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Friday, May 18, 2007

Target Rich Environment (Updated)

If you’re looking for something from our country’s leaders to set your anger level high, you’re living in a target rich environment. For me, personally, I don’t feel the level of rage that many Republicans and conservatives feel about the immigration deal. That might be because I still feel naive on the subject; I’m not really sure what the effect of the deal will be, I’m not sure I understand the costs or the benefits yet, and I want to read through all the details before I completely form my opinion.

What has got my brain burning, though, is the budget and tax plan that the Democrats are pushing through that leads me back to something I said some time ago:

In my more cynical moments, I’ve come to believe that the GOP stands for the slow destruction of the American economy and the Democrats stand for something a little more immediate.

What the Democrats are planning to do--along with all of our existing fiscal obligations--is almost guaranteed to send us into a recession of the kind that hit us early in Clinton’s first term. In fact, the “Clinton economy” only hit stride once the nation had shaken off his early tax increase and he had turned us toward a far more conservative (if I may misuse the term) tax and spend lifestyle. And for all the left likes to talk about taxing the rich, it should be remembered that their taxes usually hit across a broad spectrum and that their view of what constitutes “rich” might not be much like your own.

We will all see a gradual tax increase and for some it is bound to be quite large.


Until Thursday, the largest tax increase had been in 1993. That’s when Bill Clinton proposed a monstrous budget that even he would later admit had contained too many tax hikes. The Democrats lost the House of Representatives the following year for the first time in half a century. Clinton, speaking at a Texas fundraiser soon after Election Day, pinned the blame squarely on the hikes: “It might surprise you,” he said, “to know that I think I raised them too much too.”

Despite what happened to Democrats as a result of that tax hike, the budget they submitted their first year back in control of both houses of Congress — and pushed through Thursday on a party-line vote — provides a framework for tax hikes a full three times larger than the one that put them in the minority back then. This budget reverses more than a decade of Republican tax relief. It means a tax hike on every single American — working, retired, rich or poor — and, even as it aims to raise nearly $1 trillion with new taxes, does absolutely nothing to rein in spending or shore up an entitlement system badly in need of reform.

Everyone takes a hit. Forty-five million working families with two children will see their taxes increase by nearly $3,000 annually. They’d see the current child tax credit cut in half — from $1,000 to $500. The standard deduction for married couples is also cut in half, from the current $3,400 to $1,700. The overall effect on married couples with children is obvious: Far from shifting the burden onto the wealthy, the Democratic budget drives up taxes on the average American family by more than 130 percent.

My budget is always tight, folks. Tax increases like this hurt--especially for a guy who is going to be getting married in the near future.

Aside from the personal pain, envisioning a long lasting and deep recession resulting from this kind of a tax increase doesn’t require any kind of crystal ball. Anyone who watched the recessions after the Bush 1 and Clinton tax increases knows the score--these moves hit at employment, consumer confidence, investor aggressiveness, and new business investment. It almost guarantees decreased consumer activity--especially if they hit in combination with high energy costs--as budgets tighten and people start worrying about their bank accounts and real estate investments.

With looming Medicare and Social Security problems so enormous that they sometimes seem insurmountable, what we need our leaders to do is solve our current fiscal problems in a responsible manner. Instead they simply plan to pile new problems onto the old, confiscate more money from we, the people, and give us so many new perks of citizenship in the form of pills, government handouts, and artificially cheap high fructose corn syrup sweetened everything that maybe we won’t notice the crumbling machinery propping up the whole damned show.

This isn’t entirely about the Republican/Democrat divide--my side has shown little willingness to control spending, failed to support the President in his push to reform Social Security in a meaningful way, and happily supported him when decided to send a care package of government-subsidized drugs out to the easily-frightened senior citizens who thought that the Social Security reform was aimed dead against them. I hear the drugs had a lovely calming effect.

As an aside; When the blue hairs go to bed at night, maybe they all imagine that Kanye West actually said, “Bush hates old people.” Look, I’m going to be old some day, too, and I hope there is some security in my life. I also hope like hell that I’m not the same as the selfish bastards who killed off any chance of reform of Social Security by lapping up the bullshit peddled by the anti-reformers and AARP. I hope I don’t put my irrational fears ahead of the good of the country and a better financial future for my grandkids.

I will never join the AARP as long as they are part of the fear mongers who block Social Security reform. Never.

Anyway, the GOP leadership is mostly happy to play the spending game; it’s hardly a sport reserved for the left. What keeps me voting for the Republicans is that the Democrats are more aggressive in the taxing, spending, and relying on Uncle Sugar to make everything better department. I’m a limited government believer not because I think government is inherently evil, but because I think it is clumsy, self-serving, and rarely as effective as its free market counterparts. Unfortunately, most Americans are true believers in Uncle Sugar’s capacity to be mommy, daddy, and universal umbrella against the ills of the world--and that’s why our future looks more and more like the worst of France.

So, yeah, I guess we all have reason to be cranky today.

Read Senator Mitch McConnell’s take on the new budget plan.

Then read this.

Update: Kindly linked by Kate.

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