Put another away, there are lots of moving parts in both the macro and micro climate in any given scenario as you should full well know. You are conflating events.
Put another away, there are lots of moving parts in both the macro and micro climate in any given scenario as you should full well know. You are conflating events.
Yeah. That really gets to the heart of why I think doing nothing would be better for ordinary folks. In so many bills, there is a tax cut or some benefit that really does help low to middle class earners. But then politicians give themselves a big pat on their back for one little good thing and then completely load the rest of the bill with giveaways to all sorts of special interests. It ends up negating any of the good they had in the first place. I think American in one way or another are starting to get this.
spit wrote:
IT'S ALL HYPE. LAST YEAR IT WAS CALLED THE DEBT CEILING. CONGRESS IS A WHORE THAT DOES MORE TRICKS EACH YEAR TO REPEAT THE CYCLE- THIS FISCAL CLIFF TALK IS JUST A SPENDING BILL LOADED (ABSOLUTELY LOADED) WITH UNRELATED BILLS FOR THE LOBBY.
IT'S AN OLD TRICK. SUCKERS.
You are reasoning away recent contractions of the deficit and blaming deficit growth under Reagan and Bush solely on spending. No mention that Reagan benefited from a de-regulation boom, same as Clinton's productivity boom. Why then did deficits continue to rise? The deficit began widening under Bush immediately after passage of tax reductions not waiting for the effects of war spending and the housing collapse to develop. The relationship between cutting taxes and rising deficits is as clear as the relationship with rising expenses. We will continue to hear from others like yourself that this is not the case, but the numbers will never be there to support that view because it is false.
As for the rest of what you point to - large spending cuts are already kicking in. They are a component of the fiscal cliff agreed to during last year's debt ceiling legislation. They're as large on a dollar basis as the amount of revenue the President is seeking over the next ten years and there will be more in a deal struck over the current debate. They dwarf the small amount of revenue that may come from increasing two tax brackets for those over $250K, yet the uproar remains solely in defense of targeted tax brackets. Zero uproar over the rising payroll tax rate shows that this entire debate is less about protecting growth or efficiencies and more about protecting a small class of wealthy interests.
ryan foreman wrote:
The conservative Republicans don't like the tax cuts expiring. But they do like the spending cuts that are scheduled to go through. A deal risks losing those cuts. And they are probably right.
No, the Republicans do not like the spending cuts that are scheduled to go through.
There are large across the board cuts in defense spending that they do not like.
Here are some highlights:
The Defense Department would need to delay equipment purchases and repairs, trim services for military families and perhaps compromise the readiness of military units preparing to deploy, according to the White House report.
Elsewhere, the cuts could mean fewer FBI agents, federal prosecutors and air traffic controllers, significant cutbacks in federal scientific research, fewer food inspections and a possible limit to services at national parks and historic sites.
There is a misguided conception out there that Republicans want spending cuts.
They just like to say they like spending cuts but rarely give specifics and fiercely defend the largest item funded by income taxes, defense spending.
The Republicans do not want this sequestration to go on as scheduled.
Also, there are major cuts to education.
Special education programs will be hit very hard.
Funding for schools in low income areas will be cut down.
These are the expenses that Democrats are more likely to fight for.
Everyone has a stake in wanting to stop the scheduled spending cuts.
X-Runner wrote:
Everyone has a stake in wanting to stop the scheduled spending cuts.
This is why out deficit is out of control. Nobody truly wants spending cuts. It all needs to be cut. That is going to hurt. Politicians don't like hurt.
The point is that most economists and analysts see tax hikes as contractionary. They also have presented a rock-solid defense of why spending needs to be reined in much more than additional revenue we would purportedly get from any incremental gain from tax hikes on income and capital, thus the quagmire, because this does not align with the philosophy of Harry Reid and Obama (nevermind that medical device makers are already effectively lobbying to get an exemption from tax hikes on their products as part of the Unaffordable Care Act, because several Democratic legislators are coming to their defense ONLY NOW - the hypocrisy).
I have no interest in protecting the wealthy class. I merely don't want to see a massive exodus of capital or capital tied up in overseas shell accounts. As I mentioned previously, it's not like Bush BROADENED the base when he cut rates. Yet, the scenario of cutting rates can only work when there is relative PERMANENCE to both fiscal reform and regulatory reform. If we did that, that's how you could "soak the rich," shy of a consumption tax that exempts the real necessities of living. You are painting an historical picture of Clinton as if though cutting rates was the sole reason for the reduction of the deficit, when, in fact, nothing could be further from the truth. He also cut rates on capital, as did JFK.
