One of the major points of Jim Powell’s book, “FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression” is the inability of the Roosevelt administration to bring recovery to the stagnant 1930’s economy through legislative reform. According to Powell, much of what perpetuated the Depression was the desire of the socialists, marxists, and democrats (forgive me for my redundancy) of the FDR administration to completely reform American capitalism so that it was some kind of version of European socialism.

One of the big mistakes of the Hoover / Roosevelt administrations during this time was the attempt to redistribute wealth through increased taxation. The problems with this approach is that in the Great Depression the wealth had largely evaporated and there wasn’t wealth to redistribute. What the Great Depression needed was policy that would encourage the creation of wealth. The effect of increased taxation was to take money out of people’s pockets in the attempt to “reform” the American economy. This made it extra difficult for the American economy to recover.

The reason this historical awareness is important is that this increase in taxation at a time when the American economy is in the tank is what is being proposed the Democratic party. Obama is on record as supporting wealth redistribution as was seen in his saying that it his desire to “spread the wealth around.” This is classic Marxist speak, “from ‘Joe The Plumber’ according to his ability, to each according to his need.”

Readers need to realize that the worst thing that can possibly be done in a declining economy is to increase taxation, which is what Obama is promising when he says that he is going to cut the taxes of 95% of the people.

Before one understands Barack Obama’s tax plan, one must understand the difference between a tax cut and a subsidy. A tax cut is when someone makes money and the government allows that person to keep more of the money that was earned by that individual. A subsidy is when the government takes from one person to give to someone else. Many people in the mainstream media use the terms interchangeably, even though there are major differences between the two.

Presently, the bottom 40% of income earners pay zero income taxes. The top 20% pay 80% of all the federal income taxes. Therefore, it is not possible to give the bottom 40% a tax cut because they pay no money to the government. So this begs the question: How is Barack Obama proposing to give a tax cut to 95% of Americans?

The truth is that he is not going to give a tax cut to most Americans; it is not possible. Instead, he is going to give welfare subsidy to the bottom 40%. This subsidy Obama is calling a ‘tax cut,’ but in reality it is a tax increase in an attempt to redistribute wealth.

However, the problem is that the Republican candidate is likewise offering socialistic solutions in the time of a desperate economy. McCain’s proposal that the Federal Government buy up bad mortgages is disastrous. Home ownership is no more an American right then is health care and the government guaranteeing bad decisions on purchased homes penalizes those who didn’t make bad decisions on home purchases. In point of fact, McCain’s proposal on buying bad mortgages with a view to negotiating mortgages downwards is an incentive for all of those who are paying mortgages to suddenly discover they can’t afford their mortgages. McCain’s proposal is socialist insanity.

What our economy needs is for the State to get out of the way but what each of the major candidates offer are ideas that are sure to slow down the hope of economic recovery.