Using Class Warfare to raise the Debt Limit while the Chinese Love Chairman Mao

Posted by PITHOCRATES - July 16th, 2011

You just don’t create more Jobs by Raising Taxes

Long story short the economy sucks.  And it’s not getting better anytime soon (see Number of the Week: 5% Unemployment Could Be Over a Decade Away by Justin Lahart posted 7/16/2011 on The Wall Street Journal).

162: Number of months it would take at this year’s pace of job growth for unemployment rate to fall to 5%.

That’s 13 and a half years of more of the same.  High unemployment means fewer taxpayers.  This does not bode well for our current debt crisis or that out of control government spending.  Which has all of Washington in a panic as they desperately try to get the Republicans to cave and increase the debt limit so they can borrow more. 

Obama and the Democrats want tax hikes.  To take more from those who work.  The Republicans want to go the route of making more taxpayers (i.e., create more jobs).  And you just don’t create more jobs by raising taxes.  Unless you live in fairyland.

‘Shared Sacrifice’ means Taxing the Wealthy More

But the spending is so out of control and the economy so bad that the Obama administration is desperate for new taxes.  They’re willing to offer any deal.  And tell any tall tale (see Obama appeals to middle class on debt talks; GOP touts balanced budget by the CNN Wire Staff posted 7/16/2011 on CNN).

Obama cited budget deals forged by President Ronald Reagan and Democratic House Speaker Tip O’Neill and President Bill Clinton and Republican Speaker Newt Gingrich.

“Nobody ever got everything they wanted,” Obama said. “But eventually they worked together, they moved this country forward…”

“We’ve been down this road before,” he said. “In 1990 Congress and the president struck a deficit reduction deal that combined spending cuts with tax increases. Unfortunately, while the tax hikes remained, the spending restraint did not, and our debt has marched higher.”

There’s a little history revisionism.  The Democrats got their tax hikes.  And screwed Republicans on the spending cuts.  The infamous $3 in spending cuts for every $1 in new taxes promise in the Tax Equity and Fiscal Responsibility Act of 1982Tip and his Democrats reneged on that promise.  Just like the Democrats did on their 1990 promise. 

‘Working together’ to Obama means to do what the Democrats want and to stop being a pain in the ass.  So you can understand why the Republicans are a little gun-shy when it comes to making deals with them that require trust.  Because they have a history of being untrustworthy.

Evoking compromises of the past, President Barack Obama said Saturday that a commitment to shared sacrifice can break the current impasse on the debt ceiling…

He used his address to reach out to the middle class, reiterating his call for higher taxes on the wealthy and reforms to politically popular entitlement programs such as Medicare and Social Security. “We are all part of the same country. We are all in this together…”

One of the issues at heart of the current debate is Obama’s call for more tax revenue by allowing tax cuts from the Bush presidency to expire at the end of 2012 for families making more than $250,000. His plan would keep the lower tax rates for Americans who earn less.

Obama noted earlier this week he is not looking to raise any taxes until 2013 or later. In exchange, the president said, he wants to ensure that the current progressive nature of the tax code is maintained, with higher-income Americans assessed higher tax rates.

Shared sacrifice?  Higher taxes on the wealthy?  Clearly that’s not shared sacrifice.  That’s making the wealthy pay more.  Even though they are already paying a lot.  In fact, any poor person who wins the lotto will be shocked to see how much they will owe in taxes.  Say you won a million dollar jackpot.  Per the 2010 federal income tax table, you’ll owe $327,643.75.  Not to mention state or local taxes.  You’ll be lucky to keep half of your winnings by the time you’re done paying your taxes.  Is that fair?  If it’s you, no.  If it’s the ‘rich’ and you’re not rich, sure.  Why not?  Classic class warfare.  And it’s exactly what the Democrats are banking on.  

