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Obama's 'new' economic plan to revisit old thinking that deepened our debt

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If government spending were the key to having a robust economy, this one would be booming as never before.

No amalgam of big spenders in Washington has ever spent more than the ones who’ve held sway since 2009. George W. Bush’s spending held the previous record, but the current crop of Einsteins has given us a $1 trillion-plus deficit this year alone, and similar red ink for as far as the eye can see.

The Obama administration’s signature economic strategy, the $862 billion “stimulus” act, was supposed to create a “summer of recovery” in 2010 and keep unemployment at 8 percent. Mr. Obama’s Council of Economic Advisers predicted unemployment without the stimulus would rise to between 8 and 9 percent; but with the stimulus, it has hovered near 10 percent.

It only put us deeper in debt.

And look at where we are now: unemployment at historical highs – even with interest rates at historical lows – and an economy that some believe is sliding into another recession.

Yet unbelievably, the president’s upcoming and much-ballyhooed jobs plan is expected to include more of the same deficit spending from the geniuses that brought you the 2009 failure.

The plan also reportedly will feature the government – again – trying to keep people in houses that they can’t afford. How’s that working out?

We’ll tell you: The first mortgage bailout was supposed to help 4 to 5 million homeowners; it helped about 16 percent of that – while helping set off a rebellion among taxpayers who paid for bailing out many irresponsible homebuyers along with the down-on-their-luck ones.

That rebellion – which began with Bush’s bailout of Wall Street – came to be known as the Tea Party.

So we’ve been down this pockmarked road before.

Nor does direct government spending to artificially “create” supply and demand in the economy work. Recent government “green” jobs efforts in Boston, Seattle and elsewhere have met with abject failure: In Seattle, a $20 million weatherization program retrofitted just three homes and employed 14 people.

The entire foundation of this president’s economic policy is cemented in the oft-disproved belief that a central government makes better spending decisions than individuals and the private sector. And it ignores the somewhat elementary reality that whatever money a government spends must first be taken from someone else. In other words, it’s the belief that taking money from one American and giving it to another provides some sort of “stimulus.”

There are certain functions of government that can help an ailing economy some, but under very limited circumstances – such as building or repairing public infrastructure. Beyond that, the government largely suffocates economic vitality the more it attempts to do. It neither creates wealth nor the jobs that make it possible.

Mr. Obama has set the scene for his same-old, same-old jobs program by first unveiling a “jabs” program – trying to fool the public into thinking that “gridlock” in Washington is always someone else’s fault. There’s plenty of blame to go around, particularly falling on a president who cannot change his failed approaches. That this president is shackled to an ideology that will not work is evidenced by his choice for the new head of his Council of Economic Advisers: yet another academic, big-government, labor economist from Princeton, Alan Krueger, who was instrumental in the dubious “Cash for Clunkers” program. That program cost taxpayers a whopping $24,000 per vehicle, according to Edmunds.com, which concluded that the vast majority of the program’s 690,000 sales would have happened even without the government program.

How many more government clunkers can we afford?

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Insider Information
4009
Points
Insider Information 09/01/11 - 12:22 am
0
0
ANNOUNCING Obama-holic, the

ANNOUNCING Obama-holic, the exciting new presidential drinking game!

Everytime the president says "green jobs," "corporate jets," "millionaires and billionaires," and "investment" take a shot.

omnomnom
3964
Points
omnomnom 09/01/11 - 06:15 am
0
0
ok aces, the seattle

ok aces, the seattle weatherization thingy started in april of this year. it is expected to last another two years. it will employ 14 previously unemployed people. it also works with an unnumbered amount of contractors.. who would otherwise not have a job. the scope is to weatherize 2,200+ houses by the program's end. this seems like a severe misrepresentation of that event. not a good example. i'll agree that cash for clunkers WAS a disaster all around. and could you stop with the unnecessary quotation marks? "green"? yeesh. you against recycling too?

nofanofobama
6825
Points
nofanofobama 09/01/11 - 06:25 am
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no one is agiainst a clean

no one is agiainst a clean enviroment..but only capitalism that is allowed to flourish will create enough money to have both...jobs and a healthy enviroment..obumler has spent billions on so called green jobs that were utter wastes of money..we can have both if govt, if obumler just allows us to be americans again..hows that solar plant moving to china helping us...this prez is an utter failure..central planning does not work period...

Techfan
6461
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Techfan 09/01/11 - 07:05 am
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0
If cutting taxes was the key

If cutting taxes was the key to having a robust economy, this one would be booming as never before.

