After victory, a reality check for Obama

November 7, 2008

diana-furchtgott-roth– Diana Furchtgott-Roth, a former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The opinions expressed are her own. —

By Diana Furchtgott-Roth

Pity President-elect Barack Obama. Today, only three days after his historic victory as the first African-American elected president, the Labor Department announced that the economy lost 240,000 jobs from payrolls in October and that the unemployment rate rose to 6.5%. This underscores the difficulties he faces in raising taxes on “the rich” to fund new spending.

Obama must recognize that his campaign promises are impossible to implement without making the economy sicker. The economy is weak and getting weaker, probably contracting now at an annual rate of 3-4 percent.

Obama’s promises include a combination of tax cuts and welfare for 95 percent of working Americans, an end to America’s foreign oil dependence, a costly healthcare plan, more education spending, and so-called pay equity for women. Much of this is supposed to be funded by levies on businesses as well as tax increases on those making over $250,000.

But, according to the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, Obama’s tax package would cost $2.9 trillion over the decade from 2009 to 2018. That includes increasing the tax rate on capital gains from 15 percent to 20 percent, and raising the top two tax rates, 33-36 percent and 35-39.6 percent, on singles with taxable income exceeding $165,000 and married couples earning over $201,000.

The Tax Policy Center’s estimates do not include the effects of financial market chaos and the stock market decline, which has reduced taxable income. And with the economy worsening, tax increases on upper income earners would net less than the Center projected, increasing the 10-year deficit to over $3 trillion.

Here’s one small example. In 2005, the latest data available, the Internal Revenue Service recorded 3.5 million returns with $200,000 or more. About half those returns had capital gains income, which averaged $304,000, netting approximately $80 billion in taxes annually.

These revenues will be reduced by weak stock markets—as well as by disincentives to invest stemming from higher taxes. In addition, many Americans are losing jobs, meaning not only less wage and salary income to be taxed but increased government payouts for unemployment benefits.

As president, Obama will have difficulty paying for new projects such as an incremental $65 billion health care plan, a $30 billion addition to the Medicare prescription drug plan, and $37 billion in increased education and research spending—all estimates for one year.

The bill for some other proposals would go to employers, who are already struggling to survive the recession. Investments in alternative energy and electric vehicles, for instance, would be funded by requiring purchases of permits to emit carbon, estimated to raise $56 billion annually.

Obama would also require most employers to offer paid sick and maternity leave, vacation, and parental leave for school visits. Employers would be penalized for paying women less than men for “equivalent” jobs, however they are defined.

Of course, in a recession, federal deficits are desirable. The question is how to structure them to help the economy recover. By increasing taxes on upper-income earners, small businesses, and capital gains, President Obama would reduce incentives to work and invest. Additional requirements on employers would encourage them to open plants overseas, rather than in America, slowing job creation.

After the euphoria in the streets and the chants of “yes we can” have faded, the question will remain: do Obama’s promises make fiscal sense?

Diana Furchtgott-Roth can be reached at


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If the over 250k tax base decreases he could just increase the percentage on those still within that tax base.

The working class has not had a reasonable increase in wages to keep pace with inflation, so I would not mind a tax on the wealthy. If only the government could find a way to restrict those benefitting from the tax increases so they become more fiscally responsible. They could start by placing restrictions on the things people can purchase with government assistance.

Posted by SF | Report as abusive

Pretty easy to go negative a couple of days after the election. But the task ahead is quite difficult, and I haven’t read anything from you in the form of suggestions that sound any better than His.

Posted by Steve | Report as abusive

Obama never had a clue on how to deliver all the promises, but then again, to win an election, all you need is promises to desparate voters. Unfortunately, not all Americans are educated enough to tell the difference, the only time they will understand is 6 months down the road when nothing was changed.

Posted by robert | Report as abusive

This article isn’t “going negative”, its a reality check. Unfortunately the expectation is so high, that when many promises get broken, the backlash may be just as extreme. The reality is that this is a global problem, it is not one persons fault (Bush, Clinton, whoever)but an extreme economic cycle. There will have to be priorities, patience and personal sacrifice. If one believes they can sit back, and wait for a President to snap his fingers while proclaiming the magic word “Change”, then they are delusional. Don’t expect anything from the government. Change comes from the people — when they work for it.

