The Fiscal Cliff is just accidental austerity

[Blart]

Increased revenue + reduced spending = major deficit reduction*

For a congress that was elected based on debt paranoia, I'm surprised they're not happy. Is the GOP suddenly Keynesian? Why are they listening to the CBO?

*assuming those spending cuts & tax increases don't tank the economy and destroy our recovery, hah

[Rohirrim]

I agree with Krugman's take:
http://www.nytimes.com/2012/11/09/opinion/krugman-lets-not-make-a-deal.html?_r=1&

[Obushma]

Is the GOP suddenly Keynesian? Why are they listening to the CBO?


What the **** are you talking about? Chicago school is a form of Keynesian economics, the GOP has been Keynesian for over 50 years, where the **** you been?

[Taco John]

I agree with Krugman's take:
http://www.nytimes.com/2012/11/09/opinion/krugman-lets-not-make-a-deal.html?_r=1&

Haha... Democrats turn for brinksmanship.

They're against brinksmanship when the other guy is doing it. But when it's their turn, it's the right thing to do.

Good to see that politics hasn't changed overnight.

[Taco John]

What the **** are you talking about? Chicago school is a form of Keynesian economics, the GOP has been Keynesian for over 50 years, where the **** you been?

I'm confused as well. The Republicans are definitely keynesians. There is a minority that is begging them to move off of it, but there's no indication that Republcians have any intentions of doing so.

[Rohirrim]

Haha... Democrats turn for brinksmanship.

They're against brinksmanship when the other guy is doing it. But when it's their turn, it's the right thing to do.

Good to see that politics hasn't changed overnight.

No. I think it's time to stop trying to balance the budget on the backs of the middle class. The middle class creates the economy, not the rich. Just because the Right keeps repeating that bull**** line about "job creators" over and over, doesn't make it true. Like Krugman, Reich and even Ben Stein have said, simply pick the era where America was the most well off and duplicate that. What's so hard to understand about that?

[Rohirrim]

I'm confused as well. The Republicans are definitely keynesians. There is a minority that is begging them to move off of it, but there's no indication that Republcians have any intentions of doing so.

Anybody with a brain is a Keynesian. A mixed economy focused on the demand side has proved itself. Why did we have this second depression? Because we went supply side. We ignored what our grandfathers had learned. And please don't tell me we didn't. I know, to the Libertarians, every thing is either perfection or nothing, but that's not the way the world works. Like the Chinese proverb goes, "Running a large country is like cooking a small fish." What does that mean? It means that small moves have a big effect on the outcome. We went supply side. And we've been hovering around the ****ter ever since. Deregulation flushed us. Turn your back on the Keynesian idea of a mixed economy. Go with austerity. You know where you'll end up? Like Spain and Greece.

[Rohirrim]

I don't agree with Obama on everything, but he is dead on here:

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[Blart]

What the **** are you talking about? Chicago school is a form of Keynesian economics, the GOP has been Keynesian for over 50 years, where the **** you been?

I don't understand. How do you see Chicago school as Keynesian?

Anyway, why is the GOP now paying attention to the CBO? They certainly weren't worried about crashing the economy over the debt ceiling, because the deficit was of prime importance. It just seems entirely inconsistent. Am I missing something, or am I the only one calling them out?

[ZONA]

I don't agree with Obama on everything, but he is dead on here:

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AMEN

[pricejj]

Krugman's solution (as well as the Socialists on this board), is to let the fiscal cliff happen. Why? The answer is easy. The only way to pay for Obama's unprecedented increase in government spending is to drastically raise the taxes on the middle class. The Socialists all rejoice!

If the "Bush Tax Cuts" expire for EVERYBODY (fiscal cliff), then (theoretically) within 10 years the federal budget will be almost balanced (-1.2%).

Aaaaah there it is folks, the truth comes out. The Socialists can't have their cake and eat it too. If you don't raise taxes on the middle class, you will NEVER get close to raising 24% of GDP in revenue (which is what Obama and the Democrats have been spending since 2008).

In all reality, the only way to keep the charade going is if Obama continues $1T deficits. From this election, we have seen, that the government dependent section of the U.S. population is more than willing to let that happen.

They don't care about inflation. As long as they can afford to put gas in their cars, it doesn't matter. They never aspired to acquire real assets (whose value is skyrocketing), all they care about are material things. When you have foodstamps, a free phone, section 8, tanf, a low-wage part-time job, and a health insurance tax rebate...what else do you need?

[Blart]

Nice little conspiracy theory, but the fiscal cliff would lead to a bigger deficit, as seen in the UK. It's something we want to avoid.

I'm just trying to figure out why the GOP and Fox news, and pricejj's agree with us that austerity is bad.

[pricejj]

The only problem Europe has (which they are quickly finding ways around), is that they have a pesky 3% deficit mandate in the EU Constitution.

Without the requirement that all government deficits would have to be less than 3% of GDP...and if they could print their own Euro's (like the U.S with the dollar), life would be easy as it was pre-2008.

It's no secret, Socialism leads to a broad lower-class without land, or any real assets...and a small, wealthy, elite who owns ALL the assets. That is where we are today, and it is quickly getting worse.

[pricejj]

Nice little conspiracy theory, but the fiscal cliff would lead to a bigger deficit, as seen in the UK. It's something we want to avoid.

