Posted on 09/23/2008 3:04:40 AM PDT by markomalley
Whatever is left of the economy after the current round of crisis interventions by the Fed could go down the drain if Barack Obama is elected and carries out his plans for sharp increases in taxation. Even if Obama does not understand the linkage, most Americans do and will turn sharply against Obama’s tax plans if John McCain hammers away at the risk they pose for us all.
During the Great Depression, Congress raised taxes sharply in the Revenue Act of 1932. The top rate went from 25 percent to 63 percent. As a result, the real Gross Domestic Product dropped by 13.3 percent and unemployment rose from 15.9 percent to 23.6 percent.
In 1990, the first President Bush famously broke his “read my lips, no new taxes” pledge of 1988 and raised the federal gasoline tax and federal excise taxes, and imposed a 10-percent surtax on the top income bracket, raising its taxes to 31 percent. The recession that followed in 1991-1992 cost him re-election.
It is obvious that increasing capital gains taxes by a minimum of one-third and possibly doubling them, both of which Obama has proposed, would send a signal to investors to keep their money under the mattress. Who would buy stock knowing that the tax on any profits he or she will make is going to go up sharply if Obama becomes president?
Look at what happened just last year in Michigan. Democratic Gov. Jennifer Granholm raised taxes on almost everything. Income taxes shot up 11.5 percent, and the state’s 6 percent sales tax was expanded to dozens of new services, like investment advice, janitorial services, landscaping, ski lifts and carpet cleaning.
The $1.75 billion tax package shook the economy to its foundations. Michigan became the only one of the 50 states with a shrinking gross domestic product. The value of all goods and services produced in the state fell by 0.5 percent, while the national GDP rose by 3.4 percent. The state fell from 23rd in GDP to 35th. Taxes caused a disaster.
In a strong economy, Obama’s proposed tax increases would raise questions. In a weak economy, they portend a catastrophe. It would be like bleeding a sick patient, the medicine of 200 years ago, depriving him of blood even as he needs more, not less, circulating through his arteries.
McCain’s populist rhetoric, including his pledge to fire Securities and Exchange Commission Chairman Christopher Cox is important for a Republican candidate. But his focus should shift to the tax issue. With firms suffering, withering and dying for a lack of capital, tax increases on those who invest would be a horrible mistake.
Americans will realize this obvious fact, and McCain should use it to gain the advantage in discussing the economy.
There is no reason for the economy to work to Obama’s advantage when he is committed to a doctrinaire program of tax increases and spending hikes. McCain can use the issue to run rings around him.
If Obama is elected the country will go into a tailspin til 2012. As bad as Jimmy Carter but probably even worse. At which point, the Republicans with a conservative candidate roll back into the White House in a landslide. It won’t be pretty for 4 years and even Obama will wish he had lost, as China, Russia, and Middle Eastern terrorist states become more aggressive on the global stage.
It would take years, probably decades to recover from an Obama presidency.
If Obama gets elected, we’ll probably end up with a recession at least as bad as what happened in 1979 to 1980 when double-digit inflation and double-digit interest rates screamed the ecconomy to a halt. The possibility of a massive switch to very heavily Republican House and Senate would be very real in the 2010 elections.
If we had a conservative Reaganesque leader committed to limited government the situation would be a lot better. It's amazing how far we have sunk since the Reagan era.
As Fannie and Freddie make abundantly clear, we are still suffering from the aftershocks of the Clinton years.
If Obama wins, the results will be a hundred times worse.
Recession, that is. With the economy in the shape it is in, we CANNOT AFFORD the tax increases and big-government socialist programs Obama wants. It will bankrupt the country.
“It will bankrupt the country.”
This country is already bankrupt and in more ways than just one.
And if the grand Mufti of chicago does ruin the economy somehow the liberal media will find a way to blame the republicans and Booosh! They will carry his water no matter what... We are living in the time of Tass and Goebbles!
The roots of this "subprime" mess stretch back at least as far as the "Community Reinvestment Act" passed by a DemocRat controlled Congress during the Carter Administration.
This IBD article gives a lot of good detail.
http://www.investors.com/editorial/editorialcontent.asp?status=article&id=305938528597493&secid=1501
That’s being a bit too optimistic in thinking conservatives roll back in 2012. Are you really confident we will make it to 2012 if this dangerous radical frauds his way to the presidency?? I am not. Russia, China and all our enemies have been emboldened by the attacks on Bush and the likelihood of facing Obama. Russia will roll over whomever it pleases and China will start off with Taiwan and they will move ahead with their proxys with no concern about the risk. Not to mention what a disaster the domestic policies would cause with tax hikes to the sky and employers having to cut back because the “rich must pay”. It all comes at a cost! But this election is scary because we really cannot afford 4 yrs. of Obama and I think it’s the death knell of America if it happens. People have taken our position for granted and the serious dangers we are facing. Demonrats are the domestic enemy.
What we have is media tyranny. We need to be at war with them and give them no legitimacy. They need to be confronted head on and Republicans/conservatives should not be used in appearing on the ‘news’ channels/programs. A statement should be made for every appearance and an eventual boycott in order.
Tax the F$$$ out of the rich and the POOREST will pay the price.
I went downtown and asked a homeless man for a job... he did not have one for me :(
are americans that dumb that they’d vote for this guy?
FDR came up with all kinds of new programs. after the depression we still kept them and just added more. if there’s another depression, Obama would add another Raw Deal on top? this is crazy
Some are!
some...but so many? I can understand voting for Al Gore and perhaps even Kerry but this is nutty
at least Carter was a governor who served under Admiral Rickover. He had the sense to help Afghanistan fight back the Soviets.
This obama is a big nothing
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