The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- The parallels shouldn't be lost on anyone. And they certainly weren't lost on the market Friday, with major indices down 2.6%.
- Greece fell yet one step further in the direction of default. Look at the one-year interest rate on Greek government debt, now at 100%. This means that the expectation of default within a one-year time-frame is essentially 100%.
- President Obama delivered the latest version of his class-warfare speech, in which he proposed some near-term gimmicks to run up the budget deficit even more.
This would be laughable and comical if it weren't so serious. With Greece collapsing under its own big-government weight, one would think that Obama would take a hint, and recognize that the salvation for the U.S. economy would be to run as fast as possible away from the Greek big-government spending model.
But no. When faced with the evidence of the failure of socialist spending policies, what does Obama do? He gives a big speech with stern marching orders to sail right into the storm of a Greek bankruptcy tragedy.
What is the essence of Obama's proposal?
- Cut the payroll tax.
- Increase government spending.
- Tax the job creators.
Republicans really should support this plan, passing it immediately. Why? Because it will accelerate Obama's quest to make the U.S. look like Greece. In turn, this will set the U.S. economy into a major tailspin that will ensure that Obama is kicked out of office in 2012.
Why will Obama's plan be so harmful to the economy? It's pretty easy to understand, actually.
Let's say you're walking down the street and a cop stops you and says "I'm going to give you this car for free. Start driving it down the street. At the next red light, I will stop you and give you a $1,000 fine and a six-month license suspension for speeding, no matter what."
Would you take that offer? Of course you wouldn't. Yet, this is the kind of incentive Obama proposes in his plan. He tells us to hire more people because he will cut the payroll tax for a year or two.
But if this causes us to make money, he will take it back -- and more -- with a tax on "the rich." He's basically telling America's job creators to dig their own graves, economically speaking.
Most of America's job creators pay their de facto corporate tax in the form of income tax, because they are sole proprietorships or sub-chapter-S corporations. That means that the President keeps threatening them with huge tax hikes because they are "rich" and make more than $200,000 per year. Any remotely successful business that's above the lemonade-stand level is going to be above that level.