Obama Says Middle Class is Under Assault: Duh!
President Obama promised to aid the middle class today and said that the middle class has been “under assault”. Congratulations, Mr. President – you are starting to get it. The middle is under assault – by the government!
On the one hand Government loads up the their favorite corporations with fat government contracts, monopoly privileges and bailouts. Public employees are gauranteed fat pensions and lavish benefits. On the other hand the poor get ever-increasing government benefits. Entitlements, by the President’s own admission are on a trajectory to bankrupt the Federal Government. Paperwork, regulation and mandates kill small businesses and jobs.
Then to that witches brew just add a series of bubbles created by the Federal Reserve and grand-standing legislators who are always ready to buy votes with tax-payer dollars.
If the President really wanted to help the middle class – and everyone else he would get the government out of the way by slashing spending, taxes, regulation and mandates. He would demand that the Fed be audited and he would demand a stop to printing money out of thin air.
Let’s look at the last time the US economy was in this much trouble and how it was fixed.
During the Carter recession we had comparable unemployment and inflation and interest rates that were much worse. I was graduating from college and everyone was telling us that the US had peaked out and that we would never have the standard of living our parents had. The future looked pretty grim.
Then Ronald Reagan cut taxes by 25% and Paul Volcker limited growth in the money supply. Inflation was beaten and the economy came roaring back. Federal revenues grew dramatically despite dramatically lower rates. It wasn’t perfect. Government spending increased more than revenues (surprise!). We had a few wars we didn’t need (like anyone ever needs a war). And once Volcker was gone we never saw anything like sound monetary policy again.
Even the Keynesians admit that tax cuts stimulate the economy. But no one in government is talking about tax cuts now. Oh sure, the President will dribble out little tidbits to the groups he thinks he can buy with their own money. But it’s large, predictable, permanent tax cuts that allow consumers to plan their futures and that allow businesses to plan for growth.
The President’s stimulus plan isn’t creating any economically viable long-term growth. At best it will take money from economically viable Peters to pay politically favored Pauls.
President Obama – it’s time to admit your mistakes – cut taxes and spending and let American workers, consumers and businesspeople do what they do best – take care of themselves and help everyone around them in the process.