The Last Debate: What Happens Now and What Happens Next

There's a French saying about how "nothing lasts as long as the provisional." That's worth keeping in mind for tonight's final presidential debate between Barack Obama and John McCain. The government's ad hoc response to the global financial crisis has dramatically increased its role in the economy – and one of these two men will inherit that role in a few months. It would be nice to know what they intend to do with it.

Both candidates have put out revised economic plans in the past few days. As you watch the debate, we'd suggest you keep in mind one thing that often gets glossed over: we're facing both short-term and long-term problems with the economy. Politicians often mix these up in their speeches, but you shouldn't, because they're not the same thing.

The short term problem is, of course, how to stem the financial crisis and at least temper the recession that's likely to follow. Everyone agrees that the U.S. government has leaped into the financial markets with both feet to stop the crisis. Everyone also says the latest plan to inject money into major banks, in effect partially nationalizing them, is a short-term response. But nobody knows how long the "short-term" is. That's forgivable to some extent, because Washington is trying everything it can think of to stem a fast-moving crisis. But figuring out how much of this provisional response becomes permanent will fall to the next president, and we deserve to know what these two candidates are thinking.

The long-term problem is how we ensure a good economy, where there are enough jobs to go around, the economy grows, and people have a chance to get ahead. Some of the trends in this area are good – the long-running growth in worker productivity, for example – and some not so good, like the widening gap between rich and poor. We need to get through this crisis, but we also have to work on the fundamentals. It's the difference between what happens now and what happens next.

The government's own financial means are going to be strained. New figures show the deficit has swollen, as anticipated, and the long-term budget picture isn't that great either. So far we've had very little public debate over how we're going to pay for trying to fix the economy. Realistically, that means the government's going to borrow the money, increasing the national debt.

Granted, in the long run the bailouts could actually bring revenue to the government. The mortgage debt and bank assets will be worth something when the government eventually sells them. In the short-term, however, the federal budget will take a financial hit, and the next president will probably want to do more. McCain says he wants to spend another $52.5 billion, mostly for additional tax cuts, while Obama want to spend $60 billion on tax cuts and public works projects to create jobs.

There are clear alternatives here, drastically different visions for the U.S. economy. Are we abandoning the free market? How much government intervention is enough? How much can the government realistically do? This final debate is being portrayed as the last chance to really change the outcome of the race, and the media will also focus on attacks and "gaffes."

But more importantly, it's the last chance voters have to really compare these two candidates on these fundamental economic questions. Our Voter's Survival Kit lays out some of the options available, with the pros and cons of each – including the cons that politicians are generally loathe to admit. We deserve to have answers to these basic questions before voting, because we're going to be living with the answers for years to come.