The Fiscal Cliff thread.

[alexey]

What do you think will happen?

[Kilmer17]

I vote D. They extend the negotiations into next summer so the NEW Congress will have to deal with it.

[Thiebear]

they raise the debt ceiling based on something thats not going to happen.
we repeat this when we go from 18trillion to 20trillion this time next year.

[alexey]

I vote D. They extend the negotiations into next summer so the NEW Congress will have to deal with it.

I forgot to include that option

Other - please specify.

[skinsfan07]

Nothing will happen. The Fiscal "cliff" is less like a cliff and more like a slow downhill slope. It'll take a few months after we go off the "cliff" but things will get resolved rather quickly after that. If you're worred about this, than you've got bigger problems to deal with.

[hockeysc23]

Nothing will happen. The Fiscal "cliff" is less like a cliff and more like a slow downhill slope. It'll take a few months after we go off the "cliff" but things will get resolved rather quickly after that. If you're worred about this, than you've got bigger problems to deal with.

If you are worried about this then you probably work for the federal government or have your employment based on federal contracts. It's a pretty big deal. And the trickle down effect can be huge if not resolved.

[Riggo-toni]

Nothing, but then Dems will write bill to extend W tax cuts for middle class only and GOP will be shamed into accepting it.
What I don't want is the Obama plan where we have to raise taxes on the wealthy to fight the deficit, but we need to spend hundreds of billions more to stimulate the economy. The sequestered cuts are miniscule as is, and failure to rein in spending back below 20% means there will be no way to close the fiscal gap without massive new consumption taxes. The antiquated Keynesian creed of being able to tax and spend into prosperity might look neat on a graph, but is worthless if not counterproductive in the real world.

[JMS]

The fiscal cliff is more like a slope than a dead drop. To put it in perspective the fiscal cliff calls for a 7% defense cut after we nearly tripled the defense budget from 2000- 2012..... Compare that with George H. W. Bush (Sr.) who cut the defense budget 10% for 4 straight years in 1988-1992...
Then Clinton came in and Whacked it again for another 10% over his first two years in office... 10 and 10 again...

It would be much better if we had a deal and our elected officials could act like grown ups... Or more unlikely our electorate would actually understand what's going on in their government.... but alais our governmental philosophy is not based upon efficiency or reason, but rather stalemate and self interests. Because ultimately that's the most reliable motivation our founding fathers could think of.

---------- Post added December-3rd-2012 at 12:27 PM ----------

The sequestered cuts are miniscule as is,

Not miniscule just not extraordinary or very ambitious.

and failure to rein in spending back below 20% means there will be no way to close the fiscal gap without massive new consumption taxes.

We have actually stopped the growth of spending under Obama's first budget and until now. What we are trying to do now is take the syringe of deficit spending out of the arm of the economy
can't do it cold turkey or the economy will die... so we do it gradually...

$2 worth of cuts for every $1 of new revenue... is what is being proposed; which seems sensible.

The antiquated Keynesian creed of being able to tax and spend into prosperity might look neat on a graph, but is worthless if not counterproductive in the real world.

Actually that's the antiquated Friedman creed... Keynsian if you haven't heard is going retro.

[GSF]

Why won't the GOP discuss their suggestions openly? From an article on yahoo this morning:
http://news.yahoo.com/white-house-re...093022711.html

"They have to tell us what makes sense to them, and then we can take a look at it," Treasury Secretary Timothy Geithner said of Republicans on NBC's "Meet the Press." ''But what we can't do is try to figure out what makes sense for them."

House Speaker John Boehner countered that Republicans have plenty of ideas, even if he doesn't want to discuss the specifics publicly.

"There are a lot of items on the table," Boehner told "Fox News Sunday." ''The president knows what they are. The question is what are they willing to do?"

I agree with the GOP's view that Obama's proposal did not include near enough spending cuts. What i don't like is they keep saying that we have to make the tough decisions, but they won't say what they believe those are. They don't want to take the political blame.

Put both proposals out there so the public can better understand where both parties stand.

[JMS]

I let my wife read that statement so she'll have something to use against me when the budget gets out of whack.

We spend too much but let's just raise taxes since controlling spending..heck even cutting it, is completely irrational if not ignorant.

The populace does deserve exactly what they voted for.

Dude... Obama has the slowest growth in government spending since IKE over his first four years as President.

Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It's Barack Obama?
http://www.forbes.com/sites/rickunga...-barack-obama/

Likewise Obama is proposing 2$ in cuts for every 1$ in new revenue.. Which is a very very conservative approach to reducing the deficit which he inherited...

The GOP just don't recognize any cuts Obama has already agreed too in calculating how much he's willing to cut.. Which is idiotic.

What kills me the most is the whining on behalf of the upper 2%... I mean freaking pleeeeaaaasee... Mitt Romney paid what 12.9 % for his last two years of taxes?
This and he tell's 60 minutes he thinks he paid the right amount of taxes. Let's let Mitt and the everybody else feel the love the middle class has been feeling.
34-37% taxes with no deductions at all for folks who make over a few million. How they think a family of four living off of $ 100k is better able to weather twice their tax rates
is beyond comprehension.

