Thursday, October 30, 2008

The Democrats Plan To Pauperize America

Really, there is no other word for it: Why Democrats Will Target the Investor Class in 2009

There are at least two pretty effective ways to turn someone into a Republican: (1) get them married with kids and (2) get them to invest in the stock market. So, if I were a highly paid Democratic political strategist, I would make sure to spend a few minutes every day thinking of ways to get Americans out of the stock market—the faster, the better. And that's why if Barack Obama is elected president next week, 2009 may well bring a concerted and all-out effort by the Obama administration and a Democratically dominated Congress to turn the generally pro-Republican Investor Class into an endangered class by, among other tactics, raising investment taxes and ending the tax preferences for 401(k)'s, IRAs, and other retirement accounts. Here is the emerging battle plan for Operation Investor Class Rollback:

1) Hike Investment Taxes. Obama wants to raise capital gains taxes even though he has kinda, sorta admitted that it might be bad for the economy and might actually decrease tax revenue to the government. For now, he's talking about raising the highest cap gains rate by one third to 20 percent, though earlier in the campaign, he floated pushing it as high as 28 percent, a near doubling....

2) Eliminate 401(k)'s, IRAs, and other retirement plans. Democrats in the House are now talking openly about the longtime liberal dream of repealing the tax advantages of putting money into a 401(k) plan or other tax-advantaged retirement account....

Not only would removing the preferential tax treatment of these vehicles raise investment taxes by $100 billion a year and affect Americans making less than $100,000, it would surely prompt many Americans, already shell-shocked by the market's recent losses, to flee stocks. All this ignores the fact that there are trillions of dollars in American retirement accounts, and abandoning the higher-returning stock market at a probable bottom is classic financial foolishness. If you believe long term in the American economy, then you have to believe in the stock market. If you don't, then you have to admit the government won't be able to afford its promises anyway.

3) Replace private capital with public capital. But wouldn't a weak stock market hurt the economy by making it tougher to raise investment capital and lessen the return on risk? Surely, it would. But Obama is planning hundreds of billions of dollars of government "investment" in cutting-edge technology, particularly in the energy and healthcare sectors....

Fundamentally this is all designed for a single purpose, to make Americans beholden to, and dependant upon the state. The goal would be to make those with a middle class income unable to provide for their own retirement, or otherwise to direct the financial direction of their own lives.

The goal is also to limit social mobility. As the piece makes clear the trouble with people getting wealthier, from a Democratic point of view, is that they become more Republican. But if you are able to create a new class who feel the only way to have a middle class lifestyle is to have the government guarantee it for you, paid for by the pocketbooks of the rich 5%, then you will have permanent Democrats.

However, this fantasy is just that, a fantasy. There is no way 5% of Americans can pay for a middle class life for the other 95%. So, if you are anywhere in the top 50% of wage earners they are coming for your money next.

If you don't think this is Socialism then that only proves you don't know the meaning of the word.


bucyrus said...

I find the notion that democrats would repeal the tax benefits of 401ks utterly comical. If you're going to waste folks times by raising a specter, at least raise one that's believable. Might some whackjobs be discussing? Sure. If there any chance whatsoever that it would happen? No fricken way.

This is about as likely as repealing the home mortgage interest deduction. It's not going to happen. Politicians may be partisan, but they aren't stupid. Such changes would be about as popular as passing a law making it mandatory to steal candy from babies.

Kranky Kritter

The Iconic Midwesterner said...

You mean nut jobs like Teresa Ghilarducci, a professor at the New School of Social Research, invited by House Democrats to share her "wisdom" on the matter. Or Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support. Or George Miller, D-California, House Education and Labor Committee Chairman.

If these folks were living in a Jonestown style commune someplace I wouldn't be worried. That they hold the reins of power in Washington scares me to death.

Because, you know, our being able to invest our own money isn't reality (according to them at least.) In fact, contrary to all sanity and logic, the government is allowing us to invest their money.

Or so the theory goes.

(Hmmm...what theory does that sound like?)