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  • Morning Bell: Obama and Congress Are Choosing to Cause a Recession

    President Obama recently said, “The most important lesson I’ve learned is you can’t change Washington from the inside.” That’s demoralizing to hear when a recession is bearing down on the economy—and it’s an inside job.

    The Congressional Budget Office has forecasted a fresh recession to hit next year if Taxmageddon, a nearly $500 billion tax increase, hits the nation and Congress and the President drive us off the “fiscal cliff.” President Obama has done nothing but ignore this warning.

    In a new report, Heritage’s J.D. Foster explains that the very fact that we can see a recession coming is shocking. “Economic forecasters almost never forecast recessions,” he says. “Those few who do forecast recessions do so with great frequency and belong to the doom-and-gloom school of economics.” Yet we can see this one a mile away:

    What makes this recession different, and predictable, is that the disruptive force is Washington policies and, even more, Washington behaviors—policies and behaviors for which the nation can thank the Congress and especially President Obama. The policy is Taxmageddon. The behavior is intentional, insistent inaction. The consequence is recession. The response should and will be outrage.

    The problem is extremely clear. Congress has left town and isn’t scheduled to return until after the November election. With every day that passes, the economy drags, as the uncertainty of January 1 looms.

    Economists talk a lot about “uncertainty.” Why is uncertainty such a big deal?

    Business owners are looking at next year’s taxes already and thinking they can’t afford to hire. Investors are holding back from expansions and new ventures. This massive uncertainty is holding back all growth and keeping unemployment stubbornly above 8 percent, while millions have dropped out of the labor force because they are so discouraged.

    Uncertainty affects your personal finances, too. Think about this: If you’re a middle-class American family, Taxmageddon means that your taxes are going up about $4,100 next year. How does that affect your thinking about traveling for Thanksgiving in a couple of months? Buying Christmas presents? What about saving for retirement or your children’s education?

    It starts to hit home that you have to come up with that $4,100 somehow. You’re going to have to make cuts in your lifestyle to be able to pay this tax increase.

    The best the economy has to offer right now is a holding pattern. Holding onto our money and holding our breath, waiting for the gigantic shoe of Taxmageddon to drop on top of us.

    The President said outside forces were needed to change Washington. But this tax increase—and the recession it will bring—are an inside job. Congress and the President are the only ones who can prevent it.

    The House passed a bill that would prevent the largest share of Taxmageddon, but when Congress came back to Washington for the blink of an eye after its August recess, it failed to finish the job. Everyone promptly dashed back to the campaign trail.

    As Foster said, “President Obama should demand that Congress return to defuse Taxmageddon, and Congress should immediately heed his call. The job need only take a few days away from their campaigning.”

    Visit Heritage’s Taxmageddon page to learn more, see how it will impact you, and see Taxmageddon’s impact on your state.

    Quick Hits:

    Posted in Economics [slideshow_deploy]

    35 Responses to Morning Bell: Obama and Congress Are Choosing to Cause a Recession

    1. Unfortunately, the recession they are causing may only be a small part of the REAL problem, which is how this all could play out on the international stage. Obama and his minions in Congress have so weakened the US with limitless regulations and political correctness, that a US economy dragged this far down may leave us defenseless should some diabolical axis arise with world domination as a serious goal. History confirms the short lives of power vacuums in this world, and the list of prior diabolical axes is long. Unfortunately, very few people today even know how to find accurate history, let alone ever read it, or comprehend it.

    2. Ben C. says:

      Its called brinksmanship and will be the tactic played out this fall. The nameof the game is "Who is at fault?" I am so sick and tired of this gamesmanship – its time to throw out all the bums and start over.

    3. toledofan says:

      I sure hope those that will actually vote in November read this and understand that the Democrats would rather ruin the country, the economy and the constitution instead of doing what is really necessary. I think that the Democrats understand that if they are defeated in November they're ideology will be seen as a failure and discarded. Oner thing is clear Obama would need to be a leader to step back and do what was best for America, but, getting re-elected and doing more of the same is the real objective.

    4. Frank says:

      Obama, Romney, virtually all Democrats & all the Republican Establishment politicians & voters (thus, almost all of Congress) refuse to face economic reality & balance the budget & cut the size & scope of government. They refuse to end our out-of-control welfare/warfare/police state, end the Federal Reserve or return to sound money (gold/silver). They won't balance the budget or close some 800+ military bases in some 120+ nations around the world (left-overs from the Cold War). They won't stop the USA from being the self appointed "world's policeman" at our taxpayers (& our young soldier's lives/health) expense, which we can't afford anyways. They won't simply do the primary mission of defend our borders against outside attack.

      America can no longer afford Democrats or Establishment Republicans in control of government. We desperately need a 3rd option. Looks like America (& the world based on US Dollars) will implode first!

