Sunday, January 25, 2009

“Trickle-Down” Government Spending

Democrats, vociferous opponents and critics of “trickle-down” economics when it came to businesses growing the economy by expanding and hiring more workers (and paying more taxes), are now its strongest supporters when it comes to expanding government and hiring more government workers (by borrowing and spending more).

Why the change? In one word, “control.” In two words, “government control.” Want three words? “Democrat political control.”

The Democrats see the financial crisis as a golden opportunity to increase their share of citizens dependent on government. Over half our citizens pay little (usually none) of total income taxes. Now Democrats promise to pay them more, and tax them even less.

Question. How can you tax someone even less when they don’t pay any income taxes? Answer. By paying them a tax credit, even when they haven’t paid any taxes.

Democrats also are taking advantage by increasing the total of government workers, who are overwhelmingly supporters of Democrats, plus strengthening other Democrat stalwarts, the public employees unions.

All is not rosy for Democrats. Some discouraging words were heard from an unlikely source, the Congressional Budget Office, usually a Democrat lap dog.

The Democratic plan took a hit when the Congressional Budget Office estimated that only 7 percent of infrastructure money would make its way into the economy by the end of the year, and only 38 percent would be spent by the end of the 2010 fiscal year. Obama's new White House budget director, Peter Orszag, disputed the findings, saying 75 percent of the money would be spent by fiscal 2010.

Democrats were united in deriding President Bush’s stimulus package of tax refunds, $600 to individuals and $1,200 to married couples. Now it’s déjà vu all over again.

Other parts of the package, including the tax cuts and the direct aid to states, would be injected more quickly into the economy. The bill would offer a payroll tax cut of $500 to individuals who earn less than $75,000 a year, and a $1,000 credit to married couples who earn less than $150,000 a year.

Democrats expect it will be easy to pass their bill in the House and Senate, with at most the support of one or two Republican Senators.

So be it. The stimulus bill will wear an all-Democrat label.

Let the chips fall where they may.

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