Posted by turista | Report as abusive

We’re apparently more than able to sink hundreds of billions into wars, hundreds of billions into companies that dug their own grave, yet you are afraid of $100 billion going to the most deserving of such aid? Sounds like standard trickle down economic rhetoric to me…

Posted by Justin | Report as abusive

SF: How is it fair to simply tax those that are making more money even more to pay for those that aren’t contributing to society? It would make far more sense, and would give more incentive for people to work, if everyone was taxed equally. Those that make more money would still be paying more actuall tax dollars, but in comparision they would be paying the same. Personally, I make under 25,000 a year, and that’s before taxes. Technically I would be considered right on the edge of the poverty level, but it still wouldn’t make things right for those that have worked hard to have their money forcibly taken from them and given to me. Technically, it is illegal for the government to be taking an income tax anyway, unless we are in a time of war. Which, technically, we are not officially. There is an old saying that says: Give a man a fish, and he will eat for a day, but teach a man to fish, and he will eat for a lifetime. This is the ideaology that our country needs to adopt if we are ever to fight our way out of this recession.

Posted by Jordan | Report as abusive

In this article I am having difficulty observing alternative suggestions to Obama’s proposed projects…Commentary seems to be coming from a frusturated Republican after election results but what she’s suggesting is the “follow the way US has been following in the past”. Well that’s the reason why economy is where it is today! Nobody’s suggesting to come up with the perfect picture but at least it needs to work. Question to the Commentor is: while all above are somewhat working for Canada, why not US won’t be able to implement these?

Posted by Emre | Report as abusive

In short, the perspective here is that now is not the time for increased governmental spending to fund these \”programs.\” Rather now is the time to cut back, as most Americans are also doing. Increasing taxes is bad for promoting growth in business and investing. Those in higher income brackets that would have their taxes raised significantly will not be producing from stocks this year either.

Posted by Kevin | Report as abusive

It is easy to tally the costs, and difficult to weigh the future benifits. But unless you consider the benifits arising for those costs you really haven’t provided much of an analysis.

I can’t help but think that improving the situation of 95% of Americans may have significant economic benifits. Certainly increased energy efficiency and stopping the vast outflows of money to purshase and secure energy would also be benificial. Not to mention the benifits from taking a leadership position in addressing global warming.

Posted by ML | Report as abusive

Oh no, reality….
She also didn’t run for President.

Posted by James | Report as abusive

Yes Steve, nice of them to suggest an alternative, not.
I am sure some billions can be recouped from Iraq, for a start.

Posted by bert | Report as abusive

Obama will now need to start dealing with reality, and the lofty rhetoric of his campaign.

Posted by mike | Report as abusive

Obama was elected out of pure emotion and bought his way to the White House by way of record-setting campaign spending. Critical analysis of his record reveals he is a fence-sitter, siding with prevailing popular opinion. He does not make waves but has other people do it for him (Emanuel) so he is able to keep a healthy distance from the fray.

I do not believe he sincerely supports equal pay for women and am thoroughly disappointed by the absence of women on the list of potential cabinet members.

To that, I would add that in spite of her impressive professional achievements, Michelle Obama is reduced to a magnet for fashion commentary. This year the women’s suffrage movement marks its 80th anniversary. If these events are any indication, in all this time, women have made very little progress at all. What a sad statement on our times.

Posted by Tess | Report as abusive

We should continue to lower taxes as trickle down economics guru R. Reagan told us to do.
The lower the taxes the better off we are. Eight years of Bush is the best proof of this solid (or maybe, just maybe soiled) economic approach.

Posted by ira waxmann | Report as abusive

Ah – the view from the right-wing think tank (election results still stinging?). I would guess that Obama is very aware of the current economic conditions.
\”…President Obama would reduce incentives to work and invest.\” this is a common anti-tax fallacy. Absolutely no proof of this, including any references to the Laffer curve.

Yes, it will be difficult to overcome the disastrous presidency of GW Bush.

Posted by Dave | Report as abusive

I never got hung up in the hype surrounding Obama. I admired his charisma and the intellectual power of his spoken word. I, paid strict attention to his message and found him to be all style and no substance. I knew his numbers just didn’t add up. Americans have been crying about the $1T so far on the War on terrorism, and $90B a year in Iraq we are currently spending. Then we get hit with another $825B in bailout debit. Where are we going to get another $1,000,000,000,000 for the Obama social entitlements? Now we hear that he can’t keep his promises. What politician does? I say, thank God for small favors.

