Okay, really, I swear this time I’m going to try to make this shorter. In part 3 of the Barack Obama Website Series, I will take a look at Obama’s plans for CHANGE as it relates to the American economy.
A great deal of this section is repeated in other sections of his website, so I will only offer those points which are not redundant. I will also try to confine myself to the most important aspects of this issue.
The problem, as Barack Obama sees it, is two-fold: First, wages have remained stagnant as prices have risen over the last five years [of course the biggest idiot on the planet could have come to this brilliant conclusion]. Secondly, the wealthiest Americans received undeserving tax cuts that should have gone to middle class Americans. [Everybody knows that the wealthiest Americans don’t actually do anything to earn their money; they just watch the middle class work their butts off and cash in on that labor. None of them has ever worked a day in their lives; none of them has built a company from scratch and made the American Dream come true; they all just had rich parents who gave it to them. Oh yeah … I remember … these are the very people who employ the majority of Americans who are not on the government payroll!]
Barack Obama’s plan to solve the economic crisis is, like his platitudes of HOPE and CHANGE, quite vague. His plan does, however, contain HUGE influxes of federal (taxpayer) money. He oulines it as follows:
Jumpstart The Economy
Provide Additional Tax Rebates to American Workers: Despite the $152 billion economic stimulus package enacted under the Bush Administration, the economy has continued to weaken significantly, according to Barack Obama. He would like to further stimulate the economy by providing immediate tax rebates to American consumers at a total cost of $20 billion. [Keep in mind folks, that this is not “free” money. Americans will have to pay this loan back in the future or face further consequences resulting from a continually weakened dollar.]
Establish a $10 billion Foreclosure Prevention Fund: Obama wants to establish a $10 billion Foreclosure Prevention Fund that will increase emergency pre-foreclosure counseling and help “responsible” families facing foreclosure to “refinance their mortgages or sell their homes.” His plan is not intended to help speculators, people buying vacation homes or people that falsely represented their incomes. [I can hardly wait to hear how Obama is going to define what a “responsible” homeowner is. Responsible people do not get themselves into these situations in the first place!]
Provide $10 billion in Relief for State and Local Governments Hardest-Hit by the Housing Crisis to Prevent Cuts in Vital Services: Barack Obama believes that in the areas hardest-hit by the “housing crisis,” we should provide immediate, temporary funding in the form of $10 billion to state and local governments so that the decline in property values does not cause them to slash critical public services and cut vital infrastructure spending. [This does not address the real problem, here. State and local governments in these areas saw a huge influx of money in the past two years as real estate taxes grew along with the prices of homes. Rather than placing that increased money in special emergency funds or investing it, these governments blew the money on pork barrel projects. Now that home values are making a downturn, the state and local governments are whining about their loss of revenue. There has been no real loss of revenue, as housing prices have returned to normalcy. What is missing, however, is the influx of cash that they were using to finance all of the extra pork!]
Extend and Expand Unemployment Insurance: Barack Obama believes we need to “temporarily” extend the Unemployment Insurance program, investing an additional $10 billion, to address the needs of the long-term unemployed, “who currently make up nearly one-fifth of the unemployed” [no reference cited]. He states that these people are often “older workers who have lost their jobs in manufacturing or other industries and have a difficult time finding new employment” [again, no reference cited]. He contends that every dollar invested in Unemployment Insurance benefits results in $1.73 in economic output [still, no reference cited]. Obama’s plan will extend federal unemployment benefits for an additional 13-26 weeks at a cost of $10 billion. [This is certainly no shock. Democrats have thrived on representing the unemployed since the days of FDR and wouldn’t stand a chance of getting elected if they didn’t pander to those who either can’t or won’t work. If Democrats had their way, the majority of the country would be sitting at home, waiting for the government to take care of them. Conspiracy theorists have suggested that elected Democratic Party officials intentionally create roadblocks to economic success in order to expand their unemployed voter base.]
Provide Middle Class Americans Tax Relief
Provide a Tax Cut for Working Families: Barack Obama states he will create a “Making Work Pay” tax credit of “up to” $500 per worker or $1,000 per working family that will “provide 150 million workers with the tax relief they need” and “completely eliminate taxes for 10 million Americans.” [This, I must say is the most shockingly out of touch statement I have read on his website so far. Does he really think that 500 bucks is the tax relief I need? Can he possibly believe that handing out such an insignificant amount is going to even make a dent in the economic suffering of a single person? This is even less money than the much-maligned Busch Economic Stimulus Package gave to ALL Americans.]
Simplify Tax Filings for Middle Class Americans: Here, Barack Obama says he will simplify tax filings for middle class Americans by having the IRS create pre-filled tax forms from information that they have obtained from banks and employers so that all taxpayers have to do is simply sign the forms. This, he claims, will save American taxpayers “up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees.” [Lets see, taking out the 10 million additional Americans that he says won’t have to pay taxes at all anymore, that leaves 140 million taxpayers if we use his numbers from the preceding paragraph. That would amount to a savings of under one hour and forty-five minutes per year of each individual’s time and almost $14.28 per working American. That means the average American will have enough time and money saved in a year to go out to a decent restaurant a buy half a meal!]
