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US rivals trade blows on economy US rivals trade blows on economy
(40 minutes later)
The US presidential hopefuls have set out their economic policies in a debate dominated by the financial crisis and differences over foreign policy.The US presidential hopefuls have set out their economic policies in a debate dominated by the financial crisis and differences over foreign policy.
Barack Obama said more must be done to help the middle classes and that John McCain's tax cuts would aid the rich.Barack Obama said more must be done to help the middle classes and that John McCain's tax cuts would aid the rich.
Mr McCain presented a plan for the US Treasury to buy up "bad" mortgages and said Mr Obama wanted to raise taxes.Mr McCain presented a plan for the US Treasury to buy up "bad" mortgages and said Mr Obama wanted to raise taxes.
He accused his rival of lacking the judgement to lead in Iraq. Mr Obama questioned Mr McCain's temperament. Two polls taken immediately after the debate - by CBS News and CNN - both judged Senator Obama the winner.
Although both candidates sought to appear at ease on the stage in Nashville, Tennessee - greeting each other with a smile and handshake - some signs of the tensions between them emerged.Although both candidates sought to appear at ease on the stage in Nashville, Tennessee - greeting each other with a smile and handshake - some signs of the tensions between them emerged.
However, despite days of rancour and increasingly personal attacks leading up to the debate, there were no real fireworks.However, despite days of rancour and increasingly personal attacks leading up to the debate, there were no real fireworks.
"Until we stabilise home values in America, we're never going to start turning around and creating jobs and fixing our economy," said Mr McCain, the Republican presidential candidate.
No disasters for either candidate but Obama edges it - I cannot see how the McCain performance enthuses the middle ground McCain v Obama: As it happenedNo disasters for either candidate but Obama edges it - I cannot see how the McCain performance enthuses the middle ground McCain v Obama: As it happened
Mr McCain's proposal that the government buy up $300bn of bad debt to help homeowners goes some way beyond what has been offered by the $700bn rescue plan recently agreed by Congress.
The Republican candidate said: "Is it expensive? Yes. But we all know, my friends, until we stabilise home values in America, we're never going to start turning around and creating jobs and fixing our economy."
The Arizona senator stressed his own record of working with politicians of both parties to achieve reform and his readiness to challenge his own party if necessary.The Arizona senator stressed his own record of working with politicians of both parties to achieve reform and his readiness to challenge his own party if necessary.
"Mr Obama has never taken on the leaders of his own party on a single issue," he said. "Let's look at our records as well as our rhetoric." He also accused Mr Obama, the Democratic candidate, of having one of the most liberal spending records in the US Senate.
He also accused Mr Obama of having one of the most liberal, big spending records in the US Senate. Mr Obama countered that the current crisis was a result of the "failed economic policies of the last eight years", led by President George W Bush and backed by Mr McCain.
Mr Obama said the current crisis was a result of the failed policies of the past eight years, led by President George W Bush and backed by Mr McCain.
The political process in Washington would have to change to prioritise the interests of ordinary Americans and ensure they were able to remain in their homes, he said.The political process in Washington would have to change to prioritise the interests of ordinary Americans and ensure they were able to remain in their homes, he said.
'Wrong on Iraq''Wrong on Iraq'
The second presidential debate, taking place less than a month before the 4 November election, generated intense interest among the public. The town hall-style presidential debate, taking place less than a month before the 4 November election, generated intense interest among the public.
More than six million people e-mailed questions to the moderator, NBC news presenter Tom Brokaw, who presided over the town hall-style debate. The moderator, NBC news presenter Tom Brokaw, picked from questions e-mailed in by more than 6m members of the public and put forward by the studio audience of about 80 uncommitted voters.
Mr Obama would bring our troops home with defeat and I would bring them home with honour John McCain The shifting election battlegroundCrucial debateSend us your commentsMr Obama would bring our troops home with defeat and I would bring them home with honour John McCain The shifting election battlegroundCrucial debateSend us your comments
He selected a handful of e-mailed questions, as well as about a dozen from the studio audience of 80 uncommitted voters, on domestic and foreign policy.
Asked whether the economic crisis would affect the ability of the US to act as a "peacemaker" in the world, Mr Obama said no country could maintain the same military influence while its economy was in decline.Asked whether the economic crisis would affect the ability of the US to act as a "peacemaker" in the world, Mr Obama said no country could maintain the same military influence while its economy was in decline.
