My Big Fat Greek Bailout – And What It Means For America

So Greece is going to get its big fat bailout.

The “Too big to fail” mindset wins yet again.  First it was big union-dominated automakers and high-risk lending institutions.  And now it’s entire countries, starting with Greece.  And after Greece comes Spain and Portugal, and then will come California and a bunch of other mostly decades-long liberal-progressive states like New York and New Jersey.  High taxation and out-of-control spending equal fiscal disaster as states and countries rack up enormous debts that they can never hope to repay.

Here are a couple of headlines for you:

California will go bankrupt

Is California Too Big To Fail?

And you know damn well it is.  California all by itself is the sixth largest economy on the planet.  And the inescapable logic of redistributionism means that the other 49 states are going to have to redistribute their wealth to bail out the People’s Republic of Pelosistan.

Beware Greeks bearing IOUs.  Hell, beware ANYBODY bearing IOUs.

In contrast to everything liberals believe, the higher the tax rates, the lower the revenues that are being collected as businesses relocate to states that DON’T hate them.  This has been proven throughout American economic history, and it is certainly being proven now: the states with the highest taxes are facing the largest revenue shortfalls.

Their understanding of free market capitalist economics comes primarily through the straw man created by Karl Marx, and so they fundamentally misunderstand and distrust the economic system that made America the greatest nation on earth.  They want redistributionism, and someone has to pay for my right to be a nonproductive bon-bon-eating couch potato.  That “someone” ends up being the only people with the resources to invest and create jobs.  But the rich aren’t stupid, and so they shelter their money to avoid the higher taxes.

I mean, even Oprah Winfrey does everything she can to avoid high taxes.  Even MICHAEL MOORE does everything he can to avoid paying more taxes.

And what do we do when the disaster these people created finally comes home to roost?  We bail them out, so they can do it all over again.  It’s called “moral hazard.”  Somebody in power should look it up and then quit doing it.

We keep making this giant ball of stink bigger and bigger and bigger, and we’re all wading through it now, and everything is going to sh*t all around us because our leaders don’t have the courage to simply let losers lose.  We’ve become bailout nation, where the people who had discipline and did things right prop up the reckless so they can continue being reckless until the system crashes.  Or to put it more precisely, until the system crashes bigger and badder the next time around.

Times are going to get harder.  China is announcing that they are dumping US securities in what appears to be an economic war declared against us.  That’s going to make it a lot more expensive for us to keep borrowing.  But the only way we can continue these insane liberal-progressive policies is to keep borrowing and borrowing.

There’s no question that we need to collect more taxes.  But raising rates isn’t the way to collect more taxes.  The Bush tax cuts stimulated an unprecedented 52-consecutive months of economic growth even as it generated MORE tax revenue.  Obama’s going back to “the failed policies of the past” from the Jimmy Carter era are going to create a lot of damage as Democrats refuse to learn the lesson of the luxury tax again and again and again.

There’s also no question we need to dramatically decrease our spending.  And along with that, we need to phase down the boondoggles we’ve created via Social Security (which is now in the red, paying out more than it collects) and Medicare/Medicaid (how does a ONE HUNDRED TRILLION DOLLAR unfunded liability strike you?).

The problem is that the federal government has expanded so far beyond its constitutional limitations that its not even funny – with the lion’s share coming from progressive-Democrat social programs.  The government which was supposed to be limited to defending the country and creating infrastructure is now involved in absolutely everything under the sun.

And Democrats will fight to the death for every single one of these programs.

There’s also the now-typical Democrat demand from the government:

Pay my mortgage.  Fill my gas tank. Buy my car.  Give me free health care.  Feed me.  Change my diapers.

Which means we can’t control our black hole-spending.  Which means we can’t reduce our never-before-seen-in-human-history debts.  Which means that we’re on the same road that Greece is on.  Only no one will be there to bail us out when we collapse.

The only question is how long it takes for us to get there.

Obama’s Cloward-Piven Redistributionism Shaping The Future Collapse

There is a bizarre conspiracy afoot that most Americans are simply unwilling to comprehend, much less believe.

Obama and ‘Redistributive Change’
Forget the recession and the “uninsured.” Obama has bigger fish to fry.

By Victor Davis Hanson

The first seven months of the Obama administration seemingly make no sense. Why squander public approval by running up astronomical deficits in a time of pre-existing staggering national debt?

