Today we continue our series on what Obama should do next, particularly with the budget.

Of course, a big part of the budget is taxes. Here is an interesting fact: in 2011, the Bush tax cuts from 2001 will expire. That means that marginal tax rates will increase, capital gains tax rates will increase and dividends tax rates will increase. In other words, a huge tax increase is coming.

But Obama could change that. He could call for extending the Bush tax cuts, or better yet, making the tax cuts permanent. At a time of great economic challenge, we need lower taxes now more than ever.

Today we continue our series on what Obama should do in his budget. One thing he shouldn’t do is raise taxes:

http://ca.news.yahoo.com/s/reuters/100201/us/usreport_us_budget_backdoortaxes

Unfortunately, it looks like this budget might attempt to raise taxes using the “back door.” Here is how: the Bush tax cuts of 2001 are schedule to expire in 2011. If Obama lets them expire, taxes will go up for millions of Americans.

Are you an investor? Your taxes will go up. Are you an income taxpayer? Your taxes will go up. Are you a teacher who uses an education tax credit? Your taxes will go up. Trying to inherit your family’s land? Your taxes will go up.

President Obama can and should stop this right now by calling for the continuation of these tax cuts…otherwise we’ll all be paying more.

This week, we continue our series on what’s next for President Obama. And the timing couldn’t be better.

President Obama will soon unveil his new budget. I’ve got some ideas on what should and shouldn’t be in there. After all, politics is about money. So the budget is the place to look to see how a president wants to lead and where he wants to go.

Check back in each day this week for more on what President Obama should do next.

As we end our week of blogging about Congress, I thought we would again show some perspective on how out of control Washington spending is:

http://finance.yahoo.com/news/Federal-deficit-higher-in-apf-3876319127.html?x=0&.v=5

Here’s a question for you: what other business can you think of that can spend more than it receives? Much more than it receives. If you or I tried to run our businesses this way we’d be bankrupt.

Instead, Congress keeps spending money it doesn’t have.

Here are the key paragraphs from the article:

“The July deficit reflected government spending of $332.2 billion, a record amount for any month and up from outlays of $263.3 billion in July 2008. Of that increase, about $25 billion reflected the fact that Aug. 1 was a Saturday this year, requiring many government benefit checks to be sent out earlier and counted as spending in July.

“Government receipts totaled $151.5 billion, down 5.6 percent from a year ago. It marked the 15th consecutive month that government receipts have been lower than the same month in the prior year, illustrating how deep the recession has cut into tax receipts.”

So government brought in $151.5 billion and spent $332.2 billion. Incredible.

I hope the American people remember this recklessness the next time they go to the polls in November 2010.

This week we learn that the price of oil has begun to slip:

http://apnews.myway.com/article/20090602/D98IG75O0.html

As I’ve previously written on this blog, I think oil is overpriced and will eventually come down.  This is a small example.  What’s interesting is why the price is down: investors fear that inflation is on the horizon.  And they may be right.  The projected Obama budget during the next few years is expected to add more to the national debt than all the other presidents combined from Washington to Bush.  Now, I’m not a mathematician.  But that sounds like a lot of money.

Inflation is another good reason why we need to invest in renewable energy.  Energy sources like biomass are affordable and effective…and can help get us off our oil addiction.

Check out my website for more information on how our new Advanced Trailer for Biomass is changing the energy industry.

So the Obama budget has arrived. And the reception has not been too good.
This week, the stock market reached its lowest point since the 1990s.
Think about that: ten years of stock market gains are gone.

This week, one of Obama’s biggest supporters on the internet criticized
his budget.  Andrew Sullivan, a right-of-center blogger who passionately
supported Obama for president, wrote this:

“If you believe, as I do, that withdrawing from Iraq won’t happen as
promised, then there is close to no actual spending restraint anywhere in
sight. We are being presented with what can only be described as a
massive increase in government spending and power with the only fiscal
balance being wringing much more money from the successful. The president
predicted a tight budget and spending control in his non-SOTU, and he
appealed to fiscal conservatives by promising a long-term attack on
entitlement spending. I see nothing here yet that fulfills that promise.”
http://andrewsullivan.theatlantic.com/the_daily_dish/2009/02/obamas-long-ter.html

The reality is, no president can balance the budget without reforming
entitlements.  And Democratic president is going to do that.  There are
too many powerful constituencies in the Democratic Party who won’t allow
it.

And so, as Obama promises more government, he doesn’t promise much in the
way of controlling spending.  In my line of work, that’s a bad business
plan.

-Randy Hill

Here is the problem with President-elect Obama’s spending plans: they add to another problem–the deficit.
http://www.breitbart.com/article.php?id=D95MEMU82&show_article=1

Since 1970, the federal government has run a deficit every year except for 1998-2001. As a result, all those deficits have added up to create a $10.7 trillion national debt.  But here is a stat that will get your attention: this year’s federal budget deficit will likely exceed the amount of the entire federal budget of the year 2000!

So President-elect Obama finds himself trying to wrestle with two difficult issues.  First, how to jumpstart the economy?  He wants to do that with a combination of new spending and tax cuts.  The second issue is how to keep a handle on the budget deficit.  Sadly, his answer to issue number one makes issue number two even harder to solve.  New spending will only increase the debt we will pass onto our children.

Here’s a novel idea: how about running the government like any business or family does?  Live within your means.  Don’t spend more than you have.  And get out of debt as fast as you can.

Now that would be change we could believe in!

- Randy Hill