During the same week in which the president was vacationing in a $50,000-per-night home in Martha’s Vineyard, half a million Americans were standing in line, waiting their turn to apply for unemployment benefits. Those benefits are about $400 a week, not enough to put food on the table, pay the mortgage and car payments, and cover medical and other expenses. Not only that, but they run out (or used to) at 26 weeks. Even with Congress’s election-year largesse, which has tacked on an additional 73 weeks, unemployment benefits must run out at some point. More and more Americans — those who have begun calling themselves the 99ers — are now arriving at that point. [Read more…]
America’s economic situation needs an emergency heart transplant, but Obama and the Democrats keep offering band-aids instead. We need a major change in government economic, tax, and fiscal policies not more government bailouts. Yet the president is doing nothing to reverse the enormous uncertainty fostered by his own administration’s aggressive anti-business and pro high-tax initiatives and rhetoric.
In the latest indication that our president has no clue why businesses are struggling and unwilling to hire, Obama is trying to force through another $30 billion government bailout program to “help banks boost lending to small businesses.” Unfortunately, it’s not the lack of available funds that are stopping businesses from expanding and generating new jobs. It’s the massive economic uncertainty and instability created by misguided government mandates (especially the oppressive regulations of ObamaCare), coupled with the massive tax increases coming in January 2011, that have spooked companies and forced them into defensive economic positions. [Read more…]
In what can only be described as a partisan, pro-Obama puff piece, The New York Times has now proclaimed on its Economix Blog that tax increases are the best way to “stimulate” our economy and help America reach “fiscal sustainability”:
The single biggest step our government could take this year to address the structural deficit would be to let the tax cuts expire. And a credible commitment to long-term fiscal sustainability should reduce interest rates today, helping to stimulate the economy.
President Obama has pledged more of your money to protect the unions and secure their vote. The administration demanded and got $26 billion taxpayer dollars to spare 300,000 teachers and other public workers from the unemployment lines.
The hundreds of billions of taxpayer money already spent by Obama and the Democrats since 2009 to pay off their union supporters was apparently not enough. Despite giving $100 billion in new funding to the Department of Education (DOE), courtesy of The American Recovery and Reinvestment Act (ARRA) of 2009, in addition to the $25 billion bailout that saved the GM and Chrysler auto union workers, more is needed to thank them for their continuing support and unquestioning loyalty.[Read more…]
7/24/2010 – Henry Oliner –
Karl Marx understood that capitalism is intrinsically productive but saw an inherent unfairness in any value other than that provided by labor. Marx also understood that individual incentives to produce would inevitably lead to overproduction and painful contractions. To avoid these contractions and their impact on labor costs, he believed the proletariat should, and inevitably would, exercise control over the means of production. Some true believers insist that he sought a utopian ideal rather than an authoritarian state, but the control of production by the state became essential to their objective. [Read more…]
6/8/2010 – Robert Frank –
In his Wall Street Journal op-ed Monday, famed supply-sider Arthur Laffer argues that higher taxes on the wealthy rarely work because the wealthy simply shift their income.
President Obama’s upcoming tax increases, he says, are encouraging the wealthy to take cash and income off the table this year, robbing from next year’s growth and spending. As a result, he says “The economy will collapse in 2011.” [Read more…]
Today’s corporate profits reflect an income shift into 2010. These profits will tumble next year, preceded most likely by the stock market.
People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies.
It shouldn’t surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.
Likewise, who is gobsmacked when they are told that the two wealthiest Americans—Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains? The composition of wealth also responds to incentives. And it’s also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter. [Read more…]
The socialist policies implemented by the Obama administration and the Democrat leadership undermine America’s economic prosperity and prolong the misery for millions of companies and workers. Despite passing multi-trillion dollar government tax and spend initiatives, numerous bailouts of failed businesses, and repeated extensions of government benefits, Americans are suffering and the economy is languishing. Nationwide the unemployment rate has risen to 9.9%, while mortgage defaults and foreclosure rates have surged to record numbers.
Even with the tens of billions of dollars Congress has spent on preventing consumer mortgage defaults and home foreclosures, things have not improved much. How could they? Such government bailout measures are temporary band-aids that fail to address the structural problems our economy faces. They only delay the inevitable and push the problem further down the road. It doesn’t matter that house payments are now lower and the government has picked up the tab for a few months. If Americans cannot find a job or raise the capital to start a business they won’t have the money to pay even reduced mortgage payments. [Read more…]
5/10/2010 – Robert J. Samuelson –
What we’re seeing in Greece is the death spiral of the welfare state. This isn’t Greece’s problem alone, and that’s why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven’t fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies.
Americans dislike the term “welfare state” and substitute the bland word “entitlements.” Vocabulary doesn’t alter the reality. Countries cannot overspend and overborrow forever. By delaying hard decisions about spending and taxes, governments maneuver themselves into a cul-de-sac. To be sure, Greece’s plight is usually described as a European crisis — especially for the euro, the common money used by 16 countries — and this is true. But only to a point. [Read more…]
Investor’s Business Daily | by Thomas Sowell | Jan. 8, 2010
Most intellectuals outside the field of economics show remarkably little interest in learning even the basic fundamentals of economics. Yet they do not hesitate to make sweeping pronouncements about the economy in general, businesses in particular, and the many issues revolving around what is called “income distribution.”
Famed novelist John Steinbeck, for example, commented on the many American fortunes which have been donated to philanthropic causes by saying:
One has only to remember some of the wolfish financiers who spent two thirds of their lives clawing a fortune out of the guts of society and the latter third pushing it back.
American Thinker | by Thomas Sowell | Jan. 8, 2010
Politicians like Barack Obama try to make you believe that someone else will pay the tax he wants to impose. For example, President Obama said he will increase taxes only for those making more than $250,000 per year. Other politicians, at other times, have told us that we will tax corporations rather than individuals, or tax some other out-of-favor group or product (sin tax) rather than the majority of individuals or the general sales tax.
The problem is that in reality, the guy behind the tree is the vast majority of us…yes, the same people who were promised that they would not pay the proposed tax increase. This is quite easy to see in some examples. [Read more…]
The Washington Times | by Richard W. Rahn | Aug. 26, 2009
Why does it appear France is bouncing back more quickly from the recession than the United States? France has long been known for having an economy that suffered from too much government interference, too-high taxes and destructive union activity. Yet it grew 1.4 percent in the second quarter of 2009, while the U.S. economy continued to decline.
The United States and Britain have had the largest “stimulus” programs of the major economies (as measured by increases in government spending and deficits relative to gross domestic product) and yet they are not moving toward recovery as rapidly as most other countries that had far smaller stimulus programs or none. [Read more…]