Is this the Voice of Rational Thinking in the Whitehouse?
Posted by Ray on January 5, 2010 under Main | 
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We all know that the President has surrounded himself with a vast army of individuals to combat everything from the economic downturn to green jobs. While it is not unusual to have a literal army of people to help with a variety of issues in the Whitehouse it is unusual to have as many Czars as we have and to have so much dependence on an economic team of advisors. However, what if the team of economic advisors is a group of people who are inept, irresponsible and, in general, incompetent?
For many months now we have seen conflicting messages coming from various members of Obama’s economic team, Christine Roemer says that we are not doing that great while Larry Summers says everything is great and a host of other conflicting messages. We have also heard several stories about conflicts between Paul Volcker and many on the team, Volcker, who I am not a huge fan of, seems to be the only voice of reason and the only one who actually solved any real problem in the US while Summers and others created our problems or merely worked on hypothetical illustrations only. However, the most troubling person on this economic team is Paul Krugman who gets the most press I might add.
I realize the Krugman did win the Nobel Peace Prize, but so did a bunch of others who should not have, so who cares. Any person who actively advocates excessive deficits the way this man does must be insane. Not only is he advocating more deficit spending, a doubling of the original stimulus to $1.4T if he had it “his way,” but he also thinks a VAT consumption tax is a dandy idea as well. Most disturbing is this latest interview from Advisor Perspectives I read today were Mr. Krugman said the following:
“There is a pretty good case, at very high incomes, to have something like a tax rate in excess of 50%. We had a 70% tax rate for a good part of the 1960s and 1970s at the top end and survived with that. We had a 50% rate for a good part of the Reagan years, which people forget about. I would be willing to go north of 50% but I don’t know how high.
If you put a super-high rate on income of $5 million, then you are basically hitting only sports stars and Wall Street wheeler-dealers.”
Now, I am not sure if many people remember the 1970’s or not, but it was not exactly the era of prosperity that America is known for and is the direct result of over taxation and spending from the 1950’s and 60’s. He also does describe “super-high” incomes, but does not describe high incomes so that is open to interpretation and my guess that would be those earning more than $200K a year. However, if you add in his VAT, higher state income taxes, higher property taxes, higher sales taxes, now higher federal income taxes and all the other higher fees we have to pay this is a different ballgame than the 1960’s-70’s.
To frame and claim “we survived” the 1970’s is not exactly what most American’s want to hear, especially if they lived through it. I know that Obama’s base was not alive during that period of time, but it was not pretty and is a time most people would not care to repeat. I know retro is cool, but disco was terrible, bell bottoms are not cool and inflation really does stink. I know we are going to have to face higher taxes, that is inevitable, but how much and who is going to have to pay?
What we do know will happen is this, when taxes go up, on the wealthy, they will earn less money. This has been proven time and again through treasury tax receipts. Why does this happen? Because there is a cross over point where it is more advantageous for a wealthy person to earn less, not work as hard, and bring home the same or more money because they are paying less in taxes, it is a fact. When this happens the government will then be forced to raise taxes on more people causing marginal rates to go up across the board. Now, the poor have nothing to worry about, but the middle class does. The middle class always gets stuck with the bill, it is just the way it is.
Krugman must have lost his mind, which is all I can possibly think has happened. He is just set on mortgaging the future of the US on more stimulus and raising taxes, a system we know does not work long-term. I know we cannot lower taxes, that is impossible given our fiscal issues, we could create employment tax credits that are worthwhile to hire employees, i.e. an ongoing tax credit instead of the onetime credit often proposed or something to that effect. The best way to collect tax revenue is to close loopholes and reduce tax deductions for wealthier Americans, end of story and much better than a tax hike. An even better solution would be to simply stop the senseless spending, but that will never happen.
I guess what I am saying is that most Americans pay enough in taxes already. Just look at what the average American already pays in taxes, it is insane. Between state and federal income taxes you lose a ton of your income, never mind FICA and Social Security taxes. There is also the AMT, hopefully you are not subject to this one, but if you are it is really unforgiving. Sales taxes which you pay on just about everything you buy, think about that one for a minute and how much you pay just for groceries. Utilities tax, including your cell phone. Property taxes, which you do get a income tax deduction for, but you still pay it. If you own a car, registration fees, there is about a $.40 on every gallon of gas you buy. The list just goes on and on, but Krugman, oh, he wants you to pay way more.
So, my suggestion is that Krugman, Matt Damon, the Baldwin’s, Nancy Pelosi, Barney Frank and every other nut job that wants heavy social programs should voluntarily issue a cashier’s check for 70% of their income to the treasury every year. That is until their higher taxes are passed into law, then they do not have to worry about it. Just like you should not have to pay for your neighbor’s home that they bought and could not afford, we should not be forced to pay for these peoples wacky ideas and social programs that they cannot afford. Oh, if they do not want to write the check out to the treasury, they can send it to me, my name is CASH.
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