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In Barack Obama's budget proposal, last year's highest deficit in history is only expected to be tripled... that is if you believe his incredible projections of three per cent economic growth and don't include the cost of socialized medicine and a cap and trade policy.
Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.
If revenue continues to come in at these levels, and the fantasy growth doesn't happen, and things cost more than Obama projects (which they always do), how do we avert absolute economic disaster?
Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years. The Congressional Budget Office projects a $1.7 trillion budget deficit for fiscal year 2009.
The Obama administration, meanwhile, seems determine to waste billions of tax dollars turning the auto makers into a social program.
The U.S. government may need to inject $50 billion to keep General Motors alive and will likely take a stake of up to 70 percent in the crippled automaker.
GM will be a money laundering operation to swing tax dollars into the pockets of the Democrats' business partners, the unions, covering the cost of unsustainable salaries, pensions and benefits. Later, they'll go slowly out of business and the threat to the Obama agenda will have been averted.
At the same time, the UAW said it had agreed to different terms to restructure the $20 billion that GM owes to the union's retiree health-care fund. GM earlier had offered the UAW a 39-percent stake in the company. Now, the union will accept a stake of 17.5 percent, with a warrant to take another 2.5 percent, which could raise its total stake to 20 percent.
How does one institute permanent and dramatic government expansion in the midst of a big recession and survive the huge deficits and requisite inflationary disaster to follow?
With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.
Now that it's being floated, it seems obvious that this has been part of the plan all along.
At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT (Value Added Tax)... "There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."
Barack Obama. Value Subtracted.