Obama's Spend, Tax and Borrow Policies Will Wreck the U.S. Economy

If Obama's oratory was matched with economic wisdom, leavened with a sound knowledge of economic history, America would have nothing to worry about. Unfortunately Obama is a profoundly ignorant man who shares the statist's contempt for economics, an attitude that will have fearful consequences for the US economy. His ideological mindset is exemplified by his supreme indifference to the state of the markets. The Dow had its worst February since 1933 and, as of this writing, stands at 7,062.93. And this happened after he had given the public another oratorical masterpiece, proving that though you can fool a large number of people for a long time you cannot fool the markets. They listened and then they sold him short.

So what did the markets evidently understand that millions of Americans don't? For starters, his spending package is a monstrous piece of legislation that will do grave damage to the US economy. Furthermore, it is not even a stimulatory program in any meaningful economic sense. It is loaded with pork designed to advance the interests of the Democrats and the country and future generations be damned.

Literary hundreds of thousands of condemnatory words have already been written about Obama's economic incubus. Nevertheless, many more are necessary if Americans are to be made aware of its destructiveness. Obama lied when he said that millions of American will not suffer from the costs of increased taxes because these will be levied on the "rich", those earning $250,000 or more. In fact, there are two lies here. His super rich friends like Buffett and Soros will be able to avoid his taxes. What this means is that his taxes on the so-called rich are really taxes on getting rich. They are taxes on investment and entrepreneurship. Ultimately they are taxes on capital accumulation, the process that raises living standards.

I am forever trying to remind people that it is not governments - and certainly not the likes of Obama and Axelrod - but entrepreneurs that drive growth and it is savings that fuel it. The link between the two is indissoluble, though largely overlooked. Now Obama intends to strangle both through the use of higher taxes, more regulations and vastly increased government spending. This means that those who do not pay federal taxes at the moment will nevertheless pay heavily for his feckless policy of spend, regulate, tax and borrow.

By doubling the tax on capital gains he will be confiscating billions of dollars that were destined for investment. Most people simply do not understand the role that capital gains play in fuelling investment, even though it is investment that increases real wages by raising the ratio of capital to labour which in turn intensifies the demand for labour. (Republicans need to get this fact across to the public). The lower the real demand for labour, the lower real wages will be. But in Obama's left wing universe this is called "fair", even though it does not include his rich pals.

By attacking savings, he reduces the opportunity for entrepreneurship. As venture capital shrinks - thanks to capital gains taxes - so will the number of profitable investments that can be undertaken, regardless of the number of willing entrepreneurs. (This is something that Reagan fully understood).

His cap and trade policy is not just an additional tax on production but a savage attack on capital accumulation. By diverting hundreds of billions of dollars into solar and wind power he will be dissipating capital while simultaneously destroying masses of fixed capital, particularly among energy intensive industries and coal-fuelled power stations. (I am assuming that he is serious about implementing this program.)

His regulatory policy will price coal-fuelled power stations out of business. That's a mass of capital gone for a start. The so-called green alternatives that he intends to subsidise have insurmountable technical and economic inefficiencies that result in massive diseconomies of scale. What this means is that these wind and solar farms suffer from increasing average costs, meaning that the more you produce the greater the unit costs of production will be. The opposite holds for centralised power stations.

Even well informed critics of Obama's crushing energy policy have not grasped the severe damage it would do to the country's production structure. The idea that this could be overcome with subsidies is laughable. Imagine what would happen to aggregate demand once his politically imposed energy costs had devastated production. It would make for a good disaster movie.

Debt must be paid. That's why it's called debt. Governments borrow in order to spend. But when they spend they divert goods from other uses. It follows that the more governments spend the more of a country's resources they divert. This means that companies find themselves having to bid more and more for resources as government spending increases. This would still be the case even if this spending ended up as welfare payments and thereby raised the demand for consumer goods.

As I have already said, capital accumulation is what raises living standards. Only by producing more can we consumer more. But we can only invest by reducing the rate of consumption. In short, to invest means to give up present consumption in favour of greater future consumption. This is precisely what our venture capitalist does when he lends money to an entrepreneur instead of blowing it on another mansion and a score of vintage cars.

As for the debt, it is paid through taxation. Hence a double whammy from Obama's reckless spending binge: higher taxes now and - if Americans are lucky - future living standards that will be lower than they would otherwise have been. If they are unlucky - and this did happen in Argentina - living standards will drop.

