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What is wrong with President Obama's Thinking?

President Obama at 60 Minutes tells us how we are going to pay for the Stimulus package, by taxing the rich/small business.  (emphasis mine)
PRESIDENT OBAMA: That's how much it would cost over the course of ten years. To give us an extra tax break. Or does it make sense to say to us, "You know what? After the first $250,000, your tax rates are gonna go back to what they were under Bill Clinton." When, by the way, rich people were doing pretty well.

Sometimes I think this debate gets framed as if I think rich people, folks who are doing well, should be punished.

KROFT: Well, I . . .

PRESIDENT OBAMA: Part of what America's all about is going out there and getting rich. And, you know, if you make a good product, you provide a good service, God bless you. I want you to do well. Then you can plow that money back into creating jobs. And building your businesses. That's terrific. What I don't think makes sense is for us to borrow $700 billion to pay for that. And we don't have the money. I mean, everybody's already talking about our debt and our deficit. Why would we want to add to it?
Right Mr. President why would we ever consider adding to the debt.  Why did you sign the Stimulus (ARRA) into law if you knew you were going to have to raise taxes on small business to pay for it?  If you think of taxation as punishment than knowing the tax increase later would be needed to pay for it, you are in fact stating that the rich should be punished.  I still do not get how we are raising taxes right now.  We are still struggling to grow as a nation right now, or did I miss a memo with some funky numbers in there?  Not only are we fighting inflation, but the FED is pushing inflation.  Take a look at how inflation is calculated since Greenspan was in office and you will understand that we are already over 5% inflation because of the replacement mechanism used in the calculations.  I really wish someone with access to Bernanke would force him to read some Hazlitt.  I’ll settle for a skimming of Friedman.  The President pushes spending bills to balloon the government payroll then demands we use taxes on small business and so-called rich people to pay for them.  Meanwhile the FED starts printing money to push down the value of the dollar and driving up costs.  When the FED completes QE2 the value of the greenback will be significantly less than today AND businesses will have to raise prices which will in turn cause small businesses to create more revenue with less profits.  Why is that important?  Because a small business is usually filed in a tax bracket over $250,000!!!  So what does this all mean.  Apparently small business is getting squeezed.  Big Government gets bigger.  Big Business is too big to fail.  The Rich move their money oversees.  The poor become poorer.  The middle class becomes poor because the greenback is worth-less.  Even with Republicans in control of the House, the damage has been done and it will literally take an Act of Congress to fix things. 
The solution? Institute two pieces of legislation to take effect immediately.
                1: The Balanced budget amendment.
                2: The FairTax (also called a consumption tax).
The effect of these two items will have the following.  1: The Federal Government will be required to balance the budget each fiscal year and thus not have to spend billions of dollars in interest each year.  2: No longer will politicians and elected/appointed officials be able to play favorites with the tax code and every person will be on equal footing.  Additionally the FairTax has the advantage of removing the disincentive to stay within a certain tax bracket.  If the government wants the economy to grow, one central theme must be taken away from people; benefits for unproductiveness (laziness).