Fiscal Cliff Deal

[msj]

msj, you're back!

----

1. Obama, like Martin, raised CPP/Social Security contributions. These are head taxes. In Canada, they amount to a $4,500 tax on a working person regardless of income.

You said he was a "tax and spend[er]."

Even if one does not understand that CPP is not a tax, one should understand that raising CPP to not spend it as part of general revenue (as you incorrectly claimed) means that he is, at worst, a "tax and saver and eventually after decades, if not centuries, a spender once the CPP surplus is finally exhausted and fully transfered."

3. Both Martin and Obama are tax-and-spend politicians. To solve a government budget deficit problem, both chose raising (head) taxes rather than cutting spending.

Well, Harper is clearly a spend and deficit kind of politician so I don't see the need to talk about Martin.

As for Obama, he has a bigger revenue problem than a spending problem which you would know if you would ever pay attention to Paul Krugman (and no, I'm not wasting my time looking for a link that you will either not read or pretend to not understand).

[August1991]

As for Obama, he has a bigger revenue problem than a spending problem which you would know if you would ever pay attention to Paul Krugman (and no, I'm not wasting my time looking for a link that you will either not read or pretend to not understand).

Assuming that Keynes is right, then why would Obama impose a higher social security head tax?

As to Krugman, like Keynes, he lives in a 1929-30 world, while the rest of us live in 2008-09.

Here is the test msj: what happens when the State offers macroeconomic security? What would Keynes say now?

[Michael Hardner]

As to Krugman, like Keynes, he lives in a 1929-30 world, while the rest of us live in 2008-09.

I have always felt that the easiest thing to say about an idea is that it's old - if you're looking to criticize. The Proportional Representation people say this about democracy all the time. Everything old is new again - depressions, bailouts, etc.

[punked]

I have always felt that the easiest thing to say about an idea is that it's old - if you're looking to criticize. The Proportional Representation people say this about democracy all the time. Everything old is new again - depressions, bailouts, etc.

All I know, countries that spent a lot recovered a lot, countries that spent a little recovered a little, countries that spent nothing didn't recover and countries that cut went into recession. There is no proof like real proof eh? You can he is wrong for this reason or that but what he said worked just the way he said it would

Edited January 5, 2013 by punked

[Argus]

He cut government and taxes like no Canadian politician ever. The same can be said of Chretien.

Right up until the time when they faced actual political competition. The instant that happened, the money started pouring out of their fists as fast as they could throw it. Martin, when he became PM, promised to much money, far and wide, it probably would have led us into deficits again, even without a recession.

[Smallc]

Ah, he didn't spend any faster than Harper.

[Argus]

Ah, he didn't spend any faster than Harper.

If you include the billions spent on economic incentives to offset the recession, I suppose you could be correct.

But the point remains he had no reservations with massive increases to spending when he felt he needed it to win an election.

[Smallc]

If you include the billions spent on economic incentives to offset the recession, I suppose you could be correct.

Before that, IIRC, they had a very similar spending track. There was lots of money until 2008. No one saw that coming. Even after all the Martin an Harper tax cuts and spending, there was still double digit surpluses.

[jbg]

Personally, I think this deal will be the entirety of the tax increases. I don't think Republicans will allow any further tax increases to pass, so $620 billion is all Obama will get. So what's left is spending cuts. Republicans I think threw away the chance to do $925 billion in spending cuts in Obama offer #3, and I don't think the democrats will offer cuts on that scale again, we'll probably end up with something closer to the $600 billion in cuts in Obama's first offer when the next deal is done 2 months down the road.

The cuts will either not happen or will be smoke and mirrors. Obama got little of the tax increases he wanted. I say 1.5 to 1 victory of the G.O.P. here.

[Bonam]

The cuts will either not happen or will be smoke and mirrors. Obama got little of the tax increases he wanted. I say 1.5 to 1 victory of the G.O.P. here.

Obama got about half of the increased revenue he wanted. For this to be a 1.5:1 Republican victory, they will need to get 3/4 of the cuts they wanted. Whether that will happen remains to be seen, but with less bargaining chips on the table, I think Republicans will have a hard time getting democrats to agree to cuts in social security and medicare that were on the table in December.

[msj]

As to the CPP, who do you think guarantees Canada's State pensions? More pointedly, like a tax, Paul Martin arbitrarily raised CPP contributions. Similarly, a future minister of finance could just as easily reduce the benefits; heck, I think Flaherty did just that when he changed the eligible age of OAP to 67.

I missed this the first time around.

Once again, August, the OAS (Old Age Security) is NOT the CPP.

The OAS is paid out of general revenue.

The CPP is a separate fund (hence the separate payroll "tax").

This is not rocket science and I know I have explained this to you before so no excuses for such ignorance.

And you wonder why I ignore you so often?

It's because you ought to know better but instead act like a troll.

[bush_cheney2004]

Those cuts will not happen to bloated social programs favored by Democrats; Obama will only tinker more with COLA increases and other accounting tricks.

[msj]

Those cuts will not happen to bloated social programs favored by Democrats; Obama will only tinker more with COLA increases and other accounting tricks.

Oh, so it's like Mulroney in 1986.

Watch out, in 5 years you'll have a VAT.

Edited January 7, 2013 by msj

[Bonam]

Oh, so it's like Mulroney in 1986.

Watch out, in 5 years you'll have a VAT.

