At their convention, the Democrats emphasized their view that under President Obama, the U.S. economy has improved, and that their candidate, Hillary Clinton, will continue and expand upon that record.
The facts work against them.
Unlike prior post recessionary periods, America’s economy has failed to adequately recover. This is evident both in broad terms such as the Gross Domestic Product, and in personal terms such as the status of the middle class.
In news that came at the worst possible time for Clinton’s floundering candidacy, both GDP and home ownership statistics favored the Trump view that the progressive policies of the past eight years have damaged the U.S.
Bloomberg reports that America’s economy, already suffering exceptionally anemic growth, (far less than what would be normal following a recession) will endure an even lesser uptick than previously anticipated. Sho Chandra reports that “The U.S. economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand. Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter, Commerce Department figures showed Friday in Washington. The median forecast of economists surveyed by Bloomberg called for a 2.5 percent second-quarter increase.”
Bloomberg also found that that a key indicator of middle income health also continued to fall to worrisome levels. “The U.S. homeownership rate fell to the lowest in more than 50 years as rising prices put buying out of reach for many renters. The share of Americans who own their homes was 62.9 percent in the second quarter, the lowest since 1965, according to a Census Bureau report Thursday. It was the second straight quarterly decrease, down from 63.5 percent in the previous three months.”
The Democrat Party’s enthusiasm for more anti-poverty programs (that have cost American taxpayers $22 Trillion dollars since the 1960s without accomplishing any significant decrease in the poverty rate) and other costly programs is a necessary component of its strategy to retain the support of its base. However, as the U.S. national debt reaches $20 trillion, half of that figure being added during the Obama Administration, it is abundantly clear that there is no conceivable way the price tag can be paid.
The standard response to that dose of reality is that taxes on businesses or the wealthy will be increased.
That ignores two key factors.
First, America’s excessive corporate tax rates have already driven companies out the nation, taking their jobs, their investments, and their tax revenue with them. Hiking them further will only expand and accelerate that problem.
Second, increasing taxes on the rich will not provide the revenue necessary. Indeed, even if the entire income of the rich was taxed at 100%, it wouldn’t put a dent in the nation’s annual deficits, let alone its crushing debt.
A Forbes review of this concept noted “If the IRS grabbed 100 percent of income over $1 million …Our national debt would continue to explode… Progressives say it’s wrong for the rich to be “given” more money. The New York Times ran a cartoon that showed Uncle Sam handing money to a fat cat. But that has it backward. Money earned belongs to those who earn it, not to government. Lower taxes are not a handout. Progressives want to take more money from some—by force—and spend much of it on programs that have repeatedly failed…”
Of course, long before the government could collect, the rich would stop their income producing activities and move their domicile elsewhere. Those types of solutions, along with the massive increase in substantial regulations on the market Democrats have favored, move the United States more towards the failed examples of other nations that have adopted centralized economies.
However, what will not work in terms of actually solving the nation’s dilemma may well work in getting a candidate elected. As an entire generation suffers under the burden of excessive tuition without anywhere near an adequate number of jobs to provide a means of repayment, free tuition and government aid sounds like a lifeline. To the vast numbers of Americans who have lost well-paying jobs and must survive on lesser paying, benefit-less positions,(partially a result of Obamacare’s mandates) any government handout is attractive. But these are illusions. They will not solve America’s problems. It will not restore to the middle class the prosperity they once enjoyed before the massive growth of government programs unbalanced the nations’ finances. They certainly will not promote the creation of decent paying jobs. It will, in fact, continue and expand upon the very policies that devastated the U.S. economy.
But they will get candidates elected.