The American Spectator : Stop the Obama Tax Hikes

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Stop the Obama Tax Hikes

By Peter Ferrara on 11.10.10 @ 6:09AM

Let us survey the wreckage of Obamanomics -- not a pretty sight.

Let us survey the wreckage of Obamanomics, which followed in detail the opposite of every policy of Reaganomics.

Unemployment has been near 10% for over a year now, after reaching 9.7% in August 2009. The Bureau of Labor Statistics reports the U6 unemployment rate, which includes the unemployed, those marginally attached to the labor force (discouraged), and those working part time for economic reasons, at 17%, nearly the highest since the Great Depression.

African Americans suffer long-term, depression-level unemployment of nearly 16%, Hispanics 12.6%, teenagers 27.1%. The employment-population ratio, the percent of Americans with jobs, has spiraled down from over 63% in 2007 to 58.3% today.

Nearly 15 million Americans are unemployed, over 40% of those, 6.2 million, unemployed for over 6 months, also the highest since the Depression. Another 2.6 million were marginally attached to the work force, having looked for a job in the past year and given up. Another 9.2 million are working part-time "because their hours had been cut back or because they were unable to find a full-time job." That leaves 26.6 million Americans unemployed or underemployed.

The Census Bureau reports that 44 million Americans are in poverty, the highest in the 51 years it has been keeping records. A record number of Americans are on food stamps, and under Obamacare soon a record 85 million Americans will be on Medicaid, the health care program for the poor. In September, a record 100,000 Americans lost their homes in foreclosure.

Before this latest recession, as previously noted in this column, U.S. recessions since World War II have lasted an average of 10 months, with the longest previously being 16 months. This latest recession started in December 2007, 35 months ago. Even if the recession technically ended last summer, America should not be suffering all this economic misery nearly 3 years after the recession began.

Quite to the contrary, historically the American experience has been the worse the recession, the stronger the recovery. Real economic growth in the first 4 quarters of Reagan's recovery from the deep 1981-82 recession was a whopping 7.7%. Even the recovery under President Ford from the deep 1973-74 recession sported real economic growth of 6.2%. A similar boom was generated after the 1960-61 recession by the Kennedy tax rate cuts, even though that recession was not so severe.

But under President Obama's policies, the downward spiral in economic growth has already begun again. Real GDP growth has fallen from 5% in the fourth quarter of 2009, to 3.7% in the first quarter of this year, to near 2% in the second and third quarters. Indeed, more than a year after the recovery supposedly got under way, GDP is still below its previous peak in the fourth quarter of 2007. By contrast, in the Reagan recovery, the economy soared past its previous peak in 6 months.

This is the result after 3 years of historically easy, expansionary, Fed monetary policy, with interest rates at record lows near zero percent. There is nowhere for those rates to go from here but up. The economy this year has also benefitted from the specter of Obama's sharply increasing tax rates starting next year, causing producers to scramble to earn what they can before the grim reaper arrives. The increased regulatory costs of the EPA's developing anti-carbon crusade, financial reg reform, and Obamacare will also push the economy down not up next year.

This is all why the Fed recently announced that it is going to bring back inflation to try to revive the economy. That shocker is already causing chaos in the markets, with gold soaring to new records, well past the S&P 500, the dollar steadily declining, and commodity prices spiking, including ominously oil.

Of course, this Fed reflation is not going to work either, because as Milton Friedman explained long ago, easy money from the Fed does not change the real economy. It is just going to bring back the 1970s with a vengeance, combining long-term stagnation with inflation. This is the result of President Obama's stubborn, Rip Van Winkle return to the Keynesian economics of the 1970s, play acting like nothing has happened since 1980 to prove how braindead those economic policies are.

Dr. Obama's Marxist Elixir

In this economy, President Obama's plan is to increase the top tax rates on the nation's employers and investors for every major federal tax, starting on Jan. 1. That includes a nearly 20% increase in the top two income tax rates, counting the phaseout of deductions and exemptions. The top capital gains tax rate is scheduled to soar by nearly 60%, counting the application of Obamacare's new 3.8% tax on investment income. The tax rate on dividends is scheduled to nearly triple, from 15% to 43.4%, counting the new Obamacare tax as well. The Obamacare legislation also increased the Medicare HI payroll tax rate by 62% for higher income earners. The death tax would also be restored with a 55% top rate.

Does that sound like what our country needs right now? Is that going to create jobs, or lose jobs? Art Laffer explained earlier this year what we can expect from such a tax tsunami,

[W]hen the U.S. economy comes to 2011, the train's going to come off the tracks…. The tax boundary that will occur on January 1, 2011 tells me that GDP growth in 2010 will be some 6% to 8% higher than GDP growth in 2011. A year on year decline from trend of some 6% to 8% in GDP growth would represent a larger collapse than occurred in 2008 and early 2009.

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About the Author

Peter Ferrara is Senior Fellow at the Carleson Center for Public Policy, Director of Entitlement and Budget Policy for the Heartland Institute, and General Counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is the author of America’s Ticking Bankruptcy Bomb, now available from HarperCollins.

