Economists have been talking about the possibility of the federal government "crowding out" the private sector since the 1980s at least. That was back in the hey-day of supply side economics — which is really the only alternative to Keynesian orthodoxy. All of Obama's "stimulus" was pure Keynesianism, it totally failed, and now the President is out of ammo. Will he try to "double down" anyway?
Bottom line, too many Americans seem to believe that (1) all solutions to social problems must emanate from the federal government; and (2) there is a limitless stock of wealth for the federal government to commandeer in order to pay for these "solutions."
And it is just those "too many Americans" who compose the tax-consumer class.... Life for them is limitless freebies paid for by someone else.
No jobs will be created in America until and unless the federal government gets its boot off the neck of the private sector, the taxpayer class. This can only be effected by profound tax reform, massive deregulation, and (IMHO) the elimination of entire federal departments (can we please start with the Department of Education?); and major entitlement reform.
I don't see any other way to revive the economy, the engine of creativity, economic growth, and rising personal prosperity.
And yet perhaps these are the very things that President Obama most resents.
It's time for a new President — and a new Congress. This gang is either totally incompetent, or deliberately trying to destroy America as we know it.
My two-cents' worth, FWIW.
Thank you so much for writing, mlocher!
You wrote: “Bottom line, too many Americans seem to believe that (1) all solutions to social problems must emanate from the federal government; and (2) there is a limitless stock of wealth for the federal government to commandeer in order to pay for these “solutions.””
Exactly. bttt
Rush talked about that very thing again today:
There Aren’t Enough “Rich” to Tax
August 05, 2011
http://www.rushlimbaugh.com/home/daily/site_080511/content/01125108.member.html
BEGIN TRANSCRIPT
RUSH: Since we’re into statistics today and the unemployment statistics are just fascinating in the way that we’re being spun. It’s as bad as the way we were spun on this debt deal, and the more you look at this debt deal, what a disaster that is.
I’m gonna explain why as the program unfolds. This is from the UK Daily Mail. You’re not gonna see this in the American media. Speaking of the American media, remember all of those years, the Bush years, the media apparatchiks on TV were trying to talk down the economy and trying to talk down the market. They did everything they could to talk down the economy. Why, it was almost as though they wanted Bush to fail. Shazam, it was almost as though they wanted Bush to fail. You remember.
For four years running at 4.7% unemployment, at 5% unemployment, at 5.6% unemployment, they were proclaiming we were either on the verge of a recession or were in one. They were out trying to find the worst sob stories. Now they’re doing everything they can to talk it up. Do they really think we’re such fools that we don’t see this? When unemployment started spiraling upward, what did we get from ‘em? We got stories on how wonderful that is. Families are finding one another again, friends have social time, the stress and strain of working is no longer a part of anybody’s day. It really is a new perspective on life. All the wonderful aspects of not having a job, all the great things you could do if you didn’t have any work you had to do. Funemployment, they called it. And now they’re doing everything they can, they’re just incapable of telling us the truth, totally incapable.
The question here is who will tank first? Right now it looks like we’re in a race to see whether the country or Obama will tank first. It looks like it’s running neck and neck here. And the trick here is to make Obama tank first. Now, this UK Daily Mail story that you will not see in the US media. “Soak the rich, eh? They do not have the money. A report from the Internal Revenue Service found that the rich —” and the rich are defined this way: 8,274 people with incomes of $10 million per year or more. What do you think those 8,274 people earned combined in 2009? Snerdley, take a wild guess. All of you out there, take a wild guess in your mind. I’m not asking you to call and I’m gonna tell you what the number is here in just a second. But just think about this, 8,274 people with incomes of $10 million per year or more.
Now, you got Buffett in there and Gates at their $40 to 50 billion, but that’s their net worth. What do they earn? It’s a different number. But you take all of those people, just give me a number, what do you think, 8,274 people with incomes of $10 million per year or more, what was the combined total income earned of all those 8,274 people in 2009? One trillion, $250 billion. That’s what you say, Brian? Snerdley says a trillion. The answer is $240 billion. Brian, you were $10 billion off. That’s it. That’s right. That’s it. The 8,274 people with incomes of $10 million per year or more earned a total of $240 billion in 2009.