I fully expect a watered-down deal, that leaves the president and Congress the wiggle room to only cut spending a little. You act like these spending cuts are a already a big deal and a done deal. Whatever spending cuts we do get will be meager in the grand scheme of things. We may even see something more akin to a cap on spending. And the Fed will continue to monetize this recklessness. Frankly, I blame the mess we are in mostly on the Federal Reserve, in addition to Congress' lack of action on fiscal and entitlement reform over many decades now.
All I want for Christmas, complete with pretty charts:
The author takes the liberty to, accurately, condemn the Wall Street and government oligarchs alike, as well as the average ignorant, stoned, and brainwashed masses, but the following excerpts are too rich to be ignored. Of course, one has to define inflation and I think we are much closer to the Japanese model, exacerbated by the Fed:
"The pillars are crumbling. The $1.4 trillion wasted on two worthless wars of choice in the Middle East, the trillions wasted and liberties sacrificed for the never ending unwinnable War on Terror, the Keynesian spending frenzy that has driven the National Debt from $9 trillion to $16.3 trillion in the last five years, the looting of the American taxpayer by Wall Street and their co-conspirators at the Federal Reserve and in Congress, and the belief that ramping up the debt driven consumption that drives 71% of our GDP is our path to prosperity is absolutely freaking nuts. The pillars will not be abolished willingly. The ruling class depends upon their continued existence and expansion. There is the rub. The math doesn’t work. We’ve reached the point where continued expansion of debt and money printing no longer works. With a national debt to GDP ratio of 102% and a total credit market debt to GDP ratio of 350%, we have passed the Rogoff & Reinhart point of no return. This time is not different. A country cannot run trillion dollar deficits indefinitely and expect to not suffer the consequences. This is why those in power are increasingly resorting to propaganda, data manipulation, and outright lies to convince the masses of their omnipotence and brilliance in managing the fiscal affairs of the state."
"Through decades of mass media messaging the masses have been conditioned to believe whatever those in power want them to believe. To our invisible government rulers we are nothing but rats to be manipulated through food pellets and shock therapy. Pleasure and fear of pain are the drivers of our warped society. The ruling oligarchs truly think they know what is best for the masses and believe any means is worthwhile as long as the ends support their agenda. This is blatantly obvious to anyone with their eyes open and their brain functioning. Sadly, the government run educational system produces mostly drones that are barely able to tie their own shoes, spell Cat, or make change from a one dollar bill. Only 20% of all high school seniors score high enough on the SAT test to get a B minus in college and most of these kids come from private and parochial schools. This is exactly what those in power prefer. They want non-critical thinking, mindless consumers, who don’t understand the criminal nature of Federal Reserve created inflation or their enslavement in the chains of debt at the hands of their Wall Street slave owners. They certainly don’t want the masses to understand that real median household net worth is lower today than it was in 1969. Luckily for the oligarchs, 95% of the public couldn’t define the terms: real, median or net worth. Math is hard."
"The average person is inundated on a 24/7 basis with pabulum from liberal network media talking heads, CNBC Wall Street shills regurgitating whatever their sponsors desire, Fox News blonde bimbos and neo-con war mongers programmed to spew Rupert Murdoch talking points, MSNBC tingling leg faux journalists, NYT intellectually corrupt Nobel prize winners, NAR nitwits repeating “best time to buy” on a daily basis for the last 12 years, and government agencies whose sole purpose is to manipulate data in a way that supports the agenda of those in power. The intellectually lazy and willfully ignorant masses are no match for those who control the message and the media. How else can you explain their ability to convince millions of drones to line up for hours in front of a store and stampede like crazed hyenas to grab a $5 crockpot, the Chinese produced gadget of the moment or a designer top made by slave labor in safety conscious Bangladesh factories? How else can you explain a population willing to be molested by government TSA dregs in the name of security from phantom terrorists, the passive acceptance of military exercises in US cities, unquestioning submissiveness as Presidential Executive Orders allow the government dictatorial powers based on their judgment, the monitoring of internet and voice correspondence of all citizens, and believing that FBI agents luring clueless teenage Muslim dupes into fake terrorist plots, providing the fake explosives, and then announcing with great fanfare how they saved us from another 9/11?"
But, the prize for boldest, most outrageous, blatant use of propaganda and misinformation to cover-up their criminal looting of America goes to Ben Bernanke, his cronies at the Federal Reserve, and the Wall Street banks that own and control our Central Bank. Having the gall to portray themselves as the stabilizer of our economic system over the last 100 years is a putrid joke on the dying and broke middle class. Their mandate has been stable prices, full employment, and avoiding financial crisis. It is a tribute to Bernays and the rest of the public relations swine that the average American actually believes inflation is a good thing and it is under control despite the FACT that 96.2% of their purchasing power has disappeared since 1900, with the most rapid decline occurring since Nixon closed the gold window in 1971.
