The Fiscal Cliff thread.

[Bang]

Yes, but only from the GOP. Democrats and the left never tell lies or manipulate.

Methinks the lady doth protest too much...

How'd you like ol' Rush's review of the new Batman movie today?

You know, where he makes some remarkably insightful notations about why the villain is named "Bane".

Meanwhile, on the left's propaganda radio today they said.. uh..

FTR, I agree with Larry's assessment. Of course they both fudge it.

But the right is pretty blatant about it. And as I've said, the reason I've grown such rancor is the lack of respect for the intelligence of their followers.

~Bang

[Larry]

Yahoo/AP: Analysis: As fiscal cliff nears, markets ponder a rougher ride

NEW YORK (Reuters) - When it comes to U.S. deficit reduction, many investors would rather Congress "kick the can down the road" again than let 2013 start with a blast of fiscal austerity not seen since the Vietnam War.

While hardly optimal, a temporary deal that prevents a plunge over the "fiscal cliff" would stave off recession and buy time for investors to tweak their portfolios.

That's not to say investing won't be challenging in the meantime, as markets wait to see what action the lame duck Congress takes after the November 6 elections to prevent the automatic trigger of $600 billion of tax hikes and spending cuts in January.

Mohamed El-Erian, co-chief investment officer at PIMCO, the world's biggest bond fund with $1.8 trillion in assets, expects Congress to strike "a mini-bargain" that shrinks GDP by up to 1.5 percent. "That is something the economy can absorb without going into recession," he said.

I hope "GDP" is a typo or some such. To me, anything that shrinks GDP can't be good news.

As Congress has punted on the hard decisions, the numbers have hardly changed: Federal red ink is expected to total more than $1 trillion in 2012 for the fourth straight year.

If the full $600 billion in taxes and spending cuts were to take effect, economists at Credit Suisse said the hit to the U.S. economy would be sharpest in the first quarter of 2013, with a 5 percent decline in annual gross domestic product, and that the U.S. unemployment rate could rise to 10 percent.

Falling off the cliff would also hurt Europe, posing risks for global growth.

If the entire menu of tax hikes and spending cuts were to take effect at once, it would amount to the most severe fiscal tightening since the 1969 tax increase passed to pay for the Vietnam War. This time, the CBO estimates the economy would shrink by 0.5 percent in 2013, with a crushing first-half contraction of 2.9 percent.

[Larry]

Yahoo: Huge tax increase looms at year-end 'fiscal cliff'

WASHINGTON (AP) — A typical middle-income family making $40,000 to $64,000 a year could see its taxes go up by $2,000 next year if lawmakers fail to renew a lengthy roster of tax cuts set to expire at the end of the year, according to a new report Monday

Taxpayers across the income spectrum would be hit with large tax hikes, the Tax Policy Center said in its study, with households in the top 1 percent income range seeing an average tax increase of more than $120,000, while a family making between $110,000 to $140,000 could see a tax hike in the $6,000 range.

All told, the government would reap more than $500 billion in new revenue if a full menu of tax cuts were allowed to expire. The expiring provisions include Bush-era cuts on wage and investment income and cuts for married couples and families with children, among others. Also expiring is a 2 percentage point temporary payroll tax cut championed by President Barack Obama.

Funny.

Seems we can spend 6 pages arguing about whether every single public opinion poll in the world is conspiring to promote Obama. Several pages arguing whether reporting on a chant of "Ryan! Ryan!", which apparently was said by some people at an event, put not by all, represents a clear and ominous case of deliberate liberal media fraud.

But the possibility of the government forcing the country into another Great Recession?

Seems I'm the only one posting in the thread.

More at the link, if anybody feels like reading.

[Jumbo]

The world is chock-full of absolute "wtf?", Larry. And a majority of people are on the "uh-oh" side of the emotional stability and cognitive competency continuum. One reason I identify is because I have been a Redskins fan for 50 years.

My experience in the tailgate in particular has been even those who appear pretty rational and stable, turn out not to be, often enough. It's just a matter of more time and specific circumstance before some reveal it (and not always in open posting).

I call it "job security." :pfft:

[Larry]

I call it "job security." :pfft:

You speaking of the job you get paid for? Or the one you don't?

[thebluefood]

I've been wondering: could this fiscal cliff be a blessing in disguise? Yes, it could mean a double dip recession (which is the last thing I need since I'm graduating from college in December), but we're all going to have to take our medicine sooner or later. Maybe this for the best for all of us in the long term. Maybe this is the wake up call we need and we'll finally learn that fiscal responsibility, both in spending and revenue, is the only way we can ensure America's survival as a nation.

