Know Your ‘Rich’ Economic History

by CalWatchdog Staff | January 17, 2012 2:03 pm

Katy Grimes: In order to fully comprehend how California residents will be impacted even more by Democrats in the near future, we need to look at the economic condition of the entire country, and put our economic history into context.

Under the policies of President Barack Obama, America has suffered the longest period of unemployment near 9 percent or higher since the Great Depression. Many economists say that the unemployment rate is really hovering at 11 percent, and that the Obama administration has been jockeying the numbers[1] to make it look more favorable.

[2]

However, unemployment was 5 percent or less under President George Bush before it began to rise in his last two years in office. After Barack Obama was elected, unemployment kept rising to above 10 percent, before it began a slight decline. In particular, jobs growth slowed[3] after Obamacare passed in 2010.

“Unemployment will come down when the rate of business startups and expansions increases,” explained the Heritage Foundation[4]. “Such entrepreneurship cannot be centrally planned from Washington. However, the government can and should remove barriers it imposes that harm business prospects.” Nor can California’s recovery be centrally planned from Sacramento.

The president has already signed into law increases[5] in the top tax rates of nearly every major federal tax in current law for 2013.

Adding to the increasing tax burden, the Bush tax cuts expire in 2013. President Obama has refused to renew the tax cuts for singles with income over $200,000 per year, and couples with income over $250,000 per year — the new definition of “rich.” Who does this hurt? Job creators, small private investors, and small businesses.

“But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again,” Obama said in a speech[6] last April about the Bush tax cuts.

A recent story in Forbes[7] by policy analyst and lawyer Peter Ferrara explained, “When the tax increases of Obamacare become effective in 2013, if the Bush tax cuts just expire for these upper income taxpayers, the top two income tax rates will jump nearly 20 percent, the capital gains tax rate will soar by nearly 60 percent, the tax on corporate dividends will nearly triple, and the Medicare payroll tax will leap by 62 percent for those disfavored taxpayers.”

Just living in America in 2013 is going to be a great deal more expensive because of federal taxes. Added to the federal tax increases, what will happen in California if the Democrats have total control of the state’s checkbook could be devastating and just too expensive for any remaining small business owners and the middle class.

Given California politicians’ obsession with always being ahead of the rest of the country, if all goes according to state Democratic central planning, it appears that Californians will be much farther ahead on the road to a full blown government takeover than the rest of the country.

[8]

California’s propensity for borrowing to keep government going without commensurate cuts to state spending means that the state’s economy will only sink deeper into the bottomless black hole of debt.

History has proven time and time again that only with private-sector spending does economic stimulus occur. And history has proven that government borrowing and government spending do not stimulate anything except government jobs and government expansion.

JAN. 17, 2012

Source URL: https://calwatchdog.com/2012/01/17/know-your-rich-economic-history/

---