How Not to Run a Nation

By Alan Caruba

The political farce that ended 2012 and began 2013 has surely made the United States a laughingstock among the nations of the world. The sharp divisions between liberals and conservatives in Congress led to desperate last minute negotiations to avoid a “fiscal cliff” that faced the nation’s taxpayers and that still threatens default on our debts. The same battles will be fought again when it comes time to raise the nation’s debt ceiling limit in two months.

This is a Congress that has not passed a budget for three years.

 

This is no way to run a nation!

By a vote of 89-8 in the early hours of Tuesday, the Democrat-controlled Senate approved a plan to raise taxes on families earning more than $250,000 and to postpone sequester cuts for two months. By mid-afternoon, however, Politico.com reported that “House Republicans are overwhelmingly opposed to the Senate's bill to avert the fiscal cliff, making it nearly certain that Speaker John Boehner's chamber will amend the legislation and send it back to the Senate - a potentially serious blow to a package that appeared well on its way to becoming law.”

“House Majority Leader Eric Cantor (R-Va.), the No. 2 House Republican, told GOP lawmakers that he was opposed to the legislation in its current form. Republicans are chiefly concerned with the lack of spending cuts in the tax bill.” And that has been the problem since Obama took office, too much spending and too much borrowing to continue spending.

For the year or more the “fiscal cliff” existed Congress chose to do nothing. The frantic negotiations resulted in an agreement to make the Bush tax cuts permanent, something Democrats and the President campaigned against for years. 

 

Having to fight these fiscal battles all over again in two months will only reaffirm that Congress is incapable to arriving at common sense solutions. For the 47% of Americans who pay no taxes, the discussion is a distraction from watching the bowl games and other diversions.

It is useful to review the Heritage Foundation analysis issued prior to the late night vote. Amy Payne spelled it out in a recent commentary, saying “Tax hikes are the centerpiece of the problem” warning that the largest tax increase in American history was scheduled to kick in on January 1.

While the Bush tax cuts remain, solutions are needed to resolve what to do with the payroll tax, the alternative minimum tax patch, and a host of other tax policies that were scheduled to expire at year’s end.

However, twenty tax increases built into Obamacare are scheduled to go into effect. They will generate a trillion dollar increase for the years 2013-2022. Curiously, a tax on medical instruments that covers everything from tongue depressors to MRI machines will make healthcare more expensive for everyone despite the claim that Obamacare would make healthcare more affordable.

As the Heritage Foundation and others have been shouting from the housetops, Obamacare raises the hospital insurance (HI) portion of the payroll tax on wage income over $250,000 from 2.9 percent to 3.8 percent. It then applies that 3.8 percent rate to investment income-capital gains and dividends—for anyone earning above $250,000.

Tax experts like Curtis Dubay, a senior policy analyst for the Heritage Foundation, points out that “this is a massive policy change, since it represents the first time the payroll tax will apply to investment income.” He calls the investment income HI tax “a dangerous step down a slippery, tax-hiking slope”, predicting that “the economy will suffer, because incentives to work and invest will fall. Less work and investment will mean that businesses create fewer jobs and pay their existing workers less than they otherwise would have.”

Dubay refutes President Obama’s claim that his plan for taxing the rich would just be a return to the rates that existed under President Clinton. “That is flat out incorrect,” noting that Obama is ignoring the tax hikes hidden in Obamacare.

Stephen Moore, a member of The Wall Street Journal’s editorial board and a senior economics writer, a regular commentator on CNBC-TV and Fox News, has a new book out, “Who’s the Fairest of the Them All? The Truth About Opportunity, Taxes, and Wealth in America.” ($21.50, Encounter Books). It blessedly brief, but it covers a lot of ground, especially as regards the lies coming out of the White House about the “rich.”

A lot of Americans are oblivious to the fact that the President is operating from an ideology that is the opposite of everything that built the greatest economy the world has ever seen. His views are those of a Socialist or to put it more bluntly, a Communist. He stops short of initiating programs by which the government would nationalize all industries, but Obamacare in effect does that for the health care industry; twenty percent of the nation’s economy.

In his book, Moore defends the free enterprise system as “the on-ramp to economic progress and rising incomes.” Under President Obama, “the ranks of the poor have risen and the progress of the middle class has stalled in the United States in recent years because we have moved so aggressively away from free markets and toward ham-handed government solutions.”

The lies the President told all through his 2008 campaign and the last four years of his first term have all been intended to create class warfare. Moore points out that “Mr. Obama says that in recent decades the middle class has suffered and shrunk. He is dead wrong on this count. In fact, the last thirty years (up until the 2008 recession) have been a boom period for the middle class.”

 

The proof of that, Moore notes, “By 2011, after Mr. Obama’s first three full years in office, and after nearly two years of radical spending and taxing policies, the median American family incomes declined by almost $4,500 for every household. The poverty rate increased, and so did the number of Americans losing their homes. Yes, Mr. Obama inherited an economic mess, but his policies have done little to stop the decline.”

Throughout 2012, according to Obama, if you earn more than $250,000 you are among the “rich” in America. This is surely a redefining of what we used to consider rich; usually those earning a million or more. As things stand now “Our government,” says Moore, “relies for more than 50 percent of its revenue on the richest three percent.”

The tax rate increase on “the rich” that Obama has been demanding would raise enough revenue to run the nation for about a week. Meanwhile, the U.S. must borrow $4.8 billion every day just to meet its expenses.

Obama’s goals since becoming President can be found in the “Cloward-Piven Strategy” and I recommend you get familiar with it as the nation hurtles toward financial collapse because that is exactly what the strategy is intended to bring about in order to impose a total socialist/communist system on the world’s greatest capitalistic economy.

Among the strategy’s proposals was a “massive drive to recruit the poor onto the welfare rolls” and we have seen this in the expansion of the food stamp program and loosening of requirements for those on welfare to seek employment. The goal of the Cloward-Piven strategy is to ultimately “sabotage and destroy the welfare system in order to ignite a political and financial crisis that would rock the nation; poor people would rise in revolt; only then would ‘the rest of society’ accept their demands.”

That is Obama’s definition of “fairness” and it exists today as half of society, those with jobs or self-employed, are having their income taxed to pay for government programs for those who do not work or cannot find work; an estimated 26 million are unemployed or stopped looking for work. Another 47 million are using food stamps, a program that has greatly expanded during Obama’s first term and which uses television commercials to encourage more people to sign on.

A recent Rasmussen Reports poll noted that 73% of likely voters want government spending cut.  They sense the danger of a government grown so large it threatens the economy and, indeed, enforcement of the Constitution’s limits on government.

It has become a cliché to say the problem is government spending, but the problem is government spending.

There are a variety of scenarios regarding the near future and among them is the collapse of the U.S. dollar. Should that occur there would be wide-spread panic and demands that the government “do something.” One massive form of control has already been imposed in the form of Obamacare. When the government can determine who lives or dies, or how much care they can receive, Americans have lost a precious freedom. Other freedoms would be lost.

Obama has found ways to worsen the financial crisis and it has been deliberate. He is not merely “transforming” America, he is destroying it.

© Alan Caruba, 2013