Skip to comments.Obama Expands Economic Plans
Posted on 10/13/2008 12:07:33 PM PDT by reaganaut1
TOLEDO Senator Barack Obama on Monday expanded his economic platform, including proposals to spur new jobs, to give Americans penalty-free access to retirement savings to help them through the downturn, to urge a 90-day moratorium on home foreclosures and to lend money to strapped local and state governments.
Mr. Obama also is calling on Congress to double $25 billion the government loan guarantees for automakers and to temporarily eliminate taxes on unemployment benefits.
Senator John McCain, his Republican rival, also gave an economic speech in Virginia Beach, Va., but he had no new policy prescriptions, having rejected his advisers options over the weekend as too gimmicky, according to one Republican close to the campaign.
The main new proposals would:
for the next two years, give businesses a $3,000 income-tax credit for each new full-time employee they hire above the number in their current workforce;
allow savers with tax-favored Individual Retirement Accounts and 401(k)s to withdraw 15 percent of those retirement savings, up to a maximum of $10,000, without paying a tax penalty as the law currently requires for withdrawals before age 59 and a half;
bar financial institutions that take advantage of the Treasurys rescue plan from foreclosing on the mortgages of any homeowners who are making good-faith efforts to make payments;
direct the Treasury and the Federal Reserve to create a temporary facility for loans to state and local governments, similar to the Feds new arrangement to loan corporations money by buying their commercial paper, which are the I.O.U.s that help businesses with daily operating expenses like payrolls.
(Excerpt) Read more at nytimes.com ...
The mortgage foreclosure moratorium, with vague terms such as "good-faith efforts" is just a way to steal from lenders and reward lawyers, who get to litigate what that means. It sets a precedent that will drive up mortgage rates towards the level of unsecured personal loans.
I am not confident that McCain or other Republicans will even try to make these points.
Where is the money going to come from? Hmmmmmm?
This was a no-brainer. Bush or McCain should have been promoting this idea two weeks ago.
McCain needs to spend the entire debate RIPPING INTO Obozo’s idiotic tax proposals.
They can make these points today, but tomorrow Hussein will be on to the next goal post he sets up.
Better to focus on the big picture.
The $3K for small businesses is nothing. Hire someone, lose them, get hit with the (Obama mandated incresed/lengthened) unemployment benies and watch your pool rise.
This man is an idiot.
A $3000 tax credit to hire new workers is a joke...it costs much more to hire a new employee than this. Business don’t decide how much they are going to save in taxes when hiring an employee. This is all smoke an mirrors in an election ploy. Few businesses if any are going to say “Hey I get a $3000 tax credit if I hire you....they hire if they need the worker—if they don’t need the worker they aren’t going to hire a new worker.
A very sneaky way of increasing tax revenues RIGHT NOW. While the tax penalty would be waved, the taxes owed on the ordinary income withdrawal would be taxed at the person's current tax rate instead of their (lower) tax rate in retirement.
Every “plan” that these nitwits come up with involve putting us deeper in debt. They are trying to put off dealing with this till after the election.
...give Americans penalty-free access to retirement savings to help them through the downturn.
Encouraging Americans to spend their nest eggs to keep houses they can’t afford is hardly the long-term solution.
right on CatOwner...that is exactly what will happen...
Did McCain campaign trick Obama into announcing this garbage?
Senator Barack Obama on Monday expanded his economic platform, including proposals to spur new jobs, to give Americans penalty-free access to retirement savings to help them through the downturn, to urge a 90-day moratorium on home foreclosures and to lend money to strapped local and state governments.
lend money to the States and Local Governments???
Lend WHAT MONEY? The Federal Government is broke. The United States is over 10 TRILLION dollars in debt. It has NO MONEY So any lending that Obama suggests has to come from one source. AMERICAN CITIZEN TAXPAYERS. And as it always does the Government will not take enough from us at the beginning and will write checks that it can not cover thus growing America’ s debt to 12 Trillion 15 Trillion or more....
obama and his followers reminds me of 8 or 9 year old kids.
You know how they come up with all kinds of big ideas? Like building a space ship in the backyard. You know it’s impossible but their friends all think they can.
Also, as someone else pointed out, it would be almost a back door tax hike. Even though you wouldn't pay penalties, you would still have to pay income taxes on it.
“Good Faith” is already in effect. My brother in law who works for Wells Fargo has said they have been doing this for years. Wells Fargo just wants it’s money, and if the buyer can only pay 80% of the payment, they will “deal” with the buyer. And if 15% of your IRA is only 10k, you don’t have much money. Leave it alone and draw unemployment
This was a no-brainer. Bush or McCain should have been promoting this idea two weeks ago
I'm not sure I agree. Liquidity is the main problem right now; this would tend to take capital away from institutions and could exacerbate the problem. Also, 401k's are for retirement and should be left that way if at all possible.
People are not starving in the street; unemployment is not that great.
Until we get a system where if you don’t PAY taxes, you don’t get to vote, we will remain a hopelessly corrupt povertocracy where demagogues like the marxist bama will rule.
“good faith efforts” can’t get more vague than that. LOL!
“I will give every non-millionaire American, ONE MILLION DOLLARS...”
Interesting observation. Makes one ask, If Obozo is doing so great in the polls and has this race all locked up, why bother coming up with these ‘great’ tax ideas???
If the accounts are used to pay down mortgage dept or buy up foreclosures only, then loosening up these 401ks would improve the liquidity situation.
