President Barack Obama’s State of the Union address tonight is likely to include soothing words like “ensuring those at the top pay their fair share,” “investments to help middle-class families,” free college education, closing the “trust-fund loophole” and saving for retirement.
Who could argue with the words? After all, everybody needs help saving for retirement and paying for a college education for their children. The middle class, which has suffered under the president’s policies, certainly believes it needs a break. And what low- or middle-income earner doesn’t like the magic in the words “top pay their fair share” and in closing loopholes for the wealthy?
But somebody always has to pay. There are no budget surpluses and no grant programs for such niceties. No, the plan is to finance the new Obama goodies on the backs of the wealthiest taxpayers and the most well-heeled banks.
It’s the wrong way to put more money in the economy. What would be better is to implement policies to grow the economy by cutting taxes and regulations on businesses. When that happens, businesses expand, employer pay grows and, in turn, more money is spent for goods and services.
Just one example is the Affordable Care Act, which was enacted in 2010 but hasn’t yet seen a complete rollout. Without it and its threat of higher costs and taxes, businesses would have emerged sooner from the Great Recession, which officially ended in 2009. Instead, wary of what was ahead, businesses held back on spending and hiring. Only as the health care act spun out could they see — if dimly — how it would affect them and what it would allow them to do (or not do).