    5. Joan from Dallas says:

      The worst part about this is that no one will admit seeing the elephant in the room. This has been Obama's plan all along…first, working for ACORN, he lobbied the Clinton Administration to make mortagages avaliable to people who could not pay, collapsing the housing market. Now the government is paying mortages for those very same low income people, many are not American citizens. Obama doesn't meet with his Jobs Conuncil because his objective is to NOT create jobs so that people who would typically work can't find a job. This means more people need government assistance.Obama has kept the borders open so that as many poor people as possible flood into America and require financial assistance. His plan is to collapse the entire American economy. I think, if reelected, he will seize our bank accounts and retirement savings and pass a bill that will keep him in office indefinitely. Will his actions collapse the world economy? Will the dollar have any value whatsoever? Think about this…it's the only thing that makes any sense of what Obama is doing.

      • David Van Tassell says:

        This is excellent on your part; thank you!!!!!! All this is just another step into or in the direction of Communism. David Van Tassell from Liberty, Texas

    6. Act Responsibly says:

      I will lower my AGI to avoid the tax increases and cut spending.

    7. Mary......WI says:

      In all honesty, the polls have me in a slump right now. Obama is such a smoosher with the American people. And after watching the Howard Stern video interviewing residents of Harlem, NY this country is up against some very ignorant people who are voting by skin color only or that want free stuff from the government, for it is those ignorant people who will determine the next president. John Boehner is useless… he should be demanding Congress come back to session. Obama has transformed this great country into a socialistic hell. NEVER did I expect to lose the country I have known and proudly loved for 62 years spiral down into hell. Obama has almost succeeded in transforming this nations wealth to be equally distributed throughout the world and left us a mere shadow of what we used to be. If re-elected he will complete the job, become the dictator he has always inspired to be, and probably rename this country the Socialistic States of America with the "Amero" as our currency, and he, along with his fellow communistic friends, will rewrite the constitution for the Socialistic States of America. Sad day for America if Obama is re-elected.

    8. Mike says:

      A lot of obama supporters don't care because they pay little or no taxes. his policies are discriminatory to those who support themselves and their families.

    9. Paul Stone says:

      This is one of many inside jobs going on as our worst enemies are our President and most of the people we have elected.

    10. Roy says:

      Roy Rowley do you support him taking away jobs and giving it to illegal aliens, when people here are having a hard time getting job’s now?

    11. Ida Frade says:

      Most of us know that it's not that Obama isn't concerned about what is happening…IT IS THE WAY HE PLANNED IT! Why can't people smarter than me figure that out!!!???

    12. ron hansing says:

      We are NOT on a fiscal cliff… We are already falling, the weight is increasing the acceleration, and we are just waiting for the SMACK of the payment below.

      The irony is that the rich will feel a twinge, the middle class a wasp sting, and the poor will walk around in a daze not knowing what hit them, mumbling…. Huh!,… what?

      Actually, I see this as a positive. "Americans" ???? may finally wake up and realize that this country is charred toast.. "Seek and you shall receive…"

      Ugh, as a student of the theater of the absurd, i tend to spout mix metaphors, porportional to the absurdity.

      ron hansing 9.27.12

    13. ThomNJ says:

      In our history, EVERY single recession or depression that lasted for than a few months was because of the government's intervention. And I disagree that the current non-action will cause a recession – since we are already mired in a recession – Taxmageddon will cause a severe depression.

    14. J E Houser says:

      Horrors! Washington can't be changed from the inside — that is probably true, but Washington can, and is, changing the outside, and horribly so. The change needed in Washington is the repeal of the 17th Amendment. Reestablish the United States as a collection of States and not a collection of counties.

    15. Bobbie says:

      failure to meet fiduciary obligation! FAILURES! isn't it illegal not to meet???

      I'm surprised no one caught on to the latest entitlement mentality. Monday night's football game when my husband wanted Seattle to win but not like that! The quarterback from Seattle said "we took it too far for this not to be a touchdown!!" Even those that appear to be strong have fallen victim to entitlement, losing all manliness in the process! My, how America and the American man, has fallen unable to accept truth!!!

      It wasn't a touchdown, it was an entitlement!!

    16. glynnda says:

      Hi All Heritage readers….
      Read this article closely…..Heritage is right, Congress is helping out with this drive toward disaster, the Senate has not passed a budget in three years. We need not only to remove the left leaning people in Congress and Senate who are intentionally creating this disaster, but also republicans who have not been serious about resolving budget issues. I urge you to cast your vote to change control of the Senate and to check the voting record of your Republican Congress person. If they are not voting seriously to improve this economy, it's time to get rid of them. We are two elections away from turning this nation around. It can begin next month. Stay encouraged and fight for your nation.

    17. Juan Martinez says:

      Ms. Payne, don't you think it's a little bit dishonest to describe expiration of the Bush era tax cuts and the expiration of the Obama payroll tax cuts, both on 12/31/12, as a "nearly $500 billion tax increase"? Isn't it really "the expiration of a nearly $500 billion tax cut"? Intellectually, that is much more honest, don't you think?

    18. We will certainly have a greater recession if Romney wins and the G(reedy) O(rligarchaical) P(lutocrats) take control of the Senate

      • Bobbie says:

        Open your thinking mechanism and try to relieve your narrow mindedness repeated endlessly by democratic spokespeople who won't accept necessary considerations or truth itself, making sure you only have what they want you to know…

        Don't cheat your minds potential and don't let anyone else!!

