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21st February
2009
written by Sean Noble

With the financial crisis and the so-called solutions of the stimulus bill and the housing bill, it’s easy to forget that Obama is obligated to submit a budget to Congress. He’ll provide an outline next week, with a full budget to follow in April.  The Washington Post reports this morning that Obama’s budget will be “ambitious” and that he will seek to cut the deficit in half in the next four years.

I know what you’re thinking.  How in the world, given the massive spending that he has already signed into law, is he going to reduce the deficit?

He’s going to stick it to the “rich.”

Obama also seeks to increase tax collections, primarily by making good on his promise to eliminate the temporary tax cuts enacted in 2001 and 2003 for wealthy taxpayers, whom Obama defined during the campaign as those earning more than $250,000 a year. Those tax breaks would be permitted to expire on schedule for the 2011 tax year, when the top tax rate would rise from 35 percent to more than 39 percent.

Obama also proposes to maintain the tax on estates worth more than $3.5 million, instead of letting it expire next year. And he proposes “a fairly aggressive effort on tax enforcement” that would target tax havens and corporate loopholes, among other provisions, the official said.

Overall, tax collections under the plan would rise from about 16 percent of the economy this year to 19 percent in 2013, while federal spending would drop from about 26 percent of the economy, another post-war high, to 22 percent.

This was an especially “rich” statement from Obama advisor, David Axelrod:

“This is consistent with what the president talked about throughout the campaign,” and “restores some balance to the tax code in a way that protects the middle class,” Axelrod said. “Most Americans will come out very well here.”

Pardon me if I don’t believe the spin that most Americans will come out very well here.  The engine of our economy is the capital that “rich” people spend to hire people, grow their business and become a success.  Allowing the Bush tax cuts to expire will stifle that success and will make the recession even deeper and longer than it would otherwise be, and unemployment will continue to increase.  That doesn’t sound like most Americans coming out very well.

2010 is looking better and better for Republicans.

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2 Comments

  1. 21/02/2009

    I’ll take a minute to make a case that it isn’t looking good for Republicans in 2010, 2012 or 2016. They have done a amazingly unified job of opposing the government spending stimulus but opposing X (whatever X happens to be) isn’t enough. Congrats for that. One small step preventing more government spending.

    The Republican Party (along with the Democratic Party) still favors worldwide military occupation and empire. Name one foreign continent much less a single country that the Republican Party thinks should be responsible for defending itself?

    The Republican Party (along with the Democratic Party) has no particular commitment to limited government as represented by the US Constitution. Where in the constitution is the BATF, the FBI or the DEA authorized?

    The Republican Party (along with the Democratic Party) has not the slightest bit of commitment to honest accounting of government taxing and spending. Off the books spending, off the books accounting would prevent a balanced budget even if elected Republicans had any slightest bit of commitment to it, which short of Ron Paul they don’t.

    The Democrat Party is a scary thing to observe. Openly advocating in favor any and all government special interests, more taxes and more spending to fix any and all claimed ill.

    The Republican Party is likewise another scary thing to observe. Acting to increase taxes via expansion of the money supply and government borrowing (just like the Democrats), supporting the current level of excessive spending (just like the Democrats). Elected Republicans by and large (again, except for the one exception Ron Paul) can be trusted to support borrowing and taxing. They will oppose some over the top spending but can’t for the life of them find one government department or program they would cut back or eliminate.

    Pardon the sharp point I am pointing in your direction but I have to say that the Republican Party and the Democrat Party can be far too well described as the stupid party and the evil party. The Republican Party has a long, long way to go before they can claim to have declined the nomination of the evil party.

    http://www.reason.com/news/show/33878.html

  2. Kenny Jacobs
    22/02/2009

    Sean, Barack Obama campaigned on these very things during the summer and into the fall. The voters chose his plan. Your creative language exercise in this post doesn’t change the facts or create a convenient truth. America voted out the Bush tax policy. By electing Barack Obama they also got more integrity then the former administration could muster:

    “For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.”

    link: http://www.nytimes.com/2009/02/20/us/politics/20budget.html

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