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Time to Go for the Kill
May 22, 2013 | 65 comments
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Obamacare Implodes
May 15, 2013 | 41 comments
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Obama’s Rising Inequality
May 8, 2013 | 101 comments
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Downsize the Liberals
May 1, 2013 | 53 comments
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Fight Back! Privatize the FAA!
April 24, 2013 | 65 comments
The Obama Watch
Bush Tax Cuts Still Working — For Now
They’ve rescued Obama once. After 2012 he’ll try to get rid of them again.
During President Obama’s 2008 campaign, he termed the Bush tax cuts “the failed policies of the past.” But last December, with the economy in shambles under the Keynesian, throwback, 1970s-style economic policies of Obamanomics, it was the Bush tax cuts he turned to, agreeing to extend the tax cuts for everyone for two more years. That was directly contrary to his 2008 campaign pledge to allow the tax cuts to expire for singles making over $200,000 per year, and for couples making over $250,000.
At the time I wrote in this space that the tax cut extension would allow breathing room for the long overdue economic recovery to finally sprout this year. And sure enough, that is exactly what has happened, with unemployment falling to 8.9% since then. But President Obama is now working on the Coming Crash of 2013, which will be the result on our current course if he is reelected.
Pinning the Economy to the Mat
The Bush tax cuts were scheduled to expire at the end of 2010. Allowing their expiration for singles making over $200,000 per year and couples making over $250,000 would have meant the following for these individuals, who comprise the bulk of the nation’s employers and investors.
The two top income tax rates would have increased by nearly 20%, counting Obama’s proposed phaseouts of deductions and exemptions. The capital gains tax would have increased by nearly 60%, counting the new Obamacare tax on investment income. The tax rate on dividends would have nearly tripled, counting the new Obamacare tax as well. The Medicare payroll tax would have increased by over 60% for the targeted income earners. The death tax would have risen from the grave with a 55% top rate, if the Bush tax cuts simply expired.
Yet, in 2007, even before Obama became President, official IRS data shows that the top 1% of income earners paid more in federal income taxes than the bottom 95% of income earners combined. The top 3%, to which Obama’s across the board tax rate increases would apply, paid more than the bottom 97% combined. Yet, President Obama was still committed to his left wing extremist tax piracy policy of increasing the tax rates of virtually every major federal tax on this one small sliver of taxpayers. That is why I am thinking that the Somali pirates the Navy just captured may surprisingly turn up working at the United States Treasury Department, at the Office of Tax Policy.
But President Obama’s commitment to this tax piracy did not serve him or the nation very well. Before this latest recession, going all the way back to World War II, two-thirds of a century by now, recessions in America had lasted only 10 months on average. The longest previously had been 16 months. But by December, 2010, it had been 3 years since the last recession started.
Yet, even by that December, the latest unemployment report had showed the unemployment rate increasing again, to 9.8%. That capped 16 straight months of unemployment at 9.5% or above, the longest such period since the Great Depression.
Unemployment among African-Americans had persisted during that period at 15% or above. Among Hispanics it had also persisted well into the double digits. Teenagers had suffered persistent unemployment around 25%, 45% for black teenagers. These groups were suffering a depression.
Even though technically by December the recession was declared over, historically the deeper the recession the stronger the recovery. But President Obama’s recovery was moping along at less than half the rate of prior recoveries from similarly deep recessions. By December, the economy should have been in its second year of booming economic growth. Instead, an all-time record 44 million were struggling in poverty, one in seven Americans, with over 40 million on food stamps, another all-time record.
Rebuked by the November political shellacking, President Obama finally relented in December and agreed to extend the Bush tax cuts for two years, for everyone. And that has allowed the breathing room for the long overdue recovery to now begin to sprout, with unemployment declining to 8.9% in the latest report.
But the economy still has a long way to go before traditional economic growth is restored. The labor force participation rate remains stuck at its lowest level in 25 years. With the same labor force participation as before the recession, the unemployment rate would be 11.5% today. Those who have given up and dropped out of the labor force are still not working.
This is the second time the Bush tax cuts, “the failed policies of the past,” have saved America from a recession. After the more capital intensive Bush tax rate cuts of 2003 kicked in, the economy created 7.8 million new jobs, and the unemployment rate fell from over 6% to 4.4%. Real economic growth over the next three years doubled from the average for the prior three years, to 3.5%.
Business investment spending, which had declined for 9 straight quarters, reversed and increased 6.7% per quarter. That is where the jobs came from. Manufacturing output soared to its highest level in 20 years. The stock market revived, creating almost $7 trillion in new shareholder wealth. From 2003 to 2007, the S&P 500 almost doubled. Capital gains tax revenues had doubled by 2005, despite the 25% rate cut in 2003.