Letter to the Editor View all comments (85) | Leave a comment

Shamus| 11.10.10 @ 7:35AM

It looks like Obama is going mismanage the tax issue just like he has mismanaged so many others. If he's really serious about his stated policy, then his best strategy would be to pass a bill keeping the current rates for two years during the lame duck session. There could be a filibuster in the Senate, but he might be able to pick up votes from retiring GOP members.

If this isn't handled in the lame duck session, there will be a lot of unhappy people come January missing money in their paychecks. Republicans would blame Obama and pass a permanent tax cut. Obama's only option would be to veto, but that would just dig the hole deeper for him, as the public would already be mad at him.

Obama is so disorganized that it's a fair guess he will not get a bill introduced in the lame duck session. He'll lose more popularity in January when people find out they can't afford to pay the bills the racked up over the holidays.

SonOfSam| 11.10.10 @ 9:56AM

I wholeheartedly agree: let's pass a bill to keep ALL the tax cuts until the 2012 election. Then we can decide this issue once and for all, in the context of a Presidential election, with a clear choice between a GOP who supports lower taxes for ALL Americans vs the TelePrompter In Chief who wants to play games and try to divide us

RightIsWrong| 11.10.10 @ 12:11PM

We should decide it now instead of letting politicians punt the issue. We have more important things to concentrate on than hearing about this tax issue again.

If you can't match the cuts in spending then how can you pay for this tax cut that will cost over 700 billion over the next ten year?

You blame Obama for dividing us but you tea bagging types come to sites like this to read articles like this that blame him for everything and paint republicans as some kind of heroes for spending us into oblivion. Your so blind that you can't see that your being used to defend the people your representatives really care about, and guess what, unless your filthy rich it ain't you. It's the main reason they lumped in families making 250k and millionaires in the same tax bracket.

Ramon| 11.10.10 @ 12:39PM

"teabagging types" Oh RightIs Wrong, the searing logic of your fiery intellect is so compelling. But seriously, your marxist cant and patently obvious lack of a logical argument reduce you to the weakest of all arguments - ad hominem.

Stephanie| 11.10.10 @ 12:47PM

Right isWrong, why don't you slither back over to the Huff Po. Arrianna is awaiting your return.

Al Adab| 11.10.10 @ 1:29PM

The tax cut issue and discussion is really about increases coming. Leave the current tax rates alone, that is, no automatic increase. Eliminate the taxes in the "health care" bill. They are legion BTW. Stop HR4646. Then eliminate regulatory agencies that burden business and retard expansion. Cut hundreds of those $150K a year federal employees. Small steps lead to big changes. Get over the mantra that the economy must somehow "pay for tax cuts". We are talking about impending increases not new cuts. Cut the spending.

Shamus| 11.10.10 @ 1:26PM

Democrats have had the past 2 years to decide this issue. I suppose you could say that they have decided to raise taxes on everyone through their inactivity. If this is their decision, then at least they could be honest about it and tell people.

Taxes are a very important issue. Business can't plan any new activity without knowing how much the government will require them to pay.

Democrats were happy to raise spending by five trillion dollars without having any source of funding. It's quite absurd for them to complain that letting people keep some of the money that they earn is a poor choice.

I blame Obama for taking no action on this issue while he had control of government. Obama has made a mess and now Republicans have to come in and clean it up.

And it's not just filthy rich types who will take a big hit from Obama's tax increase. Check your pay in January and you'll see a whole lot less money. Maybe then you'll get a clue about what Barrack Obama really wants.

RDN in Houston| 11.10.10 @ 3:57PM

So we have another case of setting up the strawman (spending cuts) and opining, with great certainty, that the only way we can overcome the deficit is to raise or maintain tax levels. This is in spite of the evidence that spending is out of control...combined state and federal spending is at an all time historical high of over 40% of GDP in 2009. Spending is the problem, not a shortage of tax revenue.

Next, to make sure that you have driven your wrong headed point home, you use the vulgar perjorative of tea bagger in attacking those whom you can't defeat in reasoned debate.

I have read thousands of posts from moonbats within the past few years so I am not surprised at your sophomoric antics. Nice try. Don't go away mad, just go away.

TimothyD| 11.10.10 @ 8:58PM

Remember... The issue (for Obama) is NOT about what is good for the economy. His one and only issue, is what is good for the progressive/socialist agenda.

By increasing tax rates, and forcing more people into government dependance, he is building the liberal voter base to the point where conservatives will not have any impact with voice, or by vote.

Every tax increase, every burdonsome regulation, every fee... is designed to push people OUT of the realm of self dependance, and into government dependance. Once there, what are the chances of climbing back out, when "free government cheese" is so willingly offered?

When enough damage is done, and WELL over 50% of the voting population is on some sort of government assistance, the US will be a "one party" system. This will give the ruling class (Clintons, Kennedys, etc.) a permanent hold on the government, and the door will be firmly closed behind them.

Now, with the incoming 112th congress, there is a slim chance that we can slow down the "progress" into socialism. It's inevatable, but I don't want to see it in my lifetime (or my kids lifetime). This is hopefully a wakeup call to our population, and we can stop the slide for decades to come.

