Friday, February 15, 2008

Big Government Campaign: The Clinton-Obama Fiscal Nightmare

Kimberley Strassel, at the Wall Street Journal, notes that both Hillary Clinton and Barack Obama are unabashedly campaigning as big-government liberals (via Blue Crab Boulevard):

In the middle of an election that is supposed to be about "change," the country is instead being treated to the most old-fashioned of economic debates. The fun of it is that neither side is being shy about where it stands, which has only sharpened the old choice: higher taxes and bigger government, or more economic freedom and reform. With health care, entitlements and education all on the agenda, the stakes are huge.

We don't have a Democratic nominee yet, but in terms of this battle it matters little. Mrs. Clinton and Mr. Obama both dropped major economic addresses this week, and their most distinguishing feature was that they were nearly indistinguishable. Just ask Mrs. Clinton, whose campaign complained that Mr. Obama had copied her best ideas (even as it simultaneously complained he offered no "solutions" -- go figure).

Republican frontrunner John McCain certainly sees no differences, and his frontrunner status has allowed him to begin training his economic guns on the Clintbama approach. The battle lines are, as a result, already taking shape.

This is going to be an old-fashioned fight over taxes. Whatever they may have said on CNN, Mr. Obama and Mrs. Clinton aren't foolhardy enough to embrace wholesale tax hikes. Like John Kerry and congressional Democrats before them, both are instead proposing raising taxes on only "the rich." Both campaigns made an early bet that the Republicans' broad tax-cutting message had gone stale, and that Americans were frustrated enough with rising health-care and education costs that they'd embrace redistributionist tax policies.

Maybe. But the economic landscape has changed from last year, and even frustrated Americans have grown jittery of tax-hike talk. Mr. Obama has already shifted, and started placing more emphasis on his promise to return some of his tax-hike booty to "middle-class" Americans via tax credits. Both Democrats are already justifying their hikes by pointing out that Mr. McCain voted against the Bush tax cuts in the past.

Mr. McCain's challenge - which he's already embraced - is to keep the tax focus on the future. His campaign is going to play off polls that show the majority of Americans are still convinced that political promises to soak the rich translate into higher taxes for all. He will use the gobs of other proposed Democratic tax hikes to make that point, noting, for instance, that higher taxes on dividends and capital gains are in fact punitive to a broad swath of middle-class investors who have become reliant on those equity returns - in particular during this credit crunch.
The more one looks at the Democratic model for '08, it becomes increasingly clear what we can expect under a left-wing administration next year: creeping socialism at home and foreign policy surrender abroad.

Gaius at Blue Crab Boulevard adds some nice analysis:

The tax increases required for [Clinton-Obama spending proposals] will stop the economy dead in its tracks. And there is still the looming demographic nightmare of the boomers retirements. The word "rich" will have to be defined lower and lower. Don't believe it? Remember when Bill Clinton pushed his huge tax increases through, the rich were those earning over $200k. In the Rangel tax proposal that is already out on the table, the rich are defined as earning $150k - despite more than a decade of inflation. The rich just keep getting poorer.
Yet, Rush Limbaugh's not talking about that.