As stock markets plunge, US candidates duel over way out

WASHINGTON - As the financial crisis erodes the retirement nest eggs of millions of Americans, the US Republican and Democratic presidential nominees battled Tuesday over how to get out of the mess.

By (DPA)

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Published: Wed 8 Oct 2008, 11:55 AM

Last updated: Sun 5 Apr 2015, 2:14 PM

But despite a turn to nasty attacks in the waning weeks of the White House race, Senator John McCain, 72, the centre-right Republican, and Senator Barack Obama, 47, the centre-left Democrat, remained mostly civil during the 90-minute debate at Belmont Universiy in Nashville, Tennessee.

And even as they sparred, the two men agreed that billionaire investor Warren Buffett would be a strong candidate for secretary of the treasury if either was elected. Buffett has been a strong supporter of Obama's.

Elections are November 4.

Questions submitted by the 80 noncommitted voters seated around the nominees and others online showed how heavy the finance crisis is weighing on voters' minds.

The issue has overshadowed the wars in Iraq and Afghanistan, the nuclear conflict with Iran and the traditional US cultural issues of abortion and same-sex marriage.

Obama's rise in the polls is strongly attributed to his strength on the financial issue, but on Tuesday night, McCain scored points by wading into the audience and telling a questioner he had gone "to the heart of America's worries tonight."

"Americans are angry, they're upset, and they're a little fearful. It's our job to fix the problem," he said.

McCain said if elected president, he would order an immediate government buy-up of the bad home loan mortgages at the heart of the global financial meltdown and renegotiation to accommodate plunging home values.

"Until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy," McCain said. "And we've got to give some trust and confidence back to America."

The 700-billion-dollar finance industry rescue plan approved last week has failed to stop the free-fall of global stock markets.

The idea of directly negotiating with homeowners was discussed during two weeks of tense negotiations over the plan, but US Treasury Secretary Henry Paulson insisted it would not free up the stalled flow of credit needed to keep the economy going.

Obama said the bail-out was only the first step on the road back to stability, and insisted that the next step is giving tax relief to the middle class, which he said has borne the brunt of stagnant income and rising prices during the eight years under US President George W Bush.

The global meltdown was "a final verdict on the failed economic policies of the last eight years," Obama said.

He was "confident" about the US economy, but said it was essential that high-income earners, above 250,000 dollars a year, not receive the tax breaks favoured by McCain.

"It's important for the president to set a tone that all of us are going to contribute, all of us are going to have to make sacrifices," Obama said.

He said Washington needed to coordinate with other countries to set out regulations for the "21st century financial markets" to prevent such crises in the future.

McCain said the key to economic recovery was stabilization of home prices and showing confidence in American workers who he said are the "best in the world."

The nominees skirmished over health insurance coverage, a vital issue to 45 million Americans who lack medical plans.

McCain said he believed health insurance was a "responsibility" of the government andemployers, but which type of policy should not be mandated. He also proposed a 5,000-dollar tax credit to families so they can go out on the market and buy what they want. The amount is less than half of what average family plans cost, Obama has noted.

Obama stated that health insurance is a "right," and would make coverage mandatory for children and accessible for the uninsured. He noted that even the US Chamber of Commerce, usually a strong advocate of government deregulation and free-market practices, opposed McCain's plan because it would speed up the erosion of employer-sponsored health insurance plans.

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