Will you be better off?
Ronald Reagan asked the famous question in his debate with Jimmy Carter, “Are you better off now than four years ago?” and the electorate agreed with him. In 2012, the Republican Presidential candidate will sorely be tempted to ask same question, but maybe the candidate should ask another question, “Will you be better off four years later?”
In past columns, I have made the point that Obama’s policy has made the recovery weaker and if he had done nothing, we would have been better off. Recent GDP numbers recorded a 1.8% growth and the best we can say is that we are crawling ahead but this number represent a retreat; still early in a recovery. The growth in Obama’s recovery pales in contrast when compared to the Reagan. Over a similar period, unemployment drop was greater and growth more than double what Obama has accomplished. The reality is that Obama’s policy has retarded progress and there is nothing over the next two years that will enhance growth. During Reagan first two years, Reagan allowed Paul Volcker to wring inflation out of the system and then when inflation started downward; the recovery took off. This provided the anchor for economic growth over the next three decades. Reagan economic plan survived beyond Reagan administration, a policy of lower marginal tax rates combined with King Dollars.
While Clinton did increase marginal tax rates among the wealthy, something that Democrats keep harping on but the 1990’s saw a Democratic led Congress walk away with massive government intervention in the economy; reduce capital gain tax, reduced the growth of government and passed free trade agreements. All these moves negated the negative impact of raising marginal tax rates.
What has Obama promised for a second term? Based on his budget, more spending and Obama care will only increase medical health care cost but it will increase cost on doing business in America. When Obama talks about raising the limits for taxation for social security, he is telling many under $250,000 that their taxes will go up since it involves a tax increase into the Middle Class. Hell, Obamacare even involves tax increases involving three quarters of a trillion dollars and this will involved the middle class and small business owners. Obama’s regulatory gambits add even more costs and the Fed’s weak dollar policy is threatening an inflationary cycle while fighting what was and may still be a deflationary cycle. In fairness to Ben Bernancke, he has been given mission impossible since he is the only thing that is keeping the economy slipping down but there is only so much the Fed can do before trouble arises.
So Republicans need to ask not just the question, are you better off now than fours ago but ask even more important, will you be better off in four years? Will we live under the health care restraints of Obamacare or will we be able have more patient reform health care? Will we see taxes go up and more debt in the future or will we actually get our budget deficit under control and begin get our debt under control? What Republicans need to talk about is the future and asks the question, what kind of America you want? Everything that Obama promise will increase the cost of doing business in America, so how does that help economic growth?
The weakness of dollar represent a lack of faith in our economy and it is not just economic quandary but represent the collapse of America standing in the world. King Dollar of Reagan that extended into the Clinton era and King Dollar meant represented America’s leadership role and the weak dollar now represents America leadership world decline. As the question, is the world better off with America’s economically weaker? Are we? Ask those questions and keep asking them until Election Day.
In past columns, I have made the point that Obama’s policy has made the recovery weaker and if he had done nothing, we would have been better off. Recent GDP numbers recorded a 1.8% growth and the best we can say is that we are crawling ahead but this number represent a retreat; still early in a recovery. The growth in Obama’s recovery pales in contrast when compared to the Reagan. Over a similar period, unemployment drop was greater and growth more than double what Obama has accomplished. The reality is that Obama’s policy has retarded progress and there is nothing over the next two years that will enhance growth. During Reagan first two years, Reagan allowed Paul Volcker to wring inflation out of the system and then when inflation started downward; the recovery took off. This provided the anchor for economic growth over the next three decades. Reagan economic plan survived beyond Reagan administration, a policy of lower marginal tax rates combined with King Dollars.
While Clinton did increase marginal tax rates among the wealthy, something that Democrats keep harping on but the 1990’s saw a Democratic led Congress walk away with massive government intervention in the economy; reduce capital gain tax, reduced the growth of government and passed free trade agreements. All these moves negated the negative impact of raising marginal tax rates.
What has Obama promised for a second term? Based on his budget, more spending and Obama care will only increase medical health care cost but it will increase cost on doing business in America. When Obama talks about raising the limits for taxation for social security, he is telling many under $250,000 that their taxes will go up since it involves a tax increase into the Middle Class. Hell, Obamacare even involves tax increases involving three quarters of a trillion dollars and this will involved the middle class and small business owners. Obama’s regulatory gambits add even more costs and the Fed’s weak dollar policy is threatening an inflationary cycle while fighting what was and may still be a deflationary cycle. In fairness to Ben Bernancke, he has been given mission impossible since he is the only thing that is keeping the economy slipping down but there is only so much the Fed can do before trouble arises.
So Republicans need to ask not just the question, are you better off now than fours ago but ask even more important, will you be better off in four years? Will we live under the health care restraints of Obamacare or will we be able have more patient reform health care? Will we see taxes go up and more debt in the future or will we actually get our budget deficit under control and begin get our debt under control? What Republicans need to talk about is the future and asks the question, what kind of America you want? Everything that Obama promise will increase the cost of doing business in America, so how does that help economic growth?
The weakness of dollar represent a lack of faith in our economy and it is not just economic quandary but represent the collapse of America standing in the world. King Dollar of Reagan that extended into the Clinton era and King Dollar meant represented America’s leadership role and the weak dollar now represents America leadership world decline. As the question, is the world better off with America’s economically weaker? Are we? Ask those questions and keep asking them until Election Day.
posted by Tom Donelson at 9:38 PM
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