An Invoice for Future Generations

Over the past few days President Obama has laid out the most expansive and expensive domestic agenda since LBJ’s Great Society (we know how that worked out)! This followed the $2 trillion we just put into our financial system for TARP and the Stimulus (or the Economic Reinvestment and Recovery Act). We now have this Congress proposing a $410 billion omnibus bill which completes the budget for 2009 for 9 of the 12 major government agencies. The Democrats held off voting on this under Bush since they felt he would veto much of it. Now with their man in charge, it’s Gung Ho! The expenses for these agencies, or as the current administration says, the “investments” for these agencies, will jump by 80% from 2008 to $650 billion in 2009.

How do we pay for this? Mr. Obama says that raising taxes on people who make over $250k/yr, limiting deductions for mortgages and charitable donations, and getting out of Iraq, will do it. Well, the Wall Street Journal, with the help of the Tax Foundation, did the calculations and concluded this was “poppy cock”, as President Eisenhower used to say. In fact, taxes on everyone earning more than $75k/yr in 2006 would barely provide enough to cover the $4 trillion Congress will be spending in fiscal 2010. Keep in mind that over this current period, business will not be as good as it was in 2006. Thus, the likelihood of severe inflation is now very real and the reduced value of our dollar will severely affect the solvency of our nation in the years to come.

We are witnessing the greatest redistribution of wealth this country has ever seen and we are modeling our economy after the stagnated industrialized economies of Western Europe, where the emphasis is on sharing the wealth instead of growing the wealth. When will we ever get away from class warfare tax politics and move from a 44,000 page tax code to a flatter, easier to interpret tax policy, free of distortions and inequities, and one that encourages investment and growth?

The American electorate is not shy about making its voice heard in the ballot box and as we watch this President move us towards socialism we will exercise our options. The numbers will show that those who eventually will pay for this travesty are not only the so-called “rich” but the middle class, if we are to combat the inflation that will surely come.

Then Mr. Obama will have to take the political blame and this will become his Depression, not Mr. Bush’s, and he likely will be a one-term President despite his charisma and his amazing journey to the White House.