Why polarize opponents after promising bipartisan transcendence?

Why create vast new programs when the efficacy of big government is already seen as dubious?

But that is exactly the wrong way to look at these first seven months of Obamist policy-making.

Take increased federal spending and the growing government absorption of GDP.  Given the resiliency of the U.S. economy, it would have been easy to ride out the recession.  In that case we would still have had to deal with a burgeoning and unsustainable annual federal deficit that would have approached $1 trillion.

Instead, Obama may nearly double that amount of annual indebtedness with more federal stimuli and bailouts, newly envisioned cap-and-trade legislation, and a variety of fresh entitlements. Was that fiscally irresponsible? Yes, of course.

But I think the key was not so much the spending excess or new entitlements. The point instead was the consequence of the resulting deficits, which will require radically new taxation for generations. If on April 15 the federal and state governments, local entities, the Social Security system, and the new health-care programs can claim 70 percent of the income of the top 5 percent of taxpayers, then that is considered a public good — every bit as valuable as funding new programs, and one worth risking insolvency.

Individual compensation is now seen as arbitrary and, by extension, inherently unfair. A high income is now rationalized as having less to do with market-driven needs, acquired skills, a higher level of education, innate intelligence, inheritance, hard work, or accepting risk. Rather income is seen more as luck-driven, cruelly capricious, unfair — even immoral, in that some are rewarded arbitrarily on the basis of race, class, and gender advantages, others for their overweening greed and ambition, and still more for their quasi-criminality.

“Patriotic” federal healers must then step in to “spread the wealth.” Through redistributive tax rates, they can “treat” the illness that the private sector has caused. After all, there is no intrinsic reason why an auto fabricator makes $60 in hourly wages and benefits, while a young investment banker finagles $500.

Or, in the president’s own language, the government must equalize the circumstances of the “waitress” with those of the “lucky.” It is thus a fitting and proper role of the new federal government to rectify imbalances of compensation — at least for those outside the anointed Guardian class. In a 2001 interview Obama in fact outlined the desirable political circumstances that would lead government to enforce equality of results when he elaborated on what he called an “actual coalition of powers through which you bring about redistributive change.”

Still, why would intelligent politicians try to ram through, in mere weeks, a thousand pages of health-care gibberish — its details outsourced to far-left elements in the Congress (and their staffers) — that few in the cabinet had ever read or even knew much about?

Once again, I don’t think health care per se was ever really the issue. When pressed, no one in the administration seemed to know whether illegal aliens were covered. Few cared why young people do not divert some of their entertainment expenditures to a modest investment in private catastrophic coverage.

Warnings that Canadians already have their health care rationed, wait in long lines, and are denied timely and critical procedures also did not seem to matter. And no attention was paid to statistics suggesting that, if we exclude homicides and auto accidents, Americans live as long on average as anyone in the industrial world, and have better chances of surviving longer with heart disease and cancer. That the average American did not wish to radically alter his existing plan, and that he understood that the uninsured really did have access to health care, albeit in a wasteful manner at the emergency room, was likewise of no concern.

The issue again was larger, and involved a vast reinterpretation of how America receives health care.  Whether more or fewer Americans would get better or worse access and cheaper or more expensive care, or whether the government can or cannot afford such new entitlements, oddly seemed largely secondary to the crux of the debate.

Instead, the notion that the state will assume control, in Canada-like fashion, and level the health-care playing field was the real concern. “They” (the few) will now have the same care as “we” (the many). Whether the result is worse or better for everyone involved is extraneous, since sameness is the overarching principle.

We can discern this same mandated egalitarianism beneath many of the administration’s recent policy initiatives. Obama is not a pragmatist, as he insisted, nor even a liberal, as charged.

Rather, he is a statist. The president believes that a select group of affluent, highly educated technocrats — cosmopolitan, noble-minded, and properly progressive — supported by a phalanx of whiz-kids fresh out of blue-chip universities with little or no experience in the marketplace, can direct our lives far better than we can ourselves. By “better” I do not mean in a fashion that, measured by disinterested criteria, makes us necessarily wealthier, happier, more productive, or freer.

