American Elephants

“We Tried Our Plan,” Obama Said, “And It Worked!” by The Elephant's Child

87,897,000 Americans are no longer in the work force. Nearly 13 million are officially unemployed. So the Democrats in the Senate narrowly voted (51-48) to raise taxes on 1.2 million small businesses. Senators Joe Lieberman (I-CT) and Jim Webb (D-VA) joined the Republicans in voting against the tax hike, which would likely kill more than 700,000 jobs. Ernst and Young estimates that these small businesses  who pay their taxes as flow-through  businesses employ 54 percent of the private sector work force.

The rule that you just don’t raise taxes in a recession is denied by Democrats who expect to win the election by running against “the rich” and portraying Mitt Romney as unspeakably, disgustingly rich. They hope to impress voters with how thrifty they are by insisting that the rich pay just a little more of their “fair share.”

And if that weren’t enough, the Senate actions would raise the death tax from 35 percent to 55 percent. Democrats try to portray this as the (probably illegally gotten ) gains of people who got rich through no efforts of their own. The rich can usually deal with their wealth with foundations or trusts.  Small businesses and farms often have to sell all or part of the business to pay the death tax. Ruins many, and slows the growth of others. And to top that they would increase the top tax rate on capital gains and dividends from 15% to 20%.

The President recently told a fundraising crowd that his economic plan has been working. “Just like we’ve tried [Republicans’] plan. We tried our plan— and it worked, he said.  To prove that it worked, he cited the auto industry bailouts. “I refused to turn my back on a great industry and American workers,” he said. “Three years later, the American auto industry has come roaring back.”

Obama’s violations of bankruptcy law made the bailout of GM and Chrysler $26.5 billion more expensive than it had to be. Taxpayers stand to lose around $35 billion if GM stock were sold today. GM’s recovery is based, at least in part, on the increasing use of subprime loans.

It is becoming apparent that President Obama will say anything if he thinks it will help him win the election. He is currently running an ad that says he has a plan to “pay down the debt in a balanced way.” He tries to justify his call for a tax increase on the grounds that the increased revenue will reduce the deficit. Obama belatedly — July 27 — complied with the law that requires that he submit a budget every year no later than July 16. Senator Jeff Sessions said:

His updated budget proposes a $10.6 trillion increase in gross debt through 2022, with debt remaining permanently above 100 percent of GDP. The picture in the out-years looks even bleaker. No change is proposed to our dangerously unsustainable debt course.

The President’s claim his tax hikes are for deficit reduction is shown to be false as well. His budget proposes to spend $46.2 trillion over ten years—an increase of nearly one-and-half trillion dollars above the current law baseline and a 57 percent increase above today’s spending levels. The President’s $1.8 trillion tax increase is not used to reduce the deficit but to fund this massive increase above what we are currently planning to spend.

His economic plan has been working? The only president who combined tax cuts and spending cuts as policy was Ronald Reagan, and that brought us  a twenty year-long economic boom. This wasn’t the worst recession since the Great Depression, as Obama has constantly claimed. But instead of correctly addressing the downturn, the administration turned at once to a huge, unfunded, unworkable  government-sponsored health insurance program that nobody wants. Layer on a huge financial bill that strangles business, and does not address the factors that caused the recession, and add on a war on fossil fuels with an attempt to replace them with two ancient technologies hampered by the same drawbacks that made them only mildly useful centuries ago. It didn’t have to be this way, and we didn’t have to be in such disastrous straits.  His plan has been working?

Fortunately, Obama’s plan will not pass the House.

(click to enlarge)

This is the President’s economic plan.

3 Comments so far
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This didn’t have to be the worst recession since the great depression.


Comment by hey_sherm



Comment by The Elephant's Child

Hey, Obama wanted a legacy…


Comment by Lon Mead

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