John McCain has this to say on interest rates:
He called on the mortgage lenders to "pledge to do everything possible to keep families in their homes and businesses growing," citing the example of General Motors Corp. -- which offered no-interest financing to its customers after Sept. 11, 2001.
"We need a similar response by the mortgage lenders," McCain said. "They've been asking the government to help them out. I'm now calling upon them to help their customers, and their nation. It's time to help American families."
Of course mortgage lenders are different from GMAC in that unlike GMAC, they don't actually sell anything. GM is making profit simply by selling cars, so they don't need to make money on the financing to get some return. Mortgage lenders usually depend on the interest to make their money.
I have argued before against the obsession with lower interest rates. The attractiveness of lower interest rates is understandable, though. Clearly low interest rates provide economic stimulus, which our economy needs. But low interest rates also drive up inflation, which is one thing hurting our economy (see this story about worldwide rise in food prices). What we need is to encourage the profitability of business while not devaluing the currency. How do we do this?
We actually need to increase interest rates. We can also reduce or eliminate the tax on personal 
savings. These policies will help wring out inflation from the economy while encouraging people to save. We also need to control government debt, in the news today with more horrific reports on the solvency, or lack thereof, of Social Security and Medicare. Sound policy on these matters includes raising the retirement age, giving an option of private accounts for Social Security, and considering means testing for Medicare.
We also need tax reform beyond the tax on savings rates mentioned above. The United States has one of the highest corporate tax rates in the world. We should help corporate profitability by dramatically reducing that rate. That also reduces the incentive for corporations to send funds overseas to nations such as Ireland that already have low or no corporate tax. Obviously moving to a simpler tax code for individuals would increase compliance and transparency. I am for a flat tax for this reason.
Economic growth must now be tied to energy policy. We should be expanding our own supplies of oil by expanding off-shore and ANWR drilling. We can also reduce obstacles to building new refineries and pipelines. We also need to build new nuclear plants. That's on the supply side. On the demand side, we should grant tax incentives toward the production and purchase of hybrid vehicles. While acknowledging the burden it places on the automobile industry, in the long run we are better off raising our fuel efficiency standards.
Many of these policies are supported by McCain; some are not. But economic growth depends on this kind of comprehensive approach.
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