A Warm Love for Chairman Mao

And speaking of class warfare, you know who else is good at it?  The Chinese communists.  And it starts by indoctrinating their children (see Red State by Hannah Beech posted 7/16/2011 on Time).

Twelve-year-old Chen Le is a typical Chinese kid. He loves flying paper airplanes, plays Ping-Pong and dreams of becoming a scientist. And he aims one day to join the Chinese Communist Party (CCP) so, as Chen puts it, “I can puff out my chest and say I am a party member…”

…Then there’s the Red Army school program, which uses donations and other funds to instruct 1.15 million kids in academies named after the communist militia. “Our patriotism classes are even more patriotic than those of normal schools because loving our country is very important for our current society,” says Fang Qiang, the secretary-general of the National Red Army Construction Project Council. “Our students all have a warm love for Chairman Mao.”

A warm love for Chairman Mao?  Interesting.  Talk about history revisionism. 

[The] red revival is facing something of a backlash. For some Chinese, the color red brings back the bad memories of the 1966-76 Cultural Revolution, when frenzied Red Guards rampaged nationwide. The resurgent glorification of Mao, who even staunch supporters have grudgingly labeled “70% right and 30% wrong,” has alarmed others. As the red-culture campaign reached a crescendo this spring, economist Mao Yushi of Beijing think tank Unirule Institute of Economics wrote an online essay blaming Mao for overseeing the deaths of some 50 million Chinese. The Great Helmsman was “a backstage orchestrator who wrecked the country and brought ruin to the people,” the academic wrote. Censors quickly purged his comments.

There wasn’t a whole lot of love for Mao when he was killing those 50 million Chinese.  Just a lot of fear.  And suffering.  As China reformed and purged the rich and made everyone equal.  And poor.  And now the young are singing patriotic songs about the world’s greatest mass murderer.  To help keep everyone patriotic.  So they don’t see the rich getting richer.  And the poor staying poor.

For a nostalgic faction in the Chinese leadership, it is the market-oriented economic reforms of Mao’s successor Deng Xiaoping — which turned China into the world’s factory — that are responsible for having allowed ills such as graft and income inequality to flourish. In national surveys from 2005 onward, Chinese have expressed progressively less satisfaction with their lives, even as their incomes have surged. “We can’t stop divisions in society completely, but we can try to lessen the pain,” says Fang Ning, director of the Institute of Political Science at the Chinese Academy of Social Sciences in Beijing. “The central theme of red culture is to promote unity and equality in society. China has had economic growth. Now we want to pay attention to social growth as well.”

After some spectacular growth caused by allowing a little capitalism in, they will now be paying attention to social growth.  Much like in the United States.  And we see what that did for the Americans.  A 15 year or so recession.  And a debt crisis.  Which is now coming to China.  Who are no strangers to income redistribution.  Been there.  Done that.  Under Chairman Mao.  During his Great Leap Forward.  Which was more central planning disaster than moving the country forward.  In fact, it was capitalism that finally did move China forward.  As it moved America forward.  Until the Americans focused on social growth.   

If history repeats, as it usually does, perhaps their future will be our present.  Where they will be making speeches about shared sacrifice.  To avert a disaster.  And keep the peace.  Or they could just send the tanks in.  Which have proven to be pretty effective in shutting down an unhappy opposition.

Income Inequality sure pays the Tax Bills

The American economy won’t be getting better anytime soon.  Thanks to excessive government spending and debt.  Which the Obama administration is going to ‘fix’ by borrowing and spending more.  And increasing taxes.  Things that aren’t known for creating jobs.  Which is what we need.  Like in China.  They have a lot of them.  And see how well they’re doing?  They’re getting so rich that they have to get their young to sing patriotic songs to hide the income inequality.  So they don’t grow up and become dissidents.

Say what you want about income inequality, but it sure pays the tax bills.  China is buying U.S debt. The United States isn’t buying Chinese debt.  That should tell you a thing or two about letting the rich get rich.

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