Critics of the spending stimulus plan are starting to ask the quite obvious question, Where is the money coming from? According to Obama's plan, the rich people will pay for it:
To pay for the spending, Obama’s budget relies on revenue from raising taxes on the wealthy, eliminating tax breaks for business, cutting defense spending, and a new program charging companies for exceeding emissions caps.
Obama’s tax plan includes allowing former President George W. Bush’s tax cuts for wealthier Americans to expire — a move affecting more than 2 million taxpayers making over $200,000 a year. In addition, Obama calls for increasing the top tax rate from 35 percent to 40 percent. His advisers said that would generate about $1 trillion over 10 years. The budget also calls for increasing the capital gains tax from 15 percent to 20 percent.
These idiots act as if people will continue to produce the same amount of wealth if taxes go up. But they won't. They will hide their wealth if they can or they may just work less. So we can be sure that this increase will generate less than $1 trillion dollars. We also know that businesses do not pay taxes. Consumers pay in the form of higher prices if merchants can get away with raising them. If merchants cannot raise prices, they may cut costs in other ways, including reducing pay or bonuses or hours or benefits. I seriously doubt that Obama will cut defense spending much, but even if he does, unless he plans to withdraw all troops from Iraq and Afghanistan and the rest of the world, I doubt such a reduction will help.
His latest eco-fascist plan is simple robbery:
Another significant new source of revenue for the administration would come from a proposed “cap and trade” program, forcing polluters to pay a fee for their carbon emissions. Obama’s budget plan anticipates collecting more than $645 billion from power companies, manufacturers and other carbon producers by 2019.
The global warming hoax has been a windfall for the communists/socialists who needed an excuse to impose central planning. It's also been a boon to those firms who can now use the State to expropriate money and privileges because their green technology is, at this moment in history, unprofitable. Expect your heating and electric bills to rise in the future.
The reason the administration thinks that they can implement these measures and pay for this extravagant spending is because it believes that this stimulus plan will eventually lead to sustained economic growth:
Obama’s larger strategy depends on exorbitant government expenditures fueling a national economic turnaround. And his long-term budget is based on assumptions the economy will rebound significantly by 2011.
Built into Obama’s spending plan is a forecast that the nation’s gross domestic product will shrink by 1.2 percent this year before rebounding to 3.2 percent in 2010 and 4.0 in 2011.
The administration’s GDP assumptions far exceed those of the Congressional Budget Office and some economists, who predict growth of between 1.5 percent and 2.1 percent in 2010. Christina Romer, Obama’s chief economic adviser, defended the rosy budget forecast.
“We certainly are somewhat more optimistic, but certainly nothing out of the ballpark,” Romer said at a White House budget briefing. “It was an honest forecast that working with the professional forecasters throughout the administration and looking at the policies we were putting in place, these were the numbers that came out, and we feel very confident that they’re appropriate.”
The assumptions are central to Obama’s aim to cut the deficit, now estimated at $1.75 trillion, in half by 2012.
I think the last sentence is the most important. These rosy predictions of the future are based on Keynesian assumptions of economics. These are the same assumptions which mainstream economists used to forecast the current depression. Oh, wait a second. The mainstream economists did not predict this depression. In fact, James K. Galbraith remarked in November 2008 that about 10 or 12 of the country's 15,000 plus professional economists foresaw this crisis. Several Austrian economists, on the other hand, did predict the depression. This should tell you that the assumptions which this brain trust of economic soothsayers use are flawed.
But the more important point is that you cannot fix a problem if you do not know what caused the problem. Such an observation should be obvious to anyone. Clearly our rulers do not understand the problem at all. They are completely oblivious to what caused the depression and they are trying anything, hoping and praying that what they do will work. Think about that for a moment. No one in the mainstream can explain exactly how all of this spending will help the economy in the long-run. And yet, the people continue to put their faith into these charlatans. Why?
Moreover, they will not be held accountable for the damage they have done. They are not the ones who have to pay back the $3 trillion dollar deficit. They themselves are part of the very deficit they are running up. This means that they do not even have an incentive to figure out why this depression happened. If they had to pay this money back, Ron Paul would be top economic advisor. But since they don't, failure does not matter.
Frankly at the rate this administration is moving, I'll be surprised if the economy does not collapse by the 2012 election. At least during the Great Depression, there still a hint of a gold standard which did restrain the actions of the Fed. Now pretty much the entire world is on a fiat money standard which means the Fed can print money as fast as the presses will roll. The banks are already holding onto about $700 million in reserves. When those banks believe that times have improved and begin lending, there will be another boom which will lead to an even bigger bust. Prices will be even higher (buy gold).
I cannot predict when this empire will end. It's quite possible that our rulers could keep this game going for the rest of my lifetime. The media and schools continue to brainwash the public so the empire may continue on faith alone. But this empire must end eventually. And we should prepare ourselves just in case it does happen while we are still living.
Subject: Re: Join the National Taxpayer Tea Party Revolt
Mr. Dick Armey,
Thanks for your note and invitation, however, as a retired person that worked in the private sector engaged in activities
of common occupations, I am not a "taxpayer" as that term is defined
within the tax law. As you must be aware, most Americans
that work in the private sector and are not engaged in activities of federal privilege do not qualify as being a "taxpayer". Nevertheless, due to poor education, lack of interest, fear of the IRS, and many other
factors, these folks do not know the truth of the federal tax scheme and the wealth they are handing over each year to the federal govt. Maybe part of the Tea Party revolt could
be to educate the folks of this truth and motivate them to act
accordingly. As more people become aware of the tax scheme that is robbing them of their wealth, maybe, just maybe, they will take action to end this miscarriage of justice. Details and evidence of these facts
can be found at www.losthorizons.com.
Your help in the effort to inform our fellow citizens would be most
appreciated.
Posted by: Redman | February 27, 2009 at 08:47 PM