Tax hikes to drive a second collapse?

posted at 9:30 am on October 5, 2010 by Ed Morrissey

Congress left Washington without addressing the massive tax hikes that will come at the end of the year as the tax-rate reductions of 2001 and 2003 expire.  Absent action on Capitol Hill, those increases will take $4 trillion out of the economy over the next ten years — and even if the lower tax bracket reductions get extended, $700 billion of capital will get redirected from the private sector to Washington.  How will that impact economic growth in the US?  Peter Ferrara argues that it will create not just a double-dip recession, but a second economic collapse — one worse than what we experienced in 2008.

In his new treatise published by Encounter for its Broadsides collection, Broadside No. 17: President Obama’s Tax Piracy, Ferrara notes that Barack Obama has chosen the opposite strategy in economic policy from both John Kennedy and Ronald Reagan, especially the latter.  Reagan cut taxes, especially on capital gains and dividends, and broke down regulatory hurdles.  Obama wants not only to raise taxes on those who have the most capital, he wants to make it harder for them to use it as well, quoting a similar analysis by Arthur Laffer:

[W]hen the U.S. economy comes to 2011, the train’s going to come off the tracks. . . . The tax boundary that will occur on January 1 , 2011 tells me that GDP growth in 2010 will be some 6 percent to 8 percent higher than GDP growth in 2011 . A year on year decline from trend of some 6 percent to 8 percent in 2011 growth would represent a larger collapse than occurred in 2008 and early 2009 .

Ferrara includes this helpful and rather cheerless chart to emphasize what Laffer predicts as we hit the “tax boundary”:

On top of that, and in large part because of it, the government won’t see the revenues it expects, either:

President Obama’s budget projects that his tax increases on “the rich” (singles making more than $200,000 and couples making more than $250,000) would raise $678 billion in increased revenue during the next 10 years.  The ObamaCare legislation projected another $210 billion from the increased payroll taxes on those workers for a total of nearly $1 trillion.  But these tax increases won’t raise anywhere near the revenue projected. Obama will be lucky if this tax piracy doesn’t result in less revenue. …

The projections of higher revenues from the other tax rate increases all fail to take into account the negative incentive effects discussed above and the counterproductive interactions from all those effects. Since we know from experience that those incentive effects are powerful and real, the result at a minimum will be less revenue than expected, if not less revenue overall.

This is the problem of static analysis on tax policy.  It assumes that the changes in tax policy sets up no other incentives or changes any behavior.  Of course it does, though, as do even threatened changes.  Ferrara believes that the economy may actually look better than it is this year because capital holders are moving gains and income into 2010 to avoid higher taxes next year.  After we hit the tax boundary, all the incentives go the other direction, and that means negative growth across the board.

President Obama’s Tax Piracy gives a worst-case scenario to be sure, but even a milder version of the predicted reaction would be ugly indeed.  Ferrara backs up his argument with plenty of data and analysis for a 49-page treatise, the format of the impressive Broadside series.  He reviews the results of policy changes in tax law and regulatory expansion and retraction over the past 50 years and draws clear policy implications from all.  We have been down both roads before, and often enough to have a map to the destinations of each.

Ferrara’s book will be released in the next couple of weeks, but do yourself a favor and pre-order a copy.  The price makes it affordable to almost everyone, and also will be released in Kindle format, which I highly recommend.


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Count it!

kingsjester on October 5, 2010 at 9:35 AM

Is it DELIBERATE…………….

or,by DESIGN,

or,h*ll,let her burn!!!!!!!!!!!!!!
(sarc).

canopfor on October 5, 2010 at 9:36 AM

Good God. The reversal of the damage Obama and the Socialist Democrats have done is a matter of national emergency.

