What’s at stake:
The nation’s falling economic prosperity has caused Americans’ comfort levels to go into a tailspin. The crisis has become the No. 1 issue in the presidential election and will most likely remain a top concern until Tuesday.
“Almost nothing could change the kind of feeling people have had in the last three weeks in the next two,” said Jim Riddlesperger, professor of political science.
The next administration will have the responsibility to make changes to economic policy and reform the financial sector.
“I think that if things don’t settle down a bit more, we may need some sort of further stimulus in terms of spending and/or tax reductions. And I think the next president is likely to do something like that,” said Neeley school associate professor Ira A. Silver.
With the banking crisis comes problems for the economy that will not disappear quickly. Because of the fear factor, consumers are spending less and clutching their savings. This means less money into the markets, less profit for businesses and less available jobs to go around.
Consumers, in general, will feel the main drawbacks of the economic illness, Silver said. Declines in wealth, housing, stock market and retirement funds are the symptoms.
However, college students in particular won’t be immune. Loans will be harder to come by, but the students graduating in the next two years are the ones Silver said will see a difficult job market.
“Unemployment tends to continue moving up even after the economy turns around because businesses are not quick to rehire and start expanding until they are very confident that the economy is going to continue growing,” Silver said.
Obama proposes tax increases for wealthier couples and individuals and tax cuts for people making less than 200,000 in order to compensate for the payroll tax, according to his campaign’s Web site.
“I want to end the tax breaks for companies that are shipping jobs overseas and provide a tax credit for every company that’s creating a job right here in America. Let’s help families right away by providing them a tax cut – a middle-class tax cut for people making less than $200,000,” Obama said in the third presidential debate Oct. 15.
Obama’s plan would incorporate capital gains tax and Social Security tax increases, buying mortgages and maintaining the current corporate taxes, according to Kiplinger’s Personal Finance magazine.
McCain plans to keep the tax rates at their current levels in order to allow entrepreneurs to continue to create jobs and maintain job security, according to his campaign’s Web site. He also wants to cut the corporate tax rate.
“Why would you want to increase anybody’s taxes right now? Why would you want to do that when we have such a tough time, when these small business people, like Joe the plumber, are going to create jobs, unless you take that money from him and spread the wealth around? We’re not going to do that in my administration,” McCain said in the third presidential debate on Oct. 15.
McCain’s economic plan would also include keeping the capital gains tax and Social Security taxes at their current levels, providing relief for banks by buying mortgages and lowering the corporate taxes.