    19. I have called this President "President Zero" and this Congress "Zero plus". I wish to change both of those definitions to the "Most Productive" in the history of this country. Together they have both producted the most destructive, failed, corrupt, and debt ridden government body in the history of the United States of America. They will go down as the final straw that broke the back of this wonderful country. I fear we will never get it back.

    20. chatmandu002 says:

      "The President said outside forces were needed to change Washington." Is the president calling for revolution or a foreign army invasion? Just what does Obama expect to happen in Washington? Forever one to roll over and bow to his wishes. Obama and Harry Reid are the problems with Washington. It's time to let Obama go, he hasn't done his job.

    21. Steve Wilson says:

      Thanks to Obama and Congress were about to go cliff diving into rocks.

    22. sdfultz says:

      This is why the People have to pressure the Congress and the President to get it done!
      We the people must act, we are the outsiders that put the insiders were they are, we are the Boss!
      I refuse to believe that we can't make it happen, the question is will WE?
      We too have responsibility in our Government!
      We are not going to be successful as arm-chair activist in government matters.
      The President was right, Change comes from the outside, We make that change!
      Why do you think all these candidates are vying for our votes?

    23. Bernie Haley says:

      Hi Heritage! Love your newsletters. But, whether GOP or the Idiots are elected in November, there is no choice but to raise taxes and cut spending. There just is no other way. Take a hard look at the revenue and expenditures and it becomes obvious that Congress can't come up with a budget! The GOP is claiming a lot of things, but they're going to be in the same fix, if they get in. I don't like facing a tax increase. No one does. We must elect responsible people to office and stop these college loans and borrowing against the future! The only debt I have is my home mortgage, and it's not much. That's due to careful fiscal planning and belt tightening for many years……… Thanks again, folks; but get real. NO ONE will bail us out of this one……….

    24. Socialism rails against capitalism with the rhetoric that they are greedy and live on the backs of the poor. What they are realty against is the control of greed by the competitive marketplace. The control of greed in the competitive marketplace is being eroded by the lefts constant badgering of politicians to eliminate the penalties of wrong doers with welfare,subsidies, unemployment etc in the name of compassion. Socialism wants greed. How else can they buy votes if they can't promise “bread and circus'” to propel themselves into power.
      The unintended consequences of the competitive marketplace is that it provides more goods to more people. The unintended consequences of the government interference in the competitive marketplace leads to a depression or recession.

    25. Drifter says:

      Why would Obama do this when his entire presidency has been promoting the Fabian objective of collapsing the American economy to facillitate a complete government takeover?

    26. Jeanne Stotler says:

      All you have to do is look around you, check out McDonalds, any Amrican teens? check all the same type and you will see the same. Mgrs. will insist they checked them out and probably did, it takes time for forged, borrowed numbers to catch up, by then these people, with a new number, will move on to another employer. Then there are the jobs like lawn care, house painters, small household repairs, these people are NOT eligble for unemployent in most cases and they cannot cut their prices low enough to compete with the illegals. My sons are housepainters and in the last 2 years they have averaged 5 days or less a MONTH of work, they have to depend on food stamps to get by, they would prefer to work, just isn’t there.

    27. RennyG says:

      What this person is doing is preparing the road for a total take over and ruining or beloved country, should he be re-elected. He is in fact preparing the road so that the laying out of his plan is done. Then it is a matter of just wrapping things up up things for a new America, 'HIS AMERICA!!!" "PRAYERS!!!"

    28. PGill says:

      Beautifully and clearly explained. Is there any way this message can be front and center in the debates?

    29. Will says:

      Obama and the Socialist American hater's have been planning this take over for over a hundred year's. It's nothing new. We've been asleep a long time !!

    30. David E. M. Thompson says:

      Ms. Payne's (or the Heritage Foundation's) arithmetic is suspect. Taxmageddon's $500 billion tax increase is spread out over 10 years; so assume $50 billion next year. She calculates: "If you're a middle-class American family, Taxmageddon means that your taxes are going up about $4,100 next year." It would only take 12 million middle class American families to pay the full $50 billion at $4,100 per middle class American family.
      The tax increase may be higher in the initial years, but to get that figure up to 50 million families would require that 40% of the $500 billion be levied in the first year. Not likely.

    31. Don Bistrow says:

      I must laugh when I hear the argument blaming Congress. What part of the legislature??? How about Harry Reid's Senate?

      Paul Ryan has presented budgets that were voted on and passed. The Senate has gone over three years without a budget and no Democrat has ever voted for an Obama budget.

      So the problem lies with Democrats. I might like to play cards but without a willing partner I'm playing Solitaire.

      I'm not crazy about any politician but placing the full blame on the Obama administration is the correct answer. Even the erstwhile John Boehner secretly negotiated with Obama only to have "The One" come back and ask for more.

      Get in bed with the wolves and you get eaten.

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