In response to the "credit crunch", the end of the "housing bubble", and the "financial meltdown", the government has facilitated Wall Street takeovers, bailed out owners of bad debt and insurance giants, cut interest rates, invested in commercial paper, and injected large amounts of cash into the economic system.  Still, we read in headlines each day, it is difficult for companies to get the operating funds they need to meet payrolls, invest in new jobs and capital equipment, and expand.

Now, take this into account:  one of the key aspects of Barack Obama's economic platform is to raise taxes on businesses and capital investment.  Is the current economic climate the right time to be taking more money from businesses — money that could be used to hire workers (or, perhaps, simply not let workers go), invest in new equipment, purchase inventory, etc. — to send to the government?

Or, put more succinctly:  how are workers made better off by making their employers pay more money to the government?

It seems obvious, but every dollar a business pays in taxes is money not available to expand the business or provide for its employees.  This can have a severe ripple effect through the economy, no different than the ripple effect we saw with higher fuel prices — money is fungible, and expenses are expenses.  Many of the same people who decried high gasoline prices, blaming the "Big Oil" companies for an overall rise in inflation and increase in unemployment, are in favor of increasing the expense side of the ledger with higher taxes.  What's the difference?

Consider a consumer products company like Circuit City.  I heard a news report on the radio that because Circuit City's credit rating had been lowered, it was having problems getting access to credit.  This credit problem meant that the company is having problems buying inventory for its stores.  Less inventory means fewer choices for consumers and less business for Circuit City.  Less business means, of course, fewer workers and less chance for wage increases, etc.  But buying less inventory also ripples through the economy:  fewer workers required manufacturing TV sets, stereos, DVD players, computers, etc.  Fewer inventory items means less freight cost, so less need for drivers and for trucks.  And of course, a company not doing well has little incentive for expansion; building a new store employs construction workers and provides business for suppliers of construction materials.  Yet Sen. Obama's economic plan is to increase the cost burden of Circuit City by raising their tax rate, causing the same problems as the credit crunch.

Recently, Sen. Obama did state that he would consider postponing at least part of his tax increase plan if he were to take office in January amidst an economy still hurting.  Yet this seems to undermine the basic premise of his economic plan:  if his tax increases on businesses, income, and capital investment are good for the economy, then why postpone them?  Conversely, if his tax increases on businesses, income, and capital investment are bad for the economy, why pursue them at all?