Posted by Kevin Baker | Report as abusive

And McCain or any other presidential candidate would have a better hope? What a pointless article. Of course he’s not going to be able to deliver everything. He said it himself.

Posted by gaba | Report as abusive

It should not be a surprise to anyone that after just two days, there are negative comments on the promises he made to get elected……….after following this election closely for the last two years, there were at least $56million voters who were negative on his plans before and on election day. The rules of life apply to everyone…… careful what you promise, you just might be held accountable!

Posted by Russ | Report as abusive

Who is Diana Furchtgott-Roth anyway? I am so tired of fake media “experts,” quasi-non-governmental pseudo-leadership and academic nutcases being presented as intelligent economic or political commentators. The Bailout is estimated to have robbed about $3 trillion total from middle-class America’s retirement funds. Of course, Obama may have trouble implementing a healthcare program on his first day; however, we could start by cutting Israel’s allowance to $0.00, and using the money to help our own people instead of an unstable Marxist entity in the Mideast. Then, we could end all of the wars (which we are losing anyway), thanks to poor leadership of men like Wolfowitz, who thought that Iraq was going to be a “cakewalk.” It would be a nice start …

Posted by Mary O'Brien | Report as abusive

Is there anything in this article that was not knowable a few weeks ago? Do you enjoy closing the barn door after the horse is out?

Posted by Chris | Report as abusive

This calculation doesn’t include the amount of money spent on the economy from those getting the fiscal incentives. For instance women who will get the higher pay are likely to spend it on goods and services and stimulate the economy.

This was indeed a historic period in history, without any doubts. President Obama has wonderful ideas that will hopefully get things jump-started in the right direction, but one thing that really gets to me about our country is that the majority of people here less a small number, live day in and day out in a delusional fantasy world. The Obama honeymoon celebration will be over soon and by then, more will have lost their jobs, more money lost in the economy, murder, theft, death, declassification all will still remain and even worsen. This is all an ILLUSION folks. Open your eyes to the real world and stop worrying about appearances and impressions and where your next latte will come from. There are real human beings with real families suffering real problems and either there are iron-clad solutions for this or our very being will continue to spiral. And I am in fear that a lot of this is way over president Obama\’s head.

Posted by LivingTruth | Report as abusive

I am disgusted by the ignorant. Dump Israel support? What are you, anti-Semite or just a sucker for Palestinian terrorism? Because those are from where that suggestion comes, @Mary O’Brien. You may think you are sympathetic to “everyday” Palestinians, but you simply don’t know history, most especially of how hard Israel has tried to be reasonable while under constant assault. Your suggestion would result in one thing, you ignorant apologist for terrorists and anti-Semites: an attack and slaughter on Israel. So get out of you cushy world and have a look around. The world that you live in is not the world that exists outside of your tiny little fantasy of Israeli “aggression”.

GET A BLOODY CLUE, all you “stop funding Israel” idiots, or admit you are anti-Semitic, anti-peace, and pro-Arab (at cost of the Jewish State). Call your hate what it is, don’t dress it in Palestinian sympathy. I sympathize with the plight of the Palestinians, and the Israelis generally do, also. Fact is, though, some factions of Arabs and Islamists are USING them. So, don’t buy the hype, you fools!

Posted by Jon O | Report as abusive

Here’s a reality check for you: Having lived beyond our means for years, we can no longer afford to project our interests around the world by force. The up-front cost of the Iraq and Afghanistan wars–a perpetual state of emergency–is several hundred billions of dollars each year. Veterans care and other downstream costs, already outstripping our resources, grow by leaps and bounds each year the wars continue. We must abandon these wars. Increased Iranian and jihadi influence? Six years ago, intelligent policies could have headed that off, but now, it’s just too bad. We’ll do what we can with the force of our example, but the example of force must be left to other, richer countries, or left undone. Having accepted this fact, we can afford to protect our land and get on with Obama’s objectives.

Posted by Tom in Hakalau | Report as abusive

On the homepage of Reuter’s. Who is this?
Perhaps a Fox News analyst looking for work now.

Posted by kb | Report as abusive

@Justin: Let’s hear it for trickle-down economics, without which what would we have? We would have had the continual economics of Jimmy Carter’s era? Not survivable – a disaster. I assume you were not alive during the Carter Admin, and your naivety is one of youth not indoctrination. I assume you just don’t know what the alternative would have been in the 1980s, and why trickle down can work, BUT ONLY if government and corporations aren’t feeding off of each other.