IronDioPriest on October 5, 2010 at 9:38 AM

Upside: If they don’t extend the Bush Tax cuts There will be another wave in 2012 that should pretty much do in the Democratic Party..:)

Downside: I might use what will be left of my 401-K as toilet paper becuse another collapse would just about do it in..:(

Dire Straits on October 5, 2010 at 9:39 AM

People are easier to control when they have no money.

toongoon on October 5, 2010 at 9:39 AM

Just when I think things under Obama can’t get any worse. The hits just keep coming!

bopbottle on October 5, 2010 at 9:41 AM

Love it when the plan comes together, said the monster to the little sheep.

tarpon on October 5, 2010 at 9:41 AM

He(they)can’t be that stupid can they?

docflash on October 5, 2010 at 9:41 AM

Dire Straits on October 5, 2010 at 9:39 AM

coions aren’t good on the tooshy.

upinak on October 5, 2010 at 9:43 AM

Adults.

In.

Charge.

Del Dolemonte on October 5, 2010 at 9:43 AM

Just remember, tax revenue increased under the Bush tax cuts.

rbj on October 5, 2010 at 9:43 AM

People are easier to control when they have no money.

toongoon on October 5, 2010 at 9:39 AM

says who? Eventually, people who are poor, starving and oppressed lash back out. Put that with a huge personality of “DOn’t screw with me and mine” and you have a very deadly combo. The Dems and everyone else with a messiah complex better be aware.

upinak on October 5, 2010 at 9:44 AM

Hold on now, PBHO’s college textbooks don’t show any of this happening so it won’t.

See, right there on page 238 of “Liberal Economic Theory” it says that massive government spending coupled with over 75% taxation will make everyone happy happy happy. It’s in the book, man!

Bishop on October 5, 2010 at 9:45 AM

coions aren’t good on the tooshy.

upinak on October 5, 2010 at 9:43 AM

I guess I can use the sea shell set..:)

Dire Straits on October 5, 2010 at 9:45 AM

Just remember, tax revenue increased under the Bush tax cuts.

rbj on October 5, 2010 at 9:43 AM

Are we goping to blame THIS on bush. Right NOW? Seriously.. WTF are you smoking?

upinak on October 5, 2010 at 9:45 AM

HERES THE PLAN……………………..

Full-speed ahead,smack into thje biggest
political iceberg,then,while sinking bow
first,force-feed the engines from a cash
laden cargo ship,with taxes,from the umteenth
BAILOUT,AND BY SHEER PROGRESSIVE REASONING,
POWER-DIVE THE TITANIC OUT OF THE DEPTHS AND
BACK UPON THE WAVES!!!!!!!!!!!!!

canopfor on October 5, 2010 at 9:46 AM

This is all so freaking depressing. This WSJ article is a great companion piece – the doomsday clock is ticking…

Buy Danish on October 5, 2010 at 9:46 AM

I guess I can use the sea shell set..:)

Dire Straits on October 5, 2010 at 9:45 AM

stay away from the coral.

upinak on October 5, 2010 at 9:46 AM

Downside: I might use what will be left of my 401-K as toilet paper becuse another collapse would just about do it in..:(

Dire Straits on October 5, 2010 at 9:39 AM

You and me both.

Blake on October 5, 2010 at 9:47 AM

upinak on October 5, 2010 at 9:44 AM

Good point!..Just ask France how that worked out in 1700′s

Dire Straits on October 5, 2010 at 9:48 AM

Dire Straits on October 5, 2010 at 9:39 AM

If we can’t get a sane majority in this election the progressives will undermine the constitution so severely in two years that the election in 2012 will only be a formality.

And by sane I mean there has got to be fighting spirit in congress like we have not seen yet and few of the republicans who WILL keep their seats have not shown so far.

toongoon on October 5, 2010 at 9:48 AM

Upside:

Dire Straits on October 5, 2010 at 9:39 AM

Dire Straits:Good to see your a wee bit positive!:)

canopfor on October 5, 2010 at 9:49 AM

I don’t think Barry even cares if the economy collapses. He figures he can pin it on the GOP when that happens. That’s not gonna work in 2012, but the guy’s bought into his own hype and I don’t even think the coming tsunami in 4 weeks will serve as a reality check.

Doughboy on October 5, 2010 at 9:51 AM

Are we goping to blame THIS on bush. Right NOW? Seriously.. WTF are you smoking?
upinak on October 5, 2010 at 9:45 AM

Tax REVENUE is a good thing, when it’s the result of tax cuts. As I recall, Obama actually bragged during the campaign that his tax policies would reduce revenue. I’m going to see if I can find it…

Buy Danish on October 5, 2010 at 9:51 AM

A tax increase will help the economy in a recession about the same as bleeding a sick patient cures him. Democrats are quacks with 19th century ideas.