Albert| 11.10.10 @ 4:04PM

This is class-envy BS. Tax cuts are the ONLY stimulus the government is capable of. Cut spending to control the budget (show me a Democrat who wants to cut spending, especially the vote-buying spending that is the core of Democrat Party politics). Taking money out of the economy and redistributing it is not economic policy, it is politics and it damages the economy, not stimulates it. It never ceases to amaze me how many Democrat politicians get rich from government, through "compassion for the poor." It's drivel.

MikeD| 11.10.10 @ 4:19PM

Dear "Right-Is-Wrong"

As soon as you referred to 'paying for a tax cut' you destroyed ANY credibility you might have had and cancelled ANYTHING you might say because you betrayed your complete stupidity. Why? Because you believe that everything belongs to the government and cutting taxes takes away money that you feel rightfully belongs to the government.

That is OUR MONEY! We earned it and you feel the government has the right to take what they want and leave the crumbs for us. You have it dead wrong. You, and others like you, are the reason Obama was able to slither into the White House and the reason were in the sorry shape we are.

Here's an idea: You sign over everything you have to the government and we'll keep what WE earned! Have you socialists noticed that we've run out of other people's money yet? Instead of displaying your complete ignorance, get a copy of the Constitution and memorize it from beginning to end. Maybe then you'll be qualified to open your mouth without making a fool of yourself.

John2| 11.10.10 @ 4:30PM

Is there no more to you than this silly point?
It has been refuted too many times to count. I hope you enjoyed Ejection Day.

Woody| 11.10.10 @ 4:33PM

Christina Romer (out-going Chair of the Council of Economic Advisers in the Obama administration) and her husband recently demonstrated (peer-reviewed journal) that once total tax revenue (federal+state, corporate, etc.) exceeds 44.8 percent of GDP, raising any tax rates further actually *reduces* tax revenue. We are roughly at that point now. So increasing tax rates puts us further in the hole, therefore is DOA as an option.

joanee| 11.10.10 @ 4:50PM

You are a complete fool! Obama's policies and absolute lack of competance is why 65 seats were lost. May Obama crawl back into the wall =where he came from.

CCPony| 11.10.10 @ 4:59PM

That's "you're", not "your". Judging from your "mastery" of the English language, what's holding you back is YOU. Not "tea bagging types".

Walter| 11.10.10 @ 10:57PM

Uhhhhh. . . . cut 1.4 trillion over 8-10 years from the federal government and you have your method in which to "pay" for OUR TAX CUTS.

Or better yet, let them expire so you can see the results.

LookingforFacts| 11.10.10 @ 9:27PM

Hi folks, first time poster here, so interested in your views:

Can anyone here show me *evidence* that retaining the 'bush tax cut' tax rates in the US (which are already among the lowest in the OECD) will improve productivity? I'm all for removing the 'burden' part of government in our lives, but I've seen no facts that say the current private and business tax rates are holding back growth. Happy for someone to link me to some data and I'll revise my opinion here.

WeMustResist| 11.11.10 @ 4:23AM

It is the rise in tax rates in the early stages of recovery that is contractionary for an economy. There is plenty of evidence for that from the USA and other countries over several decades. Forgive me if I do not have the references to hand. Christina Romer has plenty of the references to hand. If she is convinced (despite being on the left, and appointed by Obama) then I hope Obama is convinced.

LookingforFacts| 11.11.10 @ 5:15AM

WeMustResist, I see your position, but I can't reconcile this action with deficit hawkishness. I feel that the lesser of the two evils here is without doubt increasing taxes to the merely low Clinton-era rates (as by international standards they are already unusually low) and taking aim at these cuts, which are still the single largest contributor to the national deficit.

Again, keen for your responses as I'm continually amazed at the double standard of promoting tax cuts (in any form, but in this case for the wealthy and incredibly wealthy) at a time when the deficit is 40% of GDP.

TeaPartyLady| 11.11.10 @ 2:02PM

If you want some information try reading "Return to Prosperity" by Art Laffer. Art was senior economic adviser to 3 presidents starting with Regan. You will read in the book that every tax increase has resulted in a net loss of revenue to the government. When Kennedy cut tax rates back in the 60's he more that tripled the amount or revenue thru two years. It is a proven fact that in the last 40 years tax increases have resulted in decreased revenues. How about the case of the "millionaires tax" recently imposed by New York state, even their blind Governor now admits that was a mistake but if you must be lead by the nose start here: http://politicalsocietyonline......-revenues/

One more comment for you LookingforFacts, why don't you do your own research instead of relying on the garbage you get from the liberal media.

Redstateboy| 11.10.10 @ 8:40AM

It's going to be very interesting, may be entertaining and perhaps very scary as to what Nazi Pelois' led lame-duck Congress is or is not going to do.

Conservative Teamster| 11.10.10 @ 9:05AM

All you people who voted for this guy have doomed your children and grandchildren to a major cut in their standard of living. This is what you get when you vote with your heart, not your head. I just hope and pray the Republicans can pull us out of this mess.

Dan Hirsch| 11.10.10 @ 9:50AM

CT;

Your children and grandchildren, too...heck, everybody's!