He said the foreign policy approach of the Bush administration, supported by Mr McCain, had made it harder for the US to address conflicts such as in Darfur because it had lost the support of international allies.He said the foreign policy approach of the Bush administration, supported by Mr McCain, had made it harder for the US to address conflicts such as in Darfur because it had lost the support of international allies.
The Illinois senator also said the US had made a bad decision going into Iraq when al-Qaeda leader Osama Bin Laden remained at large.The Illinois senator also said the US had made a bad decision going into Iraq when al-Qaeda leader Osama Bin Laden remained at large.
Mr McCain said Mr Obama had been wrong to oppose the "surge" policy of sending extra troops to Iraq and accused him of lacking the knowledge and judgement to be commander-in-chief.Mr McCain said Mr Obama had been wrong to oppose the "surge" policy of sending extra troops to Iraq and accused him of lacking the knowledge and judgement to be commander-in-chief.
Speaking of his rival's Iraq withdrawal policy, he said: "Mr Obama would bring our troops home with defeat and I would bring them home with honour."Speaking of his rival's Iraq withdrawal policy, he said: "Mr Obama would bring our troops home with defeat and I would bring them home with honour."
On Russia, Mr McCain said Mr Obama had been "wrong about Russia when it committed aggression against Georgia".
He also accused Mr Obama of having foolishly said he would carry out a cross-border raid from Afghanistan into Pakistan in pursuit of the Taleban.
Presidential candidates on whether Russia is an 'evil empire'Presidential candidates on whether Russia is an 'evil empire'
On Russia, Mr McCain said it had shown "aggressive behaviour" in neighbouring Georgia and that Prime Minister Vladimir Putin now had Ukraine in his sights. Quoting former US President Theodore Roosevelt, Mr McCain said the commander-in-chief should "talk softly, but carry a big stick".
Questioned about the possible threat posed by Iran, Mr McCain highlighted the need to safeguard Israel. "We can never allow a second Holocaust to take place," he said. However, Mr Obama challenged Mr McCain's claim to exercise sound judgement on foreign policy issues.
"We cannot allow Iran to get a nuclear weapon. It would be a game-changer," Mr Obama said. "This is a guy who sang 'bomb, bomb, bomb Iran', who called for the annihilation of North Korea - that I don't think is an example of speaking softly," Mr Obama said.
He said the US would never take the military option off the table but that it must use all the tools at its disposal, including trade and economic sanctions. He said the US would never take the military option off the table in dealing with Iran and its nuclear programme, but that Washington must use all the tools at its disposal, including economic sanctions.
He said it was important for the US to hold direct talks with Iran to deliver a "tough message" that it must change its ways or "face the consequences".He said it was important for the US to hold direct talks with Iran to deliver a "tough message" that it must change its ways or "face the consequences".
Asked about environmental issues, Mr McCain spoke of having disagreed strongly with the Bush administration over the need to act on global warming. Asked about environmental issues, Mr McCain spoke of having disagreed strongly with the Bush administration over the need to act on global warming and gave his backing to nuclear power.
He said he supported nuclear power as a safe, clean way to produce energy that would also create hundreds of thousands of jobs.
Mr Obama said cutting emissions and investment in developing alternative sources of energy was a matter of national security as well as an environmental priority.Mr Obama said cutting emissions and investment in developing alternative sources of energy was a matter of national security as well as an environmental priority.
Character assaultsCharacter assaults
Recent opinion polls have shown Mr Obama taking a widening lead.Recent opinion polls have shown Mr Obama taking a widening lead.
The latest Gallup daily tracking poll puts Mr Obama at 50% and Mr McCain at 42%, while a new CNN poll put Mr Obama ahead by 53% to 45%.The latest Gallup daily tracking poll puts Mr Obama at 50% and Mr McCain at 42%, while a new CNN poll put Mr Obama ahead by 53% to 45%.
In recent days both camps have launched fresh assaults on the character of their opponent.In recent days both camps have launched fresh assaults on the character of their opponent.
The McCain team has focused on Mr Obama's relationship with Bill Ayers, who belonged to a US militant group that opposed the Vietnam War.The McCain team has focused on Mr Obama's relationship with Bill Ayers, who belonged to a US militant group that opposed the Vietnam War.
The Obama team has highlighted Mr McCain's connections to Arizona tycoon Charles Keating, who was convicted of securities fraud 20 years ago.The Obama team has highlighted Mr McCain's connections to Arizona tycoon Charles Keating, who was convicted of securities fraud 20 years ago.