Tuesday, March 3, 2009

St. Patrick of Buchananomics

Pat Buchanan believes we have reached "pitchfork time".

The numbers don't lie :

In his campaign and inaugural address, Barack Obama cast himself as a moderate man seeking common ground with conservatives.

Yet, his budget calls for the radical restructuring of the U.S. economy, a sweeping redistribution of power and wealth to government and Democratic constituencies. It is a declaration of war on the Right.

The real Obama has stood up, and lived up to his ranking as the most left-wing member of the United States Senate.

Barack has no mandate for this. He was even behind McCain when the decisive event that gave him the presidency occurred — the September collapse of Lehman Brothers and the market crash.

Republicans are under no obligation to render bipartisan support to this statist coup d’etat. For what is going down is a leftist power grab that is anathema to their principles and philosophy.

Where the U.S. government usually consumes 21 percent of gross domestic product, this Obama budget spends 28 percent in 2009 and runs a deficit of $1.75 trillion, or 12.7 percent of GDP. That is four times the largest deficit of George W. Bush and twice as large a share of the economy as any deficit run since World War II.

Add that 28 percent of GDP spent by the U.S. government to the 12 percent spent by states, counties and cities, and government will consume 40 percent of the economy in 2009.

We are not “headed down the road to socialism.” We are there.

Since the budget was released, word has come that the U.S. economy did not shrink by 3.8 percent in the fourth quarter, but 6.2 percent. All the assumptions in Obama’s budget about growth in 2009 and 2010 need to be revised downward, and the deficits revised upward.

Look for the deficit for 2009 to cross $2 trillion.

Who abroad is going to lend us the trillions to finance our deficits without demanding higher interest rates on the U.S. bonds they are being asked to hold? And if we must revert to the printing press to create the money, what happens to the dollar?

As Americans save only a pittance and have lost — in the value of homes, stocks, bonds and other assets — $15 trillion to $20 trillion since 2007, how can the people provide the feds with the needed money?

In his speech to Congress, Obama promised new investments in energy, education and health care. Every kid is going to get a college degree. We’re going to find a cure for cancer.

Who is going to pay for all this?

The top 2 percent, the filthy rich who got all those Bush tax breaks, say Democrats. But the top 5 percent of income earners already pay 60 percent of U.S. income taxes, while the bottom 40 percent pays nothing.

Those paying a federal tax rate of 35 percent will see it rise to near 40 percent and will lose a fifth of the value of their deductions for taxes, mortgage interest and charitable contributions.

Yet, two-thirds of small businesses are taxed at the same rate as individuals. Consider what this means to the owner of a restaurant and bar in Los Angeles open from noon to midnight, where a husband and wife each put in 80 hours a week.

At year’s end, the couple finds they have actually made a profit of $500,000 that they can take home in salary.

What is the Obama-Schwarzenegger tax take on that salary?

Their U.S. tax rate will have hit 39.6 percent.

Their California income tax will have hit 9.55 percent.

Medicare payroll taxes on the proprietor as both employer and salaried employee will be $14,500. Social Security payroll taxes for the proprietor as both employer and employee will be $13,243.

In short, U.S. and state income and payroll taxes will consume half of all the pair earned for some 8,000 hours of work.

From that ravaged salary they must pay a state sales tax of 8.25 percent, gas taxes for the 50-mile commute, and tens of thousands in property taxes on both their restaurant and home. And, after being pilloried by politicians for having feasted in the Bush era, they are now told the tax deduction they get for contributing to the church is to be cut 20 percent, while millions of Obama voters, who paid no U.S. income tax at all, will be getting a tax cut — i.e., a fat little check — in April.

Any wonder native-born Californians are fleeing the Golden Land?

Markets are not infallible. But the stock market has long been a “lead indicator” of where the economy will be six months from now. What are the markets, the collective decisions of millions of investors, saying?

Having fallen every month since Obama’s election, with January and February the worst two months in history, they are telling us the stimulus package will not work, that Tim Geithner is clueless about how to save the banks, that the Obama budget portends disaster for the republic.

The president says he is gearing up for a fight on his budget.

Good. Let’s give him one.


Can't say I disagree. The screeching statist left wants us to just sit down and shut up, or better yet get on our knees with them before the Big O himself.

They are using every cheap tawdry tactic and cynical "narrativist" trick to plow over any opposition in their path....and silence any real debate or deliberation in moving the republic forward. They sure learned how to become George W. Bush.

"History's over!" (They would have us believe.)

"We won, all you Bush-loving a**holes!" (Granted there were/are plenty of Bush-loving a**holes but it hardly absolves Obama for being Bush III.)

"It's our turn to bust the budget and finish off American free enterprise, since Bush and the Republicans didn't get the job done in the last eight years."

Socialism won a HUGE mandate last November, dontchaknow??

Well, nuts to that. They can waste everyone's time blathering about Rush Limbaugh and whoever they want to convince everyone leads the Republican Party, and on and on.

