Saturday, November 1, 2008

Obama's shrinking middle class

His definition of "middle class" has shrunk steadily:

Via Hot Air, where Ed Morrisey reports that Obama's definition of "middle class" used to be even lower:

What you see in that brief 54-second clip is Obama's government-centric view of economics: "The problem was [the Bush tax cuts] weren't targeted at the short-term stimulus of the economy." The notion of government "stimulating" the economy short-term, rather than encouraging long-term growth by freeing up capital investment, is the classic Keynesian "pump-priming" fallacy.

The Earned Income Tax Credit that Obama praises as "tax cuts for working families" was originally created as an incentive for very low-income workers, since the total benefits package of the Welfare State (including cash welfare payments, food stamps, public housing, and Medicaid) was -- and still is -- a disincentive to work.

And Obama, in praising tax cuts for families making $50K-$70K completely ignores the $1,000 per-child tax credit that were part of the Bush tax-cut program. (As a father of six, I especially liked that one).

Then he talks about "the money we've given up," as if the tax cuts actually reduced government revenue. (Hello, Laffer Curve? Total federal revenue increased after the tax cuts!) Obama suggests that the reduced revenues (which weren't actually reduced) deprive Illinois of "transportation dollars" and "health care dollars." But nobody is stopping Illinois from increasing state tax revenue to fund such programs. Why should people in Illinois send more tax money to Washington in hopes of getting back a fraction to spend on their "enormous needs"? It's nuts.

1 comment:

  1. May be the middle class has shrunk because they moved up. Is that so bad? 6 kids? I have 5 myself and feel like I got off easy. My wife is one of 13. :)