Reno Hayek Symposium

     Our President’s masterful address Tuesday evoked national pride, determination, and a call to challenge and sacrifice to overcome our current difficulties. His audience was painfully aware of those current difficulties but less aware of their causes.
     His “solutions” unfortunately had little relationship to the causes and, in fact, included some of those same causes, to wit: more Barney Frank, Maxine Waters, Chris Dodd political manipulation of Fannie and Freddie putting dead beats into homes making the American Dream a nightmare for the ninety plus percent of the people who pay their bills.
     The price tag for his “solutions” was later delivered to Congress in the form of a $3.6 trillion budget blueprint dramatically increasing the deficit which he “inherited” and which in recent years was fostered by his Democratic majority in Congress. He projects a federal deficit of $1.75 trillion this year, 12.3% of the GDP a level not seen in 67 years while the country was fighting WWII. It’s one thing to ask for “blood and guts” sacrifice to fight a war, it’s another to ask for that sacrifice to put dead beats into houses, fund uneconomic alternative energy, and prop up failing schools.
     But it’s still popular in states like California with its own $42 billion deficit. It’s still popular with those who pay no taxes but still get “tax cuts!” Why, because he expects the wealthiest two percent of Americans, who already really pay taxes, to close the trillion-dollar budget gap.
     This “don’t tax you, don’t tax me, tax that fellow behind the tree” program, may be popular on a short-term basis. It’s “free money!” But the free money is going to reward bad behavior. The source of the “free money” is taxes on success, on productivity. And a lot of the free money is “mobile” or if not mobile, “patient.” So when the producers move or when they delay production, the free money is no longer there. There’s no fellow behind the tree to tax.
     So, we should enjoy the wonderful rhetoric while we can. As Robert Tracinski put it in his article, The ‘Can-Do’ Economy-Killer, ”In sum, Obama is offering the basic Roosevelt method or formula: buoyant American “can-do” optimism–in the service of the economy-killing agenda of a high-taxing, high-spending welfare and regulatory state. Get the people to love you for giving them a pep talk that lifts their spirits–even as you impose policies that dash their hopes.” via RealClearPolitics – Articles – The “Can-Do” Economy-Killer.  tjm

Free Money