The Fiscal Cliff thread.

[Thiebear]

I bet 50% of the Republicans said the same thing i would say: Elections have consequences, do whatever you want, you fought hard for it.
And the side of less debt lost.

How can you expect anyone to take you seriously when a crying Boehner is the closest thing to leadership representing your basic beliefs.

[isle-hawg]

What a depressing thread... We are ****ed - all either party gives a **** about is pissing on the other. Neither seems to care about fixing anything long term.

[Elessar78]

We are ****ed? Why? In a worse case scenario you'll be paying the same amount you were when you were forty-one?

Even the darkest hours have a silver lining and I'm not just being a pollyanna. Great Recession? Personal debt levels are down and the national savings rate actually grew.

Things have always been ****ty for the most part. Before the Renaissance, the Dark Ages and the plague ravaged western society. During the Renaissance, a few people got really rich and made great art but most people still lived a ****ty existence. Fast forward 300 or so years and you have slavery in America, the Civil War. Then the Industrial Revolution were millions of people were exploited. The turn of the century had WWI. The 20s were good but that was prob. a false bubble. 30s had the great Depression. 40s had WWII. 50s were actually pretty good. 60s booming but we also had Vietnam. 70s we saw economic trouble. The 80s had the cold war. 90s had a couple of recessions but a big time boom. 2000s we had 9/11 and a recession then a boom. Now we're in a trough. Just ride it out.

[Larry]

We are ****ed? Why? In a worse case scenario you'll be paying the same amount you were when you were forty-one?

In the worst case scenario, we trigger a depression that's worse than the Great Depression.

You may not think that will happen. But apparently, a large majority of economists believe that doing nothing results in at least some kind of recession, on top of the one we're still in.

Now, personally, I do agree that eventually returning to pre-Bush tax rates isn't a horrible idea. That doesn;t mean that doing it all at once, while simultaneously cutting spending, is a picnic.

[Thiebear]

We are ****ed? Why? In a worse case scenario you'll be paying the same amount you were when you were forty-one?

Even the darkest hours have a silver lining and I'm not just being a pollyanna. Great Recession? Personal debt levels are down and the national savings rate actually grew.

Things have always been ****ty for the most part. Before the Renaissance, the Dark Ages and the plague ravaged western society. During the Renaissance, a few people got really rich and made great art but most people still lived a ****ty existence. Fast forward 300 or so years and you have slavery in America, the Civil War. Then the Industrial Revolution were millions of people were exploited. The turn of the century had WWI. The 20s were good but that was prob. a false bubble. 30s had the great Depression. 40s had WWII. 50s were actually pretty good. 60s booming but we also had Vietnam. 70s we saw economic trouble. The 80s had the cold war. 90s had a couple of recessions but a big time boom. 2000s we had 9/11 and a recession then a boom. Now we're in a trough. Just ride it out.

I don't know about you, but i would prefer not to repeat history: Especially the Dark Ages, Slavery, Civil War, any world war or the Great Depression.
I would "hope" that the grownups(peers) would sit Boehner, Reid and Pelosi down and then have a discussion with the President that lasts longer than the next election cycle of self interest only to them.

[isle-hawg]

Why is it that anyone with a sane mind thinks spending (much) more every year then what the tax revenue brings in is a good thing? Let the fiscal cliff happen sooner rather then later. - it will happen - just a matter of when. I prefer it to happen before we double again our national debt. Things are gonna suck, but perhaps at this point we have a slight chance of coming out of this fiscal crisis?

[Thiebear]

Nah, the republicans will cave.. they always do.

Lets review:
We will pass a bill on the 250k and below. There will never be a bill for 250k+ that makes the Senate floor.
We will not cut anything
We will not (cut the growth) for anything that's not already been identified.
The Omnibus budget will come out in lieu of a real Budget on a Friday mid December and then they will go on vacation until Jan 15th or so the next day so we can forget about it over the next 30days.
Have a nice year.

