Thursday, January 8, 2009

President-Elect Obama's Dire Warning: Fear Mongering? Even Fellow Liberals Have Reservations on Stimulus Package

"The majority of Americans' attitude toward government has changed drastically in recent years. Only government can break the vicious cycles that are crippling our economy -- where a lack of spending leads to lost jobs which leads to even less spending."- Barack Obama

With all due respect, President Government, you are wrong.

You, and your cronies on Capitol Hill are trying to use politically motivated scare tactics to win the hearts and minds of the American People. By waging a shock-and-awe war of words, and predicting doom, gloom, death and destruction, some would say you are either out of touch or just plain dumb.

We do not believe you are either of those things. Instead, your plan is a calculated maneuver designed to for feed Americans nearly $1 Trillion worth of junk, bogus "tax cuts" and government bureaucracy.

The dangerous Liberal idealogy that Father Government Knows Best reared its Keynesian head again today. Government cannot be the only answer. What Obama proposed today is designed to dupe Americans into accepting a socialist state.

On the opposite extreme is Rep. Louie Gohmert's proposed tax holiday, backed by Newt Gingrich. Gohmert contends that the combination of the Bush/Paulson Bailout (what's left of it) and the Obama/Pelosi $800 stimulus package equated to the same dollar amount as giving Americans a Federal Tax Holiday for up to 6 months. The belief is that American tax payers would spend their money more wisely than the government. For most people, this is true, but the Gohmert plan is not without its drawbacks.

Newt Gingrich wrote last month in Human

Thus, if you combined the Pelosi and Paulson proposals, you could create a tax holiday through June. That would mean no working American would pay a penny in income tax or a penny in FICA tax for the first six months of the year.

And that would mean no business would pay a penny in matching FICA tax for the first six months of the year. As a pro-small business, pro-jobs creation, pro-market stimulation measure, imagine the power of that much extra money in the hands of the American workers and the American entrepreneur.

Imagine how many more people could afford to keep their homes, how many people could pay down some of their debt, how many will be able to rebuild some of their retirement funds, how many people might find the extra resources to start a new business or expand their existing business.

Now that would be a stimulus plan that stimulates the American people.

That is quite a change from the big business, big bureaucracy, big politician model we have seen in Washington recently. Where Pelosi and Paulson would stimulate bureaucrats and politicians, Gohmert would stimulate American workers, American businesses and American productivity. In the long run, we will get more economic growth and more revenue for federal, state and local governments from a growing economy with more creative businesses, more productive private markets, and more incentivized workers. The Gohmert plan is a plan to get America growing again. It is not a bailout plan. It is an economic growth plan.

From the AP:

President-elect Barack Obama warned of dire and lasting consequences if Congress doesn't pump unprecedented dollars into the economy, making an urgent pitch for his mammoth spending proposal in his first speech since his election.

"In short, a bad situation could become dramatically worse" if Washington doesn't go far enough to address the spreading crisis, Obama said as fresh economic reports showed an outlook growing increasingly grim. Since his November election, he has deferred to President George W. Bush on foreign policy matters such as the Middle East. But, with the urgency of the economic crisis, Obama has waded deeply into domestic issues as he works to generate support for his plan to create jobs, jolt the economy and make long-term investments in other areas.

Obama laid out goals of doubling the production of alternative energy over three years, updating most federal buildings to improve energy efficiency, making medical records electronic, expanding broadband networks and updating schools and universities...

Indeed, the economic news is grim. Speaking a day after the release of a stunning new estimate — that the federal budget deficit will reach an unprecedented $1.2 trillion this year, nearly three times last year's record — Obama acknowledged some sympathy with those who "might be skeptical" of the stimulus. Vast sums already have been spent or committed by Washington in an attempt — largely unsuccessful so far — to get credit, the lifeblood of the American economy, flowing freely once again.

Such statements are coded to appeal to budget hawks in both parties, whom Obama wants to win over so that approval of a package draws wide, bipartisan support in the Democratic-led Congress. To answer their concerns, he promised to allow funding only for what works.

He also pledged a new level of transparency about where the money is going. A day earlier, he promised to tackle the out-of-control fiscal problem posed by Social Security and Medicare entitlement programs and named a special watchdog to clamp down on all federal programs.
Obama made broader arguments, too, saying that the private sector, typically the answer, cannot do what is needed now. "At this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe," he said.

The package is expected to include tax cuts for businesses and middle-class workers, money to help cash-starved states with Medicaid programs and other operating costs, and a huge share for infrastructure building, investments in energy efficiency and a rebuilding of the information technology system for health care. Much of the latter portions of the plan are aimed at what Obama likes to talk about as the need for "reinvestment" and not just "recovery.



Not everyone agrees that "government is the only solution", Mr. Obama. Even some Democratic Senators, including former Presidential Candidate John Kerry, were at best skeptical, as Town Hall reports:

President-elect Barack Obama's proposed tax cuts ran into opposition Thursday from senators in his own party who said they wouldn't do much to stimulate the economy or create jobs. Senators from both parties agreed that Congress should do something to stimulate the economy. But Democratic senators emerging from a private meeting of the Senate Finance Committee criticized business and individual tax cuts in Obama's stimulus plan.

They were especially critical of a proposed $3,000 tax credit for companies that hire or retrain workers.

"If I'm a business person, it's unlikely if you give me a several-thousand-dollar credit that I'm going to hire people if I can't sell the products they're producing," said Sen. Kent Conrad, D-N.D., a member of the committee.

"That to me is just misdirected," Conrad said.

Sen John Kerry, D-Mass., said, "I'd rather spend the money on the infrastructure, on direct investment, on energy conversion, on other kinds of things that much more directly, much more rapidly and much more certainly create a real job."

The cost of the economic rescue package Obama wants is expected to swell to $800 billion or more. About $300 billion of Obama's package would be for tax cuts or refunds for individuals and businesses.

One tax provision would provide a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 to $20 larger each week.

Sen. Ron Wyden, D-Ore., said he doubted that a modest tax cut would change consumers' spending habits.

"In tough times people don't respond all that well to marginal changes, such as a small amount of money added per paycheck," Wyden said.

Democratic Sen. Max Baucus of Montana, chairman of the Finance Committee, said he hopes to schedule a committee vote on the stimulus package in about two weeks, which would coincide with the week of Obama's inauguration. Many senators still hope to approve a package by mid-February.

There is "general agreement that because of the recession we've got to move, we've got to move quickly, very quickly," Baucus said.

He added that it is too early to pass judgment on any aspect of Obama's plan.

"This is an early part of this whole process. A lot of preliminary questions are going to be asked," Baucus said.

At least Obama and Pelosi came up with something. But it's flat out wrong. Throughout history, when government controls all the money and has all the power, the people are the ones who suffer.

Let the free-market work. Let Capitalism live. Let America be America.

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1 comment:

  1. Better watch what you say about President Obama - spidey will come and get you!