The Fiscal Cliff is just accidental austerity

[ScottXray]

Originally Posted by 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.

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]

[cutthemdown]

Originally Posted by L.A. BRONCOS FAN

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]

Originally Posted by ScottXray

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]

Originally Posted by Rohirrim

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]

Originally Posted by Taco John

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?

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]

Originally Posted by Rohirrim

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?

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]

Originally Posted by Rohirrim

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]

Originally Posted by Missouribronc

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/freee...tary-procedure

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

[Taco John]

Originally Posted by Rohirrim

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?

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]

Originally Posted by 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.

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

[Taco John]

Originally Posted by Blart

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.

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]

Originally Posted by Taco John

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]

Originally Posted by Missouribronc

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/20...tary-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]

Originally Posted by Taco John

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.

Originally Posted by Taco John

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."

Originally Posted by Taco John

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]

Originally Posted by Rohirrim

>>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]

Originally Posted by L.A. BRONCOS FAN

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 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.

[Arkie]

Originally Posted by Jetmeck

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]

Originally Posted by 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....

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

Originally Posted by Arkie

....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]

Originally Posted by houghtam

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/freee...tary-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]

Originally Posted by Rohirrim

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

Agreed.

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

[houghtam]

Originally Posted by Missouribronc

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.