Obama Budget Is Plan for Catastrophe

Economist Arthur B. Laffer, head of the Office of Management and Budget under President Ronald Reagan and founder and chairman of economic research and consulting firm Laffer Associates, says President Barack Obama’s proposed budget “is the perfect plan for catastrophe.”
“It shows no spending restraint and is raising tax rates,” Laffer told Newsmax.TV’s Kathleen Walter.
He said the budget blueprint puts a greater burden on people who work and gives more money to people who don’t.
Video — Laffer: Obama Budget Is Plan for Catastrophe
“If you tax people who work and pay people who don’t, do not be surprised if you find a lot of people not working,” Laffer says.
“If you tax rich people and give the money to poor people, you’re going to have lots and lots of poor people and no rich people,” he says.
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If you know that tax rates are going to go up on January 1, 2011, you try to accelerate all the income you possibly can into 2010, which will make 2010 look a lot better than it should,” he points out. “Then, on January 1, 2011, the train goes off the track.”

The sheer size of unfunded liabilities is “awesome, just amazing,” Laffer says.

Civil service and military retirement and medical benefits, Medicare, Medicaid, Social Security, and that’s not even taking into account things like California and unfunded pensions.

The Obama administration needs to go through each of these and literally change the rules.

“You’ve got to go through all these programs meticulously and make sure you eliminate things that increase unfunded liabilities, which now exceed $100 trillion,” Laffer says. “Our GDP is only worth $14 trillion.”

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