Politics and Insights from History

Yesterday, Barack Obama once again delivered a speech. This time he was in Kansas; something that he almost forgot. Perhaps if Obama stayed in one place he might remember where he is. Yesterday, was December 7, Pearl Harbor Day. Instead of talking about it and commemorating those who died that day, he had to give a speech about how the wealthy don’t pay enough, America is unfair, and how only he knows best.

The bulk of Obama’s speech was basically chastising the rich for being rich. He claims that he wants to build the shrinking middle class. Except, the middle class is shrinking because the government keeps enacting policies that increase the cost of living and force businesses to cut costs by firing people.

Obama slammed Republicans and Conservatives who believe in Reagan’s trickle down economics theory, and who believe in cutting taxes for everyone who actually pay taxes and in cutting government regulations that hinder economic growth and development. Obama claims that Republicans have no ideas and only hold to what doesn’t work. If Reagan’s tax cuts and deregulation did not work, then why were 1980s a decade of economic growth, a prosperity that continued through most of the 1990’s despite Bill Clinton’s increase in taxes and regulation? Obama claims that the Bush tax cuts led to the recession we are in now. If that is so, then how come unemployment under bus remained under 6% until the last few months of his presidency when the housing market collapsed? Meanwhile, Obama’s policies made unemployment shoot up to 10% and the economy is now stagnated with a 9.1% unemployment. But according to Obama his not so new socialist ideas are working.

Obama rants that Republicans have no new ideas. But He and his fellow Democrats have no new ideas either. IN fact, everything they do is just a throwback to F.D>R.’s New Deal programs. Neither side has new ideas and it doesn’t matter if they do or not. What is important is if they have good ideas that actually work.

Almost every other paragraph in Obama’s speech yesterday was him whining how the wealthy don’t pay their fair share. What is fair about 50% of Americans who pay no taxes but receive government welfare from those that actually pay taxes? That’s fair? Taking money from someone and giving it to someone else to fulfill your ideological sense of fairness is fair? Obama claims that a billionaire only pays 1% of his income in taxes while someone earning 50 grand a year pays more. Let’s do the math? Say a person who earns $1 billion annually pays 1% in taxes. That equal $10 million that goes to Uncle Sam. Now take the guy who earns $50 thousand and pays 38% of his income in taxes. That amounts to $19,000 that goes to Uncle Sam. Despite the differences in the tax rate, who still pays more to the government? If this still seems unfair to some of you, why not get rid of the current tax code that even the IRS cannot make sense of and institute a flat tax, where everyone, regardless of their income level, pays the same tax rate. Let’s say the billionaire in the example above still pays 1% of his income in taxes, but now the guy earning $50,000 also pays only 1%. This means that the he will only pay $500 of his annual earnings to the government.

Interestingly, Obama is pushing an extension of the payroll tax cut. But just a few months ago he proposed increasing taxes. Also, he is pushing the extension of a tax cut, while in the same speech he claims that tax cuts led to the “greatest economic crisis since the Great Depression”.

Another thing Obama falsely claims is regarding the 1920s. Obama claims that deregulation and tax cuts led the disaster of the 1920s. The 1920 were the most prosperous decade in our history because we had presidents who deregulated and cut taxes and then minded their own business. Remember Calvin Coolidge? The reason why the stock market crashed in 1929 was because under President Hoover, the government began meddling in the economy again. Then Obama praised F.D.R. whose polices kept us in the depression. His New Deal programs were so great that while the rest of the world recovered economically the U.S. continued to have double digit unemployment and a stagnant economy.

Obama’s speech was the same speech he’s been giving since he was elected. Basically, according to Obama America is unfair, capitalism doesn’t work, the wealthy are too wealthy and could do with less, the poor just need a government program to make it, and, well, the world’s just not fair. This coming from a guy who is going to spend 17 days in Hawaii for his Christmas vacation. Isn’t this something those wealthy CEOs do?

Back in the 1930s during the Great Depression we were introduced to the forgotten man. The poor guy that lost everything or had opportunity taken from him. F.D.R. initiated a series of government run programs to help these forgotten men during this time of turmoil. Since then the government has grown adding to these programs to help all those who are disadvantaged. The are probably more government subsidies than stars in the sky. We have programs to help feed children, welfare for the poor, food stamps, housing subsidies, disability checks, Medicare and Medicaid, Social Security to provide for retirement, grants, federal financial aid to go to college, tuition subsidies even for illegal immigrants, unemployment benefits, worker’s compensation; you name it and there is probable a government program for it.

With all of these programs you would think that America has finally figured out haw to care for the forgotten man. Not so according to Obama and members of the Democrat party. They insist that we still need more school lunch programs for the children and a government run health care system to ensure that the poor are taken care of and not forgotten. For 70 years America has been adding to the list of government programs to make certain that no one is forgotten when times are tough. The problem is in all that time we still have not remembered the forgotten man. The forgotten man is not the poor guy down the street that happens to be down on his luck. It’s not the single mom that is working hard to provide for her children. Nor is it the aspiring college student that wishes to continue his education. The real forgotten man is the honest taxpayer and small businessman (or woman).

All the money that government spends to ensure that the poor or disadvantage are able to survive comes from the taxpayer. It is the taxpayer that spends his life working hard and saving what he can to provide for his family. Most times he works more than one job or decides to take that leap and start a business. Working diligently he manages to make it successful. Before he knows it his work has paid off and he is able to hire some employees and has a college fund for his children and a nest egg for him and his wife. But then the government decides that a new federal program is needed so the taxpayer’s taxes go up. He is taxed on his business, for the number of employees, on his income, even on his savings. Eventually the taxpayer is forced to let some employees go as the higher taxes cut into his business. Then, he is forced to shut the doors to his business as the government insists that he pay more in taxes because he is what they deem as too rich. Now unemployed, the taxpayer is forced to tap the money he saved for his kids’ college fund and retirement just to get by until he can find a job. Except now he is one among many that need work and everything he worked for is gone simply because the government decided to be compassionate and even the playing field for those minorities that never seem to have enough opportunity despite all of the federal programs out there.

The problem is, you will never hear about the real forgotten man. No politician truly cares about the taxpayer that is always stuck with the bill for the government’s acts of good will. If you pay your taxes, own a business, and work hard every day to meet your obligations, support your family, and save what little you can for later in life, then you are that forgotten man.

Here is a video that accurately explains the prosperity of the 1920s and how Harding helped lead to that prosperity.  Our modern politicians could learn a lot from Harding and Coolidge.   Enjoy the video.

This is a 45 minute presentation that explains briefly what Trickle Up, Trickle Down, and Supply Side economics are.  Hope you all find it helpful.   (Note: In the the first video when you here “9 million”, it’s supposed to be “9 trillion”.)