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X-Runner
Fiscal Cliff Predictions 11/26/2012 11:53AM Reply | Return to Index | Report Post
We need a fiscal cliff thread with the deadline coming up in 5 weeks.

On Januray 1:

Everyone's tax rates go up. And payroll tax goes back up.

A bunch of spending cuts go into effect, including military cuts.

We will hit the debt ceiling and need permission to borrow more.


So, how and when will this be resolved as everyone involved does not want this to happen?
Do they cut a deal before January 1?


The main issue is taxes.
The Dems want to keep it all the same except for 250 and above and the Republicans do not want any rates to go up but may budge on some deductions.


I think Obama's plan of letting the top tier rate cuts expire is the most likely scenario.
The Republican plan would take tax reform and that can't be hammered out quickly. They had a year and a half to write up reform and have nothing ready to be implemented.
Obama has much more leverage.

I think we will go past the deadline this time.
Then Republicans can vote to lower taxes on the majority of people whereas now the same result would mean voting to raise taxes on a minority of people.

My guess is that it will be signed in late January and be effective as of Jan 1.
Some damage will have been done by then.
Markets will crash. The economy will sputter and trend towards a recession.
People will lose jobs. (No one in Washington, though)
Things will come back after this is addressed but it will be from a bigger hole.

Or maybe they will get it done before Christmas and we can hav e good start to the year.
noce
RE: Fiscal Cliff Predictions 11/26/2012 12:21PM - in reply to X-Runner Reply | Return to Index | Report Post
Nothing very interesting will happen Jan 1. In December Congress will vote to delay the fiscal cliff for 6 months or so. They'll throw in some minor measures to make it look like both sides are doing something. The rest of the world will moan about the US being irresponsible (as they should) but the dollar will not collapse (yet).
Expertdude
RE: Fiscal Cliff Predictions 11/26/2012 12:29PM - in reply to X-Runner Reply | Return to Index | Report Post
Nothing much will happen. I don't think they will come up with a solution but rather a delay as suggested by the poster above.

Overall, if the tax cuts went into effect on Jan 1, the impact wouldn't be that big. There are major lobby groups campaigning and they suggest the world will come to an end but they just want to cover their a$$es.
X-Runner
RE: Fiscal Cliff Predictions 11/26/2012 12:44PM - in reply to noce Reply | Return to Index | Report Post
So you are saying the Senate and the House will vote to extend all of the tax cuts, squash the spending cuts and raise the debt ceiling in December and the president will sign off on that.

Could be.
Similar to 2010.
But I don't think so.
2010 was different. The House change hands. The economy was weaker. And Obama had a re-election bid coming up.

They may sign something in December, but it won't be status quo.

And if things do go past Jan 1, there will be issues.
Look at last year when they waited to the last second to raise the debt ceiling, which didn't effect any cash flow but sent markets crashing and the US credit rating to go down.
It may not be terrible but there will be repurcussions.
X-Runner
RE: Fiscal Cliff Predictions 11/29/2012 9:42AM - in reply to X-Runner Reply | Return to Index | Report Post
http://www.cnn.com/2012/11/28/politics/cole-taxes/index.html?hpt=hp_t2

http://www.foxnews.com/politics/2012/11/29/conservative-activist-reportedly-threatens-to-steer-donors-away-from-rnc-over/


There is a lot of heat on Republicans about their tax pledge.
There seems to be some ready to give in on letting the upper 2% cuts expire.
But Boehner is holding firm and conservative activists are threating those that vote to raise any rates.
Steve Martin
RE: Fiscal Cliff Predictions 11/29/2012 10:25AM - in reply to X-Runner Reply | Return to Index | Report Post

X-Runner wrote:

http://www.cnn.com/2012/11/28/politics/cole-taxes/index.html?hpt=hp_t2

http://www.foxnews.com/politics/2012/11/29/conservative-activist-reportedly-threatens-to-steer-donors-away-from-rnc-over/


There is a lot of heat on Republicans about their tax pledge.
There seems to be some ready to give in on letting the upper 2% cuts expire.
But Boehner is holding firm and conservative activists are threating those that vote to raise any rates.