The only ones who will be able to defend themselves from Obama's economic depredations will be his super rich friends, most of whom appear to loath America - why else would they support policies that seem guaranteed to bring the country to its knees?

Obama's defenders are utterly adrift for a sensible defence of his assault on the economy. The best they can come up with is the financial crisis. Well as the thuggish Rahm Emmanuel carelessly said:

You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.

Obama and the rest of the power-hungry Democrats and their filthy rich supporters are using the crisis - and there really is a crisis - to try and impose on America irreversible economic policies, the same sort of policies that wrecked the UK economy and ignited riots throughout Europe. Nevertheless, knee-jerk Keynesians and mindless Democrats parrot the line that without this massive spending the economy would sink into a depression.

Point out that these policies have never worked at any time or place, and they will reply that they weren't really tried. For instance, William Cheney, chief economist at Boston's John Hancock Financial, said that Roosevelt's initial policies boosted the economy and that it only regressed after he cut spending. Absolute nonsense. It was Hoover and Roosevelt's policies that kept the US in depression. As for the downturn, he would be referring to the 1937-38 crash that sent unemployment rocketing from 14.3 per cent to 19 per cent.

From the following table we can see that from 1936 to 1937 government spending fell by 2.3 per cent while the index for real manufacturing wages jumped by 10.6 per cent. With factory employment index set at 1936IV=100, Vedder and Galaway found that in the first quarter of 1937 the index stood at 103.6 and hourly money wages at 103. By the second quarter of 1937 the unions had driven the money wage index up to 114.5, an increase of 11.7 per cent, causing the employment index to plunge to 84.9, an 18.1 per cent contraction. (Ibid. 136). No matter which way one looks at the data the link between inverse movements in the unemployment rate and the real wage are inescapable.

Year	GDP bill.	Personal consumption	Consumption as a % of GDP	Jobless	The factory wage*	Government purchases
1934	66.0	51.5	78.1	21.7	111.1	10.5
1935	73.3	55.9	76.3	18.7	111.2	10.9
1936	83.8	62.2	74.2	18.4	110.5	13.1
1937	91.9	66.8	72.7	13.2	117.1	12.8
1938	86.1	64.3	74.7	19.2	122.2	13.8
1939	92.2	67.2	72.9	19.3	121.8	14.8

*These figures were taken from New Deal Policies and the Persistence ofthe Great Depression: A GeneralEquilibrium Analysis by Harold L. Cole and Lee E. Ohanian. Richard K. Vedder and Lowell E. Gallaway used productivity-adjusted wage rates to demonstrated the link between unemployment and wage rates that exceeded productivity, Out of Work, New York University Press, 1997. This book tackles movements in real wages from 1900 to 1989.

One should also note the fact that personal consumption never fell below 72.7 per cent of GDP. So if consumption drives the economy why didn't these consumption rates lift the economy out of the depression? I'll give you a clue. It's business spending that keeps the economy moving, not consumer spending, 'too much' of which can lower living standards!

Obama's massive spending binge is built on a myth - one that could have the severest consequences for American living standards.

---

A number of people have commented on the hypocrisy of Obama and his rich supporters, whose attitude is one of "do as I say and not as I do". Critics do not realise that this is characteristic of leftists. They always exempt themselves from their own strictures. I call this behaviour the Mikoyan syndrome.

Anastas Mikoyan was a communist agitator in oil refineries at Baku Batoum that were owned by an industrialist called Zubalov, Mikoyan led strikes, protests and organised study groups. One can think of him as the pre-Soviet equivalent of a "community organiser". However, once the Soviets grabbed control of the state he took Zubalov's mansion for his own, including the servants, cracked down on strikes, shot protestors, banned study groups that questioned the party's authority and sent their organisers to labour camps. He was justified in doing this because - like today's Democrats - he believed that anyone who challenged the Party was evil or stupid. I regret to say that Mikoyan survived Stalin's purges and died of old age, unlike thousands of his victims.

At the end of the day, Obama is nothing but a highly polished Hugo Chavez with the same corrupt instincts. To him the crisis is an opportunity to plunder Americans and then — with the willing assistance of America's corrupt media — use the loot to effectively turn the US into a one-party state.