Most people have more tied up in their primary residence than their retirement account anyway - my order of priority is maintaining my mortgage first.
They are seeing their poll numbers go down as the bottom is now very possibly in. McCain will do better now as economic hysteria subsides.
Has Obama promised free dental care yet? I need a root canal, a crown and some bridge work. Can’t he work this in to being a right?
Yeah, where is the money going to come from? Barry will say anything or do anything to please the largest number of sheeple ... um, I mean, people.
It’s just that BO is so full of crap. He must have just learned about this stuff. Elitists who have a silver spoon in their mouths don’t understand main street America
The stupid states, ahh CALIFORNIA as a big example, should drill for oil and cut a deal with the oil companies just like Alaska.
it’s not the worst possible idea but it shows he really doesn’t have a clue how things work.
republicans are really doomed once the democrats realize that supply side works and that they could use the increased revenue from tax cuts and growth to pay for more social programs. They won’t, of course, and they will lose the next election.
Hey, osama forgot “a chicken in every pot” or a chicken and some pot!
Here’s an idea - what about reducing gov’t SPENDING. cut programs that are not constitutional. In these trying times, people understand about tightening their belts - when is the the gov’t going to follow this example???
I would like to see the salaries for ALL Congressmen & Senators and their staffs frozen and possibly reduced.
“Interesting observation. Makes one ask, If Obozo is doing so great in the polls and has this race all locked up, why bother coming up with these great tax ideas???”
A good athlete does not let up when he is ahead — he tries to put the game away. Obama is a good politician. His half-baked ideas, which I bet are poll-tested, need to be rebutted, and McCain needs to convince voters his ideas are better.
This is a terrible idea. If there is one thing we need today as a nation and as individuals it is to encourage savings. We can’t keep spending and borrowing our way out of crisis.
About the time our original 13 states adopted their new constitution, in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh, had this to say about the fall of the Athenian Republic some 2,000 years prior:
“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury.
From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.”
“The average age of the worlds greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
1. From bondage to spiritual faith;
2. From spiritual faith to great courage;
3. From courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence;
8. From dependence back into bondage “
Sad but true. A second-best that I've long favored would be to eliminate withholding tax. Under this setup, you'd get to hold your pay for a while, then have to send off the taxes yourself, just like a self-employed person. Writing the check would make people think a lot harder about the effects of government spending.
WHAT money, Barack? Forcing banks to lend money to people who didn't have the income to pay back their mortgage LANDED us in this mess in the first place. As for "lending money" to "strapped local and state governments" through what? How will "strapped state and local governments" pay this "loan" BACK, Barack?? It's the same BS that gave us the subprime mortgage crisis TIMES A HUNDRED!
Obama was talking about rebuilding the economy from the ground up. Most people may not find that chilling. I do.
According to Obama, you won’t have to worry about paying your mortgage ;-)
What you describe is basic business pracice and micro eco 101. Unfortunately Obama and the Dems don’t know anything about either. Just like they do not comprehend supply and demand. They are trying to use the 3K like a store uses a loss leader to bring in customers. But no business man, as you say, is going to hire someone to get a tax credit if that worker is unneeded. My local mechanic has two lifts and three full time mechanics. He’s not going to hire a fourth when he can’t use him to save 3K on taxes. The Dems are scary not just for their socialistic thuggery but for their ignorance of how the world of work actually works.
A no brainer? This will simply cause another big stock sell off. And the people taking the money out will be buying high and selling low.
To destroy the democratic state and turn it into a dictatorship is Obama’s plan from the beginning.
Bullpucky. It’s a saving vehicle for lter years when you can’t work. Tap it know and you lose that cash plus it’s earning potential. In a few years of “borrowing we’ll have a bunch of people whose big screen tv is paid off but no savings. You have to take the good with the bad. JMHO
I’m a small business owner. I know Obama’s plans means to destroy commerce. Nothing in any of his proposals creates jobs or encourages growth.
This will be the Carter II years.
Far from "no new policy prescriptions", McCain immediately called for a moratorium on requirements that seniors start dissolving their tax protected retirement assets after age 72. This would recognize that this is not the best time for them to be selling off securities just to meet statutory requirements.
On the other hand, Obama's plan suggests that people be able to get to their IRA and 401K funds without penalty at a time when people shouldn't be liquidating accounts unless they absolutely have to. Most retirement accounts are self-directed and allow the owner to shift monies into bonds and short term accounts which are more secure.
Obama's plan would help induce a "run" on retirement accounts which could worsen the market problems, but of course the Times doesn't bother to analyze the results. Obama is for CHANGE!
The Obams campaign is reminiscent of the old time medicine men who promised that their worthless snake oil was a sure cure for all ills.
Call me crazy but I think having people use their 401k to get out of mortgage trouble is a better alternative than having the government bail them out with your money.
You’re right. Rather than use their own money those in mortgage trouble should just wait for you & I to bail them out.
“to give Americans penalty-free access to retirement savings to help them through the downturn”
Let’s see, the liberals love-affair with an easy-money housing boom led people to think they could extract their home equity (one part of their base of savings) now, and spend it, and worry not about having a large enough equity base later on.
So, we can be sure that Obama has no good intentions in mind now, in encouraging people to extract cash from their retirement plans now, for their temporary needs.
We know what will happen - they will become more dependent on government retirement programs latter on - and rest assured THAT is what is in Obama’s intentions, not retirees’ welfare now or later.