The average American actually believes Ben Bernanke saved us from a Great Depression when in actuality he saved the owners of the Federal Reserve from accepting the losses they generated through the greatest financial fraud in history. His “solutions” have zombified our economic system, just as the Japanese Central Bank did 20 years ago. He has destroyed the concept of saving, while rewarding the indebted and profligate with his QE to Infinity money printing policies. And the ignorant masses have been convinced by the corporate media and their corrupt government lackeys that Ben did this for them. Kyle Bass knows otherwise. He knows how the Fed and their backers have preyed upon the masses through their understanding of human psychology:
“Humans are optimistic by nature. People’s lives are driven by hopes and dreams which are all second derivatives of their innate optimism. Humans also suffer from optimistic biases driven by the first inalienable right of human nature which is self-preservation. It is this reflex mechanism in our cognitive pathways that makes difficult situations hard to reflect and opine on. These biases are extended to economic choices and events. The primary difficulty with this train of thought is the bias that most investors have for the baseline facts: they tend to believe that the central bankers, politicians, and other governmental agencies are omnipotent due to their success in averting a financial meltdown in 2009.
Central banks have become the great enablers of fiscal profligacy. The overarching belief is that there will always be someone or something there to act as the safety net. The safety nets worked so well recently that investors now trust they will be underneath them ad-infinitum. Markets and economists alike now believe that quantitative easing (“QE”) will always “work” by flooding the market with relatively costless capital. Unlimited QE and the zero lower bound (“ZLB”) are likely to bankrupt pension funds whose expected returns happen to be a good 600 basis points (or more) higher than the 10?year “risk-free” rate. The ZLB has many unintended consequences that are impossible to ignore.
Our belief is that markets will eventually take these matters out of the hands of the central bankers. These events will happen with such rapidity that policy makers won’t be able to react fast enough. The fallacy of the belief that countries that print their own currency are immune to sovereign crisis will be disproven in the coming months and years. Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.” – Kyle Bass
"We want to be lied to because the truth is too painful. Hope and denial with a dash of delusion is the recipe the mindless masses prefer. The average person doesn’t want to understand the chart below. They want to believe the U.S. will dominate economically and lead the world for decades to come. We are still the bright shining beacon of democracy on the mountaintop. Even though the facts unequivocally reveal a declining empire, the masses desperately grasp at straws in the wind. The United States share of world GDP will be vastly lower in 2021, as the hubris of declining empires never allows them to take the necessary steps to reverse the decline (Rome, Great Britain)."
"The next two charts from Mike Shedlock again reveal truths the existing social order doesn’t want you to know. Even though the working age population has grown by 10 million people since 2008, the BLS expects critical thinking people to believe the labor force has only grown by 1.3 million people. You see, the unemployment rate is calculated using the labor force. If your economic policies don’t create jobs, just adjust the labor force dramatically lower based on nothing. In desperate economic times, people do not voluntarily leave the workforce. Only a non-thinking drone would believe that 8.7 million Americans voluntarily left the workforce since 2008, when only 4 million left the workforce from 2003 through 2007. It is not a coincidence that student loan debt, which was taken over by the Obama administration in 2009 rose by $300 billion. Those in power have doled out these billions with no concern for credit risk or academic credentials in order to reduce the number of people in the labor force. Unemployed union Twinkie workers seeking a new career in lesbian studies can get a $20,000 loan from the American taxpayer to sit in their basement along with the 500,000 other University of Phoenix enrollees. The future $300 billion taxpayer bailout was worth it to keep the unemployment rate low enough to insure Obama’s re-election."
"The Obama PR machine never fails to expound upon the fact that the economy added 4.9 million jobs since January 2009. In the same timeframe, uncovered employment rose by 6.6 million. Inquiring minds might want to know what an “uncovered” job entails. Selling your accumulated Chinese crap on Ebay is an uncovered job. Calling yourself a consultant while sleeping until noon is an uncovered job. Day trading Facebook and Apple stock is an uncovered job. Trash picking is an uncovered job. The truth is that real jobs are 1.7 million lower than they were at the depths of the recession, while bullshit jobs paying virtually nothing and offering no benefits have surged by 6.6 million. These facts don’t make a great campaign commercial. The number of employed Americans is at the same level as mid-2005, even though the working age population has grown by 18 million. Since 2008 there are 3 million less full-time jobs and 3 more part-time jobs. This trend is accelerating as small businesses react rationally to the oncoming Obamacare train, resulting in aggregate work hours declining and wage growth stagnating."
