Monday, August 03, 2009

Who Are the Rubes Anyhow?

Both Geithner and Summers are hedging on the “no middle class tax increases” cornerstone of the Obama campaign. Given the close to trillion “stimulus” package, and the potential additional trillions of deficits created by the “cap-n-trade” bill and government takeover of healthcare, this can't come as a surprise to anyone.

Robert Gibbs was sent out to deny the obvious, but the math on Obama's runaway spending only adds up to tax increases. There simply aren't enough rich people to foot the bill for all of this, especially in an era where the top 1% of earners are already is soaked for the same dollar amount of income tax as the bottom 90% of taxpayers, and capital is mobile.

Sooner or later, the rich will move their capital offshore, to places where investment is appreciated.

What the rest of us will be treated to is likely to be either an extended recession or a fresh one brought on by tax increases, and a bunch of doublespeak about how our tax increases really aren't tax increases.