DonDuke| 11.10.10 @ 10:44AM

Well Teamster, I'll tell you this..... after watching Michele Bachmann last night on O'Rielly and seeing her dodge and evade taking a stand on agreeing to try to keep Premiere Obama to one term, I got a sinking feeling in the pit of my stomach. She was doing what all proper politicians do, just spouting her talking points and not answering questions. Also, it was clear she didn't want to piss off the administration on this point. God! Here we go again..... if the republicans can not deport themselves any better than Bachmann did last night, she was truly pathetic, ... say hello to the dems in 2012.... sometimes I think this is all uselass.

DonDuke| 11.10.10 @ 11:15AM

Sorry about the spelling.... sheesh!

Redstateboy| 11.10.10 @ 9:23AM

And Obama and his Party have the Gall to blubber that it was the Republicans!? that drove us in to a ditch??!!?

RightIsWrong| 11.10.10 @ 12:14PM

I guess it was democrats that lied this country into war, passed unpaid for tax cuts and a passed a huge medicaid expansion all while dragging this countries name threw the mud? You want to live in your own fantasy world, have at it, you are not entitled to your own facts.

Ramon| 11.10.10 @ 12:44PM

RightIsWrong please use spell check before you hit 'Submit'. It really makes you look dumb. threw = past tense of throw; through = over the whole distance

Also, how does one pay for a tax cut? Have you never heard of the Laffer Curve? Look it up.

Bladerunner2010| 11.10.10 @ 4:17PM

It's also "you're" and not "your." "Your" = posessive pronoun; "you're" is the contraction for "you are."

CopyKatnj| 11.10.10 @ 1:40PM

RightIsWrong says "I guess it was democrats that lied this country into war"

Yes that is correct. To be brief I'll only post a few of the many similar remarks from democrats.

“There is no doubt that Saddam Hussein’s regime is a serious danger, that he is a tyrant, and that his pursuit of lethal weapons of mass destruction cannot be tolerated. He must be disarmed.” — Edward Kennedy, October 4, 2002

“In 1991, the world collectively made a judgment that this man should not have weapons of mass destruction. And we are here today in the year 2002 with an un-inspected four-year interval during which time we know through intelligence he not only has kept them, but he continues to grow them….” — John Kerry, October 9, 2002

John2| 11.10.10 @ 5:46PM

Troll on, RIW. You are not a very good guesser. Again, no argument offered.

I suppose I'll thank you for the cliche which is directly applicable to lefties such as yourself.

Walter| 11.10.10 @ 11:06PM

Sounds like talking points from 2008 . . .

I think Bill Clinton had a speech on Saddams WMD's - IN 1998. Kennedy had his speech also... come to think of it so did Kerry... Hillary, I could go on but I'll spare ya the embaressment. Hey come to think of it, they all voted for it too... Gee whiz.

Was it the media that told us our name was being dragged through the mud during the Bush years? Who said that? Can you name them? You believe them? How about now? Are you hearing GOOD things about the USA from foreign media? Or not at all. Time to start thinking. You really ought to come to your own conclusion. . . stop using the talking points. You may just get a date one day!

Rmm| 11.10.10 @ 10:08AM

In my lifetime always, Democrats equate with higher taxes, period. It is simply amazing how they won't accept the tried and try approach of incentivizing the business community instead of gumming up the works. Clearly liberal ideology does not mix with a fine-tuned economy. It is akin to an 8 cylinder engine only running on 6.

DonDuke| 11.10.10 @ 11:56AM

And I thought I would laugh my *$&* off Rmm when I saw the sound bite of Premiere Obama saying that he couldn't condone tax cuts because "How are we going to pay for the deficit"!!!!!! This from the guy who created the majority of the deficit!!! Why wasn't he thinking of this when he spent all the money? And how is it that the American people don't see the hypocrisy in this?

Al Adab| 11.10.10 @ 10:17AM

Maintain the current tax tates, no automatic increases. Cut funding to the heavy handed, counterproductive regulatory agencies, stop funding pet projects.

The Republicans and Conservatives in alliance now have an opportunity to perform. Republicans have failed us before. DO NOT FAIL US AGAIN.

gypsy| 11.10.10 @ 10:49AM

if they do, I say half of us bring the tar, the other half bring the feathers. Then we have some tea while we turn 'em on a spit

Al Adab| 11.10.10 @ 12:18PM

Not a bad option to keep open.

Walter| 11.10.10 @ 11:12PM

My biggest worry is the gargantuan job the republicans have of cutting government. It's the biggest employer in the country. It's currently the largest burden we have ever had to fund. We can no longer afford to fund this massive circus. I can see it now. Within 18 months, labor unions will be fighting in the supreme court for their members' jobs with a cockamamie judicial order NOT to fire them... The media will be in force telling their lies and producing false polling info about the 57% (a good number to brainwash with), who want the government to keep the workers employed. . . It's going to be a tough fight. I stand behind them all the way!

Mimi| 11.10.10 @ 10:54AM

Peter...again a eye opener. We will soon know if the "O" is serious about helping or hurting the economy. We have some terrific young Republican congressmen who know how to fix things..ie Paul Ryan and America just gave them the " GREEN-LIGHT". Some interesting times are ahead. It is a pity things have gotten this bad...The DEMS are in total denial and come off as a sad " COMEDY". We the people will continue to PRAY for our COUNTRY!!!

jhoger| 11.10.10 @ 7:17PM

Funny... your vaunted Paul Ryan was happy to throw Medicare Part D onto the national credit card, don't forget.