Riverman1
83805
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Riverman1 09/01/11 - 07:10 am
0
0
If spending money on social

If spending money on social programs was the key to having content people, we would have some happy souls as never before.

southernguy08
499
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southernguy08 09/01/11 - 07:15 am
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0
TECH, I could say the same
Unpublished

TECH, I could say the same about government spending on "shovel ready" programs. See any jobs created from this Obama special? I think the term "shovel ready" should apply to something else with this administration. Know what I mean?

Riverman1
83805
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Riverman1 09/01/11 - 07:23 am
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Techfan, the total taxes paid

Techfan, the total taxes paid by the average American in 2009 was 57.7%. Of course, that's state, fed, local, sales and so on. This data is from a website called Nowandfutures.com. How much more can Americans possibly pay and still have a viable capitalistic economic system?

Techfan
6461
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Techfan 09/01/11 - 07:24 am
0
0
I imagine the elderly are

I imagine the elderly are much happier with SS and Medicare than they would be without it.

Techfan
6461
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Techfan 09/01/11 - 07:49 am
0
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2008 (latest available year),

2008 (latest available year), the richest 400 taxpayers in the US paid 18.1% in federal income tax. Strange that the rest would add up to so much.
Nowandfutures.com seems to be a weird site run by kooks.

Riverman1
83805
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Riverman1 09/01/11 - 07:57 am
0
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Techfan, guess you didn't

Techfan, guess you didn't read closely. The average American pays 17.1% in federal income tax. But he also pays 10.1% state and local, 9.7% on average in state sales tax, social security and medicare 7.65%, 2.5% property tax, gasoline tax 0.5%, other 5%.

Seriously, all Americans pay a lot...at least the ones who pay. Kool-aid drinkers beware.

justthefacts
21768
Points
justthefacts 09/01/11 - 08:02 am
0
0
Elderly, at least the smart

Elderly, at least the smart ones, would probably have been better served investing their money themselves instead of sending it to Washington. And we wouldn't be facing this economic disaster.

Bruno
780
Points
Bruno 09/01/11 - 08:20 am
0
0
Well, there is your problem

Well, there is your problem "justthefacts". SS was put in place for those people unwilling or not smart enough to plan and provide for their own upkeep in later years. It was actually never meant to supplant personal savings but due to the mentality of the general populace it has come to be their only "retirement plan".

justthefacts
21768
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justthefacts 09/01/11 - 08:32 am
0
0
Sux to be them.

Sux to be them.

burninater
9580
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burninater 09/01/11 - 09:08 am
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Riverman1, your tax numbers

Riverman1, your tax numbers are not correct:

17.1% in this analysis is the top 25% rate. This is not the rate for the "average" American, as you claim.

The 7.65% payroll tax rate only applies to the first $106,000 that the top 25% earn. This percentage does NOT apply to the rest of the income of the top 25% that these numbers apply to, and the earnings of the top 25% are FAR greater than $106,000. If the average earnings of the top 25% is a mere $1 million, than it is more HONEST to say that these people are paying less than .765% in payroll tax.

9.7% of sales tax applies to ALL of a person's income? Are these "analysts" 4th graders?

And how is it in any way HONEST to claim that all these other miscellaneous tax percentages apply to an individual's entire income? It isn't honest, and they don't apply.

The conclusion of this site that the average American is taxed at a 57.7% rate is a bald-faced lie, and shame on you for repeating it.

augusta citizen
9324
Points
augusta citizen 09/01/11 - 09:44 am
0
0
Yep, Cash for Clunkers has to

Yep, Cash for Clunkers has to be one of the biggest jokes in years. We don't need to go down this stimulus road again, it didn't work. We have too much government meddling for businesses to do business and hire. People need jobs, but what would all of these bureaucrats do all day if they weren't meddling?

From Mark Styne, "When the father of Big Government, Franklin Roosevelt, was brought before the Hoover Dam, he declared, 'This morning I came, I saw and I was conquered, as everyone would be who sees for the first time this great feat of mankind.' But the bigger government gets, the less it actually does. You think a guy like Obama is going to put up a new Hoover Dam (built during the Depression and opened two years ahead of schedule)? No chance. Today's Big Government crowd is more likely to put up a new regulatory agency to tell the Hoover Dam it's non-wheelchair accessible and has to close. As Deanna Archuleta, Obama's Deputy Assistant Secretary of the Interior, assured an audience in Nevada: "You'll never see another federal dam.". "Great feats of mankind" are an environmental hazard,for mankind has great feats of clay. But hang on, isn't hydropower 'renewable' energy? It doesn't use coal or oil, it generates electricity from the natural water cycle. If that's not renewable, what is? Ah, but, according to environmental 'dam-busters' reservoirs are responsible for some 4 percent of the earth's carbon dioxide emmissions."

So don't expect anything except more taxing and regulation, it's all they really want to do anyway.

