Let me make the point right now: we conservatives are not worried simply about the next fiscal year's budget and dealing with relief spending during a severe recession. Rather, it's the fact that Obama is engaging in precisely the kind of stealth entitlement expansionism that is almost politically impossible to cut in future fiscal years; he is misleadingly low-balling costs, just as the Massachusetts' "grand experiment" in guaranteed health insurance is facing runaway costs with only marginal increases in insurance coverage, promising certain spending increases are "temporary" (e.g., extensions to unemployment insurance), and underestimating costs by creating unrealistic expectations of federal revenues to pay for it. Obama is also perpetuating a hoax on the American people, leading them to believe that he can pay for it all with only a modest tax hike on the upper 5% of American taxpayers, while at the same time--during a recession when oil consumption is naturally down--trying to impose a carbon emissions "cap-and-trade" tax scheme which will significantly cost American consumers, all so Obama can deliver on a political chit to his special-interest environmental constituents, regardless of its drag on the national economy. Also, giving people a choice between private insurance holders, fighting interstate roadblocks, and joining a subsidized federal program is a de facto backdoor move towards national health insurance. In fact, Obama has already been caught trying to shift the medical costs of veterans with service-related disabilities to private-sector health insurers.
The issue has more to do with Obama's seeming attempt to move towards European social democratic policies--precisely at the time that Europeans are looking to ease some of the government cost burden to compete in a global economy.
But what has really annoyed conservatives like me is Blinder's misleading use of tax brackets to argue that the tax system is unfair. The argument goes like this: consider any taxable deduction, say $1000 to charity. To a person in the 35% tax bracket, he is getting $350 back from Uncle Sam, so the real cost to the rich person is $650. To a middle-income person in the 25% tax bracket, he only gets $250 back from the IRS, so the real cost of the contribution is $750. The rich man got an extra $100 back. That's "unfair".
This is disingenuous argument, because it knowingly ignores absolute tax revenues. So the higher-income person is paying over 10 times the amount of tax than the first person, although he or she doesn't get over 10 times the amount of government services. In fact, the higher-income person is unable to participate in income-restricted government assistance programs like welfare, food stamps, public housing, SCHIPS, etc.
In fact, under the Obamaian plan, nearly half of American workers will not pay a SINGLE PENNY (never mind an individual's "fair share") towards the costs of our national government and its operational programs (our justice system, national defense, environmental protection, etc.) (Payroll taxes are supposed to be self-financed entitlements.) In fact, many will be given "tax credits" or refunds, which is a transfer of income from higher- to lower-income workers.
Unfortunately, we don't have children around vocalizing the fact the emperor is wearing no clothes as Obama goes around repeating preposterous claims about how hundreds of billions in government spending is an "investment", how he's going to grow us out of a recession by increasing permanent entitlements on an aging population like health care, increasing regulations on business and taxes on higher-income job creators, and throwing government money at alternative energy and the environment (Obama, with no job creation experience, can see profitable opportunities that the private economy, with industry participants with dozens of years of experience, can't see) will yield good-paying American jobs in the short term (when, in fact, we graduate a mere fraction of the engineers graduating annually in China and India).
But Obama repeats the same misleading statistics in arguing that the middle class has not participated in the prosperity under the Bush and other Republican administrations. First, let me point out that it is not unreasonable to understand the impact of more attractive income and investment tax rates and policies in attracting capital. However, there are a number of articles, e.g., James Sherk's June 2007 Heritage Foundation article, "Analyzing Economic Mobility: Compensation is Keeping Pace with Rising Productivity". Scherk makes a convincing case that liberals are misusing statistics, e.g., focusing on wages vs. total compensation (including more rapidly growing benefits, such as health insurance, paid time off, and retirement contributions), the use of the wrong inflation measure (i.e., CPI vs. IPD), the use of median vs. average wages in relation to average productivity, and certain demographic shifts (e.g., the effects of divorce on median household income). And, of course, liberals fail to acknowledge the fact that Bush eliminated income tax burdens for millions of lower/middle-income Americans.
Obama seems calm, cool, and collected even as he knowingly spouts cuts in medical costs from the computerization of health records which even some of Obama's own followers have disputed (a topic discussed in a prior post). He argues transparency but at the same time argues passage of a bloated stimulus bill, using misleading Keynesian multipliers, with no time to debate. It's time for the press to start doing their job and calling Obama's bluffs.