You are looking at Bushanomics, not Obamanomics. How ridiculous.

loulou| 11.10.10 @ 11:45AM

Also stop Ben Bernanke. That zombie is ruining our country.

Perusha| 11.10.10 @ 12:05PM

So many “musts”! How many “needs to” demands can we DO at the same time, or even sequentially, that will actually reverse the accelerating trend toward an even larger percentage of GDP going to government?

In a spiritual community, there are specific rules for one who chooses to join it. The uber-demand is, as a practicing devotee, to be a reflecting “mirror”, and make DEMANDS on fellow members, but NOT to dissociate from them.

In a karmic sense, all Americans HAVE chosen to be members of this community, which is, to be sure, most assuredly NOT spiritual, in the conventional sense.

Well, in the old days---which I’d say ended with WWII, for most---survival demands were still inescapable. Now, however, you don’t have to be much more than an adolescent fool and you will still be able to get by, and with the “machines” so productive, even live swimming in the gravy stream they regularly spit out each day.

“Turn on, tune in, drop out”, quote Timmy Leary.

And, CW still thinks he was a weird and far out extremist!

What do you think has happened since he and his fellow LSD “warriors” introduced their radical “gulping” path to all and sundry?

Reality is like an alligator, which “eats” each day’s new emanating “food”, and it just grows and grows, always incorporating (taking into its body) each meal.

So, in a “fat chance!” way, the sum of our American fears, RIGHT NOW, is absolutely the manifestation of “turn on”, except instead of LSD et al, the drug of choice in physical terms is the junk food one sees advertised incessantly on TV, and in psychic terms, is the junk food of inane movies and TV.

Ergo, there’s a whole lot of “tuning out” going on, since when one “tunes in” to so much body-mind JUNK, and therefore logically BECOMES same, how is it possible to tune in to the “taxing” truth, a la what a Peter Ferrara so clearly lays out?

Just think! “Drop out!”, as a demand or call to un-action by the drugged out Leary, has been met.

What do you think those people who voted for Obama and other drug purveyors, like the you-know-what sucker Barney Frank, did---and thus ARE?

Drop outs!

They have successfully dropped out of the American Way.

What is the only solution? What is the unavoidable outcome?

When practically a majority, and surely a working and in-control minority, is totally happy with their fat and entertained condition, they will certainly resist, with all their still-powerful tools, any change.

Why, given that Americans are ALREADY a majority overweight or obese nation, many on the right have, themselves, turned on, tuned out and dropped out. (In 2020, a mere 10 years, it is projected that 2/3 of us will be overweight or obese!) It’s just that they have a scintilla of a memory of the previous time before Leary won out. Example numero uno…Gov. Christie. And, Rush Limbaugh provides another in-your-face body of proof of this!

“Eating IS!”

In a true spiritual community, the conditions are not really there for themselves. So, a lacto-vegetarian diet requirement is not meant to make one lean and healthy, although that will be the lawful outcome from such a change of food intake.

It is meant, spiritually, as a way to create HEAT. The friction that necessarily arises when you have to eschew a candy bar and chew some almonds, say, provides the bodily feeling, which can lead to insight.

So, in the current American scene, who thinks the Leary-programmed vast wrong-wing majority can heal itself?

No, the Universe works in mysterious ways, and it will not be mocked. Thus, one way or another, sooner or later, a crisis must come about, which cannot be ignored.

And only such a happening can possibly cause enough people to wake up and change their behavior.

Face facts. It used to be that America existed so that individuals could be free to live their lives as they chose, while respecting their fellows.

Now, America exists to---EAT!!!

Here’s one more myth that needs exposing.

Our fat cat oh-so-satisfied pompous generation raves about how in the old days most people had to work on the farms to produce food, and NOW there are only about 2% who “work the farms”.

What a self-deluding lie!

Eating to live (which used to be the lawful truth) has morphed into living to eat. And, listen, if one could make love as much as one could eat, AND SURVIVE, maybe we’d be a lot leaner!

From planning and planting all the way to swallowing and then dealing with the health consequences of such a junk food diet, it sure seems to me that at least half of American’s time and effort goes into FOOD---or, truthfully, junk food.

You see, all the concern with “health insurance” is also a vital part of the “farming” food chain.

Farmers grow it, illegals pick it, truckers move it, stores sell it, ads push it, doctors try to heal “it”, and all the other ways people live, while spent making other things, like houses and cars etc, they are still, at least subconsciously, wondering where their next meal is coming from!

“We have met the enemy, and it is us”. Pogo

How do you “meet us”?

Let’s get personally responsible, HERE!

“I have met the enemy, and it is I”

In order to meet I, I need a---MIRROR. Well, such an instrument needn’t be the one uses to “do one’s face” in the morning.

No, real demands that cause real changes are the actual “mirror” required to see oneself, with brilliant clarity.

Come to me, big daddy---the Crisis Mirror!

Reinhard| 11.10.10 @ 2:22PM

Talk to the Unabomber much?

I scrolled past this "manifesto" after the 2nd paragraph. Try a job...it'll fill the time with more productive activity.

