The Republicans’ refusal to consider Democrat tax increases, primarily on wealthy Americans, as part of debt-reduction talks is front and center in the news.
And a new Democrat strategy is now emerging to suddenly blame Republicans for sabotaging the economy. Imagine that! After watching every Obama policy ruin the economy, Democrats now are saying that it is Republicans who are out to make it worse.
This is absurd. How can they possibly make it worse?
They can’t. Obama has ruined it. Because the Democrat party has been incrementally undermining the economy for decades, while Republican/conservative economic policies have been keeping the economy afloat here and worldwide. Even communist China is using capitalism to save itself, but you will never hear a liberal fess up to that little inconvenient truth.
Consider the tax increases that Democrats want on “the rich” in the debt talks. It has been calculated that if the government took every single penny from the richest 400 people in America (The Forbes 400) that that would amount to about $1.4 trillion in income and assets.
And that $1.4 trillion would only solve the deficit crisis for… less than one year. Because the current annual deficit is about $1.65 trillion.
And then, of course, that deficit would be much worse next year because taking $1.4 trillion out of the private economy, as the Forbes 400 tax grab would do, would cause an immediate collapse in economic growth. Because that $1.4 trillion is invested in growth.
The liberal mantra is that the more money the government has, the better. And that “rich Republicans” are hoarding money and living the good life in their mansions. This is completely wrong on many counts.
First, the majority of rich people in America today are liberal Democrats. When was the last time you heard about all the rich Republicans in New York, Chicago, Follywood, San Francisco and Martha’s Vineyard? They are certainly there, but they are clearly in the minority. Go study the statistics – Democrat have more and more of the national wealth.
Second, when rich people hold onto their money, it is not stuffed under their mattress. That money is deposited in banks, where it can be loaned out to other people to start businesses and buy homes. If the money is taken away by the government, it cannot be loaned out and businesses cannot expand and people cannot buy homes.
Third, that money is also invested in stocks and bonds and private investments to provide capital to keep the economy working.
Fourth, rich people also spend their money. They buy boats or cars or got out to restaurants or add on to their homes. They are “spreading the wealth around” when they spend their money. Just ask any elite left-wing ‘hippie’ cabinetmaker in Vermont about who buys his product. It is always upper-income people.
Yet if that money suddenly disappears and is taken by the government, the bank will not have money to loan out. And companies will not have the capital flow coming from stockholders. And the cabinetmakers will suffer when rich people stop buying their wares.
In one famous case in the 1990s, when a big excise tax was slapped on luxury yachts in order to get more money for the government, thousands of people lost their jobs in the yacht-building industry because sales went kaput. Because rich people stopped buying boats when the price was pushed up artificially by the government through taxes. And ultimately the government lost money on the deal.
This is what socialists never will tell you – how the economy really works.
The only way out of the debt crisis is to cut spending. In other words, the people on the receiving end of the taxpayer cash for the last few decades from the Cowboy Poetry Festival to National Public Radio to the long-term, idle handout poor to overpaid government workers will just have to do with less. Because they have been living high off the taxpayer for far too long.
Liberals will never, ever agree to any cuts in these handouts, however. They want to keep their liberal friends employed and in the clover, and to heck with the taxpayer and with the well-being of the economy.
Of course rich liberals will be exempted from new taxes. Because the IRS is run by the Democrat party and rest assured that mostly Republicans will be audited and harassed. And rich liberals will continue to amass bigger and bigger fortunes. Even big Mr. Liberal, the singer Bono of the rock band U2, the globe-trotting do-gooder celebrity, is accused of skirting taxes in Ireland. Of course. He is a liberal.
Republicans must stand strong in order to revive our economy. Spending cuts are the only way.
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.