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Obama: The Middle Class Needs More Government

In an Op-ed in the Boston Herald, President Obama laid out his “vision” for helping the middle class. Reading through the campaign-style op-ed we find that Obama continues to believe that the only real way to help the American economy is for the government to spend more and do more.

First, President Obama finally provides his definition of middle class:

“That’s why I’m laying out my ideas for how we can build on the cornerstones of what it means to be middle class in America. A good education. A home of your own. Health care when you get sick. A secure retirement even if you’re not rich. And the most important cornerstone of all: a good job in a durable, growing industry.”

All of the items that President Obama lists in his “definition” are things that must be paid for by someone. In order to have an opportunity for a good education, someone must pay for it. In order to have a home of your own, you must work and save enough to pay for it. Someone must go to school for years to become a doctor for you to get good health care, and then someone must compensate that physician for their work. A secure retirement comes because of hard work and discipline; else the younger generations must pay for your “secure” retirement. A good job must also be earned by hard work and determination (unless you work for the government). No employer will hand out jobs without evidence of work ethic.

Continuing on, President Obama reasserts his belief that if the government would just “invest” more in infrastructure that we would have a booming economy. Listening to the President you would think that our infrastructure was falling apart, however, traveling around the country you see little evidence of this. Maybe we aren’t spending as much as other countries?

Try reading this Forbes article which shows we actually spend more on infrastructure as a percent of our GDP than those in Europe. Also, note the author there shows that our infrastructure is comparable with that of Canada and Australia. Our infrastructure spending is in line with where it should be, if we are seeing substandard results then that is a management issue not a funding problem.

In perhaps the most confusing part of the article, President Obama discusses simplifying the tax code:

“My plan would close special interest tax loopholes for companies that move jobs overseas, and use the money we save to put construction workers back on the job making our most urgent infrastructure repairs, … I’m willing to work with Republicans to simplify our tax code for businesses large and small, but only if we use the money from transitioning to a simpler tax system for a significant investment in creating middle-class jobs…”

Where to even begin here…First, when we talk about “simplifying” the tax code, we are usually not talking about doing it to increase revenue. Second, the president talks about “saving” money, when in reality he is talking about INCREASING taxes and revenue. There is no “savings” going on here. Lastly, there are no “tax loopholes” for companies that move jobs overseas. What happens is that the move from Los Angeles to Mexicali costs money and just like any other business expense this cost is deducted from your profit and therefore reduces your taxes. In reality what the President is proposing is a penalty for companies that move operations overseas.

Even so, maybe this is a good strategy to keep companies in the US? Nope. The relatively small tax increase would almost never be enough to prevent a company from moving, as companies make the move based on long-term costs, not short term ones. Even if we made the penalty large enough, we would essentially be making US companies LESS competitive and therefore more likely to close or move completely. The unintended consequences of Obama’s plan would be that we end up losing more jobs from business closures, than we prevent from moving offshore.

Overall, President Obama’s op-ed continues to push the idea that the American people are helpless without the government’s help to “push” us along and help us to make the right decisions. To be honest, I think he has the best intentions but his ideas are historically-proven failures. No matter how smart the president or his administration is, they are not smarter than 350 million individuals making their own economic decisions. The government needs to get out of the way and let the people create jobs.

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About the Author

- Brent is a Christian, veteran, conservative, husband, father, and young professional. He served proudly in the United States Air Force before completing his BBA in Business Economics from the University of Arizona. Post college he began a career as a management consultant, got married to a wonderful woman, and had a beautiful daughter. He also completed his MBA in International Business from the University of Nebraska and currently works for a Fortune 500 company. Brent is passionate about persuasion first to Christ and then to conservative principles. He believes that there is a time and place for aggressiveness, but that turning people to conservative principles requires the ability to persuade with understanding and compassion. Brent holds that conservatives must engage the middle and even the left, while standing above the emotional fray (as much as possible). Overall, Brent is a passionate defender of religious, political, and economic liberty, who is committed to educating and persuading others to join the cause.

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Brent Rosenbaum

Brent is a Christian, veteran, conservative, husband, father, and young professional. He served proudly in the United States Air Force before completing his BBA in Business Economics from the University of Arizona. Post college he began a career as ... Read the full profile...