NNtrancer on October 5, 2010 at 9:53 AM

Since we know from experience that those incentive effects are powerful and real, the result at a minimum will be less revenue than expected, if not less revenue overall.

Why would this author ANYONE assume the Obama administration has any “experience” in tax policy?

Rovin on October 5, 2010 at 9:53 AM

canopfor on October 5, 2010 at 9:49 AM

Trying my best..:)..But 401-K plan (mine at least) can’t stand another massive hit..

Dire Straits on October 5, 2010 at 9:53 AM

Buy Danish on October 5, 2010 at 9:51 AM

Buy, but are you blaming bush? rjb is… what a freaking jerk.

Come on.. this isn’t BUSH anymore.. this is OBAMA! And blaming him right now.. is sweet, sweet fun! Because Obama has nothing but to blame the Dems, his administration, his “aides” and himself.

upinak on October 5, 2010 at 9:54 AM

We are already seeing signs that Mr. Ferrara is correct. Private the private sector will move to a more hospitable environment and one that’s predicatable over what they have here.

Look at California for a great example of what parasites can do to an economy. How high is unemployment there?

dogsoldier on October 5, 2010 at 9:54 AM

Doughboy on October 5, 2010 at 9:51 AM

Then PBHO is naive as well as foolish, he’s got no idea of the public anger out here now, much less if there were to be a greater collapse of the economy.

You couldn’t pay me enough to live in a big city if things really go to hell.

Bishop on October 5, 2010 at 9:55 AM

Are we goping to blame THIS on bush. Right NOW? Seriously.. WTF are you smoking?

upinak on October 5, 2010 at 9:45 AM

He/she is not blaming anyone

blatantblue on October 5, 2010 at 9:55 AM

Obama’s Double Dip Recession: The Second Time is Wilder than the First!

Catch the fevah!

Good Lt on October 5, 2010 at 9:56 AM

Sen. Jim DeMint has a proposal re the “fired members of Congress”; ie. a limit on fiscally damaging legislation that would be passed by a lame-duck session.
http://www.nationalreview.com/articles/248657/fired-congress-jim-demint

All of the tourniquets in the world will not stop the bleeding of our nation if the Dems push through their proposed legislation and budget-busting, pork-laden appropriations bills.

onlineanalyst on October 5, 2010 at 9:56 AM

toongoon on October 5, 2010 at 9:48 AM

I’m trying to find my old copy of 1984 by George Orwell so I can sharpen my skills..:)

Dire Straits on October 5, 2010 at 9:57 AM

He/she is not blaming anyone

blatantblue on October 5, 2010 at 9:55 AM

preception. You never know with text.

upinak on October 5, 2010 at 9:57 AM

Are we goping to blame THIS on bush. Right NOW? Seriously.. WTF are you smoking?

upinak on October 5, 2010 at 9:45 AM

Money coming into the Treasury increases once the private sector has the capital and confidence to expand. The point is that lowering taxes helps the government and the private sector at the same time.

Asher on October 5, 2010 at 9:57 AM

What Obama, Pelosi and Reid know collectively about economics, could fit inside a thimble.

The three least intelligent and/or ethical people collectively and individually, we have ever entrusted with leadership of our nation.

What’s happened was entirely predictable.

Abysmal leadership. Would have been better to have no one in charge at all, than these three useless wastes of skin.

NoDonkey on October 5, 2010 at 9:57 AM

ObaMao thought that “double dip” was a great idea when he “worked” for an ice-cream stand once upon a time. In fact, the freebies were payoffs to his friends then, too.

onlineanalyst on October 5, 2010 at 9:58 AM

Tax REVENUE is a good thing, when it’s the result of tax cuts. As I recall, Obama actually bragged during the campaign that his tax policies would reduce revenue. I’m going to see if I can find it…

Buy Danish on October 5, 2010 at 9:51 AM

I remember, it was all about FAIRNESS. Not revenue to the government. Douche

NJ Red on October 5, 2010 at 9:58 AM

Visited my accountant the other day to figure out a plan for next year and beyond. I left his office without a plan. Basically, he told me to wait and see what happens after Nov 2nd.and call him in mid Dec. Nobody knows which way to jump with these clowns in charge. How on earth does a business make plans to grow if an average retiree with smaller resources can’t.

