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Pitchfork Time

Comment

In his campaign and inaugural address, Barack Obama cast himself as a moderate man seeking common ground with conservatives.

Yet, his budget calls for the radical restructuring of the U.S. economy, a sweeping redistribution of power and wealth to government and Democratic constituencies. It is a declaration of war on the Right.

The real Obama has stood up, and lived up to his ranking as the most left-wing member of the United States Senate.

Barack has no mandate for this. He was even behind McCain when the decisive event that gave him the presidency occurred — the September collapse of Lehman Brothers and the market crash.

Republicans are under no obligation to render bipartisan support to this statist coup d'etat. For what is going down is a leftist power grab that is anathema to their principles and philosophy.

Where the U.S. government usually consumes 21 percent of gross domestic product, this Obama budget spends 28 percent in 2009 and runs a deficit of $1.75 trillion, or 12.7 percent of GDP. That is four times the largest deficit of George W. Bush and twice as large a share of the economy as any deficit run since World War II.

Add that 28 percent of GDP spent by the U.S. government to the 12 percent spent by states, counties and cities, and government will consume 40 percent of the economy in 2009.

We are not "headed down the road to socialism." We are there.

Since the budget was released, word has come that the U.S. economy did not shrink by 3.8 percent in the fourth quarter, but 6.2 percent. All the assumptions in Obama's budget about growth in 2009 and 2010 need to be revised downward, and the deficits revised upward.

Look for the deficit for 2009 to cross $2 trillion.

Who abroad is going to lend us the trillions to finance our deficits without demanding higher interest rates on the U.S. bonds they are being asked to hold? And if we must revert to the printing press to create the money, what happens to the dollar?

As Americans save only a pittance and have lost — in the value of homes, stocks, bonds and other assets — $15 trillion to $20 trillion since 2007, how can the people provide the feds with the needed money?

In his speech to Congress, Obama promised new investments in energy, education and health care. Every kid is going to get a college degree.

We're going to find a cure for cancer.

Who is going to pay for all this?

The top 2 percent, the filthy rich who got all those Bush tax breaks, say Democrats. But the top 5 percent of income earners already pay 60 percent of U.S. income taxes, while the bottom 40 percent pays nothing.

Those paying a federal tax rate of 35 percent will see it rise to near 40 percent and will lose a fifth of the value of their deductions for taxes, mortgage interest and charitable contributions.

Yet, two-thirds of small businesses are taxed at the same rate as individuals. Consider what this means to the owner of a restaurant and bar in Los Angeles open from noon to midnight, where a husband and wife each put in 80 hours a week.

At year's end, the couple finds they have actually made a profit of $500,000 that they can take home in salary.

What is the Obama-Schwarzenegger tax take on that salary?

Their U.S. tax rate will have hit 39.6 percent.

Their California income tax will have hit 9.55 percent.

Medicare payroll taxes on the proprietor as both employer and salaried employee will be $14,500. Social Security payroll taxes for the proprietor as both employer and employee will be $13,243.

In short, U.S. and state income and payroll taxes will consume half of all the pair earned for some 8,000 hours of work.

From that ravaged salary they must pay a state sales tax of 8.25 percent, gas taxes for the 50-mile commute, and tens of thousands in property taxes on both their restaurant and home. And, after being pilloried by politicians for having feasted in the Bush era, they are now told the tax deduction they get for contributing to the church is to be cut 20 percent, while millions of Obama voters, who paid no U.S. income tax at all, will be getting a tax cut — i.e., a fat little check — in April.

Any wonder native-born Californians are fleeing the Golden Land?

Markets are not infallible. But the stock market has long been a "lead indicator" of where the economy will be six months from now. What are the markets, the collective decisions of millions of investors, saying?

Having fallen every month since Obama's election, with January and February the worst two months in history, they are telling us the stimulus package will not work, that Tim Geithner is clueless about how to save the banks, that the Obama budget portends disaster for the republic.

The president says he is gearing up for a fight on his budget.

Good. Let's give him one.

