Comments »
Before we get to what I think Americans want to hear from the President, here's what I think they are tired of hearing. I think the American people see through the "Blame Bush for the nation's ills" routine as a stale old bumper sticker, given that President Barack Obama was elected to the US Senate in 2004, Vice President Joseph Biden has been in elected office since the Nixon era, and House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid have held elected office since the ‘80s. I think Americans are done with elected officials such as Democratic Senator Max Baucus who admitted at a recent town hall meeting that he didn't read the health reform bill he co-authored ("I don't think you want me to waste my time to read every page of the health care bill. You know why? It's statutory language..We hire experts.") I think Americans see through the Democrats' push to tax earners making $250,000 or more, they know that taxing these small businesses and workers won't cure the nation's $13 trillion deficit, since the US government takes in just $2.4 trillion annually in tax revenues from individuals and companies and the fiscal dipsomaniacs now in control in DC have borrowed the rest. I think the American people know that the $40 billion in annual federal tax revenues from taxing the $250K+ crowd (which is middle class in many cities) just about covers the annual $27 billion in annual Congressional pork spending and many other subsidies given to buy votes, take your pick. And that those $40 billion in revenues would cover less than a quarter of the interest on the nation's debt. I think Americans see through the Democrats' argumentative, wrong-headed stance, that "just 3% of small businesses are in the upper bracket that will be hit with higher taxes," when tacing them "just because" means taking their $40 billion to pay for votes gained from spending on pork and subsidies, which means those small businesses won't be able to create private sector jobs that then create solid tax revenues--not the round-tripping of government workers paying taxes on taxpayer paid for wages. And that one out of every four dollars spent comes from consumers in those brackets, says Moody's economist Mark Zandi. And that when the upper brackets get taxed more, they shelter their income. And that the President and Congress really are raising taxes on the middle class via health reform--a new 3.8% Medicare tax on investment income and an additional 0.9% Medicare tax on wages. And that all that government spending will lead to inflation, pushing their income and capital gains into higher tax brackets, creating more tax bills because the AMT--which catches more of the middle class--and capital gains tax rates are not indexed to inflation. I think Americans know that the full corporate tax rates when you count federal, state and local taxes is higher than many countries in Europe, including France, and that companies don't pay those taxes, workers, shareholders and customers do. Americans know that taxing anything that moves and anything that doesn't (the estate tax) is the wrong way to go. They know that the real problem instead is that credit ratings agencies are saying the US's reckless spending may cause it to lose its Triple-A rating because more tax revenues are going to pay just interest on the federal debt, and that the ratings agencies don't want any government getting on the hamster wheel of borrowing, taxing, or printing money just to pay interest on the debt, interest now higher than 10% of annual tax revenues--fast approaching the breaking point for a downgrade. I think the American people know that fiscal stimulus quickly vanishes, that people won't make long-term decisions to buy a house or a car knowing that the artificial starch of fiscal stimulus is temporary, and that following politicians' logic on stimulus is like following someone down a highway who always has the right blinker on. That instead the private sector delivers solid, lasting jobs that are cheaper than the taxpayer paid for government jobs. And that a low tax, rational regulatory environment creates jobs--which Fed chair Ben Bernanke cited when he said today: "Firms are reluctant to add permanent employees, citing slow growth of sales and elevated economic and regulatory uncertainty." Meaning, the thousands of pages of rules for financial and health reform yet to be written--in pencil and not pen. I think the American people know that a stimulus plan targeted solely on upgrading the nation's bridges, tunnels, and highways is better to do during a recession when both capital and labor are cheapest. Or that the Reagan tax cuts or an annual payroll tax holiday are more effective and cheaper than the stimulus spending. Americans know that the withdrawal of government spending for Census workers, cash for auto clunkers, housing tax credits, or appliances has distorted and whipsawed the stock market. Americans know that former Federal Reserve chairman Alan Greenspan's argument is absurd, when he says that the Fed can't spot or prick asset bubbles, when the Fed fixes asset bubbles by creating even more bubbles. And that the government should have told the banks: "In exchange for massive taxpayer handouts and cutting interest rates to let you coast the yield curve to profitability, you must cut the principle payments owed on the reckless bubble era mortgages you gave." Americans know in their heart of hearts that we are not a soft Bailout Nation, Americans do not like to live in Handout Nation. They know that the Democrats' agenda -- government stimulus, trillion-dollar deficits, new costs on employers for health care, the prospect of tax hikes in January - has not lowered the unemployment rate to even the sweet-looking 8.2% in February 2009%. So here's the speech I wrote for the President in January 2009-here it is again, with minor updates: My fellow Americans, We are a great nation now caught in what feels like a vise-like grip of a protracted, sobering financial crisis. But know this, nothing, not even this crisis, can stop the powerful engines of the US economy. The last century saw more than a dozen such crises, and each time we pulled through. Americans have stared down adversity time and again with courage, and we have alway pulled through. And know this, we will pull through this one together, because we are a land of freedom and opportunity, of courage and daring. We are a nation filled to brimming of a kind, generous and gifted people, a people of compassion, a people of fire-tested gold, to quote St. Peter. We are a nation that believes compassion, liberty and the entrepreneurial spirit are as vital as oxygen. And we are a nation that has proven time and again that the might and power of