Getting Closer To A Fiscal Cliff Deal

[Jack Springer]

How is it nonsense? The House has passed a budget -- "dictator" Harry Reid refused to bring any up for a vote.

ObamaCliff is coming!!

 

[JayHawk]

Here ya go Jack... this is why your argument and many of the far lefty arguments around here are mute and ignorant.

this was sent via Email and certainly does simplify the argument.

“Fiscal Cliff” put in a much better perspective.

Lesson # 1:

* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000

Let's now remove 8 zeros and pretend it's a household budget:

* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts so far: $38.50

Got It ??.......OK now,
Lesson # 2:

Here's another way to look at the Debt Ceiling:

Let's say, You come home from work and find
there has been a sewer backup in your neighborhood....
and your home has sewage all the way up to your ceilings.

What do you think you should do ......

Raise the ceilings, or remove the shit?

So then you have to ask WHAT is it that has caused this vast imbalance? Is it medicare and Social Security that have their own funds and are not associated with the national debt or is it massive increases in spending for both Homeland security and the Military?

The other question you have to ask is what kind of shovel is necessary to remove the shit in the example above? Is that shovel cutting out benefits from medicare or Social Security that do not contribute to that debt or to cut the items that do contribute i.e. the military and homeland security? OR if you decide we must have this level of military and Social security then you have to raise taxes. First on the rich and then after the economy recovers on the vast majority of us but slowly not all at once.

 

[JayHawk]

So to follow on if we go off the fiscal cliff it is the best thing that could happen to this country. It is not a staggered tax increase nor is it quality cuts versus course across the board cuts. But you know what it puts us back on track immediately. That is probably the best we can hope for.

 

[Benvolio]

So to follow on if we go off the fiscal cliff it is the best thing that could happen to this country. It is not a staggered tax increase nor is it quality cuts versus course across the board cuts. But you know what it puts us back on track immediately. That is probably the best we can hope for.

I agree. It will broaden the tax base so that a majority will be paying income tax. That should be the primary consideration. We cannot have an economy or a democracy where a majority vote for benefits but only a minority pay income tax.

 

[JayHawk]

Right but of course republicans have been staunchly against the idea that government should increase spending to prevent massive depressions.

Then add into it the additional irrational reality that say no new taxes ever.... the republican party was under the impression they could bankrupt the country and then use that to pull the rug out from under social programs. Fortunately for us they were defeated soundly and now the military will be cut and taxes will be increased whereas entitlements are hardly challenged.

 

[chance1]

I missed the President's address - here's an article about it

sounds like more BS

Harry Reid and Mitch McConnell are now in charge - not sure who's worse

the ONLY thing that is clear is that our govt. is broken - and for the majority of u here who love to blame Repubs for everything bad and praise the Dems for anything good .......... well ud be wrong

Harry Reid has presided over a do nothing Senate and yesterday he gave a speech saying Boehner was a dictator and there would be no deal which prompted the markets to drop - nice move Harry

and his latest is that "we hope to have a deal but it won't be perfect"

we really should start over with a new senate and house - just like the Jets should start over with a new GM and coach

http://www.cnn.com/2012/12/28/politics/fiscal-cliff/index.html?hpt=hp_t1

 

[JayHawk]

Harry Reid has presided over a do nothing Senate and yesterday he gave a speech saying Boehner was a dictator and there would be no deal which prompted the markets to drop - nice move Harry

The Senate passed a budget cliff deal in July that protected 98% of America. If Boehner would allow it to be voted upon it would pass. He will not because then he would be out maneuvered.

 

[chance1]

The Senate passed a budget cliff deal in July that protected 98% of America. If Boehner would allow it to be voted upon it would pass. He will not because then he would be out maneuvered.

I don't get the 98% thing - not at all - it's a bumper sticker

51-48 and $250K is NOT the number it needs to be

it is not the definition of wealthy

 

[JayHawk]

Actually chance it is called demographics not bumper stickers.

Please provide any proof you might be able to derive from ... well hell I will take anywhere... that says those earning greater than 250 thousand dollars a year are greater than two percent of america...

