Tuesday, August 4, 2009

The Other Shoe Is Dropping

Since Obama took office in January there has been great suspense as to when the other shoe would drop. In other words, he talks a good game but this whole "no taxes on the middle class" bit wasn't going to last forever. While I have found it exhilarating trying to guess when it would happen, the not knowing is a little frightening.

I think we may not have to wait much longer. The signs are there if one looks very closely...

-Obama has been attacking Bush for the economic mess he left.

There are some who see this as nothing more than petty, small minded politics from a man who is in over his head. These people are absolutely correct. Of course, I say this because I am one of those who have said it.

I think there is more to his "the economy is worse than we thought" routine though. I have thought all along that this would be the first step in raising taxes, "the economy is worse than we thought".

He has been reminding all that would listen (which if you look at the ratings for his press conferences, there are fewer and fewer all of the time) that he had no idea that Bush left the economy in this bad of shape. Interestingly, Obama does not mention who controlled Congress for the last two years, the same last two years in which the economy started going south, or who was in that Congress.

-He is starting to waffle on whether they will raise taxes

We are now seeing articles in which reporters are saying that administration officials refuse to rule out raising taxes. Wouldn't you think that if they were not going to raise taxes they would adamantly state that. At the very least it would keep kooks like me from speculating about it.

-We are starting to see phrases like this:

Geithner was asked in the interview whether he would rule out new taxes. He said the country needs to understand the administration will do "what's necessary."

Source

Or this:

"There is a lot that can happen over time. ... But what the president has been completely clear on is that he is not going to pursue any of his priorities -- not health care, not energy, nothing -- in ways that are primarily burdening middle-class families. That is something that is not going to happen," Summers said.
National Economic Council President Larry Summers

Source

So, in other words, they don't want to primarily burden the middle class. I think this was his campaign slogan "I will not primarily burden middle class tax payers".

-They are starting to show concern for soaring deficits.

This one is ironic considering they are largely responsible for these deficits. This site is not about blame though, merely to dispense information.

Reality is setting in for Obama though. He had big plans to socialize America. The public is getting restless though about the burden we are putting on our grandchildren and people are starting to turn on his plans.

-They have a lot to pay for

This is the kicker. As I said above, he has big plans, health care, saving the Earth, re-election. These all cost money. He is starting to realize, as we all have long ago, that there are not enough multi-millionaires to tax to pay for all of this.

So what is a President to do?

Drop the other shoe.

Update: I wrote this blog early because of my work schedule. Since it's writing, these two articles have come out.

White House Says No New Taxes for Middle Class

"The president's clear commitment is not to raise taxes on those making less than $250,000 a year," Gibbs said, repeating Obama's pledge from the presidential campaign.

Which seems to dispute what I have been saying above, but...

But some Republicans say Obama already has broken his pledge not to raise taxes on the middle class.

Republicans on the tax-writing House Ways and Means Committee on Monday released a list of six programs and proposals they claim would raise taxes on the middle class -- including the tobacco tax hike and proposals to include coverage mandates in health care reform legislation.


So I will let you, the intelligent reader, decide for yourself.

Then we have this:

AP ENTERPRISE: Biggest tax revenue drop since 1932

WASHINGTON – The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation's plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession's impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government's revenues were this bleak, the year was 1932 in the midst of the Depression.

"Our tax system is already inadequate to support the promises our government has made," said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.


So, what does all of this mean? I don't know. The only advice I have is watch for falling shoes.

9 comments:

Brooke said...

One thing you can trust Obama to do is to screw us.

Gramma 2 Many said...

And duck and cover when it hits.

Chuck said...

Brooke, short and simple, nice.


Gramma, more of a bend over and kiss your a$$ good bye.

MK said...

Which ever way you look at it, due to the amount of money obama has pissed away, taxes and rates are going to have to be jacked up to pay it all back.

Sooner or later it'll have to happen, there is simply no way around it.

shoprat said...

The elder Bush and Clinton both used things are worse than I thought as an excuse to raise taxes. In defense of the elder Bush he did it as part of a compromise with the Donks (a small tax raise with budge cuts) and they reneged and he later admitted it was a mistake.

Always On Watch said...

The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation's plate and struggling to find money to pay the tab.

The numbers could hardly be more stark...


Totally predictable in this economy, yet the kumbaya ostriches who voted for BHO never seemed to realize that this was coming.

I got into a discussion with an Obamabot the other day. The ever-present theme of this economic mess is GWB's fault played into the discussion, of course. That's the only way to float the coming tax hike on the middle class.

Z said...

Chuck, I swear, we can't afford higher taxes.....period. What's the POINT of having your own business when you can't OPERATE? NO PROFIT?

Chuck said...

MK, exactly, it's inevitable

Shoprat, I cannot remember Dems actually making cuts

AOW, I think Obama's 15 minutes are up. Polls are showing people blaming his policies for the soaring deficit, just a step away from blaming him for the economy.

Z, your just being selfish, you should be working to pay taxes to support others who do not work, it's the new American way.

Randy said...

I'm sure with all the transparency Obama promised, he will tell us all about it before it comes about. I'm sure he'll post it on the web for 5 days before signing it.

Right?