The Fiscal Cliff thread.

[Larry]

Sorry. I've had others try to claim that the deficit didn't skyrocket in FY09, instead claiming that the jump in the chart was because Obama put spending on the books that had been hidden previously. I wasn't sure if that was what you were saying, but it seemed similar.

Yes, W's budgets tried to hide the actual spending. But yes, spending, and the deficit, really did spike in that year. That increase is a real one, not an accounting gimmick.

[JMS]

Sorry. I've had others try to claim that the deficit didn't skyrocket in FY09, instead claiming that the jump in the chart was because Obama put spending on the books that had been hidden previously. I wasn't sure if that was what you were saying, but it seemed similar.

Yes, W's budgets tried to hide the actual spending. But yes, spending, and the deficit, really did spike in that year. That increase is a real one, not an accounting gimmick.

Yeah I don't have a problem with anything you've said. I think your argument is stronger than mine here... I thus concede to your superior position. I blame bush for the massive deficits because his economic philosophy was blind to deficit spending and made the country blind to them too. But your point that the real culprit was the economic downturn ( which I also blame bush for) is a strong one....

So I will grumble and groan and concede the point to you... and not be really happy about it for a while. It's pretty rare when I read something from you I really disagree with. Still It's my nature to complain.

I think if you pushed me further I would even admit Bush was right to create the massive deficit in 2009 to avoid economic contraction. That statement really gaul's me too. I guess I've lost my perspective.......... need another scotch.

[SkinsHokieFan]

The President has the upper hand and is going to completely wipe the floor with House Republicans


http://abcnews.go.com/Politics/OTUS/...ry?id=17884601

WH 'Absolutely' Willing To Go Off 'Fiscal Cliff'

President Obama's lead negotiator in the "fiscal cliff" talks said the administration is "absolutely" willing to allow the package of deep automatic spending cuts and across-the-board tax hikes to take effect Jan. 1, unless Republicans drop their opposition to higher income tax rates on the wealthy.

Treasury Secretary Timothy Geithner said in an interview with CNBC that both sides are "making a little bit of progress" toward a deal to avert the "cliff" but remain stuck on Obama's desired rate increase for the top U.S. income-earners.

"There's no prospect for an agreement that doesn't involve those rates going up on the top two percent of the wealthiest," Geithner said.

Link for rest

[Fergasun]

Boehner has a problem in that he can't negotiate. Someone tell me what the GOP wants out of these negotiations. There's some faction that wants to hit the (artificial) debt limit and shut the whole thing down, they can't be guaranteed to vote for any compromise. There's another faction that is open to dealing but trying to calculate and figure out how to get the most out of this. See the difference between someone like Jim DeMint and Tom Coburn. I'm trying to think of the analogy for Democrats... just can't think of one that I don't think would compromise (Murray, Schumer, Feinstein, Boxer... I think they would all vote for a compromise)... but there's Dick Durbin who is more vocal about compromise similar to Coburn.

The Democrats are in a better position tbh... they can't waste their political capital talking about no cuts to Medicare and Social Security... that's an easy concept to grasp. Whereas the GOP wasted their time and political capital with the Ryan "Path to Prosperity" without paving the way for some type of centrist proposal. Ryan needs to get working on a "Path to Compromise" (or he should have had it in his back pocket) that the GOP can say, "this is what we want in exchange for raising tax cuts on the rich." Too bad...but at least there's been some softening in the GOP. So they'll spend the next two weeks dancing close and closer to each other, make a deal, and then they will spend the next year complaining about it and talking about how they are going to repeal the "budget reforms" that were enacted by themselves...

[Elessar78]

GOP leaders can't negotiate on the tax hike for the rich because the rich are the one's bankrolling their re-election campaigns. They may need the sheer volume of the electorate in their district but, again, this is more about where the money came from. They'd basically betray people that bankrolled their election or at least their class.

My representative is worth in the tens of millions. He isn't looking to give himself a tax hike.

They act like they speak for the rich and wealthy but as we pointed out in the Romney/Ryan thread, the vast majority of the upper income earners in this country voted for this president and ergo don't mind paying more.

[JMS]

The Democrats are in a better position tbh... they can't waste their political capital talking about no cuts to Medicare and Social Security... that's an easy concept to grasp. Whereas the GOP wasted their time and political capital with the Ryan "Path to Prosperity" without paving the way for some type of centrist proposal.

I think the Democrats are in a stronger position because frankly their position is more reasonable. If no agreement is reached Taxes on the wealthy go up, and the defense budget is cut.... That's a given. Furthermore the Dems are saying hey we want to keep the low tax rate on 98% of the people if we can possible persuade the GOP to support that. The GOP is saying Nooooooo, no cuts for 98% of the country unless you include the top 2% and take defense cuts off the table. It's like the GOP is holding a knife to their own throat and screaming at the Democrats to back down or they are going to commit suicide. Obama's like.... Do it, Do it!.... your bluffing I don't think you have the stones... you won't cut your own throat... and Boehner is saying oh yeah, we'll do it.. don't tempt us!! The democratic pundents are laughing and the GOP pundents are looking on horrified.