Kissmygrits on October 5, 2010 at 10:01 AM

Just remember, tax revenue increased under the Bush tax cuts.

rbj on October 5, 2010 at 9:43 AM

This is a credit to Bush’s economic policy, not a detraction.

The Democrats, for some reason, are incapable of looking at numbers and seeing them.

When tax revenues increased, it wasn’t the result of higher taxes.

And that notion drives a steak through the heart of Keynesian economics forever.

So what did the Democrats do? SPEND, SPEND, SPEND, SPEND and then claim there was no other way to avoid economic disaster other than raising your taxes. Why they spent so much and so recklessly despite all warnings that this would happen is a mystery to rational people (unless you factor in vote-buying, dependency-expansion and political ambition into the mix, which was the Democrat plan all along).

The spending that caused the unsustainable and disastrous deficits (which Bush failed to reign in during his last two years and even with the GOP prior to that), on the other hand, is conveniently ignored because Congress (and not the taxpayer) gets the blame for it.

Good Lt on October 5, 2010 at 10:01 AM

Kissmygrits on October 5, 2010 at 10:01 AM

Investing in Gold is starting to look real good..:)

Dire Straits on October 5, 2010 at 10:03 AM

Tax REVENUE is a good thing, when it’s the result of tax cuts. As I recall, Obama actually bragged during the campaign that his tax policies would reduce revenue. I’m going to see if I can find it…
Buy Danish on October 5, 2010 at 9:51 AM

Do you mean when he was talking raising capital gains taxes? I think that was in the debate and he only cared that it should fair and did not care that it would lower revenue as history has shown everytime.

bluemarlin on October 5, 2010 at 10:04 AM

Are we goping to blame THIS on bush. Right NOW? Seriously.. WTF are you smoking?

upinak on October 5, 2010 at 9:45 AM

Not sure where you are going on this. I liked the Bush tax cuts — got to keep more of my money, which I spent, thus helping to keep the economy going. On this area, the only thing I blame W & the GOP for is not making the tax cuts permanent. Tax cuts stimulate the economy, and with more economic activity tax revenue increases.

rbj on October 5, 2010 at 10:05 AM

Investing in Gold is starting to look real good..:)

Dire Straits on October 5, 2010 at 10:03 AM

silver… go with silver. Not as inflated.

upinak on October 5, 2010 at 10:06 AM

As if you needed anymore, here is irrefutable proof that Barack Obama is a bleeping ignoramus:

Obama’s plan will cut taxes overall, reducing revenues to below the levels that prevailed under Ronald Reagan (less than 18.2 percent of GDP). The Obama tax plan is a net tax cut – his tax relief for middle class families is larger than the revenue raised by his tax changes for families over $250,000. Coupled with his commitment to cut unnecessary spending, Obama will pay for this tax relief while bringing down the budget deficit.

Less money in, more money out. Woo Hoo! What a way to bring down the deficit!

Buy Danish on October 5, 2010 at 10:07 AM

rbj on October 5, 2010 at 10:05 AM

I misunderstood you. Someone pointed it out. It’s early and I am not totally awake. My apologies.

upinak on October 5, 2010 at 10:07 AM

I invest in steel, there are some reputable companies which offer many fine steel products.

Bonus: I can use my steel investments to take gold from others. I keed I keed. Maybe. Still….

Bishop on October 5, 2010 at 10:08 AM

Overdose – The Next Financial Crisis 1/3

http://www.youtube.com/watch?v=C-1J1GjiFxc

canopfor on October 5, 2010 at 10:08 AM

Kissmygrits on October 5, 2010 at 10:01 AM

I think that’s right. Either way after Nov 2nd is not going to be good but right this minute there is no way to plan. What surprises me is how absolutely paralysing this is.

