Northwoods gal’s Blog


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Taxes, Money, and Obama, I have many questions

I am doing research on all this money Obama wants to give out on the basis of tax cuts. Also so much of this bail out I still do not understand? How can we just keep on printing all this money and think that our dollar will remain strong? With being trillions of dollars in debt, how can we even afford to cut taxes after we gave horrendous amounts of money with the bail out?

“Sure, that’s a tax cut “only” in the hundreds of billions. But consider: President Bush’s first tax cut, $1.35 trillion over 10 years, delivered $174 billion in tax relief in its first two years. Obama is nearly doubling Bush’s cuts that were denounced by Democrats as recklessly profligate. Bush’s second tax cut in 2003 cost $350 billion over 10 years. Obama is engaged in shameless fiscal logrolling, hoping to pick up Republicans by devoting roughly 40 percent of his plan to tax cuts.”

Why is it that Obama can do the same thing that Bush did, and yet he is “the one,” while Bush was called “reckless?”


“They are characteristic Obama tax cuts, with a strong whiff of spending about them. He wants to give people $500 tax credits — a version of the $131 billion stimulus that didn’t work in early 2008 — and throw a bunch of tax benefits at business, including a credit for hiring. None of this is as straightforward — nor will it provide as much economic benefit — as simply cutting the payroll tax for working people or cutting the corporate tax rate for business.”

Bush tried the stimulus package, it worked for awhile and did give a little boost. How is trying this again going to help us in the long run?

“Even with tax cuts absorbing some of his plan, Obama is testing the outer limits of spending. The federal government spends about $60 billion a year on transportation and other sorts of infrastructure. As Harvard economist Edward Glaeser points out, doubling that amount still “would represent only 8 percent of a $750 billion package.”Obama might be reduced to the expedient suggested by John Maynard Keynes of burying money in bottles and then paying people to dig it up (some of the projects on the “shovel-ready” list compiled by the nation’s mayors are only marginally less foolhardy.”

“During the campaign, Obama was careful always to say — less than honestly — that his spending proposals were paid for. Now, it doesn’t matter.”

It seems nothing he said when he was campaigning does matter now. Nor has he told us how he will fix the state we are in now. I mean I can go and stand on a stage and say I will bring down the huge debt we are in. And now it looks like with no experience I can be the head of the CIA. I forgot, Obama is “cool” and looks good in his swimming trunks.

The Congressional Budget Office is about to release a new estimate of the “baseline” (i.e., if nothing changes) budget deficit of roughly $950 billion annually. That’s before Congress does anything else this year, when it’s about to disgorge Obama’s stimulus plan, and before Obama has even embarked on his expensive campaign promises in earnest.

The stimulus spending — or most of it — will eventually disappear, and Obama will have to raise taxes. The fiction of his campaign was that repealing the Bush tax cuts on the rich would pay for everything. Repeal probably gets $50 billion a year, which in Washington’s newly adjusted fiscal lexicon is negligible. It takes a trillion to get anyone’s attention. And “quadrillion” comes next.

I am learning a bit more. I think that is the big difference. Those of us who want to learn and to know the truth. I in no way call myself an expert on any of this, I just want to learn.


Filed under: News Bites

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