Fiscal Cliff Prediction Thread

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

  1. JohnR

    JohnR Member+

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    I'd like to see this country adopt more of the German model, whereby the government and corporations work together on vocational programs for the majority of kids that won't be 4-year college grads. That's investment in the best sense. Doubt that's happening, though.


  2. dapip

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    This video could have gone in the "War on Xmass", but I think it makes more sense here:

  3. ceezmad

    ceezmad Member+

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    Everyday I cheer more and more for the Fiscal cliff to happen.

    [​IMG]
  4. ceezmad

    ceezmad Member+

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  5. ceezmad

    ceezmad Member+

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    That only cuts the deficit in half and people are going nuts over it.

    Imagine if this happens and then we have to cut more stuff and raise more revenues, will Democrats be willing to cut more than revenues next time I wonder, or will they still demand 2X the revenues over spending cuts.

    Here is another breakdown; here they claim 600+ Billion.

    http://www.stanlib.com/EconomicFocu...6billioninfiscaltighteningattheendof2012.aspx

    Bush tax cuts, middle income earners $182
    Alternative Minimum Tax $132
    Payroll tax cut $109
    Sequestration $86
    Bush tax cuts, high income earners $56
    Unemployment insurance $34
    Affordable Care Act $27
    Total $626
  6. Funkfoot

    Funkfoot Member+

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    The AMT is very unpopular, so I would be surprised if they didn't do something about that.
  7. dapip

    dapip Member+

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    How do they say that...?

    You can't see the forest because of the trees...

    The last time the budget was balanced was in 2000. The economy was booming. Unemployment was at 3-4%. The top tax rates were at 40% and revenues as percentage of the GDP were in the mid 30 percents. Furthermore, income distribution was not as perverse as is today.

    The situation at hand today is very different. Not only was the economy in the sh!tter 2 years ago, but the income of 90% of the people has been stagnant or declined while tax rates for high earners are perversely low. Throw in baby boomers retiring and using more health services and you have your current ballooning deficit.

    Now the question is not only what to do for 2013, which can be balanced with both tax increases and expenditure cuts, but also how much do you really want government to provide. Bear in mind that 60 million plus of your country men and women have retired or in recent years will retire and that they paid into a system only to find that the promises will not be kept. For us, the younger people that still have 20, 30 years or more until that point is also clear that the volatility of a 401k is not exactly comforting. Also remember that a lot of the services that you want to cut will impact state and local budgets that also bear a burden with reduced consumption and lower property values.

    So, yeah by all means, we need at some point a small surplus in order to start taming the debt monster, but do not be over simplistic pretending that tax increases for billionaires that paid 15% or less for 10 years are equivalent to cuts to programs that are not only essential for seniors and poor people to survive, but that contribute directly and demonstrably to the economy, unlike the magical beans of supply side economics.
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  8. ceezmad

    ceezmad Member+

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    You should link to where you got that from.

    And I do agree with the writer, this is a question on how much do you want the government to provide.

    Personally I prefer to keep the government below 18-20% of GDP. Yet voters keep voting to have a bigger government (both with Military and non Military spending) and then throwing a fit when the Bill is due.

    If the plurality people want the Government to keep spending 24% and above of GDP that is fine, then revenue needs to go up to 24% and above of GDP.

    That is the question what type of government the plurality of the people want a 18% government or a 24% government.

    Senate and White house say 24% (as long as the Rich get the Bill), the house well they claim 18% government but act like a 24% government when it comes to the military.
  9. dapip

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    Link
  10. dapip

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    Very much like the GOP if you ask. They were happy working for less (cutting taxes) and partying (wagging wars) while putting everything on the credit card (national debt). And when you ask how do we pay the credit card bill, they propose to cut groceries (SS) and health insurance (medicare), instead of looking for more income or cutting discretional spending.


    Here is where I think that you are looking too much at the trees: Focusing too much on percentage of the GDP.

    If the GDP is shrinking but the population is still growing, that means that even the same percentage of the GDP will mean less money to be divided in services for more people, resulting effectively in service cuts. Now, if the economy is growing at a higher pace than the population plus inflation, the same percentage of the GDP means that you are squandering, since it will be very likely that less services will be needed and also that more money is available.

    At the end I think that our legislators should focus more on deciding which programs are desirable and benefit the society (retirement, healthcare, defense), which ones contribute to the economy (infrastructure, investment, regulation) and how much we need them.

    Personally I’m all for social investment and very distrusting of defense. I’m also all for regulation and government stimulus and wary of big oligopolies and lobbyist. The government is accountable and we can vote people out; corporations just change names and drop the buck when things are not going their way.
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  11. ceezmad

    ceezmad Member+

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    Exactly, the way it should be IMO. Spend the money you have. And yes maybe tying Spending/Revenue to a fixed % of GDP is not good, as it reduces flexibility, but definitely a range would be great (not that government would respect it).

    Well as they say, Tea Party hates goverment, OWS hates coorporations.
    Big Government in Bed with Big Coorporations is the real issue.
  12. dapip

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    Not exactly. The role of the government is to keep things running well when they're working and to fix them when they're not so well. Since the economy was in the sh!tters more government intervention was needed. In other words, Keyness is still right.