"Zero Hedge reveals more truth about our glorious jobs recovery with the following two charts. They obliterate the false narrative spun by liberal ideologues that the reason for the increase of those not in the labor force is due to Baby Boomers retiring. The truth is that while those in the 55-69 age brackets have gained nearly 4 million jobs under President Obama, everyone else has lost just over 2.5 million jobs. Is this a positive development or a sign of extreme desperation among older Americans who have seen their interest income vaporized by Ben Bernanke and there food, energy, and healthcare expenses skyrocket?"
"The accumulation of material possessions through the use of consumer debt, peddled by bankers and reinforced through relentless corporate marketing propaganda has left the country’s citizens weary, miserable, greedy, indebted and sick. Our obsession with technology has merely provided another means of distracting ourselves from confronting the dire challenges that must be addressed. We can ignore the facts but that doesn’t mean they do not exist. The abnormality that grips this nation is breathtaking to behold, as the status quo cheer on and encourage consumers to buy more things with money they don’t have in order to support an economic recovery that is dependent upon zero interest rates for Wall Street banks, QE to infinity, and the delusional desire for a miraculous return to the good old days when getting something for nothing was possible. We can no longer deny reality. If we want to add 30 million people to Medicaid, it must be paid for. If we want to wage never ending wars and police the world, it must be paid for. If we want a Federal government to spend $3.8 trillion per year, it must be paid for. Nothing is free in this world, but more than 50% of Americans seem to believe that to be true."
http://www.theburningplatform.com/?p=43582
From The Weekly Standard, FWIW:
"A new poll conducted by Politico/GWU/Battleground finds that 76 percent of Americans favor "Cutting government spending across the board."
Fifty-nine percent of Americans registered to vote strongly favor the "across the board" cuts and 17 percent "somewhat" favor the cuts. Only 13 percent strongly oppose "across the board" spending cuts, and 10 percent "somewhat" oppose the cuts. Two percent are unsure.
Sixty-five percent of Americans registered to vote are in favor of greater taxes on corporations, while 33 percent are against them. And only 29 percent favor taxing "small businesses that earn more than $250,000, while 69 percent are against these sorts of taxes.
Additionally, the poll finds, only 37 percent favor "Making significant cuts to the budget of the Defense Department, while 59 percent are against such cuts.
Twenty-three percent of Americans registered to vote believe the "most important problem" facing America is "Government spending and the budget deficit." Twenty-percent selected "the economy."
Buckle up.
You also mislead, because you fail to mention that Reagan actually hiked the capital gains rate and corporate rate as part of the Tax Reform Act of 1986. Bill Clinton also reformed welfare. Obama undid this.
Correction from above:
Sagarin wrote:
I have no interest in protecting the wealthy class. I merely don't want to see a massive exodus of capital or capital tied up in overseas shell accounts. As I mentioned previously, it's not like Bush BROADENED the base when he cut rates. Yet, the scenario of cutting rates can only work when there is relative PERMANENCE to both fiscal reform and regulatory reform. If we did that, that's how you could "soak the rich," shy of a consumption tax that exempts the real necessities of living. You are painting an historical picture of Clinton as if though RAISING rates was the sole reason for the reduction of the deficit, when, in fact, nothing could be further from the truth. He also cut rates on capital, as did JFK.
Lastly, we also had this little thing called a recession in 2001 and 9/11. It takes a while to recover from events like that, no matter the tax policy.
So, today's update is still no deal.
Obama had insisted that rate cuts elapse for those above 250, he has mentioned changing that to 400.
Boehner introduced a plan B for rates to go up for those making above 1 million dollars.
That is the first that he has relented on rates as opposed to fixes in deductions.
The Senate is not inclined to pass Boehner's plan, nor is the president.
Boehner is on pretty shaky ground against the Democrats. And the Tea Party wants his head for thinking about giving in at all.
The clock is ticking.
An agreement will really have to come in the next couple days, at least verbally.
Actually, we appear pretty close to a deal:
I have little doubt that Obama and Boehner are going to get it done. Whether the House goes along is the real question.
Wrong. Certain Republicans do like it. You have to read real news sources to know about it. You are not going to hear about it on FOX or CNN because these tend to be rank and file Republicans who are more concerned with people in their district and what their people are telling them. The Republicans you hear about on cable news are leaders who have caved into various lobbies who want all the spending.