That is what led to the meltdown we see now. CRA and Fannie Mae, out in front. You want the government to be larger? Do you know who the biggest group is regarding donations over the last 20 years is? State and local workers. So ask yourself, who are you listening to? Self-interested govt workers or practical economics?

The sensible idea in trickle-down econ. is that letting the wealthy INVEST benefits the economy at large. I’ll take that any day over socialism, thanks. And socialism, a government-controlled and -run economy from top to bottom, is what we’d have had if Jimmy Carter’s ways had kept going. What’s between those two? Just bigger government. And if you think more government is indeed the answer, and not simply better oversight (you can thank a Democratic Congress for failing us, and the GOP-run one prior to it, as far as overseeing mortgages and finance biz), you are incorrect or asking for socialism. Simple.

Posted by Jon O | Report as abusive

I am leary of anyone who wants more of their money going to the government. Who in their right mind does not want to keep more of what they EARN. The government isn’t earning any of MY money, sticking their grubby hands where they don’t belong like the bailout and economy and public education and healthcare. These are all STATE concerns not the national government.

Posted by Sean | Report as abusive

Mr. Obama,
Welcome to Washington! In a surprisingly ironic moment at his first post-election news conference, our community organizer in chief demonstrated himself a poor student of history. While the consequences of tax and spend and class warfare are sitting on our country’s economic shoulders, he has the chutzpah to stand the failed Governor of Michigan and its dragging unions at his side. He seemed to have a very stuttering and stammering style without the teleprompter, too. He should have taken he middle road and called out the failed big three for their mismanagement, the Governor for her complacency, and the unions for uncompetitive business model. That would have been something to line up behind!I’m reassured he realizes that choosing the presidential dog is a “pressing issue”. I feel safer already!

We should just stop the money injection for Israel and the war in Iraq. We can’t afford that while our economy is bleeding.

Posted by White_Worker | Report as abusive

No doubt, the euphoric reaction WILL give way to reality, as it alreadys seem to be doing. His plans will not be realized, without a massive change in the economy, quickly. There is no reasonable way to trigger growth by hurting the upper percentage of incomers, because you cannot spur growth with reduced confidence in this sector. We all would love to see some wealth spread, but not at the expense of those who can produce jobs and goods, and certainly not by taking away from those who struggle each day, just remain where they are. Watch resentment set in quickly among those who may see some $$ flow to those who, in many cases, have made a conscious decision to opt out and take what the government so readily gives out.

Posted by Rick | Report as abusive

I would also say, I was very dismayed at his demeanor during his first press conf. He did not instill any confidence,and even thougn rightfully guarded, I don’t see him as much of a creative thinker on his own. God Bless his team, they will either lift us up, or bury us.

Posted by Rick | Report as abusive

I wonder how much a chief economist or fellow at the hudsons makes? Maybe this whole article is just trying to reduce her tax burdens. Why should she have to pay for people who don\’t work as hard as she does. How hard could it be? Pay for colleges with government loans then work for the government to pay off or write off those loans, then convince all the \”right\” people that taxes on the top don\’t make sense, and by the way it is immoral.

Posted by russell | Report as abusive

I am so confused with all the things people are saying. I just pray to God to pull America out of all the troubles…the useless wars, economic crises, increasing unemployment …….all of them.

Posted by M.N.Meah, Doha , Qatar | Report as abusive

He won’t be the first president to not follow through on all of his campaign promises, and he won’t be the last. George Bush Sr. said, “Read my lips, no more taxes” and Bill Clinton promised a tax cut for the middle class. Both were shot down by Greenspan.

Obama is our next president and he deserves ou support and prayers. God bless him and his cabinet.

Posted by Gary Hart | Report as abusive

have the people not realized yet that campaign promises are never held once elcetions are over? I keep hearing about record early voters and turnout, but at the same time, I was watching the news and they said ” the west coast polls are now closing and president elect obama”… that is the electorial college at work, not the voters . and the media NEVER mentioned any party but democrat and republican.. maybe if the people and electorial college vote in an American instead of a politician, we might return to our once great status….

Posted by jacque | Report as abusive

Well, Nobel laureate Paul Krugman disagrees with you, hyphenated author-person — _vide_ his column in today’s (7.xi.08) _NYT_. I realize that the are-there-no-workhouses anti-Keynesian crowd won’t buy his take — but as you and they have been disastrously wrong about pretty much every macroeconomic analytic for an entire Schumpeterian cycle, why in heaven’s name should we prefer your deployed-and-failed theories to the scarcely-tested ones of our pal from Princeton? Hmmm?

