Hoover Reloaded

According to a Washington Post story today, the Obama administration is preparing to unveil it's budget plan for fiscal year 2010, which includes plans to slash the federal budget deficit by half in the next four years. And how does the President plan to accomplish this Herculean feat? Why, by raising taxes, of course!

Putting the time-worn label of "tax & spend Democrat" behind him, the President has apparently hit upon a fresh approach: Spend...then Tax. Well, he promised change, people. Just days after signing the huge $1 trillion + spend-ulous IOU, our President has announced that he plans to complete his class-warfare model by soaking the rich and big business. All the while framing this new spend-and-tax plan as fiscal responsibility. If Mr Obama wanted fiscal responsibility, he should have started with cutting the $30 million for the salt marsh harvest mouse or the $200 million to "design and furnish" the new Department of Homeland Security headquaters.

The script of the U.S. government's to this economic downturn so far is frighteningly familiar. In 1929, President Hoover poured billions into banks to prop them up and prevent illiquidity, just like President Bush did last fall. Hoover also signed the Smoot-Hawley Tarriff Act, a protectionism scheme not unlike recent noises being made by the current administration to "Buy American First" and renegotiate our trade treaties. The result of Smoot-Hawley was a trade war with our former trading partners which robbed our economy of vital trading partners that could have helped us get the economy revved up again.

Then, Hoover obliterated the tax cuts of the Harding & Coolidge administrations, by raising the top marginal rate from 25% to 63%. Thats right folks, Hoover raised taxes on the rich and big business. It was right after this tax hike that the Great Depression reached it's nadir, and the Hoover Administration met it's end.

Obama's tax hikes will bode no better for our generation, tax increases stiffle spending, which in turn costs jobs of people who make things people aren't buying anymore. And there's no such thing as a corporate tax in reality, businesses are not going to pass the costs onto their shareholders, so they will offset the expense by raising prices or cutting costs (i.e - jobs.) You can blame the rich or big business all you want for this current mess, but trying to punish them with higher taxes may make us feel better, but it will cost working people their jobs.

Despite the Democrats painting Bush as the Hoover of this century, it is now the Dems who are turning to the failed policies of Hoover to deal with the present day crisis. Change, more and more, looks like an unoriginal rehash of the bad ideas of the past.

Nolanbuck