Of course, I might be completely wrong and we could all be screwed.

[Larry]

While back, I ran a poll, asking people which tax cuts, if any, they thought should expire.

I was rather surprised. My vote for "all of them" was echoed by a majority.

But since then, I've changed my mind.

I think that having all of the things hit, at once, in an economy as fragile as this one, would be a disaster. And a disaster on top of the economy we've already got? Really bad.

I also don;t see anything good coming from it, politically, either.

I think that having all of those things happen at once, would drive the economy down so much that it would cause revenues to drop. Which I absolutely guarantee would lead to a vast increase in the cries of "look! raising taxes made revenues fall! Tax cuts make revenues go up!"

(People have been pushing that myth for decades, when the actual history says otherwise. And people have been buying it, anyway. I hate to think what would happen if they actually had something that kind-of supports their myth.)

I've revised my opinion, to say that maybe we can let some of the tax cuts expire, and not "kill the patient". But that all of them at once is too much.

I think that, if I were in Congress, my vote, now days, would be to extend the Bush tax cuts for the lower 98%. But let then expire for the top 2%. And let the payroll tax cut expire.

That would result in almost everybody, rich and poor, get hit with a tax hike of around 2%. To me, that's a small enough tax hike that it shouldn't be too hard on the economy. And it might be politically do-able.

[PCS]

Yahoo: Huge tax increase looms at year-end 'fiscal cliff'

Funny.

Seems we can spend 6 pages arguing about whether every single public opinion poll in the world is conspiring to promote Obama. Several pages arguing whether reporting on a chant of "Ryan! Ryan!", which apparently was said by some people at an event, put not by all, represents a clear and ominous case of deliberate liberal media fraud.

But the possibility of the government forcing the country into another Great Recession?

Seems I'm the only one posting in the thread.

More at the link, if anybody feels like reading.

It's been a topic of conversation here in the household today. We fall in to that yearly income category as well as many others. Last thing we need is that particular increase.

[Larry]

It's been a topic of conversation here in the household today. We fall in to that yearly income category as well as many others. Last thing we need is that particular increase.

Well, the way things are, if all the tax cuts expire, I suspect that there are very few households that don't see an increase.

(My parents might well be one of the exceptions. Neither has a job, so the payroll tax increase won't get them. And, while they do have rather good income, they also have tons of deductions, for medical bills. So they have almost zero taxable income.)

But if they all expire, then, well, for example, the payroll tax hike will be a 2% pay cut for every person with a job.

The income tax increases will likewise hit almost everybody. (But the rich, it will hit more.)

(But not the super rich. If all the tax cuts expire, it probably won't cost Mitt Romney a dime. Capital Gains, don't you know.)

(Although, while it wouldn't affect Mitt's taxes one bit, there is a teensy chance that the economic collapse might reduce the value of his portfolio a tad.)

[Fergasun]

Everything will depend on who gets elected and whether the GOP takes the Senate. If Obama is elected I think the GOP will have to relent and give up their protection of higher income tax rates, of course if they get control of the Senate, I don't know what happens. Neither party will have a strong majority on the Senate... so it's not like they can push through something. If Romney is elected the Democrats will have to relent and give up on raising taxes for the rich. I don't think the Democrats can get the House, but I see GOP losing a strong majority.

Incidentally, this dichotimy between our household finances (I don't want a tax increase either) and government finances (ZOMG! $16T debt how are we going to repay that!) is why we are $16T in debt. Since no one is willing to step up and pay for that debt, politically speaking, that's why its so high. If the GOP really care so much about the national debt they should tax the rich, let all the tax cuts expire, and go through with the sequestration deal.

My analogy would be this: think of the economy as an airplane, and government spending like the engine. RIght now our engines are red-lined (over $1T in debt) but our economy is stalled (airplane ain't gaining altitude, is barely flying). It's stupid to think that our economy won't crash once you throttle back the engines. At the same time, there is some fear our engines will break down, but we've had no problems pushing them further. Maybe you think the plane can glide down safely.... but I tend to think most folks think the plane will nose-dive when we remove those engines.

Unfortunately our politicians have been playing a game of chicken over this for far too long.

[ncr2h]

My analogy would be this: think of the economy as an airplane, and government spending like the engine.

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[Wrong Direction]

Here's a few statements that just about everyone should agree with:

The politicians have promised to give too much and take too little. The correction cannot happen with minor tweaks. It will be painful; for millions. Most will handle it well enough, but for some this correction will be tragic.

Sorry, but it's true.

[Larry]

Actually, about all it would take, to get back to the kind of deficits we had for most of Bush, is for the economy to get better.

