Every republican discussion on the economy ends up with promises of tax cuts coupled with an attack on democrats for raising taxes.
The Obama's usual answer of "we only raise taxes on the wealthy and 95% of households will get tax breaks" misses a big point, because it follows an old and in my view innacurate understanding of how middle class swing voters vote on taxes.  The conventional view is that these voters vote against their own economic interest based on other issues.

I think it's more accurate to say that many of these voters do vote based on their economic interests.  It's just that they buy the Republican explanation of lower taxes for the everybody, including the wealthy creates their jobs and higher taxes for the wealthy may lead to the voters losing their jobs.  So why woud they vote to get a $2000 credit on taxes if it means they risk losing their jobs?

These voters need to be convinced that Obama's position of giving tax cuts only to the middle class and not raising it on the wealthy/corporations if there is a recession, or raising it back to Clinton's level if there is no recession will actually stimulate economic growth, in a responsible way considering the budget deficit.

And to prove this, you only need to look at the stimulus checks mailed this year which in fact boosted growth beyond expectations.  Who got the stimulus?  The middle class.  Who didn't get it?  The wealthy.  And everybody, including McCain agrees it worked.
But isn't a tax cut targeted at the middle class just another way of giving a stimulus check to them, albeit in smaller increments in their paychecks instead of a big check in the mail?

This is the tax policy that works, because it puts money in the hands of the consumers, which purchase from businesses, which then make more profits and hire more people.  That's how tax policy should work to help everybody, including even the rich (the trickle up theory), rather than giving it to the rich and hope it trickles down, which does not work, and even if it works, favors the rich disproportionally.

I think Obama driving this point in a debate will work very well. It's a truer and much better explanation of why his tax plan is better at creating jobs and spurring economic growth.  The standard democrat talking point of "vote for me because I will give you money in forms of tax credit" just gets attacked as a job killer wealth redistribution scheme by the republicans and whether we like it or not, a good portion of swing voters will agree with that. 

I don't mean throw a hissy fit but somebody portrayed you as wanting to teach sex to 6 year olds before teaching them to read!
The most you can come up with is "I will hit back hard on the issues"?  It makes you look guilty just by not fighting back hard.  Relying on the press to call out McCain will not do it.  Yes, they are finally starting to do their job but it will die down soon enough and only the trully well informed are paying attention to that.  The rest have gotten the message from the ad and saw you not really addressing it and will draw their conclusions.
How about some indignation?  Don't go in the mud with them but do show your indignation.  People will support you on this, even those that may not like you.
McCain was on the view where he was called out on this lie and he stood by it.
How about some:
You all have heard about or seen the McCain ad where he accuses me of wanting to teach sex to kidergardeners before teaching them how to read.  This is one of, if not the lowest form of gutter political ads I have seen.  It is outrageous for Senator McCain to suggest that I, a father of 2 small children, along with all the other senators who worked on this bill, want to teach sex to 6 year olds.  We supported this bill to help children (yes 6 year old children) and their families fight against child predators.  For 6 year olds, it would be things a 6 year old can understand, such as "if a stranger touches your private parts, talk to mommy about it."  How can senator McCain use this to get a political advantage and try to scare voters into thinking I want to teach their children sex?  I never thought something like this could come from Senator McCain's camp, but it has.  John, do you stand by this ad with your name on it? Whatever happened to the civil politics based on the issues?  Whatever happened to honorable campaigns?  Changing Washington starts by changing how you get to Washigton, but even by the old Washington standards, this is intolerable.

The way the McCain campaign is framing the earmarks questions and how the Obama campaign is answering it is not very benificial to Obama.  Here is how it is argued at present:
McCain:  Earmarks are evil/corrupt, I have fought against them all my life, I will eliminate them and that's the change I will bring to Washington.  Plus I have a reformer in Sarah Palin to help me, she killed the bridge to nowhere.
Obama: But Palin herself is a big user of earmarks, she supported the bridge to nowhere, you guys are being hyppocritcal.
McCain: Ha!  Who are you to talk about earmarks.  You requested almost $1 Billion.
Framed like this, McCain's message is more powerfull.  Most of his critics are busy attacking Sarah Palin, drowning out Obama's message. 