Perusha| 11.10.10 @ 2:26PM

You don't have to read it, pal.

Oh, I see--you didn't.

Are you a Nazi?

Am I a Unabomber?

Quiche Lorraine| 11.11.10 @ 4:57AM

It is quite possible that you may in fact be a unabomber embrio. I agree with Reinhard, you may want to find a job, or a hobby, wife, something...

Perusha| 11.11.10 @ 12:03PM

It is quite possibel that YOU may in fact be a unabomber.

Intelligent Design| 11.10.10 @ 1:34PM

It's time for the new Congress to vote on the Fair Tax (www.fairtax.org), which would completely eliminate the federal income tax system, eliminate the IRS, and result in unprecedented economic growth. There would be no payroll withholding tax, no separate Social Security tax, no taxes on capital gains, interest, or dividends, no AMT, no estate tax, no corporate income taxes, and no federal income tax returns. Revenue would be obtained from one simple national sales tax levied on new goods (not used) and virtually all services. This sales tax, estimated initially at 23%, would be collected using existing state mechanisms (most states have a sales tax) and forwarded to the U.S. Treasury. The tax would not be added on at the point of sale, but would be embedded in prices. There would be no loopholes ---- illegal immigrants, drug dealers, other crooks, and tourists would all help pay for our federal government. Fair Tax legislation has actually been introduced in both the House and Senate in prior years, but it has not received sufficient support from the old, corrupt Congress. It should be possible to pass this legislation in the House, and also in the Senate with just modest Democrat support.

The Fair Tax is the single most effective step Congress can take to restore freedom and create truly astounding economic growth. This would lead to a massive reduction in the national debt, assuming that federal spending is also drastically cut.

How many Americans are in favor of ending the federal income tax system and the IRS? Who would be opposed?

The web site: www.fairtax.org provides all the details.

ทาสีคอนโด| 11.10.10 @ 2:02PM

It's going to be very interesting, may be entertaining and perhaps very scary as to what Nazi Pelois' led lame-duck Congress is or is not going to do.

Oldefarte| 11.10.10 @ 2:19PM

Great article, Peter! I would only add that all government welfare [except for the truely and completely elderly/incapacitated] should be converted to workfare, with those receiving government aid be required to perform some form of menial labor for their municality, ie street cleaning, road repair, building cleaning,etc. Additionally, I'd suggest that all foreign aid be either eliminated or seriously reduced, as most of same ends up in the pockets of contries' dictators and/or in their swiss bank accounts; that excessive/unnecessary military hardware be eliminated or reduced [we don't need sophisticated cruise missles or supersonic jets to fight Muslim terrorists in the Middle East];etc!!!!!

dick| 11.10.10 @ 3:56PM

I volunteer at a food kitchen that provides canned and dried food for anyone under a certain income level and for any seniors. You should hear the recipients complain that they don't like the food selections. Hispanics usually bring back the cans of green beans, for example. Not in their heritage.

loulou| 11.10.10 @ 4:15PM

But green beans are beans, aren't they??
Tell 'em beggars can't be choosers.

Walter| 11.10.10 @ 11:18PM

As far as the beans . . . Fry them . . . . twice.

Kevin in South Carolina| 11.10.10 @ 4:01PM

I find it humorous and ironic that the only reason Democrats are facing the dilemma of possibly having to deal with taxes going up on January 1st is that THEY wouldnt approve of the Bush tax cuts unless there was a sunset built in for10 years down the road. Here we are 10 years later and theyre just dying to spread that wealth around. Yet they are terrified by the prospect now

Too smart by half

Paul from SA| 11.10.10 @ 4:18PM

We must raise taxes to pay for union benefits.

Jason| 11.10.10 @ 5:50PM

Um, wow! I hope you were just trying to be funny!

Paul from SA| 11.11.10 @ 8:57PM

Yep, I'm trying to give the Republicans a slogan all people can understand.

CebVA| 11.10.10 @ 4:20PM

Left out of the discussion is the effect of raising the minimum wage over the past few years. This do-gooder feel-good folly hits the lower economic strata hardest and is undoubtedly a contributor to high unemployment among minorities and teens. To fuel a recovery, we need to repeal those hikes and mandate lower minimums wages in those states presently above the federal minimum.

Paul from SA| 11.11.10 @ 8:56PM

Yep. When you artificially raise the cost of labor, you get less employment.

There should be no minimum or maximum wage limits imposed by the gov't.

Carl Harris| 11.10.10 @ 5:39PM

You left out one very important step: Eliminate unions in the public and private sector and scale back the number of federal workers and convert their pensions to 401K accounts.

jhoger| 11.10.10 @ 7:56PM

Um, what does it mean "eliminate unions in the private sector?"

So somehow collective bargaining is not a freedom Americans should enjoy? Fascism, here we come.

Ryan| 11.10.10 @ 6:40PM

What about privatizing NASA (a bottomless pit of money dumping) and the USPS (which hasn't ended the fiscal year in black since, well, ever. And don't save HUD or the Dept. of Education or the Dept. of Energy. Eliminate them! And get us the hell out of the United Nations, another expensive anti-American propanda transmitter.

