businesses who were put under by their tax burdens, as well as another that went to Mexico because of government regulation and high taxes. Being an accountant, I'm a little closer to the subject than your average person. McCain will not raise taxes and never said he would. He has a strong record on taxes. A good few years or so studying taxes in economics courses, as well as about ten years of work experience at a level to know the consequences of tax policy, raising taxes on one segment always raises the taxes on another because consumers always foot the bill. That nifty tax cut Obama would give you would be eaten up in higher prices and higher costs due to his tax increases on the brackets above you. But, I guess it's nice to see a middle class tax cut, however it won't mean much when you don't have a job.