Tuesday, October 21, 2008

Obama’s Tax Plan and the Credit Crunch

Driving home yesterday I was suddenly struck by the discontinuity between Sen. Obama’s approach to the so-called credit crisis and his tax plan should he be elected president.

The basic problem as Wall Street crumbled was that the flow of credit halted keeping companies from being able to borrow either short- or long-term – credit that is used to finance day-to-day activities, inventory, and expansions of businesses.

There’s another word for this “credit” – money. They need money to make their businesses work. We need free-flowing money to keep our economy running.

According to Sen. Obama, failing to keep the money flowing “would have devastating consequences for our economy, costing millions of Americans their jobs.”

Yet his tax plans – raising the top income tax rate more than 11% plus increases in capital gains and payroll taxes – would suck money out of the economy, out of businesses just as surely as the credit crisis did. This isn’t a matter of opinion; it’s simple economics.

Can someone please ask Sen. Obama why it was so essential to keep money in the economy in September but it won’t be next year?


Vinny said...

Because in September, the credit system was frozen and the consequences of failing to thaw it out could have been catastrophic. Once we get past this crisis, however, we have to deal with the deficit that the Bush administration has run up over the last eight years.

ChrisB said...

If money has to be kept in the system, it has to be kept in the system. There's no way a tax increase can be healthy for an economy.

Even Gibson admits cutting capital gains taxes increases goverment revenues (a trend exploited by JFK, Reagan, and Bush) but Obama closes his eyes and cries "fairness" no matter what will happen to the economy. I guess if all else fails, it's "fair" to make everyone equally miserable.

Vinny said...

Who is Gibson?

ChrisB said...

Isn't Charles Gibson the moderator in that video? I might have had a brain fart on that one.

/* -------------- -----analytics code */