Saturday, September 27, 2008

McCain Goes Palinesque: Fiscal <> Financial

Over at Obsidian Wings, hilzoy points out that McCain doesn't seem to know the difference between fiscal and financial (debate transcript):

"Lehrer: Are there fundamental differences between your approach and Senator Obama's approach to what you would do as president to lead this country out of the financial crisis?

McCain: Well, the first thing we have to do is get spending under control in Washington. It's completely out of control."
[hilzoy:] But that's really, deeply, totally wrong. When you're going into a recession, let alone a depression, you want to get more money into the hands of people who will spend it, lend it, or in some other way help the economy get back on its feet. It's the last time to be wondering how to cut spending.
Hilzoy is right that slashing spending now is a stupid idea, but more fundamentally, this is a crisis in the private financial markets ("financial"), not a crisis of the federal government's budget ("fiscal"). It is, I grant, a financial crisis that will quickly become a fiscal crisis if (a) the "solution" is to clean out the treasury to give welfare payments to Wall Street and/or (b) the "solution" is so poorly conceived as to throw the economy into deeper trouble, in which case government revenues can be expected to decline.

McCain is truly Palinesque in his misunderstanding of what's going on if he actually thinks that reducing federal spending holds promise for solving the problems in the financial markets.

And was anyone else annoyed with this?
LEHRER: Gentlemen, at this very moment tonight, where do you stand on the financial recovery plan?
Which plan would that be, Jim Lehrer? Again and again in the debate's opening moments, Lehrer spoke as though there is a single bailout plan under discussion, when in fact there are at least two plans on offer, and each is subject to continuing negotiation and modification. Asinine.

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