When I was a sports reporter, I often went to the track to cover horse racing. A betting window was conveniently located near the press box. Eventually, I succumbed to temptation and put in, not one, but two modest wagers. One of my horses came in last. The other one died – he was literally hauled off to the glue factory. I learned a valuable lesson. That was the last bet I ever made.
One could only wish that Democrats would learn from their past mistakes: You cannot tax and spend your way out of a recession. It’s never happened. It’s not going to happen. However, they seem hell-bent on betting control of the House and Senate – and perhaps even the 2012 presidential election – on their pursuit of these failed policies.
On Monday, the president called for $50 billion in infrastructure “investments” (the Democrat word for spending) to stimulate the economy, but he stopped short of calling it a “stimulus” since that word now has the odor of the north end of a cow headed south.
Meanwhile, Obama’s colleagues in the House and Senate are still scrambling to get the votes to save the Bush tax cuts of 2001 and 2003, sans the evil rich.
The rhetoric in this debate has been over the top and not very helpful to the average voter. Republicans have pointed out that Obama’s plan to raise taxes on those making more than $250,000 a year hurts small business, the generator that must power the engine that is needed to drive us out of this recession, as many small businesses file as individuals.
Democrats fired back, claiming that this argument is overblown because this tax hike will affect only 2.5 percent of the nation’s more than five million small businesses. Therefore, the impact is negligible.
Republicans counter by saying it affects 50 percent of small-business income.
Enough! What is a voter to believe?
Time for a reality check: Both arguments are technically correct.
The term “small business” is a broad term and covers everything from a one-man or one-woman enterprise operated out of the kitchen or spare room to a manufacturing company with less than 500 employees.
Some 900,000 small businesses filing individual tax returns have incomes more than $250,000 and will be hit by Obama’s tax increase. These small businesses account for about half of all small-business income. Income is what you have left over after salary, overhead, insurance and, gulp, taxes. It’s called profit. Profit is a good thing. It’s these profitable small businesses that are able to hire more employees. Hello Democrats?
Yesterday, Obama offered a series of targeted “tax breaks” for small business. One hand giveth, while the other hand takes away, and the “giveth” part only goes to those small businesses that do what the government wants them to do, not what they need to do to stay profitable.
In the U.S., small business accounts for around half the GDP and more than half the employment. It may be hard to believe, but the top job provider in the U.S. is the small business with less than 10 employees, and those with 10 or more but less than 20 employees comes in second.
Obama’s policies are like a bully, hitting the most profitable small businesses over the head, while kicking the smaller, more prolific ones in the stomach. The smaller businesses, not directly impacted by the tax hike, will be impacted by the insurance mandate that fines small businesses that are not yet profitable enough to offer the kind of health insurance dictated by Democrats.
Just as a government cannot tax its way out of a recession, government spending also has a negative effect. When the government spends money it doesn’t have, it drives up the deficit. And, the more the government borrows, the harder it is for small businesses to raise money.
In this economy, Obama’s policies will be the death knell for many small businesses struggling to survive. Furthermore, they will decimate small towns, many of which are made up entirely of small businesses.
Never mind the track record on these policies. Obama and most Democrats plan to ride this horse till it drops.
The polls show that, although the public may not fully understand this debate, it understands the impact, and voters aren’t willing to bet their jobs and their future on these losers. This is not what they signed on for two years ago.
The rhetoric is shrill, and it will get louder. But it won’t change the end result.
Yes, fortunately, most people do learn from their mistakes.