Comments

[Jim Hawthorne:]

Political pap.
Are you seriously attempting to peddle the notion that today's economic climate wasn't forged over the last 20 years, with the total and complete 'Finacialization' of our economy?
What nonsense to suggest that at this late date an already wrecked economy didn't exist prior to January, 2009!
Partisan rants may be good for YOUR spleen, but they add NOTHING to the constructive bi-partisan debate that is crucially important for the future of this nation!
Shame on you!

Mar 02 08:48 AM

[a fat panda:]

"By doubling the tax on capital gains he will be confiscating billions of dollars that were destined for investment. " (I think that the stimulus package is stupid as well, but...) capital gains taxes? With the market lower than it was 10 years ago, most people will be worried more about tax loss carry forwards than capital gains.

Mar 02 08:52 AM

[dick streich:]

It's too bad that most Americans don;t realize what is happening. I
hope you are able to spread the word to others so that they can
act intelligently the next time they go to a voting booth.

Mar 02 08:55 AM

[a fat panda:]

It is a political rant, but he didn't say anything about the cause of our problems. He said that spending more isn't the solution. It is almost comical that a country with a capital crisis is talking about putting capital it has into building bike paths. That is stupid beyond words.


On Mar 02 08:48 AM Jim Hawthorne wrote:

> Political pap.
> Are you seriously attempting to peddle the notion that today's economic
> climate wasn't forged over the last 20 years, with the total and
> complete 'Finacialization' of our economy?
> What nonsense to suggest that at this late date an already wrecked
> economy didn't exist prior to January, 2009!
> Partisan rants may be good for YOUR spleen, but they add NOTHING
> to the constructive bi-partisan debate that is crucially important
> for the future of this nation!
> Shame on you!

Mar 02 08:58 AM

[ecliptix543:]

Couldn't have said it better.


On Mar 02 08:48 AM Jim Hawthorne wrote:

> Political pap.
> Are you seriously attempting to peddle the notion that today's economic
> climate wasn't forged over the last 20 years, with the total and
> complete 'Finacialization' of our economy?
> What nonsense to suggest that at this late date an already wrecked
> economy didn't exist prior to January, 2009!
> Partisan rants may be good for YOUR spleen, but they add NOTHING
> to the constructive bi-partisan debate that is crucially important
> for the future of this nation!
> Shame on you!

Mar 02 09:05 AM

[Steve in Gr...:]

Great article Mr. Jackson. Well written and supported by facts.

If Obama isn't stopped by a bi-partisan coalition of centrist Democrats and Republicans, the S&P will go down at least to 600 and maybe to 400.

I'm not hopeful about such a coalition.

Mar 02 10:46 AM

[Chris B:]

Where were all these budget hawks when George W. Bush was tripling the national debt and doubling the federal payroll?

Where were they when Reagan did the exact same thing?

It's like they're part-time fiscal conservatives. When Republicans are in office, it's OK to inflate the debt and spend like drunken sailors, but then when Democrats win, they get to writing about how taxes are going up and socialism must be right around the corner. Meanwhile, the myth that Republicans are for small government is repeated again and again, and people still manage to fall for it. I'll pass on the Kool Aid, thanks.

Mar 02 11:18 AM

[rogersails:]

Dude, the economy is wrecked. Get over it. The only question now is how we reboot. Wish I was smart enough to see the answer. All sides have valid points.

Mar 02 11:19 AM

[User 347440:]

First he critizes the last eight years for their debt binge, then in 30 days, he nearly equals the debt creation of the last eight years. It goes along with no lobbyists in my cabinet, no earmarks in my bills, etc. etc. Just another lying politician saying whatever needs to be said to get elected. This economy is F---ed for sure. They are all blind.

Mar 02 11:47 AM

[Mad Hedge F...:]

All food for thought. The US is turning into Europe. Think high taxes, high unemployment, more government involvement in everything, and much lower growth. That is the message the markets are telling us by retreating to the 6,000 handle, levels not seen since 1996, and down 54% from the peak only 17 months ago. Equity prices are shrinking to multiples in line with a permanently lower long term growth rate of maybe 2%, a shadow of the 5% rate seen for much of this decade. Maybe this is what mature economies are supposed to look like. If you do buy American stocks, only buy the ones that are really foreign stocks with American sounding names. Microsoft (MSFT), Intel (INTC), Oracle, (ORCL), Cisco (CSCO) all get 60%-70% of their profits from overseas where high growth rates have migrated. I think I’ll move to Tahiti and live off of coconuts and freshly speared fish, wearing only a loin cloth.

