Presidential candidates like to appear to be doing something in response to a crisis, even if they actually don't have a clue as to what to do. Of course the real point is to fool the media so they will tell the public that you are doing something. Yesterday the score was John McCain 1, Media 0. Senator McCain proposed temporarily waiving the rule for tax sheltered retirement accounts that requires that they begin withdrawing money at age 70 1/2. McCain argued that with the market badly depressed, this could force people to sell stocks at a large loss. This is so considerate of Senator McCain. Except, it probably would not help a single person in the country. The rule requires that people begin making withdrawals at age 70 1/2. They don't have to close their account completely, they only have to withdraw 4 percent in the first year. Most people always carry a mix of assets in their retirement accounts and usually begin to move away from stocks as they approach retirement. They is probably not a single person in the country who is age 70 and has a retirement account invested entirely in stocks. In other words, there is probably no one who is being forced by the current law to sell stock at a loss in order to meet the withdrawal requirement. So, Senator McCain has come up with a proposal that would help absolutely no one (it will allow wealthy individuals to protect more of their money from ever being taxed). But, the main point is that he got some good press, not that he actually has a useful proposal.
--Dean Baker