Fiscal Cliff Predictions

Well, we are at the last day of the year and there is no deal.

Even if they came up with a verbal agreement today it couldn't be written into law in time, let alone be implemented by payroll companies and businesses in time.

Though payroll companies are withholding at 2012 rates and raising SS tax by 2% effective tomorrow.

Extended unemployment benefits stop today, so a bunch of people are going to be hurt by that.

Other cuts go into effect in a couple days and we will have to see how that plays out.

At some point they will come to an agreement and we will wonder why they couldn't have settled on that compromise in December.

'pubs can cut taxes tomorrow and remain pure to their voting populace while effectively allowing a tax increase. Thus the lack of action.

That's pretty much what I said in my original post.

But since the law was already set to increase taxes, they didn't have to wait for 2013 to do this though.

Last month they could have voted to cut most tax rates and let the upper income tax cuts expire and it would not technically be voting for a tax increase.

But since it was perceived as voting for a tax increase they wouldn't do it.

They were offered to have taxes go up on only those making above 400 instead of 250 and they passed on it.

That offer expires and they may have to take 250 in the end.

Word is they plan to hold the debt ceiling hostage again soon.

I don't think Democrats should agree to any tax cuts without a long term raise in the debt ceiling now that the deadline is being passed.

I am trying to figure out what the Republicans have to gain by letting this day go by and not taking the deal that has been offered which already bends pretty far to the right.

Are they really just worried about Grover Norquist running out new Tea Party candidates against them in the 2014 primaries?

Are You Guys Just Incompetent or What?

"what's the problem, because american people are so tired of this, and they are really tired of the lawmakers thinking that the american people are stupid. you can't keep coming on the show every day saying the same thing. it's not a balanced approach."

"that's all you want to do. it's your way or the highway. raise the rates on the rich. no other way. your way or the highway. that's where we are. thank you senator."

http://video.cnbc.com/gallery/?video=3000136750&play=1

Why should the GOP play ball? They had $4 trillion in cuts agreed upon last time as per Obama's own fiscal commission until he botched that deal, and now we're talking about a little over $1 trillion in non-specified cuts. And while I think they should've taken up plan B, raising taxes is such a potent anti-growth, anti-small business cocktail. I think they should hold the Dems hostage over the debt ceiling, because we need real fiscal reform and real entitlement reform, regardless of how we got in this predicament (it spans both aisles, the tech bubble, the housing bubble, and now the sovereign debt bubble).

But the poster above is right. The Republicans have inherently sold us out under the guise of something they no longer are, while the Dems continue to cling to the farcical, historical notion that things will be great if we just get back to "Clinton-era" rates and help the middle class, even as Obamacare undercuts it, and keep printing money without a realistic exit strategy, even as we have no real growth policy in place, no agreement to broaden the base and implement pro-growth fiscal reform. We need a leader, not an empty suit with an arrogant ideological philosophy, totally inept at triangulating like Clinton or economically incompetent.

By the way, contrary to what I've been saying recently, I no longer think US bonds are a prudent investment, even if rates go lower still as the economy weakens. There are other sovereigns that are safer. Perhaps we will get a lame duck patch as I originally predicted, but, we are going to be forced to take our medicine, one way or the other. The Great Society will, in time, be proven to have been an abysmal failure, a grand illusion propped up by fiat fantasy as entitlements and interest on the debt alone will suck up all of our revenue in just a little over ten years, probably sooner if we don't get serious. Happy New Year and God Bless the USSA.

McConnell-Biden. Reminds me of the "beer summit." Obviously they are sick of dealing with Dirty Harry Reid.

http://www.politico.com/story/2012/12/fiscal-cliff-hanger-as-deal-in-limbo-85599.html?hp=t1

Congress has a much worse approval rating and Republicans get more blame than teh President for this situation:

And there was just an election.

Regardless of political points I am just reporting on the theater of the situation here and trying to see where it is going.

Congress has always had a much worse approval rating, and it is well deserved. BTW, I thought Rasmussen was a bastion of the right, which is why I chose the fairly neutral Gallup.

Let's go with your source:

"Half of all Americans want more government action to deal with the economy. But the action they are looking for is to cut government spending. Overall, 73% of Likely Voters nationwide believe the federal government should cut spending rather than increase it in reacting the nation’s current economic problems."

http://www.rasmussenreports.com/public_content/business/general_business/december_2012/new_high_73_say_government_should_cut_spending_to_help_economy

CHRIS MATTHEWS wrote:

Tax revenue always increases following tax cuts. Why are we therefore discussing tax hikes? And if revenue is down, how the hell can we not focus on decreasing expenses??

