November 14, 2010
President Obama’s defeats did not just start with the 2010 midterm election results. They started in December 2008, when President-elect Obama said “deficits don’t matter”. Well, he discovered that deficits do matter, because the American people were paying attention. They overwhelmingly rejected the runaway spending of this administration and this Democrat-controlled Congress.
President Obama suffered another loss when the nearly $1 trillion stimulus spending bill did not stimulate anything but more government jobs, while the unemployment rate went up and stayed up. The American people knew we could not spend our way to prosperity, but the president ignored that fact.
President Obama also discovered reluctantly that the American people do not like unpopular legislation shoved down their throats. Many of the members of Congress who walked the plank for Obama to pass health care deform legislation were sent into early retirement, which resulted in Republican control of the House of Representatives.
Now the big debate going into the lame duck session of Congress with spilt control of Congress is whether the existing tax rates will be extended for all, extended for no one, or extended for only those making less than $250,000 per year per couple. The latter is the position of the president.
If he prevails and the rates are set for a limited period of time, the uncertainty for private sector businesses will only be extended for that same period of time. Tax rates need to be made permanent in order to reduce economic uncertainty.
If the president agrees to make the tax rates permanent for everybody as the Republicans are proposing, he would be truly acting in the best interest of the American people for the first time in his presidency. If he does, I will be among the first to applaud his decision.
But if he chooses to let the tax rates expire for all income brackets as a political move because the Republicans will not support his tax the rich proposal, this economy will go into a further tail spin and he will blame it on the Republicans.
Fifty percent of those making over $250,000 a year are small business owners. This means the economy would stall even more and the unemployment rate would go higher. Just like the Obama Administration did not think the stimulus spending would fail, they do not believe that raising taxes on the job creators will backfire and negatively affect the economy.
Rather than sending this economy into a full scale depression if tax rates go up for everybody, I say let Obama win one! We would only have to endure these failed policies and this economic insanity for another two years. Some businesses will not be able to survive because they are barely surviving today. But many businesses would find a way to hold on until we make a change in control of the Senate and the White House.
The president’s passage of the health care bill was not a victory. It was a resounding defeat, because the majority of Americans did not agree with it and the disagreement grows stronger day by day as people discover more and more of “what’s in the bill” as Nancy Pelosi proclaimed before it was passed.
The stimulus spending bill has been a resounding failure. Just ask those members of Congress who did not mention it in their re-election defeat campaigns.
Even the president described the 2010 midtern elections as a “shellacking”. He’s right. Let’s hope he learned something. If not, let him win one on extension of the tax rates and tell the people what to expect.
We can expect more economic pain until there is a change in the White House.