I thought for the longest time the debate in this country was weather wealthy people should pay the same rate or a modestly higher rate on their taxes. That's amazingly is no longer the debate in this country.
Now the debate seems to have changed that of coarse it's unreasonable to ask corporations or the wealthy to pay anything close to the same rate as the middle class...

[twa]

Dude... Obama has the slowest growth in government spending since IKE over his first four years as President.

I assume you are including the massive bailout to artificially inflate to the new norm?

http://lubbockonline.com/filed-onlin...s#.ULzs1XbRHFA

The problem with that rosy claim is that the Wall Street bailout is part of the calculation. The bailout ballooned the 2009 budget just before Obama took office, making Obama's 2010 results look smaller in comparison. And as almost $150 billion of the bailout was paid back during Obama's watch, the analysis counted them as government spending cuts.

It also assumes Obama had less of a role setting the budget for 2009 than he really did.

Obama rests his claim on an analysis by MarketWatch, a financial information and news service owned by Dow Jones & Co. The analysis simply looks at the year-to-year topline spending number for the government but doesn't account for distortions baked into the figures by the Wall Street bailout and government takeover of the mortgage lending giants Fannie Mae and Freddie Mac.

[JMS]

I assume you are including the massive bailout to artificially inflate to the new norm?

Yes I am counting all of the trillions of dollars spent over Bush't 8 years in office which he left off budget. This includes two wars, Katrina relief, His 800 billion dollar healthcare reform package in 2006, his fiscal relief package, TARP.. etc..

The problem with that rosy claim is that the Wall Street bailout is part of the calculation. The bailout ballooned the 2009 budget just before Obama took office, making Obama's 2010 results look smaller in comparison. And as almost $150 billion of the bailout was paid back during Obama's watch, the analysis counted them as government spending cuts.

Bush's 2009 budget gave us the first 1.5 Trillion dollar deficit if you add all his off budget spending back into the mix.. His deficits 's in 2007 and 2008 were massively large too before he taught us what massive really was... Again Bush just fiddled with the books and left the big dollar items off so he could look fiscally responsible. It's one reason I turned my back on the GOP after supporting them for my entire adult life. Bush's creativity with the budget in fiscally good times.

It also assumes Obama had less of a role setting the budget for 2009 than he really did.

The 2009 fiscal year began in Oct of 2008 months before Obama won the election much less took office. Obama had nothing to do with the 2009 budget just like Bush had nothing to do with the 2001 budget which he inherited from Clinton.


Bottom Line... The way to get out of the current fiscal crisis is to ... (1) Not loose our heads.. (2) Increase revenue modestly and responsible... (3) Trim expenses where we can... (4) And this is the most important one... hold down spending increases..
This along with a 2-4% grown of GDP which it will yield will allow you to grow yourself out of the crisis. If you cut too much or you tax too much and you imperil the growth you've shot yourself in the foot.

This is known... We have many examples of folks accomplishing real economic reform with this formula...... If you aren't willing to increase revenue you aren't serious about deficit relief.

Cutting expenses $2 for every $1 dollar of new revenue seems perfectly sensible, even frankly conservative, give it a few years on that tract and we will be through the troubled spots....

Hell Obama's already cut the deficit about 30% over his first four years relative to GDP. If he can actually get some assistance from the "know nothings" in congress maybe he can even do better over the next four years.

Let's check those numbers.... ( Obama has decreased the deficit to GDP numbers by 30% in his first term. )

2009 deficit...... 1.4 Trillion
----------------- = ----------------- = 0.10057 = .10
2009 GDP .... 13.92 Trillion


2012 deficit .......1.1 Trillion
----------------- = ----------------- = 0.06875 = .07
2012 GDP..........16 Trillion


.07
----- x 100 = 70% deficit or Obama has reduced the deficit about 30% relative to GDP from when he took over in 2009 to 2012..
.1

[twa]

Obama had nothing to do with the 2009 budget just like Bush had nothing to do with the 2001 budget which he inherited from Clinton.

he obviously has nothing to do with anything
http://thomas.loc.gov/home/approp/app09.html
he certainly added to 09 spending though

[JMS]

he obviously has nothing to do with anything
http://thomas.loc.gov/home/approp/app09.html
he certainly added to 09 spending though

Yes how honest and insightful of you to take my words stating that Obama had nothing to do with something which occurred months before he won election (2009 budget), and translate that for me to Obama has nothing to do with anything...




What can we hold Obama responsible for...
#1 Not Increasing Spending as Bush did almost every year in office.

#2 Well we can certainly hold him responsible for not dramatically cutting spending and leaving us with a contracting GDP like the one he inherited. Obama could have done what Hoover did in 28 and 29 or Roosevelt did in 1936 (what the GOP in congress still want's to do) try to move to a balanced budget too sharply, while the economy is weak leaving us with an 11, 10 or even 8 trillion dollar GDP vs the 16 Trillion dollar one and growing we have today. Sure this will lower the deficit and even lower the national debt relative to where we will be otherwise.. Coarse if we do that our debt to GDP ratio will be nearly twice what it is today.. and our deficit to GDP ratio might still be bad too..

The difference between a growing GDP and a shrinking GDP is everything when you play the "let's be fiscally responsible game" or alternatively "let's not be a bunch of dorks" as many Democrats translate that..

[Thiebear]

Candidate Obama had more say about 2009
Than any other candidate. Source: wash post.