November 29, 2012
The Balanced Approach BS
Two things about Obama's famous "balanced approach" to paying down the debt. First, there's not a soul on the planet who believes there will be any pay-down while Obama is in office. The national debt is projected to reach $20 billion at the end of his next term — up $4.4 trillion from the end of this one.
Trilion dollar deficits are in store for each of the next four years, and Obama's only solution is "asking the wealthiest Americans to pay a little bit more in taxes." We have to combine cuts with revenue, he used to say. But now Obama wants to raise taxes this year, then talk about spending cuts next year.
So spending restraint is out. As is usual with Obama's promises — closing Guantanamo, keeping unemployment below 8%, the list goes on — a promise to address spending cuts next year will have its expiration date.
That leaves only tax hikes to fill in the budget hole. So, how's that going to work? Well, how did it work in England?
In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.
This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.
The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.
It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.
Can there be much hope that things will be different here? Even if we actually get the revenue that Obama's tax hike on the wealthy is calculated to produce, it will only give us enough money to run the government for about week. Eight and a half days, actually. The greater likelihood is that raising taxes in the way he proposes won't raise the revenue Democrats say it will, and it may not raise any revenue at all.
Obama's re-election has immunized him from accountability for our dismal economic growth. His place in history is secure. Left leaning media and academia will glorify Barack Obama no matter what happens. He doesn't need the economy to get better.
Obama's insistance on tax hikes, and now his plan to skip the part where we cut spending, are calculated to be unpalatable for House Republicans. It's part of a political bet. Since a recession is coming anyway, everything will be aimed at focusing blame for it on the Republicans.So let's let him have his due. I'm with Ann Coulter on this one. Repubicans should give in on taxes. Let's see how the Obama plan works.
Republicans have got to make Obama own the economy.
They should spend from now until the end of the congressional calendar reading aloud from Thomas Sowell, Richard Epstein, John Lott and Milton Friedman and explaining why Obama's high tax, massive regulation agenda spells doom for the nation.
Then some Republicans can say: We think this is a bad idea, but Obama won the election and the media are poised to blame us for whatever happens next, so let's give his plan a whirl and see how the country likes it.
Republicans need to get absolute, 100 percent intellectual clarity on who bears responsibility for the next big recession. It is more important to win back the Senate in two years than it is to save the Democrats from their own idiotic tax plan. Unless Republicans give them an out, Democrats won't be able to hide from what they've done.
Even Democrats might back away from that deal.
Give Obama his tax hikes. Then we'll see the true balance in Obama's BS.
Posted by Tom Bowler at 09:30 AM | Permalink
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