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Workers will pay a steep price for organized labor's political investment
Arthur Laffer is the economist who first postulated that higher taxes result in declining tax revenues, and lower taxes result in rising tax revenues. The American president whose policy proved that theory was John Fitzgerald Kennedy, who massively reduced taxes during his first year in office, the direct result of which was a rapid increase in government revenues.
Why did this happen? Because business boomed following the tax cuts; consumers consumed more, businesses produced more and increased wages and salaries, the ranks of the employed grew, and government coffers were the great beneficiary of this widespread prosperity.
Kennedy understood all this, either consciously or intuitively. But he was the last Democrat to so understand. Lyndon Johnson, who moved into the Oval Office after Dallas, never did get it. Instead, he instituted a gunsand-butter policy (escalating the Vietnam War at the same time he announced the Great Society, a welfare-based attack on America at a cost of billions), and the results were devastating. His only lasting contribution to the public good was the successful passage of historic Civil Rights legislation. That wouldn't have been possible without the support of Republicans in Congress.
Richard Nixon never got it, nor did Gerald Ford or Bush I. Ronald Reagan did, and lowered taxes because of his understanding. And so did George W. Bush, leading to the boom which ended only because liberals in Congress - Barney Frank and Chris Dodd most significantly - colluded with Fannie Mae and Freddie Mac to push for subprime mortgages, and we all know what happened when the recipients of such largesse couldn't afford the payments.
While it's true that Bill Clinton lowered taxes - which led directly to the boom in the latter years of his administration - he did so only because he was forced to by Newt Gingrich's "Contract With America" campaign, which gave Republicans the majority in both the House and the Senate.
Clinton, faced with those majorities, agreed to the cuts. Let's not even mention Jimmy Carter, who understood economics about as well as he understood America - which is not at all.
Comes now Barack Obama, as liberal as any person to ever seek the presidency. Compared with Mr. Obama, LBJ looks like a moderate, and JFK a flaming right-winger.
Among other things, as Rep. Buck McKeon, one of the Victor Valley's congressmen, told us, if Mr. Obama wins, the first thing he'll do is approve legislation making "card check" law. Card check, for those who follow such arcane matters, would eliminate the secret ballot in elections over unionization of a workplace. All unions would have to do - and they can't wait for this - is coerce 50 percent of the employees of a business to sign a card saying they support unionization, and an election on the question is dispensed with. How's that for democracy? Suits Mr. Obama just fine, apparently.
And then there's welfare, which is what at bottom is Mr. Obama's plan for taxation. While he claims he would cut taxes for "95 percent" of American taxpayers, more than 40 percent of Americans don't pay taxes now. How will he "cut" their taxes? By sending them a "rebate" check.
That's what he meant when he said he'd like to spread the wealth to Joe the Plumber.
Which gets us back to Mr. Laffer. The other day, Mr. Laffer appeared on one of the Talking Heads television shows (we forget which one; at this point they're all running together), and, asked what was wrong with Mr. Obama's economic plan, said, "If you tax people who work, and give it to people who don't, pretty soon you're going to have an awful lot of people who don't work." No kidding.
Estimates are that if all of Mr. Obama's programs are enacted - national health care, revisions in Social Security, expanded Medicaid elegability, etc., etc., etc., the total cost would be $4.3 trillion. Trillion! Can the American economy, and American taxpayers, afford it? Of course not.
Socialism ain't cheap. Ask any European worker (who pays for Europe's non-workers, which are getting more plentiful by the minute).