Posted by Kevin McFoy Dunn | Report as abusive

Has Ms. Roth studied the Reagan tax cuts of the 80s and the theory of “trickle down” economics? Instead of trickling down the taxes saved were invested in the stock market, fueling unprecedented growth in that sector. This created the 90s business model used by CEOs; the stock price must increase annually, no exceptions. This model became standard practice, regardless of long term corporate health. This rabid concentration on stock price pushed US jobs overseas and what Regan envisioned as an economic boost for the country started the demise of the US industrial base and led to a real re-distribution of wealth in this country. I am a staunch fiscal conservative and a proponent of a flat tax system, but honestly, can the working class be hurt much more?

Posted by Doug Hurteau | Report as abusive

Wow! The tenor of these replies and the angry, fearful, exposition is something to behold.

Change is coming, fast. We cannot expect anyone to be able to accurately predict the outcomes, except that the former American way of life and standard of living will have to make substantial adjustment.

The wealthy should be happy to make a larger contribution to the well-being of the nation. They have been getting a free pass from the government for many decades. Forget taxes. They should make a donation of their own free will. Now that would be patriotic!

The only way to fix this problem is to end taxes and replace it with control by the congress of monetary policy. Instead of the phony budget founded on phony taxes we will simply monetize all public services (print the money) and then all holders of our currency will be taxed for our national sustenance by the relative dilution of the dollar’s value.

Maybe its time to end the charade of modern economics which is in complete conflict with its own founding principals and the constitution. Let’s get the private Federal reserve out of the equation and have our representatives learn the meaning of the constitution.

Posted by Jonathan Cole | Report as abusive

Oh yeah…just what we need, more negativity. Here are more positive thoughts from one who is not suffering the pain of election loss: \”Right now, many commentators are urging Mr. Obama to think small. Some make the case on political grounds: America, they say, is still a conservative country, and voters will punish Democrats if they move to the left. Others say that the financial and economic crisis leaves no room for action on, say, health care reform.

Let’s hope that Mr. Obama has the good sense to ignore this advice\”.

Those are the words of Paul Krugman, here: n/07krugman.html?em

I WAS a lifelong Republican (55 yrs old), and am now OVER IT. Crooks and wimps should stand aside while they whine.

Posted by Gary in Virginia Beach, VA | Report as abusive

Senator Obama, I wouldn’t waste any time listening to the opinion of a woman who was part of the Bush administration’s smashing success of an economic policy. Heck of a job there, Ms. Furchtgott-Roth.

Posted by Sean | Report as abusive

Not to worry Furchtgott-Roth, the worst is behind us. President-elect Obama can\’t possibly do worse than 8 years of Republican policy. Obama only has talent. It takes genius to bring the entire global economy to the brink of nuclear meltdown. Leave it to the new president to put the economic Humpty Dumpty back together again and blame him if he fails. But, we will. Pity President-elect Obama? No, I would rather pity the commentators like you who can\’t come to grips with the new political reality in America. Suck it up, sweetheart.

Posted by choo-choo | Report as abusive

Jordan stated, “How is it fair to simply tax those that are making more money even more to pay for those that aren’t contributing to society? It would make far more sense, and would give more incentive for people to work, if everyone was taxed equally.”

There are three fundamental flaws in Jordan’s premise.

First, Jordan ignores local and state taxes, which are generally regressive, though they vary greatly. A progressive federal income tax, when added to the state and local taxes that all of us pay, would create an overall equal tax burden that Jordan proposes. (Unless of course you can afford to pay a lobbyist to provide some special loopholes, which is a fundamental problem in Washington DC and all state capitals).

Second, Jordan states that those who aren\’t in the highest 5% income bracket are not contributing to society. Such an extreme position, I hope, doesn’t represent the attitude of most Americans. We all know dedicated productive people who aren’t ever going to be multi-millionaires. None of us propose a government-funded life of leisure for the lazy, but entitlement programs are not the issue here. A progressive federal tax system is the most fair system for all.

Third, Jordan apparently thinks that the richest elements of society worked hard to earn their wealth. Ideally, this is true. However, trends indicate that the strongly tiered class system remains in effect. Wealth doesn\’t all trickle down to everyone; the rich of any country, under any tax policy, manage their money wisely so that it is retained in the family. This is understandable.

