And by “WE,” of course I mean those who support Supply-Side, market-based policies, low tax and low government positions.
For small government Conservatives and Libertarians of all stripes, this is a year of relatively slim pickings.
There really isn’t a small government candidate in the field, although McCain is far closer than either of the Democrats running.
With Mrs. Clinton’s decided lack of charm, it’s looking more and more certain of an Obama-McCain contest in the Fall.
While polls show that Conservatives, largely due to the specter of either Obama or Clinton winning, have rallied around McCain, more than a few have wondered aloud whether a “Carter-Redux” mightn’t be just what a complacent America needs right now.
Sure, if Obama embarked on what he’s promised, the largest tax hike in U.S. history (yes, allowing the Bush cuts to expire is a DIRECT tax hike), then it is almost certain that;
(1) government revenues will fall, as higher income Americans place more of their disposable income in tax deferred vehicles, like 457s, 401-Ks, IRAs, etc. While lower income Americas, with LESS disposable income to defer, will be bitten by the tax hikes, that won’t offset the drop in tax revenues coming from the more affluent due to their deferring more of their incomes. Consider that the top 10% of Americans now pay over 70% of all income taxes, their deferring more of their disposable income (tax deferred) not only makes perfect economic sense, but the revenues won’t be made up by higher payments from lower income Americans! The result of falling revenues will be the government (at every level) unable to hire more workers...which is ALWAYS a good thing!
(2) Investors, faced with higher Capital Gains rates and a return to Dividend taxes will retrench on investment, ESPECIALLY Venture Capital investment, leading to fewer new ideas coming to market, fewer new companies and fewer new jobs being created!
(3) Companies, faced with a higher Corporate Tax (Obama wants to raise that to the individual income level) will lay workers off in order to maintain their profitability.
(4) All this would lead to a perfect storm that could easily make the Carter years look positively halcyon by comparison!
Imagine this scenario, sky high interest rates, double digit unemployment, coupled with double digit inflation AND with not only a Democrat in the White House, MORE IMPORTANTLY a Democrat controlled Congress!
It wouldn’t matter if “all” the malaise were the fault of Obama’s policies or not. The delicious thing is that he’d take the blame and “liberal tax and spend” would become the pariah it had long been and richly deserves to be!
An Obama-led economic meltdown might just eradicate the American Left as a political force once and for all, which would be the best thing that could happen to America!
Now, there are going to be some misguided, Leftist dolts who’ll regard such prognostications as “wishing ill for America.”
Believing that “socialism has some good points” is “wishing ill for America!
I’m merely wishing ill for more Keynesian/socialistic policies. Yes, I WANT them to fail, no matter what the cost, no matter how deep the pain.
If we must be taught the painful lessons of WHY socialism CANNOT work, let us hasten to them and profit by them!
For small government Conservatives and Libertarians of all stripes, this is a year of relatively slim pickings.
There really isn’t a small government candidate in the field, although McCain is far closer than either of the Democrats running.
With Mrs. Clinton’s decided lack of charm, it’s looking more and more certain of an Obama-McCain contest in the Fall.
While polls show that Conservatives, largely due to the specter of either Obama or Clinton winning, have rallied around McCain, more than a few have wondered aloud whether a “Carter-Redux” mightn’t be just what a complacent America needs right now.
Sure, if Obama embarked on what he’s promised, the largest tax hike in U.S. history (yes, allowing the Bush cuts to expire is a DIRECT tax hike), then it is almost certain that;
(1) government revenues will fall, as higher income Americans place more of their disposable income in tax deferred vehicles, like 457s, 401-Ks, IRAs, etc. While lower income Americas, with LESS disposable income to defer, will be bitten by the tax hikes, that won’t offset the drop in tax revenues coming from the more affluent due to their deferring more of their incomes. Consider that the top 10% of Americans now pay over 70% of all income taxes, their deferring more of their disposable income (tax deferred) not only makes perfect economic sense, but the revenues won’t be made up by higher payments from lower income Americans! The result of falling revenues will be the government (at every level) unable to hire more workers...which is ALWAYS a good thing!
(2) Investors, faced with higher Capital Gains rates and a return to Dividend taxes will retrench on investment, ESPECIALLY Venture Capital investment, leading to fewer new ideas coming to market, fewer new companies and fewer new jobs being created!
(3) Companies, faced with a higher Corporate Tax (Obama wants to raise that to the individual income level) will lay workers off in order to maintain their profitability.
(4) All this would lead to a perfect storm that could easily make the Carter years look positively halcyon by comparison!
