It sure didn’t take long for the Republican party to return to its get-along roots even after the November 2 election demanded that the GOP stop trying to get along with the Democrats.
In a deal with president Obama to keep the lower Bush-era tax rates for another two years – which is simply common sense and good for the economy – the GOP also agreed to extend unemployment benefits for 13 months for people who already have collected for 99 weeks. That’s a damned long time to be “collecting”. And that part sure sounds like the genesis of another permanent government program under Obama Socialism. Just watch this issue carefully.
Yet the message of the November 2 election was two-fold: Tax reductions to spur growth and close deficits from the revenue side; and spending reductions to close deficits from the expenditure side.
Republicans claimed victory after not even getting one of them. It was just a block on a tax increase. And it is only temporary. And then, to add insult to injury, the GOP failed to require that Obama come up with the tens of billions needed for his unemployment extension from the stimulus hoard that he still has in his desk drawer. So Obama is going to create more debt like a good socialist would and keep the stimulus cash for handouts to buy votes in the 2012 election.
The left is livid with Obama for agreeing to extend the Bush tax rates and then doubly-livid for surprising the GOP with another capitalist proposal – to lower the Social Security tax rate for one year from 6.2% to 4.2%.
Because he understands, certainly grudgingly, what rational economists recognize – that lower taxes spur growth. That is why he stumbled on the truth by calling the Bush tax rates “stimulus”.
For Democrats, however, taxes are not about money; they are about power over people and then distributing the nation’s wealth as they see fit. So the extension of Bush tax rates is a slap at liberal power.
But Obama needs Obama Power and he is going to come out of this fairly well even though he is further losing his base. Because Obama is desperate for some positive economic news and is accepting a crucial lifeline from the GOP in the Bush rates which, if they expired A) the middle class would see a huge tax hit, along with the wealthy; and B) the economy would deteriorate as a result. Both bode poorly for the president’s re-election in 2012.
The GOP should have demanded, therefore, that the Bush tax rates must stay and that there will be no unemployment benefits extension unless it is paid out of the the stimulus. But Obama won again because he held his liberal ground while Republicans caved – as usual – so as not to seem like Scrooge for Christmas. Except that they are being Scrooge to taxpayers, which never counts in America.
Scrooge is the game that Democrats play every day with every spending program. Because if it’s not Christmas, it’s Thanksgiving or Arbor Day. If people don’t need a handout for food, it is for medicine. If their housing subsidy runs out, they need a bigger welfare payment to make it up. Handout, handouts everywhere.
Yet the same Democrats have been ruining the economy for decades with excessive taxes, regulation, lawsuits, environmentalism and union agitation, driving jobs overseas and taking away people’s ability to support themselves, replacing self-reliance with dependence. Then when Republicans say we need to cut the dependence and the spending and taxes that enable it and cause it, Democrats act like it’s armageddon and the GOP immediately heads for the tall grass.
This is a vicious cycle and is why “dependency” is a bad word to conservatives and to all rational people. Because dependency is an addiction. Meanwhile the public at large, under the influence of the Ancient Media, do not understand this cycle. They think all this cash comes from Obama’s “stash”, as one female surmised during the 2008 campaign.
Long-term unemployment benefits are just another form of dependency that kills incentive. Studies show that people are much more likely to look for work when their benefits are about to run out.
Obama is also proposing a reduction in Social Security taxes for one year. It’s hard to say where this came from except that perhaps he is punch-drunk after the last two years and said “What the hell! Let’s do it!”
Big deal. One year. The SS system has been sucking taxpayers dry for decades. A one-year hiatus is not going to change anything. SS will revert to sucking after the year is up.
Social Security is just another example of creeping government expansion and fabricated dependency. People have come to depend on it because they have been forced onto it. SS taxes today are 6.2 times the rate they were just 70 years ago and payouts a fraction. Hourly workers today pay a whopping 12.4% of their annual earnings just for Social Security.
This is made up of their ‘personal contribution’ deducted from their check (6.2%) added to their ’employer contribution’ (6.2%), all of which is actually paid by the employee because it is factored into your wage ahead of time. Your employer pays none of it. You pay all of it. And Democrats want to double SS taxes to 25% in order to keep the system in their grasp and full of cash.
What does this Obama/Republican agreement show us?
It demonstrates that we badly need the stronger group of Republicans that is coming into office in January from the November 2 election. Because these economic sob stories are a dime a million and we have to tell America that it is time to change the long-term paradigm. In the Big Picture – starting today – we must have tax reductions and spending reductions in order to have the nation that our Founding Fathers envisioned for us. Otherwise we will be left with a Euro-type country. Which is nothing at all.
Please visit my website at www.nikitas3.com for more. You can read excerpts from my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.