TIME TO ATTACK THE OBAMA ECONOMIC PLAN
Over the next several blogs, I will be reviewing 60 plus pages from the Obama website on his economic plans. While I have had the opportunity to examine some of Obama’s economic ideas in detail, there is a great deal I have not examined yet. One thing I am certain about is that Barack Obama thinks he can move the U.S. into a passive socialistic society.
Obama starts his economic plan off by outlining the “problems.”
1. Wages are stagnant as prices rise.
Obama notes that while wages remain flat, the cost of basic necessities is rising. Health care costs have increased at a rate four times higher than wages over the last six years while the cost of in-state college tuition has increased by 35 percent over the past five years. He also notes that people are saving less.
The problem is not with wages, it is with price inflation. What does Obama want here? Does he want wages to rise with price spikes? If so, that would cause out of control inflation. I sense a theme here. While he could have mentioned the energy sector or food, Obama chose to discuss the two areas of our economy that the government has had the most involvement in. If Americans are unable to afford the same amount of health care or education as they could in 2000, why do the prices continue to rise? The answer is that the government has been subsidizing these price increases for years. Go back through the federal budget over the last seven years and you will see increases in federal education subsidies and government health coverage. Of course companies are going to charge more if the government is propping up consumer demand, it’s called fiscal inflation!!!
2. Rising unemployment and limited job growth
Obama notes that recent data has shown a near record jump is unemployment with people losing their jobs in construction, manufacturing, retail, and financial services. Obama wants to increase unemployment insurance so those who lose their jobs have more time to find new ones.
Once again, the government wants to take our money and re-distribute it to the disadvantaged. Economics is about incentives and the incentive to work is driven by pay. Why be employed if the government pays you a check for the next 30, 60, or 90 days?
My solution to this problem would be targeted tax cuts and credits to companies in the affected industries that maintain current employment levels. Let’s pay to keep people productive and on the payrolls instead of paying them to stay off the payroll with zero productivity (and zero tax revenue I might add).
3. Tax Cuts for the Wealthy Instead of the Middle Class
I am not even going to address what Obama said here, because (for lack of a better word), it’s a “crock.” The top 50% of all wage earners in the United States pay more than 96% of the taxes. That means the lower 50%, or one out of every two working Americans only account for 4% of the tax revenue. Do we really need to raise taxes on the top 50%? Since the bottom 50% pays 4% of our total tax revenue, do they receive 4% of the total government services? That would be considered fair.
4. Consumer confidence is at its lowest since Hurricane Katrina
So what? If you read my previous blogs, you’d see that my confidence is low in the economy, but that doesn’t mean I need the government’s help. Seriously, what is the federal government planning to do here; send us a check anytime we feel blue about the economy? The less government is involved in consumer affairs, the better. I actually purpose the government outsource many of its economic statistics like labor, GDP, and CPI to private companies for gathering, then we can get quicker and more accurate results.
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