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Friday, March 20, 2009

"Obama is No Socialist"

Alan Blinder is tired of hearing that Obama is "leading the country down the path of socialism":

Obama Is No Socialist, by Alan S. Blinder, Commentary, WSJ: Ever since President Barack Obama released the budget..., we have been hearing a fusillade of criticism claiming that the president ... is ... a "leftie" intent on leading the country down the path of socialism.

Let's see. Socialism means public ownership and control of businesses, right? So which industries does the president propose to nationalize?

Banking? Well, no. Secretary of the Treasury Timothy Geithner has made it clear that he opposes nationalizing banks...

What about health care? Doesn't Mr. Obama want "socialized medicine"? No. He wants to reform the current system so that it costs less and covers more people. ...

Some reformers want the U.S. to adopt a single-payer system like ... "socialist" Canada and England... But regardless of whether single-payer is a good idea, it's not Mr. Obama's. His health-insurance reform plan emphasizes choice..., greater efficiency..., and portability... Which part of that is socialist?

And ... the Obama budget recognizes, rather than hides, the need to pay the bills. Half the cost of health reform would be covered by a tax provision that has really raised a ruckus: Capping itemized deductions at the 28% bracket rate. Let's consider how socialist that idea is. ...

Suppose ... three families each pay $10,000 a year in interest on their home mortgages. The cost to the non-itemizer is the full $10,000. For the family in the 25% bracket that itemizes, the net cost ... is only $7,500. And for the upper-income family in the 35% bracket that itemizes, the net cost is a mere $6,500. Just imagine a member of Congress proposing a homeownership subsidy like that directly...: 35% to the rich, 25% to the middle class, and nothing to the poor. Would anyone support it?

Enter Mr. Obama, the alleged leftist. ... He would reduce the 35% subsidy rate to 28% -- which would still leave the costs of charitable giving, mortgage interest, and much else far lower for the rich than for the poor. That's hardly a radical proposal. Indeed, it has been under discussion since the 1980s.

It's true: The president ... proposes letting the ... the top rate ... revert to where it was during the Clinton years: 39.6%. ... Unsurprisingly, the president's proposal ... unleashed a firestorm of criticism from people who claim that such radical redistribution would prolong the recession, destroy entrepreneurship, and pretty much end capitalism as we know it -- just as it did during the Great Prosperity of the 1990s, I suppose. Some claims parody themselves.

So where does all this leave us on the road to socialism? If Mr. Obama is able to get all of these proposals through Congress, the U.S. will have a fully private banking system, propped up with temporary government support; a uniquely American health-care system that covers virtually everyone; and a somewhat more progressive income tax.

If this is socialism, then let's make the most of it.

    Posted by on Friday, March 20, 2009 at 12:42 AM in Economics | Permalink  TrackBack (0)  Comments (42)


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