Vito45
-2
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Vito45 09/01/11 - 10:05 am
0
0
A man whom I trust implicitly

A man whom I trust implicitly when it comes to taxes and numbers (it is what he does) tags it at around 45% for the middle class. Based on my tax returns plus estimates of embedded taxes, it is at least that. I had it at about 55% based on the FairTax assertion of 23% embedded taxes. Many Arrows says that is too high, in reality it is more like 15%-18%. MA, if you are lurking around, jump in on this; I am going from memory of our discussion the the forum a few years back. I don't want to mis-quote you.

harley_52
23272
Points
harley_52 09/01/11 - 10:30 am
0
0
Whatever it is taxes are too

Whatever it is taxes are too high, too complicated, too unfairly distributed, too wastefully spent, too easy for politicians to steal from workers, and too often used as a way to gain political power at the expense of those paying them.

Our problem is too much spending, not too little taxing, at least for people actually paying income tax. Democrats want to raise taxes on the "rich" only because they want another tool in their "resentment and hatred" toolbox. If it weren't for envy, class warfare, and racism, they'd be toothless.

It's not like they could run on ideas or accomplishments.

Riverman1
83805
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Riverman1 09/01/11 - 10:38 am
0
0
Burn, let me ask you this,

Burn, let me ask you this, when the average person, say making 100-200 thousand a year does his taxes what is his EFFECTIVE federal tax rate? Mine on Turbo Tax was close to what they say and I do pretty well.

Now exactly what are you disputing, the sales tax, the other taxes? They are giving averages in sales taxes and so on. I think it's very reasonable to assume on the average, 9.7 % of your income nationwide goes to various sales taxes. What percentage of your income do you think you spend? The state sales tax, tax when you buy a car or boat, alcohol. Sure you can say some wealthy don't put that much into something, but that does not negate the point.

Chillen
17
Points
Chillen 09/01/11 - 10:48 am
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0
"an economy that some believe

"an economy that some believe is sliding into another recession"

Folks, we never left the recession. Oh yes, the liberal eggheads, liberal media & obama staffers will tell you we did, but the truth is that the borrowed stimulus money and the quantitative easing (money printing) just made it seem like we were out of the recession. Truth is. We never left it. If you work outside the govt and are not on welfare, that is a fact you should be very aware of.

Now what we are left with is trillions more in debt, inflation on very important items like food & gas due to money printing, and unemployment figures that are WAY worse than the lies being reported.

We are headed for economic catastrophe the likes of which any adult under 90 has never seen. Yes, the "D" word.

Unless we can hold it together until January 2013 when the community organizer joins the swells of unemployed. And even then I don't know if it can be avoided. It will take us 30 years to recover from Bush 2 and the biggest spender in US history - Barack Hussein Obama.

burninater
9580
Points
burninater 09/01/11 - 11:20 am
0
0
Riverman, I am disputing 3

Riverman, I am disputing 3 things:

1) Your characterization of your level of income as "average". The median HOUSEHOLD income in the U.S. is around $40,000.

2) Representing non-income taxes as though they apply to all of one's income. This is simply not the case. For a simple example, take the $200,000 you mention. Payroll tax on that income is 3.8%, not 7.6%. And as I mentioned, if your income were $1 million, payroll tax is down to 0.765%.

3) Treating all income as taxable. I have neither a mortgage deduction nor child credits, but my taxable income is STILL 50% less than my gross income, after 401k and HSA deductions. (Edit: just realized my 401K contribution is temporarily jacked-up at the moment -- on average, just with those two deductions I'm already 25%below my gross). Those that take the mortgage interest entitlement and child entitlement see much greater savings. Claiming the base tax rates prior to income deductions as actual taxation rates is simply not true.

I'm not disputing your point that there are more tax sources than that which is usually focused on, Federal income tax rates. I'm just making the point that pointing out that fact shouldn't be taken as license to grossly exaggerate the data.

southernguy08
499
Points
southernguy08 09/01/11 - 11:03 am
0
0
My question that no liberal
Unpublished

My question that no liberal seems able or willing to answer is, what guarantee do we have if taxes are raised that congress won't just spend more, if we don't have a balanced budget amendment? According to whammy Obammy, "We don't need a balanced budget amendment."

nofanofobama
6825
Points
nofanofobama 09/01/11 - 11:05 am
0
0
if you add new regulations

if you add new regulations signed each and every month by this administration that are anti-business and the intrusive health care that has so many hidden taxes, unintended, intended consequences and a new round of regulations that will not be voted on.. its no wonder our economy sucks..we stop drilling ..we sue boeing for wanting a new plant and new workers in a state that is non -union therefore its jobs are not important...block att merger that would bring jobs home... either this administration is stupid or this is all planned to bring us down...put me in the planned catagory obumler promised to remake america ..not enough believed him..HE MUST BE DEFEATED..at every turn til final defeat in nov. of 2012.....

