This morning. Sen. Barack Obama added four new planks to his economic policy programme:
1. A $3000 per-job tax credit for small businesses that create new jobs over the next few years.
2. Tax-penalty free withdrawals from retirement accounts
3. 90-day foreclosure moratorium for homeowners acting in good faith. (This isn't exactly a proposal that Obama previously decried -- what he objected to was a five year freeze in subprime adjustable mortgage rates.)
4. A new government lending facility to provide cash to states and municipal governments.
#1 Analysis:
# 1. It's ... a corporate tax cut. And according to the McCain campaign, it's a big one. If you multiply $3000 by the number of small business jobs
created in 2007, you wind up spending about $100 billion. The Obama campaign estimates that it'd cost $20b per year for year years. Politically, the McCain folks are in the position of criticizing Obama for rolling out a $200b corporate tax cut today.
An Obama adviser said that the plans Obama laid out today will amount to $60 billion in new spending.
On a
conference call just now, ex-Rep. Rob Portman, speaking for the McCain campaign, said that most retirement plans
already permit penalty-free withdrawals during periods of hardship. "I'm not
sure what impact that would actually have, except that it would be taking
assets of retirement programs when those assets would be at low values."
Who's Spending More?
Well, the difference between the market and face value of $300 billion in troubled mortgages is more than what the Obama campaign proposed to spend today... these mortgages are now trading at $0.50 on the dollar of less.
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