Mar 02 12:10 PM

[Aj2009:]

His budget is logic and reasonable, but it will hurt so much special interest group.
1. First, shall we agree that government need to do something: when faced with choice of spending or saving, it is quite easy to choose the latter;

2. With large spending and larger deficit, he has to find money from somewhere. If he were king of England, he could confer knightship to the 10 wealthiest people and ask for "donation " in exchange of future power sharing (maybe those people are already powerful enough? We never know how the government contract goes)

If he was a dictator, which is even simpler,well, the history is full of such bloody "wealth" transference

3. I quite agree the tax incentive to the productivity of the whole nation. There should be reward for taking risk moral or not; even I agree he should find money somewhere, his tax issue won''t help encourage business.

4. I wish 20 years later,we shall laugh at our stupidity of today: in such a country one farmer can grow enough food for 40 people, average person has more than 20 clothes and they are still buy more. The supply chain far exceeds the demand so comes the differentiation of the products--and people are quite willing to pay for the higher price, be it laptop; computer;house; or surgery. And now people find they may not need them any more for survival.

5. FDR is often praised as the leader who guide US to its dominance; oh yes; but at a huge price--the whole Europe had been wiped out.
Should we first resort to mass destruction this time and then declare fast growth?
If S&P has down to 500, then to grow at 10% per year will be quite easy.

6. Stop "market to market" maybe a good idea 9 months ago, but now with so much foreclosure ( those with more than 2 houses are quite eager to sell at least one, whether they can afford it or not) you should put a price label there.MMM, how I miss those old days; do you think we can still have $7 for 100 acres ?

7. I am in favor of "green alternatives''. Of course wind, solar, or energy from waste are more costly then oil and electricity; they said something similar when light bulb comes out first. At the moment, we can't talk about scale of economy since it is still early stage.

8. I have to say this disaster is truly self-inflicted. We have no natural disaster; there is no war threat thanks for the invention of H-bomb;no plague,with plenty of cheap oil and other natural resources; yet we still live like hell.
This is really wonderful.

Mar 02 02:38 PM

[Rokjok777:]

Not much discussion of how we got here in the first place, just blame the guy who has been in there for two months. How about a little Republican soul searching, wondering whether Saint Reagan was right? After all he started us on the "free markets can cure everything" path, just get government regs out of the way. Seems to me the US banking business could have used a little good old-fashioned regulatory oversight, it has worked so far in Australia where I moved in 2005, the government never allowed NINJA loans in the first place and the banks are doing fine. They also paid off their external debt which helps in times like these, but no, Dick Cheney told us "deficits don't matter". So before you go finding some other group to blame, have a good honest look in the mirror and think about how we got in this mess in the first place.

Mar 02 02:43 PM

[wdhalgren:]

Thank you, Mr. Jackson.

Mar 02 07:27 PM

[mvd78212:]

The stated aims of the Democrat party in convention at Denver and the Democrat congressional leadership and the Obama administration are to drive the U.S. toward a western European-style democratic socialism that will feature higher taxes, a broader social safety net including significant labor inflexibility resulting in lower full-time employment, limited social and economic mobility, equality of outcomes and a more robust role for the federal government. Instead of curing the economy the so-called stimulus program and the proposed budget are intended to take us nearer to the desired end (Rham Emanuel told us that, “You never want a serious crisis to go to waste.”)



Financial markets are only now beginning to understand that the current risk of financial collapse is far less important than is the prospect of having a low growth economy designed by the intellectual heirs of Saul Alinsky and lower returns on investments forever.

Mar 02 07:38 PM

[Thomas J. G...:]

Let's all guess how many economics classes Obama took. I say less than 3. Now if Geithner can't decide, it's up to him.

Mar 02 07:59 PM

[cannedpawn8:]

mvd78212...right on....everyone gets a piece of the pie....even if they deserve it or not..
Half the people at the Inauguration in DC were there for a handout...not history.

Mar 02 10:28 PM

[Lakertaker:]

First, Presidents do not spend. That's what congress does. President GWB never vetoed a single spending bill from his own party. Many of us did complain at the time. You just didn't hear it. And many of us former Repubs chose not to vote for him because he was assisting in the massive increase in government not sen since LBJ

Now I see Obama's suppoerters make statements like, "you never complained when the GOP under GWB were ringing up high deficits." I thought Obama was going to bring change? i thought a vote for McCain would be Bush's third term?

