Sunday, February 22, 2009
Decrease the deficit?!
Is a headline I saw on Yahoo! this morning. Needless to say, I am just a tiny bit skeptical. You see, what's coming next in the economy will not allow it. As job losses and foreclosures accelerate, the tax base dwindles. Bye, bye capital gains tax revenues, income tax revenues and corporate tax revenues. Hello, increased entitlements for those who lost their job or turn 65 in increasing numbers and ask for their Social Security and Medicare benefits.
As we decrease troops in Iraq, we increase troops in Afghanistan, so this one's a wash. As more and more "stimulus" is needed for a sclerotic, shrinking economy, more deficit spending will be promoted as the only available cure.
The only remedy available to Obama, since it makes no sense to cut government jobs while creating new government jobs, is to tax the rich. This won't be nearly enough to close the gap and also will discourage small business owners, thus worsening the jobs situation and eliminating any hope of new job creation in the private sector. The deficit will absolutely explode over the next few years. The promise to decrease the deficit will be rescinded as the economic crisis worsens.
Keep in mind as well that when things get really bad, a 401(k)/IRA/403(b) confiscation will probably get thrown into the works, so protect yourself accordingly. It will be sold under the guise of protecting us, much like the War on Terror and the War on Drugs. Don't say nobody warned you...