Wednesday, December 5, 2012

The Liberal Left's Dirty Little Secret: The Middle Class and Poor Pay For the Entitlement State

Europe’s more than half century experience shows that, no matter hard you squeeze them, the rich cannot pay for a big government that guarantees all its citizens “positive rights” to income, employment, health, and retirement. Such an entitlement state – some call it a nanny state -- is funded primarily by repressive taxes on the middle class and the working poor. This conclusion is based on hard statistical facts that neither the right nor left dispute. America’s Left has kept this fact under wraps and out of sight of voters. It should have been the focus of the 2012 Republican campaign, but it was not.

Barack Obama has been busy creating and expanding an American entitlement state that he promises will be paid for by the rich. The middle class and poor need not worry about tax increases.  For the time being, Obama can rely on lenders (and the Fed) to finance the annual $850 deficits projected under the most likely CBO scenario. But the day of reckoning will come.  At some point, the “bond vigilantes” will refuse to finance the deficit at sustainable rates, and the government will be forced to cut entitlement spending or vastly raise taxes.  When that time comes, then ex-President Obama expects the entitlement mentality to be so deeply ingrained that the middle class and working poor will accept their higher taxes with little protest.

If we continue down the road to Obama’s Big Government, everyone watch their wallets. The taxman commeth, big time! Judging from Europe’s experience, we must dramatically raise income taxes on the middle class, triple social security taxes, introduce a 20 percent federal sales tax, and raise the gasoline tax by $4.00.  These taxes are all regressive, which means they fall most heavily first on the poor and then on the middle class.

If you do not believe me, an influential member of the media elite (from the New York Times editorial board, no less), let this secret slip in a remarkably candid admission. (Note his article appeared after the election):

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  1. How the history would have unfolded if President George W. Bush had used the so called projected surplus to pay-down the debt (Larry Summers's suggestion, if I am not mistaken), rather than lowering the tax rates?

    Are the Republicans really for reducing expenditure, or cutting entitlement? Didn't President Bush expanded entitlement (unfunded Medicare Part D, among other things).

  2. Republicans need leaders that inspire; e.g., the one, Senator Marco Rubio. Republicans are out of touch with the changing demographics and social issues. Governor Romney made a great choice (Paul Ryan, master of budgetary arithmetic), but not the perfect one (Marco Rubio, an inspiring story). In difficult times, hope and opportunity trumps looming static budgetary constraints. Ryan sees lower spending as the main approach to reducing deficit or stabilizing debt. Rubio sees only economic growth as the cure all. The glass is always half-full. But, on whose table?


  3. "Arithmetic on Taxes Shows Top Rate Is Just a Starting Point" By JACKIE CALMES
    Published: December 8, 2012

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