Instead, “better” means “fairer,” or more “equal.” We may “make” different amounts of money, but we will end up with more or less similar net incomes. We may know friendly doctors, be aware of the latest procedures, and have the capital to buy blue-chip health insurance, but no matter. Now we will all alike queue up with our government-issued insurance cards to wait our turn at the ubiquitous corner clinic.

None of this equality-of-results thinking is new.

When radical leaders over the last 2,500 years have sought to enforce equality of results, their prescriptions were usually predictable: redistribution of property; cancellation of debts; incentives to bring out the vote and increase political participation among the poor; stigmatizing of the wealthy, whether through the extreme measure of ostracism or the more mundane forced liturgies; use of the court system to even the playing field by targeting the more prominent citizens; radical growth in government and government employment; the use of state employees as defenders of the egalitarian faith; bread-and-circus entitlements; inflation of the currency and greater national debt to lessen the power of accumulated capital; and radical sloganeering about reactionary enemies of the new state.

The modern versions of much of the above already seem to be guiding the Obama administration — evident each time we hear of another proposal to make it easier to renounce personal debt; federal action to curtail property or water rights; efforts to make voter registration and vote casting easier; radically higher taxes on the top 5 percent; takeover of private business; expansion of the federal government and an increase in government employees; or massive inflationary borrowing. The current class-warfare “them/us” rhetoric was predictable.

Usually such ideologies do not take hold in America, given its tradition of liberty, frontier self-reliance, and emphasis on personal freedom rather than mandated fraternity and egalitarianism. At times, however, the stars line up, when a national catastrophe, like war or depression, coincides with the appearance of an unusually gifted, highly polished, and eloquent populist. But the anointed one must be savvy enough to run first as a centrist in order later to govern as a statist.

Given the September 2008 financial meltdown, the unhappiness over the war, the ongoing recession, and Barack Obama’s postracial claims and singular hope-and-change rhetoric, we found ourselves in just such a situation. For one of the rare times in American history, statism could take hold, and the country could be pushed far to the left.

That goal is the touchstone that explains the seemingly inexplicable — and explains also why, when Obama is losing independents, conservative Democrats, and moderate Republicans, his anxious base nevertheless keeps pushing him to become even more partisan, more left-wing, angrier, and more in a hurry to rush things through. They understand the unpopularity of the agenda and the brief shelf life of the president’s charm. One term may be enough to establish lasting institutional change.

Obama and his supporters at times are quite candid about such a radical spread-the-wealth agenda, voiced best by Rahm Emanuel — “You don’t ever want a crisis to go to waste; it’s an opportunity to do important things that you would otherwise avoid” — or more casually by Obama himself — “My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody. I think when you spread the wealth around, it’s good for everybody.”

So we move at breakneck speed in order not to miss this rare opportunity when the radical leadership of the Congress and the White House for a brief moment clinch the reins of power. By the time a shell-shocked public wakes up and realizes that the prescribed chemotherapy is far worse than the existing illness, it should be too late to revive the old-style American patient.

— NRO contributor Victor Davis Hanson is a senior fellow at the Hoover Institution.

The term, “Cloward-Piven strategy” resounds in Hanson’s article without having ever once been used:

In their 1966 article, Cloward and Piven charged that the ruling classes used welfare to weaken the poor; that by providing a social safety net, the rich doused the fires of rebellion. Poor people can advance only when “the rest of society is afraid of them,” Cloward told The New York Times on September 27, 1970. Rather than placating the poor with government hand-outs, wrote Cloward and Piven, activists should work to sabotage and destroy the welfare system; the collapse of the welfare state would ignite a political and financial crisis that would rock the nation; poor people would rise in revolt; only then would “the rest of society” accept their demands.

An American Thinker article provides flesh to the concept:

The Strategy was first elucidated in the May 2, 1966 issue of The Nation magazine by a pair of radical socialist Columbia University professors, Richard Andrew Cloward and Frances Fox Piven. David Horowitz summarizes it as:

The strategy of forcing political change through orchestrated crisis. The “Cloward-Piven Strategy” seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.

