Aww, looks like the “pay no price, bear no burden” bunch haz a sad (here)…
Why do the rich fear Barack Obama?
John Coyne and his team at Brinker Capital Inc., which invests $12 billion for financially successful Americans from its King of Prussia offices, last month asked financial advisers who refer clients from across the United States to name their “biggest election fear” for the November presidential vote.
“Four more years of an Obama administration” was the choice for 70 percent of the 442 who answered. “A divided Congress” trailed at 18 percent; a Mitt Romney win or “growing Tea Party influence” were judged least scary, given the alternatives.
“The anxiety is around taxes,” Coyne, Brinker’s chief executive, told me. “Their concern is that a Democratic administration is going to try to bail out the deficit on the backs of the high-net-worth, mass-affluent market.
“It’s really becoming visceral,” he added, noting that the fear-Obama choice was up from 56 percent at year-end 2011. “The fear is that the Bush tax cuts will be allowed to expire.”
And HEAVEN FORBID that we allow that to happen, right? After all, as noted here (from a year ago)…
Ten years ago today, the first round of Bush tax cuts became law. But what if they hadn’t? What would our fiscal situation look like if history had been different in just one respect: if we’d never implemented President George W. Bush’s eponymous tax policies? The short answer is that the debate over federal debt levels would be entirely different. In that alternate world, total debt as a share of GDP would be under 50 percent this year—instead of pushing 70 percent—and it would be expected to stay under 60 percent for the rest of the decade…That’s well below the levels causing such great consternation in Washington.
Bear in mind that President Bush inherited perhaps the strongest federal balance sheet in postwar history. There were record-high surpluses, debt was at around 30 percent of GDP and falling, and the Congressional Budget Office projected that the federal government would be debt free by 2009. The country was in great fiscal shape to deal with any crises or emergencies coming down the road, and it was even ready to deal with the coming retirement of the baby boom generation.
But rather than follow President Bill Clinton’s successful lead, President Bush handed out gigantic tax cuts, with people at the top of the income ladder getting the biggest breaks. Those “supply-side” tax cuts were a complete failure as economic policy, and now, instead of being debt free and well prepared to care for an aging population, our debt-to-GDP ratio is almost 70 percent. If those tax cuts are extended—instead of being allowed to expire on schedule at the end of 2012—it will approach 100 percent by 2021.
On top of that, as noted here, that Kenyan Muslim socialist pre-zee-dint of ours has presided over a decrease in tax revenue as opposed to a spending binge, at least one relative to his foul predecessor (yes, I’ll let someone fetch the smelling salts so you can be revived, since you, dear reader, might have fainted upon hearing that).
And as former Reaganite Bruce Bartlett (quoted in the Daily Kos post) tells us here (and wow, has he seen the proverbial light, or what?)…
In January 2001, the office projected that the federal government would run a total budget surplus of $3.5 trillion through 2008 if policy was unchanged and the economy continued according to forecast. In fact, there was a deficit of $5.5 trillion.
The projected surplus was primarily the result of two factors. First was a big tax increase in 1993 that every Republican in Congress voted against, saying that it would tank the economy. This belief was wrong. The economy boomed in 1994, growing 4.1 percent that year and strongly throughout the Clinton administration.
The second major contributor to budget surpluses that emerged in 1998 was tough budget controls that were part of the 1990 and 1993 budget deals. The main one was a requirement that spending could not be increased or taxes cut unless offset by spending cuts or tax increases. This was known as Paygo, for pay as you go.
During the 2000 campaign, Mr. Bush warned that budget surpluses were dangerous because Congress might spend them, even though Paygo rules prevented this from happening. His Feb. 28, 2001, budget message reiterated this point and asserted that future surpluses were likely to be even larger than projected due principally to anticipated strong revenue growth.
This was the primary justification for a big tax cut. Subsequently, as it became clear that the economy was slowing – a recession began in March 2001 – that became a further justification.
The 2001 tax cut did nothing to stimulate the economy, yet Republicans pushed for additional tax cuts in 2002, 2003, 2004, 2006 and 2008. The economy continued to languish even as the Treasury hemorrhaged revenue, which fell to 17.5 percent of the gross domestic product in 2008 from 20.6 percent in 2000. Republicans abolished Paygo in 2002, and spending rose to 20.7 percent of G.D.P. in 2008 from 18.2 percent in 2001.
On top of that, the Inky also tells us the following from here…
America’s so-called fiscal cliff is making it hard for investors to plan ahead.
The fiscal cliff is the paradox that Congress and the White House now face: If they pass measures to slice the country’s massive budget deficit — potentially raising taxes and cutting spending — the very austerity measures helping to reduce a government budget crisis could ultimately plunge us into another recession.
What’s an investor to do in a portfolio?
The fiscal cliff is prompting consternation among financial planners, some of whom warn their retirement-age clients to avoid the stock market. “The U.S. is where Greece was four years ago,” opines Dan White, a financial planner in Glen Mills, founder of Dan White & Associates L.L.C.
Far be it for me to tell Mr. White how to run his business, but in the matter of the U.S. supposedly turning into Greece, I believe the following should be noted from here.
The one good thing I can say about this is that the Inky has at least taken a break from acting as Governor Bully’s PR Service (for now anyway), as noted here (and speaking of the intersection between our beloved commonwealth and the national political scene, it’s nice that this bit of sludge has received some play from our “news” networks with initials for names – more testimony yet to the utterly manufactured “scandal” of “voter fraud”).