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Brooks Wilson's Economics Blog: No Citizen Gets Ahead

Tuesday, June 9, 2009

No Citizen Gets Ahead

Under the banner, "No Child Left Behind," President Bush attempted to improve educational standards, particularly for underachievers.  President Obama has unfurled a new banner, "No Citizen Gets Ahead," in his attempt to improve the welfare of the poor.  He plans to raise the top income tax rate to 40%, cut deductions--even charitable deductions, remove the cap on social security taxes, and now foist the cost of health care for the poor onto the rich.  Laura Litvan and Ryan Donmoyer of Bloomberg write ("Democrats Weigh Health Mandate as Obama Urges Taxing Wealthy," June 7, 2009),
President Barack Obama wants Congress to consider taxing the wealthy instead of workers to pay for a health-care overhaul, as House Democrats discuss a plan to require health insurance for most Americans...

The president is trying to avoid broad-based levies such as a Senate proposal to tax some employer-provided health benefits Axelrod said. Instead he is urging lawmakers to reconsider limiting all tax deductions for Americans in the highest tax brackets.

“He made a very strong case for the proposal that he put on the table, which was to cap deductions for high-income Americans, and he urged them to go back and look at that,” Axelrod said on the CNN’s “State of the Union.” Goolsbee, appearing on “Fox News Sunday,” said Obama is “mindful” about how “ordinary Americans are able to foot the bills” and never proposed taxing employee benefits.
Apparently, some of his top campaign donors (the wealthy) misread candidate Obama's populist rhetoric for demagoguery, which is OK (Leonard Doyle, "Barack Obama's rich supporters fear his tax plans show he's a class warrior,", May 9, 2009).
Wealthy Wall Street financiers and other business figures provided crucial support for Mr Obama during the election, backing him over the Republican candidate John McCain as the right leader to rescue the collapsing US economy.

But it is now dawning on many among them that Mr Obama was serious about his campaign trail promises to bring root and branch reform to corporate America - and that they were more than just election rhetoric.

A top Obama fundraiser and hedge fund manager said: "I'm appalled at the anti-Wall Street rhetoric. It was OK on the campaign but now it's the real world. I'm surprised that Obama is turning out to be so left-wing. He's a real class warrior."

Chris Edwards of the Cato Institute, a free enterprise think tank, said Democrats in Congress were unnerved by the president's latest plan to raise $210 billion over 10 years from multinational corporations.
Although I disagree with many of the administration's policies, taken individually, they are well within America's historical bounds of policy debates.  I understand the reasoning behind raising the top income tax rate to 40%.  It was that high under Clinton.  I understand the distorting effects of tax deductions.  I understand the need to increasing revenues for Social Security, and the desire to help the poor gain better access to medical care.  I don't understand the economic reasoning behind the administration's attempt to raise taxes on U.S. based multinationals.  But taken as a whole, they are a radical departure from past policy debates that constitute an assault on the freedom of all Americans who are economically successful.  President Kennedy said, "Ask not what your country can do for you--ask what you can do for your country."  The Obama administration has bent those words to, "Ask asks not what we can do for our country, but what the wealthy can do for us."  Milton Friedman's opening words in "Capitalism and Freedom" are as prescient now as they were in 1962 when they were penned. 
In a much quoted passage in his inaugural address, President Kennedy said, “Ask not what your country can do for you—ask what you can do for your country.” It is a striking sign of the temper of our times that the controversy about this passage centered on its origin and not on its content. Neither half of the statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. The paternalistic “what your country can do for you” implies that government is the patron, the citizen the ward, a view that is at odds with the free man’s belief in his own responsibility for his own destiny. The organismic, “what you can do for your country” implies that government is the master or the deity, the citizen, the servant or the votary. To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, and instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served. He recognizes no national goal except as it is the consensus of the purposes for which the citizens severally strive.

The free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather “What can I and my compatriots do through government” to help us discharge our individual responsibilities, to achieve our several goals and purposes, and above all, to protect our freedom? And he will accompany this question with another: How can we keep the government we create from becoming a Frankenstein that will destroy the very freedom we establish it to protect? Freedom is a rare and delicate plant. Our minds tell us, and history confirms that the great threat to freedom is the concentration of power. Government is necessary to preserve our freedom, it is an instrument through which we can exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom. Even though the men who wield this power initially be of good will and even though they be not corrupted by the power they exercise, the power will both attract and form men of a different stamp.


  1. I don't know much about economics, so I may be making a fool of myself for making this analogy. I think "No Child Left Behind" is like setting a price floor. It is setting the minimum academic standards that no child should go below. When thinking about the phrase "No Citizen Gets Ahead" in terms of education, I feel like its setting a price ceiling. It is like saying no student should go above the set acadmic standards. Both have their ways of putting limits on education. The phrases are too extreme and unrealistic. There are people left behind and there are people that get ahead no matter if it is education or economics. Oftentimes, it is at the cost of the other. Either be more excepting of reality, or try to meet somewhere in the middle.


  2. Ernesto Ibarra9/6/09 7:26 PM

    In our country it is true that money is the blood that makes our country run smoothly. United States has been regarded as a safe haven for all who aspire for prosperity. We have fostered in our hearts the creed of “Yes we can”. When we say “yes we can” I think it is understood that yes WE can, mening all of us together. We are all Americans and it is our civil responsibly to secure our blessing for ourselves and our posterity. Our economic status at the moment is unstable to say the least. We are faced with a challenge that calls for a new strategy to promote the general welfare. The new strategy that our president presents is simply a plan to distribute money from those fortunate citizens who have a surplus of money and place them in the grasp on the less fortunate who have a shortage of money and hopefully in the long run our country will reach an equilibrium and unite classes and return to a stable economy.

    Sincerely your student, Ernesto Ibarra

  3. Kayla Harding10/6/09 11:17 PM

    As Im not very good at understanding ecomomic language and I rarley watch the news because it gets to depressing. Im starting to realize I need to watch it so I can get a grasp on reality and where our money is or isn't acutally going to the world. Wether or not the remains of money goes to the lower class, wouldn't that encourage some to give up so they can get everything paid for? Shld we work harder so we can support everyone else when in hard times we can barely support ourselves! I do think there are people out that there that deserve some help but there are also others that feed off of it.

  4. I believe Barack Obama is trying to do everything in his power to get this country out of a recession. He is looking for ways for the lower and middle-class Americans to keep some of their own money, and not give it to the goverment, so they can spend it. This will revitalize the economy in ways that will help this economy get out of its funk.

    Your student, Jeremie Reeves

  5. Rob Ekwerekwu22/6/09 2:33 PM

    Obama and his administration are stepping in the right direction to keep this country in balance. I understand that many "wealthy" people would be mad about his income tax rate raising to 40% and in a way putting a price ceiling on their income but he is thinking about the majority of the United States who are living off of minimum wage (price floor) week to week. I feel only time will tell about this change but right now it is what the vast economy wanted so let's ride with it.