Posted on 09/22/2010 10:05:02 AM PDT by Kaslin
WASHINGTON -- President Obama has a real problem with wealth and people who have it -- something this anemic, investment-starved economy needs more of, not less.
He also has trouble understanding growth economics and the recent economic history concerning tax rates, budget deficits and tax revenues, often citing statistics and outcomes that are just plain wrong.
He demonstrated his ignorance anew Monday during a one-hour town hall-style gathering where he took questions from CNBC analyst John Harwood and a studio audience that expressed deep disappointment and skepticism about his handling of the economy.
On the whole, it was a disappointing performance, as many dispirited Americans hoped that he would signal some change in his failed economic policies, more optimism about the economy's near-term future and a hint of compromise with those Republicans and Democrats in Congress who oppose raising taxes on small businesses, investors and anyone who makes more than $250,000 a year in the midst of a jobless recovery that barely deserves the name.
Obama insists he doesn't hate Wall Street, isn't anti-business, still believes in free enterprise and the private sector as the source of most job creation and hasn't been "vilifying business." This from the man who has made Wall Street, the health insurance industry, oil and coal businesses, the medical profession, big banks, credit card companies, mortgage brokers and just about any enterprise that makes, in his words, "obscene profits," his favorite whipping boys.
In the end, he repeated the same arguments he's been making for the past two years. He defended his economic policies, which he said have worked, and stuck to the same specious arguments why he will let the Bush tax-rate cuts on the two highest income brackets expire at the end of this year.
Why? Because he thinks the country can't afford them and the money is needed to reduce the deficit. He's done the math, he says, and whenever tax cuts have been tried, it has made the government poorer.
In fact, history shows just the opposite. Cutting personal income and business tax rates has brought in more revenue as a result of stronger economic growth. When President Kennedy proposed cutting marginal income tax rates across the board "to get America moving again," government economists warned it would worsen the deficit. But as the economy grew, more people were working and tax revenue rose. By the end of the 1960s, the budget was in a surplus.
When President Reagan took office in 1981 and cut income tax rates across the board, too, the budget was at about $600 billion. But federal revenues didn't decline over the course of his presidency as the economy soared out of a severe 1981-1982 recession. By the time he left office, annual tax revenues also soared to about $1 trillion as a result of stronger economic growth and new job creation.
Obama claimed that federal tax rates were higher in the 1950s under President Eisenhower and in the 1980s than they are now under his presidency. They were higher in the post-war decade, true, but he doesn't say, or doesn't know, that it was why Kennedy proposed they be cut for everyone, declaring, "a rising tide lifts all boats."
The income tax rates certainly were not higher when Reagan left office in 1989. He had brought the top marginal income tax rate down to 28 percent under a sweeping, bipartisan tax-reform bill.
Obama, still playing the class warfare card, talked of two dozen hedge fund managers who each made $1 billion and other wealthy Americans who were millionaires, saying they should be taxed at the 40 percent tax rate (instead of the existing 35 percent) because they are too rich.
But a soak-the-rich economic policy isn't going to create a single job or start up a new business. This requires capital and investors who are willing to risk it on new enterprises. Capital is on strike in the Obama economy, and his plan to push capital gains tax rates higher will only keep it locked up and spread further uncertainty throughout the investment and business community. It's pathetic to see Obama boast about creating 67,000 new jobs in one month, when jobs were being created at a rate of 200,000 to 300,000-plus a month under the Reagan tax cuts.
Consumer spending grew at an anemic annual rate of 2 percent in the second quarter under Obama's spending stimulus, in sharp contrast to the robust 6.5 percent rate under Reagan in 1983 as the economy surged out of Jimmy Carter's recession.
Unbelievably, Obama blames the recession on the 2001-03 Bush tax cuts. "I felt that we had to have a different economic philosophy," he told the CNBC audience. A lot of factors led to the recession we are in, but leaving more money in the economy wasn't one of them, and even Obama wants to keep Bush's low-to-middle income tax rates.
Worse, Obama believes you can raise taxes in a recession on the one sector of the economy that produces most of the jobs and much if not most of the capital investment to fuel economic growth.
Sucking another trillion dollars out of America's private sector will further weaken the economy and kill jobs, which in turn will reduce government revenue and worsen the deficit.
but obambi is rich he has a vandetta against himself? oh wait he will make himself exempt of the vandetta.
obambi is rich from the government trough and therefore, that is okay.
Libs have no problem with wealth gained through oppression and exploitation by government power and coercion.
I strongly advocate elimination of all refundable tax credits. Everyone should pay at least 10% of their income for taxes as long as we have an income tax. Tax freeloading must stop. Tax welfare must stop.
He doesn’t have a problem with his OWN wealth, however.
Reminds me of an old Star Trek episode.
"I am Nomad."
Here’s the thing about the wealthy, they love big government because it keeps out their competition. That’s why most of the filthy rich, like Warren Buffett are Democrats.
I wish our side would stop saying ‘Rich’ or ‘Wealthy’ and instead refer to those as ‘Employers’.
“History shows that almost all tyrants have been demagogues who gained the favor of the people by their accusation of the notables.” Aristotle, Politics Book 5 Part 10.
I would bet an audit would show him to be nearly broke. Of course, that is ignoring the $millions/$billions he has stashed abroad.
Thats strange. I thought Hussein had a vendetta against all REAL Americans.
Who is John Galt?
So that explains it. I never could understand why these people wouldn't want others to have a chance to do as well as they have. I guess I'm naive.
When you think about it this way, given the choice, would a business owner want a system that makes it easy for competition to emerge, or would he want a system that creates barriers to competition?
Thank you!
I refuse to allow those I talk politics with to use the word "rich". I say "Oh you mean our employers and investors, the people who sign your check?" I point out that punishing employers and investors is perhaps the best way to HARM lower income levels, if that were your goal.
The turning of the word "rich" into a pejorative is part of the reason we have so many people ignorant of how capitalism actually functions.
Thank you!
I refuse to allow those I talk politics with to use the word "rich". I say "Oh you mean our employers and investors, the people who sign your check?" It's instructive to point out that punishing employers and investors is perhaps the best way to HARM lower income levels, if that were your goal. By merely taxing them, you reduce their income, but by targeting their employers through tax policy, you may cost them their job.
The turning of the word "rich" into a pejorative is part of the reason we have so many people ignorant of how capitalism actually functions.
Well many of those “rich” and “wealthy” are neither.
They simply are trying to become wealthy while having road block after road block thrown in front of them while at the same time being vilified for not paying their “fair share” and/or causing the economic mess we’re in.
my wealthy MIL hates the rich too.............go figure
In terms of just economic analysis, of course the author is right. But I think the author makes a huge mistake in assuming that zero is simply wrong out of ignorance. In fact, the title of the article is accurate - it’s a vendetta against the “rich” (and the middle class as well). But then the author goes on to explain zero’s policies that damage the “rich” as a reflection or function of his ignorance.
Either it’s a vendetta or it’s ignorance. It can’t be both.
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