Fiscal Cliff talks Round 3

[EKublai]

Obama has made his proposal.

The plan includes "$1.6 trillion in tax increases over 10 years, $50 billion in immediate stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits." and in exchange "embraced the goal of finding $400 billion in savings from Medicare and other social programs to be worked out next year, with no guarantees."

So for anyone who's been following the fiscal cliffs talks lately, I think this was a really stupid decision by the White House. There was the beginnings of some real good will there, with some Republicans abandoning Grover Norquists Anti-Tax pledge.

But seriously, Obama has been trumpeting a "balanced" approach to reducing the deficit without guaranteeing any spending cuts at all. WTF!? I voted for this guy (twice) because I saw the derailing of the Tea Party before my eyes this summer. Knowing the repubs were going to be more docile, this would be the perfect opportunity for compromise, and having our government not slack.

Our problem, in my eyes, is both not enough tax revenue AND too much spending.

WE HAVE TO MEET SOMEWHERE IN THE MIDDLE!

[Th-e]

At 11/29/12 09:13 PM, EKublai wrote:

Our problem, in my eyes, is both not enough tax revenue AND too much spending.

WE HAVE TO MEET SOMEWHERE IN THE MIDDLE!

If we could meet somewhere in the middle, we wouldn't be having this fiscal cliff stuff in the first place!

And even if a deal DOES get put in place, we are knocking off only a miniscule portion of our deficits.

Prior to the Great Recession, we NEVER, EVER, EVER had deficits above $500 BILLION. That's billion with a "B" for those who forgot that such a thing existed. Now, we have annual deficits in excess of a TRILLION dollars!

As I see it, every deficit dollar above $500 billion is a bailout of the Federal Government. As I see it, we have spent $3.554 Trillion dollars bailing out the federal government, and another massive bailout will come for 2013 and many years afterwards.

Bush may have been responsible for the first and maybe second trillion+ dollar deficits, but these continued mega-deficits belong to Obama (how the **** did he convince people to vote for him again???).

We need real solutions, not just fiscal cliff solutions.

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And even then, I predict one of these two things will happen with regards to the fiscal cliff.

1. We go over the cliff, face its cuts full force, and the economy goes back into recession. The majority of people will blame Republicans, and the GOP will become even weaker than it is now.

2. Republicans will cave in to the Dems at the last minute. We get what the Left wants. If things get better, the Democrats get praised for their actions and become stronger. If things get worse, the majority of people will blame Republicans for preventing the Democrats from doing more to fix our economy, even if the Democrats were responsible for making things worse.

Either way, the Democrats will win, so they can manipulate the fiscal cliff results to their wills.

OK, maybe I am overreacting and exaggerating with this...a lot...but it feels that way to me.

[Feoric]

There's a lot of hysteria for no reason. Rhe relative dollar amount of a deficit is meaningless, it is about the deficit as a percentage of GDP and GDP growth. There's plenty of studies done that show that modest deficits are actually a good thing. Deficits are in some sense the way that the economy grows, by introducing more currency into the market in a way that's always stimulative: the government hires to build stuff. As long as you running modest deficits over the long term - say 3% - inflation means you're treading water.

The absolute worst time to try to reduce deficits is in a recession/recovery, because that is when you need federal spending the most. A 1.08 trillion deficit (which is where it stands as of today) is sustainable with some revenue generation. What many people don't realize (in particular the ones who are constantly freaking out about the deficit) is a) the deficit is already going down (it was 1.4 trillion before) and b) the economy is actually growing a respectable pace (2.7% in Q3).

Krugman has a good article if you want to read more.

[Ravariel]

At 11/30/12 12:18 PM, JMHX wrote: Either way, it's not difficult to play this issue to an already receptive public who will see the failure to pass a debt deal as Republican unwillingness to acknowledge their defeat in November. I'm making no comment on the wisdom of the policy proposals put forward by the White House, merely on their efficacy as political cudgels to alternately demoralize Republican regions while tossing broad, across-the-board treats to voters in key electoral regions.