the human heart can withstand any blow, any financial hurricane, that comes our way. And because we are a forgiving people, I ask you to bear with me. I have humbly changed course. Yes, I have fallen prey to the quick adrenaline shot of approving massive government spending, I have not listened enough to the calamitous revelations of self-examination, of discovering how wrongheaded these moves can be. The Renaissance scholar Montaigne, like the great scholar Socrates before him, once said that ignorance aware of itself is the only true knowledge. I see that now. I see now that high-tax, big-spending policies force any economy to lose momentum as they have done in Europe, where growth in government spending outstrips revenues and rates in productivity. Where fiscal and trade deficits soar. Where public debt, excessive taxation and unemployment have followed. Where central banks try to solve the problem by printing money. Where international competitiveness was hurt, the currency depreciated, and their economies, and their nations, fell moribund. I remember the leadership of those who, by the force of their electrifying will and courage, stared down these problems. How Margaret Thatcher took on the unions, privatized and slashed taxes to restore growth and jobs in Great Britain, despite more than 350 economists telling her no, virtually shouting at her to stand down. I remember, too, how Germany a few years ago under Social Democrat Gerhard Schroeder defied his party's dogma and loosened labor's grip on the economy. How Presidents John F. Kennedy and Ronald Reagan saw that a tax system that had grown like kudzu was smothering your financial lives, and was strangling growth. I remember what John F. Kennedy said, that "an economy hampered by restrictive tax rates will never produce enough revenue to balance our budget, just as it will never produce enough jobs or enough profits." I know that we in government stand down, you stand up. That's is the exhilirating heart of the American people. I see my original tax cut plan didn't go far enough. I see how easily my spending plans have derailed. The fundamental problem--too much debt, too many cars, too many houses, now too many dollars to fix those problems--still plague the economy. Again, I remind you my fellow Americans, that history shows, as well as study after study, that those who believe that big government spending can save us, that only "investments" made by politicians produce returns, have been proven wrong. Numerous studies show tax cuts provide a quicker and in fact bigger bang for the buck, along with targeted fiscal help for the private sector. I now pass the baton to the private sector. I have humbly decided to keep all of the Bush tax cuts. I do that to help the economy, and to help Americans who have saved and invested their hard earned dollars and who didn't consume beyond their means, because I do not want to force them to pay the tab for those who did. Remember, 12 Senate Democrats voted for the same Bush income tax cuts in 2001, cuts I vilified during my campaign. These Democrats saw how they would help small businesses create jobs. Remember, Democratic Senator Max Baucus of Montana said this along with Senator Chuck Grassley in voting for the 2001 Bush cuts: "Entrepreneurs and small businesses ... will receive 80 percent of the tax relief...Experts agree that lower taxes increase a business' cash flow, which helps with liquidity constraints during an economic slowdown and could increase the demand for investment and labor." What the good Democrat said here is that lower taxes on small businesses can create jobs. And I was wrong to say in my campaign I wasn't going to raise taxes on the middle class, when in fact I have. I have decided to kill health reform's higher taxes on the middle class, and I have decided not to rescind the Bush capital gains tax cut. I will not raise capital gains taxes, because I see many middle class Americans live off of their capital gains, I see that a capital gains tax hike will hurt middle class elderly people, retiree pensions and middle class retirement savings in things like 401ks. I see, too, that higher capital gains taxes cause people to sit on potentially bad stocks, as they seek to take advantage of lower, long-term rates. Yes, I was going to raise capital gains taxes, yes, which is why I did initially call my middle class tax cut a "net" tax cut, I admit, I tried to whip a fast ball by you, I'm sorry. I was wrong. Please forgive me. I was also wrong and misleading when I said that small business owners will not be affected by my tax hikes on the upper brackets, when I said most small businesses would fall under the income threshold I wanted to raise taxes on. When the Senate Finance Committee found that of the filers in the highest two tax brackets, three out of four are small business owners. And of those, 50% of businesses have employees with 20 to 249 workers who would pay the higher taxes under my initial tax plan. These are the businesses that are the engines of job growth in this country. So my initial plan was not right--I really do want to help small businesses create jobs. Again, when we in government stand down, you stand up. And from the bottom of my heart, I humbly thank you for that. We are a people guided by what is right and good and real and true, we are in the service of justice, the service of each other. I thank you for giving me the honor of serving you. God Bless you, and God Bless our great country, America.
Elizabeth MacDonald is the stocks editor for Fox Business Network. She is recognized as one of the top prize-winning business journalists in the country, and has received 14 awards, including the top prize in business journalism, the Gerald Loeb Award for Distinguished Business Journalism, and the Newswomen's Club of New York Front Page Award for Excellence in Investigative Journalism.
Subscribe to Posts
August JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember
2010 200820092010
Advertise with us | Jobs at FOX Business Network | Internships at FBN
Terms of use. Privacy Statement. For FOXBusiness.com technical issues write to foxbusinessonline@foxbusiness.com; for all other feedback, write to feedback@foxbusiness.com.
Quotes delayed at least 15 minutes. Market Data provided by Interactive Data (Terms & Conditions). Powered and implemented by Interactive Data Managed Solutions. Company fundamental data provided by Morningstar. Earnings estimates data provided by Zacks. Mutual fund data provided by Lipper. Economic data provided by Econoday. Dow Jones & Company Terms & Conditions.
This material may not be published, broadcast, rewritten, or redistributed. © 2010 FOX News Network, LLC. All rights reserved.
Read Full Article »