Friday, January 29, 2010

Tax-Tax-Tax, Spend-Spend-Spend

The day after President Obama’s State of the Union, Congress went ahead and passed a $1.9 trillion — that’s right, $1.9 trillion — increase in the federal government’s debt limit. Let me tell you why this bothers me.

First, in order to avoid bankruptcy, it means future tax rates are going to have to go up. Second, Mr. Bernanke bought a lot of our debt in 2009. That brought down the dollar and hiked the gold price. So, has Washington set us up for major inflation in the years ahead?

The Obama White House saved Bernanke’s floundering re-confirmation bid with a flurry of last-minute pressure and phone calls. Does that make the Fed head Obama’s man? Forty-seven Democrats voted for him. And only 22 Republicans voted for him. Are Democrats the easy-money party? I’ll let you decide.

Meanwhile, President Obama basically stood by his agenda in his address. There was no Sen. Scott Brown burning-bush epiphany. Obama wants to raise taxes on foreign corporate profits. That’s a very bad idea. It’s bad for growth, bad for jobs, and bad for stocks. And it’s protectionist.

Obama whacked banks and is standing by his bank-tax hike, which actually will reduce bank loans in the future. He did not extend the Bush tax cuts on capital and investors. He stayed with big-government health care, implying all the over-spending and over-taxing that goes with it.

He stayed with cap-and-trade. Yet another mammoth tax hike. He even took an ill-advised and uninformed whack at the Supreme Court.

And you know what? His teensy, tiny, temporary tax credits for small businesses are not real incentives. They are just a form of government spending. That’s why they won’t produce growth and jobs.

It looks to me like we’re still on the course of tax-tax-tax and spend-spend-spend. It’s a sorry mix for stocks and economic growth.

I’d hoped to see a bigger spending freeze and real limits for small government. And I still believe a policy of across-the-board tax cuts — which Obama refuses to look at — is still the answer for jobs and growth.

On that score, check out Scott Brown’s response to Obama’s State of the Union speech:

Bold action means broad-based tax cuts for families and businesses to create
jobs and not merely targeted tax relief. Bold action also means major reform and
restructuring to actually cut spending and not just freeze it.

Well, I couldn’t have said it better myself. In fact, I have said it about a thousand times.

Tea-party, free-market populism.