(Yeah, I know. "Gee, is that all it would take?").

And, if we could get to that point, then reducing the deficit further wouldn't be the huge sacrifice, either.

Yeah, there are things that need to be done. Particularly involving the long term problems of SS and Medicare. But even those problems do not require grand, massive, suffering.

[thebluefood]

Actually, about all it would take, to get back to the kind of deficits we had for most of Bush, is for the economy to get better.

(Yeah, I know. "Gee, is that all it would take?").

And, if we could get to that point, then reducing the deficit further wouldn't be the huge sacrifice, either.

Yeah, there are things that need to be done. Particularly involving the long term problems of SS and Medicare. But even those problems do not require grand, massive, suffering.

Unfortunately, it looks like that's exactly what we're all going to get. It doesn't seem like Democrats and Republicans are at all willing to work with each other on anything. They're going to let a double dip recession happen out of stubbornness.

[twa]

Why isn't the economy getting better??

It is possible we are already in another recession bluefood

[Fergasun]

Bush Tax Refunds: $152B (2008)

TARP (bank bailout): $452B (2008-09)

Obama Economic Stimulus: $787B (2009-10)

Payrol Tax Holiday: $220B* (2011-12)

*based on my estimate

People are just like corporations (well they are apparently "people" too under some instances of the law). We like getting money from the government.

[Hubbs]

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Government spending makes the world go 'round, dot'cha know.

[Fergasun]

Government spending makes the world go 'round, dot'cha know.

Go ahead and pretend that government spending isn't helping, or is hurting the economy. There's a reason the politicians on both parties don't mind continuing the deficit spending, so long as they can convince you the other guy is the reason for it. I didn't include the doc fix and other tax extenders in my tally as well... and that's barely the tip of the ice berg.

How's all that austerity working for Europe?

[Hubbs]

How's all that austerity working for Europe?

I like how people continue to call what Europe's doing "austerity." But anyway, that's not really what I found interesting about that post. More the idea that government spending is the "engine" of the economy.

[SnyderShrugged]

Go ahead and pretend that government spending isn't helping, or is hurting the economy. There's a reason the politicians on both parties don't mind continuing the deficit spending, so long as they can convince you the other guy is the reason for it. I didn't include the doc fix and other tax extenders in my tally as well... and that's barely the tip of the ice berg.

How's all that austerity working for Europe?

This is sarcasm, correct?

---------- Post added October-5th-2012 at 07:47 AM ----------

[Larry]

Yahoo: Boehner Rejects Obama's Request to Extend Middle Class Tax Cut

Fresh off his reelection as House speaker Wednesday afternoon, John Boehner emphasized the need for bold leadership in order to repair the ailing economy, telling reporters that job creation remains the top priority for congressional Republicans.

"Our majority is a primary line of defense for the American people against a government that spends too much, borrows too much when left unchecked," said Boehner, R-Ohio. "With so many challenges that are ahead of us, the American people need to see us act courageously, think selflessly and lead boldly. And our majority is up to the task, and I expect the president is, as well."

A short time earlier, the House Republican Conference voted Boehner in to another two-year term as speaker.

Boehner rejected the president's call earlier Wednesday for House Republicans to quickly pass Senate legislation that would extend middle class tax cuts, and he alternatively called on the Senate to take up House-passed legislation to extend all of the current tax rates for one year.

"Instead of the House moving on the Senate bill, the Senate ought to move on the House bill," Boehner said.

[HOF44]

I think the only thing that can stop us from going over the cliff is the FUBAR that would be caused by the AMT suddenly hitting so many people. The IRS has decided to not reprogram in anticipation of a settlement of some kind. They said if non occurs some might not be able to FILE a return until late March.

[thebluefood]

Great, we're going to jump off the fiscal cliff and go into another recession just as I'm graduating from college. Awesome.

Anyone have some rope I can borrow?

[Larry]

I think the only thing that can stop us from going over the cliff is the FUBAR that would be caused by the AMT suddenly hitting so many people. The IRS has decided to not reprogram in anticipation of a settlement of some kind. They said if non occurs some might not be able to FILE a return until late March.

Uh, I don't think the fiscal cliff will affect the taxes people file this coming April a bit. I think it will only affect money that people earn in '13 (and pay taxes on in '14.)

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Great, we're going to jump off the fiscal cliff and go into another recession just as I'm graduating from college. Awesome.

Anyone have some rope I can borrow?

Got any gold? Or ammo?

[SnyderShrugged]

LOL, and just think all this is over how much to reduce the increases in spending rather than any real reductions.