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Lynn Forester de Rothschild Headshot

Barack Obama's America

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When Barack Obama announced that he was running for president he was very clear that, if elected, he planned "not just to hold an office, but to gather with you to transform a nation". Twenty months after that statement in Springfield Illinois, we now have a much clearer view of what he means by "Change We Can Believe In". In a campaign of soaring generalizations on mostly centrist themes, Barack Obama has described the details of the transformation he would bring with almost surgical precision. What he offers may be, in substance and in spirit, a radical departure from the principles of the American Dream that has defined our nation over the last two centuries.

In the guise of a "middle-class tax cut", Senator Obama is actually adding a new tax in order to create a new welfare program that will add to the annual $400 billion that we currently spend on our welfare system. According to the Tax Policy Center, each year Barack Obama will take $70 billion from the 2% of small businesses and individuals who create over 16 million jobs and will send checks for almost $100 billion to over 40%, or approximately 60 million Americans, who pay no taxes at all. Cleverly, Senator Obama has called his transfer a "refundable tax credit" instead of "income redistribution". Indeed, to label as a "refund" a payment which the recipient has never funded is wordsmithing on steroids.

When Bill Clinton turned "welfare" into "workfare" in 1996 and created twenty two million jobs for Americans, he said, "We are taking an historic chance to make welfare what it was meant to be, a second chance, not a way of life". At the time, then State Senator Obama called this highly successful policy "disturbing". No wonder that the Chicago New Party, an affiliate of the Democratic Socialist Party, endorsed State Senator Obama in 1996 after he signed the pledge that was required in order to receive the endorsement. Now, if elected president, he will re-create a failed welfare system while calling it "tax reform". No candidate has ever been cleverer with words than Mr. Obama. But, does America want to "spread the wealth" as Mr. Obama advocates? According to the June Gallup Poll, Americans, by a margin of 84-13%, want our government to fix the economy and create jobs, not to redistribute wealth.

The fundamental problem with Senator Obama's stealth economics is that his dogma will not make America stronger or fairer. Today, the top 1% of earners contributes 40% of the nation's $2.6 trillion tax intake and the bottom 50% pay 2.9% of our nation's total needs. It has been shown that reductions in tax rates increase tax revenues because private enterprise strengthens the economy which in turn creates a larger tax base. For example, in 2003 the richest Americans paid $136 billion in taxes and after the Bush tax cut in 2006 they paid $274 billion.

During our last devastating global economic crisis, Franklin Roosevelt protected this country from the statist dictatorships that were emerging in the rest of the world. He protected capitalism by creating programs and institutions to protect innocent people but did not raise taxes and did not remove incentives for private wealth creation. In another era, with real fiscal deficits larger than we face currently, President Kennedy reduced taxes. The historical evidence is clear that nations that stifle private enterprise have less robust economies with slower growth and less innovation, opportunity and diversity.

In his book, The Audacity of Hope, Mr. Obama stated that "eking out a bare Democratic majority isn't good enough." Indeed, if the pollsters are correct and the Democrats win overwhelming majorities in the House and Senate, Senator Obama, if elected, would easily implement both his promises for $307 billion of new federal spending per year and his punitive tax policies. The truth is that with the level of spending in the Obama plan, either taxpayers between $40,000 and $250,000 per year will have to fund the massive costs for the new programs he is promising, or the promises will be abandoned.

Perhaps more sinister is Obama's reconfiguration of the American Dream. My father made an inflation adjusted income of about $50,000 per year. He never took a handout but he worked two jobs. He taught us that if we worked hard and played by the rules there was no limit to what we could become in America. Now, Barack Obama is changing that compact with America. In Barack Obama's America, there is a ceiling to the American Dream. He decides the level at which our money becomes the government's money.

There is a reason why immigrants fly to America to achieve their dream. Now, in the guise of a "middle class tax cut" Barack Obama is threatening that dream. If he succeeds, Barack Obama will bring the kind of radical transformation that this country does not need and never has. And the country will be in for a shock.

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