“Even of you confiscated every dime they earned, you would barely have enough money to cover government spending for 24 days.” In fact, this $240 billion, I mean that’s pretty close to the actual real number of budget cuts in the debt deal when you strip everything away. Now, about 25% of that money already goes to the federal government for federal income. So actually that $240 billion would run the government for 18 days.
“Another 227,000 people earned $1 million or more in 2009. Millionaires averaged taxes of 24.4% of their income — up from 23.1% in 2008.” Now, you might be asking, how did that happen? Well, the Bush tax cuts, folks. Obama’s tax increases hadn’t started, and Obama’s not immaculated yet. “They, too, did not earn enough money to come anywhere close to covering the annual deficits that are $1.5 trillion a year.” So 8,274 people who earn $10 million per year or more, earn a total of $240 billion in 2009. Another 227,000 people earned a million dollars or more in 2009. But it doesn’t come anywhere close to covering the deficit of $1.5 trillion.
“Barack Obama was the first president to sign a budget with a $1 trillion deficit into law.
In fact, all the taxpayers — including the ones who get a refund check bigger than the withholding taxes they paid — have the money.” The point of this is next time you hear Obama or a Democrat say we’ve got to raise taxes on the rich, it’s not about getting revenue to run the government because they don’t have the money. Now, I’ve been doing this show for 23 years, and I have been employing this data, whatever the accurate data was for the year I was disclosing it, it hasn’t changed in terms of percentages. Confiscate every dollar earned by people who make $10 million a year or more and you run the country for barely over two weeks. That has not changed since I first heard of this statistic 23, 25 years ago. It hasn’t changed. As it is, these people are already paying 70% of the total income tax burden! So there’s no economic growth hidden away here in a tax increase on these people.
How does taking money out of the private sector grow it? And that’s what tax increases do. How in the world does taking money out of the private sector cause it to grow? Mathematically impossible, folks. From Reuters: “Total adjusted gross income reported on tax returns, measured in 2009 dollars, was $7.626 trillion, down from $8.233 trillion in 2008 and $8.989 trillion in 2007. Total adjusted gross income was up only slightly from the $7.475 trillion reported in 2001, when there were 10 million fewer taxpayers.”
Individual tax collections equaled 15.4% of all income. “Doubling federal income taxes for everyone would still leave us $400 billion or so shy of balancing the budget.” That’s the bottom line. Doubling federal income taxes for everybody would raise $1.1 trillion, $400 billion shy of the deficit. I know these numbers are hard to follow, but all this is gonna be on RushLimbaugh.com later today, and I suggest you go there, print it out, or e-mail it, make electronic copies, PDF, whatever you want, and spread this around. This needs to be seen by many people. It’s not going to be in the US media.
END TRANSCRIPT
Read the Background Material...
• UK Daily Mail: IRS: Not Enough Rich to Cover the Deficit
http://blogs.dailymail.com/donsurber/archives/39534
• Reuters: U.S. Incomes Fell Sharply in 2009: IRS Data
http://www.reuters.com/article/2011/08/04/us-usa-economy-incomes-idUSTRE77302W20110804
Thanks for your input. Good stuff.
To answer your question, I am becoming very convinced that Obama has a "spread the wealth" agenda and does not understand economics, Keynesian or certainly Adam Smith economics. I believe that Obama will try to have the government provide an alternative to "failed" industries in the US. So yes, he will "double down", but the polls will tell him when and how hard to push it.
There is talk about an infrastructure bank that Dennis Kucinich, on FBN, explained could expand into lending [government] money to other industries. This would fill the gap created by the Dodd-Frank bill that has limited the money, through various regulations, that banks can lend consumers and businesses. Further, Obama wanted, and still wants, a public option for health care, which, in my opinion, would eventually become the only option. There is also discussion about the government managing 401Ks, probably ending up in employees having to invest in US Treasuries, because the stock market failed in 2008-09. The list goes on.