This is going to get real bad, folks. The first people to turn against this president will be the handout crowd when they discover their gas will not be paid for

Mar 03 07:39 AM

[Smithy:]

Comrade Vladimir Lenin Obama is the most destructive force that has ever hit the American economy ever.
By the time, this communist lunatic is through, the American econonmy would have been damaged beyond repair. Obama is simply nuts.

Mar 03 11:11 AM

[rrbatch:]

Right on Mr. Jackson!!

Dick Morris says Obama has launched "The war on prosperity", and he's correct. Your point is to begin political resistance to Obamanomics if we're to see recovery from the current "malaise" in our lifetimes. Let me list some of the more destructive features of Obamanomics:

1. Bad mouthing the economy and demonizing the "rich" may satisfy the populists, but it's discouraging the private investments that alone can revive a productive economy. Government employment may put bread on a few tables, but it is never "productive".

2. Raising taxes on investors and investments will also discourage new productive contributions. For this reason, raising taxes on the "rich" will most likely reduce government revenues and increase deficits.

3. The "stimulus" act is a fraud. At an average cost of $225,000 for each of 3.5 million jobs "saved or created", we'd do better to just pass out the cash - at least then the recipients would nearly qualify as "rich" and would be taxed accordingly. Little of the $787 billion goes to "our crumbling infrastructure"; rather the bulk of the money goes to public schools (where less than 50% of the workforce actually teach) and to bail out fiscally imprudent state governments.

4. Increasing the government's fiscal deficit to the levels proposed by Obama is the height of irresponsibility. As with the excess of private debt that led to the current crisis, it can only lead to debt repudiation or hyper inflation. The interest on the debt will soon exceed 25% of the federal budget, much of this going to China and the oil sheiks who hold an excess of dollars. If they don't buy at current interest rates, those rates will increase. And as the value of the bonds and the dollar decrease, our necessary imports (like oil) will be more expensive.

5. Obama's energy policy is another fraud, with subsidies for windmills and "clean coal" as "alternate energy". Some 80% of our oil consumption is for transportation, and I have yet to hear of a windmill-powered car or airplane. Practical initiatives to increase domestic production of liquid fuels are totally lacking from the policy. The imposition of "cap and trade" fees on carbon burners will significantly increase costs to both industry and consumers, all to mollify a band of irrational global warming zealots.

6. I look with dread for the outcome of a new "health care" policy. Whatever arrives will doubtless increase costs and incur rationing - a bureaucrat reaching decisions on whether you or I get to live or die. Demonizing the pharmaceutical companies can only result in decreasing incentives to develop new drugs - where the US industry has been responsible for the lion's share of discoveries to the benefit of our lives. I can only hope there will be a successful constitutional challenge to federal usurpation of this area of the economy.

I could go on, but you get the point. I see a long period of stagflation, but worse than the 1970s, if Obamanomics is not stopped. I'll be making my investment decisions and political contributions accordingly.

Mar 03 01:43 PM

[fireball:]

larry, moe and curly see a hole in the boat so they knock another hole in the bottom to let the water out.
all the sheeple bleat obahahamahahah.
who is john galt?

Mar 03 04:37 PM

[devassocx:]

>> they said something similar when light bulb comes out first

I don't think the gov't used tax payer $ to subsidize deployment of light bulbs...it was pure free market forces.


On Mar 02 02:38 PM Aj2009 wrote:

