During the Great Depression, Herbert Hoover damaged the economy, and impoverished the American people, with costly, artificial attempts to stimulate the economy through increased government spending, financed by heavy taxes like the Revenue Act of 1932.
Obama is now doing the same thing through his proposed $2 trillion cap-and-trade carbon tax. That tax fulfills his prediction in 2008 to the San Francisco Chronicle (which didn’t report it) that “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s regressive excise taxes were in 1932. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air.
The $2 trillion that Obama’s proposed “cap-and-trade” carbon tax on energy use and utility bills is expected to raise is far more than the $646 billion the Administration earlier estimated. That’s at least $3,100 per family per year.
Obama is also emulating Herbert Hoover’s protectionism. Hoover signed the Smoot-Hawley tariff, which helped turn a recession into the Great Depression by triggering a trade war with other countries.
Similarly, the bill incorporating Obama’s carbon tax contains protectionist measures that will likely trigger an economically-destructive trade war. Indeed, Obama already started a trade war through a provision in his $800 billion stimulus package that blocked a measley 97 Mexican truckers from U.S. roads. That minor NAFTA violation “caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade,” destroying 40,000 American jobs. (Even before that, the Congressional Budget Office admitted that Obama’s stimulus package would actually shrink the economy in the long run).
The $2 trillion raised by Obama’s cap-and-trade carbon tax may be dwarfed by the money it siphons from consumers to well-connected corporations that have learned how to game cap-and-trade schemes.
In the Great Depression, President Herbert Hoover raised marginal tax rates to 63%, and went on a deficit spending binge. Similarly, Obama has proposed higher marginal tax rates, which will produce another $1.9 trillion in tax increases.
In spite of its massive size, Obama’s carbon tax won’t begin to pay for all his spending increases, such as a budget that will generate $4.8 trillion in increased deficits, Obama’s trillion-dollar toxic-asset program, and his $800 billion, economy-shrinking “stimulus” package, all of which contradict Obama’s campaign pledge of a “net spending cut.”