Obama’s speech on deficit reduction–we can have our cake and eat it too (and the rich will fund it)
I’ll skip right to the bottom line – Obama’s speech yesterday was an uninspiring restatement of the classic liberal tax and spend ideology that essentially says government is good and big government is better.
Once again to give his “4 trillion in deficit reduction” context “the chart” is offered:
4 trillion still leaves trillions in deficit spending over the next 10 plus years. And notice the trend as we head toward ‘19. That’s right – the impact of ObamaCare. I don’t remember a word about that particular program being on the table. 4 trillion in deficit reduction doesn’t answer the mail as far as I’m concerned because it means we continue to do more deficit spending and roll up more staggering debt. Had he talked about 4 trillion in debt reduction I might have taken him more seriously.
Essentially Obama said the same thing every other big government liberal has said for the decades it has taken us to get in this shape – let us raise taxes to pay for this mess we’ve gotten ourselves into and we promise to make it better. Trust us.
How many times must we hear this before we finally wake up to the fact that it isn’t going to happen that way? Raising the taxes on the rich isn’t going to curb spending. Only curbing spending does that. And while I saw a whole bunch of hand waiving about that in the speech, I’ve seen that in countless other speeches by politicians who claim the same.
Obama’s speech also was an attack on the GOP plan, and an establishment of the “granny will be eating cat food if they get their way” narrative again. Only the left can be compassionate in the proper way. The right? It hates you and wants to kill you.
He even went as far as to call the recent plan by Paul Ryan “unserious”. Obama additionally was completely disingenuous at one point, pretending that the only thing that Republicans were interested in cutting was spending in the “12% discretionary spending” side of things. Of course, as I’ve been telling you, these CRs only address that sector of spending, the rest – entitlements – running on automatic until each are addressed separately.
Obama wants us to believe we can afford everything at about the same level as we have it now if we’ll just tax the rich and “eliminate waste”. Of course his tax the rich plan would add about $32 billion in revenue a year to projected budgets and deficits in the trillions. If you’ve never been a fan of fuzzy math, then don’t take a deep look at Obama’s numbers.
Obama wants to you to believe that we can afford everything. That’s utter nonsense, but what it does is a) establish the ideological basis for the size of government and b) claim that size of government we have now is necessary.
A 70% cut to clean energy. A 25% cut in education. A 30% cut in transportation. Cuts in college Pell Grants that will grow to more than $1,000 per year. That’s what they’re proposing. These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget. These aren’t the kind of cuts that Republicans and Democrats on the Fiscal Commission proposed. These are the kind of cuts that tell us we can’t afford the America we believe in. And they paint a vision of our future that’s deeply pessimistic.
Deeply pessimistic or startlingly realistic? I see it as the latter. Let’s just take one issue he mentions above. Education. A “Constitutional” role of government? Not that I know of. And, here’s the reality:
What you see charted there is utter failure. But the cost? Through the roof. We can’t afford a “return on investment” like that – yet Obama is ready to tax the rich and throw even more money down the federal education rat hole. Want to cut the deficit? Cut the Department of Education and leave the schools to the states and local communities. We. Can’t. Afford. It. And obviously big brother hasn’t a clue.
Obama mentions tax reform. But not as you or I would understand it. When most speak of tax reform they’re talking about lowering the rates and broadening the base. That’s not at all what Obama is talking about. Tim Carney analyzes that:
For Obama, there are no rate cuts — in fact, there are rate increases. But more revealing, the only "loopholes" he wants to kill are those with which he disagrees.
Obama has created dozens of tax credits and tax deductions aimed at shaping the economy in his image. Obama’s supposedly "serious" talk about the deficit never proposed to eliminate his own tax credits. He also never touches other tax credits that reward the behaviors he likes, even at the expense of the economy and tax revenue — like the ethanol-blending credit.
Obama clearly sees the tax code not simply as a way to collect revenue, but as a way to modify behavior. The only "loophole closing" he has proposed in recent months is even more discriminatory than the loophole itself: Obama doesn’t want to end the "production tax credit" that applies to coal mining, manufacturing, forestry, and oil and gas drilling — he just wants to kick oil companies out of the club that benefits from this tax credit.
He certainly isn’t proposing an end to tax credits for wind and solar energy or electric cars. These are the "investments" that will help us "win the future."
Maintaining and expanding such favoritism in the tax code — and he’s certain to insist on new and extended tax credits next year — is the opposite of "reform." But using words to mean something they’ve never meant before is standard fare for this administration.
On that score, Obama deliberately conflated spending and tax breaks Wednesday. He called for us to "reduce spending in the tax code."
While "spending in the tax code" might sound odd, it actually exists. For instance, the "Investment Tax Credit" for renewable energy is available to corporations even if they owe no taxes, and is often paid in the form of a check from the U.S. Treasury to those companies that are doing what Obama wants them to do. The Earned Income Tax Credit is the poor-man’s version of this — a welfare payment from the Internal Revenue Service.
But Obama wasn’t talking about eliminating these "tax expenditures." When he spoke of lowering "spending in the tax code," it was in the context of his desire to raise rates for upper-income Americans. Under Bill Clinton, the top tax rate was 39.6 percent, but today it’s 35 percent. That extra 4.6 percent of income that a successful American gets to keep — to Obama that counts as "spending" by the government.
The only way to understand the continued attack on the rich by this administration is found in Carney’s last line – “Obama … counts that as “spending” by the government”. It’s a premise as old as autocratic rulers everywhere – everything belongs to the sovereign (king, state, dictator) and you’re allowed to keep what the sovereign allows you to keep by his or her grace and benevolence.
Taxes should fill a single function – provide the revenue necessary to fund a Constitutional government. What it shouldn’t be is a method of granting favors or “modify behavior”. But that’s precisely what ours has become. Obama is fine with that.
That brings me to the throw away line of the entire speech:
More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.
Not if this guy and the left have anything to do with it. In fact Obama spends the entire speech telling us why we’re not self-reliant and need government to save us from ourselves and help us throughout our lives.
It is the usual double-talk combined with classic liberal ideology that says government should play a major role in all our lives and we must make the sacrifices necessary (and collectively) to enable the vision the anointed have set out for us.
Anything else is, well, “un-American”.