February 24, 2009

It is very hard to predict what will happen in the future, whether that future is tomorrow or in ten years. Nevertheless, I will give prognostication a go regarding the Federal budget. Obama has been talking about “fiscal responsibility” and about balancing the Federal budget by the end of his first term in office. In view of the vast amounts of money in the “stimulus package” just signed into law, as well as the money spent or set to be spent in the bailouts of banks, the auto industry and default mortgagees how will the budget get balanced. One obvious way is to increase taxes, and this will be one of the corner stones of the Obama balanced budget effort. Income taxes will be raised on the top 5% of wage earners, taxes will also be raised on corporations after all it was those greedy bastards in big business that caused our economic difficulties. The Federal tax on gasoline will be raised from the current eighteen cents per gallon to probably a dollar. Other taxes will be invented say a value added tax on goods, or excise taxes on imports. Regardless, taxes on the American people will increase. Taxes alone, however, will not be enough to balance the Federal budget which is now so dreadfully out of balance. Some things in the Federal budget will need to be cut, but what? My prediction is defense. The U.S. military industrial complex will be gutted so that social programs like universal health care can be born. I don’t know if this is good or bad, only time will tell. For twenty-five years those on the left have been calling for exactly this scenario and now it will come to pass. Is should not come as a surprise to anyone for President Obama is a child of the left and he has not tried to hide this fact. As he has said “I won” and now he will do what he believes is in the best interests of the country. His path is completely different from the one we have been following for the past twenty-five years whether it will prove to be more or less successful will not be known for many years. I have no stake in right or left politics, so I hope he succeeds.