RSS Feed MenuThe Obama administration is often accused of waging class warfare. But an early look at their new TARP plan – massive government loans to investors willing to wager a comparatively small amount of money sifting through bad assets in search of good – suggests that the plan will probably end by creating more billionaires than any other single action of the US government.
On the other hand, maybe the accusations of class warfare have some validity after all. They just fail to appreciate which class it is that this administration is targeting: not investors so much as the high-salaried affluent. If you have a couple of billion to invest, this administration is your hospitable friend! If you earn $750,000 at a law firm – whammo. It’s your taxes that are rising, and your deductions that are being stripped away.
As for Warren Buffett, well, did he get to be Warren Buffett by backing the wrong horse?
ModerateGal // Mar 23, 2009 at 6:44 pm
If you earn $750,000 at a law firm – whammo. It’s your taxes that are rising, and your deductions that are being stripped away. —- Well, I guess lucky for me that my husband and I don’t earn anywhere near that amount of money. And I’m having a hard time crying for those who do. Their taxes are going to rise a whole 3%! Waaah waaaahh waaaahhh!
DWAnderson // Mar 23, 2009 at 8:47 pm
I would like to participate in the program, albeit with much less that $1B. What are the odds I’ll be able to?For what little we know of the program so far, this is likely to be a far bigger giveaway than any bailout to date.Why not auction off the right to access to this financing?
A.B. // Mar 23, 2009 at 10:15 pm
A loyal class of new billionaires. Great. And, to the question, “no.”
Bulldoglover100 // Mar 24, 2009 at 7:39 am
I agree with the 3%waaaaaaaa….LOL…..I mean come on am I really suppose to feel sorry for people who make 750 thousand a year getting their taxes raised 3%???? Really? In what reality????If I HAVE to pay 29% of my income in taxes? THEY should have to also! I am sick and tired of the wealthy in this country getting away with paying 1 – 11% in taxes while I pay 29% of MY income!…I don’t CARE if Geithner’s plan makes new gazillionaires!!!! As long as they pay the same amount in taxes as I do! THIS is WHY so MANY REPUBLICANS/INDEPENDENTS voted for Obama in 2008! They are sick and tired of the status quo and yet the leaders in the GOP? Refuse to listen just as they are now becomming the party of NO. They will deserve what they get in the coming elections.
Jeffryw // Mar 24, 2009 at 10:22 am
Bulldoglover: Spoken like a true socialist. Who the hell are you to decide that a guy who makes 750k (and therefore already probably has paid almost 375k of that local, state and fed taxes–and if he owns a small business, well…even more) should pay an EXTRA 22,500 into a federal black hole because you will never make that kinfd of money? Honestly. What is wrong with being the party of NO when the alternative, is YES to mega trillion deficits that make Bush look like a miser, YES to European type wealth distribution that stifles enterprise and creativity, YES to a permanant majority class of government dependents, YES to stripping our military of its ability to wage war by reducing its funding, YES to pelosi, YES to Ried, YES to Barney Frank, et al.???I got news for you. The 750k guy pays a marginal tax rate of 35%. The billionaires of the world, the super rich, Warren Buffet, Steve Jobs, Citadel’s Ken Griffen, Steven Spielberg, etc. They are the ones who don’t pay taxes like we do. And guess who they supported in the election? See a pattern here? You have a right to make as little OR AS MUCH as your skill and intellect will allow. This bitterness over “the rich” is misplaced. Consider one more thing. 40,000 households in New York City pay 50% of the city’s income tax–out of a population of 8.2mm. And now there is talk about taxing them more. “Tax The Rich!” I have seen the rallies. What if just 1/4 of them say “screw it, I’m off to New Jersey.”? Who will pay for the beloved social programs now??? Look in a mirror if you live in NYC. There’s your answer. And you won’t be able to afford to leave.
barker13 // Mar 24, 2009 at 11:25 am
re: David Frum’s original post — Dave. “…massive government loans to investors…” How can a bankrupt entity “loan” money it doesn’t have to anyone…??? Oh… yeah… via putting it on MY tab… by putting it on my wife’s tab… my kid’s tab… my sometime in the future grandkids’ tab… (*SIGH*) Sure… I’m GLAD to have government borrow – at interest – in MY name. (*SMIRK*) (You’re getting the sarcasm here… right…???) Yes, David, Obama is indeed waging “class warfare,” but beyond that, he – and the Democratic Party… and certain elements within the GOP – are waging war against the future economic security of each and every one of us as individuals as well as those unborn as yet! Oh, yeah… the Barak man does NOT think small! BILL
midcon // Mar 24, 2009 at 12:14 pm
Jeffryw: Your example of someone making $750K and paying half that in all taxes would be more interesting if you were referring to actual data. The highest marginal federal tax rate is 35%. That would mean 15% more is being paid for state and local taxes combined. I find that difficult to believe (except perhaps for NY which is a socialist state).
sinz54 // Mar 25, 2009 at 7:08 am
Look, Obama’s budget is a classic “tax-and-spend” budget, of the type I thought had been buried 30 years ago. (Yes, even the feckless Jimmy Carter tried to balance the Federal budget during his administration, though he never quite succeeded.) So Obama hasn’t left us with good choices: Either we raise taxes on somebody, or we run up even bigger deficits (and the ones Obama is going to run up are mind-boggling as it is).What I find most depressing is that Obama wants to party like it’s 1965–but I’m old enough to remember what goes wrong with that approach.
ktward // Mar 25, 2009 at 12:19 pm
I’ve little sympathy for a 3% tax increase on those earning above $250k/yr, which is merely an expiration of Bush’s tax cuts which were, by all accounts, controversial on both sides of the aisle. And there is always room, as Obama has left plenty, for many voices and opinions. But many of you are, however, forgetting the one overarching and unprecedented factor here: the economic tsunami in which the Bush admin, and to a lesser degree previous admins, left us. (And I can’t, in good conscience, singularly blame the communication-challenged Mr. Bush. He had a disproportionately influential and powerful posse.) Point is, all the ‘regular’ partisan-differentiated economic rules & ideologies become an albatross we literally cannot afford to burden our precious necks with. I realize there are worst-case scenarios in any approach, but there is NOTHING productive that can come from obstructionism, no matter how ‘principled’. We can either support Obama, and succeed or fail. Or we can obstruct him and we will fail, for there are no viable options. Like it or not. I’ll go with the better odds.
sinz54 // Mar 27, 2009 at 7:54 am
ktward: There is a tremendous amount of stuff in Obama’s budget that has NOTHING to do with fixing the “economic tsunami.” The economic meltdown did NOT stem from lack of alternative energy or lack of universal health care or a failing domestic automobile industry. It stemmed entirely from the decline in housing prices which triggered a meltdown in the highly leveraged financial sector.So I would support an Obama budget that focused ENTIRELY on reviving the economy by fixing the problems in the financial sector, but NO OTHER new initiatives until the economy was revived. What Obama is doing is using this economic crisis as a lever to force Congress to adopt an entire range of longstanding liberal wet dreams that liberals were dreaming about long before this economic crisis occurred. And I’m opposed to that.