I'm just trying to figure out why the GOP and Fox news, and pricejj's agree with us that austerity is bad.

The CBO says that by allowing all current legislation to proceed without alteration that the deficit would be cut in half in 2013, primarily by raising taxes on the middle-class.

The 'fiscal cliff' would probably put the U.S. economy in recession in 2013, but would be great for the future solvency of the U.S....as deficits are projected to close rapidly over the next decade.

Allowing the baseline to proceed would generate revenues of 24% of GDP (in time), without raising taxes (or just raising taxes on the 'rich'), would only generate revenues of about 18% of GDP. So what's it going to be, are you going to allow tax rates to rise to pay for your spending?

My guess is no. Why do it, when there is no immediate consequence of running $1T deficits? Print baby, print!

[pricejj]

Nice little conspiracy theory, but the fiscal cliff would lead to a bigger deficit, as seen in the UK. It's something we want to avoid.

I'm just trying to figure out why the GOP and Fox news, and pricejj's agree with us that austerity is bad.

'Austerity' is only a tax increase. You know that. Of course, tax increases harm the economy. But why raise taxes when you can print all the money you want without repercussions?

It's the Democrat way!

[Blart]

Overuse of the word "socialism" is like overuse of the word "****" - the more you say it, the more normal and non-threatening it becomes.

To your parents, it conjured up images of the enemy, kind of like the word "terrorist" today.

Thanks to overuse by Tea Partiers, "socialism" for today's generation means access to their parent's health insurance, medicare for grandpa, food for the poor, affordable housing, and any and all basic social safety nets.

Exit polls showed that young people identify more positive thoughts with socialism than capitalism. Keep it up!

'Austerity' is only a tax increase.

False.

[Rohirrim]

If we didn't have a central bank creating some liquidity in the system during this crisis our unemployment right now would be showing Spanish sized numbers. The stimulus should have been much bigger.

[pricejj]

Of course, with federal debt growing ~7% per year, and GDP growing only ~1% per year, you are quickly stuck in the situation we are stuck in today...with the Federal Reserve printing all new debt issued to the U.S. (~$80B) monthly.

This doesn't present a problem of course, as long as the broad lower class is content without owning any real assets.

[Rohirrim]

Of course, with federal debt growing ~7% per year, and GDP growing only ~1% per year, you are quickly stuck in the situation we are stuck in today...with the Federal Reserve printing all new debt issued to the U.S. (~$80B) monthly.

This doesn't present a problem of course, as long as the broad lower class is content without owning any real assets.

It's called "crisis management" and is not a long term plan.

[pricejj]

Exit polls showed that young people identify more positive thoughts with socialism than capitalism. Keep it up!



Unfortunately, that does nothing for the sustainability of Socialist policies. It doesn't matter how many people you get to vote for European Socialism...it's not working, and it will never work.

It's pretty simple really. Say you own a huge farm. Due to technological advances, you can pretty much collect the harvest yourself, without employing anybody else. Now imagine if 100 other people own tiny little pieces of the farm. They all farm their own plots, and make a profit (though, added all up, it's not as big as the profit you took home yourself). That's 100 jobs, as opposed to 1 job.

Now you see the real problem with Socialism, and why it never works. You put the ownership of real assets out of the hands of everyday man, and vast unemployment exists. That's what happens when you live on a planet with finite resources.

[pricejj]

It's called "crisis management" and is not a long term plan.

What is the time frame for the end of this "crisis management"?

[Rohirrim]

What is the time frame for the end of this "crisis management"?

When the economy is back on its feet.

[Blart]

Unfortunately, that does nothing for the sustainability of Socialist policies. It doesn't matter how many people you get to vote for European Socialism...it's not working, and it will never work.

It's pretty simple really. Say you own a huge farm. Due to technological advances, you can pretty much collect the harvest yourself, without employing anybody else. Now imagine if 100 other people own tiny little pieces of the farm. They all farm their own plots, and make a profit (though, added all up, it's not as big as the profit you took home yourself). That's 100 jobs, as opposed to 1 job.

Now you see the real problem with Socialism, and why it never works. You put the ownership of real assets out of the hands of everyday man, and vast unemployment exists. That's what happens when you live on a planet with finite resources.

Alright, since I assume you believe Obama to be pushing a socialist agenda, how do you see the next 2 - 4 years in America economically? What will our unemployment rate be in 2014, after Obamacare puts its icy grip on the throats of innocent poor people?

[cutthemdown]

Obama can forget about th repubs going along with an income tax increase on Americans. The ones that won in the house were elected because of that stance. He will have to deal or face the fiscal cliff. Repubs will give in on revenue increases through eliminating loopholes. Probably they will offer up the 2nd home/vacation home tax write off among other things.

[Blart]

When it comes to the fiscal cliff, Wall Street will hold a gun to someone's back. They won't stand for another recession.

Who do you think they'll make cave: The guy they bet billions against this election? The senate, feat. Ms. Occupy herself, Elizabeth Warren?

I'm guessing they'll grit their teeth, and make the house tax our nation's private jet owners.

[ScottXray]

Obama can forget about th repubs going along with an income tax increase on Americans. The ones that won in the house were elected because of that stance. He will have to deal or face the fiscal cliff. Repubs will give in on revenue increases through eliminating loopholes. Probably they will offer up the 2nd home/vacation home tax write off among other things.

