Monday, July 07, 2008

Economy on the Rise

No, that’s not the US economy, which is still facing many problems including rising oil prices, the subprime mortgage crisis and the housing bubble, increasing unemployment and underemployment, affecting nearly every country in the world with the interdependent global market. Debate on economic issues is on the rise among our Presidential contenders, Senator John McCain and Senator Barack Obama.

McCain has reverted to his original pledge to balance the budget within his potential first term in office. “The near-term path to balance is built on three principles: reasonable economic growth, comprehensive spending controls, and bi-partisanship in budget efforts…In the long-term, the only way to keep the budget balances is successful reform of the large spending pressures in Social Security, Medicare, and Medicaid,” the McCain campaign says in a policy paper that was released today (pg 4). The kinds of reforms, however, have yet to be spelled out.

“The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.” With the new timetable for US withdrawal that Iraq may agree with, this is possible. But, that’s assuming either of the cases is thought a victory, and on what terms.

According to the NYTimes, “fiscal analysts who have examined his economic plans say that his calls to extend the Bush tax cuts while cutting corporate and other taxes would likely increase the deficit.”

The Democrats eagerly seized his pledge, calling it unrealistic. Obama’s campaign is working to emphasize economic issues as “a discussion on economic security for American’s families,” pushing his proposals that aid families and provide more direct benefits.

The battle between McCain and Obama continues as economic issues come to the forefront of this election for the time-being. When Bush first came into office the budget was in surplus. Our ridiculous deficit now demands attention, as do other issues that are significantly affecting our economy, but the solution is not so easy.

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