Imagine this scenario, sky high interest rates, double digit unemployment, coupled with double digit inflation AND with not only a Democrat in the White House, MORE IMPORTANTLY a Democrat controlled Congress!
It wouldn’t matter if “all” the malaise were the fault of Obama’s policies or not. The delicious thing is that he’d take the blame and “liberal tax and spend” would become the pariah it had long been and richly deserves to be!
An Obama-led economic meltdown might just eradicate the American Left as a political force once and for all, which would be the best thing that could happen to America!
Now, there are going to be some misguided, Leftist dolts who’ll regard such prognostications as “wishing ill for America.”
Believing that “socialism has some good points” is “wishing ill for America!
I’m merely wishing ill for more Keynesian/socialistic policies. Yes, I WANT them to fail, no matter what the cost, no matter how deep the pain.
If we must be taught the painful lessons of WHY socialism CANNOT work, let us hasten to them and profit by them!
While polls show that Conservatives, largely due to the specter of either Obama or Clinton winning, have rallied around McCain, more than a few have wondered aloud whether a “Carter-Redux” mightn’t be just what a complacent America needs right now.
ReplyDeleteI'm not too sure about the economics of Obama, but I do know that he wont be able to blame W for the woes for more than 30 days without looking like a whiner (though argumentably he could blame him until Sep 09, when the fiscal year officially ends - right?)
That's a tough one Rachel.
ReplyDeleteI've always heard that a previous administration's economic policies stretch on for at least six months....BUT, the economy really isn't a "President's economy," it's rightfully Congress's.
It wasn't Bill Clinton who turned around his administration's economy, which drastically improved after 1994...it was really "the Gingrich economy."
If the Democrats (either Hillary or Obama) get in and taxes are hiked, the expected result would be LOWER revenues, as more higher income people defer more of their income in 457s, 401-Ks, IRAs, etc.
With the top 10% of income earners already paying over 70% of the taxes, once those folks begin deferring more of their disposable income in tax deferred vehicles, revenues will drop.
Couple that with less investment due to increaing Capital Gains taxes and renewed taxes on previously taxed dividend money and you have what will look like a Carter Redux.
Obama has been far more upfront and honest than Hillary on his advocacy for tax hikes, but I think both their plans would be disastrous.
And that's why I kind of see it as a "Win-Win" for those who can ride out the storm.
Tax hikes will certainly hurt a lot of people earning btw $60K and $120K/yr, BUT if it cuts government revenues and we're forced to maintain our worldclass Military and domestic security administration, we'll have to see cuts in other areas that the government had no business being in, in the first place.
I've always advocated "tax cuts to where they actually CUT government revenues," and we've never gotten that, so maybe tax hikes that actually reduce tax revenues may do the trick of "starving government."
I think shrinking government (social services NOT military ones) by whatever means is always a good thing.
Either way, I believe there is a quite a bit more pain coming down the pike.
obama has promised to not only let the tax cuts expire, but to impose additional tax increases. he has also acknowledged that this means revenues to the federal government will decrease and that the economy MAY suffer SOME. however, he says he must take these steps in order to make things more FAIR.
ReplyDeleteyeah, whatever. "i'm going to wreck the economy, but i need to in order to even the score." makes perfect sense - doesn't it?
I'd like nothing better than to see the American left bite the dust, but the spectre of an Obama-led economic meltdown is a bit too frightening for me.
ReplyDeleteThe rise of China as a global economic powerhouse with an increasingly sophisticated military force, in conjunction with the shrinking dollar and evaporating American production capacity makes me shudder.
I'm not sure we'd survive long enough to savor a conservative, free-market economy. On the other hand, at least we'd all have jobs at Wal-Mart.
JMK, I tend to agree with Mick Brady on this one. While I can see how a Carter Redux would teach America a much needed lesson I fear that today's world is too dangerous for another Carter style presidency.
ReplyDeleteMick, Seane-Anna and Heidianne, I agree that an Obama-led economic meltdown would be too high a price to pay, but it appears that apathy is the cost of affluence and we've had over 25 years of Supply-Side prosperity and affluence.
ReplyDeleteYou hear more and more people clamoring for government-managed healthcare and more "free stuff," the price of that is higher taxes, more regulation and less individual freedom.
While I don't look upon a Democratic WH as a foregone conclusion, I don't see McCain as anyone I can get that confident over.
So, while I'd like nothing better than Democratic meltdown prior to November 2008, I don't see that as all that likely and barring that, I think the 2008 race will be very, very close.