Cloward and Piven were inspired by radical organizer [and Hillary Clinton mentor] Saul Alinsky:

“Make the enemy live up to their (sic) own book of rules,” Alinsky wrote in his 1989 book Rules for Radicals. When pressed to honor every word of every law and statute, every Judeo-Christian moral tenet, and every implicit promise of the liberal social contract, human agencies inevitably fall short. The system’s failure to “live up” to its rule book can then be used to discredit it altogether, and to replace the capitalist “rule book” with a socialist one. (Courtesy Discover the Networks.org)

Newsmax rounds out the picture:

Their strategy to create political, financial, and social chaos that would result in revolution blended Alinsky concepts with their more aggressive efforts at bringing about a change in U.S. government. To achieve their revolutionary change, Cloward and Piven sought to use a cadre of aggressive organizers assisted by friendly news media to force a re-distribution of the nation’s wealth.

In their Nation article, Cloward and Piven were specific about the kind of “crisis” they were trying to create:

By crisis, we mean a publicly visible disruption in some institutional sphere. Crisis can occur spontaneously (e.g., riots) or as the intended result of tactics of demonstration and protest which either generate institutional disruption or bring unrecognized disruption to public attention.

No matter where the strategy is implemented, it shares the following features:

1. The offensive organizes previously unorganized groups eligible for government benefits but not currently receiving all they can.
2. The offensive seeks to identify new beneficiaries and/or create new benefits.
3. The overarching aim is always to impose new stresses on target systems, with the ultimate goal of forcing their collapse.

Nobody wants to believe that a large and influential group of our leaders would want to create a catastrophe as a means of having an opportunity to impose their will upon an ensuing “super-government” that would necessarily have to arise from the ashes.  The concept strikes many as madness.

Only it’s happened too many times in just this century to label as “madness.”  It is, in fact, the goal of virtually every revolutionary movement.  You have to tear down the old in order to create the new.

Consider the fact that the leftist organizers of the 1960s – like Barack Obama’s friend and mentor William Ayers, who was instrumental in Obama’s early career and his run in politics – are very much still around and still profoundly shaping the leftist agenda.  Take Ayers’ Weather Underground co-founder Jeff Jones, whose Apollo Alliance wrote a big chunk of Obama’s stimulus package.  Take Tom Hayden (who endorsed Obama), leader of the leftist group Students for a Democratic Society.  He proclaimed in a landmark 1962 speech that the youth must wrest control of society from their elders, and that to that end universities had to be transformed into incubators of revolutionary “social action.”  And his calls to use any means necessary to achieve that “social action” – certainly including violence and force – colored and in fact defined the entire 60s leftist radicalism.  Hayden was one of the writers of the “Berkeley Liberation Program.”  Some highlights: “destroy the university, unless it serves the people”; “all oppressed people in jail are political prisoners and must be set free”; “create a soulful socialism”; “students must destroy the senile dictatorship of adult teachers.”  And his “community outreach” fomented horrific race riots.

These people are still dictating the agenda of the left today.  They were trying to fundamentally transform society then, and they are trying to fundamentally transform society today.  Only their tactics have changed; the goal remains the same.

You don’t think Barack Obama – who was in turn mentored by communist Frank Marshall Davis, by radical organizer Saul Alinsky, by terrorist William Ayers – (the link is to a CNN story demonstrating that Obama’s relationship to Ayers was MUCH deeper than Obama claimed) – doesn’t value these people and share their values?  Then, to put it very bluntly, you are a fool.  The words of our current president:

“To avoid being mistaken for a sellout, I chose my friends carefully.The more politically active black students.  The foreign students.  The Chicanos.  The Marxist Professors and the structural feminists and punk-rock performance poets.  We smoked cigarettes and wore leather jackets.  At night, in the dorms, we discussed neocolonialism, Franz Fanon, Eurocentrism, and patriarchy.  When we ground out our cigarettes in the hallway carpet or set our stereos so loud that the walls began to shake, we were resisting bourgeois society’s stifling constraints.  We weren’t indifferent or careless or insecure.  We were alienated.”

But of course, Obama really wasn’t alienated, by his own statement.  He was a member of a community–a community of far-far-leftist radicals.

Also, of course “the more politically active black students” were the violent, racist, and criminal Black Panthers.

Obama was always about “change.”

You may not believe me now.  I understand that.  But hear this: it is my contention that things are going to get seriously bad in this country.  And that there are liberals, progressives, socialists (as Obama’s climate czar Carol Browner is), communists (as Obama’s ‘Green jobs czar’ Van Jones describes himself) – or whatever the hell these people want to call themselves – who are manipulating and riding the current times in order to take advantage of the future collapse.