ORconservative on October 5, 2010 at 10:10 AM

Tax REVENUE is a good thing, when it’s the result of tax cuts. As I recall, Obama actually bragged during the campaign that his tax policies would reduce revenue. I’m going to see if I can find it…

Buy Danish on October 5, 2010 at 9:51 AM

You’re referring to that Democrat primary debate where he told Charlie Gibson he doesn’t care if increasing the capital gains tax rates lowers revenue because he’s interested in “fairness”. That’s the sort of social justice, anti-capitalist nutjob we’re dealing with here.

Doughboy on October 5, 2010 at 10:10 AM

upinak on October 5, 2010 at 9:54 AM

Where is he “blaming” Bush? Bush’s tax cutting policies increased revenue. That’s a good thing. Happened under Reagan too..And JFK…

Buy Danish on October 5, 2010 at 10:10 AM

silver… go with silver. Not as inflated.

upinak on October 5, 2010 at 10:06 AM

You make a good point..But I think Gold is going to go thru the roof..:)

Dire Straits on October 5, 2010 at 10:11 AM

CoastoCoast

Gerald Celente—Nov 4, 2008, 1/4

http://www.youtube.com/watch?v=HbRLEKKodIc&p=56CF87686939BBFC&playnext=1&index=15
==========================================================
Right back to the beginning!!

canopfor on October 5, 2010 at 10:12 AM

He(they)can’t be that stupid can they?

docflash on October 5, 2010 at 9:41 AM

When you’re a committed ideologue, stupid doesn’t play into it.

Kafir on October 5, 2010 at 10:13 AM

Expiring on Jan 1, 2011 is the $1000 child tax credit, it will revert to a $500 credit. A family with 3 children will see $1500 tax increase in 2011, not counting other expiring tax laws.

Dasher on October 5, 2010 at 10:13 AM

Buy, but are you blaming bush? rjb is… what a freaking jerk.

Come on.. this isn’t BUSH anymore.. this is OBAMA! And blaming him right now.. is sweet, sweet fun! Because Obama has nothing but to blame the Dems, his administration, his “aides” and himself.

upinak on October 5, 2010 at 9:54 AM

Uh, he is actually praising Bush for increasing tax revenue by lowering taxes. I think you misread his post.

Johnnyreb on October 5, 2010 at 10:15 AM

Tax hikes to drive a second collapse?

Lacking common sense Obama was never taught to appreciate Aesop, since childhood formal education was officially Muslim.

“We’re very pleased that President Obama can be recognized for his economic policies’ contributions to the food stamps program,” said the Secretary of Agriculture.

When he finds himself in a hole, Obama needn’t allow us to quit digging since he can fly, doomed with an Icarus complex compounding his others.

maverick muse on October 5, 2010 at 10:16 AM

those increases will take $4 trillion out of the economy over the next ten years

No it won’t… because the slowdown resulting from the tax hikes will mean even less in the way of revenue across the board. The $4 trillion assumes an economy functioning at the current level (as dismal as it is).

mankai on October 5, 2010 at 10:16 AM

We’re *already* seeing the effects of the tax uncertainty, and have been since April 2010. If this hypothesis holds, it has already shown up in the stock market, where stock prices should have been rising throughout the summer, as the stock market’s underlying dividends are projected to grow through the end of 2011.

I say “should have been rising” since the dividend futures data indicates growth (dividends are the primary driver of stock prices.) But if the dividends are being inflated as part of a game of “beat the clock” as shareholders seek to avoid higher taxes on dividends in 2011, we should expect stock prices to continue to significantly underperform with respect to those projected levels of future dividend payments to shareholders.

Not to mention that the higher taxes themselves will tend to push stock prices lower because investors will realize lower returns on their investments. That’s going to weigh heavily against a lot of people’s retirement accounts. Including those public pensions that are already underfunded and guarantee payments based on bizarrely inflated investment returns that will become virtually impossible to achieve, much less sustain.

ironman on October 5, 2010 at 10:17 AM

Uh, he is actually praising Bush for increasing tax revenue by lowering taxes. I think you misread his post.

Johnnyreb on October 5, 2010 at 10:15 AM

wow… how many times do I have to freaking apologize?