A wise man on the right would recognize the need to do something about revenue, but on the condition that spending cuts also occur across the board and not just to the military.
X-Runner
RE: Fiscal Cliff Predictions 11/29/2012 10:32AM - in reply to Steve Martin Reply | Return to Index | Report Post
We're not talking about wise men we are talking about congressmen.

What do you think they will do and when?
Mr. Obvious
RE: Fiscal Cliff Predictions 11/29/2012 10:40AM - in reply to X-Runner Reply | Return to Index | Report Post
The best deal that can be made on the revenue and spending side is by letting the cliff happen. It will be much ado about nothing except it will actually have slightly substantive cuts. Any deal they will make will merely push much needed cuts way out into the future. 10 year budget projections and baselines are meaningless.
lenny
RE: Fiscal Cliff Predictions 11/29/2012 10:46AM - in reply to X-Runner Reply | Return to Index | Report Post
Any plan that passes the Senate will be moderate and contain all sorts of concessions to deficit hawks. If House Republicans are the only thing stopping a deal it will damaging to the party. The Boehner may not lead the charge to compromise, but also won't try to hold the opposition together with an iron fist. Some Republican votes will be won with the usual wheeling and dealing.
X-Runner
RE: Fiscal Cliff Predictions 12/3/2012 8:43AM - in reply to lenny Reply | Return to Index | Report Post
http://www.washingtonpost.com/business/economy/fiscal-cliff-talks-at-a-stalemate-over-tax-hikes/2012/12/02/1c31b98a-3cc6-11e2-bca3-aadc9b7e29c5_story.html


Negotiations don't seem to be going anywhere.

From the article:

While it had always seemed likely that the two sides would reach a stalemate before finally coming to agreement — as has been the pattern over the past two years — lawmakers and congressional aides tracking the back-and-forth said there’s a growing probability that no deal will be reached in time to avoid the fiscal cliff.


Boehner will not vote to raise taxes on the 250+.
Obama will not sign a deal that doesn't include rates going back up on the 250+.
If they can't come to agreement, the rates automatically go up on the 250+, along with everyone else.

Some Republicans will have to cross the line and go against Boehner to get any deal done in the next three weeks.
Otherwise, we go over on Jan 1.
I doubt Obama will back off.
He just won the general election and campaigned on that very point. He held that point in 2008 campaign as well. But now he has no re-election to worry about. He has no political risk.
Boehner campaigned on his point as well but didn't have an election involving the entire country and he still has to face re-election in two years.
drunk
RE: Fiscal Cliff Predictions 12/3/2012 9:13AM - in reply to X-Runner Reply | Return to Index | Report Post
I say we all fall off the cliff and then we can all pay our fair share.
POMPATUS OF LOVE
RE: Fiscal Cliff Predictions 12/3/2012 9:30AM - in reply to drunk Reply | Return to Index | Report Post
I agree. It'd be great for our rigged income tax system to finally be made fair and have everyone pay the same %, regardless of income, rather than pushing 40% of the income tax burden on the top 5% and allowing the bottom 60% to skate.
I predict the assclowns you people elected - who are to blame for the "fiscal cliff" to begin with - will successfully blame the crisis on everyone but themselves. I also predict most people will be stupid enough to view the "fiscal cliff" as some sort of unpredictable tsunami that Barry is bravely fighting off, not as the trainwreck actually caused by barry & co.
I predict the elctorate will become even more illiterate, uninformed & short sighted and we'll continue to elect con-men like Barry until the whole thing implodes - at which point the Republicans & "the rich" will be blamed, of course..
Sagarin
RE: Fiscal Cliff Predictions 12/3/2012 11:42AM - in reply to X-Runner Reply | Return to Index | Report Post
 
RE: Fiscal Cliff Predictions 12/3/2012 12:42PM - in reply to X-Runner Reply | Return to Index | Report Post
Defense cuts? Scuttle plans to build one damn super jet we'll never ever need and I'm sure that will help quite a bit and not be missed.
X-Runner
RE: Fiscal Cliff Predictions 12/3/2012 12:53PM - in reply to Sagarin Reply | Return to Index | Report Post
Warren Buffet is another successful trader ... and he has a different opinion.

My question is - what is YOUR opinion on what WILL happen?

