Whatever happens with the Obama tax plan for working class vengeance on the wealthy, Middle America is going to get burned. When White House agenda squares off against fairness and when Obama special interest favoritism bumps heads with the broader good of the working class, agenda and favoritism will win every time. Working class Americans? They will keep on losing.
The president ran up a tab on the backs of the working class
What better argument can be made for fiscal responsibility than that the working class ends up holding the bag when Washington screws up? Despite White House charges of irreparable harm done by Republican fiscal policy, unemployed Middle America would likely exchange the Bush years for the Obama recession in a heartbeat.
The Bush tax rates have been in effect throughout the president’s first term, so the deficit he ran up was charged to the same taxpayers he claims were bullied by GOP fiscal policy. Damning those tax rates at every opportunity, Democrats in Congress helped the president burn through hundreds of billions of tax dollars beginning with the Recovery Act, knowing full well that those they claimed to defend would pay the tab in the event the Obama tax plan to recoup our losses from the rich failed.
What did the working class get for its money?
For starters, Middle America bought an $831 billion budget deficit¹ with a recovery package that the Congressional Budget Office tells us has nearly stopped delivering:
The effects of ARRA on output peaked in the first half of 2010 and have since diminished, CBO estimates. The effects on employment are estimated to lag slightly behind the effects on output; CBO estimates that the employment effects began to wane at the end of 2010 and continued to do so through the first quarter of 2012.²
Those evaporating stimulus effects left us with an 8.2% unemployment rate. At least the president can take credit for saving the American auto industry. The working class, many of whom were supported by that industry, helped to pay for that White House success. While the president talked up the auto industry’s resurgence last March, taxpayers were still $37 billion light on the $80 billion spent to keep the industry from expiring.³
Mr. Obama likes to extend the umbrella of the government takeover of General Motors to include the rescue of American manufacturing, but as the employment market sags that resurgence has sagged with it. Fewer manufacturing jobs were created during the entire second quarter of this year than were created in January.4
Fortunately for the working class, if Democrats can get the Obama tax plan through Congress the president can use some of that money to spend on infrastructure projects, if he can find any to spend on. The White House is putting the money before the projects, because the work to build roads, bridges, futuristic railways, and all the other things our decrepit country needs for the 21st century does not exist. Infrastructure projects have to be created, planned, budgeted, and farmed out. They take a long time to get going, especially projects of the scope and magnitude envisioned by the White House (see: A Federal Infrastructure Bank: Stashing Cash for a Jobless Tomorrow). As far as the plan for an infrastructure bank to fund these non-shovel ready projects is concerned, the Congressional Budget Office talked about that proposal just last week:
The number of projects that would be good candidates to receive a loan from a federal infrastructure bank as envisioned in recent proposals is probably limited, at least in the short term.5
An infrastructure bank would, however, give unions the illusion that a pool of ready cash is being held in reserve to pay member salaries at Davis-Bacon wage rates, until we get serious about our new high-speed rail system or the other job creating projects we keep hearing about.
The Obama Tax Plan: the working class gets stuck with the bill
Life is not fair. At times it can be downright unpleasant. Despite what the president says about the failure of trickle down economics, when the economy does well the working class does better than when the economy is falling apart. Fears of socialism will become very real as the Obama tax plan plays out, and not because we will redistribute the incomes of the wealthy. Hundreds of billions of dollars were spent by this president with the complicity of congressional Democrats. When the Obama tax plan to fleece the rich fails along with the rest of our misguided fiscal policy, it will be Middle America’s incomes that get redistributed to pay for Barack Obama’s failures.