It certainly helps them mask how they are behaving like fascists, only with triple the hubris and profligacy of the Bush junta :

"Submit or face the witch hunt and the smear. You're either with us or against us."

Well, make no mistake about it....we're against you.

8 comments:

Hube said...

LOL at this post's title -- from that great "McLaughlin Group" parody by the 90s SNL crowd. Dana Carvey as McLaughlin was priceless!!

Tyler Nixon said...

I know, I love that sketch!

Anonymous said...

"Their U.S. tax rate will have hit 39.6 percent."
Now I see that neither Pat Buchanan nor Tyler Nixon understand what a marginal tax rate is and how it operates in calculating income taxes.

This ignorance causes a significant error in the main point in this piece, how much in taxes this small business couple would owe.

This error permeates his piece.

It also strains credibility, to say the least!

Here is another misstatement: "Add that 28 percent of GDP spent by the U.S. government to the 12 percent spent by states, counties and cities, and government will consume 40 percent of the economy in 2009."
Consume??? I view government spending as part job creation. If the private sector is not creating jobs, then government spending is one form of economic stimulus. Tax cuts are another. The word consumption implies that the money goes into a government black hole, never to be seen again. This is not reality.

Of course I am concerned about these huge deficits. Given this crisis, I have not seen a comprehensive plan, except for the Obama plan, to address it without the deficits and with significant infrastructure, IT healthcare, and education enhancements, all job creation steps.

"Who is going to pay for all this?"
Net export nations who export to the US will continue to lend us money, because it is in their vital interest to have our economy grow again. Also, the tax increase on the >$250K AGI folks will pay some starting in 2011 when it kicks in.

Who IS going to pay for all this???"
The Obama gamble, and it is a gamble, is that the economy will be in growth mode in two years, at which time the tax increase on the >$250K AGI folks will kick in, which, in addition to the increased revenue from growth, will enable the deficit to be cut in half by 2013.

Where is Pat Buchanan's plan? He hasn't one! So he is just one more of the Dr No's we see popping up on opposition side. This is no help!!!

We can debate on how realistic this plan is, and we will as the Obama plan passes through Congress.

Perry Hood

Tyler Nixon said...

Honestly, Perry, feel free to re-re-regurgitate what angels dance on the head of a pin.

The bottom line is unchanged, no matter what you say : higher taxes, massive deficit spending.

Your claims of "concern" with the effects of this one-two punch in the gut of would-be recovery are simply unsupported by anything you say,

At root is your ideology that government can be an engine of economic prosperity.

Nonetheless, you admit it's all a big "risk" and "gamble", etc.

Again with your "what is your plan?" line.

J.H. Christ, I think everyone who you've asked that has responded, often in detail. I know I have, yet you persist with this phony smear tactic, as if anyone who disagrees with you has no ideas of their own.

You are always welcome here, but you have long since ceased adding any value or insight to the dialogue. Your assumptions that only you (or those with who you have agree) have the answers is, in fact, the real ignorance here.

tom said...

Perhaps you are the one who doesn't get it Perry:

Using Pat's example and assuming only the top marginal rate changes in both US and California taxes (a poor assumption, the reality will probably be higher taxes in the top 3 brackets and more people paying AMT):

Fed: $153120.80 (30.6% avg rate)
State: $42906.02 (8.58% avg rate)
Med: $14500
SS: $13243
----------------
total: $223769.82

That's close enough to call half especially once you add in city & county payroll taxes.

Bowly said...

Now I see that neither Pat Buchanan nor Tyler Nixon understand what a marginal tax rate is and how it operates in calculating income taxes.

This statement is technically correct, although I suspect Tyler just didn't notice it, and Pat deliberately ignored it for effect. They're smart guys.

Consume??? I view government spending as part job creation.

This statement, however, is pure economic ignorance. If 40% is good, then 100% must be 2.5 times as good. If that's not true (and it isn't), then I'd like to hear what your value for the perfect number is, and to see the economic and mathematical models that led you to that conclusion. Is 42% better? 38%? If more is better, where do we stop, and why?

Hube said...

J.H. Christ, I think everyone who you've asked that has responded, often in detail. I know I have, yet you persist with this phony smear tactic, as if anyone who disagrees with you has no ideas of their own.

Y'see, Perry? It ain't just me. How many times have *I* told you that?

Just yesterday I told you at DE Politics to CHECK HERE for numerous alternatives to the Obama plan -- in response to, get this, you asking someone "What's YOUR plan?" Yet again.

Miko said...

Barack has no mandate for this. He was even behind McCain when the decisive event that gave him the presidency occurred — the September collapse of Lehman Brothers and the market crash.

Vote totals show indeed that Obama has no mandate for anything, but this statement is pure nonsense. What's the argument? That people voted for Obama specifically so he'd do something about the economy and therefore he shouldn't?