We're expecting around 12 inches of snow here at The Manse by the time it all winds down Monday evening. I doubt BeezleBub will have school tomorrow, which means he'll get an additional day on his winter break. It also means he'll have time to use the Official Weekend Pundit Snowblower to get everything cleaned up while I'm at work.
*********While I usually try to spread around the topics when I pen this weekend staple, I can't do that this time around. With the President's address to Congress, the so-called Stimulus Bill, and his proposed budget, I feel the need to comment and link to a number of posts and articles covering those three actions. Normally I wouldn't stick primarily to a single subject, but I've reached the point where I cannot think of anything else.
Many of those I'll be linking to have discovered the same thing I have: Obama hasn't got a clue about how the economy works, nor does it appear that he cares. Neither do his advisors. It appears they're doing everything the can to handcuff just about every area of our economy all in the name of 'recovery'. They haven't learned that for every dollar taken out of the economy, that's one less dollar available to the taxpayers to invest, spend, or save, which is what really 'stimulates' the economy. If they take enough out of the economy it stagnates. By placing even higher burdens on businesses, large and small, there will be little incentive for any of them to expand, to hire new workers. Even if Obama manages to create more jobs, they'll likely be government jobs which, as we know, do nothing but suck up tax dollars, produce nothing, and add nothing to the economy. The same is true for the many 'regulations' Obama wants to put on entire sectors of the economy. All they will do is make it more difficult to do business with little to show for it except to illustrate how much power they have over the very economy they're trying to 'save'.
*********James Lewis of American Thinker tells us how at least one liberal is finally waking up to the fact that Obama is gambling, with the odds against him.
You and I know what an unbelievable series of high-risk gambles Obama is taking with the future of this country. None of the liberals I've talked to so far have the faintest inkling of a smidgen of a notion of even a tiny whiff of an idea. They are so deep in the Obama bag that their frilly knickers are almost covered.If someone like David Broder is scared, then the rest of the liberals should be, too. But will they wake up before it's too late to stop this debacle in the making? If I had to guess, the answer is “no”.
But David Broder, the "Dean" of liberal pundits presiding at the Washington Post itself, has finally caught on. Mr. Broder has the shakes over Obama's O-dacity. Good news! Here's one liberal who is in touch with reality, and he's scared out of his wits.
(H/T Maggie's Farm)
*********Larry Kudlow certainly understands how Obama is dismantling our economy by declaring war on the very institutions that drive it - “investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.”
Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obama’s left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spending program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years.There are plenty examples, both present day and in history, that show how Obama's economic plan will do nothing but weaken the economy, stifle growth, while making the American economy even less competitive. All one needs to do is look at France to see how well their economy is doing, for that is where Obama is driving this nation. France has a chronically high unemployment rate (employers cannot easily lay of workers they no longer need, so they are reluctant to hire workers they may not be able to shed if the economy tanks), the unions have considerable control of the economy (we're always hearing about nationwide strikes by truckers, railroad workers, civil servants, and others), and their health care system is falling apart (it's not as bad as Canada's or the UK's, but it's getting there).
Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more. Obama is doing it wrong on both counts.
We really don't want to go there.
*********I get the impression that Obama is counting on the altruism of the American taxpayers to willingly give more to the government. Counting on it is a grave error. People are altruistic when they can afford to be, but it isn't something anyone should count on. Marxists always tried to foster altruism in order to support their ideology, but they failed miserably. That's one reason why the Soviet Union failed, because one thing the Marxists failed to understand about Marx was that he believed man would come to communism by evolution, not by revolution and coercion.
In this case Obama is trying hard to ignore the power of incentives. Positive incentives can produce more economic growth. Negative incentives can produce economic contraction.
One area where he's ignoring incentives: charitable donations.
Under the president's proposal, joint filers making more than $250,000 a year would only recoup 28% of the value of qualified deductions, rather than higher percentages laid out under current law.But anyone with an understanding of incentives knows that this change in the tax code will have the effect of decreasing charitable donations, which in turn will decrease the revenues collected because that money will go someplace else that garners a better deduction. It's another example of the Law of Unintended Consequences.