I misunderstood you. Someone pointed it out. It’s early and I am not totally awake. My apologies.

upinak on October 5, 2010 at 10:07 AM

Thanks… and Good Morning.

upinak on October 5, 2010 at 10:17 AM

The Blame Bush Narration,and remember Nancy had just secured
the Republican Party vote,then,Nancy strutted to the well,
and SCREWED OVER TEAM RIGHT WITH THE “FAILED” 8 YEARS OF BUSH
POLICIES!!!!!!!!!!!!!!!
============================

Speaker Nancy Pelosi (D-CA) Floor Speech Before Bailout Vote
Semptember 29,2008

http://www.youtube.com/watch?gl=CA&hl=en&v=VMLo7i38D58

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Nancy BLAMED THE GOP,NO REGULATION,NO DISCIPLINE,……..

This is where the LIBERAL MSM NARRATION WENT INTO HIGH
GEAR!!!!!!!!!!!!!!!!!!!!!!!!!!1

REWATCH,and WHY NOVEMBER IS SOOOOOOOO IMPORTANT TO VOTE!!!!

canopfor on October 5, 2010 at 10:19 AM

Downside: I might use what will be left of my 401-K as toilet paper becuse another collapse would just about do it in..:(

Dire Straits on October 5, 2010 at 9:39 AM

You might *strongly* consider moving your 401k and investment funds into money market or cash before the end of the year, as a lot of folks are going to do, if only to wait and see for a bit.

Many folks will do this prior to 12/31, so we’re going to likely see a downward pressure on the stock market as the new year approaches…

Midas on October 5, 2010 at 10:19 AM

Uh, he is actually praising Bush for increasing tax revenue by lowering taxes. I think you misread his post.

Johnnyreb on October 5, 2010 at 10:15 AM

The problem with tax cuts raising revenue is that increased revenue just encourages government to spend more and actually to borrow more since they assume the increases will continue.

The deficits under Reagan were not caused by the massive tax cuts. Revenue skyrocketed… but so did spending by the Dem Congress.

Tax cuts must be combined with freezes in spending, and eventually cuts in spending… and more cuts in taxes. As it has been said… if you cut taxes and revenues increase, you haven’t cut them enough.

mankai on October 5, 2010 at 10:20 AM

The One’s putative father was an economist.

But I thought the Toonces analogy applied only to his driving.

IlikedAUH2O on October 5, 2010 at 10:21 AM

The $4 trillion assumes an economy functioning at the current level (as dismal as it is).

mankai on October 5, 2010 at 10:16 AM

I think they were counting on a minumum of 4% annual growth in those projections.

Johnnyreb on October 5, 2010 at 10:21 AM

This article is fear mongering.

tomas on October 5, 2010 at 10:21 AM

Tax REVENUE is a good thing, when it’s the result of tax cuts. As I recall, Obama actually bragged during the campaign that his tax policies would reduce revenue. I’m going to see if I can find it…

Buy Danish on October 5, 2010 at 9:51 AM

I can’t say for sure, but as it was suggested above, you may be getting this from the ABC debate in which Gibson asked him about the counterintuitive result that low capital-gains tax rates actually generated greater revenue. As I recall, Obama looked like a deer in headlights–I’ve always likened it to the seen from A Few Good Men when the dopey soldier (Lowden Downey Jr.) got caught in a lie on the witness stand and was reduced to gibberish: “Well, you see, there was this blowout.” Anyway, I think Obama showed up for the next debate with a few more tax talking points, and at that debate, Obama threw out a kind of cut-off-your-nose-to-spite-the-rich-man’s-face argument by insisting that higher rates were simply a matter of “fairness.”

In other words, Obama doesn’t want those whose assets appreciate between time of purchase and time of sale to succeed.

BuckeyeSam on October 5, 2010 at 10:21 AM

Midas on October 5, 2010 at 10:19 AM

You make a good point..:)

Dire Straits on October 5, 2010 at 10:23 AM

Gold might not be such a good idea. Progressives have experience with that already. One thing they can never regulate is barter and black market.

