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March 4, 2009
WSJ: 'A Republican road to economic recovery'
Topics: Political News and commentariesPaul Ryan, ranking Republican on the House Budget Committee and who also serves on Ways and Means has an article at WSJ on the good and the bad of Obama's proposals, and some better alternatives (emphasis mine):
[...] After two months of drastic interventions, has hope replaced fear, and confidence pushed aside uncertainty? Hardly.Continue reading here ...The budget the president released last week, however, does provide some certainty about where we are headed: higher taxes on small businesses, work and capital investment.
Add to this the costly burdens of a cap-and-trade carbon emissions scheme and an effective nationalization of health care, and it is clear that the government is going to grow while the economy will shrink. In a nutshell, the president's budget seemingly seeks to replace the American political idea of equalizing opportunity with the European notion of equalizing results.
A constructive opposition party should be willing to call out the majority when it falls short. More important, Republicans must offer alternatives. In this spirit, here is what I would do differently:
- A pro-growth tax policy. Rather than raise the top marginal income tax rate to 39.6%, it should be dropped to 25%. The lower tax brackets should be collapsed to one 10% rate on the first $100,000 for couples. And the top corporate tax rate should be lowered to 25%. This modest reform would put American companies' tax liability more in line with the prevailing rates of our competitors.
We've seen 10 years of growth in our equity markets wiped out in recent months, while 401(k)s, IRAs and college savings plans are down by an average of 40%. The administration and congressional Democrats want to raise capital gains tax rates by a third. Instead, we should eliminate the capital gains tax. It supplies about 4% of federal revenues, yet it places a substantial drag on economic growth. Individuals already pay taxes on income when they earn it. They should not be socked again when they are saving and investing for their retirement and their children's education.
Capital gains taxes are a needless burden on investment, savings and risk-taking, activities in short supply these days. Getting rid of this tax could help establish a floor on stock prices and stem the decline in the value of retirement plans by increasing the after-tax rate of return on capital.
Democrats oppose this, playing on emotions of fear and envy. But while class warfare may make good short-term politics, it produces terrible economics.
Although the focus of the WSJ piece is on Republican alternatives to Obama's wealth redistribution plans, the point about class warfare making for good short-term politics but that it produces terrible economics is important because it speaks to the core of Obama's policies. American Power addressed this issue in it's post titled, "Barack Obama's Economic Class Warfare":
It goes without saying that Barack Obama's got a problem with wealth and wealth creation. The administration's new budget represents the biggest wealth transfer in American history, a radically-pure spending blowout that must be justified by excoriating the corporate sector and the nation's affluent for reaping "selfish gains" while refusing to "invest" in America's future. That kind of talk is leftist code language for big government advocacy.American Power then points to a piece by The New AmericanDemocratic-leftists will of course argue that this is not class warfare. President Obama is not "demonizing the upper-class in order to make people in the lower classes angry at them." Today's nihilist lefties will argue that the party's money grab is simply a matter of "raising taxes on people who can afford it, while allowing less fortunate people to keep their money."
Don't believe it for a minute - this is pure Democratic baloney.
The New American that examines President Obama's address to the nation "for trick wording and dishonest blame-shifting" and addresses Obama's language that indicates he intends for the government owns all wealth made by Americans:
President Obama's address was chock full of false diagnoses of how the economic recession got started, as well as frightening language that indicates the government owns all wealth made by Americans. Here are a few examples, beginning with his explanation of the thinking that led to the recession:Clearly, class warfare and wealth redistribution are the core tennents of Obama's policies and proposals. He intends to socialize America and target capitalism and the free market as evil. And as the Paul Ryan noted in the WSJ article, "While class warfare may make good short-term politics, it produces terrible economics."Statement: "People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway."
Correction: The lowering of lending standards was not the result of just about every Wall Street banker suddenly -- and all at the same time -- becoming corrupt and losing the ability to make money. Sometimes individual crooks like Bernie Madoff emerge in business, but markets don't go corrupt en masse after decades of operating competently. Instead, the lowered lending standards were led and underwritten by the congressionally chartered mortgage subsidy banks, Fannie Mae and Freddie Mac. And federal regulations often required private banks to dole out loans to bad risks under the guise of subsidizing loans in neighborhoods with minorities through the Community Reinvestment Act and backed up by the threat of costly lawsuits and fines.
Statement: "Regulations were gutted for the sake of a quick profit at the expense of a healthy market."
Correction: There's no doubt among anyone paying attention that the recession was created by government rather than a result of a lack of government, regulations or otherwise. The Federal Reserve Bank -- chartered by Congress -- created the crisis by suppressing interest rates for more than 10 years (beginning in 1995) that led to the housing bubble. It was the Fed that ruined an otherwise healthy market.
Statement: "A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future."
Correction: This is a clear reference to the Bush-era tax cuts that allowed the American people to keep more of their own money. It's also an equally clear indication of where Obama is coming from in his worldview. He speaks of a "transfer" of "wealth to the wealthy" as if the people's money was government's to dole out as it wills. Your wealth is not your own, Obama says. Everything belongs to government, and whatever scraps government allows you to keep is a privilege and a "transfer" from the common wealth bank that is government. "Investment" is simply a rhetorical device to refer to "government spending" for Obama.
Obama blaming bankers for the banking crisis is a bit like saying that wet streets cause rain.
Posted by Hyscience at March 4, 2009 7:48 AM
Articles Related to Political News and commentaries:
- WSJ: 'A Republican road to economic recovery' - Mar 04, 2009
