Voodoo-economics aka Obamanomics
And before some weenie calls me racist, the term voodoo economics was from the Reagan era -- leveled against Ronnie by a Democrat.
Folks, we are now starting to see what Obama has in store for us if her gets elected: and it ain't pretty. His "Hope and Courage" (or whatever) campaign is a blind for raw socialist greed for income redistribution and, coincidentally, some of the worst policy decisions to come along since the Great Depression.
Yesterday in the WSJ, they did some numbers as to what his tax hikes are going to mean. Briefly: (1) top Federal rate up 4.6%; (2) phase out of itemized deductions; (3) additional soc sec tax of 12.4% for income above $250K; (4) marginal tax on dividends up from 15% to 39.6%; (5) phase out of dividend deductions 1.2%. Net of all this (for combined net income of over $250k) the combined marginal tax rate increases from 44.6% to 62.8%. The combined marginal rate on dividends (inc. corp tax rate of 35%) rises from 50.4% to 65.6%. Bad enough, but when view in the prism of after tax return on a dollar of earnings, the actual number is worse ... it represents a third less spendable/investible income. That's right, you take home only two thirds of what you did. The balance goes to ....
These are not small numbers. These are huge. And the free income for investment will shrink dramatically, killing off the incentive to save and invest. It represents a stunning slap to the most productive sector of our nation: if you work hard for financial security, we will take it all, so why bother? Can you spell "disaster?" What is the idea, to take the money and spend it through the government to make up the difference in growth? Ever heard of communism and what it meant to financial security or health? Did it ever -- in any one single case you can mention -- work?
These levels of taxation have not been seen in 30 years -- during which the country has experienced the strongest uninterrupted growth seen in history. As pointed out by Boskin in the WSJ, this also declares the foundation of a welfare state in the mold of France: there is no link between social security taxation and benefits. Simply put, the cap comes off on FICA. This proposal represents the creation of an entitlement system to benefit the chronically lazy and indolent ... his constituency. And have we ever been successful in weaning anyone from entitlements? Ever?
Couple this with his "proposals" for trade protectionism and we have the ingredients for a full-blown disaster of biblical proportions. Smoot-Hawley was protectionist introduced when the markets were fragile ... as they are now. His lame-brained ideas are the corollary of the idiocy shown by Congress almost 80 years ago. Obama might have hope, but apparently, he has no education with respect to economics -- or worse -- history. He wants to "rip up NAFTA" -- notwithstanding the benefits to Mexico where wages have almost doubled, trade between Canada, US and Mexico tripled, and our agricultural trade with the two has similarly grown. Rip it up, and watch the flood of wage refugees arrive. Great idea. He has already said that he will feed them and house them -- and tax us to do it.
But his desire to negate trade treaties is completely at odds with his desire to alleviate global hunger and poverty: you can't have it both ways. You can't be the world leader the Bush wasn't -- "we care" -- and become protectionist. Or maybe you can, but the countries that try this (Russia, China) have controlled press that won't contradict the leaders. Is this a hint?
INTERNATIONALLY, Obama has stubbed his toe and irritated he new-found "friends" in a spectacularly stupid fashion ... a page out of Dubbya's manual on foreign relations: While in Germany -- one day after Obama-stock in Berlin -- he said that the NATO allies need to step up their participation in Afghanistan, so that the US could cut its burden there, saving billions of dollars. These dollars could then finance lower taxes for middle class families. As an aside, from what we have just read above, Obama has a different idea as to what a "middle class" family is that I do.
The Germans nearly infarcted: the head of the FDP (a German middle-left party) stated, "[u]nder no circumstances will the the German taxpayer pay with more money and troops for Afghanistan to finance tax cuts in the United States." The CSU (right-ish) leader expressed disappointment for Europe and Germany. The ruling CDU leader, Merkel, pointed out that it was the opposite of solidarity for one side to make more sacrifices to permit the other side to make gains from such sacrifice.
Doesn't that sound like the actual trap that all American presidents have been in since 1945? Including Dubbya? If you want us there, you have to pay for it Obama -- our "allies" have never shouldered their fair share, always enjoying the freedom of their American-guaranteed security, all the while complaining about how we manage it. THAT, Mr. Obama, is reality. No amount of social-liberal clap-trap is going to negate that. The Europeans care, all right, just don't try to make them pay for anything. How naive can you get?
