While Wall Street and virtually all economists not on Obama's payroll understand the depth and breath of the onrushing governmental spending disaster, it will well beyond the grasp of most ordinary Americans. Trillions of dollars. We can't even begin to understand numbers that large.
Sadly, it's well beyond the grasp of most politicians in Washington, too.
The Washington Dems are trying to blame the whole thing on previous administration, normally a foolproof strategy good for the first couple of years of any new administration. Unfortunately, in this case, such an argument doesn't stand up to even the most cursory analysis. Compared to Obama's spending, Bush was a rank amateur. Actually Bush was a rank amateur in most areas of government, but I digress.
While Dems love to point a finger at the cost of the war in Iraq or the so-called tax breaks for the rich to explain the deficit, Barack Obama has done more damage in two short weeks than Bush did in eight long years. The chart below says it all.
We are in the process of creating an unpayable debt. And inflation is just months away. The complete default of the United States is clearly on the horizon.
How Nancy Pelosi could propose an 8% increase in spending in this recession is beyond all comprehension. That she did it on top of $800 billion in new spending, not so cleverly disguised as a "stimulus package," is stunning. If only anything passed earlier was actually a stimulus, we might have a prayer. It wasn't and we don't.
Just read some of the analysis dominating the nation's newspapers and economic journals.
Reuters reports Obama budget plan forecasts $1.75 trillion deficit. "An eye-popping $1.75 trillion deficit for the 2009 fiscal year is projected in Obama's first budget. That is equal to 12.3 percent of U.S. gross domestic product."
ABC News points out that Obama is planning the largest tax increase in US history: Almost $1 Trillion in New Taxes Over Next 10 yrs, Starting 2011. "President Obama's budget proposes $989 billion in new taxes over the course of the next 10 years, starting fiscal year 2011, most of which are tax increases on individuals."
While the President attempts to aim tax increases toward the highest wage earners, the facts simply prove his oft stated plan cannot possibly raise the needed revenue to offset his massive spending plan. In a detailed analysis, The Wall Street Journal shows that even if Obama taxed this top 2% of wage earners at 100% of income, he would still fall trillions short of the revenue needed. The 2% Illusion shows the complete fallacy of Obama's tax the rich scheme.
"But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion."
Tragically Obama's may well hit the lower and middle classes hardest of all. Since it is simply impossible to tax the rich enough to cover the deficit, hidden taxes on energy that hit the poor the very hardest will make up a huge part of the shortfall.
What Obama's plan does do is tax small business into oblivion. Virtually every small business will be really hurt by Obama's announced tax plan. Instead of helping the economy, these taxes will lead to massive unemployment. What Obama fails to announce is virtually all small businesses fall under his tax increase plans. The ABC Analysis covers the tax increases on business.
In order to sell this insane plan in congress, Dems are designing the fight as Class Warfare. While John Kerry fired the first salvo yesterday, the demonization of the rich and corporations isn't lost on the Associated Press who detail it today's article, Obama plan brings cries of class warfare.
While Democrats are calling the Republicans the "Party of No," a resounding "NO" is exactly what is needed if we are to save our economy and, ultimately, our country. Sadly, it will require Democrats to wake up and show some sense and demand economic realism and restraint from the Democrat leadership and the tragically naive President Obama.