Oldnuke on October 5, 2010 at 10:24 AM

When Barack the Boy Wonder was proffered as President, I’m sure many figured what harm could this newbie do? The excuse “What could go wrong?” isn’t just naive, it is manifesting catastrophe. All of this was thoroughly foreseeable.

Mark30339 on October 5, 2010 at 10:24 AM

I misunderstood you. Someone pointed it out. It’s early and I am not totally awake. My apologies.

upinak on October 5, 2010 at 10:07 AM

Quite alright. It’s especially early for those in Alaska.

I actually would want less tax revenue — coupled with a big reduction in the federal government.

rbj on October 5, 2010 at 10:25 AM

By the way, this is what we get when we don’t see Obama’s transcripts. I’d really like to know about the crackpot courses he took in undergrad because he surely didn’t get exposed to economics.

I’m guessing his international relations studies concentrated on all the grievances other countries have with the United States.

Conservatives and the GOP cannot allow another un-American POS to be elected President ever again. McCain was a wuss in this regard. Call spades spades.

BuckeyeSam on October 5, 2010 at 10:27 AM

All of this was thoroughly foreseeable.

Mark30339 on October 5, 2010 at 10:24 AM

Which is exactly why I feel no pity for idiots who are now having buyer’s remorse and I show them no mercy. If they were stupid enough to fall for that obviously empty suit then they’ll be fooled by the next snake oil salesman too.

Oldnuke on October 5, 2010 at 10:28 AM

On this area, the only thing I blame W & the GOP for is not making the tax cuts permanent. Tax cuts stimulate the economy, and with more economic activity tax revenue increases.

rbj on October 5, 2010 at 10:05 AM

Bush stood up for America, against all odds. And many of us stood up for Bush, supporting him through hard times. But he’s out of office now, and it’s time to smell the coffee.

I’d add to that critique of temporary cuts with tax rebates requiring repayment that Bush not only failed to cut federal spending, but compounded federal bureaucracy. The worst thing Bush did was appointing/supporting Sec./Treasury Paulson’s financial corruption causing the nation’s economic collapse along with a global recession for personal gain via mortgage investment fraud, THEN MAKING THAT CABINET OFFICE AUTONOMOUS, also protecting bank fraud from becoming exposed in court. Regardless of public propaganda to get it passed, Bush/Paulson TARP was meant for European aid, not for American taxes to aid America.

/People embrace abuse when dealt compassionately, especially if recognition is uncomfortable.

maverick muse on October 5, 2010 at 10:32 AM

Did anyone else see Herman Cain’s smackdown of the Dems’ class warfare taxation scheme on Kudlow’s program on the parallels between the markets now and in the ’30′s?

I tried to post the link from CNBC, but it won’t go through.

onlineanalyst on October 5, 2010 at 10:35 AM

NJ Red on October 5, 2010 at 9:58 AM
bluemarlin on October 5, 2010 at 10:04 AM
Doughboy on October 5, 2010 at 10:10 AM
BuckeyeSam on October 5, 2010 at 10:21 AM

Yes, it was part of the Charlie Gibson debate, but well before that it was part of his brilliant plan. Here’s the link again (and of course there’s much more abject stupidity to marvel over…)

Buy Danish on October 5, 2010 at 10:36 AM

The 21st Century FDR signs “Happy days are here again…”

Er, uhm, ….. hope!

juanito on October 5, 2010 at 10:44 AM

Your recall of the events during Bush’s tenure are correct, maverick muse. I really have a hard time stomaching what Paulson pushed on the American taxpayer.

IIRC Bush couldn’t get those tax cuts through Congress at the time though without agreeing to an expiration date.

onlineanalyst on October 5, 2010 at 10:44 AM

You’re referring to that Democrat primary debate where he told Charlie Gibson he doesn’t care if increasing the capital gains tax rates lowers revenue because he’s interested in “fairness”. That’s the sort of social justice, anti-capitalist nutjob we’re dealing with here.

Doughboy on October 5, 2010 at 10:10 AM

Exactly, and a bizarre moment. It means he sees taxes as much as a means to enforce his notion of equality as to raise revenue. Lenin said, “The way to crush the middle class is to grind them between the millstones of taxation and inflation.”

