As expected, most of the debate was centered on the economy and how the war on terror, taxes and spending will affect the economy.
The truth is that whoever becomes the next president, they will have to both raise taxes and massively cut spending in every major department of the government. Sen. McCain seemed like he has begun to realize this when he said he will cut spending in many programs and start by freezing all but a few government department budgets.
Sen. McCain also addressed the allure of Obama’s tax plan to increase the taxes on the wealthy, which would include small business owners. Sen. McCain pointed out that in the global economy, if taxes are higher in one nation than in another, business owners simply relocate to the nation with the lower taxes – taking the jobs with them.
When Obama was asked what he would cut because of the ensuing financial meltdown, he didn't name one department or item that he would cut. It doesn’t really matter what they say they are going to do, because I'm convinced that the next president will have to drastically cut all government programs by as much as 50% for several years while at least holding taxes at their current rate and in some cases raising them.
The $700 billion proposed Paulson bailout is just the tip of the iceberg that has started to melt. The government will probably need $2-3 trillion dollars before the meltdown is over and these bailouts will only cause further melting for years to come. I would rather see the stock market drop 40-50% in one day, then to see our currency lose much of its value through inflation over several years. That is the trade off there. It's not like the proposed bailout is going to solve the problem. Its just going to delay it, which means its going to take longer for rebuild the economy.
Perhaps the biggest problem with the bailout is that it will destroy the global confidence in the dollar, which will be next to impossible to get back. Once foreign investors lose faith in the dollar as the strongest currency in the world, it will take decades of strong economic policy to restore and that is not something that will come easy. Most of our politicians don't understand that 'strong economic policy' means.
Overall I thought the first presidential debate was very good. Both Senators showed lots of personality and gave lots of information about their positions.