Fiscal Cliff

bush_cheney2004 · December 22, 2012

This cliff was constructed by Obama and it looks like he's going to get his wish of tax hikes across the board. All the finger pointing and gamesmanship is just window dressing.

That's fine by me....they decried "Bush Tax Cuts" as immoral from the 'git go, but now they want to preserve all of them except for the highest marginal rate.

2013 will see taxes rise for all...the party is over.

Argus · December 23, 2012

The real source of America's fiscal mess. Highly recommended.

http://www.pbs.org/independentlens/park-avenue/

cybercoma · December 24, 2012

The real source of America's fiscal mess. Highly recommended.

http://www.pbs.org/i...ns/park-avenue/

Could you offer a synopsis for those of us that can't take the time to watch it right now?

Argus · December 24, 2012

Could you offer a synopsis for those of us that can't take the time to watch it right now?

What the PBS show points out is what an earlier documentary Heist: Who Stole The American Dream also demonstrated. Over the past thirty years in response to a memo sent to the US Chamber of Commerce by a corporate lawyer American business has put substantial money and effort into taking control of the US government, quite successfully. The Koch brothers alone spent $200 million on buying politicians in the last election. US corporate interests and the men who control them have been largely successful, and now write most legislation and control most politicians. And all of this has resulted in huge cuts in corporate and high income tax rates over that time, as well as a wholesale transfer of wealth from poorer Americans into the hands of the uber rich.

The corporate elites have no desire or need for government intervention, for government charity (medicair, medicaid, welfare, food stamps, etc), no desire for legislation to police them or protect consumers or workers safety, and have, through a wide series of political/propaganda organizations, done their best to convince ordinary Americans of the wisdom of supporting policies which actually harm themselves and help the elites. Government has been starved of funds, its share of GDP lower than in decades, and the elites keep pushing for more cuts, more cuts, making government smaller and weaker.

Edited December 24, 2012 by Argus

Argus · December 24, 2012

del

Edited December 24, 2012 by Argus

cybercoma · December 24, 2012

What the PBS show points out is...

Thanks, Argus. I really appreciate it.

login · December 25, 2012

Could you offer a synopsis for those of us that can't take the time to watch it right now?

http://www.youtube.com/watch?v=BbA1ma_Uck4

-TSS- · December 28, 2012

Usually second-term presidents waiting for their second term to begin can just chill out and enjoy. This time it is not the case. Imagine what the situation would be now if Romney had won and there would be a situation like there is today but with a lame-duck president and a president-elect just waiting to get in.

bush_cheney2004 · December 28, 2012

Usually second-term presidents waiting for their second term to begin can just chill out and enjoy. This time it is not the case. Imagine what the situation would be now if Romney had won and there would be a situation like there is today but with a lame-duck president and a president-elect just waiting to get in.

It doesn't really matter, because "a situation like there is today" was engineered and signed by the same president and Congress long before now. There is no "fiscal cliff"...it is more like a fiscal slope.

eyeball · December 28, 2012

Correct me if I'm wrong Argus but aren't you an avowed elitist? I would have thought you'd be more supportive of our governments being under the control of the rich.

You old lefty you, who would have guessed it?

sharkman · December 29, 2012

That's fine by me....they decried "Bush Tax Cuts" as immoral from the 'git go, but now they want to preserve all of them except for the highest marginal rate.

2013 will see taxes rise for all...the party is over.

I've got to agree with you there, and the party is indeed over. The next year will be eventful I think.

Argus · December 29, 2012

Correct me if I'm wrong Argus but aren't you an avowed elitist? I would have thought you'd be more supportive of our governments being under the control of the rich.

You old lefty you, who would have guessed it?

I am indeed an elitist. I just don't see any of our current politicians as belonging in that particular category. And I don't presume wealth, often derived through inheritance, makes one elite. More importantly, what is good for a member of the wealthy class is not necessarily good for the middle class, elite or not. The behaviour of the wealthy in influencing government has not been designed to improve society but improve their own fortunes regardless of the effect on society.

By elite I meant intelligent, wise (not the same as intelligent) thoughtful, educated. knowledgeable and skilled, not someone like Donald Trump, who just got lucky in who his parents were.

Big Guy · January 1, 2013

Howard Dean was on one of the Sunday morning political shows. He was the only one on the panel who declared that going over the "fiscal cliff" was the best thing that could happen to the USA. His evaluation was that it is the uncertainty that is causing economic problems. He felt that a short term "fix" would make the matter worse. He finished by predicting that if the default condition is allowed to proceed then there would be some short term pain but that in 6 months the DOW would be at 15,000 and the country would be accelerating out of the economic downturn. He also mentioned that the public would blame the Republicans for the short term pain and in two years the Democrats would have a majority in congress. I found that to be an in interesting point of view.

kimmy · January 1, 2013

I was going to post something similar, Big Guy.

Letting the tax cuts expire and incurring the mandatory spending cuts is probably the best thing that could happen in the long term.