Not only that, but this proposal fixes what has been Obama's main error in negotiating with the Reps. He has been opening with proposals that mirror what he (and Reps, for that matter... see: Simpson-Bowles) saw as the eventual end-point of negotiations, in order to sidestep around a lot of the bullshit that normally surrounds controversial content, and show the right that he is serious about compromising. However, the right saw this as a weakness, and mirrored Obama's overplay with more extreme positions, in order to force the negotiation further to the right.

Now that Obama has put up a plan that is very strongly left-of-center, the corresponding Republican offer is bound to be closer to the center than they have been used to doing of late. The eventual negotiation should land them in a place where neither side is happy, but both can trumpet success and victories.

Or, the Reps will continue to bury their heads up their ass, send us off the cliff, and then Dems will chortle, propose sweeping tax cuts (the no Republican would dare vote against) tied to new spending (that they'll be powerless to stop as the adding of public-sector and infrastructure jobs (new-new deal, ahoy!) will be necessary to avoid more recession) that will let them dance towards re-taking the house in 2014.

Half of my family will lose unemployment benefits if we cliff it, but I'm kind of fascinated to see what might happen in Washington if we do.

[leanlifter1]

Welcome to inflation !

[Iron-Hampster]

one side will cave. This is really a decision of forcing Americans to pay off the credit card that the government is maxing out against their will, and putting even more money on the credit card first. lose lose.

[Feoric]

At 11/30/12 09:51 PM, Iron-Hampster wrote: one side will cave. This is really a decision of forcing Americans to pay off the credit card that the government is maxing out against their will, and putting even more money on the credit card first. lose lose.

We don't have a credit card. We can print our own money.

[SmilezRoyale]

If the republicans were true ideologues who cared more about upholding their nominal positions instead of scoring short term political points, they would realize the incredible advantage in basically telling the president and his party "We agree to let you do whatever you want with the budget, we will take no credit for it's successes and bear no blame for it's failures."

They will take the blame for whatever happens to the extent that they try to obstruct the course of the federal government, in spite of likely being able to *achieve* nothing in the long term. If, on the other hand, an unimpeded president and congress plunge the economy into the abyss at time-lapse speed, the issue of who is to blame will be settled.

A shame really.

[leanlifter1]

At 11/30/12 10:06 PM, Feoric wrote:

At 11/30/12 09:51 PM, Iron-Hampster wrote: one side will cave. This is really a decision of forcing Americans to pay off the credit card that the government is maxing out against their will, and putting even more money on the credit card first. lose lose.

We don't have a credit card. We can print our own money.

You can't print money but your profligate's and slave masters do and here in lye the problem.

[morefngdbs]

At 11/30/12 10:06 PM, Feoric wrote:

At 11/30/12 09:51 PM, Iron-Hampster wrote: one side will cave. This is really a decision of forcing Americans to pay off the credit card that the government is maxing out against their will, and putting even more money on the credit card first. lose lose.

We don't have a credit card. We can print our own money.

;;;;
AH , yes ...,but a HUGE PART OF THE PROBLEM

IS that you do not print yer own money !

You allow a privately owned & controled for profit company to print your money, loan it to you at interest !

THat's the scam dud....that's the why your own government cannot actually be in control, someone outside your government controls your money supply !

[leanlifter1]

At 12/1/12 09:01 AM, morefngdbs wrote:

IS that you do not print yer own money ! You allow a privately owned & controled for profit company to print your money, loan it to you at interest THat's the scam dud....that's the why your own government cannot actually be in control, someone outside your government controls your money supply !

Not to mention "Fractional Reserve Lending"

[Ravariel]

Hey, why don't you all go make a thread in which you can complain about the Fed, fiat currency, and all the eeeeeeeevils of government, and let the rest of us discuss the actual matter posted originally in the OP. This is getting ridiculous.

[leanlifter1]

At 12/1/12 11:47 AM, Ravariel wrote: Hey, why don't you all go make a thread in which you can complain about the Fed, fiat currency, and all the eeeeeeeevils of government, and let the rest of us discuss the actual matter posted originally in the OP. This is getting ridiculous.

Cause the OP/thread is akin to debating on what color to paint a sinking ship !

