Friday, October 24, 2008

A Litnay of Obama's Unbridled Spending

Here are some great reasons why Obama is bad for the economy.

For example, the Obama tax plan calls for large tax increases, including raising rates on dividends and capital gains to 20% from 15%. This will make it harder for financial firms to raise private capital, and force greater reliance on public capital. Worse, his refundable tax credits will raise the share of those making no contribution to the funding of general government to 48% from 38%, hastening, perhaps cementing, the unhealthy budgetary dynamic of a majority of voters receiving more in public payments than they pay in taxes.

While Mr. McCain proposes serious spending control, achieving it would not be easy. Mr. Obama says he'll go through the budget line by line, yet proposes large increases in social spending, paid for by an assumed Iraq peace dividend. President Clinton decreased military spending rapidly (38% as a percentage of GDP), leaving major holes in our military. It's still a dangerous world; we should not repeat that mistake. Mr. Obama's Social Security proposal is to turn to taxes first and rule out even a small increase in retirement age, no matter how much life expectancy increases.

Saying he is not a protectionist is not enough; nor is saying he is cutting taxes by counting spending increases as tax cuts. He could help financial markets and the economy by pledging to delay any tax hikes until the economy is healthy and to veto any additional ones from Congress.

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