Here I will start with a wiki links that uses Census bureau data and New York Times defined criteria of the classes... they actually define those above 250K as the top 1.5% from 2006 statistical data.

What is hard not to comprehend?

I understand you think it is unfair because a lot of people who make 250k live in the NYC area. That however makes it no less true that 98% of Americans earn less than that....

 

[chance1]

Actually chance it is called demographics not bumper stickers.

Please provide any proof you might be able to derive from ... well hell I will take anywhere... that says those earning greater than 250 thousand dollars a year are greater than two percent of america...

Here I will start with a wiki links that uses Census bureau data and New York Times defined criteria of the classes... they actually define those above 250K as the top 1.5% from 2006 statistical data.

What is hard not to comprehend?

I understand you think it is unfair because a lot of people who make 250k live in the NYC area. That however makes it no less true that 98% of Americans earn less than that....

i'm not debating the accuracy of the 98% figure - i'm sure the math is correct

and it's great for a politician to be able to say the 1% or the 2% ....... in this case in a very negative way ..... they're beating the system, etc.

Obama went to $400K in this first go round with Boehner - he'll have to do it again

and w/o some kind of blueprint to reign in spending, it doesn't really matter anyway

i don't think taxes are THE ANSWER - economic growth is coupled with reasonable but necessary spending cuts including the military AND entitlements

 

[JayHawk]

See entitlements usually means Social Security and Medicare both of which have issues but have nothing to do with our budget excesses. NOTHING.

So we do agree... taxes need to be raised and spending needs to be cut on the military and other government departments.

Where we diverge is you argue this 250K thing as if somehow they will remain immune. We must raise taxes on the 2% to start the process but eventually taxes should raise for every human being in the US. SO i see no issue with the 250 starting point. Eventually it needs to go up on the vast majority of America or we will never pay our debts down.

 

[chance1]

See entitlements usually means Social Security and Medicare both of which have issues but have nothing to do with our budget excesses. NOTHING.

So we do agree... taxes need to be raised and spending needs to be cut on the military and other government departments.

Where we diverge is you argue this 250K thing as if somehow they will remain immune. We must raise taxes on the 2% to start the process but eventually taxes should raise for every human being in the US. SO i see no issue with the 250 starting point. Eventually it needs to go up on the vast majority of America or we will never pay our debts down.

immune ? no just not having their taxes raised

given the # of taxes - sales, state, city, etc. - they're hardly immune

where would u put SS and medicare ? what "problem bucket?"

paying our debts down will be more easily managed by an economy that is growing

many dems agree - many leading dems agree that the 250k figure is arbitrary and TOO LOW

schumer, pelosi, hoyer and many others - sorry i don't have the link but i will find it

 

[JayHawk]

immune ? no just not having their taxes raised

given the # of taxes - sales, state, city, etc. - they're hardly immune

where would u put SS and medicare ? what "problem bucket?"

paying our debts down will be more easily managed by an economy that is growing

many dems agree - many leading dems agree that the 250k figure is arbitrary and TOO LOW

schumer, pelosi, hoyer and many others - sorry i don't have the link but i will find it

Feel free to find your link.... allllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll people should have their taxes rasied but only after republican meddling stops the recovery of America's economy. Once the economy is strong they should incrementally increase taxes on everyone so as not to make it a single death blow to the economy.

 

[xbuzzerx]

i'm not debating the accuracy of the 98% figure - i'm sure the math is correct

and it's great for a politician to be able to say the 1% or the 2% ....... in this case in a very negative way ..... they're beating the system, etc.

Obama went to $400K in this first go round with Boehner - he'll have to do it again

and w/o some kind of blueprint to reign in spending, it doesn't really matter anyway

i don't think taxes are THE ANSWER - economic growth is coupled with reasonable but necessary spending cuts including the military AND entitlements

I don't actually dispute the GENERAL things you are saying here, Chance. My issue with Republicans and the general conservative viewpoint on taxation and solving deficits is that they have a blind, dogmatic belief that lowering taxes at any time regardless of the circumstances (i.e. two wars were just started or we're already in a deficit) is the sole and reliable precursor of economic growth.