So, how do you suppose this foreign policy genius is going to fare with the Russians?
Folks, we are now starting to see what Obama has in store for us if her gets elected: and it ain't pretty. His "Hope and Courage" (or whatever) campaign is a blind for raw socialist greed for income redistribution and, coincidentally, some of the worst policy decisions to come along since the Great Depression.
Yesterday in the WSJ, they did some numbers as to what his tax hikes are going to mean. Briefly: (1) top Federal rate up 4.6%; (2) phase out of itemized deductions; (3) additional soc sec tax of 12.4% for income above $250K; (4) marginal tax on dividends up from 15% to 39.6%; (5) phase out of dividend deductions 1.2%. Net of all this (for combined net income of over $250k) the combined marginal tax rate increases from 44.6% to 62.8%. The combined marginal rate on dividends (inc. corp tax rate of 35%) rises from 50.4% to 65.6%. Bad enough, but when view in the prism of after tax return on a dollar of earnings, the actual number is worse ... it represents a third less spendable/investible income. That's right, you take home only two thirds of what you did. The balance goes to ....
These are not small numbers. These are huge. And the free income for investment will shrink dramatically, killing off the incentive to save and invest. It represents a stunning slap to the most productive sector of our nation: if you work hard for financial security, we will take it all, so why bother? Can you spell "disaster?" What is the idea, to take the money and spend it through the government to make up the difference in growth? Ever heard of communism and what it meant to financial security or health? Did it ever -- in any one single case you can mention -- work?
These levels of taxation have not been seen in 30 years -- during which the country has experienced the strongest uninterrupted growth seen in history. As pointed out by Boskin in the WSJ, this also declares the foundation of a welfare state in the mold of France: there is no link between social security taxation and benefits. Simply put, the cap comes off on FICA. This proposal represents the creation of an entitlement system to benefit the chronically lazy and indolent ... his constituency. And have we ever been successful in weaning anyone from entitlements? Ever?
Couple this with his "proposals" for trade protectionism and we have the ingredients for a full-blown disaster of biblical proportions. Smoot-Hawley was protectionist introduced when the markets were fragile ... as they are now. His lame-brained ideas are the corollary of the idiocy shown by Congress almost 80 years ago. Obama might have hope, but apparently, he has no education with respect to economics -- or worse -- history. He wants to "rip up NAFTA" -- notwithstanding the benefits to Mexico where wages have almost doubled, trade between Canada, US and Mexico tripled, and our agricultural trade with the two has similarly grown. Rip it up, and watch the flood of wage refugees arrive. Great idea. He has already said that he will feed them and house them -- and tax us to do it.
But his desire to negate trade treaties is completely at odds with his desire to alleviate global hunger and poverty: you can't have it both ways. You can't be the world leader the Bush wasn't -- "we care" -- and become protectionist. Or maybe you can, but the countries that try this (Russia, China) have controlled press that won't contradict the leaders. Is this a hint?
INTERNATIONALLY, Obama has stubbed his toe and irritated he new-found "friends" in a spectacularly stupid fashion ... a page out of Dubbya's manual on foreign relations: While in Germany -- one day after Obama-stock in Berlin -- he said that the NATO allies need to step up their participation in Afghanistan, so that the US could cut its burden there, saving billions of dollars. These dollars could then finance lower taxes for middle class families. As an aside, from what we have just read above, Obama has a different idea as to what a "middle class" family is that I do.
The Germans nearly infarcted: the head of the FDP (a German middle-left party) stated, "[u]nder no circumstances will the the German taxpayer pay with more money and troops for Afghanistan to finance tax cuts in the United States." The CSU (right-ish) leader expressed disappointment for Europe and Germany. The ruling CDU leader, Merkel, pointed out that it was the opposite of solidarity for one side to make more sacrifices to permit the other side to make gains from such sacrifice.
Doesn't that sound like the actual trap that all American presidents have been in since 1945? Including Dubbya? If you want us there, you have to pay for it Obama -- our "allies" have never shouldered their fair share, always enjoying the freedom of their American-guaranteed security, all the while complaining about how we manage it. THAT, Mr. Obama, is reality. No amount of social-liberal clap-trap is going to negate that. The Europeans care, all right, just don't try to make them pay for anything. How naive can you get?
So, how do you suppose this foreign policy genius is going to fare with the Russians?
posted by Zaphod at Wednesday, July 30, 2008
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