[Feoric]

At 12/1/12 11:53 AM, leanlifter1 wrote: Cause the OP/thread is akin to debating on what color to paint a sinking ship !

Are you a bot? I swear you have 900 posts and all of them say the same thing, all the time.

[leanlifter1]

At 12/1/12 12:16 PM, Feoric wrote:

At 12/1/12 11:53 AM, leanlifter1 wrote: Cause the OP/thread is akin to debating on what color to paint a sinking ship !

I swear you have 900 posts and all of them say the same thing, all the time.

The problems in society have not changed for years let alone the short time I have been hear.

[leanlifter1]

At 12/1/12 01:26 PM, Korriken wrote:

1. can we all agree to simply never reply to leanlifter? ever? He might go away if we simply NEVER respond to him.

Cause that will make the Fed dissolve and bring back the power and freedoms to the people.

[Feoric]

I don't think Korriken understands the concept of marginal tax rates or knows about the income inequality in the United States.

Why won't anyone think of the struggling millionaires?!

[Iron-Hampster]

At 11/30/12 10:06 PM, Feoric wrote:

We don't have a credit card. We can print our own money.

I hope that's just some form of sarcasm.

[Feoric]

At 12/1/12 02:26 PM, Iron-Hampster wrote: I hope that's just some form of sarcasm.

No. It's not. It's literally how the federal government handles finances.

[leanlifter1]

At 12/1/12 02:27 PM, Feoric wrote:

At 12/1/12 02:26 PM, Iron-Hampster wrote: I hope that's just some form of sarcasm.

No. It's not. It's literally how the federal government handles finances.

You mean the IOUs the government writes up to "The Fed" with the onus essentially being placed onto the tax paying, voting, working public ?

[Feoric]

At 12/1/12 02:36 PM, JMHX wrote: We call those Treasury Bonds, and they're amazing.

@Iron-Hampster: I've gone more indepth about this here and the post directly below it.

[leanlifter1]

At 12/1/12 02:36 PM, JMHX wrote:

At 12/1/12 02:34 PM, leanlifter1 wrote: You mean the IOUs the government writes up to "The Fed" with the onus essentially being placed onto the tax paying, voting, working public ?

We call those Treasury Bonds, and they're amazing.

They are as good as an IOU written on a napkin only on fancy paper. Also they are as good as economic enslavement of the masses but hey give a guy an iphone5, Car, roof over head, Cheeseburger and steak once and a while, a vacation, etc... and the illusion of freedom that all that entails and he will turn into a fairly highly productive slave for 30 to 40+ years.

[leanlifter1]

At 12/1/12 02:41 PM, Feoric wrote:

At 12/1/12 02:36 PM, JMHX wrote: We call those Treasury Bonds, and they're amazing.

@Iron-Hampster: I've gone more indepth about this here and the post directly below it.

We will see how on point you are profligate !

[Feoric]

At 12/1/12 04:09 PM, Korriken wrote: I understand well enough that the rich are leaving for nations with much lower tax rates. Can't tax people who aren't here.

Our marginal tax rates are already low. They're the third lowest rates they have ever been post WWII. Certainly you're not going to defend FYGM assholes that "flee" the United States because they somehow can't afford Clinton-era tax rates? Please.

the way I see it. if the tax money was put to good use, I wouldn't mind paying a high tax rate.

Are you making $250,000 a year or more? If not, you won't see a tax increase.

Problem is, when you got tax money being thrown around like monopoly money on things that are of no use to anyone,

Ha, Tom Coburn. I Remember one of his anti-pork amendments:

"None of the amounts appropriated or otherwise made available under this act may be used for any casino or other gambling establishment, aquarium, zoo, golf course, swimming pool, stadium, community park, museum, theater, arts center, or highway beautification project, including renovation, remodeling, construction, salaries, furniture, zero-gravity chairs, big-screen televisions, beautification, rotating pastel lights, and dry heat saunas."

Sure, pork is a problem, but unfortunately it's a bipartisan one. Democrats and Republicans both jam bullshit into bills to please their respective districts. But really, there's bigger fish to fry, like the Military and Defense budgets.