Obviously they don't like all the spending cuts and tax increases. They just see the fiscal cliff as the best alternative. And frankly they are right. Same goes with the Democrats.
ryan foreman wrote:
The Republicans you hear about on cable news are leaders
Right. The leaders of the Republicans don't want the spending cuts to go as planned.
They are the ones that count. The ones that sway the votes.
Rand Paul may want all of the cuts, be his type are still a minority of the Republicans and they do not have the votes.
you're smoking crack, bro'. As is anyone who claims the fed govt is spending less now than before, whether you're comparing 2012 to 2011 or whatever. Tax cuts have nothing to do with deficits. Tax cuts always increase revenue. Whether politicians make wise use of the additional revenue or not has nothing to do with tax cuts.
Prediction: barry will justify continued insane spending levels by claiming all manner of false 'savings' & also claiming future revenue growth from increased domestic oil/gas production, which he'll also falsely claim credit for.
If tax cuts generate $1B in additional revenue, Congress just spends an additional $1.2B. Meanwhile guys like you miss the point again & draw false correlations.
But again, its not just Rand Paul Republicans. Its certain "ultra liberal" Democrats who are really true progressives that wouldn't mind going the fiscal cliff route given the options congressional leaders are presenting them with. The fiscal cliff provides key elements that progessive Dems like: A higher tax on the super rich. Cuts on military spending, and a lower deficit. Any deal between Obama and Boehner will do away with these to some extent. Moreover any deal to avoid the fiscal cliff will still include an increase in payroll taxes and cuts to entitlements that progressives don't want. So what is in it for progressive Dems? Just like some of those rank and file Republicans they see the fiscal cliff as the least worst option. These Dems and Rs together can form a fairly powerful voting bloc. My prediction is that some kind of deal will happen. But it will be like the Wall Street bailout vote where there will be an interesting bi-partisan mix of those who vote against it.
X-Runner wrote:
ryan foreman wrote:The Republicans you hear about on cable news are leaders
Right. The leaders of the Republicans don't want the spending cuts to go as planned.
They are the ones that count. The ones that sway the votes.
Rand Paul may want all of the cuts, be his type are still a minority of the Republicans and they do not have the votes.
Well, the quagmire continues. What's ironic is that in the last round of negotiations that failed after Obama only embraced his own fiscal commission's ideas at the 11th hour and then moved the goalposts on Boehner, the Simpson-Bowles plan was seeking roughly three times the amount of cuts in spending as increased revenue. Now, they are horse trading over a roughly one for one deal, which will make nary a difference in the grand scheme of things. It's the spending, stupid.
http://www.reuters.com/article/2012/12/19/us-usa-fiscal-idUSBRE8A80WV20121219
Well. The amazing thing for me continues to be the vast amount of stuff they agree on and are not even fighting over. At this point, who the hell really cares what happens. Your taxes are going up and entitlement spending is going to be cut no matter what. Its just fiddling with how much.
why would you ignore the spending cuts from the last made-up crisis / hostage situation in the summer of 2011 when you make that comparison?
and do you realize how much the s-b plan would raise taxes? obama is not seeking even remotely close to that amount.
are you saying that you'd support that type of tax increase, even though "it's the spending, stupid"?
ryan foreman wrote:
Well. The amazing thing for me continues to be the vast amount of stuff they agree on and are not even fighting over. At this point, who the hell really cares what happens. Your taxes are going up and entitlement spending is going to be cut no matter what. Its just fiddling with how much.
the real fiddling is over whose taxes are going up and whose benefits are being cut. so far the lower middle and middle class is not doing so well.
the payroll tax cut looks to be gone no matter what, so a middle income person's 2013 tax bill vs 2012 is going up by about 2 percentage points.
similarly, the expanded child tax credit from the 2009 stimulus bill looks to be going away. so nearly anyone with a dependent child will see a tax increase.
there is also a new 3.8% tax on investment income if your AGI is over $200k for individuals or $250k for married couples.
none of these tax increases seem to be under negotiation at all.
republicans in congress seem to be fine with these automatic tax increases, but they are really concerned about the tax increases on wealthy wage earners.
on the benefits side, the question is whether to try to preserve benefits for those who are less fortunate. so far the answer to that seems to be no.
But with some of this they can postpone until next year and then sign into law retroactively. I recall reading this could happen with the Child tax credit.
But yeah. I doubt if many people realize that many Democrats and Obama support raising the payroll tax cut and cutting entitlements. This what they support without any pressure from the Republican party. Thats before you even get to all the things he does support but will fold like a lawn chair with any resistance by the Republican party. This is what Obama supporters voted for whether they know it or not.