"That's not class warfare; that's common sense."?

The phrase, “That’s not class warfare; that’s common sense,” has now become President Barack Obama’s signature catch phrase. From his State of the Union speech to his late release of the 2013 budget, President Obama uses this to invoke the support of the middle class and deflect the comments thrown at him from the Republican side. However, I can’t help but ask the question. Is it really common sense?

With the release of the 2013 fiscal year budget I, perhaps naively, was looking forward to spending cuts and programs that would grow the economy out of the recession. We had finally shown signs of life, albeit very dim signs, that we were creating jobs as we saw the unemployment rate slowly creep down to 8.3% last month. So what did we get in this new proposal? $137 billion in spending inside a $3.8 trillion budget while our hopes of reducing the deficit have been delayed from the original 2014 date to now 2018. Common sense you say Mr. President? I believe history wins that argument.

One of the main focuses for President Obama in the past months and will be at the forefront of the 2012 Presidential election campaign is the tax on what President Obama deems, “The wealthy.” This has been done before in American history and it did nothing but decrease cash flow in the economy. In 1930, President J. Edgar Hoover placed a major tax hike on the wealthy to balance the budget. The top marginal tax rate for incomes rose from 25 percent on incomes in excess of $100,000 to 63 percent on incomes in excess of $1 million. By doing so, President Hoover actually decreased household spending as their disposable income dropped significantly and it led to further contraction of the US economy.

In reference to this idea of spending to reduce the deficit, this has only worked as a major factor once in history: World War II. After the Great Depression of the 1930s a massive influx of military funding flooded the market. This worked because men left their jobs to fight in the war while women worked more in the factories. The number of unemployed workers declined by 7,050,000 between 1940 and 1943 as the number in military service rose by 8,590,000, according to the Library of Economics and Liberty. It’s apparent that it wasn’t so much the economic recovery as it was the draft that decreased unemployment, tightened budgets and rationed goods during war time. A recovery through spending is, thus, not the right solution.

It’s clear that America needs to be more focused on a supply-sided economy to see recovery. The current administration should be instilling consumer confidence back into the dollar. Economies grow when citizens have money, believe in it’s worth, and are given a low marginal tax rate so they can keep putting the money back into the market. If you tax someone with higher tax rates then they are less likely to invest that money back into the market. On the other hand, if you devalue the currency then the country will go back into a spending frenzy because they don’t believe the money will be worth anything as seen in drastic circumstances, such as the Great Depression of the 1930s. Value through steady cash flow of a strong currency and innovation will grow the economy, not taxing those who have already worked hard to be where they’re at.

It’s the American dream to work your way to the top and achieve your goals. What incentive is there to work your way to the top if getting to the top means you have to pay a substantial percentage more back to the government on issues that do not, and possibly will never, have an influence in your life? What are taxes but a number on a piece of paper that tells you how much you owe the government for something you may never use? We must all do our part to help the less fortunate, but at what cost to ourselves. When does it stop becoming affordable for us to help others? As they say in airline emergency guidelines, “Place your mask over your nose and mouth before assisting others.”