« Dem triumph could elevate Kerry to Foreign Affairs Chairman | Sarkozy calls Obama Iran stance 'immature' »
PrintOctober 28, 2008
The Obama Economy
So far as I can tell, no one has ever figured out how to simultaneously grow an economy and reduce the gap between rich and poor. When economies grow, the poor get richer and the rich get richer, but the rich get richer faster because they make more investments. When economies shrink the opposite happens: the poor get poorer, but the rich get poorer faster as they watch their investments shrivel.
So if a President wanted to, say, "spread the wealth around" or "redistribute the wealth" he'd find himself faced with a stark choice. Is he prepared to cause a recession, or even a depression, in order to achieve this goal?
Because I believe that's the only way to achieve it.
How does this impact our current Presidential contest?
Barack Obama has proposed to do two things that will give us an idea as to which way he wants to go on the question of whether to grow the economy or spread the wealth.
He has proposed a "tax-the-rich and give 95% of us a tax rebate" policy. Anyone paying attention already knows that 40% of the country doesn't pay any Federal Income tax, so they would get a government hand-out. A check in the mail. A "rebate" for taxes they never paid and never would have paid. A chicken in every pot.
If it sounds like the promise of a politician unconcerned with the truth that's because it is.
Obama has also proposed to let the Bush tax cuts of 2001 expire. He hasn't said it as many times as he has promised not to raise taxes on 95% of the country, but it remains part of his written platform. If this happens taxes will rise for 100% of all Americans who pay taxes. Some people who didn't earn enough to pay taxes in 2008 will suddenly find themselves bearing some of the burden again.
Meanwhile, the poorest people will still get their welfare, ahem, I mean "rebate" check.
Why is it Obama can say with a straight face that he will cut taxes for 95% when he'll actually raise taxes for 100%? Because the Bush tax cuts were enacted by a Republican administration. To the Democratic Party leadership, they lack legitimacy. They don't count as something that really happened. And when they expire, it just means things are returning to normal. The dark days are over, and we get to start over from where the Democrats (under Bill Clinton) left off.
Ergo, raising your taxes doesn't actually count as raising your taxes.
What will happen when taxes go up? Obama will turn a recession into a depression that might last 3 years, until somebody gets elected to rescue the country from him.
Will the Democratic Party see a recession, or a depression, as a bad thing? Not if their goal is to "spread the wealth around". A recession or a depression will result in a reduction of the gap between rich and poor. They will have achieved their objective, and in the process they can press forward on their agenda to de-legitimize not only the last 8 years of the Bush presidency, but to de-legitimize all economy policy begun since the time of Ronald Reagan.
Take us back to the days of malaise under Jimmy Carter.
I kid you not. This is where we're going if Obama gets elected.
Unless he's smarter than he looks, and "spreading the wealth around" is as much of a lie as giving 95% of us a tax break is. If he really wants the economy to grow, all he has to do is leave the Bush tax cuts alone. Recognize that Republican presidents are legitimate, and their policies aren't perpetually and permanently harmful.
Is that so hard for a Democrat to do?
Jim Lion
Los Angeles
Jim Lion
Los Angeles
