John McCain’s economic “plan” deserves to be subjected to relentless mockery. He may not think the voters are bitter, but if he thinks they’ll swallow this pile of garbage he must think they’re either stupid or as ignorant of economics as he claims to be himself.. (Mind you, I’m not saying he’s wrong: helped by the economic illiteracy of mainstream political journalists, and their steadfast refusal to ever call “bullsh*t” when the numbers don’t add up, McCain might get away with this bamboozlement.)
Others with professional credentials can do a better job than I on the technical details. But here are the salient points:
1. First and foremost, he’s going to fix the deficit and pay for his Hundred Years’ War by … cutting taxes again. His earlier promise to balance the budget by the close of his first term has magically vanished. That’s just as well, since he’s not even proposing enough spending cuts to pay for any substantial part of this giveaway, so the result is exploding the deficit. In any case, the imaginary $100 billion to be saved by cutting programs that McCain can’t (after more than two decades in Washington) specify is to go into … corporate tax cuts.
That means that the government accumulates still more debt, in precisely the period when it should be paying down debt to get ready to finance the retirement of the baby boom. Either we wind up defaulting on Social Security or we wind up defaulting on the national debt. Take your pick.
2. Gasoline prices are high partly because crude oil is scarce and expensive but mostly, in the short term, because refinery capacity is tight. That means that a summer’s “holiday” from federal gasoline taxes wouldn’t be reflected in lower prices at the pump, but would go directly to ExxonMobil’s bottom line. Brilliant! (And borrowed from Bob Dole, it turns out.) And since the proposal is only for this summer, McCain isn’t even proposing to try to actually get it done if he’s elected. Pure election-year pander.
3. McCain is going to simplify taxes by offering each taxpayer a :”choice” between the current system and a “simpler” system with a bigger standard deduction and only two tax rates. The only problem is, the only way for a taxpayer to figure out whether to stick with the current system or pick the new “simplification” is to compute his taxes both ways. That should save loads of time.