You are probably right about what the GOP congress will try to do. ....but keep in mind that the increase in unemployment and the reduction in the economy that will ensue if we go over the cliff will end up putting pressure on that congress to raise taxes later on anyway. By 2014 those in congress now will be paying for it at the polls, both Dems and Republican. This may result in a switch in both the house and senate then as people will be sick of the games by both sides. And Obama will still be president until 2016.

Obama has nothing to lose by pushing for the increases on the upper classes. He campaigned on that point, and he won the election. The Bush cuts for the wealthy are dead, either in the lame duck, or in 2013.

It is also true that there are going to have to be increases on the middle class and taxes in general, combined with the spending cuts. We have been living a standard of living that is based on debt, which is exactly why the housing bubble popping burst the economic bubble in general, and why so many people ended up upside down.
Taking out home equity loans then buying TVs , clothes , cars etc. with the
money from the homes and then being surprised when everything went to hell in a hand basket.

[L.A. BRONCOS FAN]

https://sphotos-b.xx.fbcdn.net/hphotos-ash3/558911_557124250979757_1169315282_n.jpg

[cutthemdown]

https://sphotos-b.xx.fbcdn.net/hphotos-ash3/558911_557124250979757_1169315282_n.jpg

Awesome! See this is what i am saying. Real liberals want to do what they did on healthcare and the stimulus, which is ram it through. Unfortunatley dems fail to realize Obama has less power this time, then 4 yrs ago.

That coupled with facing the so called fiscal cliff makes it hard for Obama to deliver on that yearning for hardball. But when obama thinks about it he will say what do i care im not running again, and cave. Because if he doesn't he will have a recession, but not of low paying jobs, of high end military contracting jobs.

The house is a group of politicians with different agendas. Hell obama might even have trouble in the Senate. it's easier for the president to make a concesion then it is to force them all onto the house.

A good President will deal. The liberals will be pissed because like LABF says they would rather go over the cliff then not get to raise taxes.

[cutthemdown]

You are probably right about what the GOP congress will try to do. ....but keep in mind that the increase in unemployment and the reduction in the economy that will ensue if we go over the cliff will end up putting pressure on that congress to raise taxes later on anyway. By 2014 those in congress now will be paying for it at the polls, both Dems and Republican. This may result in a switch in both the house and senate then as people will be sick of the games by both sides. And Obama will still be president until 2016.

Obama has nothing to lose by pushing for the increases on the upper classes. He campaigned on that point, and he won the election. The Bush cuts for the wealthy are dead, either in the lame duck, or in 2013.

It is also true that there are going to have to be increases on the middle class and taxes in general, combined with the spending cuts. We have been living a standard of living that is based on debt, which is exactly why the housing bubble popping burst the economic bubble in general, and why so many people ended up upside down.
Taking out home equity loans then buying TVs , clothes , cars etc. with the
money from the homes and then being surprised when everything went to hell in a hand basket.

Romney got what 48%, they all voted based on low taxes. That and Obama won bcause of immigration, the latino vote...and women, the whole its your body thing. It wasn't on raising taxes he won on. Especially not with the group he is raising them on.

[Taco John]

No. I think it's time to stop trying to balance the budget on the backs of the middle class.


This bit of rhetoric doesn't really mean anything to me. You balance a budget by reducing spending and/or raising taxes. Currently, the rich pay the lion's share of the taxes collected in this country. It doesn't really mean anything to say that the budget is being balanced on the backs of the middle class. It's just rhetoric - not anything based on actual fact.

[Taco John]

I agree with Krugman. Obama shouldn't seek a deal. Neither should the Republicans. This "so called fiscal cliff" is a step in the right direction.

Of course, I'd rather see us reduce spending AND reduce taxes. But this will be the first reduction in spending in who can guess how many decades. I'll take it, even if it comes with a tax hike.

[Rohirrim]

This bit of rhetoric doesn't really mean anything to me. You balance a budget by reducing spending and/or raising taxes. Currently, the rich pay the lion's share of the taxes collected in this country. It doesn't really mean anything to say that the budget is being balanced on the backs of the middle class. It's just rhetoric - not anything based on actual fact.

It means that, since Reagan, policies and tax code changes have resulted in Romney paying 13% of his income, and his secretary paying 30% of hers. Of course the rich pay the lion's share of taxes collected if you put it all in a big pile and say who put in the most. And their incomes have quadrupled over the last thirty years on these wealth redistributing policies so they are not only making a hell of a lot more, they are keeping a hell of a lot more of what they make. And now they want to balance the budget by cutting grandma's Medicare and SS? :bs:

The rich in America have been on the gravy train for thirty years while wages and income for the middle class has stagnated or declined. Most of this is a result of policy. It's time those policies were changed. Like Lincoln said, the workers come before capital, for without them, capital doesn't exist.

[houghtam]

It means that, since Reagan, policies and tax code changes have resulted in Romney paying 13% of his income, and his secretary paying 30% of hers. Of course the rich pay the lion's share of taxes collected if you put it all in a big pile and say who put in the most. And their incomes have quadrupled over the last thirty years on these wealth redistributing policies so they are not only making a hell of a lot more, they are keeping a hell of a lot more of what they make. And now they want to balance the budget by cutting grandma's Medicare and SS? :bs:

The rich in America have been on the gravy train for thirty years while wages and income for the middle class has stagnated or declined. Most of this is a result of policy. It's time those policies were changed. Like Lincoln said, the workers come before capital, for without them, capital doesn't exist.

