Economic Policy

Among other differences, Obama and McCain both seem to have rather different ideas when it comes to Economic Policy. McCain pushes for lower taxes and a limited role of the government (one that stands on your side, not in your way). Obama, on the other hand, is taking a social policy approach: rebuild infrastructure and invest in energy technology.
Today, the “fundamental problem” in the real economy referred to in this article is that people have been treating rising asset prices as a substitute for personal savings. In other words, in the past, people had been relying on the rising value of their homes or increasing value of their stocks instead of setting aside extra income. Since asset prices have not been rising much lately, people will need more savings for retirement or in case of emergency.
This underlying “structural deficiency” has caused three secondary problems to become more apparent. First, the aging population in America is growing. A large population is about to enter the years during which they have expected to spend their retirement savings. Since more savings are now needed, the transition may take longer than expected. The current credit crisis is a second problem that the American economy is facing. Banks are trying to raise more capital and lend out fewer loans, but that does not mean that capital is being allocated efficiently. Thirdly, the American economy will undergo some shifts, from consumption to investment, due to lower consumer spending. This may be beneficial in the long-run, but in the short-run it translates to lost jobs and costly readjustments. If people begin saving more, this will have an effect on consumption (it will decrease in the short-run).
The article suggests that policymakers should focus on regulatory reform that is forward-looking, avoiding further fiscal stimulus in the form of tax rebates, which will push consumers to spend, rather than save. This will only bolster the economy in the short-run, postponing needed adjustments..
Back to McCain v. Obama...which plan is better? who's right? McCain proposes to increase regulation for financial markets, extend tax cuts on individuals, and cut the corporate rate. Obama, on the other hand, plans to invest in infrastructure development and energy technology. He also plans to extend tax cuts, but only for people making less than $250,000 and certain interest groups like students, seniors, mortgage owners, and low-income workers, and savers. Obama would raise the capital gains tax and some corporate taxes. There are striking differences in the way the two candidates would apportion the tax burden: people earning more than $1 million would pay $58,000 less in taxes than they do now under McCain, but $247,000 more in taxes under Obama. Both candidates plan to cut taxes, which the article warns against. Obama, on the other hand, does plan on investing in energy markets, which the article suggests would be beneficial. With each candidate, it's estimated that about $4 trillion will be added to the national debt. Neither candidate can claim to be a budget balancer.