A Peek at the Price Tag

It seems that Mr. Obama’s campaign promise to only confiscate the income of the wealthy hit a mathematical roadblock. Class warfare got Obama elected, but it doesn’t pay the bills.

Reality is seeping into the White House’s surreal economic projections. Who would have guessed that annual trillion dollar deficits are not sustainable? But don’t kid yourself. Mr. Obama, Pelosi, Reid, Barney and company knew monstrous tax increases were required to support the transition from capitalism to European styled socialism.

Of course, these utopian miscreants had hoped the reckoning would be delayed until after the 2010 congressional elections. This would have given them time to complete the reorganization before their supporters realized that their incomes were on the Treasury’s short list of available donors.

It seems that Obama’s timetable was based on the assumption that the government could temporarily suspend the laws of economics with unbridled spending. This would have extended the introduction of a Cap and Trade energy tax and a 10% national sales tax (VAT) beyond the election.

But nationalizing banks and the auto industry was capital intensive. Without huge infusions of funds, the integrity of the US monetary system will continue to deteriorate, along with the value of the dollar. And Geithner’s ponzi scheme of buying the US debt with freshly printed money didn’t fool the international investors.

The 52% of voters who trusted Obama’s promise of a free lunch didn’t realize their incomes would be on the menu. They are now looking down the barrel of the largest income redistribution scheme in the history of mankind.

Setting aside the segment of Obama supporters who have never contributed a penny to the government, nor have any plans for doing so, there sits about 40 million Democrats and Independents who are about to get a remedial lesson in arithmetic and political reality.

These are the well intentioned, fiscally illiterate, trusting fools who voted for change and wanted the bragging rights for electing a product raised on affirmative action. They got what they voted for, and they are about to take the beating of their lives.

Obama is driving the country down the only path with which he is familiar. He is turning affirmative action into a government prerequisite.

Of course, affirmative action is nothing more than government sponsored economic and political discrimination against the productive segment of society. In Middle America this group is commonly called working taxpayers.

The average family in America earns about $50,000. In addition to their current income, Social Security and Medicare contributions, excise and capital gains taxes, state and local sales, excise, property and income taxes, Obama and friends attempted to squeeze another $3000 from their net incomes for energy usage (Cap and Trade).

After those nasty conservatives pointed out that Cap and Trade was a tax concealed in environmental clothing, the proposal pretty much fizzled, but Waxman and Markey are still pushing it. Undaunted, Obama and friends are now floating a Value-Added Tax (VAT).

Its implementation would reduce the buying power of the average family at least 10% (about $5000). A VAT will guarantee decades of the same double digit unemployment, second rate healthcare and the flat-lined economies enjoyed by the prosperity-adverse Europeans.

Get prepared! Obama’s policies are fermenting a taxpayer revolt unlike anything America has experienced since the American Revolution. It’s going to get ugly.

The Next Fiscal Coffin Nail

According to a recent Fox News Poll, 69% of the registered voters are satisfied with what Mr. Obama has accomplished in his first 100 days in office. The number includes 92% of Democrats and only 24% of Republicans. That’s a big gap.

But the percentages sound about right. The uneducated, ignorant and complacent won’t complain until they see their tax bills climb into the stratosphere after the 2010 mid-term elections. Of course, another surge in unemployment will be a noisy part of their wakeup call.

That’s when the 52% who think the size of government hasn’t grown, or is actually shrinking, will wake up to the new reality.

Anyone who has walked through a mall in the last thirty days realizes that most US citizens are intelligent enough to know they can’t spend their way out of a recession. And that’s why the banks aren’t lending.

The financial institutions are scrambling to build their reserves for the pending disaster in commercial real estate. Think not? Go to any mall and count the number of vacant stores, mostly boutiques, which are boarded up. And take note of the growing vacancies in office parks and retail strip malls.

The home mortgage crisis will soon be compounded by defaults in the commercial sector. So anyone who believes the worst of the banking crisis is over will be blindsided by this development. America is currently experiencing a lull between fiscal storms.

The US printing presses will be working around the clock to cover this shortfall. With stocks on life support, municipal bonds looking like junk bonds and the US Treasury printing money, Americans can bet their last inflated dollar that the current recession will deepen.

And that is the good news. Without massive tax increases the value of the US dollar will implode. Timothy Geithner and Obama know this. They are also aware that America’s credit worthiness will come under further assault as phase two of this debacle unfolds.

Be reminded that the health of the US economy is built on credit, as credit sustains consumer spending. And consumer spending accounts for 70% of the GNP. When credit tightens the US economy contracts. If it dries up, the economy will come to a standstill. Small businesses will disappear in droves.

There is only one logical reason why this brewing storm isn’t being addressed publicly. And it’s the same reason Obama’s administration keeps the Social Security and Medicare time bombs in the shadows. Fiscal reality is their political enemy.

Obama and the Democrats are holding their breath. They want to pass universal healthcare and a myriad of new welfare programs before the public understands the country is facing a near insurmountable deficit.

This is the reason the Democrats are fighting desperately for the cap-and-trade energy initiative, the largest tax increase in the history of the world. This infusion will temporarily mask the inevitable economic fallout from unbridled government spending.

Here is the bad news. The taxes required to save Obama’s agenda will create ObamaLand, a second rate socialist republic.