Tuesday, February 2, 2010

Obama's Economy - The Gas And The Brakes

My father-in-law always drove a car with the right foot on the gas and the left foot on the brakes. As you might imagine it caused a jerking motion to the point of whip lash and a very uncomfortable ride. President Obama is doing the same thing related to the economy. Obama is pumping Billions of dollars into the economy with his $787 Billion SwindleUS I Plan, that has been a complete failure, and his $100 Billion SwindleUS II Plan in his 2011 budget, presumably to create or save jobs. Of course, most of the jobs saved have all been government jobs rather than private sector employment and very few new jobs have been created. This is in addition to the $1.25 Trillion the Federal Reserve has pumped into the economy to keep mortgage interest rates low. This is all being done through borrowing and deficit spending that is not sustainable.

At the same time that Obama and the FED are flooding the economy with billions of dollars, the President is proposing new regulations and taxes that will diminish the impact of the federal stimulus money. When the Bush Tax cuts expire at the end of 2010, Obama wants to raise taxes on single people earning $200,000 or more and married couples earning $250,000 or more. Their top federal income tax rates will go from 35% to 39.6%. This is in addition to the average state income taxes that many people pay of 6%, which will result in a combined income tax rate of about 46%. This does not include property and sales taxes and other user fees. When all taxes are combined, it is pretty easy to get up to 50% of income paid to federal, state and local governments for the privilege of living in the United States.

When Democrat Socialists say that the so called "rich" do not pay their "fair share", I would ask how much more must the "rich" pay since the top 10% of wage earners already pay 70% of all taxes in the United States. Obama plans to increase income and capital gains taxes on small businesses, oil companies, banks and other companies with foreign operations by $2 Trillion over the next ten years assuming it is ever collected because tax increases usually retard the growth of the economy resulting in less tax revenues going to the government, not more. These are the very same people and companies that create jobs in the United States. If Obama takes more money from them, they will create fewer jobs either because they will have less to spend, or less to invest in their businesses. Well dah! Also, keep in mind, about 50% of the people in our country pay little or no income taxes at all. How fair is that??

The problem with all of this is that many small businesses are S corporations, which means they pay federal income taxes at their personal tax rate rather than the corporate income tax rate of 35%. So, when their federal income tax rate goes up to 39.6%, it will result in lay offs at the same time that Obama wants to give small businesses $5,000 for every employee that they hire at a cost of $33 Billion, which is an incredible waste of money that will not create one new job that would not have already happened. This is really dumb and the work of Obamanistas that have never worked in business. Obama also wants to tax the 50 largest banks in the country another $90 Billion a year as a punishment tax in addition to their normal corporate income taxes even though they have paid back TARP monies plus interest. It is GM, Chryler, Fannie Mae and Freddie Mac that still owe TARP monies not the banks. These are the very same banks that Obama wants making loans to small businesses. Hello, this is just $90 Billion that will not be available for loans. This is lunacy.

And then, there is CAP & TAX in Obama's 2011 budget. Obama assumes that there will be higher energy taxes in 2011 resulting from the passage of this legislation. President Obama is managing the economy like my father-in-law drove a car with one foot on the gas and another on the brakes because he does not understand Economics 101. The more money the government confiscates from individuals and businesses, the less money they will have to spend as consumers and investors, which hurts job growth. Raising taxes of any kind during a recession will retard the growth of the economy and cause job losses. As such, all this stimulus money will have little impact if the government provides it with one hand and then takes it back with another. This is just common sense and fifth grade math. It is also the reason we still have high unemployment.

We need to elect Conservatives in 2010 and 2012 that have worked in the real world and understand Economics 101. We need lower taxes, less regulations and tort reform to grow our economy. President Obama is a big government, tax and spend Socialist. Obama's unprecedented deficit spending and social engineering will lead to the bankruptcy and collapse of the United States, if allowed to continue. We cannot let that happen. We must take back our country in 2010 and 2012. We can do it. We must do it.

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