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Obama Declares War on Investors, Entrepreneurs, Businesses, And More

In big government, Democrats, Larry Kudlow, nationalized medicine, Obama, socialism on February 28, 2009 at 10:10 pm

We’ll say it Larry ,”we told you so”

Posted By: Larry Kudlow Anchor
cnbc.com 27 Feb 2009 04:39 PM ET

http://www.cnbc.com/id/29434104

Let me be very clear on the economics of President Obama’s State of the Union speech and his budget.

He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.

That is the meaning of his anti-growth tax-hike proposals, which make absolutely no sense at all — either for this recession or from the standpoint of expanding our economy’s long-run potential to grow.

Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obama’s left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spending program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years.

This is nearly double the government-spending low-point reached during the late 1990s by the Gingrich Congress and the Clinton administration. While not quite as high as spending levels in Western Europe, we regrettably will be gaining on this statist-planning approach.

Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more. Obama is doing it wrong on both counts.

And as far as middle-class tax cuts are concerned, Obama’s cap-and-trade program will be a huge across-the-board tax increase on blue-collar workers, including unionized workers. Industrial production is plunging, but new carbon taxes will prevent production from ever recovering. While the country wants more fuel and power, cap-and-trade will deliver less.

The tax hikes will generate lower growth and fewer revenues. Yes, the economy will recover. But Obama’s rosy scenario of 4 percent recovery growth in the out years of his budget is not likely to occur. The combination of easy money from the Fed and below-potential economic growth is a prescription for stagflation. That’s one of the messages of the falling stock market.

Essentially, the Obama economic policies represent a major Democratic party relapse into Great Society social spending and taxing. It is a return to the LBJ/Nixon era, and a move away from the Reagan/Clinton period. House Republicans, fortunately, are 90 days sober, as they are putting up a valiant fight to stop the big-government onslaught and move the GOP back to first principles.

Noteworthy up here on Wall Street, a great many Obama supporters — especially hedge-fund types who voted for “change” — are becoming disillusioned with the performances of Obama and Treasury man Geithner.

There is a growing sense of buyer’s remorse.

Well then, do conservatives dare say: We told you so?

http://www.cnbc.com/id/29434104

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  1. He’s a very dangerous man, indeed. Extremely dangerous to our Republic and to the freedom of its citizens from the yoke and authority of government.

    He is also playing a very dangerous game.

  2. those of you who voted for him AXED for change and you got it

  3. And I say Larry, “Bring it on”.
    You republicans just do not get it! Your fundamental belief the completely free market is the basis of everything that is good in the world has been discredited, BIG TIME, by the excesses of the moneyed classes over the last 8 years. Greedy investors, large corporations, and private-equity and venture-capital funds (especially) have piled money unto themselves and screwed it up for the 98% of the rest of us. Their excesses have distorted society and show that pure self interest, unfettered by regulation leads to chaos.
    Social spending is NOT pejorative if restores the balance to a more sustainable of equitable society. The founding fathers did not ever envisage 90% of the wealth being owned by 5% of the population. They expected that the middle class would be strongest class – this not the case today.

    Remember, when this distortion occurred in France the French revolution restored the balance by clopping off many heads! Social unrest was not out of the question if the situation was allowed to continue.

    Many of us hope that “hedge-fund” types will one day become like the dodo bird – a lazy, slow moving creature, only interested in getting fatter and that is now extinct.

    Then, the genuine investor (not speculator), entrepreneurs, small businesses owners will thrive, create jobs and be the catalyst for wealth creation across ALL of society.

  4. Fasten your seat belts, it’s going to be a bumpy ride.

  5. social spending is a waste of money period for every dollar spent by the Gov only about 3 cvents gets out the door

  6. Social spending for lazy, greedy idiots who dropped out of school while I was busting my butt studying physics…

    Yea, bring it on!

  7. yesw obamas budget rewards sloth

  8. 9:31 AM

    If there really is a wealth gap in this country it has been caused by a few things. One opinion is that one of main catalysts was the inflated price of housing which was caused by cheap and available credit.

    The average Joe makes $75,000 a year; by standard mortgage eligibilty formulas he should only be buying a $225,000 home. But Joe buys a $400,000 home anyway and he’s immediately behind. His $75,000 a year is immediately less household income, since he is paying a mortgage that proportionality too high for his monthly budget.

    To your next point, not everyone was making money in this country on Wall Street. Plenty of folks in the 33% tax bracket (those making over 201,000 and “wealthy” by Obama standards) own restaurants, stores, small business, and etcetera. This new rhetoric that everyone who has made money is a hedge fund managers is stupid.

    5% of this country pays 70% of the taxes. Where is the equity in that? Why is it more equitable that the 5% should now pay 75% of the taxes? Who decided what is fair?

    You voted for Obama because you wanted the government to help people. Give them health care and a quality education. If the United States government was a charity you’d see that every dollar donated by tax payers resulted in less than .05 cents to each needy citizen. Would you give to that charity?

    If you really wanted to help the poor, you would give them vouchers so they could get their kids out of the worst public schools in the country. The true democratic crime in this country is refusing to provide the poor with a quality education. Please don’t make the argument that we need to spend more money, we already spend more than any other nation and we are still behind. Are American kids stupider than the kids in Singapore and South Korea?

    And then there is health care. You are going to see the government take over and limit the amount of “expensive” treatments for illness. The United States leads the world in cancer treatment and prevention because our current system is the only one willing to pay for expensive preventative tests and chemotherapy. In England they give you some morphine and tell you to settle your affairs. (Yes they do, I’ve know folks with relatives there with lung cancer who didn’t get chemotherapy. The assumption is that you are probably going to die, so why bother.)

    Lastly, there is a symbiotic relationship between business and government which democrats keep missing. Twenty percent of New York states budget came from Wall Street, where do you think the shortfall will come from now. Higher NY State income taxes and higher NY State property taxes which will be put on all tax brackets, not just the top 5%.

    All those bad, bad big businesses are going to pay a lot less taxes this year because they aren’t making money this year. That means you will be paying more personally.

    But hey, you’re a democrat, you like taxes.

  9. Obama is a Socialist, with Marxist tendencies. Have you guys figured it out yet?

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