The Obama Administration Employs Voodoo Economics

I remember back to when Ronald Reagan, when running for President was accused of using voodoo economics. His plan was simple and the math worked; cut taxes for everyone and the economy will grow on its own with no other help from the U.S. government. More income in the employee’s pockets more spending at the store. The increase in income at the store equaled the need for additional employees to help out with the extra sales. The extra sales equaled more orders from the manufacturers. The more orders required more employees needed to produce the goods. The more employees equaled more money to spend thus an exponential growth of the economy.

That is simple mathematics at work. Compare that to the economics being used by the Obama Administration since the beginning of the year of 2009. The first program initiated was the Economic Stimulus that was supposed to stimulate 1,000,000 new jobs by the U.S. Government paying out $160,000,000,000.00 (yes that is billions). That equals $160,000.00 per job. The administration statistics tell us that there were 640,000 jobs created or saved. Here’s the problem; every economist has no idea where the administration came up with the phantom figure of jobs saved. Every one of them say that is an impossible figure to calculate. The actual number of jobs created was closer to 60,000 (on the high side). Let’s use the figure conjured by using voodoo 640,000 that equals the TAXAYER spent $250,000.00 per job saved or created. If we use the original premise of the Stimulus of creating jobs that equals $2,600,00.00 per job created; but we’re not going to use this figure because the number is too low, thus proving the program was a failure.

Next in line came the New Stimulus package, $8,000.00 tax credit for first time home buyers. The IRS says that 1.9 million taxpayers will receive that credit the tax year 2009. The National Realtors Association reported that 350,000 of those buyers could not have bought a home without this stimulus. The cost to the TAXPAYER is $15,200,000,000.00. Let’s break that down to the number of house purchased by people who otherwise would not have been able to purchase a home without the stimulus, $15,200,000.00 divided by 350,000 equals $43,400.00 per home purchased that would not have been otherwise. The National Association of Realtors also noted that approximately 80% of those homes were not new construction, thus relating to virtually no increase in jobs in the housing construction industry.

Next comes the Cash For Clunkers Program. This program sucked $3,000,000,000.00 (yes, again we are talking billions of TAXPAYER money). Let’s take a look at the automotive consumer researcher Edmounds.com, an well established and revered forecaster of automotive sales trends and results. Their published results state that the cost to the TAXPAYER was $24,000.00 per vehicle sold (The Obama Administration accused them of covering cars sales on Mars). I have yet to figure out where that voodoo connection came from? The Edmunds study compared historic sales figures during the recession to conclude that the Cash For Clunkers program only generated 125,000 sales that would not have occurred anyway. The study did not differentiate between sales of domestic to foreign car purchases, so there is no way to calculate the number of jobs created or saved.

Now the triumvirate Obama, Reid & Pelosi wants us to believe that the $1.3 Trillion government take-over of our health care system is going to be tax neutral. The most current information from the IRS there were 138,372,000 tax returns filed in 2008 for the tax year 2007. Let’s be generous and say there will be an increase of 10% in the number of filling for tax year 2008; that equals 152,000,000 tax filers. Now we must remember that only about 40% of those actually pay any taxes, so that leaves about 61,000,000 TAXPAYERS. Let’s do the math; 1,300,000,000,000.00 divided by 61,000,000 TAXPAYERS equals $21,.300.00 per TAXPAYER in cost.

Here is where the voodoo kicks in; there are approximately 308,000 in population in the U.S. That means only about 20% of the entire population actually pays any income taxes (that is the revenue needed to pay for the above programs). Let’s see how TAXPAYER NEUTRAL these programs are (We were sold on the idea that these programs would pay for themselves – just like Medicare, Social Security, Medicare, et al:

$ 160,000,000,000.00
$ 15,200,000,000.00
$ 3,000,000,000.00
$1,300,000,000,000.00
TOTAL $1,478,200,000,000.00

This is the additional tax burden added to the 61,000,000 TAXPAYERS in the United States. Simple math tells us that is an additional tax burden on the U.S. TAXPAYER of $24,233.00 individually (that is making a simple assumption that this amount is evenly distributed). What we haven’t taken into consideration is how much it is going to raise the cost of our goods and services. We all know that this cost is going to be passed on to the consumer. The consumer is having problems now paying for the necessities of life let alone any extras. When the costs increase then they will be looking to pare down the amount they spend and will not buy that extra piece of fruit at the grocer, will cut down their driving causing less in the amount of gasoline purchases. This will trickle down into the retailers laying off employees, the manufacturers laying off employees and the increase in the oppression exerted by the Federal Government.

I am not by any means a math genius. I am a writer and photographer; so I am using the facts and figures of those who crunch numbers for a living. I have no idea how these additional costs to the TAXPAYER is going to create anything more than a bushel full of new regulations and a handful of new Federal government employees to add more regulation on an already over-burdened TAXPAYER. From a TAXPAYER stand point, this sure does look like voodoo magic to me.