As stated here, about $18 billion is spent each year on earmarks, compared to a budget of over $3 trillion and a deficit exceeding $400 billion.  Yes, eliminating earmarks would be great but will do little to change anything.
 
I think Obama's response to this should be to hammer on a few points:
1. McCain thinks small.  Facing a $400 billion deficit, his central message is eliminate $18 billion.  He doesn't get it.  Obama is addressing the big things, wages, jobs, fairness in taxes, the huge deficit.
2. Even in his small thinking, as a crusader against earmarks, he chose a VP who requested the biggest earmark per capita of anybody. This shows a lack of judgement on his part.  Like hiring the fox to guard the henhouse.
3. Facing the $400 billion deficit, he wants to continue spending $10 billion is Iraq, open ended, keep tax breaks to the wealthiest, etc.  
Then he can keep going in his normal eoconomic plan talking points.

I think this allows him to keep the focus on McCain's judgement in picking Palin, vs direct attack against her, blunt criticism against his own earmark requests, and attack McCain on one of his biggest strength (crusader against earmarks).

As I said in my other post, the other thing he should attack McCain on is by showing that while McCain was once a maverick, he is now towing the Bush/Cheney line.

Let's face it, they have won this round.  And they were helped by the kind of attacks leveled at Palin, however justified or unjustified.  The attacks have elevated her and diminished Obama, fairly or unfairly.

So stop attacking Palin herself.  The bridge to nowhere may seem tantalizing and clear cut but it's not resonating.  Whoever is predisposed to liking Palin will not turn against her because of that, just like whoever is predisposed to like Obama will not turn against him because he asked for $900 million in earmarks.  People who like them discount these things as "that's what politicians have to do".  All it does is turn voter who were already against them further against them.  Same for the other stuff.

Attack McCain on his strengths (his I am a maverick going against my party line)  There is a lot to go after here and democrats need to do what republicans do, which is repeat it over and over and over again at every chance, interview, ad that they can.

List the things McCain claims make him a maverick and show how he was whipped back in line by the right wing faction.  Repeat over and over how he now says he will not vote for his own immigration bill to cater to the right wing.  How he opposed the Bush tax cuts maverick move) but now supports them to cater to the right wing (no longer maverick).  How he opposed overturning Roe v Wade (maverick move) but now supports it to cater to the right wing (no longer maverick). How he considered Joe Leiberman (maverick move) but chose Sarah Palin to cater to the right wing (no longer maverick).  Voter will not buy he was never a maverick.  If dems argue this, they lose creditbility and the other part of the message will not go through.  They should ackowledge he tried to be one, but show he went back against this to cater to the right wing.  This is what Bush also did, promising to be bi-partisan (saying he has done it in TX), no nation building, fiscally responsible but then had to cater to right wing and go against each of these promises.  We don't want the same thing to happen again!

Democrats need to hammer on this over and over and after 4 or 5 weeks of hammering on this, he will no longer be the maverick for the swing voters.

Keep attacking on the no substance, no talk about issues by McCain.  This line is working for Obama.

Lastly, on Palin, the only thing to do now is wait for the interviews and debates and hope she shows her lack of knowledge on issues.  If she doesn't, LEAVE HER ALONE.  Otherwise, you are lowering the bar she needs to clear on this by attacking her constantly, and just like the convention, if she then gives 1 or 2 semi decent interviews and parrots talking points at the debate, she will be acclaimed as a great success again who proved her "vicious" critics wrong and will have much less pressure to give any more interviews after the debate.

