Stimulus or an increase in constituancy?

A very important discussion is taking place today in D.C. The outcome of which will determine the amount of burden that we will be stricken with for generations to come. It is amazing to me that Americans do not fully understand the graveness of the situation. I suppose that the complacency stems from the 'me now' lifestyle that has enveloped the attitudes of the American people over the past decade or so. It seems that the public is more concerned with the current addiction of some Hollywood starlet or who's going to be exposed tonight on ET, than the monumental growth of Government that will take place with the stroke of a pen. Not since FDR have we succumbed to the pressures of everyday life.

The New Deal grew Government to the point that it increased their role to almost 30% of GDP. Prior to this commitment of entitlements, Governments role was less than 5% of GDP. The current administration is proposing to grow Government even more. Various sources state that this list of entitlements, under the guise of stimulus, will increase the ratio to over 50% of GDP.

The bottom line in all of this, is that they've got it all wrong and we are just going to roll over and let it happen. The projects that are being called for are government subsidized. The money for this spending needs to come from somewhere. Does anyone no where? Two things will need to take place in order for the spending to begin. They will need to create the money by printing it, and they will need to increase taxes.

Printing money causes inflation, which means that the money we have in our pockets and in savings and investments will be worth even less than it does right now. It dilutes the supply in the market, making everything more expensive. The taxes that will need to be levied to pay for these pork barrel projects will also have an adverse reaction to our economy. Our chief executive has said that he will cut taxes on 95% of all Americans. Do you think that he will stick by this? He is already wafering. Besides that, less than 30% of the American people currently pay taxes at all. For sure, that number will increase to at least 50% when everything is said and done. This will surely add to the Democrat base.

So, when the number of taxpayers in this country becomes less than 50%, that piece of the pie is responsible for more of the tax burden. The people in this portion include middle income, high income, exceptionally high income earners, and business owners. Two things will potentially take place: The exceptionally high earners (Hollywood elite, athletes, executives, and so on) will be able to bypass some of the taxes due to their team of accountants. The business owners will freeze hiring, steer income away from net profit, or worse, move out of the country. This leaves the majority of the tax burden to shift to middle income and high income earners. How long will that last? If things go forward the way that our President and the Democrat-controlled Congress wishes, I fear that we will be stuck in this rut for a long time.

Freezing non-defense Government spending and cutting taxes will resolve all of the issues that we are facing. The Democrats will not allow that because their constituency may awaken and realize that they do not need the Government as much as once thought. They will also not allow it because it is a conventional thought of responsible Republicans. Passing this package is a win-win for Democrats. They have included some meaningless tax cuts in the bill, so if the spending does not work, they can blame it on the Republicans for their input. Time will tell, but if history is any indication, what happens today will be haunting us for the next fifty years or more. Similar to social security, medicare, medicaid, unemployment, and more.