The Coming Crash of 2013
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
Letter to the Editor View all comments (24) | Leave a comment
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Bill Hussein O'Stalin| 3.9.11 @ 6:34AM
It's obvious now that Obama may be Osama's secret weapon in the United States. Essentially, Osama Bin Ladin is clever enough to see he need do no more.
Obama and his fifth column are marching across the economy hiding behind the progressive agenda, and all the while stomping the Constitution, and you, and the economy into the ground.
Mitch Angoop| 3.9.11 @ 2:06PM
Unfortunately, I have two important topics to bring up. The first topic will inflame every left/lib moron in our Country. Why? Here's why: American Blacks are either the stupidest group of people in the world, or they are willing to destroy their own lives to protect the vile dictator 'wannabee' in the White House simply because he's allegedly Black. (He's not, but they don't seem to care.)
My second issue is very upsetting and requires this preface:
WARNING!
I do not want to be alarmist, but I have been wrestling with the worst virus/worm I have EVER encountered. It apparently got in through a ‘hole’ in an ADOBE FLASH update message. It will come up as a warning that your computer has been infected by a virus and appear to be scanning your hard drive. DO NOT OPEN IT OR EVEN CLICK ON IT! If you do not know what to do, try to get into SAFE MODE and call an expert. Microsoft has issued more than a dozen security definitions and attempted patches in the last week and it keeps getting back in. This is very serious! I may be paranoid, but it looks like it could be a coordinated attack on our internet. I hope I’m wrong.
You may now return to Mitch's regularly scheduled ranting and raving.
Bill Hussein O'Stalin| 3.9.11 @ 2:35PM
Download Avast Free Edition or for a few bucks the upgrade. It will scan your computer then do a reboot and you will have to place everything in the "chest" then delete it later.
Mitch Angoop| 3.9.11 @ 3:50PM
I've had success with Microsoft Security Essentials, but, at the end of it all, even after encapsulating it and removing, I still had to do a System Restore just to be certain.
Have you had any experience with Microsoft Security Essentials, and does it compare with Avast?
Thanks very much for the help!
Bill Hussein O'Stalin| 3.9.11 @ 3:57PM
Avast works and prevents further infections.
Mitch Angoop| 3.9.11 @ 5:27PM
Bill,
Thanks very much. I'll just add this to your long list of intelligent suggestions! Thanks again.
Alan Brooks| 3.9.11 @ 8:55PM
even if everything you all write is fact, it is such a relief the dynastician from Kennebunkport-cum-Crawford is gone. Hallelujah
TennesseeVolunteer| 3.9.11 @ 7:44AM
Peter, we continue to hang on here in flyover country. Your plan is a good one but we have to defeat Obama! Everything else after that can work itself out.
His defeat signifies a rejection of liberalism, a lack of common sense and, dare I say, a return to a Christian nation!
Alan Brooks| 3.9.11 @ 8:57PM
" a return to a Christian nation!"
America is a satanic nation, that is why it got to the top of the heap. Christianity is the veneer, the necessary covering.
335blues| 3.9.11 @ 9:40AM
The "bush tax cuts" did not rescue the marxist obama. Do you think that we have forgotten what happened already? Are you rewriting history? It was the republican leadership that rescued obama by letting him off the hook when we had him down. It is just like what is happening right now with the budget. The republican leadership is prepared to capitulate. The republican leadership can do the right thing and (1) not raise the deficit limit and (2) shut the government down until the marxist democrats agree to REAL cuts. But they won't because they spineless wimps that are more worried about re-election than saving the country.
russel| 3.9.11 @ 10:32AM
You're right . I didn't waste time on this article when I saw it was yet another doomsayer and his woe is us . Forget any ' solutions ' to anything if this boob is re-elected . The only solution presenting itself is revolution . How's that for prophesy ? . I prefer the much rosier outlook that America is dead tired of this depression and will kick zero in the ass so hard his hair will hurt . Remember too , we have a year and a half left in his FIRST term and that's an eternity in political time . Plenty for him to finish screwing up what he statrted .
Alan Brooks| 3.9.11 @ 9:01PM
"I prefer the much rosier outlook that America is dead tired of this depression and will kick zero in the ass so hard his hair will hurt ."
So then you can elect another empty-suit GOP president?
ExCdn4FT| 3.9.11 @ 9:42AM
As usual, another insightful article with real solutions to the many financial issues facing this country. Defeating Obama and the progressives in 2012 is essential.