Exactly.

You can look at things with a cold, objective eye and say "Welp! Everyone pays 20% of their income. It's fair! YAAAAAAY!"

But we all know...we ALL know that 20% from someone making $40k a year hurts them much more than 20% from someone making $200k. Calling it a "flat tax" is just a way of coding the language so it sounds fair.

And if you want to get all biblical, if a flat tax were fair, why did Jesus say that the widow who cast a mere farthing into the treasury cast more than the rich people?

[Missouribronc]

No. I think it's time to stop trying to balance the budget on the backs of the middle class. The middle class creates the economy, not the rich. Just because the Right keeps repeating that bull**** line about "job creators" over and over, doesn't make it true. Like Krugman, Reich and even Ben Stein have said, simply pick the era where America was the most well off and duplicate that. What's so hard to understand about that?

This is a bunch of crap. Why? Because the Democratic Senate, which has been Democratic for four years, hasn't passed a budget in three years. Can't balance a budget if you don't even talk about one.

The fact that they haven't even discussed a budget makes the above post hysterical.

[houghtam]

This is a bunch of crap. Why? Because the Democratic Senate, which has been Democratic for four years, hasn't passed a budget in three years. Can't balance a budget if you don't even talk about one.

The fact that they haven't even discussed a budget makes the above post hysterical.

Since you have apparently never taken a government class yet seem perfectly content to spout tired talking points from your ass that you truly know nothing about, here's some knowledge for you.

http://www.economist.com/blogs/freeexchange/2012/02/parliamentary-procedure

There, don't say I never did anything for you, cupcake.

[Taco John]

It means that, since Reagan, policies and tax code changes have resulted in Romney paying 13% of his income, and his secretary paying 30% of hers.

You're comparing taxes on capital gains vs. taxes on wages. Do you understand this?


Of course the rich pay the lion's share of taxes collected if you put it all in a big pile and say who put in the most. And their incomes have quadrupled over the last thirty years on these wealth redistributing policies so they are not only making a hell of a lot more, they are keeping a hell of a lot more of what they make. And now they want to balance the budget by cutting grandma's Medicare and SS? :bs:

Their incomes have quadrupled because The Fed keeps flooding the market with dollars, and those dollars filter through the system and get collected by those with the biggest nets in the stream. You can't favor Keynesian economics, and then complain when the market flood gets you a result you don't like.


The rich in America have been on the gravy train for thirty years while wages and income for the middle class has stagnated or declined. Most of this is a result of policy. It's time those policies were changed. Like Lincoln said, the workers come before capital, for without them, capital doesn't exist.

This doesn't make any sense. The rich have been on the gravy train for more than 30 years. They've been on the gravy train for time immemorial. That's because they're rich. But if you're choosing to isolate the last 30 years, in the last 30 years we got rid of Bretton Woods, and have done everything we could possibly do to screw over the poor by inflating their dollars and weakening their spending power through Keynesian economics.

See, the problem with people who use rhetoric like yours is that you're hot and bothered about "the rich" vs. "the workers" but you don't bother to look at they symptoms of the disparity, and for whatever reason, you think that taxing "the rich" more will somehow solve the disparity, when in reality, all it will do is further perpetuate the imbalances. I can't imagine what you're trying to fix by taxing "the rich" more. Any tax raise will get passed on to the middle class - and for what? More bombs?

[Blart]

I agree with Krugman. Obama shouldn't seek a deal. Neither should the Republicans. This "so called fiscal cliff" is a step in the right direction.


At least you're consistent. Why isn't the GOP cheering on these sudden, mass spending cuts?

[Taco John]

At least you're consistent. Why isn't the GOP cheering on these sudden, mass spending cuts?

They will be. This fiscal cliff IS the Grand compromise. Democrats get what they want: increased taxes. Republicans get what they want: budget cuts.

Yes, both sides will have to sacrifice some sacred cows to the flames, but you can see where this is going already. Krugman is encouraging Obama to practice brinkmanship, and already you're starting to hear conservative voices saying that the Republicans should walk away (http://www.redstate.com/2012/11/08/the-fiscal-cliff-and-the-keyser-soze-option/).

Here's what the CBO says about it:

Substantial changes to tax and spending policies are scheduled to take effect in January 2013, significantly reducing the federal budget deficit. According to CBO’s projections, if all of that fiscal tightening occurs, real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)—reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year. That contraction of the economy will cause employment to decline and the unemployment rate to rise to 9.1 percent in the fourth quarter of 2013. After next year, by the agency’s estimates, economic growth will pick up, and the labor market will strengthen, returning output to its potential level (reflecting a high rate of use of labor and capital) and shrinking the unemployment rate to 5.5 percent by 2018.