Karl| 11.10.10 @ 7:11PM

In practice, President Reagan was a Keynesian. When combatting the recession of 1981-1982 he used a combnation of fiscal and monetary stimulus. That fiscal stimulus included not only tax cuts but also significant spending increases.

Like President Obama, President Reagan inherited a weak economy and his predecessor's last budget. Like President Obama, in 1981 President Reagan added tax cuts and spending increases to the budget he inherited and set a post WW II record for spending as a % of GDP.

We were actually adding jobs when President Reagan took office. However, between August 1981 and December 1982 we lost a total of 2.673 million private sector jobs. We did not experience job gains until 1983, two years after President Reagan took office.

In contrast, between December 2007 and December 2009 we lost a total of 8.467 million private sector jobs, including a peak loss of 806,000 jobs in January 2009 alone, the month President Obama took office. This was over 3 times the job losses in the early 1980's. Since President Obama took office, job losses declined throughout 2009 and we have had private sector jobs gains for 10 straight months in 2010.

Yes, the recovery has sputtered this year versus President Reagan's THIRD year. Why? The difference is that we INCREASED spending and set a new record in FY 1982. We then INCREASED spending and set another new record in FY 1983. We did not drop spending until all the jobs lost had been recovered. Spending did not slip below the FY 1981 level until FY 1987.

By contrast we actually CUT spending in FY 2010, President Obama's first budget year. And we are likely to cut spending again in FY 2011, even though we are still down over 7 million jobs versus 2007.

Reagan was allowed to follow Keynes' prescription for fiscal stimulus. Obama was not.

The CBO estimates that one million lost jobs has a fiscal cost of $54 billion PER YEAR in lost payroll and income taxes plus increase spending for unemployment compensation, food stamps, welfare, etc. In the short run, the most important priority is to get people back to work. The proven way to do that is Keynesian stimulus UNTIL ALL THE LOST JOBS ARE RECOVERED. It worked in WW II. It worked under Reagan. It can work again if we give it a chance. Cutting spending in the near term is counterproductive.
-----------------------------------------------------
Yes we need to address the stuctural deficit as we prepare for the retirement of the baby boomers. Like Reagan we should gradually raise the age for full Social Security benefits--and this time we should index the age to life expectancies.

I agree we should eliminate the Department of Agriculture, although I would move its food stamps and other social spending to HHS rather than Commerce. While I would eliminate agricultural subsidies and import restrictions, especially ethanol subsidies/restrictions, I agree that surviving programs like crop insurance for small farmers should go to Commerce.

There are other spending cuts we could adopt now to implement in future years. I am anxious to hear the recommendations of the deficit commission. But making any tax cuts permanent BEFORE we have approved specific spending cuts is putting the cart before the horse.
----------------------------------------------------
As an aside for all who, like the author, think that tax cuts are the answer to everything. The 2nd largest job loss since the Great Depression was from January 2001 to July 2003 when 3.450 million private sector jobs were lost. Most of these jobs were lost AFTER we passed the tax cuts in 2001. In other words we have had our two biggest periods of lost jobs since the Great Depression AFTER passing massive tax cuts.

jhoger| 11.10.10 @ 7:20PM

Excellent comment, Karl.

Quiche Lorraine| 11.11.10 @ 5:13AM

jhoger,
You just like him because he bears the same name as your beloved ideological mentor.

Quiche Lorraine| 11.11.10 @ 5:14AM

You'll always be an idiot I guess.

richard2010| 11.10.10 @ 7:44PM

Hey, why not just spend 20 tillion dollars and really have a multiplying effect? We could then employ all of Mexico. Why not spend 100 trillion dollars and we could also employ South America? All we need to do is just spend and everyone in the world will be employed. Karl - you are brilliant!

Quiche Lorraine| 11.11.10 @ 5:04AM

No....more like 600,000,000,000 katrillion dollars, then we can all just hang-out at the beach forever and drink beer till we puke.

Intelligent Design| 11.10.10 @ 8:21PM

Every increase in taxes is a decrease in private property, and freedom.

Bernd| 11.10.10 @ 8:35PM

If this debacle on the part of Obama/Reid/Pelosi/Geithner/Bernake results in anything good it will hopefully be the following realizations:

1) The government cannot conjure up economic activity out of thin air by borrowing money and spending it. To the contrary people realize that this borrowed money has to be repaid and adjust their spending and savings patterns accordingly.

2) The government cannot conjure economic activity and prosperity out of thin air by printing money or pursuing the modern version "quantitative easing"

If either of these two things were to work then then case would be made to do them all of the time. But they don't work - not in good times nor in bad.

All other things being equal every dollar taken out of the economy by the government no matter what the government uses that dollar for is a net negative to the economy. Efforts to inflate our way out of this mess will just erode the value of our savings and investments and lead to problems that we last saw during the Carter administration.

PC| 11.10.10 @ 8:42PM

Karl, don't know where to begin so let's start with jobs under Obama vs. Bush. From the Memphis Business Journal, November 10, 2010:

Forty-eight states -- including Tennessee -- have been losing jobs at a faster pace under President Barack Obama than under President George W. Bush, according to a Buffalo Business First analysis of private-sector employment data.

