Socialism, Obama, and America's Future

Stanley Kurtz documented something we have all known: President Barack Hussein Obama is a socialist!  Contrary to claims made in 2008 by Obama, his staff, and supporters, he was a member of the socialist New Party in Chicago.

Kurtz wrote:

In 2008, candidate Obama deceived the American public about his potentially damaging tie to this third party [The New Party].  The issue remains as fresh as today's headlines, as Romney argues that Obama is trying to move the United States toward European-style social democracy, which was precisely the New Party's goal.

Is Obama a socialist?  Obama falls within the mainstream of contemporary socialism as represented by Germany's Social Democrats, the French Socialists, or Spain's socialist-workers party.  By this criterion, yesObama is a socialist.  He is clearly a socialist in the European sense of the term. 

France has just elected François Hollande president.  Hollande is a proud socialist.  How are Obama's and Hollande's policies similar?

  • Reject austerity and embrace "growth." Hollande said that he will end the current austerity efforts. Obama has accused House Budget Committee Chairman Paul Ryan (R-WI) and his House-passed budget of "social Darwinism," apparently meaning to say that the plan is so austere that it would leave millions of helpless Americans to fend for themselves, or what we used to call taking "personal responsibility."
  • Raise taxes on the "rich." Hollande proposes a two-tiered tax structure. He wants to impose a 45-percent tax on incomes over €150,000, up from 41 percent, as well as a 75-percent tax on incomes above €1 million. Obama has proposed lots of new taxes for families making more than $250,000 a year.
  • Raise the dividends tax. Hollande has also proposed increasing the dividends tax. Obama proposed raising the dividend tax rate from 15 percent to the highest personal income tax rate, 39.6 percent, next year.
  • Crack down on the financial industry. Hollande wants to separate retail and investment banking, and he wants a financial transactions tax. Obama has already pushed through the Dodd-Frank financial reform bill and made a lot of headlines attacking the "fat cats" on Wall Street.
  • Promote renewable energy projects. Hollande prefers clean energy ideas that don't work. He wants to reduce nuclear from 75 percent to 50 percent of France's energy and replace it with other green energy sources. Citizens Against Government Waste says that in America, there are about 20 green companies with federal grants or loan guarantees that could be in financial trouble. But Obama is campaigning on funding even more green jobs.
  • Increase public subsidies to small businesses. Hollande wants to create a public investment bank to help small companies and home grown industries, funneling money to those companies that are least able to survive on their own. Obama has already tried to buy small business votes by providing a tax credit to offset the cost of health insurance.

Obama's economic policies are almost identical to those of the French socialist François Hollande.

Socialism has failed wherever and whenever it has been tried.  Much of the world realizes this.  With socialists, it is always the people rather than the system that is the cause of failure.  But socialists refuse to acknowledge that the laws of economics are not revocable and cannot be legislated, regardless of how hard they try to behave otherwise.  As England's Lady Margaret Thatcher said, "The problem with socialism is that eventually, you run out of other people's money."

Socialists got a chance to implement their vision, and in the 20th century alone, they left a pile of corpses some 260 million bodies deep.  The tragedies of socialism are even more horrible when you realize that some people understood, predicted, and warned that brutality is essential in a world where the means of production are owned by the state as socialism wants.  In 1893, German libertarian Eugene Richter, in his book Pictures of the Socialistic Future, predicted with stunning accuracy how socialism, which promised prosperity and peace, would instead deliver poverty and warfare.

The two most visible socialist countries in the world are Cuba and North Korea.  Both countries produce misery, poverty, and brutality, and they are two of the poorest countries in the world, held together only by totalitarian rule and external economic support.

Socialism advocates, recognizing that socialism has never worked, changed to a system that is part capitalism and part socialism.  They believed that capitalism could be used for resource reallocation, while the caring nature of socialism could ensure equitable (to them) wealth redistribution.  Their new efforts focus on income taxes.

With socialist Europe imploding, Scandinavia, the definition of socialism, is doing quite well.  Denmark, Norway, and Sweden do not seem to have the debt problems that the U.S. has.  Why?  The answer can be found in the progressive, socialistic U.S. income tax code and its absence in Scandinavian countries.

In 2009, almost half of U.S. households paid no federal income taxes, while the top 10 percent of income earners paid about 73 percent of federal income taxes.  The top 25 percent of U.S. income earners paid 86 percent of income tax collected.  The bottom 50 percent of taxpayers paid less than 4 percent of federal income taxes collected.

Let's compare income tax percentages with Denmark, a Scandinavian country.  In 2011, in Denmark, the richest 30 percent of income-earners paid 48.7 percent of all income taxes, while in the U.S., the richest 30 percent of income earners paid 65.3 percent of all income taxes.  The poorest 30 percent of Denmark's income earners paid 14.1 percent of all income taxes, while in the U.S., the poorest 30 percent paid only 6.1 percent of income taxes.

In fact, the U.S.'s poorest 30 percent of income-earners paid only 43 percent of the portion of all income taxes paid by the poorest 30 percent of income-earners in Denmark.  The richest 30 percent of income-earners in the U.S. paid 34 percent more of the total income tax burden than do the richest 30 percent in Denmark. 

Income tax structures in Norway and Sweden are similar to Denmark's.  Most Americans assume that Scandinavia is much more socialist than we are.

The U.S. has one of the most progressive income tax systems in the world.  No Scandinavian country is as bad as the U.S. at making richer citizens pay higher income taxes.  No Scandinavian country provides its poorer citizens the ability to avoid paying for government programs on which they have an equal vote, as is the case in the U.S.  The U.S. is living the socialist dream: that those with the greatest income will carry those with less income.  We are living by the socialist mantra that each shall pay (income taxes) according to his means.  The government then uses the tax money to subsidize those who support them politically with votes.

And Obama is calling for the "rich" to pay more income taxes, to pay their fair share.

But now we are finding that many of the more able or willing to produce are having second thoughts about socialist principles.  Most businesses are now in a "holding pattern," waiting for socialist fools such as Obama, Reid, and Pelosi to be removed from their respective positions in the 2012 elections. 

The U.S. economy is very listless as a result of this holding pattern.  Gross domestic product increased at a very slow 1.9 percent annual rate in the first quarter of 2012.  We will not see any strong economic growth until after an Obama and socialism loss in the November 2012 elections.

And what of our future  even if (when) Obama is defeated in November?  Socialism never goes away, despite its poor track record.  People willingly abandon both logic and history to flock to its false premises and promises.  Art Carden, at the Ludwig von Mises Institute, said, "Socialists have generally tried to do two things: dethrone and kill God so that The People or The State might be exalted, and repeal the laws of economics."

It was Karl Marx who in 1843 said, "Religion is the opium of the people" in an attempt to dethrone God.  Socialists also said that economic laws were peculiar and historically unique artifacts of the particular conditions of production under capitalism.  Here are 26 Natural Laws of Economics that cannot be repealed, regardless of how many statutes socialists enact.

The U.S., once best hope of freedom and prosperity, has now fallen for socialism's message, and has started down its path to ruin.  Freedom and prosperity have already been seriously compromised, with much worse to come if America's course is not soon reversed.

Dr. Beatty earned a Ph.D. in quantitative management and statistics from Florida State University.  He was a (very conservative) professor of quantitative management specializing in using statistics to assist/support decision-making. He has been a consultant to many small businesses and is now retired.  Dr. Beatty is a veteran who served in the U.S. Army for 22 years.  He blogs at

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