McCain Offers New Tax Cuts, Incentives

Obama did announce a plan yesterday to allow withdrawal from 401(k)s, although the amount would be limited to $10,000. It remains unclear how many people would utilize the plan. Certainly, it would prompt some to reduce their retirement savings, moving money from capital markets into the everyday economy to pay for expenses and liabilities.

What would attract investors to the market would be a permanent reduction in the capital gains tax, not a short-term reduction. It also would make sense to increase the capital loss vs. ordinary income to offer investors greater flexibility to manage their portfolios.

In McCain's newest stump speech -- at least today's version -- he reiterated his plans to buy mortgages to help those who are facing foreclosure. His plan for the most part helps those with assets -- real estate and stocks. But he won't stop there. He also targeted those receiving unemployment benefits by suspending the federal taxes on unemployment for 2008 and 2009. The McCain campaign noted this would help 3.6 million unemployed workers.

One thing has become clear in recent days. Both McCain and Obama appear willing to offer new plans to stave off an economic crisis. However, neither of the candidates have said how they would pay for them. Worse, both campaigns have dodged the issue of fiscal sanity in the presidential debates and the VP debate by glossing over it with open-ended promises to make spending cuts.

The new economic plans -- and the massive tab to taxpayers -- should make for an exciting final debate on Wednesday night between the two candidates.