Riverman1
83805
Points
Riverman1 09/01/11 - 11:18 am
0
0
Burn, I think you've said

Burn, I think you've said before you're an accountant or something like that and I'll trust you. I think I see what you mean about counting the taxes with the gross would not be accurate. What is your best estimate of what the AVERAGE American pays in total taxes? Break it down into income levels if you want. What percentage in fact pay any taxes?

dichotomy
32902
Points
dichotomy 09/01/11 - 11:22 am
0
0
It's widely known that Obama

It's widely known that Obama was not a sterling student. He only has a few crib notes from his Keynesian economics course to guide him. He has had these notes automated and installed on his telepromter.

DEFINE "ERROR MESSAGE": It's the TEA Party's fault.

1. Raise taxes on people who are doing well.

2. Spend government money as fast as you can.

3. IF
the Democrats are in the majority goto Rule 1 and continue

ELSE

Print ERROR MESSAGE

goto Rule 4

4. Borrow huge amounts of money from China.

5. goto Rule 2

I think programmers call it a nested loop. There is no way to exit the above loop unless it is uninstalled.

burninater
9580
Points
burninater 09/01/11 - 11:29 am
0
0
I'm a geologist River, so

I'm a geologist River, so trust an accountant's numbers! Just double-check that they are treating the numbers honestly. We all have agendas, and it is a constant effort to really look to see if we are dealing with numbers realistically when we are using them to prove a more nebulous argument.

I have no idea what the average American pays, but I bet you would get more accurate numbers if you look at a source that faces more peer review, such as the Economist, or the CBO, or the Heritage Foundation. Even Wiki has been shown to be generally pretty reliable when fact-checked by independent groups (it was actually shown to have LESS factual errors than the Encyclopedia Britannica, embarrasingly enough for that over-priced behemoth). I do know, however, that the numbers the site you originally posted (and thank you for posting your source) HAVE to be inflated, based on the simple fact that they are claiming that taxes that DON'T apply to 100% of one's gross DO.

That would make me generally suspicious of that source, as it is a pretty clear factual distortion designed to advance an ideologic bent.

burninater
9580
Points
burninater 09/01/11 - 11:40 am
0
0
dichotomy, your nested loop

dichotomy, your nested loop would work beautifully for the Republicans, too.

They would only have to change line 1, to: Raise taxes on those who are struggling.

Vito45
-2
Points
Vito45 09/01/11 - 11:53 am
0
0
Burn and everyone else, take

Burn and everyone else, take a look at your own situation. It is easy enough to look at your last tax return and sum up FIT,SIT,FICA, Medicare, etc. Add to that your property taxes, real and personal; and any other fire tax, school tax, etc. that you pay. Sum those up and hold that number.

We all have a pretty good idea of money spent. Speaking for myself, I spend 100% of my "take home" pay because all of my savings and investments are taken out first. What is left over I spend on living expenses. Take that number and apply 17% to it for embedded taxes. Include house payment and car payment because those items had embedded taxes when you financed them.

Add those two up and apply it to your gross income. I think most of you will get a sour stomach when you see how much you really pay in taxes.

Chillen
17
Points
Chillen 09/01/11 - 11:58 am
0
0
burninator "raise taxes on

burninator "raise taxes on those who are struggling" would include obama's over $200K group too. They have lost 20-30% of their income or more and they have debts too. Debts & lifesyles that were amassed based on their many years of reliable income that has been destroyed by our economy.

Things aren't rosy for anyone right now except the politicians, federal govt employees and the liberal elite (Buffet, Soros, etc) who have become richer under this administration. Oh, and the 20% of folks on welfare haven't noticed much change either. They can still sit on their butts & collect my money every month.

southernguy08
499
Points
southernguy08 09/01/11 - 12:15 pm
0
0
Liberals...still waiting.
Unpublished

Liberals...still waiting.

Riverman1
83805
Points
Riverman1 09/01/11 - 12:28 pm
0
0
Burn, I looked at several

Burn, I looked at several other sources including the CBO, NY Times and the Tax Foundation. Basically, what I saw was that fed, state and local taxes amount from 30-35% depening on the source. SSN and Medicare 7.65%, 5% for miscellaneous which I totally believe if you think about estate taxes and the myriad of other taxes. I am leaving out the 2.5% in property taxes because I assume some sources are including that in the local taxes. So we have about 49% if you take the 35% base figure. You have to add something for sales tax although we can debate whether or not it is actually 9.7. So we are actually close to the original statement from nowandfutures.com of 57% using mainstream sources.

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