Thursday, October 25, 2012

Dreams From My Second Term Agenda

     This week, President Obama released a book-like agenda for his second term, should he be re-elected. The rather lengthy tome used thousands of words to express three main themes, which he repeated in all three debates and just about every stump speech on the campaign trail. President Obama's three big ideas for a second term that he claims will fix all our problems are 1) Soak the rich, 2) Hire teachers and 3) Build roads and bridges.
     The trouble with the President's first agenda item, soak the rich, is that the top 10% of wage earners in this country already shoulder 70% of the total tax burden, according to the latest IRS statistics. Additionally, over a million small businesses would be hit by the President's higher tax rate because they file as sub-chapter S corporations, which means they file their taxes as individuals. These small businesses account for two thirds of new job creation. Logic, and simple economics, would dictate that these small businesses will hire fewer, or no new workers if they are paying more in taxes. Not to mention the additional burden that Obamacare will place on them. The other problem with soaking the rich is it leaves them less money to invest in private enterprises that keep people employed and create economic activity. A strong economy depends on business investment, a third of Gross Domestic Product is comprised of this type of investment.
     President Obama's second big agenda item, hire more teachers, is both antithetical to reason and disingenuous. According to the Department of Education, since the 1970s the number of teachers has doubled while student enrollment over that period has only increased by 8%. The myth that smaller class sizes leads to a better educational experience for students has no basis in reality. If it did, universities would never turn out educated students because in many courses the class sizes are in the hundreds. I remember my own elementary and high school experience where class sizes were rarely under 40 pupils to a class, and my education didn't suffer at all from class sizes they now call too large. The last thing to remember on this agenda item is that practically all direct education spending happens at the state and local level. The Federal government doesn't hire teachers, so no president can promise to do so. And the over 100 billion dollars a year that is spent by the Federal Department of Education is done so on administration costs, none of that money actually augments bottom line education.
    The last part of the President's agenda, building roads and bridges, sounds good on the surface but its reality is a different story. The President would have people believe that our entire infrastructure is crumbling and no administration in the last 50 years has allocated a dime to its repair. This just isn't true, the Federal government has doled out hundreds of billions of dollars in taxpayer money over the last 30 years for infrastructure maintenance and repair. The problem is that politicians use that money to build bike paths and new government buildings that they then name after themselves. No politician wants a pothole named after them and giving people something new will always garner more votes than simply fixing something old that has fallen into disrepair. Infrastructure spending is another example that is illustrative of the fact that we don't have a funding problem, we have an allocation problem.
     The common thread linking all three of the President's main agenda items is redistribution of wealth. Whether it is redistributing that wealth from the rich to the poor, as in the first agenda item, or it is redistributing wealth from everyone to his union supporters, as in the last two items, re-distribution is the plan for a second term. And the President, for all of his failings, has not failed to make crystal clear his intention to redistribute wealth. And if the voters return him to office next month, it will be with the full knowledge of his intentions, and God help us if those intentions are realized. 

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