Output would be greater and unemployment lower in the next few years if some or all of the fiscal tightening scheduled under current law—sometimes called the fiscal cliff—was removed. However, CBO expects that even if all of the fiscal tightening was eliminated, the economy would remain below its potential and the unemployment rate would remain higher than usual for some time. Moreover, if the fiscal tightening was removed and the policies that are currently in effect were kept in place indefinitely, a continued surge in federal debt during the rest of this decade and beyond would raise the risk of a fiscal crisis (in which the government would lose the ability to borrow money at affordable interest rates) and would eventually reduce the nation’s output and income below what would occur if the fiscal tightening was allowed to take place as currently set by law.

http://www.cbo.gov/publication/43694


Personally, I would just as soon see the payroll tax deductions kept into place, not to mention the Bush tax cuts themselves. Not to mention, I could do without the Obamacare tax raise that comes due. But is that's what it takes to eliminate $78 billion from the yearly budget in one shot, I'll take it for a start. I wasn't thrilled about the Bush tax cuts to begin with because they weren't passed with offsetting spending cuts. But getting spending cuts in Washington takes both sides pointing guns at eachothers heads and pulling the trigger and hoping they can survive the bullet, as we're about to find out.

[Jetmeck]

I'm confused as well. The Republicans are definitely keynesians. There is a minority that is begging them to move off of it, but there's no indication that Republcians have any intentions of doing so.



mINORITY MY ASS....POLLS SHOW 2/3 of Americans want the rich to pay more ?

We all no what republicans think of polls though !

[Jetmeck]

This is a bunch of crap. Why? Because the Democratic Senate, which has been Democratic for four years, hasn't passed a budget in three years. Can't balance a budget if you don't even talk about one.

The fact that they haven't even discussed a budget makes the above post hysterical.


Ass, the republican lead house has passed a bill to balance the budget every year knowing full well it had no chance in hell of passing the senate ? What do you call that ?

They will compromise or pay the price

[Blart]

Alright, I didn't know this before, but the spending cuts are almost entirely from military.

According to Republicans, that's the one and only place where government can create jobs:
http://thinkprogress.org/security/2012/07/18/543931/republicans-goverment-create-jobs-military-spending/

So yeah, I'm calling it. Boner and the Tea Buddies will cave in order to save the war machine. Sorry rich people.

[Rohirrim]

You're comparing taxes on capital gains vs. taxes on wages. Do you understand this?

You're making my argument for me. You're exactly right. And why does that discrepancy exist? Because our tax code was changed by special interests to reward investment income over earned income. Again, I'll post Lincoln's quote to support my reasons for being opposed to this: "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."

And Romney ran on the idea of ending all capital gains tax. Period. And the estate tax as well. This is out and out feudalism.


Their incomes have quadrupled because The Fed keeps flooding the market with dollars, and those dollars filter through the system and get collected by those with the biggest nets in the stream. You can't favor Keynesian economics, and then complain when the market flood gets you a result you don't like.

Who gave them the biggest net? The Fed? No. Policy. Tax code. Deregulation of the markets. Turning the market into a casino. The Fed had nothing to do with that. In the Keynesian argument, the public sector restores liquidity to the private sector, and the markets, during a crisis because capitalism cannot operate without it. Is it the Feds fault that the rich take that money and stash it offshore? Or that banks stick it in their vaults and refuse to lend it? Or that the casino continues to operate, still out of control, still creating meaningless wealth on paper while the infrastructure of the country collapses? Austerity is like removing the gas from the car and then saying, "Now, let's see how she runs."


This doesn't make any sense. The rich have been on the gravy train for more than 30 years. They've been on the gravy train for time immemorial. That's because they're rich. But if you're choosing to isolate the last 30 years, in the last 30 years we got rid of Bretton Woods, and have done everything we could possibly do to screw over the poor by inflating their dollars and weakening their spending power through Keynesian economics.

See, the problem with people who use rhetoric like yours is that you're hot and bothered about "the rich" vs. "the workers" but you don't bother to look at they symptoms of the disparity, and for whatever reason, you think that taxing "the rich" more will somehow solve the disparity, when in reality, all it will do is further perpetuate the imbalances. I can't imagine what you're trying to fix by taxing "the rich" more. Any tax raise will get passed on to the middle class - and for what? More bombs?

I'm not an economist. I don't have my degree in economics. Economics is highly complex and almost arcane. From what I do understand, there is much evidence for the viability of the Keynesian school of thought and much to discredit the idea of fixed money tied to a commodity such as gold, especially volatility, which is why every country dumped it.

One proof used by Keynesians is the evidence that nations came out of the Depression much faster as soon as they switched to a floating, or fiat currency. Those who stayed with gold the longest suffered the most. Floating currency gives a nation more flexibility to deal with crisis. Sure, it needs strict oversight, but what doesn't? Ever hear of the cornering of the silver market? Any system can be abused, and the greedy are always looking at new ways to steal. There is no such thing as a "perfect" system. That's why we have government.

Anyway, I don't see a simple change in the tax code as the panacea for all societal ills, but it is a big piece of the solution. One of the biggest changes has to be a change of national mindset to deal with the reality that our capitalist system itself is out of control. The idea of shrinking the government is the exact opposite of what is needed. Government has become the servant of the capitalist special interests who write self-beneficial policies to enhance their own power and wealth to the detriment of the rest of the country. The balance has to be restored.

Like Teddy Roosevelt said:
The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man’s making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have called into being.

[L.A. BRONCOS FAN]

>>It means that, since Reagan, policies and tax code changes have resulted in Romney paying 13% of his income, and his secretary paying 30% of hers. Of course the rich pay the lion's share of taxes collected if you put it all in a big pile and say who put in the most. And their incomes have quadrupled over the last thirty years on these wealth redistributing policies so they are not only making a hell of a lot more, they are keeping a hell of a lot more of what they make. And now they want to balance the budget by cutting grandma's Medicare and SS? <<



And that's why libertarianism will never be taken seriously by mainstream America.