That could mean a couple in the 35% tax bracket who once could have recouped $3,500 of a $10,000 donation to a charity would now recoup only $2,800.
The White House estimates the change would generate about $318 billion over 10 years.
Speaking of unintended consequences, a perfect example of taxes having the opposite effect from the one intended is the so-called “luxury tax” placed on luxury cars, planes, and boats back in 1990. It was thought it would be a good way to tax the rich. But what happened is the market for those luxury goods dried up, causing a loss of jobs and very little in the way of tax revenue.
We'll be proving that one again, but on a broader front if Obama gets his way.
(H/T Betsy's Page)
*********An opinion piece in the WSJ Online Journal debunks the “2% Illusion”, where by increasing income taxes on the top 2% of income earners will somehow be able to pay for the trillions of dollars of Obama's stimulus package and proposed budget.
President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime."So where is he going to get the rest of the money he needs in order to spend our children's future? From the rest of us, of course. He won't be able to keep his promise to cut taxes to the middle class because he'll need the revenue. He'll also have to place an even heavier burden on businesses, particularly small businesses. How can any of this help the economy? It can't. It will merely cause a greater retrenchment in the economy because no one will be able to afford buying anything that would help grow the economy. Everyone will be on an austerity budget.
This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. Income.
Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.
Is this merely the first step down a slippery slope that will lead us to the nightmare of Atlas Shrugged?
Unless the insanity is stopped now, bet on it.
*********One of the more interesting comments to the above post I found on the WSJ forum defined the problem Obama, the Dems, and many of the liberals appear to have in regards to the economy, and particularly money.
I guess the 52% of the people who voted for [Obama] have magical thinking, also. Who creates wealth? Why, it comes about by magic. Where will it come from if there's no incentive to create it if it's confiscated? Why, somehow somebody will be there creating it. Magical thinking rules the day over there in the Land of Washington.That's right folks, money comes from magic!
Somehow this sounds more likely an explanation of how Obama and the Congressional Democrats plan to pay for all this spending.
*********One thing Obama and the Democrats won't be able to blame on former President George Bush: the deficit.
Says Bob Krumm:
Ordinarily, from January to September of a new President’s first year, the government lives under the budget of his predecessor. That isn’t the case this year. Last fall the Democratic-controlled Congress refused to act on President Bush’s 2009 budget proposal, gambling that by delaying ratification of the budget until the new year, they would also have the Presidency and could write the budget exactly the way they wanted: without any Republican interference.And if the Congressional Republicans can distance themselves from this budget debacle, voting against it as a block in the House and the Senate, they'll have given themselves the mantle of being fiscally responsible, unlike their Democrat colleagues. This might be the best chance the GOP will have to regain seats in both chambers in the 2010 mid-term elections.
It worked out for them like they planned. However, the 2009 budget may be a case of “be careful what you wish for.” Barack Obama and the Democrats now own the 2009 budget. Every bit of it. They also own all of the (almost certain to be an underestimated) $1.75 trillion budget deficit, an amount four times the largest deficit President Bush ever created.
*********Obama has a propensity to use straw man arguments, particularly when it comes to Republicans.
President Barack Obama reveres Abraham Lincoln. But among the glaring differences between the two men is that Lincoln offered careful, rigorous, sustained arguments to advance his aims and, when disagreeing with political opponents, rarely relied on the lazy rhetorical device of "straw men." Mr. Obama, on the other hand, routinely ascribes to others views they don't espouse and says opposition to his policies is grounded in views no one really advocates.And that's only the beginning.
[Last] Tuesday night, Mr. Obama told Congress and the nation, "I reject the view that . . . says government has no role in laying the foundation for our common prosperity." Who exactly has that view? Certainly not congressional Republicans, who believe that through reasonable tax cuts, fiscal restraint, and prudent monetary policies government contributes to prosperity.