As others have pointed out, the only way to rein i nthe deficit is a combination of tax hikes AND cutting spending where it's not needed. problem is, no one wants to cut THEIR spending. they have no problem cutting the spending that doesn't affect THEM.

100% correct.

(Left doesn't want welfare reform, right doesn't want reduced military spending) so what's gonna happen in the next few weeks? we'll find out.

Because the budget can be reasonable without any cuts to Social Security or welfare programs.

perhaps the fiscal cliff might be just the thing we need.

Let's go fiscal cliff diving!

Who was responsible for it the last time that happened?

[SmilezRoyale]

At 12/1/12 02:41 PM, Feoric wrote:

At 12/1/12 02:36 PM, JMHX wrote: We call those Treasury Bonds, and they're amazing.

@Iron-Hampster: I've gone more indepth about this here and the post directly below it.

The trust fund ammounts to treasury bills that collect interest

The social security "Trust fund" amounts to nothing more than treasuries, and if the government isn't actually running profitable businesses, this does *not* amount to the government actually investing in anything. The interest on those treasuries can only be paid for with taxes. There's nothing marvelous about this, it's just a rube-Goldberg mechanism.

You're probably not going to like this source, but at least the tone is not incendiary. I don't care about the Bias of a source, sources consist of two things, empirical claims and logical claims. Logical claims can be verified by the reader without intellectually authoritarian appeals. You're free to dispute the empirical claims, I would be half glad and half upset it you managed to do it, but that really ought to be done by appealing to other sources.

http://www.fee.org/the_freeman/detail/the-myth-of-the-social -security-trust-fund/

Forgive me if I misinterpreted your link, but this *is* the impression I got from reading it.

[Feoric]

At 12/2/12 01:08 AM, SmilezRoyale wrote: Forgive me if I misinterpreted your link, but this *is* the impression I got from reading it.

We're on the same page, but I think the confusing stems from me using the word "invest," so allow me to clarify.

Social Security has amassed a rather large trust fund in the form of interest-bearing treasury bills. This is a rather safe investment, as any holder of treasury bills knows, and so they can provide the Social Security department with funds for a significantly longer amount of time - nearly 75 years.

Well, that's all and great, but it isn't a permanent solution. Social Security can only stay solvent if the trust fund earns enough interest to meet increasing demand. Spending more money on Social Security isn't a good option, however, as that would either raise the payroll tax or remove the autonomy of the system - Social Security, after all, is supposed to be separate from the general budget. In other words, we need to raise the future value of our Social Security investment in treasury bonds without raising the principle.

[Feoric]

At 12/2/12 07:37 AM, Korriken wrote: defend them? hell no! I'm just saying they're doing it. It's not so much 'can't afford it' as it is 'unwilling to pay it'

The article you linked mentioned Eduardo Saverin, who was born in Brazil into a wealthy family, lived in America and then moved to Singapore. If capital flight is a problem like you are saying, I want to know why wealthy people tend to live in places like New York (which has an 8.97% top rate) and California (which has an 10.5% top rate), instead of South Dakota (which has 0 income taxes).

Fun fact: people who renounce citizenship are still taxed by the US for 10 years afterwards. This is only if you are deemed to be expatriating for primarily tax avoidance reasons. The IRS presumes anyone with a net worth of more than $2 million (or average annual tax liability of somewhere within the $40k figure) over the past three years is expatriating for tax evasion. You can try to convince them that this isn't the reason why you're expatriating, but good luck trying to do that. Voluntarily surrendering a green card is viewed in the same light as expatriating, so you don't necessarily have to be a citizen for this to apply to you.

irrelevant, but ok. Like I said, I wouldn't mind a tax hike on what I make if it was being put to good use and not being wasted.

The biggest waste of tax dollars are the ones being used to fund and insanely bloated military industrial complex we don't need, and funding an insanely fucked up healthcare system. We could cut down the military to a size that dwarfs the next 5 or 10 countries as opposed to 30. We could stop pissing away money in the desert through wars. We could reformulate the tax system so that brackets actually curve out alongside income instead of basically discouraging wage income.

we spend more on welfare than the military, though cuts to both would be a good step in the right direction.