And all the polls indicate that most Americans feel the Republicans are to blame for the failure of negotiations. Taxes are going to go up, and the House Republicans are going to wear it.

John Boehner tried to find a compromise, and the Grover Norquist/Tea Party/Breitbart wing of the party shanked him for it. They'll pay a price.

-k

Canuckistani · January 1, 2013

Well, they've kicked the cuts down the road a couple of months and raised taxes on 450k+. All this anguish and so little accomplished. Guess they'll just continue to sputter along. If they would just adopt our single payer style health care system, that would be a savings of 1 trillion a year right there, almost eliminating the deficit in one fell swoop.

sharkman · January 1, 2013

I heard an economist being interviewed this week, and he said allowing the tax cuts to expire without modification would have a 4 % drag effect on the economy. So if it had been growing at 2%, it would wind up at -2%, or a recession. And I'm sure you could find expects saying pretty much the opposite, although I'm not sure Dean is an expert. At the end of the day, Obama seems reluctant to allow the cuts to expire all at once. He had the power in his hands to do so, but instead made this deal. What does that suggest?

Smallc · January 1, 2013

That he was probably looking at the short term, instead of the long term. The US needs a deficit fix. It's going to hurt when it comes. Now probably wasn't the right time to go over the cliff, but, at some point....

sharkman · January 1, 2013

Why not?

Canuckistani · January 1, 2013

I heard an economist being interviewed this week, and he said allowing the tax cuts to expire without modification would have a 4 % drag effect on the economy. So if it had been growing at 2%, it would wind up at -2%, or a recession. And I'm sure you could find expects saying pretty much the opposite, although I'm not sure Dean is an expert. At the end of the day, Obama seems reluctant to allow the cuts to expire all at once. He had the power in his hands to do so, but instead made this deal. What does that suggest?

I doubt that he meant a reduction of 4% GDP growth - that's pretty extreme. The Estimates I've seen are around 1% including from the spending cuts.(Govt spending is part of GDP). Nobody seems to be saying that the combination of spending cuts and tax increases would immediately improve the economy. The question is what would the longer term effect be - would it send the US into another recession, or would it help to eventually dig them out of it? The spending cuts as predicated would be stupid - just across the board cuts. They need to cut fat and leave muscle. But that's much harder to do, because somebody's fat is always somebody else's muscle. As for tax increases, everybody in the US needs to pay more. But eliminate the stupid deductions, like the mortgage deduction first, lower corp taxes while reducing loopholes there, and make dividends taxable at the same rate as other income. And set up a much more progressive income tax regime.

kimmy · January 1, 2013

Well, they've kicked the cuts down the road a couple of months and raised taxes on 450k+. All this anguish and so little accomplished. Guess they'll just continue to sputter along. If they would just adopt our single payer style health care system, that would be a savings of 1 trillion a year right there, almost eliminating the deficit in one fell swoop.

The deal passed the Senate, but has not passed Congress. The Breitbart types are already campaigning hard for it to be rejected, and calling for Boehner's head on a pike as well.

-k

Canuckistani · January 1, 2013

The deal passed the Senate, but has not passed Congress. The Breitbart types are already campaigning hard for it to be rejected, and calling for Boehner's head on a pike as well.

-k

You're right. While I think the austerity caused by the lack of a deal will hurt the US, and us as well, it might be a good slap in the face and maybe wake them up from their "we can't handle the truth" dream.

bush_cheney2004 · January 1, 2013

You're right. While I think the austerity caused by the lack of a deal will hurt the US, and us as well, it might be a good slap in the face and maybe wake them up from their "we can't handle the truth" dream.

Agreed....it would be like the impact of the "Canadian peso" back in the 1990's.

geoffrey · January 1, 2013

That he was probably looking at the short term, instead of the long term. The US needs a deficit fix. It's going to hurt when it comes. Now probably wasn't the right time to go over the cliff, but, at some point....

I honestly believe that the Democrats think they can postpone a recession forever. What's important to remember is that recessions are a normal, healthy part of economic progress. Creative destruction if you will. That reality seems to escape most politicians in the U.S. and around the world, and now we're on a perpetual course of additional debt and money printing to keep above that magical 0% economic growth.

For most people, they don't feel a 2% recession* over a quarter or two (likely the outcome of a plunge off the cliff). But for whatever reason, the politics of allowing a recession to happen have become bigger than the problem itself.

* refering to the slowdown, not the tax increases, which people do feel.

Why not?

No one wants to wear a recession. It's more political than economic.

Canuckistani · January 1, 2013

Agreed....it would be like the impact of the "Canadian peso" back in the 1990's.

Yep, we manned up and went thru it, did us a lot of good. Remains to be seen if Americans have the toughness required. But nice "you did it tooooo" Well actually we did it, and y'all didn't. Always hope I guess.

bush_cheney2004 · January 1, 2013

Yep, we manned up and went thru it, did us a lot of good. Remains to be seen if Americans have the toughness required. But nice "you did it tooooo" Well actually we did it, and y'all didn't. Always hope I guess.

...and you are still whining about it. See provincial "wait time" lists.