Yet some billionaires, Warren Buffett and Bill Gates, for example, believe that their wealth shouldn’t be blindly handed to their direct offspring to create another layer of paparazzi-attracting leisure class nobility. Refreshingly, these men have demonstrated their desire to return their fortune to society through trusts with the express goal of wealth redistribution to improve the health and education of the least fortunate. Apparently Jordan either disapproves of this goal or mistakenly believes that private industry would do a good job of ensuring a high standard of health care and education for the youth who are least able to afford it. Jordan, please show me a nation that has a lower overall personal tax rate than the USA that has both higher educational achievement and health statistics for children. When you can, then lower spending for children can be achieved and we can relax the tax rate for everyone without allowing society to decay. Until then, let us first work on making our system less wasteful and more efficient in an effort to keep up with the dozens of nations with higher health and education standards than the USA.

Posted by Jean | Report as abusive

Taking from the rich to give to the poor and then everyone will be rich and equal? That sounds like Robin Hood? The U.S. is not in never never land. People in this country get rich because they worked hard and they’re always ambitiously achieving more. Are we to punish hard workers who went to college, stayed late at work and risk their savings to start their own business and reward those part time McDonald fryer operators who burn the fries time after time even with a timer on?

Posted by Jim | Report as abusive

sounds like their are a few bitter McCain fans out in limbo. the best comment still covers all of it. look, the last four years have been a mess. Obama is about to try to work on cleaning it up. it is going to take sometime. it is not going to happen overnight. change takes time. McCain was going to face the same challenges. he had no plan, he had no reason, he was going to keep us going in the same direction. say what you want to say, the people spoke. it will take sometime and it will take all of us. no matter how much money you make, you have to change the way you are living. parents have to be parents to their children. we have to live within our means. the government has to control how they spend. everyone has to be smarter. all of this he is not ready mess and you will see garbage all of you need to get over it. right now, Obama needs us and we Obama. or you can just keep crying in you little world talking about Bush Bush and McCain and palin………

Posted by bryan | Report as abusive

Since Mr. Obama dosen’t understand anything he talks about except that he wants to rule America I am certain he dosen’t comprehend what Diana Furchtgott-Roth has written either. The certainty since December of 2007 that Obama would win the election caused investors to cash in their stocks. That’s right you Obamamaniacs!Your Savior caused the world wide economic depression he now says he wants to solve. The only way Obama can fix the problems he caused is to resign before taking office in January. And Biden, Pelosi and Reid must also resign with him.

By Diana Furchtgott-Roth


Diana, you’re talking about the world as though there are absolutes. That’s a very mundane train of thought.

Obama by changing the ‘geopolitical’ situation (especially in the M.E, and namely Iran) could bring the price of crude oil down, and therefore give this economy “a real boost” CHEAP OIL!!!

Don’t worry Diana, it is obvious Obama wasn’t your choice of candidate. But don’t worry about it, “you’ll get over it”! :)

Proud to be a liberal

Posted by Jack Durbin | Report as abusive

Obama… a brilliant preident.

After the last one, “We deserve Obama America!”

GOP eat your heart out!

Posted by Jack Durbin | Report as abusive

He can pay for it by ending the Empire (5% of the worlds population and 50% of the worlds war spending). Let all democracies bare the cost of a free world.

* stop the Bush wars
* 14 aircraft carries down to 4
* no new fighter aircraft know nation is within decades of touching an F18 why do we need two new fighter?
* Bases: Rome had 36 the British empire had 39 why do we have 800
etc etc …

Posted by mike | Report as abusive

Furchtgott-Roth: “Of course, in a recession, federal deficits are desirable. The question is how to structure them to help the economy recover. By increasing taxes on upper-income earners, small businesses, and capital gains, President Obama would reduce incentives to work and invest. Additional requirements on employers would encourage them to open plants overseas, rather than in America, slowing job creation. After the euphoria in the streets and the chants of “yes we can” have faded, the question will remain: do Obama’s promises make fiscal sense?”

Routine resistance to increased taxes on the privileged class will take many forms (and has taken many forms since the beginning of time). The preceding Furchtgott-Roth quote is just one example of the same old rich person’s chorus.

