OPINION: McCain, Obama Muddled Bailout Message

The Bush administration and Congress this week continue to negotiate details of the proposed $700 billion bailout of bad debt from Wall Street banks. The bailout would be the largest ever of its kind and hamper any future administration with billions in debt.

The deficit could soar over $1 trillion, while the national debt could easily surpass the $10 trillion mark. Also, a bailout will likely take years to unwind.

Given the large implications of such a bailout on the future administration, why has neither presidential nominee tried harder to influence the debate in Congress?

Neither candidate had called for a bailout with the scope proposed by Treasury Secretary Henry Paulson's plan. Before Paulson's weekend proposal, Sen. Barack Obama (D., Ill.) had been trying to drum up support for a second stimulus package, while Sen. John McCain (R., Ariz.) had been busy assuring voters he wouldn't waste taxpayer dollars on a bailout.

Once a bailout was announced, both of the candidates tepidly endorsed the plan on the campaign trail. Worse, the candidates sparred over who had greater lobbyist ties to the troubled financial industry rather than addressing the ramifications of the biggest bailout plan in U.S. history. Do the candidates really understand what it means?

The bailout comes with risks. The Treasury plan raises both the deficit and the national debt while weakening prospects for a recovery of the dollar. A weak dollar helps exports. However, a weak dollar has also meant higher petroleum prices, which negates the positive effect of exports and puts pressure on the U.S. consumer. The consumer accounts for 70% of economic activity.