Headed for so­cial­ism? No, we’re al­ready there

The Washington Times Weekly - - Commentary - Pat Buchanan

In his cam­paign and in­au­gu­ral ad­dress, Barack Obama cast him­self as a moderate man seek­ing com­mon ground with con­ser­va­tives. Yet, his bud­get calls for the rad­i­cal re­struc­tur­ing of the U.S. econ­omy, a sweep­ing re­dis­tri­bu­tion of power and wealth to gov­ern­ment and Demo­cratic con­stituen­cies. It is a dec­la­ra­tion of war on the Right.

The real Mr. Obama has stood up, and lived up to his rank­ing as the most left-wing mem­ber of the United States Se­nate.

Barack has no man­date for this. He was even be­hind John McCain when the decisive event that gave him the pres­i­dency occurred — the Septem­ber col­lapse of Lehman Broth­ers and the mar­ket crash.

Repub­li­cans are un­der no obli­ga­tion to ren­der bi­par­ti­san sup­port to this statist coup d‘etat. For what is go­ing down is a left­ist power grab that is anath­ema to their prin­ci­ples and phi­los­o­phy.

Where the U.S. gov­ern­ment usu­ally con­sumes 21 per­cent of gross do­mes­tic prod­uct, this Obama bud­get spends 28 per­cent in 2009 and runs a deficit of $1.75 tril­lion, or 12.7 per­cent of GDP. That is four times the largest deficit of Ge­orge W. Bush and twice as large a share of the econ­omy as any deficit run since World War II.

Add that 28 per­cent of GDP spent by the U.S. gov­ern­ment to the 12 per­cent spent by states, coun­ties and cities, and gov­ern­ment will con­sume 40 per­cent of the econ­omy in 2009.

We are not “headed down the road to so­cial­ism.” We are there.

Since the bud­get was re­leased, word has come that the U.S. econ­omy did not shrink by 3.8 per­cent in the fourth quar­ter, but 6.2 per­cent. All the as­sump­tions in Mr. Obama’s bud­get about growth in 2009 and 2010 need to be re­vised down­ward, and the deficits re­vised up­ward.

Look for the deficit for 2009 to cross $2 tril­lion.

Who abroad is go­ing to lend us the tril­lions to fi­nance our deficits without de­mand­ing higher in­ter­est rates on the U.S. bonds they are be­ing asked to hold? And if we must re­vert to the print­ing press to cre­ate the money, what hap­pens to the dol­lar?

As Amer­i­cans save only a pit­tance and have lost — in the value of homes, stocks, bonds and other as­sets — $15 tril­lion to $20 tril­lion since 2007, how can the peo­ple pro­vide the feds with the needed money?

In his speech to Congress, Mr. Obama promised new in­vest­ments in en­ergy, ed­u­ca­tion and health care. Ev­ery kid is go­ing to get a col­lege de­gree. We’re go­ing to find a cure for can­cer.

Who is go­ing to pay for all this?

The top 2 per­cent, the filthy rich who got all those Bush tax breaks, say Democrats. But the top 5 per­cent of in­come earn­ers al­ready pay 60 per­cent of U.S. in­come taxes, while the bot­tom 40 per­cent pays noth­ing.

Those pay­ing a fed­eral tax rate of 35 per­cent will see it rise to near 40 per­cent and will lose a fifth of the value of their de­duc­tions for taxes, mort­gage in­ter­est and char­i­ta­ble con­tri­bu­tions.

Yet, two-thirds of small busi­nesses are taxed at the same rate as in­di­vid­u­als. Con­sider what this means to the owner of a restau­rant and bar in Los An- geles open from noon to mid­night, where a hus­band and wife each put in 80 hours a week.

At year’s end, the cou­ple finds they have ac­tu­ally made a profit of $500,000 that they can take home in salary.

What is the Obama-Sch­warzeneg­ger tax take on that salary?

Their U.S. tax rate will have hit 39.6 per­cent.

Their Cal­i­for­nia in­come tax will have hit 9.55 per­cent.

Medi­care pay­roll taxes on the pro­pri­etor as both em­ployer and salar­ied em­ployee will be $14,500. So­cial Se­cu­rity pay­roll taxes for the pro­pri­etor as both em­ployer and em­ployee will be $13,243.

In short, U.S. and state in- come and pay­roll taxes will con­sume half of all the pair earned for some 8,000 hours of work.

From that rav­aged salary they must pay a state sales tax of 8.25 per­cent, gas taxes for the 50-mile com­mute, and tens of thou­sands in prop­erty taxes on both their restau­rant and home. And, af­ter be­ing pil­lo­ried by politi­cians for hav­ing feasted in the Bush era, they are now told the tax de­duc­tion they get for con­tribut­ing to the church is to be cut 20 per­cent, while mil­lions of Obama vot­ers, who paid no U.S. in­come tax at all, will be get­ting a tax cut — i.e., a fat lit­tle check — in April.

Any won­der na­tive-born Cal­i­for­ni­ans are flee­ing the Golden Land?

Mar­kets are not in­fal­li­ble. But the stock mar­ket has long been a “lead in­di­ca­tor” of where the econ­omy will be six months from now. What are the mar­kets, the col­lec­tive de­ci­sions of mil­lions of in­vestors, say­ing?

Hav­ing fallen ev­ery month since Mr. Obama’s elec­tion, with Jan­uary and Fe­bru­ary the worst two months in his­tory, they are telling us the stim­u­lus pack­age will not work, that Tim Gei­th­ner is clue­less about how to save the banks, that the Obama bud­get por­tends dis­as­ter for the repub­lic.

The pres­i­dent says he is gear­ing up for a fight on his bud­get.

Good. Let’s give him one.

Pat Buchanan is a na­tion­ally syndicated colum­nist.

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