The Democrats have all the cards and the Republicans are too detached from reality to realize this is not a battle they can win. The more they play it up the worse it's going to be when they cave in, or drive themselves off the cliff and allienate 98% of the country who will live with the resulting recession and higher taxes both of which were entirely avoidable.

[Rdskns2000]

Go over the cliff and do nothing.

The country will survive the new recession. Noone deserves any tax cuts of any kind and quite frankly, they should be pushing for a national sales tax on top of the income taxes. The quickest way to raised money and you can lower the bottom tax rate for the poor.

[JMS]

Go over the cliff and do nothing.

The country will survive the new recession. Noone deserves any tax cuts of any kind and quite frankly, they should be pushing for a national sales tax on top of the income taxes. The quickest way to raised money and you can lower the bottom tax rate for the poor.

Well 2 thoughts...

#1 Poor don't really pay taxes now so what does lowering their taxes really even mean.
#2 The best way to reduce the deficit is by a balanced cut spending, increased revenue formula which allows the economy to grow. The economic growth is really what is going to do the heavy lifting if we can get our house in some sort of fiscal order.
If we go into a recession that means growth is gone and the GDP is shrinking... That will hurt significantly especially if it's avoidable.

[isle-hawg]

Congress and the Pres should have adopted the bi-partisan deficit commission's recommendations. But of course they did not have the guts to do so. The best thing for this country is to go over the cliff IMHO now with the automatic tax increases for most and budget cuts. I say this knowing full well that I well this is not in my personal interest working for DOD. I just find it completely immoral to pass on debt (bankruptcy) to future generations.

If the Speaker had any moral compass whatsoever he would either endorse what the commission proposed OR propose a better plan. Besides NPR which is not even a drop in the bucket, what are the cuts that he proposes that would balance the budget?

[Thiebear]

Larry, you make a good point.
Allow me to pontificate though:
If the Bush era tax cuts had not been passed, TARP would not have had the same effect on a more balanced budget than the one we had in 08-09. And the Stimulus could have been bigger and more productive in '09, which may have turned the economy around much faster.
So, round about and indirect, but the point is, the bush tax cuts did put us in a position of weakness for dealing with an economic calamity.

The Bush tax cuts were passed due to put us in a stronger position due to an economic calamity. No different than the TARP. (Both severed their purpose at the time)?
It lowered taxes 3% across the board? helped a lot of people with 401ks and created the ROTH Ira? Not all that horrible when restaurants were closed with National and a recession.
The capital gains tax on qualified gains of property or stock held for five years was reduced from 10% to 8% for those in the 15% income tax bracke

[Buford]

who cuts taxes during a time of war? That might have be the the 2nd dumbest move of that admin behind going into Iraq and taking our eye off the ball (Afghanistan/Bin Laden).

Just because those are ending doesn't mean we don't have to pay for them. And no, they didn't pay for themselves.

[twa]

Hasn't Obama cut taxes during war? (as well as JFK)

is this some kind of trick question?

[Larry]

The Bush tax cuts were passed due to put us in a stronger position due to an economic calamity.

The Bush Tax Cuts were passed to save us from a GOP-projected future in which the entire national debt would have been paid off by 2015.

And yes, it would appear that they were successful.

It lowered taxes 3% across the board?

It lowered taxes by 3% on the top income tax bracket. Other brackets received different amounts of cuts.

helped a lot of people with 401ks

Dunno about "helped". I'm pretty certain that 401K's existed before Bush, and were completely tax exempt before him. But it wouldn't surprise me if he didn't adjust them in some way or another.

and created the ROTH Ira?

Nope. Created in 1997.

The amount that you are allowed to put in them has been increased several times. Don't know if it was in the same law as the tax cuts or not. Might well have been.

Not all that horrible when restaurants were closed with National and a recession.

As is typically the case, I have no clue what you're talking about, here.

[alexey]

I'd be more inclined to buy into the GOP argument for Bush tax cuts if they were not so tilted towards the rich.

[Larry]

Not really fiscal cliff related, but it's about the economy, and not really worth it's own thread.

Yahoo: US economy adds 146K jobs, rate falls to 7.7 pct.
US economy adds 146K jobs; jobless rate falls to 4-year low of 7.7 percent; Sandy minor factor

WASHINGTON (AP) -- The U.S. economy added 146,000 jobs in November and the unemployment rate fell to 7.7 percent, the lowest since December 2008. The government said Superstorm Sandy had only a minimal effect on the figures.

The Labor Department's report Friday offered a mixed picture of the economy.

(Rather long article at link.)

I think the final sentence of my quote sums up the article: There's things in there that both political sides will grab hold of, and run gleefully towards the horizon, with.