Or maybe the government should first stop giving out tax credits to people for living in states that have their own VAT (or income tax). Never made sense to me why the federal government should subsidize state level taxation in this way...

So many stupid counterproductive tax credits and deductions which enrich no one but tax lawyers and accountants.

Edited January 7, 2013 by Bonam

[Smallc]

The US is a country of subsidies at current. Much of that needs to stop (and yes, it needs to stop here too in many cases).

[jbg]

Obama got about half of the increased revenue he wanted.

To think he'll get that amount of revenue from an extremely small group of taxpayers is dreaming in technicolor.

[Bonam]

To think he'll get that amount of revenue from an extremely small group of taxpayers is dreaming in technicolor.

What small group? Every employee in the country will be paying more tax.

[bush_cheney2004]

....So many stupid counterproductive tax credits and deductions which enrich no one but tax lawyers and accountants.

True.....I just ordered TurboTax for 2012 and the bulk of the tax return entries I make will be dedicated to a jumbled mix of deductions and credits.

[August1991]

Once again, August, the OAS (Old Age Security) is NOT the CPP.

The OAS is paid out of general revenue.

The CPP is a separate fund (hence the separate payroll "tax").

Your distinction seems interesting but irrelevant. The State can do what it wants when the situation is critical. The Quebec government, for example, simply passed a law lowering civil servant salaries by 20%. msj, you know the history of "income trusts".

----

From what I know from your postings here, you work as a (tax) accountant. If you're good, you're not simply a bean counter; you anticipate wisely what the future tax-take will be. You arrange your clients' affairs now so that they benefit in the future.

Such is life in the early 21st century; accountants who must predict the political future.

Oh, so it's like Mulroney in 1986.

Watch out, in 5 years you'll have a VAT.

Agreed. I reckon that a federal sales tax, VAT, will be Obama's other gift to the Democratic Party. Edited January 7, 2013 by August1991

[Pliny]

And Republicans passed a budget which Mitt Romney ran on and lost by 5 million votes so....... Apparently the people approve or do you hate democracy to?

People voted for Barack Obama,(Jamie Foxx's lord and savior), women's reproductive rights, immigration amnesty, Obamaphones, food stamps and increased longevity for employment insurance. I don't think the budget was a big concern for the five million that made the difference.

I don't think a universal democracy is the best political system, Perhaps writing a test demonstrating some level of understanding regarding politics, economics and government would make it more palatable.

I am willing to live with majority rule decisions but a government that caters to special interests for votes invites a tyranny of the minorities.

[Argus]

Those cuts will not happen to bloated social programs favored by Democrats; Obama will only tinker more with COLA increases and other accounting tricks.

Bloated? Describe this 'bloat'.

[Bonam]

Bloated? Describe this 'bloat'.

This bloat:

Entitlement spending has grown more than three times faster than the economy over the last 4 decades. That is not sustainable, no matter what your tax policy, period.

Edited January 7, 2013 by Bonam

[bush_cheney2004]

This bloat:

Yes....that bloat. The "social safety net" has turned into a five star hammock.

[dre]

This bloat:

Entitlement spending has grown more than three times faster than the economy over the last 4 decades. That is not sustainable, no matter what your tax policy, period.

Its not sustainable but it will get fixed in the credit markets not in the US political system.

[Argus]

Entitlement spending has grown more than three times faster than the economy over the last 4 decades. That is not sustainable, no matter what your tax policy, period.

Context free charts aren't really much evidence. I'm sure 'entitlement spending' has grown more rapidly in the US. Just as it has everywhere else in the world. After all, in 1965, your base year, many countries had just begun to address social spending issues and how to try and deal with the poor and downtrodden. Things like student loans and grants to the poor and aid to disabled people, heck, even public pensions. The Canada Pension Plan wasn't even brought into existence until 1966. In the US, Medicaid and Medicair started up in 1965. And the development of extremely expensive health technologies in recent year has caused the cost of health care to skyrocket across the board, especially in the US, where there is little effort at consolidation and efficiencies.

It seems most people in the west wanted a more caring society where the poor were helped to get more skills and education (and in any event weren't left to die of starvation) and the elderly were cared for. In nations which have run their affairs in an orderly fashion that has not turned out to be all that difficult a task to accomplish. So my question is why can Americans not afford basic care for those who can't pay for it themselves? Is it perhaps because you have so many poor? I note that the poverty line in the US for a family of four is set at about $24k and 15% of Americans are considered to be below the poverty line. In Canada, the poverty line for a family of four is set at $35k, and the rate is about 10%. Could this be because the US has not been very effective in poverty elimination programs? In fact, your poverty numbers are growing. That means fewer people contributing and able to save and more people needing help. Maybe you guys should be working on eliminating poverty instead of focusing on cutting the help you give to the poor.

And if that sounds like a leftist viewpoint I'd like to point out I don't come at this budgetary stuff out of any ideological standpoint but that of a lover of efficiency and effectiveness shaded with humanity and empathy. It is a GROSS waste of resources for so many people to be spending their lives in poverty with little hope of advancement. It is also extremely costly to the state both in terms of absent productivity and taxation and the costs of maintaining those individuals at a bare minimum lifestyle. Extreme efforts should be made to get them into productive work, regardless of what that costs in skills training, education, addiction programs, etc.

Edited January 8, 2013 by Argus