Wednesday, January 7, 2009

Obama, G.W. Bush and the endless Gravy Train

"Barack Obama will provide a tax cut for working families: Obama and Biden will restore fairness to the tax code and provide 95 percent of working Americans the tax relief they need. They will create a new 'Making Work Pay' tax credit of up to $500 per person, or $1,000 per working family" campaign promise on Barack

Dick Morris makes a great point (in Newsmax : Obama Stimulus Fosters Tax-Exempt Tyranny ) about something Rush Limbaugh warned us about years ago. Democrats under Obama want to remove more taxpayers off the bottom of the income tax rolls. They also want to expand the Earned Income Tax Credit (EITC) that pays some workers negative income taxes for working. This program was started by Reagan with the intent of encouraging the poor to get off welfare. GWB later added the Child Tax Credit which paid non-income-taxpaying working parents (mostly single Mom's) to have kids. Then in 2007 the democratic congress and president GWB passed a stimulus package that included tax rebate checks for those that paid no federal income taxes. In fact Obama now calls his proposed "refundable tax credits" which are are basically welfare checks ,the "Making Work Pay" tax credit. But the program should really be called"Making your Vote for Democrats Pay".

You see right now democrats are offering tax credits (aka tax rebates, tax relief, aka income tax cuts) to those that pay no income taxes. Obama keeps repeating the phrase tax relief for hard working Americans (aka middle class). This sets up a large group of public that expects help with housing, education, health care, social security, Medicare... but pay no or nearly no federal taxes at all and honestly believe they earned social security and medicare. (See Social Security and Obama: Pension or Welfare? for more on that.) Obama is going to raise energy taxes and other taxes that will be hidden (in prices or economic growth) from those that pay them, keeping the costs of handouts hidden. But they will add more behavior modification tax breaks and credits that will be visible for the purpose of controlling us . So Obama will score himself lots of middle class tax breaks and no middle class tax increases. Sounds like another Reagan RIGHT??

And what is our winning political argument against this? That every citizen needs to have the federal government take at least some of his money proportional to government spending, visible to him, so he understands that it's not an endless gravy train? So he understands there is a price to endless giveaways? So he understands that income-threshold-triggered tax rebates punish ambition, hard work, investment, and savings and send a signal that says self-success is bad, but handouts are good?

What did republican majority under president GWB's leadership teach the public about this subject of basic civics? That we can can have tax cuts, especially for the upper income, and have massive government spending, and deficits and national debt and financial investor bailouts and corporate bailouts all at the same time with no cost. That the gravy train is endless. Also that the solution to fixing the economy is we all go on a shopping spree to increase inflation to create more more real estate agent sales and stock broker jobs? (The other night democrat Jim Cramer investment host CNBC seriously recommended this for 2009 after attacking GWB.) And the non-income-tax payer hears Obama say :“They got theirs under Bush, now it's time for you hard working Americans to get yours”.

So Bush set things up for Obama to expand the working welfare democrat voting block to over 50% of the public. Our only hope now is a bond market/dollar crash before the spending plan gets under way so we have an argument against the purchase of America's soul. We need a Peter Schiff to be our modern Ross Perot economic and message guide. The Republican leaders need to rally the public against the endless national debt and personal debt for short term consumer consumption, against government interaction in the markets to stimulate paper boom and bust bubbles built on debt. Also against devaluing the dollar, creating inflation then blaming the producers for increased prices. Unlike many GWB style conservatives, Schiff points out that tax cuts without cuts in spending, and especially increases in spending, is just redistributing wealth from person to person, or across ages. (For the record I don't trust Washington with any tax increases, democrats or republicans. But GWB has led the country into fiscal insanity, and tax cuts alone is not a sane message.)

Because after all the massive borrowing and spending "to save the economy" Obama may look responsible by raising taxes on republicans (it will look that way anyway ) to pay off what they will call the GWB credit card. And what will elected Republicans be able to do when a tax increase vote is brought up a year or two from now? After republicans supporting Obama's stimulus package a year or so earlier(2008), and supporting all the borrowing and spending bills under GWB? GWB got us in this mess, although many conservatives just cared that he was not raising taxes during his eight years and a few believers still claim that is all that matters. But he left us with trillions of dollar in debt, an economy in shambles and a liberal democrat hegemony for as far as the eye can see with a democrat mandate for socialism. Thanks again George W Bush.

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