Patrick Buchanan is the author of the new book "Churchill, Hitler and 'The Unnecessary War." To find out more about Patrick Buchanan, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 2009 CREATORS SYNDICATE INC.



Comments

2 Comments | Post Comment
Sir;...Up to nearly the last moments before the election, the Republican candidate and president were both calling the economy fundamentally sound...Were they lying, or to their minds, telling the truth??? .Is failure for the small, the middle class and working classes what they truly desire, and find sound???Now we find, after the election, that they were just blowing burrs up our butts...Now we find that the systemic problems of the economy which have been growing from the days of Reagan are coming home to get well, or die...Who else can fix them but the government???And what does moderation have to do with a radical problem??? Have you ever had a moderate toothache, or heart attack, or kidney stone??? Would you then want a moderate solution, and a moderate doctor???The economy has been in serious troubles for many years...Reagan fed the monster deficits, and it was quiet for a while... But the systemic problems of the economy have been growing, with panics, and meldowns and bailouts every few years...Underlying all these problems is the fact that wealth has been sucked out of the lower classes, and the public, and deposited with the upper class.... Having no sense of patriotism, they have exported much of our capital thinking they could import endlessly into this country... They took too much.... They counted on self restraint as a class which they could not demonstrate as individuals... All they know is money....Were they moderate in their profits??? You may have been a Catholic....You may know how the church lost ground over the notion of Just Profits... Profit knows no justice... They know only more, and more.... So what if Mr. Buchanan wants a moderate solution to a radical problem????The king of England wanted a moderate American Revolution....Louis, in Franch and the Czar in Russia wanted moderate revolutions.... But when moderate change had a chance, it was denied.... So, if you do not think change is called for, any change will seem radical....Let me tell you the true problem.... The change needed in this country is nothing short of revolutionary.... We cannot fix an amputation with a bandaid.... The rich have amputated our wealth, public and private; and in the hands of the rich it ruins our economy... Our problems are not only radical, but chronic.... These problems have been in our faces, and long denied.... Now we have to face reality... And the right wants radical change as much the left.... The left demands economic justice, and the right seeks moral justice; but the rich only want things as they are with the left and right at odds, and at loggerheads.....It is for that reason that they resist all essential change.... They simply do not want that genii out of the bottle...Thanks...Sweeney
Comment: #1
Posted by: James A, Sweeney
Tue Mar 3, 2009 5:00 AM
Byuke you are a pristine example of how perniciously denial works to turn the human psyche into rationality's greatest enemy. The stock market cannot begin to presage a recovery until the true market really hits a bottom that's real, not make believe. Right now, that bottom can't be found until the market can figure out the actual value of all of those deliberately opacified assets the banks and the stock market itself have sold us like the trinkets Europeans sold to the Indian tribes in exchange for North America. And how little those trinkets are worth is not going to be admitted for a long time because your buddies have done such a find job of hiding their true worthlessness. You really don't get how much these guys have ripped off you and your kids and their kids and their kids and theirs. You can't rationally blame that on our president. Since you're talking stocks, by the way, you should learn a little about the significance of the "falling knife" pattern in technical analysis. Your "lead indicator" stock market began slicing through all of that toxic blubber long before Obama became president. It's still "leading", and the message is that the falling knife won't stop it's free-fall decent until it finds some bone. But the economic bone has been rotting right along with the country's educational, transportation, manufacturing, and healthcare infrastructures for a long, long, time. The market is going to fall back in short order to the levels it saw in 1994 or earlier unless our president and the other world leaders can do something to bring about the kind of massive, global spending World War II forced upon us. Not sure how much you agree with this, but that kind of war is not an option these days. So we have to spend like there is a war, and I don't mean W's and your phonied up war on terror. World War II deficit spending, which is what got us out of the depression and blasted us into the greatest era of prosperity the world has ever seen, was also the greatest program of government-financed and government-dominated borrowing the world has ever seen, and it wasn't limited to this country. I guess that kind of deficit spending is just fine with you as long as the money is spent on killing, maiming, and mass destruction.
Comment: #2
Posted by: Masako
Thu Mar 5, 2009 7:42 PM
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