> His budget is logic and reasonable, but it will hurt so much special
> interest group.
> 1. First, shall we agree that government need to do something: when
> faced with choice of spending or saving, it is quite easy to choose
> the latter;
>
> 2. With large spending and larger deficit, he has to find money from
> somewhere. If he were king of England, he could confer knightship
> to the 10 wealthiest people and ask for "donation " in exchange
> of future power sharing (maybe those people are already powerful
> enough? We never know how the government contract goes)
>
> If he was a dictator, which is even simpler,well, the history is
> full of such bloody "wealth" transference
>
> 3. I quite agree the tax incentive to the productivity of the whole
> nation. There should be reward for taking risk moral or not; even
> I agree he should find money somewhere, his tax issue won''t help
> encourage business.
>
> 4. I wish 20 years later,we shall laugh at our stupidity of today:
> in such a country one farmer can grow enough food for 40 people,
> average person has more than 20 clothes and they are still buy more.
> The supply chain far exceeds the demand so comes the differentiation
> of the products--and people are quite willing to pay for the higher
> price, be it laptop; computer;house; or surgery. And now people find
> they may not need them any more for survival.
>
> 5. FDR is often praised as the leader who guide US to its dominance;
> oh yes; but at a huge price--the whole Europe had been wiped out.
>
> Should we first resort to mass destruction this time and then declare
> fast growth?
> If S&P has down to 500, then to grow at 10% per year will be
> quite easy.
>
> 6. Stop "market to market" maybe a good idea 9 months ago, but now
> with so much foreclosure ( those with more than 2 houses are quite
> eager to sell at least one, whether they can afford it or not) you
> should put a price label there.MMM, how I miss those old days; do
> you think we can still have $7 for 100 acres ?
>
> 7. I am in favor of "green alternatives''. Of course wind, solar,
> or energy from waste are more costly then oil and electricity; they
> said something similar when light bulb comes out first. At the moment,
> we can't talk about scale of economy since it is still early stage.
>
>
> 8. I have to say this disaster is truly self-inflicted. We have no
> natural disaster; there is no war threat thanks for the invention
> of H-bomb;no plague,with plenty of cheap oil and other natural resources;
> yet we still live like hell.
> This is really wonderful.
>
>
>
>
>

Mar 03 10:40 PM

[Leftfield:]

Unfortunately, the time of low capital gains taxes have not seen anything but a decline in pay for a majority, masked by phony Wall St. gains, easy debt and phony inflation stats. I regret that this time of unprecedented gains for the top tier produced no leadership worthy of such wealth. This makes it harder to oppose Obama's socialism.

Someone is holding the bonds that are strangling us. That would be the true super rich and the very largest interests and foreign nations. Our confused and dysfunctional nation has been sleepwalking to corporate/government fascism, now with a dose of Euro soclialism.

I read in SA recently that in an Israeli kibbutz, 20% do the work, 80% talk. Many people are wired to be more social, but want the fruits of the work. They have talked this country away from the clear words of the Constitution for a long time. The bad fruits of bad decisions are met with more bad decisions. I believe Jefferson said that if you choose security over liberty you will have neither.

Mar 04 07:06 AM

[milkchaser:]

There is nothing bipartisan about Obama, though.

On Mar 02 08:48 AM Jim Hawthorne wrote:

> Political pap.
...
> Partisan rants may be good for YOUR spleen, but they add NOTHING
> to the constructive bi-partisan debate that is crucially important
> for the future of this nation!

Mar 04 05:16 PM

[milkchaser:]

Your facts are amiss. Bush almost doubled the national debt ($5.675T to $10.025T). Neither he nor Reagan tripled the national debt. However, doubling the national debt is not something to be proud of either.

A major difference: Reagan's budgets were never accepted by the Democratic Congresses of his day, and Bush signed anything the GOP Congresses sent him. In both cases Congress bears the major responsibility for increases in spending. But Bush was by far more profligate. The only time of spending restraint (and even this was just slower growth, not reduction) was from the budgets passed by the 1990s GOP Congresses which Clinton signed. Clinton never agreed to a GOP spending bill without requiring more spending be added in, but he did sign these bills.

Maybe what we need now is split gov't again -- toss out Pelosi and Reid (et al) and put Obama on a spending diet.


On Mar 02 11:18 AM Chris B wrote:

> Where were all these budget hawks when George W. Bush was tripling
> the national debt and doubling the federal payroll?
>
> Where were they when Reagan did the exact same thing?
>
> It's like they're part-time fiscal conservatives. When Republicans
> are in office, it's OK to inflate the debt and spend like drunken
> sailors, but then when Democrats win, they get to writing about how
> taxes are going up and socialism must be right around the corner.
> Meanwhile, the myth that Republicans are for small government is
> repeated again and again, and people still manage to fall for it.
> I'll pass on the Kool Aid, thanks.

Mar 04 05:36 PM

[milkchaser:]

You are absolutely right that the GOP congresses of this decade did not keep spending under control. However, that does not absolve the Democrats from being even more profligate in their spending. If there is any prayer of getting spending under control, it will most likely come from a re-ascendant, chastened GOP. The last fiscally conservative Democrat was Grover Cleveland.


