Remember president Bill Clinton vowing to “end welfare as we know it”?
After the Republican congress twice sent him welfare reform legislation, he finally signed it on the third try only because he thought that he might lose the 1996 presidential election if he didn’t.
And while “ending welfare as we know it” has been a conservative dream for decades, Democrats have been promising to end “corporate welfare” for the same amount of time. But these “welfare” descriptions really are opposites because poor people collecting welfare are a net minus to society, while corporations that create jobs and wealth are obviously a plus.
The old adage is that you get more of what you subsidize, and you get less of what you tax. So if you subsidize poverty with welfare payments, you will have more poor people which is why there is so much poverty in America 40 years after Lyndon Johnson’s ‘War on Poverty’.
On the other hand if you tax business heavily, you will have fewer jobs which is why America is falling behind in the world economy. Because we have the second highest corporate tax rate in the world – 35% – after Japan, a nation that has been in a recession for 20 years because it is a high-tax, socialist country. And why Europe, with its sky-high taxes and invasive regulations, has chronic year-after-year unemployment rates of 8% to 15%.
But the definition of “corporate welfare” is inaccurate because it is derived from the viewpoint of liberalism in which it refers to anything less than a 100% tax rate on corporations. So if a corporation pays 35% corporate tax, Democrats call it “65% corporate welfare” or “a 65% corporate subsidy”. And then any reduction in that 35% rate is said to be “an increase in corporate subsidies” or “more corporate welfare.”
This is also how the media have framed the debate on taxes as well. Over and over we hear about “the Bush tax cuts for the rich that will expire in 2010”. But there is no such thing as a “Bush tax cut”. It really is a Bush-era tax rate on the wealthy, which also is 35% and is lower than the Clinton-era tax rate on wealthy Americans which was 39%.
So don’t be fooled because there is no baseline against which all taxes are measured. Except in liberal America where any tax less than 100% is a “tax cut.”
Now Time magazine is building up the Obama mystique, photo-shopping Obama’s face onto a famous picture of socialist president Franklin Roosevelt. Because Obama has promised, among other things, to raise the existing tax rates on wealthy Americans, raise capital gains tax rates and raise taxes on businesses.
Yet at the very same time most commentators, even including Britain’s very liberal prime minister Gordon Brown, are suggesting that the United States and possibly even the world consider a business tax reduction to stimulate growth and steer us out of the current fiscal slowdown. This is good news. Because finally Adam Smith’s and Milton Friedman’s and Ronald Reagan’s economic ideas – which simply state the obvious fact that economics are always at the mercy of natural laws like supply and demand, taxation and economies of scale – are part of our rational dialogue. Even Europe is coming around. Europe now has lower corporate tax rates than the United States.
And it is well known that one of the main causes of the great depression of the 1930s was that president Hoover, against his principles but under public pressure, signed onto increased tax rates on wealthy Americans and on business, leading to the slowdown that morphed into the depression.
During the 2008 campaign, Obama was advocating more of the policies that already have led to the Obama Worldwide Recession. Here is why it is Obama’s recession:
1) Our current domestic woes began – and have spilled over into the international arena – as a result of banks lending trillions of dollars over the years to people without the ability to repay. Under the socialistic Obama-oriented Community Reinvestment Act of 1977, banks were forced to loan money to “low income” people. But never satisfied, liberals then made these mandates apply to “low- and moderate-income people”. This is called Creeping Socialism and is the way that it goes from helping the poor into supporting the middle class.
2) Obama’s Democrat friends in the government-sponsored Federal National Mortgage Association (Fannie Mae) then gave banks a way to rid themselves of these loans by buying the loans and passing the liability on to the taxpayer. In 1999, Fannie Mae rescinded the requirement that borrowers have any kind of documentation for the loans, leading to no-doc and low-doc loans, or even NINJA loans (no income, no job).
3)Obama’s friends at Fannie Mae then cooked the books and looted the agency. Franklin Raines, an Obama and Clinton advisor, walked away with $90 million while the agency collapsed and was taken over by the government. James Johnson, another Obama advisor and big-time Democrat operative, got more than $20 million.
4) The entire banking industry has been permeated over the last 40 years by Obama-type intellectuals who say that the word “conservative” is evil and that banks should become institutions for social engineering. So banks lowered their standards. The current crisis is the end result.
5) Wall Street has been taken over by liberals who have corrupted the system. According to a study by the Center for Responsive Politics, employees at the top nine Wall Street firms in the 2008 election cycle gave a whopping 60% of their campaign contributions to Democrats, some of them extremely liberal like Schumer and Obama.
6) The huge stock market selloff of Autumn 2007 came as a result of the Obama-caused mortgage crisis and from fear that Obama was going to get elected and jack up capital gains tax rates. So people sold out before the Obama rates kicked in.
7) The Big 3 American car companies – General Motors, Ford and Chrysler – have been slowly collapsing for years because Obama’s union friends have been getting $70 an hour wage/benefit packages. Meanwhile the pay rate in the thriving non-union “Southern auto industry”, which includes foreign nameplates like Nissan, Toyota and BMW, is $48 an hour. The Big 3 are seeking a survival bailout. The non-union companies are not.
8) Many Obama-friendly American cities are running to the federal government for bailout money, yet their fiscal crises have been caused by decades of profligate spending by corrupt Democrat administrations. Conservatives have warned that these policies eventually would lead to collapse. Now they have.
9) Since America is the economic engine of the world, our current Obama Recession is spreading worldwide. Meanwhile Europe and Japan have done nothing over the last 30 years to counterbalance any weakness in the American economy because Europe and Japan have been in permanent recessions. The reason is because they have Obama-type policies – high taxes on everything, huge government spending programs, slow growth, high unemployment, massive regulations. If their economies had been growing all this time, this Obama Worldwide Recession would not be nearly as harmful as it is.
10) Obama’s friends in the public school teacher unions have decided not to teach anything to tens of millions of people who now have no education and no ability to think. Their ignorance is a key factor in the Obama American Recession. Obama says that the solution is to give these schools more money while rational people (conservatives) have been suggesting alternatives for decades.
Certainly Obama wants to “end corporate welfare” like all liberals. It actually means “raise taxes”. Except “corporate welfare” is OK when it comes to bailing out his union friends at the Big 3 car companies, in which case he wants unlimited taxpayer funds.
The unions should bail out the car companies with their own money. They have drawn many, many times the wealth out of the auto makers than those companies need to stay afloat.
This indeed is the Obama Worldwide Recession. America, and the world, needs to cut business tax rates and all other taxes, cut their bloated government budgets, let banks do their lending according to historical standards and promote alternatives to the failed public school system.
We are in the Obama Worldwide Recession for one reason only: It is called Obama Socialism.
Final note: The Dow Jones Industrial Average closed at 9625.28 on election day November 4. The Dow figures for every day afterward is a function of many factors, including the incoming president Obama who was supposed to offer us hope and optimism.
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