Economic growth can be, literally, trends and fads that spawn a lemming effect and turn into a worldwide boom. They aren't necessarily created, spurred on or initiated by simply hacking a percentage in the tax code. Look at the dot com boom. Look at the housing boom. None of that was people going "well shit taxes went down marginally somewhere, let's all create a speculative industry boom out of nothing." They were basically unforeseen events. Or trends, fads. They weren't long-term sustainable forms of economic growth but few to no booms are.

Long story short, this blind belief that endlessly cutting taxes (I guess till we get to 0.00% ?) commensurately creates economic growth is fiction, it's economic religion. Some of our biggest booms were under much, much higher tax rates than today. Mark Cuban has stated openly that for the incredibly wealthy like himself, wiggling over a couple percent isn't something they even NOTICE in terms of what they go spend money on or whether or not they choose to invest money in businesses or creating jobs.

So if you state (and I agree with it) that this goes beyond taxes, spending and that we need economic growth-- then the question is what do you believe in supporting, promoting, or investing in in order to create that. The only thing Republicans seem to believe in investing in is defense spending and unless you believe there's somehow some untapped huge private sector nation-wide boom waiting to happen from defense spending then that idea isn't going to cut it. Obama talks a lot about incentives programs for both education and start-ups for green energy industries, but it tends to get drowned out and few people talk about it. What's your plan?

 

[Kulindahr]

From the National Journal of all places. Wow if they are lambasting the republicans for playing with the debt ceiling then mood has finally shifted.

Still we will continually meet a debt ceiling unless we start raising revenue.

When Mitt Romney pays 14% and I pay 28% there is something wrong with America.

If you pay 28%, he should be paying 38%.

 

[Kulindahr]

I don't actually dispute the GENERAL things you are saying here, Chance. My issue with Republicans and the general conservative viewpoint on taxation and solving deficits is that they have a blind, dogmatic belief that lowering taxes at any time regardless of the circumstances (i.e. two wars were just started or we're already in a deficit) is the sole and reliable precursor of economic growth.

Economic growth can be, literally, trends and fads that spawn a lemming effect and turn into a worldwide boom. They aren't necessarily created, spurred on or initiated by simply hacking a percentage in the tax code. Look at the dot com boom. Look at the housing boom. None of that was people going "well shit taxes went down marginally somewhere, let's all create a speculative industry boom out of nothing." They were basically unforeseen events. Or trends, fads. They weren't long-term sustainable forms of economic growth but few to no booms are.

Long story short, this blind belief that endlessly cutting taxes (I guess till we get to 0.00% ?) commensurately creates economic growth is fiction, it's economic religion. Some of our biggest booms were under much, much higher tax rates than today. Mark Cuban has stated openly that for the incredibly wealthy like himself, wiggling over a couple percent isn't something they even NOTICE in terms of what they go spend money on or whether or not they choose to invest money in businesses or creating jobs.

So if you state (and I agree with it) that this goes beyond taxes, spending and that we need economic growth-- then the question is what do you believe in supporting, promoting, or investing in in order to create that. The only thing Republicans seem to believe in investing in is defense spending and unless you believe there's somehow some untapped huge private sector nation-wide boom waiting to happen from defense spending then that idea isn't going to cut it. Obama talks a lot about incentives programs for both education and start-ups for green energy industries, but it tends to get drowned out and few people talk about it. What's your plan?

Too much two-dimensional thinking is the problem -- I sometimes think no one who can't do linear algebra shouldn't be eligible for Congress, because they can't possibly have the ability to picture the way things really work. The fact is that the Laffer Curve is a special case that really does work -- but you can only tell when it's going to by considering a batch of other variables, not just the two the classic graph rests on. We're nowhere near the conditions required for Laffer's notion to apply (at the very least it requires a much better humming economy).

