Here's President Obama in August 2009 regarding the link between tax
increases,recessions, and business growth: "The last thing you want to do is raise taxes in the middle of a recession because that would just suck up -- take more demand out of the economy and put business in a further hole."
Today, in a still weak economy, raising taxes has moved from being the "last thing" to do to being Mr. Obama's top priority.
Single-handedly, Obamacare, counting premium mandates and penalties, is likelyto
become the largest tax increase in U.S. history.
And that's just the beginning. On the Obama administration's to-do list inorder to create a world that's fairer and cleaner are higher taxes aredividends, capital gains, high-earners, interest income, overseas profits,inheritances and fossil fuels.
When President Obama delivered theaforementioned warning in August 2009 about the negative impact on businessfrom hiking taxes during a recession, the U.S. economy was growing at a fasterpace than this year's economy.
"Real GDP increased 3.5 percent in the third quarter of 2009," reports the Commerce Department's Bureau of Economic Analysis.
This year's economic growth, in contrast, makes the August 2009 quarter look good.
The Bureau of Economic Analysis reports that "real GDP in the UnitedStates expanded 2.0 percent in third quarter of 2012" and "1.3 percent in thesecond quarter of 2012."
We're now three years past Mr. Obama's anti-tax, pro-business prescription in 2009 for economic recovery and the federal debt has expanded by $3.6 trillion,the real unemployment rate is 15 percent (counting the unemployed who've quitlooking for work and counting the "involuntary part-timers" who can't find full-time employment), economic growth is substantially lower than in August2009, and President Obama is no longer saying that raising taxes in a bad economy is the "last thing" to do.
Here's the August 2009 exchange between NBC's Chuck Todd and President Obama:
Todd: Let me jump to another topic, Scott Ferguson. He's upset about taxes. Hesays, "Explain how raising taxes on anyone during a recession is going to help the economy." And he actually wants you to look at historical markers wherethis has happened, where this has been a helpful thing coming out of arecession.
Obama: Well, first of all, he is right. Normally, you don't raise taxes in
arecession, which is why we haven't and why we cut taxes. So I guess what I would say to Scott is his economics are right, you don't raise taxes in arecession. We haven't raised taxes in a recession.
Todd: But you might for health care. You might for the highest, for some of
Obama: We have not proposed a tax hike for the wealthy that would take effectin the middle of a recession. Even the proposals that have come out ofCongress, which by the way were different from the proposals I put forward,still wouldn't kick in until after the recession was over. So he is absolutely right. The last thing you want to do is to raise taxes in the middle of arecession because that would suck up -- take more demand out of the economy andput business in a further hole."
So we're not now in an official recession,just the worst recovery since World War II, so now it's okay to raise taxes andput "business in a further hole"?
Ralph R. Reiland is an associate professor of economics and the B Kenneth
Simonprofessor of free enterprise at Robert Morris University in Pittsburgh.
Ralph R. Reiland