The tax behind the tax cuts
President-elect Obama recently proposed a new $300 billion tax cut. While I am all for tax cuts as a paleoconservative, I find it very sad that along with these tax cuts Obama is proposing billions of dollars in spending increases. Our nation is already in tons of debt and what does he want to do? He wants to spend billions more and cut 300 billion more in revenue. How does this make any sense? And then the government wonders why so many Americans are in debt. Maybe they should worry about their spending habits first. The nation has a much more serious spending problem than the people, the only reason it gets away with it is because it controls the presses that print the money.
While tax cuts are great and support free market ideals, we need to realize that with Obama’s proposal he is cutting taxes, while indirectly taxing us right back. How? With inflation. The government doesn’t have the billions or even trillions Obama wants to spend. They will try to garner money through sale of securities such as bonds, but there is no way that much will be raised. So, to make up the difference for what they need they will print it. We are already printing money at a rate above economic growth and that means inflation. Print more money like Obama wants and that will lead to more inflation. That means the money we have is worth less. Essentially, it is taxed.
So, while the plan may seem helpful, it really isn’t. In fact, in the long run it is disastrous for the financial well being of this country. This plan only tries to make Obama look good in front of those who don’t understand or care about how the monetary system works. In reality, it is a disaster.
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