Step1 Complete: Boehner caves, the fiscal cliff is probably averted.
Speaker John Boehner has proposed allowing tax rates to rise for the wealthiest Americans if President Barack Obama agrees to major entitlement cuts, according to several sources close to the talks.

[JMS]

I bet 50% of the Republicans said the same thing i would say: Elections have consequences, do whatever you want, you fought hard for it.
And the side of less debt lost.

Actually the Democrats won the 2012 election, and as anybody who has been paying attention ( which rules out most Republicans who still call themselves fiscally conservative); the democrats are significantly more fiscally responsible than the Republicans and have been since the early 1980's....This is due to the following policies...

(1) Calling for very very modest takes increases on the wealthiest and most able to afford these increases.
(2) Holding down spending even reducing the deficit over the last 4 years.
(3) Being the last party to actually balance the budget.
(4) Recognizing that massively increasing spending while decreasing revenue is a recipe for larger deficits and larger debt; not smaller debt.

How can you expect anyone to take you seriously when a crying Boehner is the closest thing to leadership representing your basic beliefs.

Boehner used to be one of the most conservative whackadoodles in congress... In the last 8 years the extreme shift to the right in the house GOP has made Boehner a moderate.
He's actually negotiated deals with the Dems, taken them back to his members; only to have them vote Boehner's agreements down... ( aka debt crisis last year )..

[HOF44]

Now it appears the negotiations are heading down a path that might bring the SSI in payroll back up while increasing the cut off level for tax increases on the wealthy. Henry Ford had this figured out a long time ago. The middle/lower class has to have the money to spend to make the economy move. Whatever they end up doing taking away money from the middle class now could stall the recovery. Hope the Dems hold the line on this or at least come up with a compromise to say raise the limit on gross income taxed for SSI to say 150K.

[Wrong Direction]

http://news.investors.com/ibd-editor...h-spending.htm

Fiscal Cliff's Dirty Secret: It's Not About Taxes At All, But Too Much Spending
By Sen. Rand Paul, Investor's Business Daily
…
The current debate over tax hikes is an empty one built upon a false premise. The debate is whether raising tax rates will address our current crisis. The premise is that it is a lack of taxation that has led to the crisis. Both are hopelessly wrong.

President Obama's proposed tax increases on the top 2% of earners would fund the federal government for about eight days. Even if we taxed Americans earning over $1 million on 100% of their income, we would raise only about $600 billion in revenue.

Taxing citizens at this level is a tyranny even Europe hasn't reached, and still it would only address about one-third of our deficit.

…

Instead of sitting around trying to think of new ways to vote away someone else's money, Washington leaders should finally begin to address the real crisis that has threatened us long before the current handwringing: spending.

With a $16 trillion national debt and well over $1 trillion annually in deficits, we barreled over the edge of fiscal insolvency long before this month.

Why do we lurch from deadline to deadline with no apparent action on our nation's problems until the next deadline approaches? I presented Social Security and Medicare reform to the Senate over a year ago. I directly spoke to the president and vice president about my plan. And their response? Absolutely nothing!

Is it any wonder people are fed up with their government? The president announces we have no time for spending reforms, but when the deadline passes I predict not one committee will step into the breach to begin the process of reform.

Why? Because Democratic leadership still insists that Social Security and Medicare are just fine. Meanwhile, Social Security actuaries tell us that Social Security this year will spend $165 billion more than it receives. Medicare will spend $3 for every $1 it collects. Yet, the president says he doesn't have time for entitlement reform.

…

The only solution is to cut spending. It's no secret to anyone, except perhaps Washington leaders, that our current levels of spending are not only unsustainable, but the main culprit in our fiscal crisis.

Opponents of spending reductions — whether Democrats who insist on maintaining and expanding current domestic spending, or Republicans who insist on maintaining and expanding current Pentagon spending — make the case that any cuts to their preferred parts of government would be "Draconian" or "devastating."

