09 September 2010
Unseen Restitution
The purported failure of the Obama Administration’s economic recovery program was analyzed by James K. Glassman in Commentary Magazine (September 2010) as in part the result of the realization that it would ultimately have to be paid for with higher taxes. Well, you don’t say! The entire community deceived itself into an inevitable crisis—the banks fooled themselves into believing that the mirage of immediate returns from greater risk-taking would never disappear; the Congress fooled itself that deficit-spending on pork-barrel projects would be continuously supported by overseas lenders; lower middle-class families fooled themselves that home prices would rise forever.
The current strategy of the Obama Administration is to let the Bush income tax reductions for upper middle-class citizens expire in order to pay for the recovery program. That will probably affect 5% of the population. The trick is to combat the public relations strength of that sliver of the public, which has been successful in convincing the rest of the country that a rise in income taxes on those making more than $250K/year will have a devastating impact on everyone’s economic welfare. Yes, it will sting those higher-income groups; but they were the primary beneficiaries of the economic boom over the last ten to fifteen years. A return to more disciplined behavior forced by the state, in French president Sarkozy’s conception, is needed in order to guarantee prosperity in the long run.
The purported failure of the Obama Administration’s economic recovery program was analyzed by James K. Glassman in Commentary Magazine (September 2010) as in part the result of the realization that it would ultimately have to be paid for with higher taxes. Well, you don’t say! The entire community deceived itself into an inevitable crisis—the banks fooled themselves into believing that the mirage of immediate returns from greater risk-taking would never disappear; the Congress fooled itself that deficit-spending on pork-barrel projects would be continuously supported by overseas lenders; lower middle-class families fooled themselves that home prices would rise forever.
The current strategy of the Obama Administration is to let the Bush income tax reductions for upper middle-class citizens expire in order to pay for the recovery program. That will probably affect 5% of the population. The trick is to combat the public relations strength of that sliver of the public, which has been successful in convincing the rest of the country that a rise in income taxes on those making more than $250K/year will have a devastating impact on everyone’s economic welfare. Yes, it will sting those higher-income groups; but they were the primary beneficiaries of the economic boom over the last ten to fifteen years. A return to more disciplined behavior forced by the state, in French president Sarkozy’s conception, is needed in order to guarantee prosperity in the long run.
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