Voodoo Economics

President Reagan had a theory about economics. The theory went something like this: cut taxes on business and wealthy individuals and they will reinvest those savings into businesses and the economy and the effects will “trickle down” to the middle class and those living in poverty. The theory was called “Trickle-Down Economics”; by Democrats it was called “Voodoo Economics”. The implication, of course, is that this theory is the workings of a raving lunatic—it would only work in Magic World.

Well, here in the Obama Nation this week the President announced a new budget that includes the promise that he will cut the national budget deficit in half by the end of the first term. How does he plan to do this?

DREAM and SPEND, of course.

First, the plan relies on GDP growth figures that are unrealistic, inflated by close to 2% by some estimates. Second, it relies on more heavily taxing the people who have money to stimulate the economy. Third, the plan calls for massive increases in spending for such things as climate change and alternative energies, and other government programs. Of course, this is on top of the recently passed stimulus bill that will cost American taxpayers $787 billion and a little-talked-about spending bill this week that cost us another $400 some odd billion (but whose counting). This total is comes to about $1.2 trillion in deficit spending. Just $1 billion less than the deficit President Obama said he “inherited”. President Bush- 8 years to $1.3 trillion; President Obama- 8 weeks.

Okay, let me put this is microeconomic terms. Let’s say you owed $25,000 in credit card debt. Following President Obama’s plan you would take the following action to eliminate that debt:

STEP 1: Go out and spend your entire paycheck on several new pairs of shoes, the complete third season of "Will and Grace" boxed DVD set, a new 52” plasma screen TV, and new rims for your SUV. Do not, I repeat, DO NOT use any of that money to pay off your credit card debt.

STEP 2: Despite the fact your employer says you are getting a 2% pay raise for the next three years, assume that figure will be more like 5% and budget the extra 3% to pay off some of your debt-- spend the rest.

STEP 3: When your children earn money for say mowing lawns, shoveling snow, or simply getting a birthday card from grandma, increase the amount you take from them to about 40%.

STEP 4: Chant : “I do believe in Obama, I do believe in Obama. Yes we can! Si, se pueda!”

POOF!

The debt is paid off. Like Magic. Like Voodoo.