Tags: Schiff | Obama | Economic | Logic

Schiff: Obama's Economic Logic Is Backward

Tuesday, 10 April 2012 08:00 AM

Euro Pacific Capital CEO Peter Schiff says President Barack Obama's understanding of economics is 180 degrees off.

"The economists that Obama follows believe that business will only create jobs once they know consumers have the money to buy their products," Schiff writes in a note to investors.

"But just as wet sidewalks don’t cause rain, consumption does not lead to production. Rather, production leads to consumption."

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

"Something must be produced before it can be consumed."

Obama, Schiff notes, believes that prosperity came only in the 20th century after the government began redistributing wealth from rich people like Henry Ford to the middle and lower classes.

"He ignores the fact that America’s greatest growth streak occurred in the 19th rather than the 20th century, and that America had become by far the world’s richest nation before any serious wealth redistribution even began," says Schiff.

Obama’s preoccupation with redistributing wealth by punitively taxing the wealthy cannot have a positive outcome because redistribution always creates disincentives that result in less wealth being created, Schiff points out.

"All societies that have attempted to create wealth through redistribution have failed miserably," he says. "This should be obvious to anyone who spends more than a few minutes studying world economic history."

"But the president is on a mission to get reelected and his ace in the hole is to fan the flames of class warfare. It’s a tried and true political strategy, and he looks ready to ride that hobby horse until it breaks."

The Washington Examiner reports that when the Senate resumes after spring break, it will immediately face a vote on the "Paying a Fair Share Act of 2012."

Known as the "Buffet Rule," the bill would raise taxes on those earning more than $1 million and is intended to ensure that the nation's wealthiest pay at least 30 percent.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

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Tuesday, 10 April 2012 08:00 AM
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