It's clear by now that McCain made a hasty and rushed vetting and decision to pick Sarah Palin.  I always thought his choice would depend on who Obama chose.  If Obama chose Hillary, he would go with experience and try to portray the dems ticket as dangerously inexperienced.  But since Obama chose Biden, he saw his chance and took a big gamble on it.  But I think he had Palin in mind for a while and was waiting to see what Obama would do before deciding on her.
Regardless on when he decided to choose her though, how he handled the annoucement is cynically logical, and dare I say, may even be brilliant. 
Because, once he knows it's Palin, (and he knew about the pregnancy, troopergate, AIP ties etc.) what is his number one priority?  It's not keeping this secret, he knows it will come out.  His number one priority is to keep her away from any interviews where she might trip and show her lack of knowledge until they fully cram all their talking points into her and she can reliably parrot them.  The crucial thing is not to let her divulge her real opinions (or lack of) and show how unprepared she is. 
If in the meantime the media gets in a frenzy and some inapropriate things are mentioned, all the better, they can push back hard, blame the media, create sympathy for Palin and have the perfect stage set for her to deliver a scripted speech (that they wrote), in front of a friendly audience, and create an excellent first impression.
The stage is set for her and the McCain campaign now for her to deliver a great speech, get all positive press coverage, sympathy for being "unfairly attacked" all this time and finally responding and showing who she "really is".
If she is able to parrot talking points rigidly, they can successfully camouflage her unpreparedness.  Hopefully, the media will not accept this and probe deeper with thoughtfull questioning (ala Tim Russert).

It's clear by now that McCain made a hasty and rushed vetting and decision to pick Sarah Palin.  I always thought his choice would depend on who Obama chose.  If Obama chose Hillary, he would go with experience and try to portray the dems ticket as dangerously inexperienced.  But since Obama chose Biden, he saw his chance and took a big gamble on it.  But I think he had Palin in mind for a while and was waiting to see what Obama would do before deciding on her.
Regardless on when he decided to choose her though, how he handled the annoucement is cynically logical, and dare I say, may even be brilliant. 
Because, once he knows it's Palin, (and he knew about the pregnancy, troopergate, AIP ties etc.) what is his number one priority?  It's not keeping this secret, he knows it will come out.  His number one priority is to keep her away from any interviews where she might trip and show her lack of knowledge until they fully cram all their talking points into her and she can reliably parrot them.  The crucial thing is not to let her divulge her real opinions (or lack of) and show how unprepared she is. 
If in the meantime the media gets in a frenzy and some inapropriate things are mentioned, all the better, they can push back hard, blame the media, create sympathy for Palin and have the perfect stage set for her to deliver a scripted speech (that they wrote), in front of a friendly audience, and create an excellent first impression.
The stage is set for her and the McCain campaign now for her to deliver a great speech, get all positive press coverage, sympathy for being "unfairly attacked" all this time and finally responding and showing who she "really is".
If she is able to parrot talking points rigidly, they can successfully camouflage her unpreparedness.  Hopefully, the media will not accept this and probe deeper with thoughtfull questioning (ala Tim Russert).

With the latest uproar on the comments of Geraldine Ferraro, it is interesting to look at it compared to the uproar that came from the Clinton camp and Clinton supported when Chris Matthews made his comments on the reason Hillary Clinton is where she is now.  If you recall, he basically said in so many words that the reason she is successfull now is because she was cheated on by her husband.  Now a lot of people took offence to that and rightly claimed it diminishes her accomplishements.  They denouced and hounded NBC/MSNBC until they got their apology.  I wonder what Ferraro thought or said about that episode.
But how can these same people who cried fould so loudly over Matthews comment not denounce just as loudly the comments by Ferraro that diminish Obama's other accomplishements and basically makes the same argument as Matthews that Obama's success is mainly due to his race?  Am I off base here or are not the parallels striking?
If I just substitute race with sex and racism with sexism, there is no difference between the two.  So if the Clinton camp feels so wronged by Matthews argument, they should have no problem understanding how wrong Gerraro's arguments are.
And If Geraldine Ferraro felt Chris Matthews statements were bad, she should have no problem understanding her own statements are also very bad.  I wish somebody would ask her what she thought of Matthews statements.