Messing with the social contract/safety net = political suicide.

[Rohirrim]

And that's why libertarianism will never be taken seriously by mainstream America.

Messing with the social contract/safety net = political suicide.

The mistake the Right makes is in labeling the safety net as something strictly ideological. That's bull****. Just because, for them, everything is ideological doesn't make it true for everybody else. I have a gay friend who I'm always telling, "Dude. Your "gaydar" is ****ed up. You think everybody is gay simply because you're gay."

The safety net was a practical response to one of the failures of capitalism. Of course, there are many who believe that capitalism is somehow magical and perfect, and if we just get out of the way, it will solve all our problems.

[Arkie]

When Warren Buffet says he only pays a 15% effective tax on his income, that's because his income mainly comes from capital gains and dividends, and he is completely ignoring the fact that the companies he owns must pay a corporate income tax of as much as 35% before he can receive those gains and dividends.

Fortunately, we do have access to facts (http://www.theatlantic.com/business/archive/2012/04/here-are-your-favorite-tax-graphs/256017/) that do not distort or color the picture. The chart below uses the numbers as crunched by the Congressional Budget Office. The effective total tax rate shown is the ratio of total federal taxes (income, social security, corporate, excise) divided by comprehensive household income. As Greg Mankiw notes, our tax system is highly progressive: "the rich face average tax rates more than twice those of the middle class, and about seven times those of the lowest quintile." And these effective tax rates include all the benefits of whatever deductions may have been available to individuals and companies along the way.

http://3.bp.blogspot.com/-hnukjSOaWWM/Txj0V41keQI/AAAAAAAAGak/-szGoIRgKm8/s400/Tax+rates+by+income.jpg

[Arkie]

mINORITY MY ASS....POLLS SHOW 2/3 of Americans want the rich to pay more ?

We all no what republicans think of polls though !

I don't think you know what you're replying to. That has nothing to do with what he posted.

[L.A. BRONCOS FAN]

When Warren Buffet says he only pays a 15% effective tax on his income, that's because his income mainly comes from capital gains and dividends....

...which is a good argument for taxing capital gains at the same rate as income.


....and he is completely ignoring the fact that the companies he owns must pay a corporate income tax of as much as 35% before he can receive those gains and dividends.



This shop-worn, disingenuous right-wing argument confuses the nominal corporate tax rate with the effective rate.

After exploiting all the loopholes available to them, most of those companies pay nothing.

[Missouribronc]

Since you have apparently never taken a government class yet seem perfectly content to spout tired talking points from your ass that you truly know nothing about, here's some knowledge for you.

http://www.economist.com/blogs/freeexchange/2012/02/parliamentary-procedure

There, don't say I never did anything for you, cupcake.

So, because the House disagrees, there's really no reason for the Senate to do their duty?

That is the dumbest thing I've ever heard.

If the two sides would come to the table and discuss it, we might get something done. BTW, I don't have a side.

[Odysseus]

I don't agree with Obama on everything, but he is dead on here:

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Agreed.

If we are all respecters of Maynard Keynes why is it China gets it and implements it but we do not?

[houghtam]

So, because the House disagrees, there's really no reason for the Senate to do their duty?

That is the dumbest thing I've ever heard.

If the two sides would come to the table and discuss it, we might get something done. BTW, I don't have a side.

That's not even close to what the article said, so thank you for proving my point about your ability to read and comprehend. You can pass a budget, but it won't take effect unless it either passes the House or passes the Senate with 60 votes. Considering any budget passed needs to include raising taxes, and the Republicans won't pass it, yeah, what's the point again?

An yes, you do have a side. You've made it painfully obvious with the uneducated drivel you've spewed here the last few months.

[Odysseus]

When Warren Buffet says he only pays a 15% effective tax on his income, that's because his income mainly comes from capital gains and dividends, and he is completely ignoring the fact that the companies he owns must pay a corporate income tax of as much as 35% before he can receive those gains and dividends.

Fortunately, we do have access to facts (http://www.theatlantic.com/business/archive/2012/04/here-are-your-favorite-tax-graphs/256017/) that do not distort or color the picture. The chart below uses the numbers as crunched by the Congressional Budget Office. The effective total tax rate shown is the ratio of total federal taxes (income, social security, corporate, excise) divided by comprehensive household income. As Greg Mankiw notes, our tax system is highly progressive: "the rich face average tax rates more than twice those of the middle class, and about seven times those of the lowest quintile." And these effective tax rates include all the benefits of whatever deductions may have been available to individuals and companies along the way.

http://3.bp.blogspot.com/-hnukjSOaWWM/Txj0V41keQI/AAAAAAAAGak/-szGoIRgKm8/s400/Tax+rates+by+income.jpg

This is inaccurate as you are only talking about one side of the equation. An accredited investor is outside the normal rules that govern FDIC. Once you achieve this you are, without a doubt, offered better investments, more sophisticated means to bypass federal rules, and despite Sarbannes Oxley are more than capable of getting insane returns on investments 80% of Americans have no idea even exist.

