Stunning

Economically, these are scary times:

In a dramatic move on the evening of Tuesday September 16th the Federal Reserve agreed to provide American International Group with a loan of $85 billion to help it stave off bankruptcy. …

They may have had no choice. Markets did not completely fall apart after Lehman’s bankruptcy, as some had feared, but they were highly agitated. … Officials worried that the collapse of AIG, with its $1 trillion balance sheet and operations in 130 countries, could send the financial system into a tailspin. (emphasis added)

Let me put in a plug for the Government of Canada. Back in 1995, Prime Minister Jean Chrétien decided to do something about Canada’s enormous perennial deficit and cumulative debt. Chrétien and his Minister of Finance, Paul Martin, made significant spending cuts and reduced federal transfers to the provinces. The results weren’t always pretty — I still consider the gutting of the (un)employment insurance program to be indefensible — but those austerity measures put Canada on a relatively secure economic foundation. (Not to say that Canadians aren’t vulnerable during the current crisis.)

By contrast, the Bush administration increased the USA’s debt by $32 trillion.

President Bush has made a mockery of fiscal “conservatism”. And John McCain continues the Republican fixation on tax cuts, primarily for the rich.

Obama’s plan is looking increasingly unachievable, too, but at least he targets the middle class with his tax relief. McCain lies persistently about Obama’s plan.

If you want to understand who would benefit from the candidates’ tax proposals, take a quick look at the graph here. More generally, Obama gives an accessible, bullet-point summary of his economic policies in a two-minute video, which you can view on Ben Smith’s blog.

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