Folks that can't grasp the mechanics of algebra probably shouldn't be posting in a thread about tax policy. That your self-righteousness and ego tend to mirror many of those crafting policy in Congress helps explain why we are in this mess on Dec 31.

Cutting spending always sounds nice until you get specific.

It could mean cutting funding to the schools that your kids go to.

Cut the social security that your grandmother is getting.

Cut the unemployment benefits that you uncle is getting.

Cut the military pension that your father is scheduled to receive.

Cut the defense contracts that you company does business with.

Cut funding for the roads that you drive on.

Cut funding for the hospitals you may need.

Put every expense line item out there and see if 73% still want those spending cuts.

As I have posted here earlier, the Republicans themselves do not want the sequestrian spending cuts that are scheduled to go into effect.

I think we can all agree that the deficits are a result of politicians promising to provide low taxes and all of the programs that people want.

algebra mechanics are hardly needed to see the correlation between tax cuts & fed tax revenue growth, bra'. Get your Mama to show you how to use google search & do a little homework, once you're tired of playing Xbox & drinking koolaid

No. That's a Rasmussen survey. They skew questions and cherry-pick results to support conservative policy. Need any reminders of their performance in the latest election? Here's the survey question as they provide it on their site:National Survey of 1,000 Likely VotersConducted December 12-13, 2012By Rasmussen Reports1* In reacting to the nation’s current economic problems, what worries you more…that the federal government will do too much or that the federal government will not do enough?2* In reacting to the nation’s current economic problems, should government increase spending or cut spending?What's with the ellipsis in the first question? What was in the actual question given to respondents they're not willing to show now?

Sagarin wrote:

Let's go with your source:

"Half of all Americans want more government action to deal with the economy. But the action they are looking for is to cut government spending. Overall, 73% of Likely Voters nationwide believe the federal government should cut spending rather than increase it in reacting the nation’s current economic problems."

http://www.rasmussenreports.com/public_content/business/general_business/december_2012/new_high_73_say_government_should_cut_spending_to_help_economy

Obama just held a press conference.

Apparently it was supposed to announce a deal.

But, no it is not done yet.

Something must have fallen apart on the way to the microphone.

The deal is a total joke. Raising taxes on those earning more than $400/450k from 35 to 39% doesn't really do anything.

This deal shall save $600billion over the next ten years, or just over $60 billion per year.

Too bad the deficit is around $1.1 trillion per year.

So after these changes the deficit will be $1.04 trillion per year.

$ 1,040,000,000,000

Pathetic.

I agree that it is a joke if you look at it like that.

But what is a joke are any projections.

How can they say that raising marginal rates a few percent on incomes above 400 will save $600B in 10 years?

Those numbers depend on how the economy does over 10 years.

If the economy is good it will bring in much more than an extra $600B.

If it's bad and we see a depression then we won't bring in much more if any with those rates.

If high earners really do well over time then it can bring in some decent revenue.

Low earners doing well won't help because they no longer will be low earners.

Low unemplyment is what really gets tax revenue from low earners.

Both sides right now agree that low rates on low earners keeps them with income to spend and they spend almost everything they get. This keeps the economy going which is vital to tax revenue.

The difference is on high earners.

Republicans feel that putting extra taxes on high earners will pressure them to hire less and hurt the economy - the job creators argument.

Democrats feel that is where the money is as far as tax revenue and that they will continue to hire as long as consumer demand is there and they will just have less for themselves.

X-Runner wrote:

If the economy is good it will bring in much more than an extra $600B.

I am pretty sure those numbers are based on a rather optimistic outlook and will, in fact, be quite a bit lower.

any spending cuts as part of the deal? No? Then yeah, you are correct - it is a total joke.

The latest bi-partisan deal passed by the Senate extends rate cuts to individuals making under 400 and families under 450 and do not expire.

Let's see what Boehner and the House boys do and if they pass it.

The spending cuts are being kicked down 2 months. The debt ceiling looms.

The payroll tax cuts are gone.

Everyone's taxes go up right away and will be reflected on your next pay check.

Look for a stimulus discussion later.