Like tax hikes, this too is a false narrative. According to the Congressional Budget Office, nominal spending in 2008 was $2.5 trillion. The outlays for the 2013 budget are an estimated $3.5 trillion.

This means the federal government plans on spending $1 trillion more next year than it did four years ago. By any measure, this is a significant and dramatic growth in spending.

Estimated revenue for 2013 is $2.9 trillion if the Bush tax cuts expire. Our 2012 revenues were $2.4 trillion, which included the Bush tax cuts. The Bush tax cuts would only make a difference of $500 billion this year — about one third of our entire deficit — but would also further harm our economy due to the job market decline that always accompanies any rise in taxes. History has proved this point time and again.

But if we spent only at 2008 levels combined with the revenues of 2012, next year we would have a deficit as small as $89 billion. An $89 billion deficit would represent less than 1% of GDP. The 2012 deficit was as high as 7.3% of GDP.

Did anyone think the size of government we had in 2008 was somehow not enough government? This is how drastically spending has increased in just the last four years.

Those who argue we can't cut spending are basically saying that our federal government was far too small when Barack Obama entered the White House and that now we can survive only if government continues to spend at its current level. I know few if any Americans who honestly believe this, Republican or Democrat.

More at link.

[Wrong Direction]

More at this link:
http://www.aei-ideas.org/2012/12/the...but-theatrics/

[PeterMP]

More at link.

How much of the increase has to do with increased size of goverment vs. the same size government spending more money?

Having more people on unemployment or medicare and medicaid hasn't really increased the size of the government.

Related with respect to your second link and figure, what do they mean by current law?

Does that mean in the future per a person on medicare and medicaid that the government spends the same amount per a person as it does now (i.e. the total costs of medicare now/number of people on medicare now = x, and then x*the number of people predicted to be on medicaid in 2030 = amount of money that medicaid spends in 2030)?

[Wrong Direction]

How much of the increase has to do with increased size of goverment vs. the same size government spending more money?

Having more people on unemployment or medicare and medicaid hasn't really increased the size of the government.

There are a lot of reasons that spending goes up $1,000,000,000,000/year in 4 years, one of which is the inability to reduce costs during those 4 years. Getting into peeing matches about whose laws/recessions/regulations/implementation policies account for which proportion of that increase, or semantics about the size of government, misses the forrest for the trees.

Related with respect to your second link and figure, what do they mean by current law?

Does that mean in the future per a person on medicare and medicaid that the government spends the same amount per a person as it does now (i.e. the total costs of medicare now/number of people on medicare now = x, and then x*the number of people predicted to be on medicaid in 2030 = amount of money that medicaid spends in 2030)?

I don't know what specifically goes into that prediction, but I assume it accounts for current law that includes baseline projected increases based on CPI, or whatever index Medicare, Social Security, etc. are all tied to today. The entitlement problem is driven by both enrollment and cost of services/benefits.

[alexey]

There are a lot of reasons that spending goes up $1,000,000,000,000/year in 4 years, one of which is the inability to reduce costs during those 4 years. Getting into peeing matches about whose laws/recessions/regulations/implementation policies account for which proportion of that increase, or semantics about the size of government, misses the forrest for the trees.
...

Somebody starts a discussion about why spending goes up, and you:

1) Give your reason why spending goes up
2) Claim that this topic needs no further discussion

[megared]

It seems like Obama's negotiating against himself...he's gone from $1.6 trillion to $1.2 in tax revenue, he's raised the threshold from 250K to 400K for higher taxes, and he's started to look at Social Security. Why is he even making concessions at this point in the game? What is he getting in return for this?

Boehner doesn't even seem like he can get support from his own party for what he's negotiating. To me, when this Plan B foolishness doesn't pass, Obama should make him start from square one. Same thing if we don't have something in place by Christmas. It doesn't hurt Obama at all if we go off the fiscal cliff. Boehner wasting a week of negotiations in order to waste time on this bill that's a nonstarter should have consequences.