President Obama’s philosophical leanings were still unclear when he took office. Despite having the most liberal voting record in the Senate for 2007, he managed to convince people (Democrats and Republicans) that he was a centrist. It should now be clear that all his talk about ignoring the politics of left and right ““ about bridging the partisan divide ““ was posturing.
Though he audaciously continues to feign ideological detachment, Obama’s first major policies confirm our worst fears: He is moving us rapidly toward socialist democratization and a centrally planned economy like that of Sweden and France.
Obama’s 2010 budget blueprint, which is now being debated in Congress, is likely to go down in history as the moment when he outed himself as a left-wing ideologue. FDR himself would have blushed at it. Weighing in at an astounding $3.6 trillion by White House figures, it calls for massive new spending by virtually every major division of government, a “down payment” of $634 billion for universal health care coverage, and government activism in energy and education policy.
To fund this ambitious plan, Obama has resorted to what else but mind-boggling new taxes on the so-called “rich.” He plans to restore the draconian Clinton-era tax rates of 36 percent and 39.6 percent on couples earning more than $250,000 per year, in addition to raising the capital gains rate (the tax on investment income, in stocks, real estate, etc.) from 15 percent to 20 percent. On top of this, he will try to limit tax deductions and exemptions for these individuals. In all, Obama wants to impose tax increases on the nation’s most successful citizens by about $637 billion (and this does not include what they will pay toward “cap and trade”).
Obama knows that his budget pushes the envelope of what the American people will find acceptable. Like all politicians, he also knows that the best defense is a good offense. So to soften the blow of his unprecedented spending figures, Obama tried to recast them in terms of economic recovery. In the budget’s opening message, he said, “This crisis is neither the result of a normal turn of the business cycle nor an accident of history. We arrived at this point as a result of an era of profound irresponsibility that engulfed both private and public institutions from some of our largest companies’ executive suites to the seats of power in Washington, D.C.”
But for all his talk of the “irresponsibility” of his predecessors, all of Obama’s spending cannot be attributed to a weak economy or fiscal indiscipline. Despite promising to “go through our books page by page, line by line, to eliminate waste and inefficiency,” the budget itself is so massive that Democrats themselves are up in arms ““ no area of government is left untouched by less than tens of billions in new spending. Even the premier of China has expressed concern that Obama’s reckless spending would devalue the dollar and imperil his country’s investment in the U.S.
Obama’s estimate for what his proposals will cost ($3.6 trillion) is also ““ unbelievably ““ a conservative estimate. According to the Congressional Budget Office, the White House underestimates its spending figures in 2009 and 2010 alone by a whopping $347 billion, and over the course of 10 years, by a staggering $1.7 trillion. In addition, it says that the federal deficit will increase by $2.3 trillion more over 10 years than Obama is predicting. That’s more than a slight miscalculation, especially for a president who won on the assumption of his economic capability.
Most importantly, though, the budget does not cure the problems that lie at the heart of this economic crisis. By increasing taxes on the parts of the population that create most of the jobs and contribute most to the economy, he is inevitably sacrificing jobs and growth for ideology. Meanwhile, the “toxic assets” that are the root of the crisis are still at large ““ something neither the stimulus package nor the budget adequately address (and Geithner’s plan fails to remedy).
At the same time, Obama continues to wave his arms and urge us to prepare for disaster unless everything in his budget is passed, and passed quickly. This is one way to get what you want, but it hardly inspires confidence in America’s innate ability to overcome hurdles.
Certainly, this combination of spending and catastrophism is no way to bring about recovery ““ the dipping equity values demonstrate that. Why, then, is Obama doing it? Simply put, he cares more about creating a personal dictatorship (to borrow Newt Gingrich’s words) than he does about the long-term shape of the economy. He has lusted over this idea all his political life, and he is willing to forfeit a second term for its realization (as that will be the outcome if his budget passes).
By maintaining the impression that everything will go caput unless we do everything he says, Obama can effectively limit debate and get what he wants. Even though the budget itself expects growth to resume in 2010, his liberal programs will last well after his presidency, much like those introduced by FDR that we are still paying for. Centrism, such as people expected from this precocious president, has not been fulfilled.
E-mail Pherson at apherson@media.ucla.edu. Send general comments to viewpoint@media.ucla.edu.