Things didn’t have to get as bad as they’re going to get.  It certainly won’t be George Bush’s fault (all of Obama’s efforts to turn him into the current version of Emmanuel Goldstein to the contrary).  It is not George Bush’s fault that Barack Obama’s budget accumulated so far in 2009 exceeds all eight years of Bush’s combined deficits.  It’s not George Bush’s fault that we have seen historic and completely unsustainable levels of red ink under Barack Obama.  It’s not George Bush’s fault that Barack Obama is essentially truing to nationalize wide swaths of our economy, such as health care and energy.  It’s all on Obama.

Obama’s massive debt is creating serious worries about the future of the U.S. dollar.  We are forecasted to be paying a trillion dollars a year just in interest on the debt by 2019; and it will very likely be a lot more a lot sooner.

What’s going to happen then?

Well, let me tell you what the Cloward-Piven proponents believe will happen: they think the coming complete crash of our economic system will result in the complete takeover of the economy and the society by the state.  They think that as panicked and hungry people look around at the disaster big government created, they will have no choice but to turn to government for help.  They think that they will finally have the socialist utopia they always dreamed of but American independence and self-reliance would never allow.

If by some miracle in defiance of all the laws of economics Obama’s economic policy actually doesn’t kill our economy, Obama and Democrats will win big.  If, far more likely, Obama’s economic policy causes a crash of the entire system, liberals believe that Democrats will ultimately STILL win big.

You can call me crazy if you like.  But mark my words.

As you see things getting worse, and liberals using the complete and catastrophic failure of big government to justify even MORE and even BIGGER big government, what might seem crazy to you now will make a lot more sense.

Why Barack Obama and Democrats Are Wrong On The Economy

Let me ask you a question: when did a poor person ever give you your job?

Let me be even more precise: when did a poor person ever give you a high paying job with excellent benefits?

Hello? Is this thing on? Do I hear crickets chirping?

The fact of the matter is this: all the Marxist-style class-warfare demagoguery of the Democrats aside, we desperately need the rich and the jobs they create by means of their education, expertise, inspiration, hard work, and investment.

How many times have you heard the phrase, “the rich need to pay their fair share of taxes?” from Barack Obama and from Democrats?

Do you have any idea how much the rich are paying in taxes?

In 2005, the top 1% paid 39.4% of the federal income tax burden. The wealthiest Americans have been increasingly paying more and more of the total tax burden. In 2000, the wealthiest 1% paid 37.4%.

According to the Treasury Department, perhaps for the first time ever, the richest 1% of taxpayers will have paid more than 40% of the income tax burden. The top 5% will pay just under 60% of the total taxes. The richest 10% will pay 70% of taxes.

The top 50% of income earners will pay 97% of the tax burden. The bottom 50% of income earners will pay only 3% of taxes. And the the bottom 45% of income earners will actually pay 0% of the federal tax burden. Americans in the bottom quintile who have jobs get reimbursed for some or all of their 15 percent payroll tax through the earned-income tax credit (EITC), a fairly efficient poverty-abatement program.

The richest 1.3 million tax-filers — those Americans with adjusted gross incomes of more than $365,000 in 2005 — paid more income tax than all of the 66 million American tax filers below the median in income. Ten times more.

If that isn’t “a fair share,” I don’t know what would be.  It is simply a fact that the rich are most definitely paying their “fair share” and then a whole bunch more.

The Democrat Party today consists of demagoguing liars, ideologically-brainwashed fools, the hopelessly naive, and the inexcusably ignorant.

Unfortunately, we have more liars, fools, and naively deluded, and ignorant people in this country today than we’ve ever had before. And, given the fruits of the liberal-dominated education system, we will continue to have more and more of all four of these classes of people. Liars, fools, the naive, and the ignorant constitute a powerful voter block indeed.

What is fascinating is that the tax plan that Demcocrats falsely claim “favors the rich” actually end up requiring the rich to pay the overwhelming majority of the tax burden.

Prior to the Reagan Revolution in 1981, the top marginal federal income tax rate was 70% (it is currently 35% under President Bush). At the 70% rate, the top 1% paid only 19% of the federal income tax burden, and the top 5% paid 37%. With the tax rate cut in half, the top 1% are paying more than twice as much of the total tax burden – nearly 40% – and the top 5% are paying nearly 60%.