Mark Cuban isn't alone. Warren Buffet was one who said that people earning the figures he does wouldn't really notice the difference between a 25% tax and a 35% tax, because it would have no real impact on the way they do things either personally or in business, except maybe to sharpen their skills a little; the only thing that really matters is an even playing field. And that reflects what I've found in my economic research in the last few years while on JUB: any tax rate under a third for the very wealthy doesn't affect jobs or productivity enough to matter. What does matter is the rate on those at the bottom, because a thousand dollars less in taxes is a thousand dollars pumped right into the economy, because every one of those dollars will get spent immediately as it didn't get taken by taxes.

And we need incentives -- under the right conditions, those do yield more revenue than they cost. Green energy is a good area, as is health care. On top of those we could use some real stimulus spending, spending on transportation especially -- repairing bridges long in need would be fair, but identifying highways so badly gone they're inhibiting commerce, and others where upgrades would enhance commerce, are the best way to go.

 

[Benvolio]

We cannot have a successful economy or democracy when more than half the voters are immune from the taxes and spending for which they vote. That is the most important thing at this point. We can survive another recession.

 

[Jack Springer]

Too much two-dimensional thinking is the problem -- I sometimes think no one who can't do linear algebra shouldn't be eligible for Congress, because they can't possibly have the ability to picture the way things really work. The fact is that the Laffer Curve is a special case that really does work -- but you can only tell when it's going to by considering a batch of other variables, not just the two the classic graph rests on. We're nowhere near the conditions required for Laffer's notion to apply (at the very least it requires a much better humming economy).

Mark Cuban isn't alone. Warren Buffet was one who said that people earning the figures he does wouldn't really notice the difference between a 25% tax and a 35% tax, because it would have no real impact on the way they do things either personally or in business, except maybe to sharpen their skills a little; the only thing that really matters is an even playing field. And that reflects what I've found in my economic research in the last few years while on JUB: any tax rate under a third for the very wealthy doesn't affect jobs or productivity enough to matter. What does matter is the rate on those at the bottom, because a thousand dollars less in taxes is a thousand dollars pumped right into the economy, because every one of those dollars will get spent immediately as it didn't get taken by taxes.

And we need incentives -- under the right conditions, those do yield more revenue than they cost. Green energy is a good area, as is health care. On top of those we could use some real stimulus spending, spending on transportation especially -- repairing bridges long in need would be fair, but identifying highways so badly gone they're inhibiting commerce, and others where upgrades would enhance commerce, are the best way to go.

I've never understood the liberal love affair with Warren Buffet. Buffet runs an extremely aggressive organization that buys up companies, controls and destroys some with an iron fist (remind anyone of how Romney was described), and destroys competition -- not the usual things that liberals like to call their own.

Locally Buffet's company Nebraska Furniture Mart has killed off more small, family owned businesses than Walmart ever did -- and yet liberals hold him up as one of their prophets.

Buffet is always complaining about the rich not paying enough taxes -- he and his liberal rich buddies can pay more -- no one is stopping them.

Any liberal care to explain?

 

[Benvolio]

I've never understood the liberal love affair with Warren Buffet. Buffet runs an extremely aggressive organization that buys up companies, controls and destroys some with an iron fist (remind anyone of how Romney was described), and destroys competition -- not the usual things that liberals like to call their own.

Locally Buffet's company Nebraska Furniture Mart has killed off more small, family owned businesses than Walmart ever did -- and yet liberals hold him up as one of their prophets.

Buffet is always complaining about the rich not paying enough taxes -- he and his liberal rich buddies can pay more -- no one is stopping them.

Any liberal care to explain?

I am not a fan of Buffet's but I do not agree he has intentionally bought and destroyed companies, and Nebraska Furniture destroyed the competition before Berkshire Hathaway bought it. The Blumkins owned it then.
But he is a world class hypocrite. He is worth 40 billion or so in Berkshire stock but pays very little income tax because the company has never paid a dividend. No dividends to tax. His salary is a mere 100,000 or so. Now he has started to give stock to charities he can claim a deduction for the appreciated value. He wants high spending by the government, but our money, not his. He likes the estate tax but does not intend to pay much as he gives his stock to charity.

 

[Jack Springer]

^^
Buffet bought 80% the store in 1983 and he started it's aggressive campaign to crush it's competition.