Archive for May 1st, 2010

I meant to write about this article when it first came out, but it got buried in my inbox. That being said, this Washington Times column by Richard Rahn makes an excellent point about the dangers of too much government. He points out that Argentina used to one of the world’s most prosperous nations. Unfortunately, decades of statism have taken a harsh toll and the Latin American nation now is an economic basket case. Between Bush and Obama, we’ve had about 10 years of bad policy, so it would require lots of additional bad policy to drag America down to the Argentine level, but the trend is definitely in that direction:

A century ago, if you had told typical citizens of Argentina (which at that time was enjoying the fourth-highest per capita income in the world) that it would decline to become just the 76th richest nation on a per capita basis in 2010, they probably would not have found it believable. They might have responded, “This could not happen; we are a nation rich in natural resources, with a great climate for agriculture. Our people are well educated and largely descended from European stock. We have property rights, the rule of law and an open free-market economy.” But the fact is, Argentina has been going downhill for eight decades, and it has the second-worst credit ranking in the entire world – only Venezuela has a lower ranking. Argentina, despite its natural resources and human capital, has managed to throw it all away. Argentina did not become relatively poor because of having been involved in destructive conflicts. It became poor because it has had a series of both democratically elected leaders and non-elected dictators who never missed an opportunity to make the wrong economic decisions. …The U.S. is not yet Argentina, but, if many of the policies of the Obama administration are not reversed, America will only get poorer and, in as little as 30 years, become a middle-income country, while dozens of other countries will enjoy a higher standard of living.

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In a previous blog post, I showed a cartoon joking about Obamacare as a Trojan Horse for the IRS, but with each passing day we are learning new – and always unpleasant – details about the mammoth legislation that was imposed by the left. The excerpt below from the Boston Globe reveals that businesses will face costly new reporting requirements to the internal revenue service because of government-run healthcare:

Tucked away in just 23 lines of Section 9006 of the Healthcare reform bill be a dramatic change in the 1099 reporting requirements.  No longer will corporations or payments for merchandise be exempt 1099 reporting.  This new law is effective January 1, 2012.  A large majority of payments made by a business will now be reported on a 1099.  …There is no doubt this will be an administrative nightmare for many businesses in the first year or two.  Taxpayer identification numbers need to be collected for all vendors.  Have a large business related meal at a restaurant, this will need to be reported on a 1099.  Spend a week in a hotel in Waco Texas, you will need to send a 1099.

My Cato colleague has more details in one of his recent blog posts.

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The President had another “spread the wealth” slip of the tongue the other day, this time remarking that “at some point you have made enough money.” Some have commented that this exposes Obama’s anti-capitalist ideology, and others have correctly noted that the government should have no role in determining the “right” level of income. But I think Michelle Malkin hit the nail on the head by exposing the absurd levels of hypocrisy when Obama (who is in the top 1 percent) and his cabinet (filled with other people who are very wealthy) push policies designed to make it more difficult for other people to get rich. And as Michelle notes, Obama and his cronies largely got rich because of favoritism rather than producing anything of real value:

President Obama spoke the most revealing and clarifying ten words of his control-freak administration this week: “I think at some point you have made enough money.” …Obama then ad-libbed peculiar definitions of what he called the “American way” and the profit motive: “You can just keep on making it if you’re providing a good product or providing good service. We don’t want people to stop, ah, fulfilling the core responsibilities of the financial system to help grow our economy.” Fundamental lesson of Capitalism 101: Governments and bureaucrats don’t make what people want and need. They only get in the way. It is individuals, cooperating peacefully and voluntarily, working together without mandate or central design, who produce the world’s goods and services. They make what people desire and demand for themselves, not what Obama and his imperial overlords ordain that the masses should have. As usual, Obama’s populist demagoguery is telling in its omissions and selectivity. While he lectures on the morality of salary caps for everyone else, his own cabinet is filled with fabulously wealthy CEOs and statist creatures who have parlayed government employment (a “good” service) into private gain as lobbyists, consultants, and advisers (“core responsibilities of the financial system”), and then back again to public stints. Revolving doors have always grown the Beltway economy. …That famous mock-up poster of Obama as the creepy socialist Joker has never seemed more apt.

The only thing I would have added is that Obama and friends represent the interests of government, and people in government receive twice as much compensation, on average, as the taxpayers (i.e., serfs) who pay their lavish salaries and benefits. This is utterly disgusting.

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