The Budget, Stimulus, and Socialism

We have been living through an era in which powerful industries such as oil, insurance, pharmaceutical, securities, and medicine, along with enormously rich individuals, were able to control the wealth of America with their financial power and were able to transfer the lion’s share of that wealth to themselves. They did this in part through the dominance of Reaganomics. Their Supply-Side or “Trickle-Down” economics coddled the rich with tax and economic policy. They claimed that trickle-down would, in the long run, benefit everybody including the poor. Instead, it resulted in the widest discrepancy in income and wealth in our nation’s history. The rich got richer and the poor were foreclosed.

Now, with the election of a luminous and exciting new president, a new social movement is taking place. That movement is supported by the vast majority of Americans who seem to have suddenly awakened from a long period of lethargy. At last look, the polls showed that 67 percent of Americans approved of the President’s performance. A poll taken following President Obama’s speech to Congress on February 24 showed that 80 percent of the speech-watchers approved of the President’s plans for dealing with the economic crisis.

With several bold strokes, including his stimulus plan and his 10-year budget, President Obama has inaugurated the most far-reaching social changes since the New Deal. Needless to say, his proposals have been angrily denounced by reactionary conservatives, including that fat, ignorant, boorish, drug-addicted blowhard, Rush Limbaugh. They scream that the President is leading us into European-style socialism. Well, it certainly is not socialism, but there are several things about Europe that we might want to replicate. One is universal health insurance.

President Obama’s budget will overhaul health care. It will create a $634 billion, 10-year “health reform reserve” as a down-payment to create affordable health insurance programs for individuals and employers and to finance disease prevention and wellness programs. The budget also includes $15 billion a year for renewable energy programs like wind power, solar power, and the building of more efficient cars and trucks right here in America. It attacks global warming, expands the federal role in education, and cuts taxes for the middle class.

The President plans to finance much of this by obtaining higher revenue from rich individuals and polluting industries, and by slashing billions in direct payments to agribusinesses and farmers with more than $500,000 in annual revenue. The President has called for roughly $100 billion a year in tax increases on the wealthy — mostly delayed until 2011 when the recession will presumably have ended. The plan will also eliminate corporate subsidies (that economists have long criticized) for health insurers, oil companies, and other big businesses. The budget will reduce the costs of war primarily through downsizing the war in Iraq. It will also reform entitlement programs, including Social Security, Medicare, and Medicaid.

One increasingly hears the refrain that President Obama is leading us toward socialism. This comes from people who know nothing about socialism, capitalism, or history. It could hardly be called socialism where the President seeks to keep the automobile, insurance, and banking industries private and alive with government help. It could hardly be called socialism where the President is providing tax breaks for small business owners. His plan will eliminate all capital gains taxes on startup and small businesses in order to encourage innovation and job creation. Moreover, the budget authorizes the Small Business Administration (SBA) to support loan guarantees of $28 billion to small businesses.

Government exists to do for people that which they cannot do for themselves. The modern history of America is replete with instances of government stepping-in to help its citizens and help the economy. Consider the New Deal, Social Security, Medicare, Medicaid, the 1980s bailouts of the S & Ls and of Chrysler, farm subsidies, aid to the arts and sciences, and much more. These governmental initiatives have not made us a socialist country and have not prevented us from being a robust free market economy.