Memo to Kudlow: Start being a watchdog, not a lapdog!

Kudlow asks how big Government is Obama and doesn't answer the question right.

Larry Kudlow is so sold on 'tax cuts' he gleefully reports on them being '40%' of Obama's big Government spending plan without reading the fine print. He's a dog who found his bone, but he fails to notice it's a fake - the supply-side watchdog has gotten distracted. You have to read most of the column before he admits the goose egg in the Obama 'stimulus' plan:

"And many of the tax cuts are refundable credits, which really are a form of government spending."

Didn't the previous Democrat President, Clinton, play these semantic games, calling spending 'investment' and other nonsense? Now, giveaways to non-taxpayers are called a tax cut by sleight of hand of 'credits' that are Government checks mailed by the IRS. Wow, so if medicare payments we sent by the IRS, socialized medicine could be one big tax cut too. In reality, 100% of Obama's Big Government spending plan to stimulate socialism is "a form of government spending", but 40% is packaged
as tax cuts, since the IRS will be shelling out the dough. No, it's not right to think of this as equivalent to a tax cut since the pocket that gets the money is not getting it from private sector effort and in many cases don't pay taxes at all. This is a huge EITC expansion, a huge transfer payment expansion - and transfer payments are not and never have been 'tax cuts'.

So what we have now is an $800 billion stimulus package with $300 billion of so-called tax cuts which could infer less spending than before — maybe only $500 billion worth.

Have we gotten to the point where we put 'only' next to $500 billion spending sprees? That amount is too huge in any case.

While Kudlow is right to point out that the TARP 'investment' is wrong scored as deficit, where he is wobbly is on thinking that implies we should ignore the deficits at all. Remember, the Obama plan WILL be spending, $800 billion in an added deficit - $500 billion spend by political bureaus, and $300 billion in targetted refundable tax credits. This is Keynesianism on crack.

Alas, none of the package incentivizes production, income and investment directly through reduced tax rates and lower regulations. Good ideas are left on the shelf: A capital gains tax cut, that would instantly lift asset values and good by itself end the housing and credit crunch in one fell swoop; the idea of alternative tax plan, like the Gohmert idea of a real tax cut via a tax holiday; making Bush tax cuts permanent; repeal of Sarbanes Oxley; making permanent R&D tax credits; tax cut to allow repatriation of US corporate capital overseas without a tax hit.

Kudlow states the Obama plan is popular. The media builds it up like the Second Coming. Nobody is pointing out the Swiss cheese nature of his plan - it's full of holes due to the failed nature of govt spending programs. If even conservative commentators fall on the job of pointing out the truth about how erroneous his plans are, while the liberal MSM Obamedia is in their usual slavish devotion mode, why wouldn't 65% of the people think there is nothing wrong with Obama's plans, even if flawed and fallacious?

Kudlow is right to point out the lack of Republican conservative alternative response, but he is wrong to praise this instead of pointing out what is wrong with it and should be better. And no, Kudlow is wrong to 'bargain down' or let Obama off the hook just because he won more votes in November. If Obama is right, fine, say he is doing good. But he's not, and it's feeble to end up saying: "I guess I could say it could have been worse." This is inexcusable bargaining down. Basically he's not Stalin, so we can relax - that is not a proper response to bad public policy that just happens to not be as bad as you might have feared.

The only appropriate response to Obama's dreadful plan is full and outright opposition to a plan that will not help the economy long term, is a flagrant waste of money on the spending side that will make a temporary and barely noticable improvement in short-term consumption, opens the door to huge amounts of boondoggling and waste, while harming our nation's fiscal balance.

It needs to be made clear that:

• There is NO stimulus at all to private sector economic activity without REAL tax cuts and not fake giveaways mislabelled as tax cuts
• Excessive Government spending that loads on the debt is not a good idea and has consistently FAILED in the past to spur the economy
• There are many GOOD IDEAS to improve the economy out there - tax rate cuts, regulation reform, pro-energy policies, investment incentives, trade initiatives - that should be part of any 'stimulus' and to not include them is to harm the economy

The correct answer to Kudlow's question is that we are afflicted by the biggest shift to big Government in Federal policy since at least LBJ's era and possible the 1930s. There is zero intellectual, moral or economic justification for it, but to fail to acknowledge this reality or to downplay it is to disserve the readers. There is no way a $500 billion spending plan could NOT be viewed as massive.

Conservative media: It's time to stop being lapdogs and start being watchdogs!