A Couple of Predictions

I've been looking in my Campaign Crystal Ball, and I have a couple of predictions for you:

1. Over the next year, we'll hear a lot about "tax cuts for the rich" as the Democrats continue to stoke the fires of class warfare for political gain.

Here's the reality: In 1980, 48% of total Federal Income Tax receipts came from the top 10% of income earners. In 2004, that same top 10% paid 71% of the Income Tax. In 1980, the top 5% of income earners paid 35% of all Income Taxes collected. In 2004, the top 5% paid 58% of all Income Taxes collected. (That's over half, for the math-challenged.) In 1980, the top 1% of income earners paid 17% of the Income Tax. In 2004, they paid 37%. (Those tax burden increases are with the "Bush tax cuts." Imagine what will happen if they're allowed to expire!) At the same time, in 2006, it is estimated that 41% of all Americans paid no Federal Income Tax whatsoever!

Lest you think that all of those people are simply too poor to pay any tax, let me remind you that only 12.7% of households fell below the federal poverty level. So there are a lot of families out there who are not "poor," but they still aren't paying any Income Tax, while well over half of the tax burden fell on the top 5% of income earners. Oh, and in case you're thinking that the top 5% must be made up of really wealthy people, any household that made over $157,176 is in that top 5%. Let me say that one more time, so we're perfectly clear: Households who made over $157,176 in annual income paid 58% of all Federal Income Tax. Households who made over $300,000 in annual income paid 37% of all Federal Income Tax.

So, to those Democrats who continually hammer home the point that the "Republican tax cuts" will disproportionately favor the wealthy, I'd just like to say, "DUH!" Of course they do! It would be mathematically impossible for any meaningful tax cuts to not disproportionately favor the wealthy, because the wealthy pay a disproportionate amount of the tax! But let me also remind you that these same wealthy individuals create most of the jobs in this country. If we let them keep more of their money, they'll invest more of it and create more jobs. That's why the "Bush tax cuts" have been so effective at stoking the country's economic engine over the last seven years.

But they'll never tell you that. They will continue the drum beat that (sadly) has worked for them in the past: "Republicans = fat cats who favor the rich at the expense of the little guy." They think we're too stupid to figure it out for ourselves. I find that incredibly disrespectful, and it's another reason why I won't vote for a Democrat. You want my vote? Don't insult my intelligence.

2. Expect the "R" word to be seen and spoken early and often. No, not that one. I mean "Recession." You can expect the Democrats to be the prophets of gloom and doom, and you can expect the mainstream media to parrot the line. It's already started. To the surprise of the gloom-and-doomers, retail sales over Thanksgiving weekend were actually up somewhere between 5% and 8% (depending on whose figures you want to use) compared to the levels a year ago. But the spin has already started: Overall sales are up, but individuals are spending less. They're also increasingly shopping at Wal-Mart instead of Macy's. They've shot their wad and sales will nosedive in the coming weeks. If there's any negative economic news to be found, you'll hear it.

Here's the reality: The national unemployment rate in October, 2007, stood at 4.7%. Most economists agree that anything below 5% is, for all practical purposes, full employment, because of the number of people who are unemployable, and the fact that there will always be a certain number of people who are between jobs. Our economy has been so strong that we've been able to absorb astronomical increases in gasoline prices, and the softening of home sales, and we still created 160,000 new jobs in October. All in the middle of a war! But still we are starting to hear the media ask, "are we headed for a recession?"

There's an interesting phenomonon in the country today: when asked, most people will tell you that they're doing pretty well economically. But they'll also say that they're concerned about the overall economy and where the country is headed. Heck, how could they not be, with the constant drumbeat of negativity? And it's only going to get louder between now and next November. As we've observed previously, the news out of Iraq is starting to get good enough that even the New York Times can no longer ignore it. If it continues to improve, by next summer the Democrats will be desperate for an issue that can make the American people forget how badly wrong they were on the war issue. That issue will be the economy. No matter how good things really are, you will be told that we are on the brink of an economic disaster from which only Hillary (or whoever beats her for the nomination) can save us. Count on it.

It's not bad enough that they have to root for the country's defeat in Iraq, now they're rooting for a recession. Sheesh. Anyway, thanks for listening...and remember what I said when you see it happening over the coming months...