As government expands, liberty dies. ”We the people tell the government what to do; it doesn’t tell us,” from Ronald Reagan’s, “We The People” speech. “Man is not free unless government is limited.”
A warning Reaganites need to read…
(Investors) In the political marketplace, there’s now a run on Obama shares. The left is disappointed with the president. Independents are abandoning him in droves. And the right is already dancing on his political grave, salivating about November when, his own press secretary admitted Sunday, Democrats might lose the House.
I have a warning for Republicans: Don’t underestimate Barack Obama.
Consider what he has already achieved. ObamaCare alone makes his presidency historic. It has irrevocably changed one-sixth of the economy, put the country inexorably on the road to national health care and, as acknowledged by Senate Finance Committee Chairman Max Baucus but few others, begun one of the most massive wealth redistributions in U.S. history.
Second, there is a major financial overhaul, which passed Congress on Thursday. Economists argue whether it will prevent meltdowns and bailouts as promised. But there is no argument that it will give the government unprecedented power in the financial marketplace.
Its 2,300 pages will create at least 243 new regulations that will affect not only, as many assume, the big banks, but just about everyone, including, as noted in one summary, “storefront check cashiers, city governments, small manufacturers, homebuyers and credit bureaus.”
Third is the near $1 trillion stimulus, the largest spending bill in U.S. history. And that’s not even counting nationalizing the student loan program, regulating CO2 emissions by EPA fiat, and still-fitful attempts to pass cap-and-trade through Congress.
But Obama’s most far-reaching accomplishment is his structural alteration of the U.S. budget. The stimulus, the vast expansion of domestic spending, the creation of ruinous deficits as far as the eye can see are not easily reversed.
These are not mere temporary countercyclical measures. They are structural deficits because, as everyone from Obama on down admits, the real money is in entitlements, most specifically Medicare and Medicaid.
Only Half Done
ObamaCare freezes these out as a source of debt reduction. ObamaCare’s $500 billion in Medicare cuts and $600 billion in tax increases are siphoned away for a new entitlement — and no longer available for deficit reduction.
The result? There just isn’t enough to cut elsewhere to prevent national insolvency. That will require massive tax increases — most likely a European-style value-added tax. Just as President Reagan cut taxes to starve the federal government and prevent massive growth in spending, Obama’s wild spending — and quarantining health care costs from providing possible relief — will necessitate huge tax increases.