And not only do the rich pay a higher percentage of their wealth in taxes under the lower taxes of the Bush plan, but they pay a higher ratio of their wealth in taxes than they did when the rates were higher:

for the top 5 percent and 10 percent of earners, the ratio of taxes paid compared with income earned has risen. For example, in 1980, the top 10 percent earned 32 percent of the income and paid 44 percent of the taxes—a ratio of 1.4. In 2004, this group earned more of the income (44 percent) but paid a lot more of the taxes (68 percent)—a ratio of 1.6. In other words, progressivity—in terms of share of total taxes paid—has risen. On the other hand, for the top 1 percent of earners, progressivity has declined from a ratio of 2.2 in 1980 to 1.9 in 2004.

There are several reasons for this relationship between lower tax rates for the rich and the rich actually ending up paying more taxes:

First, when one punishes hard work, creativity, and investment, the result will invariably be less hard work, creativity, and investment. Let me put it this way: I need some yard work done, liberals. How about you come over and break your back working for me, and when your finished, I’ll give you 30% of your wages, and give the other 70% to all those “poor” who didn’t do anything? Don’t like that deal. Guess what? Nobody else does either.

Another reason lowering taxes actually results in the rich paying more taxes is the reduction in sheltering assets:

Keep in mind as well that the IRS only records the income that taxpayers report. Its data don’t include income that the rich hide in tax shelters or otherwise defer. And there is evidence that lower tax rates since 1981 have caused the rich to declare more of what they earn. In 1980, when the top income tax rate was 70%, the richest 1% paid only 19% of all income taxes; now, with a top rate of 35%, they pay more than double that share. With lower rates and fewer tax loopholes after the 1986 reform, there is less incentive to shelter income to avoid tax.

With high taxes, there is a greater incentive to pay accountants to move assets around to conceal them or bury them in non-taxable locations. As long as there are taxes, there will always be tax shelters, of course, (I still remember my outrage in 2004 over learning that George Bush – who called for lower taxes – was paying the maximum tax rate of 35% while John Kerry – who called for everyone else to pay higher taxes – was sheltering his own wealth and paying less than 18% in taxes). But lowering taxes reduces sheltering, and makes it more worthwhile to invest.

A third reason that lower taxes for the rich result in the rich paying more taxes is due to the incentive to increase their investment. Stephen Moore, the senior economics writer for the Wall Street Journal editorial board, points out that the capital gains tax is essentially a voluntary tax because asset owners can avoid it by simply holding onto their stocks, homes, or businesses. This “lock-in” effect can be economically inefficient, because owners have a tax incentive to hold on to poor investments rather than drawing out the cash and putting it into assets that would be more productive. When the capital gains tax is cut, people unlock their assets and reinvest in other enterprises.

The 1997 tax reform, passed by a Republican Congress under President Clinton, reduced the capital gains tax rate from 28 percent to 20 percent, and taxable capital gains nearly doubled over the next three years. The 2003 reform brought the rate down to 15 percent, and between 2002 and 2005 there was a 154 percent increase in capital gains reported as income.

Democrats cry that gains by the rich have come at the expense of the declining living standard for the middle class. But that is simply stupid. Think of Bill Gates, the wealthiest man in America. Has Bill Gates made your life better, or worse (periodic aggravation over some stupid computer glitch aside)? Bill Gates has made the work of millions of businesses and individuals more easy and more productive. And if Bill Gates suddenly took his tens of billions of dollars and moved to France, the income distribution in America would all of a sudden appear far more equitable, but no one would be better off (except in France, which would all-of-a-sudden become tens of billions of dollars richer).

Barack Obama has come out and stated that he would raise the capital gains tax. He falsely believes that only the rich pay them, but he is simply wrong. The latest polls show that 52 percent of Americans own stock and thus benefit directly from lower capital gains and dividend taxes. Reduced tax rates on dividends also triggered a huge jump in the number of companies paying out dividends. As the National Bureau of Economic Research put it, “The surge in regular dividend payments after the 2003 reform is unprecedented in recent years.” Dividend income is up nearly 50 percent since the 2003 tax cut. And money market funds, pension funds, and various other vehicles which are very invested in the rewards of lowered capital gains benefit the overwhelming majority of Americans.