Remember that the entire deficit nor the debt needs to be eliminated, it needs to be brought down. If you eliminated the bush era tax cuts and added deeper defense cuts that are already technically planned it would stabilize our deficit situation, coupled with healthy moderate economic growth.

As far as social security/medicare/medicaid, it doesn't need to be cut at all, but it does need reform. Eliminate the payroll cap and reform part D and that's about it. Senator Begich had a plan to do that for just Social Security and thats supposedly to add 75 years to Social Security complete with higher COLA adjustments.

can be, perhaps, but how much welfare do we REALLY need? I find almost a trillion a year to be excessive While there are some out there who really need help, I see many many more people who are unwilling to get a better job because they don't want to lose their free money. To me, personally, that's morally disgusting, but to each their own.

There are literally zero people on welfare that are living comfortably. How much money do you think welfare recipients get?

Perhaps the government should see about investing more in the workforce via training. Perhaps even forced training for welfare recipients. It would create more jobs as vocational schools get built and staffed, it would push bottom feeders towards bettering themselves by making them train for better jobs which pay better, with a promise to cut off their money if they refuse to undergo training. setting up a method to bus people to and from the school would get rid of the "I can't get to the school" excuse. Those who are truly mentally handicapped still have their SSI.

Why invest in job training if the jobs aren't there? It would be better if money was spent on infrastructure projects that would employ all those unemployed construction workers and improve conditions for US citizens and businesses.

I remember a couple of government shut downs, but no 'fiscal cliffs' to speak of.

Well, okay, that's fair. I was referring to obstructionism, but you bring up a point I'll quickly address.

If anyone wondering what the hell the fiscal cliff is, it's a catchphrase referring to the effects of key pieces of legislation which will occur by the end of the year. They are:

1) Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

2) Alternative Minimum Tax Patches

3) Implementation of the Medicare Sustainable Growth Rate Formula

4) The Budget Control Act of 2011

5) Taxes on families making more than $250,000 a year ($200,000 for individuals) imposed by the ACA.

Both government shutdowns were a bipartisan clusterfuck of crybabies demanding to have it their way. Naturally, given the way the media works, Republicans will almost always take the blame. Truth is irrelevant, it's all about perception, as those who give us the 'news' has learned over the years. They can make pink paper bags popular by singing its praises long and hard enough.

Oh stop with this media persecution complex.

[adrshepard]

At 12/2/12 01:28 PM, Feoric wrote: We could cut down the military to a size that dwarfs the next 5 or 10 countries as opposed to 30. We could stop pissing away money in the desert through wars.

A military that dwarves only the next 5 or 10 countries would not be able to meet our current demands and would seriously jeopardize counterterrorism and deterrence efforts. The next 5 or ten countries do not have the demands that we do, and you're going to have to come up with a pretty compelling reason of why we should abandon our global position of strength.

We could reformulate the tax system so that brackets actually curve out alongside income instead of basically discouraging wage income.

Conceivably it could discourage wage income but it takes so much initial funding to be able to live off of investments that its not an option for all but the very wealthy.

As far as social security/medicare/medicaid, it doesn't need to be cut at all, but it does need reform. Eliminate the payroll cap and reform part D and that's about it. Senator Begich had a plan to do that for just Social Security and thats supposedly to add 75 years to Social Security complete with higher COLA adjustments.

So his plan is basically wealth redistribution from people who have money to those who don't, especially since his plan maintains the existing social security payment penalties for people with high income. We need to make a decision on what social security actually should be: a program to keep seniors out of poverty (which is what it was originally designed as), or a self-funded pension program.

There are literally zero people on welfare that are living comfortably. How much money do you think welfare recipients get?

Comfort is a relative term. Depending on the state, welfare recipients get a hell of a lot more money than they need to survive and work. Free spending cards, which allow welfare recipients to spend money on cigarettes and booze, are one example. The 90's reforms put an end to most of the problems, but if you include welfare to mean Medicaid, Medicare and Social Security, there's much more waste and abuse.

Why invest in job training if the jobs aren't there? It would be better if money was spent on infrastructure projects that would employ all those unemployed construction workers and improve conditions for US citizens and businesses.