Not what you think should happen or would like to happen.
Is Boehner going to keep the rates down accross the board?
His only chance for that is to get a deal done this month.
Will Republicans cave this month or are we going into January without a deal?
Flagpole
RE: Fiscal Cliff Predictions 12/3/2012 1:09PM - in reply to X-Runner Reply | Return to Index | Report Post
I don't understand Boehner's position. On the one hand he acknowledges that Obama WON the election with the pledge to up tax rates on those making $250,000 a year, and yet he appears not willing to allow that to happen. It's silly.

We are already starting to see some bad things from this...market dropped a bit, manufacturing in the US losing steam...this COULD be big trouble.

Buffett says that the US won't enter a recession even if we pass the fiscal cliff deadline, but I'm not so sure of that.

I DO wish that Obama would offer more in terms of cuts too though...he and the Democrats have offered more than the Republicans are insinuating, but I still don't think it's enough...we can cut things now, and then down the line when our fiscal house is in order a bit more, we can add some back; cuts and tax increases have to both be in play here.

Personally, I'm for Social Security and Medicare changes too. We live longer. It's silly to continue to allow Americans to take money disbursements out at the same ages as before (Medicare age should be raised too). They could tier it, but ultimately full Social Security Benefit retirement needs to be upped to 70 at least, and as we live longer and longer, that could be raised even from there. If people want to retire earlier than that, then they can invest for that.
lenny
RE: Fiscal Cliff Predictions 12/3/2012 1:19PM - in reply to Flagpole Reply | Return to Index | Report Post
Why should Obama offer more cuts? Republicans will reject ANY proposal. Let them counter offer and tell the American people exactly what programs they want cut. So far they have offered nothing.


Flagpole wrote:

I don't understand Boehner's position. On the one hand he acknowledges that Obama WON the election with the pledge to up tax rates on those making $250,000 a year, and yet he appears not willing to allow that to happen. It's silly.

We are already starting to see some bad things from this...market dropped a bit, manufacturing in the US losing steam...this COULD be big trouble.

Buffett says that the US won't enter a recession even if we pass the fiscal cliff deadline, but I'm not so sure of that.

I DO wish that Obama would offer more in terms of cuts too though...he and the Democrats have offered more than the Republicans are insinuating, but I still don't think it's enough...we can cut things now, and then down the line when our fiscal house is in order a bit more, we can add some back; cuts and tax increases have to both be in play here.

Personally, I'm for Social Security and Medicare changes too. We live longer. It's silly to continue to allow Americans to take money disbursements out at the same ages as before (Medicare age should be raised too). They could tier it, but ultimately full Social Security Benefit retirement needs to be upped to 70 at least, and as we live longer and longer, that could be raised even from there. If people want to retire earlier than that, then they can invest for that.
RuKiddingME!!!
RE: Fiscal Cliff Predictions 12/3/2012 1:21PM - in reply to X-Runner Reply | Return to Index | Report Post
it will be voted down at the very last minute, to keep people like you and I glued to the TV, great for advisers, ratings, etc etc....wait and see!
~
RE: Fiscal Cliff Predictions 12/3/2012 1:27PM - in reply to X-Runner Reply | Return to Index | Report Post
The R's will never negotiate a deal with the current Pres to his favor. Not even in this instance where the problem is of their own creation. Unless there's some way to bring legislation to the floor of the House to actually vote on, GOP leadership will gamble on going over the cliff. From now till then they'll be strategizing and message-testing the correct way to frame the result as an albatross for the White House, (i.e. it's no longer about the deficit or debt, it's now about the negative effect that austerity tends to have on aggregate demand).
Geaf
RE: Fiscal Cliff Predictions 12/3/2012 1:27PM - in reply to lenny Reply | Return to Index | Report Post
[quote]lenny wrote:

Why should Obama offer more cuts? Republicans will reject ANY proposal. Let them counter offer and tell the American people exactly what programs they want cut. So far they have offered nothing.

[quote]

I'm looking to hire you as a consultant. You want $10,000 for the job, I'm offering $5,000. We both agree on the first $5,000 - so why don't you start working with that pay base, and we will talk about the next $5,000 "later".

If you don't agree to this, you're simply an obstructionist. Never mind that you have no guarantee of the next $5,000 and lose any bargaining ability.
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