I'm watching the Dow fall under 10,000 for the first time in a few months. No angst. No surprise. I'm told this has something to do with problems facing the European Union. Maybe. But as long as this president continues with his economic policies, it will not be the last time we plunge below 10,000. Or even 9,000. We are on the precipice of a disaster that shows we learned nothing from the Great Depression, which by the way, was overseen by the same type of progressive Democrats who are now running things in Washington.
Increase the size of government. Waste money. Raise taxes. That's become the Democrat's modus of operandi. It may not have a noticeable impact during good times when consumer confidence is up and unemployment is below 6% (as it was during the Clinton years), but it certainly doesn't promote private sector growth. After all, the Clinton years ended in a recession that the Bush tax cuts were fortunately able to correct.
So now that Obama and the Democrats have increased spending across the board, including an 84% increase in discretionary spending, two omnibus bills with trillions in deficit spending, the disastrous cash for clunkers, and a trillion dollar failed stimulus that hasn't stimulated anything but government, they want to play the role of fiscal chicken hawks and work to reduce the deficits they just created by passing pay-go amendments and raising taxes.
This is a really, really bad idea. After all, a tax increase is the same thing as a salary cut, a reduction in the discretionary income for the average working family. And a reduction in discretionary income is the worst thing that could happen when consumers aren't spending. Now they have even less money to meet their financial obligations, to spend on their families and at small businesses in their communities.
Besides, deficits aren't the problem. Spending is the problem. Federal spending goes up every year regardless of who is in charge. Granted it goes up a lot more under Democrats (the last year Republicans controlled Congress the budget deficit was a manageable $160 billion vs. Pelosi and Obama's 2011 budget deficit of $1.4 trillion) and especially when huge entitlement programs are passed (which progressives always favor). Deficits aren't the cancer killing the patient, they are a symptom of the cancer - too much government spending. So why just treat the symptom?
Democrats want us to focus on deficits instead of spending, because they like big government. And so long as spending can be paid for with tax increases (it can't according to the Laffer Curve, but that's a whole different issue), why stop spending? They never met a tax increase they didn't like, so of course they are for pay-go amendments. It makes tax cuts next to impossible, grows government, and gives them more power. But by focusing on deficits instead of spending, we are neglecting the root of the evil - the loss of private sector wealth and free enterprise. In the meantime, businesses are getting crushed, finding it harder to succeed faced with new taxes and unnecessary regulation. And voila, we have recreated the exact type of policies that led to the Great Depression.
This will be Obama's legacy, and while the president talks a lot about favoring small business and entrepreneurs, his policies do nothing to encourage confidence. He has created an atmosphere that frowns on letting businesses and banks do what they do best - make a profit. Then he chastises them for not hiring. This is a lot like claiming to love sports cars, so long as they don't run on gas or oil. Then chastising them when they don't go fast.
Take it from me. I just closed a furniture store after trying to hang on for 14 months of decreasing sales. I could no longer afford the 50% loss in revenue and customer traffic. And for every month of Obama speeches and policies, it only got worse. Government is growing at the expense of the private sector. It always does. Sadly, progressives only applaud this. And that's what I hear: Democrats applauding the closing of my store and the end of my means of income.
