Economic Realities

A couple of predictions for the economy over the next two years - both of which will have a potential impact on the Obama Republicans:

1) The expiration of the Bush tax cuts will lead to an immediate, but temporary influx of new cash to the government and a decline in private capital. This will be followed within a year with an increase in unemployment as privates small businesses lay off employees. The deficit will not go down because government spending will most likely increase - the Obama Republicans are probably not going to do anything about the Obamacare.

2) What little funding increase cuts the Obama Republicans do push through, right now a measly $100 billion, could lead to a decline in the economy because so much of it is now dependent on government spending - a la FDR.

The fact is, the government does NOT need more money to function, it needs to cut spending and not just increases in spending, but the baseline - whole programs and agencies need to be cut from the federal budget. By revoking completely and not replacing it with Republican Care - Trillions of dollars can be saved, but it doesn't decrease our current spending levels.

The sad fact is that none of the programs proposed by the Obamacrats or the Obama Republicans does anything to help the middle class. The majority of the Obama economy has been about wealth redistribution - from the middle class to the welfare class. The top 1% - the small percentage that are really wealthy - are relatively immune to the Obama's shenanigans, they have their wealth and new money doesn't change that much so you could take a few extra bucks out of their paychecks to help pay for government. But since the majority of the 1% are small business and not zillionairs then you do risk increasing unemployment in both the welfare class and the middle class.

No economic policy should be about keeping individuals happy where they are - the intent is for people to strive to move up the economic ladder and not stay where they are. By not taxing the welfare class the government provides no incentive to move up. By increasing taxes on the middle class and upper middle class then they become trapped, unable to move up, and in many cases they move downward as the upper class hold more and more of the country's wealth.

We could always go back to the pre-Reagan taxes for the upper income brackets (top 1%) - 70+% tax rates. This won't change their wealth much - not talking about small businesses which make up most of the upper 1% - as they have their money. It will, though, create an effective permanent barrier to upward movement from middle class to upper middle class to wealthy. It will also effectively stop the upward movement of the welfare class to the middle class.

The apparent stagnation in the welfare class has nothing to do with the current tax structure but everything to do with the government's continued policy of aiding and abetting poverty. Poverty is not caused by rich people, especially in a country like ours where everyone has the opportunity to succeed.