Barack Obama also claims that he will lower taxes for most Americans, but the reality is that most Americans pay very little in taxes. Again, the bottom 50% are paying only an infinitesimal percentage of the taxes, so you can’t give them much of a tax cut by definition. Yet these are the people to whom the Democrats claim to want to give tax cuts. Just how much should the rich be expected to pay? How will penalizing their productivity not undermine that productivity? At the same time, Obama is committing himself to spending nearly two trillion dollars in new spending. And when the rich begin to reduce their investments, shelter their money, and conceal their assets in tax-free vehicles, where do you think he will go to get the money to fund his programs?

The simple fact of the matter is that the richest Americans are paying far more than their fair share of taxes. As Stephen Moore notes:

But Barack Obama has decided the rich still don’t pay enough. He would redistribute the tax burden even more heavily on small business owners and the entrepreneurial class (two-thirds of the tax filers in the highest income tax bracket are small-business owners.) The nonpartisan Tax Foundation’s Scott Hodge has just crunched the numbers on the Obama plan and concludes that “more than $131 billion would be redistributed from the top 1 percent of taxpayers to all other taxpayers.”

Sounds fair, no? Only 1.13 million taxpayers, out of some 128 million, would end up paying higher taxes, according to the Obama camp.

But in the real world, who ends up paying a tax is not just the person on whose tax return it falls. History has demonstrated time and again that raising tax rates on the wealthy in the name of “redistribution” leads to so much income shifting, reduced work and investment, and redeployment of money into tax shelters, that the rich usually pay less, not more taxes, at higher rates. The burden of paying for government shifts to others, including some who may not file an income tax return at all – because they no longer have jobs or no longer earn enough to pay income tax…

Somebody needs to give the Obama campaign a refresher on all this. The Tax Foundation’s Mr. Hodge wonders: “Can a tax system so focused on redistribution be compatible with economic growth?” Probably not but the Obama brain trust wants to give it a try anyway.

The Tax Foundation had this to say about the Obama plan:

“Under the Obama plan for 2009,” explains Hodge, “more than $131 billion would be redistributed from the top 1 percent of taxpayers to all other taxpayers.”

As a result, the top 1 percent of households would pay more federal taxes of all kinds than the bottom 80 percent of households. That lopsided distribution under Obama does include payroll taxes and other federal taxes, but it excludes the new payroll tax hike that Obama plans to levy on people making more than $250,000 because details about that plan are currently unclear.

“In other words,” says Hodge, “it is at this point a cautious estimate to say that in 2009, under Obama’s plan, 1.13 million Americans would pay more in all federal taxes than 128 million of their fellow citizens combined.”

This is outright confiscation. It is Democrats urging their voters to seize the assets of a minority of voters. It is “the tyranny of the masses” that our founders so rightly feared. And it is wrong.

Lower taxes for the rich result in more investment, a stronger stock market, more hiring, and more products and services that benefit people’s lives. The redistributionism favored by Democrats, on the other hand, result in counterproductive policies that hurt the very people that they propose to help.

In a Foreign Affairs article titled, “An Empty Revolution: The Unfulfilled Promises of Hugo Chávez,” Francisco Rodríguez points out that:

Even critics of Hugo Chávez tend to concede that he has made helping the poor his top priority. But in fact, Chávez’s government has not done any more to fight poverty than past Venezuelan governments, and his much-heralded social programs have had little effect. A close look at the evidence reveals just how much Chávez’s “revolution” has hurt Venezuela’s economy — and that the poor are hurting most of all.

You’ve heard that proverb: “the road to hell is paved with good intentions”? Whoever coined it probably had liberals in mind.

When President Bill Clinton took office, he initially veered to the left with the help of a Democrat House and Senate. The result was so disasterous that the largest political landslide in U.S. history occurred under his watch, with Republicans and their “Contract With America” sweeping in. And the economic strength of the mid 1990s was due far more to the resurgence of Republican ideas than it was to the wisdom of Democratic economic stratgies.

As we consider the prospect of the most liberal member of the U.S. Senate becoming president with a filibuster proof Democratic Congress, we should soberly consider the disaterous lessons of redistributionism and socialist style governments and learn from those mistakes rather than repeat them.