Barack Obama Too Much Like The Socialist Francois Hollande

IBD Editorials ^ | June 27, 2012 | LARRY ELDER

[Kaslin]

Did the French just elect a self-described socialist who wants to raise taxes on the rich? Yes, they did.

Is President Obama asking for four more years with an economic philosophy similar to that of the new French president? Yes, he is.

In France, those earning over a million euros would face a tax rate of 75%. And one of Francois Hollande's first acts as new president of France was to reverse his predecessor's course and lower the retirement age from 62 to 60 — this in a country whose projected unfunded pension liabilities for its living citizens are about $8.37 trillion, or 300% of its $2.774 trillion gross domestic product.

The United States' unfunded Social Security, Medicare and prescription drug benefits liability for its living citizens is about $50 trillion, or 333% of our current $15 trillion GDP.

France is a country whose debt is 90% of its GDP (U.S. debt-to-GDP ratio is over 100%). It had zero GDP growth in the first quarter of 2012 and has an unemployment rate of 10.2%. Taxes, as a percent of GDP, are 56%. (U.S. state, local and federal tax take is 33% of GDP, excluding the dollar value of government-issued mandates on the private sector.)

France is a mess. Hollande, like Obama, pays no attention to the many examples of government-controlled economies versus those where government takes less from people and relies on the private sector to create jobs.

Let's look at just one such example. Hong Kong became a British colony following the first Opium War in the mid-1800s. As mainland China fell to communist control a century later, many Chinese migrants and corporations fled to the island. In 1961, Britain named Sir John Cowperthwaite, a proponent of the Austrian school of free-market economics, as financial secretary of Hong Kong.