This is a snippet of an article I recently read on the impact of Obamacare to the economy. There have been consistent, persistent and blatantly obvious obstructions placed in the road to business by this administration. The pResident has worked long and hard to not only ensure his economic malfeasance persists, but has been abetted by a willingly corrupt media in veiling the damage being done by the policies of the left. But first, a vignette:
I’m in the commercial real estate business, and have managed commercial properties for more than 20 years. A friend of mine has been in the real estate services business, providing everything from janitorial services to window washing to parking lot repairs for about as long. In fact, the company I work for was his first account. In the last 20 years, he has expanded from a handful of full-time employees to 150 full-time employees. I recently discussed with him his concerns about the effect of Obamacare on his business. Most of his employees are in lower-skill occupations and so only earn $10 – $15 per hour. He cannot afford to tack on health care benefits equal to another $3.50 to $5.50 per hour without going broke. His more affordable alternative would be to pay the $2,000 per employee fee, which would effectively erase his entire 2012 profit from his business. In essence, this one provision is the equivalent of a 90% – 100% tax on his typical net business income. Worse yet, since the law does not allow the $2,000 per employee charge as a deductible business expense, he’ll have to pay federal income tax on approximately $240,000 of business income he didn’t get. Implicit in the law (or perhaps it is explicit) is the notion that it is the responsibility of employers to provide health insurance to their employees, and if they don’t they are bad people, greedy capitalists exploiting the working class, and deserve to be punished.
What is my friend to do? He can raise his prices and risk losing business from people like me who will then need to cut back on his services, or who will go to his smaller competitors with fewer than 50 employees who are not (yet) subject to the fee. Or he can cut back the hours of his employees until he has fewer than 50 working full-time. Or he can fire most of his employees and tell them they are on their own as independent contractors, and he may be able to subcontract with them from time-to-time for specific jobs. None of these alternatives are good for the business owner, his customers, his employees, or the economy in general.
This is what you get when people sheltered all their lives in government and community organizing, with little knowledge of how businesses actually operate, are put in charge of crafting far-reaching economic policies. This is what you get from people who don’t recognize businesses as the drivers of employment, economic growth, and higher standards of living, but see them as entities that need to be regulated, managed, and controlled by government for the “public good.” This is what you get from people who deride the idea that successful businesses are created by their owners working long hours, developing good ideas, and putting capital at risk, but instead are the creations of government and the community at large.
This, of course, brings to mind another worthy read and a great window into the future of America: Baltimore. From the article:
The Baltimore city government is on a path to financial ruin and must enact major reforms to stave off bankruptcy, according to a 10-year forecast the city commissioned from an outside firm.
But it was this nugget, buried towards the bottom that really stood out to me:
Baltimore already has the highest property taxes in Maryland — twice as high as in neighboring Baltimore County. The city’s local income taxes are the highest allowed under state law. While the city enacted some new taxes to deal with the 2010 deficit — including taxes on bottled beverages and higher hotel and parking levies — city officials say they can’t tax their way out of the problem without driving away residents and businesses.
“We’ve got to go from a vicious cycle to a virtuous cycle. That starts with a good, stable fiscal foundation for the city government,” said Andrew Kleine, the city’s budget director. “When you’ve lost so much population and the tax base has shrunk, it’s very difficult to deal with.”
Read more: http://www.foxnews.com/politics/2013/02/06/city-baltimore-is-on-path-to-financial-ruin-report-says/?cmpid=prn_aol&icid=maing-grid10%7chtmlws-main-bb%7cdl1%7csec3_lnk1%26pLid%3D266688#ixzz2KES5HKSW
To me, this is so damn obvious that it boggles the mind why it hasn’t been pointed out—and history has born out the fruits of this on a national level—CUT SPENDING AND TAXES. Reagan did it and it worked swimmingly. Anyone who knows anything about personal finance, or who has gone through debt counseling, knows that you CANNOT have financial stability and success if you don’t cease excessive spending.
We just saw that the last quarter of economic activity contracted. “Austerity” has been blamed for the GDP decline, except for the inconvenient fact that U.S. deficit spending went up—technically the exact opposite of “austerity”. The economy contracted because people have less confidence, less money, and lower paying, part-time jobs; all a direct result of Obama Administration policy. This is also know as an EPIC FAIL.
The economy is not going to take off this year. Hell, we’ll be lucky not to go into a recession this year.
Some more quality reading, which should of course be done away from a ledge or window…