On Mar 02 11:18 AM Chris B wrote:

...
> Meanwhile, the myth that Republicans are for small government is
> repeated again and again, and people still manage to fall for it.

Mar 04 05:41 PM

[milkchaser:]

> I think I’ll move to Tahiti and live off of coconuts and freshly speared
> fish, wearing only a loin cloth.

What exactly do you look like in a loin cloth?

Mar 04 05:43 PM

[milkchaser:]

Bear in mind that the deficits to which Cheney was referring were moderate compared to the whopper Obama and the Dems in Congress just foisted on us.

That said, fiscal conservatives were vocally unhappy about Republican spending earlier this decade. We held our noses and voted Republican fearing that the Democrats would be worse. We were right.

As for regulation, it was Democrats who stopped regulation of Fannie Mae and Freddie Mac. Had they been controlled per the legislation sponsored by McCain and his fellow Republicans, this credit crisis might have been less bad. But that legislation was shot down by mostly Democrats (and a handful of Republicans).

It is ironic that those most responsible for the mess (Dodd & Frank, et al) were given more power and those who tried to stop it (Bush & McCain, et al) were blamed.


On Mar 02 02:43 PM Rokjok777 wrote:

> Not much discussion of how we got here in the first place, just blame
> the guy who has been in there for two months. How about a little
> Republican soul searching, wondering whether Saint Reagan was right?
> After all he started us on the "free markets can cure everything"
> path, just get government regs out of the way. Seems to me the US
> banking business could have used a little good old-fashioned regulatory
> oversight, it has worked so far in Australia where I moved in 2005,
> the government never allowed NINJA loans in the first place and the
> banks are doing fine. They also paid off their external debt which
> helps in times like these, but no, Dick Cheney told us "deficits
> don't matter". So before you go finding some other group to blame,
> have a good honest look in the mirror and think about how we got
> in this mess in the first place.

Mar 04 05:51 PM

[milkchaser:]

Economics classes? How many arithmetic classes did he take? He can't seem to add two numbers and find the correct sum.


On Mar 02 07:59 PM Thomas J. Gordon wrote:

> Let's all guess how many economics classes Obama took. I say less
> than 3. Now if Geithner can't decide, it's up to him.

Mar 04 05:53 PM

[milkchaser:]

I think you will find that average pay has not declined in quite some time. What happened is that the rich got richer and the poor got a little bit richer but not as fast as the rich. Even this is misleading as the group of people who were rich this year was not the exact same group who were rich 10 years ago. And many people who were poor 10 years ago are not nearly as poor today. People move up and down the ladder.


On Mar 04 07:06 AM Leftfield wrote:

> Unfortunately, the time of low capital gains taxes have not seen
> anything but a decline in pay for a majority, masked by phony Wall
> St. gains, easy debt and phony inflation stats.

Mar 04 05:59 PM

[User 369853:]

There’s one more thing to lower the living standard, and hurt the poorest people - eliminate tax benefits for religious charitable organizations that are far more efficient and effective than any Government hand-out bureaucracy.

Mar 04 09:10 PM

[Mr. Ed, Jr.:]

When the only defense of Obama's actions is to say "Hey-- what about what the Republicans did before Obama was elected ?", then there really is no defense.

Obama is in office BECAUSE of what the Republicans did. He promised every 30 seconds that he would change all of that.

What we have gotten is idiotic Republican-like spending -- on steroids. Or crack. Not sure which.

But this situation will likely be corrected next year, when voters-- in an act of self defense-- send Republicans to Congress.

Thanks and another tip of the hat to the Founding Fathers-- this time for the 2 year congressional election cycle.

Mar 17 12:26 AM

[thejoint00:]

YOU are exactly right in noting that more people will be worried about tax loss carry forwards. However capital gains is a form of personal income growth. So while everyone is worried about keeping the money they have right now, these taxes are being designed to keep people from increasing thier personal wealth.

On Mar 02 08:52 AM a fat panda wrote:

> "By doubling the tax on capital gains he will be confiscating billions
> of dollars that were destined for investment. " (I think that the
> stimulus package is stupid as well, but...) capital gains taxes?
> With the market lower than it was 10 years ago, most people will
> be worried more about tax loss carry forwards than capital gains.

Mar 28 05:45 PM