Charles is a world apart from most of the MSM sensationalists. If you break down his exact words, you find that his statements are 100% accurate. As a nation, we are all headed for a lot of pain and grief is Obama is elected.
We're already headed for a lot of pain economically and the Democrats' answer is to increase spending AND taxes.
Whoever is pres. will have to keep govt. spending high. Consumers are tapped out and are cutting back on spending. Corp. american profits are falling, they are laying people off in droves and cutting back on spending, and the only entitiy left that can spend enough to keep the economy plugging along is the govt. Shades of the 30's. Only taxes Obama is proposing to increase is on the rich (over 250K). It worked well in the early 90's. Bush I increased taxes because the deficit got to 350 Billion a year, so he broke his 88 campaign pledge and raised taxes on everyone. Cost him the election, but he was honorable and did the right thing for the nation. He protected the value of the dollar by helping bring down the budget deficit, and that warded off a return to inflation. The Reagan tax cuts in 82 were not a panacea to the economy in the long run. Then Clinton followed up with another tax increase, only on the rich, in 93. It didn't hurt the economy, and helped produce the first balanced budget in 40 years, by the late 90's. Raising taxes is not an immediate downer for the economy. The key is "who you raise taxes on". If the person whose taxes go up makes plenty of money and saves it, then spending in the economy will not go down. A tax increase on the wealthy does not have a negative impact on the economy. Under Clinton, I did not go into a higher tax bracket, but I did begin to lose partial deductions that I previously had full use of. My tax bill went up. Nothing changed for me, except I saved at a slightly lower rate. I spent just the same. I was happy to help the country balance its budget. We need to increase taxes on the rich, and Warren Buffet knows it too. We all know that the unfunded liabilities 20 years out for medicare and mediciad is 3 times bigger than the social security problem. We cannot afford those expenses for all 3. What's going to happen? I think some taxes must go up, some benefits will be trimmed (social security will be means tested and if your retirement income is too high you won't get SS or you'll get a reduced benefit). That won't solve all the problem. We are seeing inflation in the dollar, and I think we'll see LOTS more. We could see burger flippers making 100K per year, and paying 30K in taxes. Engineers will make 500K per year and pay 200K in taxes. All houses could cost at least 1 million per year. At those wage and tax rates, we could easily pay the SS benefits promised under todays scheduled payment plans. And, your standard of living will be lower than it is today. Your million dollar house will be 1,000 sq ft. Now, obviously I don't know if that's how it will go; maybe it won't. But try looking 20 years into the future, and figure how you're going to position yourself to deal with that world. Is the rest of the world going to have to inflate their currencies to deal with similar issues? Then investing in foreign bonds may not help you. There is gold, which works well in inflationary scenarios. We had a 23 year bear market in gold from 78 to 01, and been on a 7 year bull market since 01. Will it be a 15 or 20 year bull market in gold? I don't know, but I'm holding my coins. I sold a few at 750 and 950, looking to buy some back if we see 650 or 550. I don't accept the statement at face value that increased taxes are bad. That's too simple a view. It depends who the tax is on, and how high it is. The real problem is the massive deficit. It has killed the dollar when you combine is with the trade deficit. Bush got both tax cut plans he wanted in 01 and 03, look at the economy now. Why would anyone think we're on the correct path proposing more tax cuts. They have not worked the last 8 years to improve the lives of the middle class.
I don't have time to comment on the rest of your post but you honestly believe that modest tax cuts have caused the economic conditions we're now in? Yikes.
The tax cuts combined with out of control spending has created a massive budget deficit, the biggest of any 8 years by a large margin. The cumulative deficit of 5 trillion that was built over 230 years has been doubled in 8 years, trashing the dollar. We see the effects in gold tripling in price since 2001 and we see it as a cause of part of the increase in oil prices, which are about double what they were in 2001. Cutting taxes and increasing spending, blowing out the budget deficit, is BAD. A dollar that has lost 40% of its value in 8 years vs. the Euro, causes inflation, and that lowers our standard of living, since we can afford less now. The deficit grew by roughly $5 Trilliion, from 5 to 10 trillion, in round numbers. That's pathetic. Increasing the money supply right now by the amounts promised in the bailout would be unthinkable, except for the fact that the alternative is probably worse. The impact will roll into the system over the next few years.
Sorry, but it is not government spending that drives the economy; it is consumer spending. The more the government spends, the deeper the hole we dig for ourselves.
Normally, you are correct. This is NOT NORMAL times. The consumer is pulling in their spending as layoffs rise, jobs are less secure, savings accounts fall in value, and home values fall. Much of the spending the last 8 years came from equity loans based on rising home prices, but that game is over. The consumer is in a bind. Business is laying off people, profits are coming under pressure, and spending will be curtailed by business. If govt. cuts back on spending also, for the next 2 or 3 years, at the same time the consumer and corporate america cut back, it would be detrimental to the economy, IMO. This is a temp condition until the economy is healthy enough to run on its own.