That'd be great, except there aren't that many infrastructure projects that have a viable need to be done (as opposed to make-work projects). State and local governments had to scramble to find projects for stimulus funding in 2009 and I have no doubt that even the projects that weren't obvious wastes probably wouldn't meet a investment/return test. After all, it wasn't like the states themselves had to repay the funds. Even the CBO has said that the overall program is most likely going to produce an overall negative effect on the economy when you include the debt service costs.

[adrshepard]

At 12/2/12 03:48 PM, JMHX wrote: Actually, the onus to prove this is on you, since an unsustainably large military budget is a national security risk. When the time comes to make large cuts to what becomes an unaffordable defense program, the main victims are defense contractors, weapons systems, foreign basing and military overseas supply chains. The point here isn't that "we hurt ourselves by cutting these,"

Here you go again with your labels like "unaffordable" and "overextended" as though these are indisputable truths that everyone agrees with. Something is only unaffordable in the sense that no other money can be allocated to it without sacrificing some other vital spending. What's vital is a question of priorities, not truth or fact.
Eliminating foreign bases and advanced weapons systems by definition hurt "us" by reducing our country's combat effectiveness and capability. Those should only be cut as a last resort, because it's absurd to believe the US will never have a need for strong conventional forces again, or that certain regions where we have bases will never be the stage of combat again. If you want to maximize efficiency through managing "brass creep" and reforming the contract award process, fine, but keep our operational capabilities intact.

"Welfare" isn't just one thing. Social security, unemployment insurance, WIC, credits to families with dependent children and veterans' disability benefits are all classified as 'welfare.' You're going to have to be more specific with what programs you're talking about,

Look up welfare electronic benefit transfer cards. Current law allows state welfare benefits to be spend on anything, even cigarettes and booze.
Unemployment insurance should be allowed to revert back to the normal six month duration.

It's been abused since the 1940s when the Birchers lumped everything together and re-labeled it as nothing but giving money to poor people to buy drugs.

I guess you give generously to panhandlers in the streets, then, because they would never spend it to get drunk or high.

Have you SEEN our national bridge infrastructure report? Shit be falling down, 'yo.

When has any public utility EVER been without problems? Besides, those reports are a joke. Everything is rated "D" but is simultaneously used all the time without any apparent problems. What's the difference between a "B" road and a "D" road if cars can still drive over it? What's the difference between an "A" bridge and a "C" bridge if they both support the same volume of traffic? Expansion of transportation networks to prevent excessive congestion, ok, but only if the freight delay and fuel consumption costs can be shown to exceed the cost of investment over a reasonable period of time. Improvements to infrastructure to reduce the cost of annual maintence, fine, but under the same restrictions. For any other reason, it's not worth it. For all the talk on the national level, I have yet to hear any compelling argument or declaration that spending trillions in infrastructure improvements would achieve definitive savings. Supporters always talk in generalities about the economic growth it would lead to, but that's only true when a new form of transportation is first being implemented, not when existing transportation systems are updated to accommodate volume growth. The potential for savings are there, but new, untapped economic potential? I doubt it.

And don't even get me started on the safety aspect. If the only consequence of not spending trillions is that a dozen people may die in a bridge collapse once every five or ten years, sorry, they ain't worth it.

[SmilezRoyale]

At 12/2/12 01:44 AM, Feoric wrote:

At 12/2/12 01:08 AM, SmilezRoyale wrote: Forgive me if I misinterpreted your link, but this *is* the impression I got from reading it.

We're on the same page, but I think the confusing stems from me using the word "invest," so allow me to clarify.

Social Security has amassed a rather large trust fund in the form of interest-bearing treasury bills. This is a rather safe investment, as any holder of treasury bills knows, and so they can provide the Social Security department with funds for a significantly longer amount of time - nearly 75 years.

The point of mine that you need to address is the issue that interest on treasury bills comes from the only source of revenue the federal government has; taxes. [Aside from selling assets held by the federal government] The USFG is not a private corporation that pays it's bond holders with a proportion of its profits. And that was the central point of the link I provided.