JOHN W. McCAIN'S ECONOMIC DELUSIONS

In this homage to Van Dyke, Rinaldo sits in for everyday Americans and Armida and her friends... well you know who they are and what they want

Earlier today we examined the delusions of NRSC chairman John Ensign. I didn't mean to imply that Ensign is the only Republican suffering from this kind of dementia. In an interview to air tonight on Money & Politics, John McCain said "you could make an argument that there's been great progress economically" over the past seven years. And even the most cursory look at McCain's careless and clueless attempts to make voters think he gives a hoot about the economy-- beyond what bombs and planes cost-- will show that he and Ensign are walking the same thin line between the real world and a world of make believe, where John Sununu gets re-elected and voodoo economics makes everybody rich.

McCain's financial agenda-- to keep the Bush Economic Miracle on course-- is the blueprint for a Depression. Anyone who doesn't realize he is Hoover to Bush's Coolidge deserves what could be headed their way.

There's not only McCain's support for making Bush's tax cuts permanent. Most outrageous is McCain's plan to cut the corporate income tax rate, from 35 percent to 25 percent. What you won't read in today's coverage of McCain's proposal is that, according to a 2004 Government Accountability Office study, 61% of American corporations, including 39% of large companies, paid no corporate income taxes between 1996 and 2000. Last year, corporations shouldered just 14.4% of the total US tax burden, compared with about 50% in 1940. And McCain wants to give these corporations a break?
 
It gets even worse. A study from the nonprofit group Citizens for Tax Justice found that, because of loopholes, the corporate tax burden in the US is actually the world's third lowest when measured as a percentage of gross domestic product. McCain did promise to remove the tax loopholes that he described as "inconsistent with a free-market economy," but he offered absolutely no specifics.

And Grandpa's Gas Tax Folly isn't fooling many people either. "It's one of those ideas that sounds good but would turn out to be a disaster for the nation's highway system."

With fuel prices approaching $3.50 a gallon, the "gas-tax holiday" that Senator McCain floated at Carnegie Mellon University in Pittsburgh as a means of easing the burden on taxpayers was a political ploy. He knew it would get the attention of voters because Americans are desperate for relief from high fuel prices.
 
In his fourth term in the U.S. Senate, Senator McCain has to know that this is not the answer for economic revival. Instead, it is a recipe for infrastructure neglect.
 
The federal gas tax is 18.4 cents per gallon; the tax on diesel fuel is 24.4 cents. The federal Highway Trust Fund would be $11 billion short if the price of a gallon of fuel was reduced by those amounts between Memorial Day and Labor Day. That's money dedicated almost exclusively to building and maintaining highways, with a portion going to mass transit.
 
So while consumer pain would be eased a little, traveling on the nation's roads would be much more bumpy in the future. The tax, which hasn't been raised in 14 years, also pays for repairing and maintaining highway bridges, which nationwide are rapidly deteriorating.

But, like McCain said, he's just trying to bomb some countries and doesn't know-- or care-- squat about the economy. He brags, condescendingly, that he can hire "people" to do that. Well, if Carly Fioina, the disastrously failed head of Hewlett Packard, now one of McCain's chief economic advisors, is an example of what we can expect, we'll soon be looking back at the Bush years wistfully as a time of abundance and prosperity.

Fiorina has been one of corporate America's loudist evangelists for sending America jobs overseas. She thinks's it's a great way for corporations to save money. After all, why pay someone a decent middle class salary when you can pay some poor slob in China or India slave wages?

Last week I went to visit the Center For American Progress in DC. I was relieved to meet so many smart people working on solutions to problems I know politicians can barely comprehend,. You'd never find a greed-obsessed hack like Fiorina working there. They do, however have a swell video of her explaining the experience she has had which McCain decided qualifies her to come up with some kind of a vision of McCain Economics-- what DWT has come to know as the "Get Those Damned Kids Off My Lawn Economic Plan." The clip shows her in Milwaukee yesterday-- McCain a few feet away-- explaining how she kept billions of dollars overseas to avoid U.S. taxes.

While Fiorina was leading HP, the company aggressively exploited offshore tax planning. The company held more than $14 billion overseas in 2004, according to the Washington Post, reducing its tax rate from 35 percent to 12 percent. At the time, Fiorina was a prominent defender of the offshoring of American jobs –- or, as she called it, “right-shoring.”

Now she is advising Sen. John McCain, who has refused to support the elimination of incentives to invest overseas. He even voted against an amendment to require companies to pay taxes on money they earn from foreign-made products sold in the U.S.

The bottom line: While proposing $175 billion in corporate tax cuts, McCain would continue to allow CEOs focused on the bottom line to invest overseas, rather than at home. The result is lower wages and a higher share of the tax burden for American workers.

UPDATE: BARACK OBAMA TAKES ON McCAIN'S VOODOO ECONOMICS IN ERIE, PA

"Only someone who has spent two decades in Washington could make a statement as disconnected from the hard times that people are facing all across America. Only somebody whose campaign is run by Washington lobbyists could think we're making great progress while so many Americans are struggling."