Taxing and Spending is the Way to Prosperity

Certainly Obama  thinks taxing and spending will lead to some utopia like world where everyone is equally rich or poor, happy or miserable, or something or other.

But, Obama is not the only one that thinks that way. It is no secret that the southern European countries of Portugal, Spain, Italy, and Greece are essentially bankrupt. The grabbing most of the headlines of late is Spain. We have heard that the EU is going to bailout the banks of Spain to the tune of $120 billion. But Spain has more troubles than just their banks. They have 24% unemployment (50% for those 25 years of age and younger), their economy is in recession, and their cost of borrowing is now around 7%. Spain needs to grow their economy and they need to keep government services going. So, what is their solution? Raise taxes!

From CNBC we learn:

Rajoy, of the center-right People’s Party, proposed a 3-point hike in the main rate of Value Added Tax on goods and services to 21 percent, and outlined cuts in unemployment benefit and civil service pay and perks in a parliamentary speech interrupted by jeers and boos from the opposition.

Can you imagine that? The people of Spain were already paying an 18% VAT and now the government wants to raise it to 21%. Unbelievable! VAT taxes, as you know, are paid by everyone, including the unemployed and low-income people. Folks, I live in a country that has a 15% VAT. It’s a killer! Here in Venezuela 80% of the population would, by American standards, be considered as living in extreme poverty. Yet, like their Spanish brethren, they pay an outrageous VAT tax on everything other than some foods (foods that are in any way processed are not exempt from VAT). So, how does the government of Spain think this three percentage point increase in the VAT tax is going to help their economy? I don’t get it.

Okay. Let’s get back to our sad excuse for a president, Barack Obama. He too likes taxing and spending. He would probably love to have a VAT tax; but for now it doesn’t fit with his class warfare strategy. Lately he has been pushing to extend the so-called Bush tax cuts, which have been the income tax structure for a decade now, for everyone except those earning more than $250,000 per year. And, by the way, aren’t these “Bush tax cuts” one of the things Obama has blamed for causing our painfully slow recovery; along with oil companies, ATM machines, and Europe? Then, of course, there is his favorite the “Buffet Tax”. For some reason, these tax proposals are getting a lot of support in our House of Representatives. So, Obama’s minions have come up with what they believe will be a tax that will be easier to sell to the American people. They call it the Robbin Hood Tax.  Fox News has the story:

Backed by the AFL-CIO and National Nurses United, the measure would impose a  tiny three-hundredths-of-a-penny tax on financial trades. Supporters say the  bill would cost the average investor just $1 per year, but could raise up to $35  billion annually from the high-stakes, high-volume high-speed computer trades  critics claim increase market volatility.

Wow! $35 billion! That ought to keep our bloated government going for a couple of more days. Who could complain about a tiny three-hundredths-of-a-penny tax? You don’t suppose our government, if they once got such a tax on the books, would ever raise to a hald of a percent like the UK, do you? And who would pay this tax. Well, of course, those rotten-to-the-core Wall Streeters and billionaires and millionares would have to pay. But, what about all of those pension funds, including union pension funds. I wonder if the AFl-CIO and the National Nurses United thought about that?

Does Obama reaally want to tax the rich or is it all show to impress his followers? In my opinion it is all show. He doesn’t need more money to spend. He has already $800 billion per year to spend as he sees fit. At the risk of sounding like a broken record, I want to remind you that the 2009 stimulus package never went away. Through Continuing Resolutions that $800 billion has been there every year of the Obama administration. No one talks about this. Not the MSM, including Fox Newa, nor Paul Krugman who is alway bewailing the fact that the “Stinulus Package” hadn’t been much bigger. By October of this year, Obama will have spent $3.2 trillion stimulating our economy. Assuming there will be another Continuing Resolution this Fall, the next President will have another $800 billion to spend.

So, no I don’t think Obama is serious about taxing the rich. It is all show. Most of his “stimulus” spending has gone to his crony friends, which he says he wants to tax. I’m not buying it.

Well, that’s what I’m thinking. What are your thoughts?

19 thoughts on “Taxing and Spending is the Way to Prosperity

  1. I have proved in my latest piece that the US is not positioned fundamentally much different than Spain. We developed a comparison table of ten economic fundamentals that are key to the economies of both nations and the US loses 6-4 against Spain.