The progressives whine about the ‘gap between rich and poor’, and naive voters think that progressives want to raise up the poor, but progressives will be quite content to crush the rich until we are all poor. For them that is quite an acceptable state of equality.

slickwillie2001 on October 5, 2010 at 10:44 AM

What really grinds me is that the union sheep that attended Ed Schultz’s grievance-fest on Saturday do not realize that their (underfunded) pension funds are tied to the success of the markets. If the markets plunge because of tax increases “on the rich,” both jobs and pensions will wither away.

onlineanalyst on October 5, 2010 at 10:50 AM

test

Dire Straits on October 5, 2010 at 10:53 AM

People are easier to control when they have no money.

toongoon on October 5, 2010 at 9:39 AM

Give that man (or woman)a cigar. You nailed it.

Jarhead68 on October 5, 2010 at 10:56 AM

People are easier to control when they have no money.

toongoon on October 5, 2010 at 9:39 AM

None of Czar Nicolas’ descendants were available for comment on this point.

Kafir on October 5, 2010 at 11:21 AM

canopfor on October 5, 2010 at 9:49 AM
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Trying my best..:)..But 401-K plan (mine at least) can’t stand another massive hit..

Dire Straits on October 5, 2010 at 9:53 AM

Dire Straits:Joking aside,your right,but all the talk is
pointing to another one–ugh!:)

canopfor on October 5, 2010 at 11:36 AM

Upside: If they don’t extend the Bush Tax cuts There will be another wave in 2012 that should pretty much do in the Democratic Party..:)

I agree with the ‘should’ part. However, if Pubs take control of at least one house of Congress, if the tax cuts are not extended, and if the economy tanks again, Obama will blame the Republicans and their ‘policies’ for the new downturn. Yes, it will be a shallow and transparent strategy, but Obama is a pretty shallow guy. Everyone should be prepared to spend the next 2 years fighting these ridiculous charges, because Obama will spend the next two years pointing a cynical finger at the Republicans.

joejm65 on October 5, 2010 at 11:43 AM

This is all so freaking depressing. This WSJ article is a great companion piece – the doomsday clock is ticking…

Buy Danish on October 5, 2010 at 9:46 AM

Great article, Danish. Thanks.

novaculus on October 5, 2010 at 12:05 PM

Just remember, tax revenue increased under the Bush tax cuts.

rbj on October 5, 2010 at 9:43 AM

Are we going to blame THIS on bush. Right NOW? Seriously.. WTF are you smoking?

upinak on October 5, 2010 at 9:45 AM

He said tax REVENUE INCREASED under Bush… that was good. Sheesh!

leftnomore on October 5, 2010 at 12:28 PM

The best precious metals come in copper, tin, lead and steel. Available in many popular sizes and now in decent supply… you can get food with them, barter and when government comes to control you then you have a 7.62% better answer for them and what they can do with their ‘control’.

ajacksonian on October 5, 2010 at 12:31 PM

The best precious metals come in copper, tin, lead and steel. Available in many popular sizes and now in decent supply… you can get food with them, barter and when government comes to control you then you have a 7.62% better answer for them and what they can do with their ‘control’.

ajacksonian on October 5, 2010 at 12:31 PM

Don’t forget the precious spices! (Unique, H110, IMR-4350, etc.)

txleadfoot00 on October 5, 2010 at 4:31 PM

Another dip? Can I get chocolate topping on my triple-dip?

ss396 on October 5, 2010 at 5:15 PM

To be fair, tax hike or cut a second collapse is coming due to the commercial real estate market, municipal bond defaults and food inflation which is being driven by factors largely unrelated to the US.

Rob Taylor on October 5, 2010 at 6:57 PM

Downside: I might use what will be left of my 401-K as toilet paper becuse another collapse would just about do it in..:(

Dire Straits on October 5, 2010 at 9:39 AM

We’re working on buying a house right now, and we’ll have to strip my husband’s rather meager 401K for our share of the closing costs, but right now, I think we’ll get much much more long term out of that money using it for a house with a much lower PITI payment than our current rent, than we would leaving it in the 401 till he retires in 9 years.

LibraryGryffon on October 5, 2010 at 7:54 PM