More Bushenomics: Why McCain's Plans Would Only Add to Americans' Economic Pain

By Nomi Prins, AlterNet. Posted September 9, 2008.

Somewhere between box-office hit and policy wonk mentality is the real world. Here, "Country First" should represent more than military prowess; it should mean economic stability. A country can't be strong if the personal economies of its citizens are weak. Yet, under McCain's economic strategy, individual financial security is under attack.

Grandiose notions of combat don't pay for adjustable mortgages, sneaky credit card fees and rate hikes, health care premiums, tuition, gas or food. They don't regulate a banking system gone mad that has already commandeered billions of dollars of bailouts (from Bear Stearns to the cost of "effectively nationalizing" Fannie Mae and Freddie Mac).

McCain's main economic promises are cutting taxes, creating jobs and balancing the budget (aka removing pork). All commendable, except when you consider the details. His policies would result in a higher deficit, a lower dollar, more jobs leaving the country, and a reduction in Social Security, Medicare, education and other entitlement programs.

Let's start with tax cuts. The "pro-growth" plan on his Web site centers on corporate taxes, which he would cut from 35 percent to 25 percent to "help American companies compete and keep jobs from going overseas."

But his cuts won't actually be tied to job creation. Already, corporations don't pay a lot of taxes, and that hasn't kept jobs from heading east. According to the U.S. Government Accountability Office, two-thirds of U.S. corporations paid zero federal taxes during the past decade. Almost three-quarters of all foreign corporations between 1998 and 2005 didn't, either.

Citizens pay the bulk of the $2.5 trillion federal tax revenue. Our income taxes contributed 43 percent of it and Social Security taxes 37 percent. Corporate taxes only accounted for 13 percent. If McCain was truly a "reformer" bent on "fighting" for us, he'd go after the $20 billion of executive compensation sliding through loopholes, or the $100 billion of annual offshore tax dodges. Instead, American citizens effectively wind up subsidizing this.

As for jobs, McCain said, "We're going to help workers who've lost a job that won't come back find a new one that won't go away." He didn't specify how, even though the unemployment rate of 6.1 percent is a five-year high, and we have lost more than 600,000 jobs this year.

When he talks about jobs going overseas, McCain means China. Between 2001 and 2007, 2.3 million jobs were lost or displaced (two-thirds of those jobs came from the manufacturing sector, the rest from the tech sector), as the trade deficit with China tripled. He didn't say how he would change that. In his acceptance speech, McCain pretended to acknowledge the pain of voters -- in swing states. "Bill and Sue Nebe from Farmington Hills, Michigan ... lost their real estate investments in the bad housing market. Bill got a temporary job after he was out of work for seven months. Sue works three jobs to help pay the bills."

Now, I don't know Bill or Sue, but they probably own fewer homes than McCain does. This characterization of the homes of millions of Americans as "investments" rather than actual residences comes from a man who, like Bush, is against regulating the lending industry or helping homeowners, though he considered the $30 billion bailout of Bear Stearns "necessary to protect the economy."

Other than that, he didn't address the foreclosure crisis. The percentage of homes in foreclosure doubled this quarter versus last year, 30 percent of subprime loans are now in foreclosure, and 5.35 percent of prime ones are. McCain has no plan to deal with this.

On health matters, McCain said he fights "for Jake and Toni Wimmer of Franklin County, Pennsylvania. Jake works on a loading dock, coaches Little League and raises money for the mentally and physically disabled. Toni is a schoolteacher, working toward her master's degree. They have two sons; the youngest, Luke, has been diagnosed with autism. Their lives should matter to the people they elect to office. They matter to me."

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Nomi Prins is a senior fellow at the public policy center Demos and author of Other People's Money and Jacked: How "Conservatives" Are Picking Your Pocket (Whether You Voted for Them or Not).