Eliminate Income Taxes for Seniors Making Less than $50,000: Barack Obama wants to eliminate all income tax for seniors making less than $50,000 per year, eliminating income taxes for 7 million seniors and providing these seniors with an average savings of $1,400 each year. Under Obama’s plan, 27 million American seniors will not need to file an income tax return. [Okay, TIME OUT: It has not been explained here what age group is being defined as a “senior.” Is he using the AARP’s definition (age 50 and older) or the Social Security Administration’s (67 years old for those born after 1959)? Also, Barack Obama does not provide any justification as to why these seniors are any more deserving of not paying taxes than working families, who are supporting children, are.]
Fight for Fair Trade: Obama says he will “fight” for fair trade practices with other countries of the world that will open up foreign markets to support good American jobs, using trade agreements “to spread good labor and environmental standards around the world.” He continues by stating he will “pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and non-tariff barriers on U.S. exports.” [I can only ask myself, “What does it mean when he says he will ‘pressure’ and ‘fight’?” Really, Barack, I’d laugh if I were a foreign country and you used words like that to me. Is this before or after you have our military withdraw from Iraq with their tails tucked between their legs? You shouldn’t use words like that unless you mean them. I also don’t understand why any foreign country would be willing to open their markets to “support good American jobs.” Don’t they have their own citizens’ jobs to look after?]
Amend the North American Free Trade Agreement: Obama believes he will be able to work with the leaders of Canada and Mexico to “fix NAFTA so that it works for American workers.” [There is really no plan, here. These are just words. A plan would outline what specifically Obama would use as an incentive for Canada and Mexico to accept a new deal that doesn’t “work” for their countries’ workers.]
Invest in the Manufacturing Sector and Create 5 Million New Green Jobs
Barack Obama says that he will double federal funding for research and tax breaks to companies for the creation of the “first wave” of green technologies and jobs. He will also increase funding for federal training programs that include green technologies in addition to creating a “Renewable Portfolio Standard (RPS) that will require 25 percent of American electricity be derived from renewable sources by 2025.” [This latter goal would be far more believable if he supported increasing the number of nuclear power plants. I mean, come on now, 25%! How many windmills does he think the environmentalists are going to let us erect before they come to the conclusion that we may be potentially decapitating the nation’s bird population or disrupting the breeding habits of the North American brown bat? On a side note, I can’t help but wonder how we have evolved technologically when our answer for “new” energy is to revert to a device that has been around, by some accounts, for nearly 2,000 years! I do support the transition to electric cars. Keep in mind, however, that “plugging in” will cause an even greater demand for electricity that will certainly put a damper on the 25% goal. I can also already hear the environmentalists screaming about the number of batteries polluting the landfills, as well.]
Support Small Business
Barack Obama plans to eliminate all capital gains taxes on start-up and small businesses in order to encourage innovation and job creation. He also wants to invest $250 million to create a national network of “public-private business incubators which will facilitate the critical work of entrepreneurs in creating start-up companies … in disadvantaged communities throughout the country.”[Huh? I don’t know what a “business incubator” is! I do know that $250 million works out to $5 million per state, which hardly seems like an amount of money that will make any significant impact on the creation of businesses. Barack Obama also doesn’t state how long a new, small business will be exempt from capital gains taxes under his plan.]
Barack Obama says he wants to strengthen the rights of union employees by overturning the National Labor Relations Board’s decision to exempt certain supervisors from union protections and prohibit companies from permanently replacing striking employees. He also states that he will raise the minimum wage and index it so it adjusts to national inflation rates. [Bear in mind that these are Barack Obama’s plans to CHANGE Washington from the “politics of old.” Are you kidding me? These ideas have been the mantra of the Democratic Party since Franklin D. Roosevelt’s “New Deal” in 1932. Taking away business owners’ rights to permanently replace workers who refuse to show up is a concept that has the potential to shut down the American Economy. Unions are already crippling this country’s ability to compete in a global economy. The concept of annually increasing the national minimum wage does not address the wages of those who make more than minimum wage. Their wages must increase in proportion to the minimum wage or we will become a two-tiered society; those at the top and those at the bottom. The backbone of this country – the middle class – will disappear altogether. Can anyone say “South America?” Once again, I must point out that the President of the United States does not have the power to do these things. Thank God! If he did, we would never be able to stop the snowball of inflation as it bounded down the hill, growing larger and more burdensome as it and the American economy crashed at the bottom.]
Protect Home Ownership and Crack Down on Mortgage Fraud
The overall theme here is that the unscrupulous mortgage industry has been tricking home buyers into purchasing mortgages that they cannot afford by making things too confusing for the average person to understand. In this section of the plan, Obama would like to create a 10% Universal Mortgage Credit (much like the current sales tax credit) for homeowners who do not [or are too lazy to] itemize their deductions.
