Tuesday, February 19, 2008

McCain and the Fed

John McCain, presumptive nominee of the Republican party, has said that he doesn't understand economics and in this interview with Bloomberg, he proves it.

Feb. 17 (Bloomberg) -- Republican presidential candidate John McCain said Federal Reserve Chairman Ben S. Bernanke should have been quicker to cut interest rates to try to avert a recession.

``I personally would have liked to have seen those rate cuts earlier,'' McCain said today on ABC's ``This Week with George Stephanopoulos.'' ``That doesn't mean I want him fired, it doesn't mean I've lost confidence,'' McCain said.

I don't know how many times I have to repeat this but the cure for excessive credit is not more credit. While that may seem apparent to the average person, politicians (and the Fed for that matter) just don't seem to get it.

McCain does go on to say some things I agree with:

He said Bush allowed $35 billion in funding for pet projects, called earmarks, to be included in the budget over the last two year, money McCain said he would have cut.

McCain also pledged not to raise taxes if elected.

``No new taxes,'' McCain said. ``I could see an argument, if our economy continues to deteriorate, for lower interest rates, lower tax rates, and certainly decreasing corporate tax rates, which are the second-highest in the world.''

McCain said he also supports reducing government spending.

``Spending restraint is why our base is not energized,'' he said. ``Spending restraint is why we are having to borrow money from China.''

I'd love to see some spending restraint and lower taxes, especially corporate taxes. Unfortunately, I think the odds of that are pretty low, no matter who is elected.

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