The Coming Economic Storm
by Tom Donelson on November 19, 2012 at 5:02 PM
The Obama Administration is playing chicken with the economy while hoping their friends in the media blame the GOP for any repercussions if the fiscal cliff leads to a serious recession. Let's be clear, the case is over not whether to increase taxes, per se, or increase revenues, but over the tax rates. It has become a battle of symbolism over substance, something Democrats excel at.
The Wall Street Journal editorialized that Obama wouldn’t mind us going over the fiscal cliff, since he will get his massive tax increase to fund his ever growing appetite for the growth of government. Elections have consequences and we are about to find out what happens when an immature statesman plays chicken to institute symbolic tax increases that will do little to pierce the Obama deficits but could send a message to businesses and entrepreneurs alike; America is no longer open for business.
Patty Murray, who wants to be the next head of the Senate budget committee, has made it clear that she doesn’t view it her responsibility to put a budget together, and Harry Reid has essentially given the White House veto power over the budget. Not only has Reid failed in his basic duty as a legislator by refusing to pass a budget and providing some balance between Congress and the Presidency, he has made it clear that he is perfectly willing to let the country go straight to economic hell if it benefits his Party. So far, Obama and the Democrats' failure to even consider bipartisan plans put out by those on their own side indicates the election is not over. It is a “rub in your face moment” to the Republicans and the American people be damned. Obama's attitude is, "I won, you lost, so surrender your principle and accept my superiority." A deal similar to Bowles-Simpson could be worked out. Taxes will go up, mostly through elimination of deduction, but tax rates will be lowered. There is a limit what government practically can do and what it should do. Tax rates matter since it sends a message, there is a limit we will take off the top. It's important not just for symbolism but also important for future growth as American businesses and entrepreneurs will know in advance what they need to pay Uncle Sam and what they will have left afterwards.
Obama has one thing going for him, an energy boom ready to explode. If Obama and his leftist allies can get over their beliefs that American energy development is evil and going to destroy the planet, there will be revenues coming into the government coffer. The budget deficits could be eliminated through prudence cuts and energy revenues, plus you get the benefit of America becoming an energy exporter and able to give OPEC the middle finger! Will Obama and his allies try to cripple the energy market through excessive regulations, or would they allow it to grow? An energy boom will make any President looked good; even the least knowledgeable ones on economic issues like our present President.
We are now entering what a friend of mine calls, the permanent Obama recession. After the election, we have seen the CIA director admitting, “Yeah we did know early on that the attack on our consulate in Benghazi was a terrorist act,” but only after the FBI conducted a questionable investigation into his affair. (Note for Obama voters, he lied on Benghazi.) In September, we were told that Americans living under the poverty line would drop slightly, but after the election, guess what? They went up and minorities hurt the worse. See what you get when you give the left 80 percent of your vote, you get screwed. Obama's “Katrina” remains invisible to most Americans as the Media reported great leadership over Sandy and failed to follow up as FEMA manages to do as badly for New York as they did for New Orleans. The Photo Op is no longer needed since the election is secure; who cares about a few bitter clingers in Staten Island? Higher unemployment, higher poverty rate, middle class income dropping month after month, New Yorkers ignored by their own government except for a high profile photo-op and an administration ready to sink the economy: see the kind of brilliance 51% voted for? My new slogan paraphrased from the cult program Firefly, "I may be on the losing side, but I am not on the wrong side."