North Dakota, Michigan and New Hampshire are the sole exceptions to the overall pattern of decline.

You guys will flog Keynes until the cows come home to justify government taking from the private sector. When will you ever quit? No amount of logic or data seems to stop you.

Karl| 11.10.10 @ 9:54PM

PC - I suggest you begin with the actual facts from the BLS website:
Private Sector Job Gains/Losses in Thousands
Jan-07 186
Feb-07 79
Mar-07 213
Apr-07 65
May-07 127
Jun-07 42
Jul-07 15
Aug-07 -109
Sep-07 -14
Oct-07 65
Nov-07 97
Dec-07 23
Jan-08 -12
Feb-08 -85
Mar-08 -58
Apr-08 -161
May-08 -253
Jun-08 -230
Jul-08 -257
Aug-08 -347
Sep-08 -456
Oct-08 -547
Nov-08 -734
Dec-08 -667
Jan-09 -806
Feb-09 -707
Mar-09 -744
Apr-09 -649
May-09 -334
Jun-09 -452
Jul-09 -297
Aug-09 -215
Sep-09 -186
Oct-09 -262
Nov-09 75
Dec-09 -83
Jan-10 16
Feb-10 62
Mar-10 158
Apr-10 241
May-10 51
Jun-10 61
Jul-10 117
Aug-10 143
Sep-10 107
Oct-10 159

Yes there were high job losses in President Obama's first few months in office from the continuation of the recession that started in December 2007. However, you can see that those job losses decline from 806,000 in January 2009 to 83,000 in December 2009 followed by 10 straight months of jobs gains. Generally the first few months of economic results in a presidency are the result of the policies of the predecessor. It sure looks like that is the case here.

Quiche Lorraine| 11.11.10 @ 5:08AM

That's because there are fewer jobs to lose as time goes on eh? I'm confident he'll finish off the jobs by 2012 though. He's just collecting his second wind.

carnot| 11.11.10 @ 6:54PM

1) who trusts the BLS?

2) those statistics don't begin to approach the reality of what has been going on in the jobs market.

3) One magic number hasn't changed: 9.6%....eff off.

joe| 11.10.10 @ 8:47PM

Reagan signed one of the largest tax hikes in history in 1982. So Obama is the opposite of Reagan since Obama has not raised taxes yet.

Rmm| 11.11.10 @ 9:25AM

I don't know about that, i.e. tax hike, but I do know that the stock market took off like a rocket in 82. It was a great time to be invested in a little known company named Apple Computer.

carnot| 11.11.10 @ 6:56PM

LIAR...or is it IGNORANT LIAR?

Mr Obama's Congress has legislated tax increases in the health care bill....as well as sin tax increases (that are incidentally not "progressive")

jschmidt| 11.10.10 @ 8:57PM

Obama has no background in economics, business, and little background in gvernment. He is the most inexperienced president in 60 years and he abdicated control to Pelosi and Reid who are bent on the redistribution of wealth to those who don't work. Make everyone the same. Poor.

carnot| 11.11.10 @ 6:59PM

that's a myth that is patently false. much of the legislation in play now has been well known within Liberal circles for years. you think Pelosi's staff drafted that mammoth piece of health care corruption? of course not. they're both water carriers who know exactly what they are doing.

firebrandpatriot| 11.10.10 @ 9:08PM

The private sector is not spending. 70% of the American economy is based on consumer spending. The public sector is the only spending option left. When will all the Pollyannas wake up?

Ralph Perna| 11.10.10 @ 9:23PM

Who;s kidding who, let's call it like it is,a DEPRESSION !

judithod| 11.11.10 @ 12:22AM

The Bush tax cuts ushered in 48 months of consistent economic growth--the second longest in U. S. history. What stopped the growth? The 2006 election of the Democratic majority to Congress. Since the Democrats took control, $5 trillion has been added to the national debt. And then there's the Community Reinvestment Act inaugurated under Carter and expanded under Clinton, which gave away mortgages to anyone regardless of their ability to pay and threatened banks with penalties if they dared to redline.

carnot| 11.11.10 @ 7:00PM

small correction: able people are paying. they just aren't the same ones buying.

Ted R.| 11.13.10 @ 11:39PM

What rubbish. The growth of the Bush years was pure smoke and mirrors. After the dot-com bubble burst, Americans leaped into another bubble in the real estate market. What kept the economy going through the middle part of the decade was deficit-fueled growth, stemming from irresponsibly loose monetary policy, government deficit spending and consumer deficit spending (facilitated by borrowing from foreign creditors), and - of course - the housing market bubble, which was both cause and effect of the first two.

The American economy failed to innovate in the last ten years; we borrowed money not for investment, but instead primarily for consumption. What were the sectors of the economy that accounted for virtually ALL of the economic growth of the last decade? HEALTH CARE, FINANCE, and HOUSING. These are areas where a lot of money was to be made, but very little value was added to the economy. And we have conservative policies to thank for it.

The modern-day conservative culture of get-rich-quick-at-all-costs, a culture which dates back to Reagan, has brought the economy low; it may take years before we recover (longer, if deficit-busting tax breaks remain in place). We have all the Cons who march in lockstep to their corporate masters to thank for this one.