Candidates spar over fix for ailing economy

PHILIPSBURG, Oct 08, 2008 (The Centre Daily Times - McClatchy-Tribune Information Services via COMTEX) -- AIG | Quote | Chart | News | PowerRating -- Hard on the heels of this week's Wall Street upheavals, worries over the nation's economy surged to the front of a 5th Congressional District candidates forum Wednesday.

Centre County Republican Glenn Thompson, Clearfield County Democrat Mark McCracken and Venango County Libertarian Jim Fryman answered questions for 75 minutes -- 15 minutes more than scheduled -- in front of an audience of 50, mostly from the Philipsburg-area business community.

McCracken said the economy is at its "most critical point since 1929" and blamed the Bush administration's "poor fiscal policy" over the last eight years.

"This is a time when we need the federal government to balance the budget, build surpluses and pay down the federal deficit," McCracken said. "We need to straighten this out at the fiscal level."

Thompson said he disagrees with government "bailouts" of financial institutions. The Federal Reserve on Tuesday agreed to an $85 billion bailout that would give the government an ownership stake in the insurance giant American International Group.

Such actions, Thompson said, create unwanted monopolies when the economy's strength lies in the private sector. Fryman said bailouts create irresponsible business practices because company managers "know they can get their money back."

A question about the large and continuing purchase of U.S. securities by Chinese and other foreign government institutions -- and the possibility that they'll cash in the securities -- touched off the edgiest candidate comments.

Thompson called it "the greatest threat to the nation's economy and the nation's security" and added: "It's time for the government to act just like we do with our households" -- living within one's means.

McCracken said that "Bush went to war and did not fund it" but instead used borrowed money from China. Fryman said part of the threat is that foreign institutions want to cash in their U.S. securities because the dollar keeps losing value.

"The Iraq war is eating up money and causing enemies around the world," Fryman said. "We have to get control of our money so these people don't want to turn it in."

Thompson and Fryman called for keeping the tax cuts made by President Bush in 2001 and 2003, while Mc- Cracken said the tax cut should be allowed to expire in 2011.

McCracken repeatedly faulted the "poor fiscal policy in Washington" and referred to unfunded federal mandates as a "coward's" tax increase.

"They cut the taxes at the federal level but they pass the taxes down to the local level," he said.

Thompson said that "our revenue coming in is greater than what it ever has been as a result of those tax cuts."

The federal deficit could be reduced, Thompson said, by eliminating needless regulations that add to costs and by not rehiring to fill federal jobs soon to be vacated by retiring baby boomers.

Fryman added that voters should be wary of elected officials presenting enlarged mock-ups of checks to people.

"Every time you see a politician with a cardboard check, hold onto your wallet," Fryman said. "You're really losing money when you see a cardboard check."

The forum was sponsored by the Moshannon Valley Economic Development Partnership and moderated by the partnership's executive director, Stan LaFuria.

At the start of the forum, LaFuria praised former U.S. Rep. Bud Shuster, R-Bedford, whose district once included Philipsburg and Rush Township, and U.S. Rep. John Peterson, R-Pleasantville, who is retiring after his term expires this year.

"If you needed federal support, Bud was always there for us, and then more recently Congressman Peterson was always very helpful to not only the partnership but to the entire area," LaFuria said. "So we're looking forward to developing a very productive relationship with the winner of this campaign."

Mike Joseph can be reached at 235-3910.

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