These are not normal times. Therefore, such routine talk of “federal deficits” and “how to structure them” are “republican-ese code phrases” for the ever continuing Reagan/Bush x 2-era resistance to tax hikes on the wealthy privileged class. In other words, it is somehow better for America to borrow, so that the wealthy can invest and create jobs, i.e., the failed trickle-down philosophy of sharing privileged class wealth with the middle class and working class.

Much of the preceding is what we heard repeatedly from the McCain/Palin ticket. The last time I looked, the false republican message of Reagan/Bush x 2/McCain was amply REJECTED by 53% of the voting electorate and by the majority of the voting electorate in 56% of these United States and the District of Columbia.

Here’s the REAL DEAL, Mr. & Mrs. Reader: The fearful and false republican refrain about the comingling of projected across-the-board tax increases for the wealthy privileged class with IMAGINARY personal, capital gains & net profits income tax increases for the middle class & small businesses, respectively, was believed by ONLY 46% of the voters in 44% of the states…said republican song-and-dance-routine thereby receiving a mere 32% of the electoral votes nationwide.

So, I say to the critics of raising taxes on the wealthy…get off it, why don’t you. The wealthy have always been able to fend for themselves. It’s time for them to show their tax-patriotism to the flag and the country that has been so exceptionally good to them. It’s time for the privileged class of $Millionaires and “lower” privileged class of “regular” wealthy Americans to bring jobs back to America…and for the super privileged class of $Billionaires to put their fortunes at the disposal of our great nation.

It will be up to President Obama and Speaker Pelosi, as well as Majority Leader Reid, to hammer home to the democrat majority in congress (and republicans willing to listen) that all of the excuses and diversions by members of the privileged class (as well as its spokespersons) must be navigated…and very quickly. Time is running out.

America’s progressive federal income tax system that came of age out of the 16th Amendment, as well as the first tax rate schedule of February 1913 & October 1913, respectively, was turned on its head by Ronald Reagan and an obedient privileged class congress in 1981…as borrowing to pay America’s bills grew by leaps and bounds, and continued on through the subsequent presidencies of Reagan’s vice president and the latter’s son.

I don’t much care for Bill Clinton as an individual. Likewise George Bush for the same reason. Neither offered up blood-patriotism on the battlefields of SE Asia in the 1960′s and 1970′s. That is, both avoided service in the uniform of our great nation in wartime in a war zone.

Even so, at least President Clinton and the republican-controlled congress that he alternatively partnered with and fought with over a period of 6 years saw that prosperity for the privileged class lies in a large consuming middle class that absorbs the working class.

All President Reagan managed to do (besides sinking America up to its eyeballs in a quicksand of debt) was to shrink the middle class and increase the size of the working class.

The tax rate schedule that grew out of the 16th Amendment (and which was signed into law by Woodrow Wilson) intended that the privileged class pay America’s bills and minimize America’s debt. It also intended that the middle class and working class NOT be taxed…but rather that they consume with tax-free dollars.

We can’t expect that the first $66,300 and $88,400 (in today’s dollars) for single and married taxpayers, respectively, be exempt from federal income tax as originally intended in 1913. In other words, we can’t expect that the letter of the Revenue Act of 1913 be adhered to at this late date.

However, we of the 53% who voted for the Obama/Biden ticket should be able to expect that an Obama/Pelosi/Reid tax rate schedule be structured in such a way that tax reductions for the middle class and tax increases for the privileged class comply with at least the spirit of Wilson’s Revenue Act of 1913…the spirit that was dampened by Reagan’s so called Economic Recovery Tax Act of 1981 & Tax Reform Act of 1986.

It was the latter two revenue acts that started the redistribution of America’s wealth from the middle class to the privileged class, and that borrowed America’s fiscal & financial integrity to the brink of disaster…with an FY 2009 budget deficit of $1 Trillion and a national debt of $12 Trillion.

Disabled American Veteran

Please take notice: All right wing solumnists, pundits and spinmeisters from the Hudson Institute, the Heritage Foundation, the Hoover Instituion, American Enterprise Institute and the rest of the “conservative think tanks” that will try mightily to undermine the incoming Obama administration — we’re on to your game, we know your tactics and we understand that your biases are purely self-serving. It will not work this time!

For a terrific (albeit 10-year old) essay on how these GOP operatives and culture warriors use their influence to undermine democracy and the interests of the voter, taxpayer and the middle class, check out this article: acy/ConservThinkTanks.html

Posted by Steve Bonser | Report as abusive