Every single day I have a friend, family member or co-worker talking to me about politics/economics. While, I don’t see myself as above intelligent, I think am able to formulate and communicate an argument (maybe that does make me smarter lol JOKING!). Well today, I had a very close friend arguing with me above government spending. I have talked about my libertarian views which tend to minimize government spending – HERE, HERE and HERE.
Well today, this particular guy was going at it pretty hard, so I checked with one of my fav. websites to see if there was any new research/articles pertaining to how in the hell is Obama going to pay for all these promises. Well I found a great article at the Cato Institute’s website…
I am all about the Cato Institute’s website, they have opinion pieces, blogs, research pieces etc. Some choice blurbs to describe the Cato Institute:
The Cato Institute seeks to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets and peace. Toward that goal, the Institute strives to achieve greater involvement of the intelligent, concerned lay public in questions of policy and the proper role of government.
The Jeffersonian philosophy that animates Cato’s work has increasingly come to be called “libertarianism” or “market liberalism.” It combines an appreciation for entrepreneurship, the market process, and lower taxes with strict respect for civil liberties and skepticism about the benefits of both the welfare state and foreign military adventurism.
Notwithstanding my praise for the Cato Institute (and trust me I don’t agree with everything there, but it is a resource) they highlighted a Wall Street Journal Article written by Alan Reynolds titled “How’s Obama Going to Raise $4.3 Trillion?” – Full article HERE.
Mr. Reynolds, goes through each of Obama’s alleged ways to pay for what he wants and either supports them, or refutes them explains how they will not pay for what he wants. Before going through the how, lets talk about the why,
Sen. Obama has nonetheless promised to devote another $1.32 trillion over the next 10 years to several new or expanded refundable tax credits and a special exemption for seniors, according to the Urban Institute and Brookings Institution’s Tax Policy Center (TPC). He calls this a “middle-class tax cut,” while suggesting the middle class includes 95% of those who work.
Mr. Obama’s proposed income-based health-insurance subsidies, tax credits for tiny businesses, and expanded Medicaid eligibility would cost another $1.63 trillion, according to the TPC. Thus his tax rebates and health insurance subsidies alone would lift the undisclosed bill to future taxpayers by $2.95 trillion — roughly $295 billion a year by 2012.
But that’s not all. Mr. Obama has also promised to spend more on 176 other programs, according to an 85-page list of campaign promises (actual quotations) compiled by the National Taxpayers Union Foundation. The NTUF was able to produce cost estimates for only 77 of the 176, so its estimate is low. Excluding the Obama health plan, the NTUF estimates that Mr. Obama would raise spending by $611.5 billion over the next five years; the 10-year total (aside from health) would surely exceed $1.4 trillion, because spending typically grows at least as quickly as nominal GDP.
A trillion here, a trillion there, and pretty soon you’re talking about real money. Altogether, Mr. Obama is promising at least $4.3 trillion of increased spending and reduced tax revenue from 2009 to 2018 — roughly an extra $430 billion a year by 2012-2013.
Do these numbers not scare you? Cause if this is what he is publishing, can you imagine what he’ll actually spend.
These are all direct quotes (emphasized by yours truly obviously) from the article presumably based on Mr. Reynolds research:
- Raising the tax rates on the salaries, dividends and capital gains of those making more than $200,000-$250,000, and phasing out their exemptions and deductions, can raise only a small fraction of the amount.
- Even if we have a strong economy, Mr. Obama’s proposed tax hikes on the dwindling ranks of high earners would be unlikely to raise much more than $30 billion-$35 billion a year by 2012.
- In his acceptance speech at the Democratic convention on Aug. 28, Mr. Obama said, “I’ve laid out how I’ll pay for every dime — by closing corporate loopholes and tax havens.” That comment refers to $924.1 billion over 10 years from what the TPC wisely labels “unverifiable revenue raisers.” To put that huge figure in perspective, the Congressional Budget Office optimistically expects a total of $3.7 trillion from corporate taxes over that period.
- In other words, Mr. Obama is counting on increasing corporate tax collections by more than 25% simply by closing “loopholes” and complaining about foreign “tax havens.”
- Mr. Obama’s dream of squeezing more revenue out of corporate profits, dividends and capital gains looks increasingly unbelievable now that profits are falling, banks have cut or eliminated dividends, and only a few short-sellers have any capital gains left to tax.
- Yet the CFARB credits John McCain’s budget with only a $5 billion savings from troop reduction in Iraq, while Mr. Obama gets an extra $55 billion (Extra $55 Billion doesn’t explain the spending in my humble opinion).
- Mr. Obama has offered no clue as to how he intends to pay for his health-insurance plans, or doubling foreign aid, or any of the other 175 programs he’s promised to expand. Although he may hope to collect an even larger share of loot from the top of the heap, the harsh reality is that this Democrat’s quest for hundreds of billions more revenue each year would have to reach deep into the pockets of the people much lower on the economic ladder. Even then he’d come up short.
I know this is a heavy blog post, but before you vote in less than a week, please I implore you don’t be just one of those usual Americans that says, “YEAH THATS WHAT I WANT!” without thinking how are we going to pay for it.