Obama also has new economic plans (via Marginal Revulution):
— for the next two years, give businesses a $3,000 income-tax credit for each new full-time employee they hire above the number in their current workforce;
— allow savers with tax-favored Individual Retirement Accounts and 401(k)’s to withdraw 15 percent of those retirement savings, up to a maximum of $10,000, without paying a tax penalty as the law currently requires for withdrawals before age 59 and a half;
— bar financial institutions that take advantage of the Treasury’s rescue plan from foreclosing on the mortgages of any homeowners who are making “good-faith efforts” to make payments;
— direct the Treasury and the Federal Reserve to create a temporary facility for loans to state and local governments, similar to the Fed’s new arrangement to loan corporations money by buying their commercial paper, which are the I.O.U.s that help businesses with daily operating expenses like payrolls.
This is no better than McCain’s new proposals. The tax credit for hiring won’t induce anyone to hire workers they don’t need. There may be some marginal effect. I don’t see any advantage in allowing workers to tap their retirement accounts without penalty. If the worker got himself in financial trouble, he should pay a penalty. Maybe if he does, he won’t get in this situation again. Slowing down the foreclosure process just extends our pain, as I’ve mentioned before. And who decides what constitutes a “good faith effort”? As for lending money to states, why should Floridians, for instance, pay for the profligacy of California politicians?