McCain's Economic Package

No economic plan drafted as part of an election campaign can be considered comprehensive, that includes Barack Obama's. John McCain's is particularly pathetic.

McCain's Plan
Suspend rules forcing seniors to liquidate a portion of the retirement accounts annually: Looks like a good idea. The major beneficiaries will go to those people wealthy enough to be able to just sit on their assets for a few years. It won't help most retirees who have to liquidate part of their retirement periodically to pay for food and home heating.
Reduce taxes on seniors making mandatory withdrawals from IRAs and 401(k)s: On the surface this is a good idea. However, it will have little effect on the poorest retirees; most of the benefits will go to wealthy people with massive retirement accounts.
Eliminate taxes on unemployment benefits: Again, on the surface not a bad idea. But, again, the benefits will mostly go to wealthy people who are out of work from six and seven figure jobs. Think of poor Lehman Brothers CEO Richard Fuld.
Reduce taxes on long-term capital gains: Aimed at helping the wealthiest Americans who panicked, sold into the teeth of the crash, and still managed to make a profit.
Guarantee 100% of all bank savings for six months: Effectively already being done by the FDIC. This will only benefit people like the McCains who routinely keep a couple million dollars in their checking accounts.
Purchase and renegotiate everybody's mortgages: I can't quite figure this one out. There is a lot of bad paper out there that was written by unscrupulous mortgage lenders. There are millions of subprime mortgages totally trillions of dollars. It would be a massive program, probably an order of magnitude larger than McCain estimates. Think $3 trillion.

Obama's Plan
Barack Obama has an extensive and detailed plan on his website. It would take a month and more education than I have to analyze it. I will just concentrate on the proposals in his October 13 speech.
Ninety Day moratorium on foreclosures: Call it a tourniquet, if you will. Like FDR's bank holiday when he took office, this will be a cooling off period to let both banks and homeowners come to grips with what the hell is happening.
Allow withdrawals from IRAs and 401(k)s without penalties: This is the polar opposite of McCain's plan.It's a better plan. Rather than relieve a burden from people who don't need the money now, Obama will lift a burden from people struggle to survive today. The downside is that people could eat through their retirement savings too quickly, setting up serious problems later.
Job Creation Tax Credit: This will create an incentive to create new jobs, especially by small businesses. In an economic climate like this keeping old jobs will be hard enough. I doubt this will be very effective but it can't hurt.
Lend to States and Localities: The next shoe to drop will be entire states, counties, and cities going bankrupt. California is dangerously close to insolvency. If this type of assistance isn't offered then states and localities will have to raise local taxes, undoing any good the Federal effort can achieve.

Note: Yes, I know that McCain has an extensive plan, too. I've read it. It is mostly empty platitudes and not worth analysis.

Note #2: Derivatives are the root cause of this mess. There are $1.14 Quadrillion worth of them floating around the world. That is more than 100 times the current federal deficit and more than 16 times the Gross World Product. It's a major pile of shit.