The bottomline is the party is over and the loopholes need to be closed. I think it is nothing short of childishness that the "wealthy" are being so immature about the larger issue of our own nation building and are so obsessed with profits. Do they not see the profits they can make right here in America? I do not ask them to stop pillaging but pillage so that it benefits us all.

[Fedaykin]

When Warren Buffet says he only pays a 15% effective tax on his income, that's because his income mainly comes from capital gains and dividends, and he is completely ignoring the fact that the companies he owns must pay a corporate income tax of as much as 35% before he can receive those gains and dividends.

EDIT: I was wrong about dividends.

As for capital gains, the sale of a stock has no tax implications for the company (except in the case where the company itself is buying back its own stock). Except in that special case, the company isn't even a party to the transaction.

When you trade a stock, you aren't selling it to the company and you are not receiving money from the company's coffers. You are receiving money from the person or entity buying that stock from you, based on a perceived value not a concrete value.

[SoCalBronco]

I agree with Krugman. Obama shouldn't seek a deal. Neither should the Republicans. This "so called fiscal cliff" is a step in the right direction.

Of course, I'd rather see us reduce spending AND reduce taxes. But this will be the first reduction in spending in who can guess how many decades. I'll take it, even if it comes with a tax hike.

I would prefer a "grand bargain", but having the threat of the cliff hanging over Washington's head isn't bad, either. One way or another, we need real progress on the debt. If the automatic cuts come and the Bush tax cuts expire, that's great....I'm fine with that. At least it will result in some real savings for once. Yes, it will lead to a recession, but that's a small price to pay for some long term gains.

Look, everyone's ox is going to get gored. The tax cuts for the wealthy will have to expire...even if they already pay a high share of the overall taxes. Medicare and SS will have to be adjusted. Now that Obama has won re-election, it means vouchers are probably out, but at the very least, eligibility ages are going to go up...albeit incrementally over time, but they will increase, and inflationary increases are going to be tightened....alot. Defense is going to take a haircut.

The fiscal cliff is the best thing that could have happened to this government. Because nothing gets done without a gun to the head. No kicking the can down the road. They need to come up with a package of at least 4 trillion in spending cuts/new revenues. That's the minimum the credit rating agencies see as a viable answer to the debt issues.

[L.A. BRONCOS FAN]

Election has still more consequences:

Now that Congress is trying to reach a deal on the debt, one side has leverage.

(Hint: it's not the Republicans. Second hint: Democrats know it.)

In debt talks, failure is an option

By Steve Benen (http://maddowblog.msnbc.com/_nv/more/section/archive?author=steve-benen)

Mon Nov 12, 2012 8:00 AM EST

http://m.static.newsvine.com/servista/imagesizer?file=steve-benenD7B4ACEF-C318-93CF-AF15-0D65CA418159.jpg&width=380
Associated Press

President Obama and congressional leaders have about seven weeks until the end of the calendar year, at which point automatic spending cuts, which both parties oppose, will kick in, and all Bush-era tax cuts will expire. Policymakers seem to believe a debt-reduction agreement is still possible to avoid these measures, but it's an uphill climb.

The dirty little secret, though, is plenty of Democrats seem to realize (http://thehill.com/blogs/blog-briefing-room/news/267253-sen-murray-dems-would-let-bush-era-rates-expire-before-taking-unfair-deal) that a deal isn't entirely necessary.

Sen. Patty Murray (D-Wash.) on Sunday said Democrats were prepared to allow the expiration of all George W. Bush-era tax rates if Republican lawmakers objected to raising taxes on the wealthiest.

"We can't accept an unfair deal that piles on the middle class and tell them they have to support it. We have to make sure that the wealthiest Americans pay their fair share," said Murray on ABC"s "This Week."

Murray said one option would be to let the lower rates expire across-the-board and then return to the table next year with new talks on a tax-cut package.

Murray, who's likely to become the new chair of the Senate Budget Committee, specifically said if Republicans fail to compromise, "[W]e will reach a point at the end of this year where all the tax cuts expire and we'll start over next year. And whatever we do will be a tax cut for whatever package we put together. That may be the way to get past this."

Quite right. It's easy to imagine the talks collapsing before New Year's Eve, and then President Obama proposing a new approach with the new Congress, focused on tax cuts for the middle class, and Clinton-era rates for income above $250,000. If it took a few weeks to pass, policymakers have the option of making it retroactive to Jan. 1.

It would get the support of the Democratic Senate, and if House Republicans balk, they'd be responsible for higher middle-class taxes.
Given this, Murray's comments yesterday offer a reminder of why the pressure is on the GOP, and why the White House need not accept a bad deal. One side has leverage, it's not the Republicans.

http://maddowblog.msnbc.com/_news/2012/11/12/15109551-in-debt-talks-failure-is-an-option

[SoCalBronco]

Letting the Bush tax cuts expire in their entirety is fine. That's like 2T in savings just right there. A recession is a small price to pay to ensure those savings. I'd hope it doesn't get to that....ideally they could reach a grand bargain to avoid that....but if push comes to shove...let it all expire.

[Blart]

http://krugman.blogs.nytimes.com/2012/11/14/the-austerity-bomb/


"It can’t be emphasized enough that everyone who shrieks about the dangers of the austerity bomb is in effect acknowledging that the Keynesians were right all along, that slashing spending and raising taxes on ordinary workers is destructive in a depressed economy, and that we should actually be doing the opposite."

