Fiscal Cliff Prediction Thread

Discussion in 'Politics & Current Events' started by JohnR, Nov 9, 2012.

  1. VFish

    VFish Member+

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    This administration will never see us to growing our way out of any economic crisis. I'd suggest revisit the questions about your GrandMa... does she really need that oxygen tank?


  2. JohnR

    JohnR Member+

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    Yeah, I've talked about that on another thread.

    The logical conclusion is if we raised taxes to increase revenue, used the new revenue to create a national health care system, and shrunk the private health sector dramatically so that it covered nonessential items and high-priority care for the wealthy, that the country would save a huge amount of money.

    But that is Marxist Leninist Socialism that is Bound to Fail, so that's not politically feasible.
  3. VFish

    VFish Member+

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    It has worked everywhere else, why wouldn't it work here?
  4. MasterShake29

    MasterShake29 Member+

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    Poll Question:

    Which happens first?

    a) The fiscal cliff gets resolved
    b) The NHL lockout ends
    c) Humans go extinct


  5. dapip

    dapip Member+

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    At the end, the only real way to balance the budget is letting the tax cuts expire and adding some new taxes. Spending cuts are generally really small and tend to impact key sectors of the economy or vulnerable people. My budget added 1 trillion in revenue and cut 80 billion in spending, mostly in defense. Ain't that easy boys?
  6. dapip

    dapip Member+

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    Corrected.
  7. ceezmad

    ceezmad Member+

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    That is what you call a balanced approach.

    Then again for you I guess the tool would not let you kill the rich take their money to pay for a 1 trillion dollar increase on spending.
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  8. dapip

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    Who called it balanced? Fox News? The reason we have a deficit is because of tax cuts not because of spending (at least not for the last fiscal year and the next). Only MSM and morons pretend that there is any possible balance between 500 billion in tax cuts and 30 billion in Medicare. Besides is a limited tool. I would cut defense spending by 500 billion. Is that balanced enough for you?
  9. ceezmad

    ceezmad Member+

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  10. dapip

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  11. ceezmad

    ceezmad Member+

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    There was anothe tool, I think the New York times

    but for this one

    790B new taxes
    162B Cuts
    220B cuts on benefits

    Boom 70B surplus!
  12. ceezmad

    ceezmad Member+

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  13. ceezmad

    ceezmad Member+

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    Exactly, Buffet said 18% (high for me but ok).

    That means 6% cut on spending, 3.2% (let’s make it 4% to have a surplus) increase on revenues.


    Shit you probably want bigger government so even at 20% that is 4% cuts on spending and a 5.2% raise in revenue (more for a surplus).
  14. ceezmad

    ceezmad Member+

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  15. dapip

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    I think that in principle we agree... There is a 1.3 Trillion difference and we need more revenue and some spending cuts.

    Just removing some provisions that were in place 10-15 years ago raises 600B to 800B (Bush tax cuts and Capital Gains taxes) and that puts us halfway. Hopefully some policies get more people working and with better pay and that will increase the income tax by 100 billion, but that will be a bonus. All this might be counted as "New Taxes" but in reality is a return to old taxation levels.

    On the other end of the scale we need in theory 500B to 700B in expenditure reductions. You seem to think that some of it/most of it must be achieved by cutting Social Security and Health Expenses, while I think that most of if should come from Defense. I went as far as proposing 500B (which reviewing the figures I think is a little over the line) but I think we can cut $300B to 400B which will take us back to 2001 levels and put us in line with what other nations spend (2.5% of GDP).

    There are two premises why I think that cutting entitlement programs is not the correct way:
    1. These expenditures have a very high multiplier, meaning that cutting one billion probably hurts the economy more than it saves; the most recent example was just mentioned in Ezra Klein's article: Pushing seniors out of Medicare will cost the economy double what the government saves.

    2. I have sincere hope that the ACA will reduce what we spend in Healthcare during the next few years, probably 100 billion per year, hopefully a little more. If we manage to reign in healthcare expenditures and pump back into other sectors 6-8% of our GDP the ACA will be probably the greatest legislation of the 21st century (money wise at least).

    So here is how I would achieve a balanced budget:




    Bush tax cuts expire: 500-600B
    Capital Gains tax increase: 200B
    Carbon Tax: 100 B
    DoD Cuts: 300-400B
    Healthcare Savings: 100B

    Total: 1200B-1400B.
  16. JohnR

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    Not killing the rich. The only way to make the numbers work is to let the entire Bush cuts expire, across the spectrum.

    This is not a tax hike, any more than when your mother-in-law leaves after staying with you for a week that you evicted her. This is the expiration of a temporary series of cuts. An experiment that failed, landing us with big effing deficits and not delivering the job growth and booming economy as promised.

    W has had his way 11 years now, and it's not a good way. Enough is enough.
    GiuseppeSignori and fatbastard repped this.
  17. ceezmad

    ceezmad Member+

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    Cutting Defense spending to 450-500Billion and freezing it there for the next 5-10 years would be ok with me, cutting much more would be trouble IMO.

