Friday, February 27, 2009

Taxes Will Rise on Middle Class

Anyone who has read the revenue projections and cost of expenditures in Obama's "New Era of Responsibility" budget recognizes that the numbers are based upon pure fantasy. His projection that in 2 years, the US will achieve 5.5% growth is completely laughable; those are Chinese type growth numbers. He even projects growth of over 3% here next year, when we could easily still be in negative territory. His savings also take into account spending in Iraq for the next ten years that rival the spending there today, with 140,000 troops coming home in the next couple of years. On the spending side his rosy projections for the cost of expenditures like healthcare are way off the mark, even by his own estimation (he calls it a down payment), so unless he's planning to prevent anyone over the age of 55 from getting a new hip or the right treatment for their cancer, he's seriously delusional.

So what does this mean? It means the money has to come from somewhere, and that, my friend, is you. Forget the promises of soaking the rich to pay for all of this $3.7 Trillion bill. According to a report in the Wall Street Journal yesterday, even if the government squeezed every extra dollar from the rich, it would not come close to the numbers he plans to spend. That leaves middle America as his next target. Face it folks. In a social democracy, anywhere in the world, the rich are not the only ones who pay exorbitant taxes. Everyone does. In Obama's world, you are not off limits.

From FoxNews:White House Budget Plan Leaves Little Room for Error, Economists Warn
President Obama may have a tough time keeping to his tandem goals of cutting the deficit and sheltering middle-class families from tax increases, critics say.
Thursday, February 26, 2009

"Estimated Budget Totals for 2008-2010 Show Government Public Debt Rise 63 Percent
Economists and conservatives say President Obama's massive $3.55 trillion budget leaves little room for error, and it will be very hard for him to meet his tandem goals of cutting the deficit and sheltering middle-class families from tax increases.

Obama, who released details of his budget for fiscal 2010 on Thursday, said he foresees halving the deficit by 2013. But his budget calls for a $634 billion "reserve fund" to cover the costs of universal health care coverage over 10 years, as well as $200 billion for the wars in Iraq and Afghanistan through next fall and another contingency fund for the sickly financial sector on top of the $787 billion stimulus bill that he signed last week.

With all these expenditures, many are saying they doubt Obama can reach his deficit goal while keeping his pledge to raise taxes only on couples making more than $250,000 a year.

"He's going to have to start moving down the scale and raising taxes on people making $150,000, people making $100,000 and even people making $75,000," said economist Adam Lerrick, a scholar at the conservative American Enterprise Institute. "You have to increase taxes. It's very simple. You have to pay for this somehow."

Part of the concern stems from optimistic White House projections about the rate of economic recovery. The budget overview assumes the economy will grow at a rate faster than other forecasters, including the Congressional Budget Office and the Blue Chip index (the consensus of leading private economic analysts)."


undertaker said...

This is not a budget. It is a plan to destroy the economy. Would you "set aside" in a "contingency fund" $25,000 for your gas expenses for the next ten years? If I were the Chinese, I would not lend him one more dime.

Mad Mom said...

I agree, UT. The Chinese will pull the plug at some point, and then we will be up a creek without a paddle. To put it mildly. How do we pay them if we default? What do they get from us? The Chinese (and Japanese) are probably asking themselves that very question right now.