The Obama administration just released its dire predictions for our economy: A $9 trillion deficit from 2010-2019, doubling of the national debt by 2019 and 10 percent unemployment this year. Obama’s economic advisor Christina Romer said, “This recession was simply worse than the information that we and other forecasters had back in last fall and early this winter.”
Wow, the race toward collapsing the economy is even swifter than I could have ever imagined. President Obama has tried to place the blame on the previous administration, but President Bush does not have anything to do with the current spending and projected spending that is already projected to triple the deficit this year.
These projections will only come true if the Federal Government continues on its current path of unprecedented spending. With this news, it seems that President Obama either has no idea how to reverse this course or no intentions to do so. The former is ineptitude…the latter is just scary.
Why would Obama and the Democratic majority wish to continue down such a disastrous path? Why have they been so hell-bent to change the fundamentals of an economy that has provided more prosperity than any other in the history of the world? I think you need simply probe the past history and associations of Mr. Obama and many of the Democrats in congress. Obama has a long history of sitting under the tutelage of communists, including his father, Frank Marshall Davis, Bill Ayers (the domestic terrorist), and the “Reverend” Jeremiah Wright to name a few. These people had a large influence on Obama as he formed his social/political philosophies. They were all either avowed communists or outspoken haters of America. It has been the standard mantra of communists for years that to “fix” what they see as wrong with America, they must first tear it down. This allows them to remake it according to their own ideology.
But, how can we really fix things? How do we move back from the edge of the abyss? The answer to that is simple, but does not allow the left the control they desire. The three steps to economic recovery are: lower taxes, decrease spending, and easing of regulatory control on business. Any one of these would have an immediate, positive impact on the economy.
Lowering taxes has had a positive economic impact every time it has been tried. This gives corporations more of their own money to spend on hiring and expanding, and gives individuals more disposable income to circulate through the economy. But, the Democrats say, we can’t afford this, the government has too many obligations. We can’t reduce our income to the government without jeopardizing vital public services. This, frankly, is a BIG LIE! Every time the Federal tax rate has been lowered in the last 50 years, income to the treasury has actually increased…First under Kennedy, then under Reagan and lastly under George W. Bush.
How can this be? How can I lower my cost and increase revenues? I don’t know, ask Wal-Mart. I know that this analogy is a bit simplistic, but not far from true. Simply put, as tax rates are lowered, more cash circulates through the economy and it grows…thus growing the tax base. Though the tax rate is lower, there is more money changing hands to be taxed. In a way, this is just like Wal-Mart…the lower their prices, the more people come and buy things, the more money they make. Of course, in Government, as with Wal-Mart, you can only lower costs so much before you reach a point of diminishing returns.
What we are currently seeing is the opposite effect. If you raise taxes, there is less money in the economy and thus a smaller tax base. The Democrats answer to this is raise taxes again. But what we are seeing now is that revenues at all levels of government, local, state and federal, are down. You can’t keep taking more and more taxes from a shrinking tax base and expect the economy to grow. Here too is a point of diminishing returns.
Decrease spending…this is self evident. Most of us have lived through this in our personal or business lives. When the income begins to shrink or prices raise, we must tighten our belts. Government is fond of telling us that we should do this…but seem totally unwilling to follow their own advice. As we all know there is fat and waste in almost any organization or budget that can be trimmed if needed. In the Federal government, the pork and waste is epic.
Easing regulations on corporations is also desperately needed. Many companies move operations off-shore not principally for cheaper labor, but to escape the huge regulatory burden placed on them in this country. Some regulation is good and needed. There is a time though when there is enough regulation, but like Congressmen who feel the need to keep turning out new laws, regulatory agencies feel the need to create new regulations to expand their influence and justify their existence. Depending on the industry, some companies need to hire armies of lawyers and other personnel just to track compliance.
So, does Obama really want to reverse the trend and move us toward a new prosperity? I don’t think so. He has shown no inclination to even consider the remedies above. What is his true agenda? I have my own fears about that, but whatever they are, he and the Democrats need to be stopped. They cannot continue to rush our country toward an economic collapse.
As Senate Minority Leader Mitch McConnell, (R-Ky.) put it "The alarm bells on our nation's fiscal condition have now become a siren. If anyone had any doubts that this burden on future generations is unsustainable, they're gone — spending, borrowing and debt are out of control."