    That is about 200-250B in cuts, match that on S.S. and other healthcare/welfare spending, for 500B in cuts, then get more taxes for 700-800B and boom we are there.

    That is more revenue than cuts, Republicans would not vote for that, but I think is a fair deal.

    But "the people" would vote out of office anyone that voted for that.

    But as JohnR said, people claim they want a balance budget until they see the numbers needed to balance the budget, then they say never mind.
  18. JohnR

    JohnR Member+

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    Let's get this straight. Bush tax cuts were temporary. Letting them expire is like having your mother-in-law leave the house when her visit ends. That is not an eviction. And if she stays longer, that's not business as usual. That's an imposition on her part.

    Meaning, the expiration of the Bush tax cuts should be taken as a given. Negotations should begin from that point.

    Meaning, the Republicans are trying to get away with fleecing the Democrats on revenues. Particularly as most Americans want revenue growth to match spending cuts, they want military cuts, they want tax hikes on the top earners, and they don't want entitlement cuts.

    Ronald Reagan and George Bush never had more of a mandate than Obama has now. It's time for the Republicans to step out of the way, sign a deal, and let the American public and the President it elected get a chance to enact the policies that they desire.
  19. ceezmad

    ceezmad Member+

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    Well, I would prefer to cut spending to below 18% of GDP, but I would be ok with holding it to 20% of GDP.

    That is about 3 Trillion per year. Right now spending is at about 3.7 or 3.8 Trillion.

    So let’s cut the military 250Billion, we still need about 500B more in cuts.

    Revenue wise, sure lets get revenues above 20% of GDP and use the difference to pay back the debt.

    So I am usually in line with most people here in BS in terms of revenues, the difference I have with the Liberals here is that I want more cuts in spending than most here are willing to swallow (An I am ok with cutting military spending by a fair amount).
  20. JohnR

    JohnR Member+

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    Deal. I can live with those spending cuts.

    Both the spending cuts and revenue increases need to be phased in, though. Too much shock to happen at once. Although the housing market is rebounding; the U.S. economy is healthier than most people believe.
  21. MattR

    MattR Member

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    The WSJ tool allows you to cut everything, and you are still 400 billion in the hole.

    I'm thinking that cuts alone with no revenue increases, while an excellent bumper sticker, does not pass the sniff test.
  22. ToasterLeavins

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    Neat. Bush tax cuts caused our huge deficits, poor job growth and a faltering economy. It also caused my cat to commit suicide by overdosing on catnip. God damn george w bush. Talk about a simplistic "analysis"
  23. JohnR

    JohnR Member+

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    In addition to reality, there is also politics.

    1) The Democrats won the Presidency
    2) The Democrats won the Senate
    3) The Democrats lost the House, but did win the House popular vote
    4) The public wants substantial revenue increases
    5) The public especially wants higher tax rates on high incomes
    6) The public does not want changes to Social Security or Medicare
    7) The Republicans have moved the bar, and are attempting to make permanent was bill sold and passed as temporary bill
    8) Since the current bill is temporary, it is a huge Democratic concession not to permit taxes to rise in December

    The Republican position is patently ridiculous. Given the facts above, the President has already offered the Republicans a good package. To claim that package is far to the left -- when in fact it pretty much is in the middle of public opinion -- is obstructionist. To not move, week after week, from this obstructionist stance is obstructionist. The public knows, and by a 2-1 margin it will blame the Republicans if a deal does not occur.

    All of which normally would mean that the GOP would move substantially to the middle to get something done. But ... it's not clear that the GOP today is a full-fledged ruling party, or a protest party. Ruling parties don't want to be ridiculous, but protest parties don't mind.
  24. JohnR

    JohnR Member+

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    Where'd you get that from? Bush cuts caused a budget surplus, powerful job growth, and the strongest economy of our lifetime.
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  25. dapip

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    But a lot of people won't be able to live with those cuts. Trying to balance the budget in a good/fair year, I'm OK with it, since low unemployment rates and high revenues probably indicate that most people is doing OK and that government intervention in the form of Food Stamps, Unemployment Benefits, Healthcare Benefits is less needed. And for sure this not yet the time to have a 100% balanced budget based on those indicators.

    Secondly, as I mentioned in a previous post the multiplier in some of those expenditures is really high, meaning that the economy (i.e. the beneficiaries of these programs) will have to pay more for the same service and that less money will be available for other things, effectively hurting the economy.

    Thirdly, we are forgetting the big picture here as is that we are just coming out of a big depression, we also endured a decade of binge spending and on top of that we have a wave of 60 million retirees using more and more government services. Don’t forget that we are also about 30 million more people than we were back in 2000, meaning that there is going to be an inertial factor in the government to grow for at least another decade.

    All these factors taken into account, it is just logical that we need more revenue and that some spending need to be reigned in but most of the spending in social programs should be left untouched IMHO. But, and here I agree with ceezmad, what we should ask our elected officials to do is to actually build the economy so in a few years we have more and better paying jobs because this will lead definitely to more revenue and less social spending. More investment in infrastructure, development of alternative fuels and education, among other things; that is where we should put our money, not in the DoD’s hands.
    fatbastard repped this.

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