Sunday, November 9, 2008

Singing the Blue State Blues

According to The Center on Budget and Policy Priorities, twenty eight states and the District of Columbia face a budget deficit for the fiscal year 2008-2009. Twenty of these 29 voted for Barack Obama and are thus considered "blue" states (or in the case of DC, a district). California faces the biggest deficit ($16 billion), as well as the largest deficit per taxpayer ($740). My home state of RI is 4th on the list according to deficit per taxpayer at $550 per person, and also has the largest unemployment rate in the nation at 8.8%. So why would does Barack Obama's economic plans rely on the same failed policies employed by these "blue" states which are bleeding red ink?

Rhode Island has a long time Democrat run State General Assembly. In fact, after this year's elections, only 10 Republicans remain in the 113 seat legislature. The state is plagued by cronyism, strong unions, high personal and corporate taxes, entitlement programs which attract the non- working as well as illegal immigrants, and rampant political corruption. And yet the voters, in their ultimate wisdom, continue to reward the same self-destructive policies and politicians without fail. The Republican Governor is all but ham-strung by a legislature which works concertedly to thwart his every policy proposal to grow the state's economy and create a business friendly environment. Rhode Island recently made national headlines when Jack Welch held it up as a dismal place in which to do business. Unless there is change, this does not bode well for the state in the years to come.

Blue states such as California and New York are lining up to ask the federal government for bail-outs. In addition, the Big 3 automakers from Michigan (another blue state that is "in the red" and which has the 2nd highest unemployment rate) are asking the federal government for loans of $25 million to stay in business, despite the fact that they admit that they have not shown innovation and failed to control the strong unions which have squeezed them dry.

Obama and his advisors are currently prioritizing which policies to enact when he transitions to President. He stated at his first press conference that he believes the policies he campaigned on are still the best way to go. Is this the economic policy that is going to shape our entire country under Obama's plans: high corporate taxes, unimpeded unions, engorged and newly created entitlement programs, and innovation busting taxes on successful small business owners, combined with a Democratic supermajority? Throw in stringent carbon emissions caps which will increase energy costs for all, along with a protectionist trade policy and a picture emerges of a downturn of which even Rhode Island couldn't dream. Perhaps Li'l Rhody's economy will be held up as example as to what we can all expect to"enjoy" under our new President-elect's direction. The rest of you have no idea what you're in for.

4 comments:

Noel said...

Straight from the horse's mouth (or website in this case):
"Barack Obama will provide a tax cut for working families:
Obama and Biden will restore fairness to the tax code and provide 95 percent of working Americans the tax relief they need. They will create a new "Making Work Pay" tax credit of up to $500 per person, or $1,000 per working family.

Provide tax relief for small businesses and startups:
Obama and Biden will eliminate all capital gains taxes on startup and small businesses to encourage innovation and job creation.

Fight for fair trade:
Obama and Biden will fight for a trade policy that opens up foreign markets to support good American jobs. They will use trade agreements to spread good labor and environmental standards around the world."

I think the second paragraph will interest you most, you being a small business owner and all.
What's it like to know nothing about someone's polcies except what you hear in conservative criticisms, and then regurgitate said criticisms ad nauseum?
If you're so sick of the pols, run for office.

Mad Mom said...

Dear Noel, Thanks for your comments. Please note that 1) 40% of the "tax cuts" Obama proposes go to people who already pay NO federal income tax. 2) As a sole proprietor, I would not enjoy any of the proposed changes regarding capital gains taxes proposed by Obama. 3) Obama's "good labor and environmental standards" are code phrases for increased unionization and increased energy costs, which we all pay for. 4) The blueprint for this post comes from The Economist (not exactly conservative, dear), which recently featured the red state of Utah as an ideal for good fiscal policy. 5) And perhaps I will run for office someday!

matthew said...

The tax cut by Obama also includes the expiration of the Bush tax cuts which would actually raise taxes on everyone making over 27,000 a year...

Mad Mom said...

Good point, Matthew. It's unfortunate, to say the least, that the media failed to inform the electorate about the truth behind Obama's tax "cuts". We're all going to pay.