    The only difference between the two countries is that Spain Bank’s are being bailed out by the EU; while America’s Federal Government is being bailed out by itself – printing money and borrowing money due to its advantageous “reserve currency” position.

    1. “The only difference between the two countries is that Spain Bank’s are being bailed out by the EU; while America’s Federal Government is being bailed out by itself – printing money and borrowing money due to its advantageous “reserve currency” position”

      And that too can not go on indefinitely.

  2. Oh, noooo… The 800 billion has achieved eternal life, now, in the form of continuing resolutions. We absolutely have to kill this beast. I have to write Rep. Tom Price about this one, and also Chambliss and Isakson. This is preposterous!

    As far as Obama goes, I believe he is absolutely convinced that a dollar of government spending gives the same stimulus as a dollar in private spending. He even is dumb enough to call it an investment. How can someone with an Ivy League education be this stupid?

    I think Spain has similar but different problems. They have always had problems, and I think it is because Spain is not as blessed with a lot of resources. For example, Spain has coal, but its production has to be subsidized. The coal miners are another one of the problems. It is impossible to make up subsidies with volume.

    They tried to subsidize their way into cheap wind power, and that cost the economy much more than the subsidies. The wind power scheme is inherently less efficient than fossil fuels, and it actually cost the economy thousands of jobs.

    The Spanish have gotten themselves into a position of being damned of they do the right thing, or damned if they do the wrong thing. The best thing they can do is to ramp into cutting subsidies, and spread the pain. Of course, if I were a retired coal miner, I would go to the streets in violent protest when or if my pension gets cut.

    Obama, on the other hand, thinks he has infinite resources, and is dedicated to fundamentally changing our nation into a European loser of a country. The dude i a loser.

      1. The beach is very nice. Florida Gulf Coast beach communities are known for their white sand and great seafood. We are withing a mile of the Alabama part of the beach, an area known as the Redneck Riviera. Whatever, the bikinis are nice, too. It certainly seems to me that Greece and Spain are in for a rough ride. Too bad. I don’t like to see anyone in that condition. This movie may be coming to us, soon.

  3. Good reminder. I learned everything I needed to know about how money worked when as a child I played monopoly. Overspend and you go broke. So much for Park Place.

  4. Strange but I was taught not to spend what you don’t have and it you do go into debt try an pay it off. I never realized that my masters in the government would tax those rich folk so I can get more free stuff.

  5. 1.) President Obama is worried about what’s wrong with his campaign. The first thing wrong is that President Bush cut taxes, waged wars, added prescription drugs to Medicare, stimulated, bailed out — increasing the national debt $5 trillion in eight years. But President Obama cut taxes, waged wars, added prescription drugs to Medicare, stimulated, bailed out — increasing the national debt $5 trillion in four years. The government has been stimulated $10 trillion in twelve years and is on steroids. The President rejected the findings of his debt commission and the Democrat Senate hasn’t passed a budget in three years. 2.) The second thing wrong is that more steroids for growth won’t work and hiring policemen, firemen and teachers doesn’t build the economy. You’ve got to go to the private sector. Washington’s responsibility is to fashion an industrial policy for Corporate America to invest and make a profit. Tax laws, labor laws, environmental laws, trade laws all comprise an industrial policy. The founding fathers adopted an industrial policy two years before the Constitution with the enactment of the Tariff Act of 1787. 3.) The third thing wrong is that President Obama refuses to compete in globalization. Globalization is nothing more than a trade war with production looking for a country cheaper to produce. China sets the competition with its controlled capitalism. We can’t lower our standard of living to China’s but we will have to adjust to survive globalization. 4.) The fourth thing wrong is that the President refuses to enforce the trade laws. If President Obama enforced the War Production Act of 1950 he wouldn’t have to beg Russia for helicopters for Afghanistan and we’d have employment instead of unemployment.

  6. I think you are right Jim, he isn’t serious about taxing the rich.He is simply using this for political reasons because he knows it plays to the base and he hopes to be able to paint the Republicans as the ones who are protecting the rich. I wouldn’t be surprised if he actually hopes all the tax cuts will expire because that way he can raise taxes while blaming the Republicans.

    1. Wharever it is that Obama wants, we can be sure that it is not the American people who will benefit but him personally. I continue to be astounded that 45% of registered voter approve of his presidency. How is that possible?

  7. Nothing. He will be able to do nothing, because not one of his “allies” will stay with a sinking ship. All will head for the lifeboats and try to avoid being sucked down with him.

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