Understanding and Arrogance

From Fortune:

'The Obama White House likes to say that the theories of John Maynard Keynes form the foundation for its fiscal policies. Most notably, it draws upon the legendary British economist's idea of spending big to pull out of a recession.

But one economist says the administration has gotten Keynes only half right. Allan Meltzer of Carnegie Mellon is one of the most influential monetarists of the past 50 years. He has served in the Department of the Treasury under President Kennedy and on the Council of Economic Advisors during the Reagan Administration. He also authored the book, Keynes's Monetary Theory: A Different Interpretation.

While the Obama team is laying out huge sums of money, Meltzer says it's neglecting a key part of Keynes' plan: You can't run up a debt without a way to cover it.'

The whole article is a great read, along with this one by Gerard Alexander in tomorrow's Washington Post. The opening paragraph says it all:

'Every political community includes some members who insist that their side has all the answers and that their adversaries are idiots. But American liberals, to a degree far surpassing conservatives, appear committed to the proposition that their views are correct, self-evident, and based on fact and reason, while conservative positions are not just wrong but illegitimate, ideological and unworthy of serious consideration. Indeed, all the appeals to bipartisanship notwithstanding, President Obama and other leading liberal voices have joined in a chorus of intellectual condescension.'

Fuzzy Math

Sen. Obama's tax and spending proposals have been dissected in this blog and elsewhere ad nauseum, so I will not dwell on all of them here. My concern in this article is to specifically address the blatant attempts on the part of the Obama campaign do deceive through fuzzy math. The deception specifically relates that most basic of household activities, balancing a checkbook. A caveat: I do not always succeed at this activity myself (mostly from failure to take time), so I can relate to someone who might struggle to do so. I can not however, excuse a planned, deliberate national policy that is not only designed to end in imbalance, but is designed to deceive the public.

Our national debt currently stands at over $1 trillion. Obama's proposed plans for tax rebates and increased spending, amount to around $1.6 trillion. Additionally, he proposes an additional $1.4 trillion according to the National Taxpayers Union. Multiple reports have stated that Obama's proposals would dramatically increase the deficit, would eventually increase taxes on the very middle class he purports to protect, and would slow growth just as we're entering a global recession. Would people get money from from the government under Obama's plans? Yes they would. Would these policies be the best way to grow the economy and spread opportunity (rather than 'the wealth')? No they would not. It is physically impossible for 5% of the populace to take care of a $4 trillion + deficit, and the demands that the Obama policies place on business and individuals in exchange for the benefits they supposedly will receive are onerous at best. The government should be in the business of creating a favorable climate for growth, and then allowing that to succeed or fail, not ensuring that everyone is the same. Freedom and equality depend on limits on government action as much as they do on government action.

How are we going to pay for this massive deficit under the Obama plan? We don't know for certain since Obama has been particularly vague (even more than normally) in stating if he would cut any spending, and what his intentions toward the deficit are. We might have some clues however. In an interview on CNBC the other day, Rep. Barney Franks alternately said we should forget the deficit for awhile and find the 'plenty of other rich people' out there to increase taxes on. There have been several reports examining a possible market reaction to the anti-growth nature of the Obama proposals recently, and of course, we Obama's promise to spread the wealth and Biden's statement that paying taxes is our religious and patriotic duty.

I would agree that paying taxes are necessary and important for government functions. I would even agree that there's a case to be made for increasing the tax rate somewhat on higher income levels. But I find it ludicrous that liberals are constantly referring to all increased taxes as 'progressive' and all decreased taxes as 'regressive' (particularly as concerns higher income tax brackets). The higher the burden a small or middle-sized business has to bear, the less they'll be able to pay for additional work-force. If a small business is pulling in a million a year, after paying the additional taxes under the Obama plan (which the owner is charged at an individual rate as if the business income is a personal take for the owner), the additional health care, the additional Medicare, overhead costs, and reinvestment in the business, there would be precious little left to make the business worthwhile. If the owner then invested what little he or she took home, Obama would then increase the rate of the capitol gains tax paid upon those investments, and increase the tax rate upon the inheritance built over the years.

The Obama policies are quite simply, anti-growth. They are socialist in nature, but worse, they will hand a tremendous deficit down at least several generations. What really bothers me the most, is the consistent attempt by Obama and Biden to sell these policies, in the vaguest of terms, as helpful to the middle-class. These proposals simply don't add up, and are deceptive. This is not change we can believe in. In fact, it's our patriotic duty to vote against it.