The plan also calls for increasing penalties on those lenders who engage in mortgage fraud and mentions his Stop Fraud Act, which provides the first federal definition of mortgage fraud [the definition is never provided, however].
Further, Obama states he will create a fund to help “innocent” homeowners refinance their mortgages and will prevent bankruptcy courts from foreclosing on a house without offering refinancing terms. This fund will be “partially” funded by penalties imposed upon the unscrupulous mortgage industry.
[Frankly, I have no problem with people being able to refinance their mortgages. I don’t know how he plans to define who the “innocent” home purchasers are versus the ones that were trying to “game” the system. Maybe an IQ test would be in order. The fact is, the current crisis was created by homeowners who bought more house than they could afford, paid too much for those houses and gambled that they could take advantage of the low introductory rates being offered by lenders before refinancing a couple of years down the road. Anyone with a brain could see a year before the housing industry crash that there were far more homes being built than the market could support and that housing prices were going to come crashing down. Because people purchased homes that were overpriced, when their prices fell, banks were not willing to refinance loans, since the houses were not worth what they were purchased for. I have never understood why adjustable rates are permitted in the mortgage industry or the credit card industry, for that matter. Speaking of credit cards …]
Address Predatory Credit Card and Payday Loan Practices
The credit card industry is largely unregulated and gets away with things that would be criminal in any other industry. This section of Barack Obama’s Economic Plan needs far more detail than Obama has gone into on his website and would garner greater support if people understood the terms that he uses. I agree wholeheartedly with everything contained in this section (are you shocked?) and feel the need to explain them item by item]:
Ban Unilateral Changes to Credit Card Terms: Credit card companies have provisions in their agreements that allow them to change their fees, interest rates and virtually every aspect of their contracts with card holders with only a fifteen day notice. This means that, at their whim, credit card companies can decide to change the interest rate you are paying from 10% to 20%, make it retroactive, tack on handling fees and pretty much violate any and all terms of the credit card agreement that was signed by the card holder.
Only Allow Interest Rate Increases on Future Debt: If a credit card holder is just one hour late on a payment, credit card companies currently have the ability to increase the credit rate on every purchase that you have previously made. In fact, many credit card companies have purposely set the time that a payment is considered late to occur before the mail arrives on that due date. Things happen in life and sometimes a bill goes unpaid by accident. The credit card companies are hoping this occurs so that they can double and even triple the amount of money that you owe them. This frequently puts people in situations where they become so overburdened with debt, that they become buried in a hole they can never get out of. Barack Obama understands that some people may be deemed less credit worthy because of missed payments. While it is permissible for credit card companies to increase rates on future purchases, they would not, under his plan, be able to increase the interest rate on past money owed [AMEN!].
Prohibit Universal Defaults: This is, perhaps, the most disgusting provision of credit card agreements. The “Universal Default” provision allows credit card companies to increase your interest rates for past and future debt if you have missed or made a late payment to ANY creditor. They may also increase your credit rate on past and future debt if your credit score falls. This would be like your mortgage company doubling your house payment because you returned a video one day late to Blockbuster.
Prohibit Interest on Fees: There are numerous fees buried in the fine print of credit card agreements. Credit card companies currently are allowed to charge interest on those fees. So, if you owe a late fee, for example, a credit card company can slap you with a $25 charge and triple your interest rate on money owed from 12% to 36%. Effectively, this means that the $25 charge is really a $34 APR fee in this example.
Place a Cap of 36% on Payday Loans: People who need this type of advanced money are already “robbing Peter to pay Paul.” The fees that are being charged would land a loan shark in jail. Obama’s plan would cap the amount that these companies can charge at 36%. Even at this rate, a person whose normal take home pay is $400 would only receive $256 from the Payday loan places. Personally, I think that even this rate is too high but, if credit card companies can get away with it, I guess these businesses can too!
For the most part, Obama’s plan for the economy seems to wipe out the middle class. The tax relief that he offers is less than the tax cuts that are in effect under the Bush plan. Furthermore, business owners will be forced to cut jobs, lower salaries and raise prices to compensate for the higher taxes that they will have to pay as individuals. Raising the minimum wage will not have much of an effect, as workers will be scrambling to find the few remaining jobs.
Unions will gain unchallenged power under this plan that will destroy many American companies, who will no longer be able to compete with other businesses around the world. Unprecedented loss in jobs can be expected as many companies move their operations overseas. This plan has economic meltdown written all over it!
There is not even a mention in Barack Obama’s plan about the largest contributing factor to our current economic woes – the high cost of fuel. This is apparently not seen as a problem to him since he recently said “I would have preffered that the price of oil got to its current rate more gradually [than it did].”
In Part 4 of the Barack Obama Website Series (coming soon to a computer near you), I will be examining Barack Obama’s plan for CHANGE as it relates to education.