2009-2010 will rank with 1913-1914, 1933-1936, 1964-1965 and 1981-1982 as years that will permanently change our government, politics and lives.

Just as the stars were aligned for Wilson, Roosevelt, Johnson and Reagan, they are aligned for Barack Obama. Simply put, we enter his administration as free enterprise, market-dominated, laissez-faire America. We will shortly become like Germany, France, the United Kingdom or Sweden -- a socialist democracy in which the government dominates the economy, determines private sector priorities and offers a vastly expanded range of services to many more people at much higher taxes.

Obama will accomplish his agenda of "reform" under the rubric of "recovery." Using the electoral mandate bestowed on a Democratic Congress by restless voters and the economic power given his administration by terrified Americans, he will change our country fundamentally in the name of lifting the depression. His stimulus packages won't do much to shorten the downturn -- although they will make it less painful -- but they will do a great deal to change our nation.

In implementing his agenda, Obama will emulate the example of Franklin D. Roosevelt (not the liberal mythology of the New Deal, but the actuality of what it accomplished). When FDR took office, he was enormously successful in averting a total collapse of the banking system and the economy. But his New Deal measures only succeeded in lowering the unemployment rate from 23 percent in 1933 when he took office to 13 percent in the summer of 1937. It never went lower. And his policies of over-regulation generated such business uncertainty that they triggered a second-term recession. Unemployment rose to 17 percent in 1938 and, in 1940, on the verge of the war-driven recovery, stood at 15 percent. (These data and the real story of Hoover's and Roosevelt's missteps, uncolored by ideology, are available in "The Forgotten Man" by Amity Shlaes.)

But in the name of a largely unsuccessful effort to end the depression, Roosevelt passed crucial and permanent reforms that have dominated our lives ever since, including Social Security, the creation of the SEC, unionization under the Wagner Act, the federal minimum wage and a host of other fundamental changes.

Obama's record will be similar, although less wise and more destructive. He will begin by passing every program for which liberals have lusted for decades, from alternative energy sources to school renovations to infrastructure repairs to technology enhancements. These are all good programs, but they normally would be stretched out for years. Freed of any constraint on the deficit -- indeed empowered by a mandate to raise it as high as possible -- Obama will do them all rather quickly.

But it is not his spending that will transform our political system; it is his tax and welfare policies. In the name of short-term stimulus, he will give every American family (who makes less than $200,000) a welfare check of $1,000 euphemistically called a refundable tax credit. And he will so sharply cut taxes on the middle class and the poor that the number of Americans who pay no federal income tax will rise from the current one-third of all households to more than half. In the process, he will create a permanent electoral majority that does not pay taxes, but counts on ever expanding welfare checks from the government. The dependency on the dole, formerly limited in pre-Clinton days to 14 million women and children on AFDC, will now grow to a clear majority of the U.S. population.

Will he raise taxes? Why should he? With a congressional mandate to run the deficit up as high as need be, there is no reason to raise taxes now and risk aggravating the depression. Instead, Obama will follow the opposite of the Reagan strategy. Reagan cut taxes and increased the deficit so that liberals could not increase spending. Obama will raise spending and increase the deficit so that conservatives cannot cut taxes. And when the economy is restored, he will raise taxes with impunity since the only people who would have to pay them would be rich Republicans.

In the name of stabilizing the banking system, Obama will nationalize it. Using TARP funds to write generous checks to needy financial institutions, his administration will demand preferred stock in exchange. Preferred stock gets dividends before common stockholders do. With the massive debt these companies will owe to the government, they will only be able to afford dividends for preferred stockholders -- the government, not private investors. So who will buy common stock? And the government will demand that its bills be paid before any profits that might materialize are reinvested in the financial institution. So how will the value of the stocks ever grow? Devoid of private investors, these institutions will fall ever more under government control.

Obama will begin the process by limiting executive compensation. Then he will urge restructuring and lowering of home mortgages in danger of default (as the feds have already done with Citibank). Then will come guidance on which loans to make and government instructions on the types of enterprises to favor. God grant that some Blagojevich-type is not in charge of the program, using his power to line his pockets. The United States will find itself with an economic system comparable to Japan's, where the all-powerful bureaucracy at MITI (Ministry of International Trade and Industry) manages the economy, often making mistakes like giving mainframe computers priority over the development of laptops. Continued...