It took nearly two years, but Obama has finally fulfilled his promise to be bipartisan and to compromise with the Republicans. Of course, he no longer had a choice in the manner since Democrats no longer have super majorities in Congress. The compromise allows for the extension of the Bush Era tax rates to remain valid for 2 more years, it calls for a tax break for businesses hiring workers, it redefines the death (estate) tax, and it allows for the extension of unemployment benefits. But still, Obama’s reaction to the compromise was a bit mindboggling. He blames members of his own party for not going along with the compromise and then he blames Republicans for being obstructionists (compared them to hostage takers). Obama is bitter that the compromise did not go 100% to his liking. However, that is the nature of politics and any compromise – neither party is going to be 100% happy with the outcome. So why does Obama act like a narcissistic spoiled child when things do not go his way? Generally, Presidents are happy and giddy whenever they strike a compromise. But not Obama, during his press conference he complained about the entire bartering process – hanging Congress’s dirty laundry out on TV – Something he did not do when it came to the healthcare reform compromises amongst Democrats. And what is even more confusing was the hypocrisy and misinformation he communicated during the press conference.
•Obama accused Republicans of not wanting to extend unemployment benefits. However, the truth is that the Republicans would have extended the benefits if Congress agreed to spending cuts to pay for the benefits.
•Obama says he dislikes the part of the proposal that provides tax cuts for the wealthiest Americans. Extension of the Bush Era tax rates means every American’s taxes will remain the same – no one is getting a tax cut.
•Obama stated that “all” economists agree that giving the wealthy tax breaks does not help the economy – in other words supply side or trickle down economics does not work (However, Obama declined to state that his stimulus package [a big government “Keynesian” economic policy] was a failure). However, Obama also failed to mention that many Democrats agree with the philosophy that raising taxes on anyone during a recession is a recipe for a disaster (Obama’s top economic advisor – Larry Summers – is one example – and he was forced to resigned). But in the same speech, Obama insists that extending unemployment benefits is critical to keep the economy moving. Well, Mr. President, isn’t extending unemployment benefits trickle down economics by placing the money in the hands of the taxpayers? And to insinuate that the extension of unemployment benefits will have a greater positive impact on the economy than providing tax incentives for wealthy small business owners is simply confusing. Many ill informed liberals argue that the wealthy save their money and do not spend it. It is as if placing money in the bank, or in stocks, or in mutual funds does not stimulate the economy. Remember, banks are failing at a rate of 15 per month and this costs the taxpayers billions. And let’s not forget that banks provide the loans for small businesses to expand and grow. Investments in corporations (via stock purchases) provide stability for them to obtain loans, to hire more employees, or to buy other failing companies (saves jobs). If stock prices are going up, then people are making money that will eventually be spent in the economy.
•Obama rightfully claimed that cutting unemployment benefits could have a crippling effect on many families. Yes, this is true, but why is so hard for him to see how a 5% tax increase would be crippling for wealthy individuals who run businesses – it affects their bottom line. Or why is so difficult for Obama to see the negative effects of increasing the death tax from 0% to 55% in a single year.
•What is even more puzzling is that Obama agreed to tax cuts for businesses in an effort to promote hiring, but he is against keeping their tax rate at 35% (if he got the tax rate increase on the wealthy the tax rate would have gone up to 39.6%). It is evident that liberals have not heard of the Laffer Effect. In essence, at some point, additional tax increases results in less tax revenue for the federal government.
In the end, it was the House Democrats who blocked this compromise that could add over a half trillion dollars to the deficit.
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