John McCain has released a few of his planned economic policies this week. As reflective of his previous statement "I know a lot less about economics than I do about military issues," these changes will do a lot of harm our economy, especially long term. His policies are - update the tax code to something simpler, but leave the old tax code in place if you would prefer to use it; create a "gas tax holiday" for the entire summer; and offer government backed 30 year mortgages to at risk borrowers, with applications available at the post office.
That last one may be something helpful, he is vague on the details though so I can't say for sure. We do need real help on the mortgage front, but I am wary about the government arbitrarily buying back mortgages. I need to look at this proposal more closely, should more details be released, and compare them with the other candidates' before I can make more detailed remarks.
The gas tax holiday has to be the most ridiculous proposal I have heard in a while. The problem with fuel prices isn't the $0.18 added to unleaded to pay for road repairs. Repairs that are used (or should be) to keep bridges from collapsing for example. This will save the average driver less than the cost of one tank of gas over the three months he is proposing (3 months, 15 gallons per week, $3.50 per gallon). The problem is the $1.00+ hike created by an oil man's war in the Middle East. The instability we created there reduced output and encouraged speculators. Meanwhile, encouraged to "keep spending" here, our consumption has gone up. Bush's unwillingness to push for tougher CAFE standards until Congress just recently acted, plus his unwillingness to encourage funding in new energy sources has also helped raise demand. The last thing we need to deal with $114 oil is an 18 cent per gallon encouragement to use more. What we need is real encouragement to consume less or at the very least, more wisely. We need to stop using oil and natural gas for electricity when infinite (at least for the next several million years) energy is beamed to us 11-13 hours a day. But pushing a policy like that could hurt the Exxon's of the world who are making $41 billion off of $100+ oil.
The change to the tax code has to be almost as idiotic. So now, should his plan go through, not only would we have the convoluted craziness of the current tax code, where someone making billions of dollars can pay less in taxes than his secretary making $30-$50k, but we will also have yet another (lets call it 1040EZ-R) form that may or may not allow us to pay less. In order to figure out which one is the best, we will still have to pay tax professionals hundreds of dollars while the tax code adds five more books. "Americans do not resent paying their rightful share of taxes -- what they do resent is being subjected to thousands of pages of needless and often irrational rules and demands." This is why we will offer one more random form for you to compare with the other arcane rules and demands.