We now have the opportunity to observe the last Presidential campaign for what it was and, accordingly, peer more clearly into the future. Barack Obama’s win for reelection was not a failure of democracy but can be viewed as a failure of American voters, marking a shameful period in American history. Rather than using the election as an opportunity to turn around the national deficit, the Presidential campaign was reduced to little more than pandering in its lowest form.
Let’s return again to the issue of taxes and see where the country is actually headed. President Obama’s winning strategy was to continually claim that the rich need to pay their fair share, and his attacks reflected that. One ad attacked opponent Mitt Romney’s tax rate, claiming he paid fewer taxes than the middle-class. Romney reportedly made $20 million as the former governor of Massachusetts. This is true, but Obama’s ad stated that he was only taxed on 14% of his earnings. The truth could not have been any more distorted. Romney had in actuality paid 14% of his annual income, just under $3 million dollars in taxes. This is a similar amount the other so-called “1%” were paying.
An individual making $20,000 a year pays roughly 30% (+/-), amounting to about $6,000 in income tax. Therefore, though he pays a lower tax rate, Romney actually pays more of the total income tax. In other words, the top 1% are actually paying more of the taxes, rather than paying more in taxes, and thus more than their fair share.
Another conveniently overlooked tax is the capital gains tax levied on investment profits – a tax paid predominately by the “1%.” This is actually how most top executives and investors are taxed, so they pay a lower income tax. Thus, the working and middle-classes actually pay less (and fewer) taxes than the top richest individuals. Obama was able to successfully turn this against Romney, misleading voters for yet another term.
Though he champions tax hikes for the rich, Obama seems oblivious to other holes in the tax code. For example, it is possible for those on welfare to receive tax returns, even though their income is tax-free. In this case, rather than generating revenue, the government is allowing precious tax dollars to slip through its fingers. However, despite repeated calls for reform, Obama insists that it the welfare system is necessary for preserving our economy. He even hopes to expand it, promising the same universal healthcare that has doomed Europe and is slowly draining the financial life out of Canada. This isn’t the only problem Obama’s must come to terms with.
Obama holds Republicans responsible for the economic damage, but in truth, he is more to blame. His stimulus plan was largely pork earmarked for redundant projects and failed to improve a struggling economy. Millions of dollars were allocated to build turtle tunnels under a highway. Millions more were awarded to Yale to study the effects of diet and exercise on obesity. Another university received a grant to determine if concentration was instrumental in completing difficult tasks.
Though some jobs were created through these expensive endeavors, they were no more economically effective than Roosevelt’s New Deal projects. In fact, enough was spent on Obama’s stimulus plan to give everyone in America a check for $100,000. Those funds could have been used by our citizens to pay mortgages, decrease debt, buy cars, make investments, and even start companies. In other words: produce long-lasting, significant changes to the market, thus enabling the economy to recover. Instead, more failed policies only served to prolong America’s suffering.
As American industry and financial institutions began to collapse, Obama enacted a series of bailouts. This strategy was contrary to the capitalistic nature of our economy. The banks, housing market, and auto industry should have been allowed to completely collapse. Though jobs would have been lost, the companies that survived would have emerged stronger and smarter. Instead, costly bailouts, issued to preserve jobs, only served to stagnate our already struggling economy. Furthermore, oversight of these bailouts was virtually non-existent – in several cases, such as AIG, executives used bailout money to pay their own excessive bonuses. When news of this went public, outrage swept across the nation. His bailouts were not the only strain Obama placed on the American people.
Obamacare caused additional economic strife, though some good did come of the bill. For example, preexisting conditions cannot be used to deny healthcare. However, it also has several negative points. In 2013, everyone will be required to have health insurance. While this reduces the financial strain produced when the uninsured visit the ER, it also restricts individual freedoms. In addition, failure to comply will result in the levying of a tax, adding further injury to struggling families, especially those who own small businesses. It is those unfortunate entrepreneurs that will have to pay for health insurance. Like the Great Depression, this recession does not affect the United States alone.
Our sudden increase in debt has had global consequences as well. We have borrowed money from China (a rival since the Cold War) resulting in a credit rating downgrade. The effects of our spending may have even helped accelerate Europe’s current fiscal crisis. Still, as the year comes to a close, we are no closer to a balanced budget, and our economy is in even greater danger.
Regarding the ongoing “fiscal cliff” drama against the backdrop of a highly polarized, inflexible Congress, unless concessions are made on both sides of the aisle, more grief and embarrassment are sure to follow. Rather than encourage political tug-of-war, President Obama should be supporting ideas from both parties. Sadly, old habits die hard, and should a new budget fail to materialize, the Republican party will be left holding the bag. At least, that’s what the American public will hear.
America has been a financial superpower for generations, and could emerge from this recession stronger, smarter, and better. This will require smart fiscal planning, responsible budgets, and bipartisan policies. However, with President Obama at the helm, the seas ahead are likely to be rough with party-line strife and liberal agendas. To be certain, the next four years will anything by smooth sailing.
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Jason Mimiaga is a writer from the Colorado Springs area.