[cutthemdown]

Letting the Bush tax cuts expire in their entirety is fine. That's like 2T in savings just right there. A recession is a small price to pay to ensure those savings. I'd hope it doesn't get to that....ideally they could reach a grand bargain to avoid that....but if push comes to shove...let it all expire.

Obama is window shopping for a recession of his very own. What do you want for Christmas!

[cutthemdown]

Investors are running for the hills! Stock market down another full 1%. Turmoil in the mideast. Turmoil in the EU. But Obama thinks its a good time to raise income tax, and raise capital gains on the big boys with the fat wallets. Of course they are selling off why wouldn't you if you made money and taxes are only going to go up.

Recession, here we come, this one is all on you liberals. Enjoy it.

[Requiem]

All sales on Black Friday just go to the government. Every cent.

[Odysseus]

And that's why libertarianism will never be taken seriously by mainstream America.

Messing with the social contract/safety net = political suicide.

You are assuming suicide is rational. It is not. America is thinking and responding foolishly. We have lost our central communities and compassion so we have become a hoard of vigilantes hungry to do each other in.

[L.A. BRONCOS FAN]

This idiot learned nothing from the election...

Boehner's refusal to support middle-class tax cuts is the root of the stalemate.

http://www.dailykos.com/story/2012/11/30/1166096/-Boehner-steps-into-the-abyss

http://s3.amazonaws.com/dk-production/images/2431/large/boehner_reuters_larrydowning.jpeg?1343767046

Boehner steps into the abyss

Speaker John Boehner declared an impasse Friday negotiations with the White House over avoiding the fiscal cliff.

“There’s a stalemate,” Boehner said at a news conference.

[L.A. BRONCOS FAN]

It's a dark day for Mr. Turtlehead...

https://s-static.ak.facebook.com/rsrc.php/v2/y4/r/-PAXP-deijE.gif (http://www.dailykos.com/story/2012/11/30/1166122/-Mitch-McConnell-makes-a-fiscal-cliff-offer-and-proves-he-can-t-count)Mitch McConnell makes a fiscal cliff offer and proves he can't count...
(http://www.dailykos.com/story/2012/11/30/1166122/-Mitch-McConnell-makes-a-fiscal-cliff-offer-and-proves-he-can-t-count)
http://s3.amazonaws.com/dk-production/images/576/large/mcconnell-evil.jpeg?1342121316

[TonyR]

The reality should be seeping in to viewers of the Sunday shows that the Republicans don’t have a game plan. They don’t have a single, specific proposal to avoid the fiscal cliff. And even if they had one, they don’t have a roadmap to get there. They keep expecting Obama to come back with something more to their liking, which they’d also reject. Many Republicans literally don’t understand what is happening. Sen. Charles Grassley tweeted over the weekend that he was frustrated that President Obama hadn’t embraced the recommendation of the Bowles-Simpson Commission. Apparently, he is one of the many people in Washington who doesn’t understand that Bowles-Simpson recommended letting the Bush tax rates on the wealthy expire, while also proposing to cap or eliminate deductions primarily enjoyed by the wealthy. http://www.thedailybeast.com/articles/2012/12/02/on-the-fiscal-cliff-republicans-got-nothin.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+thedailybeast%2Farticles+%28T he+Daily+Beast+-+Latest+Articles%29

[TonyR]

Really good read from Bruce Barlett.

http://economix.blogs.nytimes.com/2012/12/03/the-debt-limit-is-the-real-fiscal-cliff/

In my opinion, the fiscal cliff is akin to the so-called Y2K problem in late 1999, when many people worried that computers would freeze, elevators would stop running and planes would fall from the sky. Of course, nothing of the kind happened.

So if the fiscal cliff is a faux problem, why do we hear that industry and financial markets are deeply fearful of it? The answer is that there is a very real fiscal problem that will occur almost simultaneously – expiration of the debt limit. Much of what passes for fiscal-cliff concern is actually anxiety about whether Republicans in Congress will force a default on the nation’s debt in pursuit of their radical agenda.

[TonyR]

From the same article...

In short, the debt limit is a hostage that Republicans are willing to kill or maim in pursuit of their agenda. They have made this clear ever since the debt ceiling debate in 2011, in which the Treasury came very close to defaulting on the debt.

[Rohirrim]

Investors are running for the hills! Stock market down another full 1%. Turmoil in the mideast. Turmoil in the EU. But Obama thinks its a good time to raise income tax, and raise capital gains on the big boys with the fat wallets. Of course they are selling off why wouldn't you if you made money and taxes are only going to go up.

Recession, here we come, this one is all on you liberals. Enjoy it.

Not so fast, cupcake.

While 53 percent of those surveyed say the GOP would (and should) lose the fiscal cliff blame game, just 27 percent say President Obama would be deserving of more of the blame. Roughly one in 10 (12 percent) volunteer that both sides would be equally to blame.
Those numbers are largely unchanged from a Post-Pew survey conducted three weeks ago and suggest that for all of the back and forth in Washington on the fiscal cliff, there has been little movement in public perception. The numbers also explain why Republicans privately fret about the political dangers of going over the cliff, while Democrats are more sanguine about such a prospect.
http://www.washingtonpost.com/blogs/the-fix/wp/2012/12/04/republicans-losing-blame-game-on-fiscal-cliff/

The American people have figured out who are being the immature brats on this one.