Obama's new Small Biz proposal comes from Kerry's bill introduced in Sept.

[beachmom]

I just love this, as it is a great idea, and shows that Kerry's ideas are going to have resonance with a President Obama:

http://online.wsj.com/article/SB122368108334524797.html?mod=googlenews_wsj

Sen. Obama, campaigning in Chillicothe, Ohio, unveiled a plan to temporarily provide low-interest loans to struggling businesses by using existing structures already in place through the Small Business Administration.

...

Obama campaign officials said the Democratic nominee's proposal wasn't intended to be a dramatic response to collapsing credit markets or to Sen. McCain's recent housing-policy proposal. "It's just another tool in the toolbox," Obama spokeswoman Jen Psaki said.

...

Sen. Obama's lending plan for small businesses was cobbled from similar legislation pending in the Senate. In late September, Sen. John Kerry, chairman of the Small Business and Entrepreneurship Committee, introduced a bill that would treat the financial crisis like a federal disaster, thereby allowing the Small Business Administration to guarantee private low-interest loans to small businesses.

Like Sen. Kerry's bill, Sen. Obama's proposal would temporarily waive closing fees associated with these loans. The Kerry bill seeks $715 million in appropriations, which Sen. Kerry said would generate $25 billion in loan guarantees. Sen. Kerry's bill was shelved while Congress worked on passing the $700 billion rescue plan last week.

It's unclear how much the measure would help. When a similar program was enacted nationally after the Sept. 11, 2001, terrorist attacks, it pumped about $2 billion into local economies, Sen. Kerry's office said.

On Friday, Sen. Kerry expressed support for Sen. Obama's proposal. "It's clear Barack understands the challenges faced by Main Street," he said in an email.

This is really an excellent idea (unlike McCain's that says 70 year olds don't have to withdraw from their 401(k)'s or IRAs during a downturn in the market this year, which does not affect a lot of them), and will directly affect jobs, which small business creates so many of.

[sandnsea]

1. I don't understand that retirement account plan

I would think you would want people to be able to take more of their money this year, not less. Why would it be helpful to anybody to not take money out of their 401K?

[beachmom]

2. Well, if you already have the spending money you need,

then you would rather not withdraw money from 401 (k)'s and IRAs which also creates taxes. This is for more wealthy retirees who don't NEED that money but are forced to start withdrawing when they reach 70. The thing is not all of a person's 401k is in stocks or equities -- people also have them in bonds or money markets. I think it is a gimmick to cater to wealthy Floridians; I doubt it will attract a lot of attention, but we'll see what the reaction is to it from the AARP.

[sandnsea]

3. Keep it in the investments

That would seem to help all the investment vehicles the most. If retirees don't take their money out, then that keeps more money in the money markets, etc.

Most people have their retirement set up for minimum taxation as it is. They've already calculated how the 5% figures into their annual income and taxes. The ones who don't, have a lot more money to worry about than retirement accounts.

I still think it would help more to let people take out some money without penalty, to let people buy the things that they can't currently get credit for.

[beachmom]

4. The law at this time dictates that when you reach the age of 70 (or 70 1/2) you HAVE

to redeem X amount of funds from 401ks and IRAs. I agree with you that it is bad to redeem if you don't have to, but the law requires that they do. Basically, it is because these funds have been tax free, and Uncle Sam wants those deferred taxes. McCain's plan delays that requirement for one year. I say it is a gimmick because most retirees don't have that kind of money and have already been withdrawing from 401ks and IRAs already.

I was just watching several news programs that said part of the sell off this week was because people are redeeming their mutual funds, and so the mutual funds HAVE to sell in order to get the cash to process those redemptions. Basically, people are panicking.

[sandnsea]

6. Yes, I know that

I don't see how not having to take money out helps retirees. As you stated, people are redeeming their mutual funds, they want to redeem their mutual funds, so not redeeming them would seem that he is looking out for the mutual funds, not the retirees.

[karynnj]

5. I agree

plus if all the money is in stocks, if they have to take money out, tey have to cash in stocks at what may well be a low point. So, if you have an alternative, you would not want to do this.