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August 8, 2008

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.


Nitin said...

What kind of person reads a 60 page economic plan for fun? :)

Sex Mahoney for President said...

Isn't sending the people a check every time they feel blue the Bush plan?

Taxing the wealthy is an important part of keeping them from financing their own private armies when our government starts to fail.

You and I are in agreement about tax incentives for companies that maintain employment levels, but it might also behoove the government to penalize companies that outsource jobs, thereby reducing the cheap labor cost's attraction .

From what I can remember, you're opposed to governmental interference regarding price fixing, so then what do you recommend when people's wages don't cover the inflated cost of basic goods and services?

Sex Mahoney for President

Jeremy said...

When people's wages don't cover inflated cost of goods and services, the price will naturally fall. Historically, the consumer occasionally gets pressed but never folds to high prices. Government involvement to subsidize the consumer in a time of high prices will only lead to maintained higher prices.

If the government tries to punish companies for moving jobs overseas then the small business I work for will get taxed for having a staff of 15 in India. This would help or inhibit future job growth?

Sex Mahoney for President said...

Fair enough. In America, at least, there aren't too many people who can't afford basic needs like food, but then what do you recommend for health care costs, since an awful lot of people will go without necessary treatment while the market "corrects" itself?

Sex Mahoney for President

Jeremy said...

I agree. We may have passed a point of no return with government involved health care. But, does this mean we should insert the government in other areas of the economy that go through the struggle.

For healthcare, no matter what we choose there is going to be pain.

H.C.I.C. - New Whig Chairman said...

1. how is it not a problem for wage increases to not at least equal standard inflation? which they have not, especially considering that the the manner in which inflation is now measured has been changed so as to hide true rises in costs. flat wages are not good...of course they aren't flat if you are in the uber-rich category. the same category that doesn't spend as much of their income as the rest of us...thereby limiting growth in the economy.

calling education subsidized by the government is laughable. grants and loans have not kept up with price increases in tuition...the so-called "market" for education is a fallacy.

as for health care - the answer is simple. insurance companies (making huge profits and refusing to pay out whenever they can get away with it) drive the cost of health care. they spend a huge percentage on administrative tasks that far out-paces the same when the government conducts the process. they drive prices further upwards by charging obscene amounts to physicians for malpractice insurance (and because you will claim it is due to lawsuits you should know that a tiny percentage of suits ever get to trial and that in counties with historically high jury awards insurance rates tend to be lower than in other areas...hmmmmm, can you say profiteering?)

2. the welfare queen has been proven as bullshit. why be employed if you are getting uninsurance? because human beings have this need to feel worth something...not to mention I would love to see you survive on unemployment.

3. your numbers are misleading and you know it. the top 50% of income earners may pay 96% of income taxes, but they also make 90% of all income. when you put it that way it doesn't sound like the bottom 50%, who basically don't make shit, are really getting any bit of a deal.

4. funny how less government involvement in consumer affairs is exactly what destroyed the economy and led to lower consumer confidence. the wonderful conservative logic of fucking things up to prove that government will always fuck things up.

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