Something We Can All Look Forward To
President Obama announces His Budget Plan and the Stock Market Craters
President Obama got his $800 billion stimulus package off the launching pad and now we eagerly await the massive stimulus to come when people start seeing their taxes reduced in April by $8-$16 per week. Stand back, the crowds could be euphoric and out of control.
With the ink barely dry on that package, President Obama rolls out the next attack on future generations of Americans. His plan calls for the addition of debt so staggering that it may destroy the U.S. economy. How long before the additional interest on the national debt starts growing so fast that we cannot pay it, let alone the principal? In his budget he plans to add half a trillion to the national debt every year, and all of this is with some very rosy forecasts of 5% and 6% GDP growth. Will someone please tell the rookie, that when you slam the most productive earners with more taxes, they tend to react by producing less.
“The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.”
The Reagan policies produced 25 years of unprecedented growth. So the inexperienced President Obama is going to undo this because…? The Democrats love to point to the economy during the Clinton years, but you have to look a bit more closely. During the first two years of the Clinton’s time in office the economy was basically flat. The economy didn’t really start moving until 1995. What coincided with that? Oh, yeah, the Republicans took control of Congress. Taxes were cut and the economy took off like a rocket.
If you look at the term of George W. Bush, after 9/11 and the recession he inherited, he again cut taxes and the economy took off. The stock market didn’t start it’s downward spiral until about six months into 2007. What coincided with that? Oh, yeah, the Democrats took control of Congress. Coincidence? You decide.
So now we have the new president deciding to trash the policies that have successfully grown the economy under Reagan, Clinton, and Bush. At the same time he is going to saddle future generations with massive debt on top of a looming Social Security and Medicare bill coming due.
I consider myself an optimist, but for the first time in my life I am actually fearful that one man could destroy the U.S. economy in his first 100 days and rush this in under the guise of an emergency, where there is no debate, no time to read what is getting put into law, just slam it in and trust the the most inexperienced president in the last century that it will be all right. Do you feel better now?
Can We Dump this Canard Over the Side?
More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years.
This economic inequality hogwash is dishonesty at it’s peak. The so-called economic inequality is a sign of the success of the economy. Think about it, the economy has a floor but not a ceiling. That is, your income cannot go below zero, but there is no limit to how high it can grow. So as incomes rise higher and higher, yes, they are going to move further from zero. This is like saying that air travel is worse today than when the Wright Brothers flew because planes fly higher now than they did in 1903! So let’s pass a law that says airplanes can’t fly higher than 2,000 feet so we don’t have a great inequality in altitudes.
There is nothing stopping anyone from having that high income if they work hard, use their talents, and succeed. America is not about punishing the successful. Many who start out at the bottom move up. Many who came here as immigrants start at the bottom. If the Democrats want to improve the numbers, let them control the illegal immigration that is probably inflating the numbers on the bottom. Let’s stop turning success into failure. How many people would like to be like Bill Gates? How many people think America would be better off if we were all like Willy Loman?
The Big Flameout
The Productive Ones Set Sail to More Favorable Tax Climates
Let’s suppose for a moment that the stimulus works and the economy takes off. With what President Obama has in the works, and the massive taxes that he plans to impose on the top earners, and the carbon taxes he plans to levy on businesses that weill be passed along to the consumers in higher prices (there goes your $8 tax break), and the masive debt he is loading on future generations, the stimulus will soon flameout, and a bigger recession will follow. This time we won’t able to borrow and spend our way out of it. Tax cuts won’t matter because there will be no one earning anything to tax. The wealthy will have packed up and moved to more favorable tax climates and Barack Obama’s historic presidency will have flamed out as well.
