Published on TheHill.com June 16, 2009
To quote the esteemed Rev. Jeremiah Wright, the chickens that were hatched in the stimulus package are coming home to roost in the healthcare proposal. The budget deficit Obama racked up paying for the massive federal spending passed in January is now having a real economic and political impact, which is forcing the president and his congressional allies into hard choices as they face his healthcare legislation.
Of course, the prudent thing to do is postpone healthcare changes until the economy generates some revenues and trims the deficit. But the socialist in the White House can’t do that. He’s got to strike while his congressional majority is hot. So he is forcing his administration and his party to choose among unpalatable choices to finance his program. His demand may be a bridge too far, endangering his popularity with the American people.
First of all, the very fact of a focus on healthcare reform inevitably stirs discussion of the deficit. Americans are allergic to deficit spending and worry the more the deficit grows. As interest rates rise and the government finds it more and more difficult to borrow enough to cover Obama’s massive spending, the economy is likely to show the negative effects. It is a matter of a few months, certainly no more, before voters start to realize that it is the deficit, not the pre-existing conditions Obama inherited, which is causing the prolongation of the recession. Already the jump in mortgage rates has slowed the refinancing, which was the only aspect of the Obama economic program that was working well.
But the foreign and domestic focus on the deficit has a harsher political impact: It forces the Democrats to come up with money to fund healthcare reform. In other words, it makes them raise taxes. The Democratic Party is good at fooling itself that tax increases don’t matter and are politically palatable, but they do and they are not.
The massive spending healthcare will require dwarfs the capacity for the rich alone to pay the bill, no matter how confiscatory Obama chooses to become. Only broader taxes will do the job. Obama faces two practical choices: a value added tax or taxing health insurance benefits.
The political harm either way will be enormous. Not only will Obama be breaking his pledge not to tax the middle class, but he will be doing so in a particularly pernicious way. If Obama opts for the value added tax (VAT), Democrats will hope to cloak the increase in the price of the product. They reason that the consumer won’t know how much the tax is since it will be added on throughout the sale and resale of the product rather than at the cash register at the end, as the sales tax is. But it will work the other way. As inflation sets in, triggered by Obama’s deficit spending, consumers will blame the whole thing on Obama. His VAT will be much magnified in the voters’ minds to include all of the inflation going on. Just as voters blamed Clinton’s gas tax increase of five cents in 1993 for the entire run-up in gasoline prices at the pump, so they will place all the blame for inflation on Obama’s VAT.
Or Obama could tax healthcare benefits, a direct reversal of his campaign pledge. He would be adopting a policy for which he overtly and loudly criticized McCain. And his popularity will wilt as taxpayers suddenly have to add onto their tax liability the money their employer has always paid for their health insurance. Obama will probably have his own separate line on the 1040 and even on the short form for his new tax. That’s not the way to stay popular.
Obama’s only good option is not to move so quickly on healthcare reform, to give himself some wiggle room. But as the song says, “we’re knee deep in the big muddy but the damn fool says to push on!”
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[…] Of course, the prudent thing to do is postpone healthcare changes until the economy generates some revenues and trims the deficit. But the socialist in the White House can’t do that. He’s got to strike while his congressional majority is hot. So he is forcing his administration and his party to choose among unpalatable choices to finance his program. His demand may be a bridge too far, endangering his popularity with the American people. Read the rest here… […]
Since when do we live in a country that says our “leaders” can work hard to acquire the best of the best, but we, as their “subjects,” cannot have anything more or better than the next guy?
Get mad! Speak up! Speak out!
Debra J.M. Smith
www.InformingChristians.com
[…] via HEALTHCARE: OBAMA’S WATERLOO? at DickMorris.com. […]
[…] do is postpone healthcare changes until the economy generates some revenues and trims the deficit. But the socialist in the White House can’t do that. He’s got to strike while his congressional majority is hot. So he is forcing his administration […]
These government actions (e.g., TARP, GM, Chrysler, Stimulus, and Health Care) remind me of when your child (i.e., Congress) keeps saying no, after a parent (i.e., American taxpayer) has time after time told them to stop. Obama seems to be in a horse race (the two year period until the 2010 congressional elections) to pass every piece of socialistic legislation (without any regard to the consequences) before the checks and balances catches up to him and congress.
To me Obama is a wolf in sheep’s clothing and when you listen to his speeches he first starts out with some sentimental statement (either about himself or taxing the rich because they are evil). He then moves on to evoke his agenda to play on your emotions (we need health care, energy reform, etc.); which is followed by a long rhetorical statement designed to make you forget the initial question or intent of the speech) and to leave no time for follow up questions. This is done to mask the truth (that the current economic problem has been in the making over the last 40 years caused by an increasing credit bubble, a housing collapse, increased government spending and a systemic failure of the banking structure).
To me the health care issue is analogous to FDR promoting a program like Social Security by promising something in return, while all along knowing most people would never receive any benefit on their investment. My personal opinion is these programs are a means to increase taxes without causing a revolt. For example, Social Security used the 1880 census as a starting point for recipients when the population of the country was 25 million and taxing the 1936 starting population of 130 million.
Obama will use nationalized health care in the same manner to raise taxes eventually on everyone — just look at Great Britain and France that have government run health care and the tax rate is 70% — to hide his true intent (which is to create a classless society).
www.kerchner.com/audio/apuzzoseanandfrankshow20090618.mp3
The interview is a Must Listen and of paramont importance. Please spread far and wide.