Sen. Barack Obama shed new light on his economic plans for the country, saying he would rely on a heavy dose of government spending to spur growth, use the tax code to narrow the widening gap between winners and losers in the U.S. economy, and possibly back a reduction in corporate tax rates.Apparently, Obama doesn't understand the concept of irony, but that is another matter.
In an interview with The Wall Street Journal, the Illinois Democrat said that he was trying to put together tax and spending policies that dealt with two challenges. One is the competition from rapidly growing developing countries, like India and China. The other: the U.S. becoming what he called a "winner-take-all" economy, where the gains from economic growth skew heavily toward the wealthy.
Sen. Obama cited new economic forces to explain what appears like a return to an older-style big-government Democratic platform skeptical of market forces. "Globalization and technology and automation all weaken the position of workers," he said, and a strong government hand is needed to assure that wealth is distributed more equitably. He spoke aboard his campaign bus, where a big-screen TV was tuned to the final holes of the U.S. Open golf tournament.
What Obama seems prepared to offer is a sort of FDR New Deal Redux, essentially using the govenrment to spend the nation out of economic trouble. What Obama forgets is that it took a war to really end the Great Depression.
But leaving the history lesson aside, government spending creates a larger federal budget. A larger budget in turns demands fuel to feed the fire, that fuel being tax dollars. For every dollar spent on taxes, that is one less dollar being pumped into the economy for other purposes, like buying a big screen TV or a custom bus, or being saved for a rainy day. All Obama's plan will do is create a sense of entitlement from teh government that is already killing the budget. New Deal legacy Social Security is draining the coffers. Great Society's medicare is adding to teh great suction on the Treasury and more government spending is not likely to help.
The very forces that Obama cites as harmful are teh very forces that created the great economic engine of the 1990's. Globalization offered new markets, technology made things better, faster, and cheaper, as well as freeing up workers to take on new tasks. Automation makes workers safer, healthier and oh yeah, allows them to make more money doing less physical labor.
Obamanomics--gotta love the lack of historical perspective.