27 Feb 2009

How Not to Handle an Economic Crisis

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What should a president do when the economy is in the tank and investor confidence has collapsed? Why, wage class warfare and soak the rich, of course! It worked so well for FDR, after all.

The New York Times rejoices that Obama and the democrat Congress are “sweeping away” the ideas of Ronald Reagan and breaking with policies that led to three decades of growth and prosperity.

After all, Socialism has worked out so well everywhere it’s been tried.

The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.

The Obama budget — a bold, even radical departure from recent history, wrapped in bureaucratic formality and statistical tables — would sharply raise taxes on the rich, beyond where Bill Clinton had raised them. It would reduce taxes for everyone else, to a lower point than they were under either Mr. Clinton or George W. Bush. And it would lay the groundwork for sweeping changes in health care and education, among other areas.

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational gains.

Bob Krum remarks sardonically:

Barack Obama’s plans to hyper-inflate the government bubble while he taxes the rich at confiscatory levels, is so certain to collapse the economy that I can only conclude that he is a brilliant Rovian plant whose purpose is to finally drive a stake into the heart of the era of big government.

I only hope the nation survives that long.

One Feedback on "How Not to Handle an Economic Crisis"

Scott D

The problem is that government works like a ratchet. It only gets bigger. You can never make it smaller. All conservatives are able to do at any point they have control is stop turning the ratchet. And as we saw during the Bush administration, they are not even inclined to do that.
The Obama administration will, I believe, be successful in reducing income inequality because equality in income is inversely related to the rate of growth. By slowing growth, income disparities will shrink. Everyone will be worse off than if we were pursuing high growth strategies, but, heck, isn’t the important thing that we are all more nearly worse off?


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