    Really? Who says that? I think that the TP is the greatest fiasco ever and that they have political relevance only shows how far tons of cash and an angry mob can go in politics. On the other hand OWS problem is that they want to change the system without a real revolution. Ones are puppets, the others are idealists. But I do not think that their beliefs systems are equal.

    Fortunately enough people saw that one party was worst than the other and despite all the money thrown at it, we kept some control. It is not going to be easy but I think I see a light at the end of the tunnel; I will be sure when they overturn Citizens United.
  13. ceezmad

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    IMO Keynes is only right until the point a country runs out of money, then it is default time.

    Now the USA is more like Japan we can borrow more than 200% of GDP and still have people lending us money at low rates, so yes a stimulus would probably work for us, at least on theory.

    Then again, a war between China and Japan with us selling weapons to both sides would be a giant stimulus to the economy. I mean it did get us out of the great depression.
  14. dapip

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    With the only problem being that Keynesianism does not apply to wars ant tax cuts, but to fiscal stimulus. The country is in 10-12 triillion in debt because Bush's tax cuts, Iraq and Afghanistan, Stimulus and other remedy policies only account for 3-6 trillion if that much.


    As long as the US is the biggest or among the biggest economies in the world, borrowing with a purpose shouldn't be a problem. Again, I know that we need to tame the monster but right now the debt is not the problem, getting the economy completely out of the sh!tter and balancing the budget for the short term, mostly by going back to the tax rates of the Clinton era.

    Highly paid manufactured jobs are needed to get us out of the sh!tter. Infrastructure, alternative fuel sources, high tech manufacturing, you name it. Arms are not so crazy about them but I guess that they count as one of those sectors with highly paid jobs, so you have a point.
  15. dapip

    dapip Member+

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    Have I told you Paul Krugman is spot on on the subject?

    http://www.nytimes.com/2012/12/17/opinion/krugman-that-terrible-trillion.html?src=recg

  16. JohnR

    JohnR Member+

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    Yes, he's the best source.

    Reason being threefold. One, he's just about the smartest person writing about the subject. Two, he always brings numbers and charts. Three, while he's attacked as being a demagogue who has his mind made up before addressing the subject, that's not so. Take his latest blog post, on the rumored fiscal cliff deal. Krugman reverses his previous position of ripping Republicans as not being serious and ripping Obama for even considering such a proposal. Now, he writes, the terms are attractive enough to the left where it will be an "agonizing" process for him to decide if the President would be correct in inking the deal.

    Presented with different evidence on a familiar subject, he arrives at a different conclusion. Ever seen that from a Chicago school economist? Damn tooting you haven't.
  17. dapip

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    I think that he is the best economist writting in any major news source, because he is the rare economist that does not write to toot his own horn... and paradoxically by not doing so, he does...
  18. JohnR

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    Looking increasingly likely that Obama will sign a Social Security cutting, military saving, payroll tax increasing, high tax rate compromising bill that pretty much even Grover Norquist will be happy with. Capital gains and dividend tax rates will be lower than under Ronald Reagan.

    Two thirds of voters don't want the Social Security cuts, they do want military cuts, and they do want tax hikes to extend down to $250k in income. Haven't seen the polls but they probably don't want the payroll tax increasing, either.

    So the President is offering a deal with several items that not only his own party, but independents and even moderate Republicans don't want.

    In the words of one conservative writer -

    Yup.
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  19. ceezmad

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    Well when you ask people you want to raise taxes on everyone but you, they will say yes.


    If you ask them you want to cut spending on things that do not affect you, they will say yes.

    That is why I always found the raise taxes on the rich pol pretty stupid.

    Is like poling "should Muslims be racially profiled at airports", I am sure the polls would be different between Muslims and non-Muslims.
  20. JohnR

    JohnR Member+

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    It's not quite that straightforward. Republicans have won a lot of elections promising never to raise taxes on anybody.

    Cutting spending is hard because the people who are affected shriek to eliminate the cuts, and those who are not affected are not as motivated to make the cuts occur.

    So what happens in practice is that Democrats are tax-and-spend, and Republicans are not-tax-and-spend.
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  21. Cascarino's Pizzeria

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    House GOP calls off Plan B vote...Boehner can't rangle the Republican cats
  22. Footer Phooter

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    How is anything going to get passed if he can't even manage his own party?
  23. cleansheetbsc

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    Is the Louis Gohmert wing of the party insignificant yet?
  24. Cascarino's Pizzeria

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    He needs to promise raising pocket change in taxes, and get $1 trillion in Medicare cuts from Democrats. Anything else is unacceptable to his base.
  25. purojogo

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    this is not a mere failure of leadership...it is failure of a party to even show it can act in any particular direction whatsoever....The gall to actually call it quits and go home in the face of what happens at the end of the year....The GOP might as well go full CEO and give themselves a bonus while they are at it..... Succeed or fail, it does not seem to matter to them anymore....
    bigredfutbol repped this.

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