[BRIGADE] PJB: Pitchfork Time
Published: Tue, 03/03/09
Pitchfork Time
By Patrick J. Buchanan
In his campaign and inaugural address, Barack Obama cast himself as
a moderate man seeking common ground with conservatives.
Yet, his budget calls for the radical restructuring of the U.S.
economy, a sweeping redistribution of power and wealth to
government and Democratic constituencies. It is a declaration of
war on the Right.
The real Obama has stood up, and lived up to his ranking as the
most left-wing member of the United States Senate.
Barack has no mandate for this. He was even behind McCain when the
decisive event that gave him the presidency occurred -- the
September collapse of Lehman Brothers and the market crash.
Republicans are under no obligation to render bipartisan support to
this statist coup d'etat. For what is going down is a leftist power
grab that is anathema to their principles and philosophy.
Where the U.S. government usually consumes 21 percent of gross
domestic product, this Obama budget spends 28 percent in 2009 and
runs a deficit of $1.75 trillion, or 12.7 percent of GDP. That is
four times the largest deficit of George W. Bush and twice as large
a share of the economy as any deficit run since World War II.
Add that 28 percent of GDP spent by the U.S. government to the 12
percent spent by states, counties and cities, and government will
consume 40 percent of the economy in 2009.
We are not "headed down the road to socialism." We are there.
Since the budget was released, word has come that the U.S. economy
did not shrink by 3.8 percent in the fourth quarter, but 6.2
percent. All the assumptions in Obama's budget about growth in 2009
and 2010 need to be revised downward, and the deficits revised
upward.
Look for the deficit for 2009 to cross $2 trillion.
Who abroad is going to lend us the trillions to finance our
deficits without demanding higher interest rates on the U.S. bonds
they are being asked to hold? And if we must revert to the printing
press to create the money, what happens to the dollar?
As Americans save only a pittance and have lost -- in the value of
homes, stocks, bonds and other assets -- $15 trillion to $20
trillion since 2007, how can the people provide the feds with the
needed money?
In his speech to Congress, Obama promised new investments in
energy, education and health care. Every kid is going to get a
college degree. We're going to find a cure for cancer.
Who is going to pay for all this?
The top 2 percent, the filthy rich who got all those Bush tax
breaks, say Democrats. But the top 5 percent of income earners
already pay 60 percent of U.S. income taxes, while the bottom 40
percent pays nothing.
Those paying a federal tax rate of 35 percent will see it rise to
near 40 percent and will lose a fifth of the value of their
deductions for taxes, mortgage interest and charitable contributions.
Yet, two-thirds of small businesses are taxed at the same rate as
individuals. Consider what this means to the owner of a restaurant
and bar in Los Angeles open from noon to midnight, where a husband
and wife each put in 80 hours a week.
At year's end, the couple finds they have actually made a profit of
$500,000 that they can take home in salary.
What is the Obama-Schwarzenegger tax take on that salary?
Their U.S. tax rate will have hit 39.6 percent.
Their California income tax will have hit 9.55 percent.
Medicare payroll taxes on the proprietor as both employer and
salaried employee will be $14,500. Social Security payroll taxes
for the proprietor as both employer and employee will be $13,243.
In short, U.S. and state income and payroll taxes will consume half
of all the pair earned for some 8,000 hours of work.
From that ravaged salary they must pay a state sales tax of 8.25
percent, gas taxes for the 50-mile commute, and tens of thousands
in property taxes on both their restaurant and home. And, after
being pilloried by politicians for having feasted in the Bush era,
they are now told the tax deduction they get for contributing to
the church is to be cut 20 percent, while millions of Obama voters,
who paid no U.S. income tax at all, will be getting a tax cut --
i.e., a fat little check -- in April.
Any wonder native-born Californians are fleeing the Golden Land?
Markets are not infallible. But the stock market has long been a
"lead indicator" of where the economy will be six months from now.
What are the markets, the collective decisions of millions of
investors, saying?
Having fallen every month since Obama's election, with January and
February the worst two months in history, they are telling us the
stimulus package will not work, that Tim Geithner is clueless about
how to save the banks, that the Obama budget portends disaster for
the republic.
The president says he is gearing up for a fight on his budget.
Good. Let's give him one.
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