Obama's New Economics
Barack Obama's signature plank throughout his campaign has been his threat to raise taxes on every business and those making more than $150,000 per year. Now, however, as the economy turns even worse, Obama embraces tax cuts as the way to salvation.
Here's what he had to say on ABC's This Week:
Mr. Stephanopoulos: "So even if we're in a recession next January, you come into office, you'll still go through with your tax increases?"
Senator Obama: "No, no, no, no, no. What I've said, George, is that even if we're still in a recession, I'm going to go through with my tax cuts. That's my priority."
Mr. Stephanopoulos: "But not the increases?"
Senator Obama: "I think we've got to take a look and see where the economy is. The economy is weak right now. The news with Freddie Mac and Fannie Mae, I think, along with the unemployment numbers, indicates that we're fragile. I want to accelerate those tax cuts through a second stimulus package, get more money into the pockets of ordinary Americans, see if we can stabilize the housing market, and then we're going to have to re-evaluate at the beginning of the year to see what kind of hole we're in."
Obama makes two critical points: The first is that tax cuts are the key to economic stimulus and growth, and the second is that putting "more money into the pockets of ordinary Americans" is more useful than Keynesian outlays. He's beginning to sound like an economic conservative.
But if Obama concedes that taxes are detrimental to the economy, the larger question, then, is why he would ever raise them. He's on the road to Damascus, but he still has more miles to go.
Tags: economics | taxes | Barack Obama
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Reader Comments
The economy
History shows that government run infrastructure job programs do nothing to stimulate the economy. Tax breaks and incentives for small business and consumers do the most good. A flat income tax rate would be a fair thing to do in this country....but we all know the rich just keep getting richer and they are running the government. Money is power and the rest of us poor working slobs will remain just that. Unless Americans start to pay more attention to the politics in this country things will never "change". We need more teaparties to weed out the politicians that are calling real Americans "fakes" and " instigators". Politicians who don't really care about what their constituants want from government should not be reelected. We owe it to ourselves and our children to become more involved and pay attention to what goes on in all aspects of government. We have become lazy and complacent. Our fore fathers would be quite distressed to see us now.
The economy
History shows that government run infrastructure job programs do nothing to stimulate the economy. Tax breaks and incentives for small business and consumers do the most good. A flat income tax rate would be a fair thing to do in this country....but we all know the rich just keep getting richer and they are running the government. Money is power and the rest of us poor working slobs will remain just that. Unless Americans start to pay more attention to the politics in this country things will never "change". We need more teaparties to weed out the politicians that are calling real Americans "fakes" and " instigators". Politicians who don't really care about what their constituants want from government should not be reelected. We owe it to ourselves and our children to become more involved and pay attention to what goes on in all aspects of government. We have become lazy and complacent. Our fore fathers would be quite distressed to see us now.
Sam, it is more complext than you make it out.
Why would one ever raise taxes? To pay for government services. For many of us that includes schools, police, firefighters, public works, roads, water treatment, sewage treatment, garbage disposal, etc. For others it may mean national defense, the military, wars, intelligence services, etc. And government serves other positive purposes providing physical, legal, and regulatory environment that promotes safety, productivity, and success (e.g. avoiding the food contamination that occurred in China) . It is not always perfect, but if one does not like government, he can move to southern Somalia where there hasn't been a government since 1991.
Taxes are not all about economics; they are also about providing public goods and services that need to be paid for. It is becoming clear that the US can not continue indefinitely to borrow to pay for its own government (the Republican strategy of Borrow and Spend). We in the US will have to start paying our own way and that means paying [more] taxes - particularly if we want to remain a super power. Hopefully, people are starting to get this and we will end our freeloading ways (after the recession). If not, this economic crisis is just the first of more that will end badly for the US.
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