For some reason, general wisdom (or at least mainstream media opinion) is that economic issues favors the Democrats.  But why?  Certainly, Democrats dole out benefits to one group at the expense of another and promote class warfare.  But are they really better for the economy?

Democrats often characterize Republicans as being mean spirited haters of the poor and middle class.  However, consider that over 50% of the current Federal budget goes to entitlements and social programs.  It is difficult to see how anyone can say that the poor and middle class are being forgotten.  Keep in mind that nothing is free; every dollar the government gives away comes from somebody's pocket.  At what point have we reached a reasonable balance between helping our citizens and allowing people to keep the money they earn rather than give it up in taxes?  Apparently, Democrats feel that no matter how much we help our citizens, it is never enough despite the fact that there are serious concerns about our ability to continue funding existing programs into the future.  They pile on escalating demands for more and more programs and entitlements, always casting Republicans as Scrooge. 

Democrats also talk about the poor and middle class as though we live in a serfdom and the only way a person can have a better lot in life is to be born to royalty.  They talk about the unfairness of how income is distributed when, in fact, income is not distributed but rather it is earned.  They discuss the "haves" and "have nots" in our society when, in fact, compared with others, America is actually a country of "haves" and "have lots" per Dr. Thomas Sowell.  They talk of fairness and giving help to the less fortunate when, in fact, they want to give handouts and achieve a socialist goal of equal outcomes.  President Reagan said that if you reward poverty and incompetence, you will get more of both; the success of welfare reform bears this out.

The reality is that fairness is already built into our economic system.  Longitudinal data reveal that very few people remain at the same economic status throughout their lifetimes.  For example, of people in the labor force, only 5% of those in the bottom 20% financially in 1975 were still there in 1991 while 29% of those initially in the bottom 20% had moved into the top 20%.  People just entering the job market take entry-level positions and move to higher paying jobs as they gain experience and skills.  Wealthy people also move down with considerable frequency for a variety of reasons.  The American dream is that, with hard work, you can achieve your goals and the unfettered economic mobility in our system provides this.  The Democrat dream is that things will be given to you and, with hard work, your earnings will be taken away from you.

Obama brags that he will give 95% of taxpayers a refund.  At present, about 33% of tax filers pay no income tax at all.  Proposals by both McCain and Obama will increase this to about 43%.  This suggests both candidates are sensitive to the financial difficulties faced by lower income households.  It seems a reasonable balance of fiscal policy with providing benefits to citizens for 43% of our people to be able to enjoy the benefits of living in America income-tax free.  Not good enough for Obama, though.  He goes further, making good on his promise through income redistribution, taking money from higher income groups and giving it to lower earners.  It is difficult to see this as anything less than socialism or, more cynically, vote buying.  This is not a hand up, it is a hand out.  Another example is that Democrats pander to the poor by favoring increases in the minimum wage, knowing full well that such increases hurt low wage earners by shrinking the number of entry level positions.

Obama wants to increase taxes for the rich, saying they should pay these because it is "neighborly" or "patriotic" (according to his running mate).  There is an inherent irony in stating that the rich should pay greater and greater amounts for being successful in America while the poor shouldn't pay, or even be subsidized, for enjoying the benefits for living in our country. 

Mixed in with Obama's "tax the rich" proposals are plans for high taxes on the engines of our economy; corporations, businesses, and investments.  There is considerable danger that such taxes will further slow an economy that is teetering on the brink of recession.  It has been said that we cannot tax our way out of this economic mess, we must grow ourselves out of it.  Obama's tax plans along with his intent to restrict free trade are reminiscent of similar policies by President Hoover in the early 1930's that likely prolonged the Great Depression.

There are three additional issues with Obama's tax plans.  First, Obama speaks in outraged terms about how greedy corporations are making obscene profits, as though they hoard this money in some dragon's lair.  In fact, corporations don't keep profits, they distribute them to shareholders.  Anyone who has a 401k, retirement fund, or owns any other type of investment is likely to benefit.  Enormous numbers of Americans use such vehicles to invest in their future and Obama's plan is to pay for his social plans now by taking away from our future.  Second, Obama wants to impose a windfall profits tax on the oil industry.  This was tried in the Carter administration with the predictable result that domestic oil production decreased.  This will accomplish nothing except deepening our trade deficit.  Finally, Obama speaks as though he is only going to tax the rich although it is certain that his economic advisors know the basic economic principle that all taxes are regressive.  For example, if you increase corporate taxes on WalMart, who pays?  Liberals are fond of casting WalMart as a big, evil corporation, but it has not been endowed with the privilege of printing money.  Its business plan is built on thin profits and high volume, so thecost of new taxes can't easily be absorbed.  No, you can bet increased corporate taxes will find their way to the price of goods on their shelves and these prices are paid by - you guessed it! 

The recent government rescue of the credit markets will cost upwards of one trillion dollars.  Add this to the record deficit our government was already running and doubts about our ability to continue to pay for mandatory entitlement programs.  Then, consider the additional one trillion dollars in spending called for in Obama's budget plan with the certitude that once a program or entitlement is enacted it will remain in the budget forever.  Federal debt is a drag on the economy and it is difficult to see how our country can possible grow and prosper under this spending burden.

Another issue is the nature of spending plans.  Obama is a strong proponent of social engineering, with many spending plans that direct our financial resources to goals considered beneficial by Democrats.  Some of this involves direct spending, such as for infrastructure.  The ability of such direct spending to stimulate the economy is questionable; for example, it has not been successful in Japan.  Other Obama proposals involve government partnerships with the private sector.  These endeavors can distort markets.  For example, a side effect of the recent ethanol subsidies was increased food prices.  Also, markets created by government spending may not become self-sustaining and can collapse when subsidies are removed.

In conclusion, it is only through massive denial of reality and delusional beliefs about basic economic principles that one could conclude Obama and the Democrats are the answer to our current financial woes.  It is a pure fabrication that Republicans don't care about lower and middle class families; over half of our Federal budget goes to entitlements and social programs and the number of Americans who will owe no income tax is the same for Republicans and Democrats.  It is absolutely false that taxing "the rich" will not affect Americans in general.  Increasing taxes on our economic engines and addng a trillion dollars in Federal spending is tantamount to economic suicide.