I would very much appreciate Peter's perspective on the FairTax and it's place in the puzzle. Eliminating the IRS is almost as important as getting rid of Obama.
richard ryan| 3.9.11 @ 11:13AM
Great ideas, sir. I especially like the voucher system for government elderly and poor. Medicare and Medicaid spend more money precisely because they reimburse doctors poorly. Sounds counter intuitive but it is definately true.
chriser| 3.9.11 @ 11:31AM
Now we just need to find a Republican presidential candidate who can support and articulate these policies. Are any of the current bunch capable?
LiveFreeOrDie| 3.9.11 @ 1:22PM
"And despite President Obama's occasional rhetoric, no new nuclear power plant construction is anywhere in sight in the U.S., though 60 new reactors are being built around the world, from Brazil, to Argentina, to Lithuania, to India, even Sri Lanka, with 20 being built in China alone."
The arms race with the soviet union has become the energy race with China. Leftist policies ensure we will lose this race by vigorously pursuing the exact opposite. Less supply, more demand and higher prices. The Bush tax cuts will be drops in the bucket when energy prices, "Necessarily skyrocket". Nobody will be thinking about taxes when they can't afford to gas-up their cars, heat their homes or operate their businesses.
Clint| 3.9.11 @ 1:26PM
Sen. Jim DeMint (R-S.C) said U.S. dependence on foreign credit and oil has brought the country to its knees.
"Today America is literally on its knees to China and other countries for the credit we need to run our economy," DeMint said in a floor speech Tuesday afternoon. "We are also on our knees to the Middle East, which is very unstable right now, for the oil we need to run our economy, to even take our food to market, the essentials here at home."
"We have a Congress that, instead of addressing the issue of a trillion-and-a-half dollars [the current estimate of the deficit], is debating between $61 billion and $6 billion,” said DeMint. “These are fractional. You cannot even see the line here of what is being proposed by our Democratic colleagues."
Obama Is Beatable.
The Tea Party Rebellion Escalates.
Carpe Diem.
Who Knows?| 3.9.11 @ 1:52PM
Therefore, how can anyone be very hopeful about any changes that can be made, to stop the bleeding, in time to keep it from getting worse?
I’m (TOO!) old enough to remember that the doomsayers have almost forever been warning of the coming wreck that social security, medicare and medicaid are, and here we are! Still TALKING about them, and even more wasteful VESTED INTEREST programs.
There is actually a piquant, and biting way to stifle the people who support programs like Obamacare---
Use jujitsu, and agree with them, and one up them, by saying we should go all the way, and force people to buy their food from GOVERNMENT stores.
Even ask them how we could destroy the EVIL private business we currently shop at.
So, find out where they purchased their last meals, either restaurants or food stores, and tell them you want to nuke them.
Yes, let’s expand all the military PX’s!
It’s just not FAIR that they get to choose where to FREELY purchase stuff, when so many people have less than they do!
I want ONLY government gas stations, etc!
Who Knows?| 3.9.11 @ 1:53PM
Oops--- I failed to copy the first paragraph of this comment---
"Never forget that vested interest RULES, and any attempt to change the status quo MUST defeat the inevitable resistance it presents."
Dee See| 3.9.11 @ 11:26PM
----Continuity of agenda ALERT!
Seems Janet Napolitano, in Mexico last
Nov 30th signed in a certain 'Trusted Traveller'
agreement which put into place a MASSIVE
'green card' open border ID card.
80 MILLION Mexicans, specifically the young,
are being bio-metrically scanned, fingerprinted
and enrolled. It enables them to come and go
into the US and Canada with TOTAL, unchallengable access
---all with an ATM
sweep of the card. TRUE!!!!!!!
TRUE! TRUE! TRUE!
The Bush--Clinton--Bush--------OBAMA
Globalist-EUGENICS front steams on.
CHECK OUT Alex Jones/Jerome Corsi
latest INFOwars postings on Youtube.
AGAIN!
------HUAC meets NUREMBERG ------NOW!!!
Bennet Cecil| 3.12.11 @ 12:56AM
Hopefully American voters have had enough of Marxist politics and will give president Obama the same vote of confidence that they gave Jimmie Carter. We should replace him with Michelle Bachman and restore our Republic to greatness. Vouchers for our schoolchildren instead of monopolist will advance education. Rep ace Obamacare and Medicaid with block grants to states. Open the federal employees health plan to taxpayers. Reduce corporate income tax to ten percent to encourage job growth. Sell Sally, Freddie, Fannie, GM, AIG etc in the market. We need reform and downsizing of the federal government.
Creative Recreation | 8.11.11 @ 2:04AM
is good