Export thread

Look out for that Fiscal Cliff!

#1

Silent Bob

Silent Bob

Well, it's time to pay the Piper and reset taxes back to circa 2001. You can't have tax cuts, and have two wars without someone paying the bill. Thanks George W Bush.

Can I return that crummy 150 dollar check you gave me back in 2002 and call it even?



#2

Adam

Adam

Well, it's time to pay the Piper and reset taxes back to circa 2001. You can't have tax cuts, and have two wars without someone paying the bill. Thanks George W Bush.

Can I return that crummy 150 dollar check you gave me back in 2002 and call it even?

JUUUUUUMP!



#3

Zappit

Zappit

Tea Party's holding all this up and dragging the entire country down? Republicans might be regretting how they embraced those extremists a couple years ago. If the Republicans take the heat for the fallout, and everything indicates they will, they won't have much of a chance during the next midterms. The effects of going over the cliff will still be felt then, since the Teabags are practically cheering for the dive. They won't fix it.


#4

TommiR

TommiR

I'm still thinking you guys will work this out in the last minute like you did with the debt ceiling crisis last year, or at least come up with something to kick the can further down the road.

Still, I'm holding on to some money I can buy stocks with, in case you can't solve it and the stock market takes a nose dive.


#5

DarkAudit

DarkAudit

Can we be sure this "cliff" isn't just the invention of one side or the other in order to bully the other into caving to it's demands? Or the invention of those who rely on FUD to make the highest profits?


#6

Bowielee

Bowielee

Can we be sure this "cliff" isn't just the invention of one side or the other in order to bully the other into caving to it's demands? Or the invention of those who rely on FUD to make the highest profits?
It's definitely not an invention. It's sensationalistically named, but Bush instituted a series of tax cuts and raised government spending in 2001 and they were ment to be a temporary stopgap measure to kind of "ride out" the recession. The problem is that we aren't fully recovered from that recession yet and if something isn't instituted, next year, everyone will be paying higher taxes across the board, by quite a lot. It will also lower federal spending. Rather than try to explain the role of government spending in Keynesian economics, I'll just leave this link here. http://en.wikipedia.org/wiki/Keynesian_economics

Now, it can be fully argued that we should just buck up and accept the higher tax rates, but at a time when we're just starting a very fragile recovery from probably the worst recession ever, it may have disasterous consequences.


#7

TommiR

TommiR



#8

Bubble181

Bubble181

I really don't het the Republican side in this debate. "We're against higher taxes for the rich, so we'll force higher taxes on the poor by not cooperating". Can they really sell that to anyone with an income under $1,000,000? It's bonkers.
Of course, the Democratic side isn't that much better - "we don't want to try and cut spending on some unnecessary and abused systems, so we're just going to force everyone to pay more taxes" isn't a great big rallying cry either.

There should, of course, simply be both: higher taxes for the top tier salaries (and we're talking about the US - it's not like even the Dems want to institue a 75% tax like France :p), and decent budget cuts on topics where money is being wasted left and right. Of course, where to cut spending is another issue.


#9

Covar

Covar



#10

PatrThom

PatrThom

It's definitely not an invention.
I think the most simplistic (and personally relatable) explanation would be to imagine that you had some bills, but your payday wasn't going to be until next week, so you bought stuff on your credit card, not realizing that your statement was going to be due the day after payday and that the finance charge would put you over your limit. So now that payday is right around the corner, you have to decide whether you want to keep your entire paycheck and suffer the over limit fees, or whether you pay your statement to prevent the fees but then have less money to work with until next payday.

--Patrick


#11

Krisken

Krisken

I wish people would stop comparing government budgets to household budgets. Every time I see it I feel myself getting dumber by proxy.


#12

strawman

strawman

I see it I feel myself getting dumber by proxy.
It's more than a feeling.



#13

strawman

strawman

You can't have tax cuts, and have two wars without someone paying the bill. Thanks George W Bush.
Why are you blaming Bush? He signed the first one before the wars were a twinkle in Osama's eye. Congress created and passed them, and it was a bipartisan effort. The senate was 50/50, and the republicans only held 9 more seats in the house than the democrats.

If anything, blame Obama who came in on a recovery act, then extended them in 2010 - again, passed by congress and signed by Obama.

If you're going to say that a president should have acted differently, then you should be blaming Obama, who saw both wars and didn't let them expire as they would have if congress and Obama simply not acted.

Quite frankly, though, it appears that they are simply flying by the seat of their pants. There's no US Federal Budget. If there were, it most certainly wouldn't be balanced. Right now they seem to be making the best decisions they can in the face of absolutely no planning, or even economic direction for the future.

This has been going on for so long that we're past considering their actions negligence, and well into gross negligence.


#14

PatrThom

PatrThom

I wish people would stop comparing government budgets to household budgets. Every time I see it I feel myself getting dumber by proxy.
I'm open to alternative methods of getting people to understand the impact and importance of other people's decisions.

--Patrick


#15

Krisken

Krisken

I'm open to alternative methods of getting people to understand the impact and importance of other people's decisions.

--Patrick
Except, you know, it doesn't. It creates a false idea on how government budgets work and their impact on the economy as a whole. It's a view that has brought us to the stupidity we see in the House and Congress, where neither party is willing to do what is best for the country in a misguided attempt to 'balance the budget' while ignoring what is best for the country in an effort to cut every program and not raise any revenue, a move which would cripple the economy in the same way the fiscal cliff would.

Oversimplifying the effect of government spending and comparing it to household incomes makes people less informed, not more.


#16

PatrThom

PatrThom

Except, you know, it doesn't.
...which is why I solicit an alternative. I know that when I try to discuss finances with people, I can see that once I try to talk about anything outside their personal finances, they just stop paying attention. It's my experience that your average person doesn't seem to realize that their financial universe is just a raft in a big, big ocean, and they pay so much attention to their little bubble that they can't see how the motion of that ocean pushes their raft about in whorls too big for them to directly see. In order to explain the Ocean, I could try and build something really, really complicated, but it seems easier to just talk about something they're more familiar with, like their bathtub.

--Patrick


#17

Bowielee

Bowielee

Why are you blaming Bush? He signed the first one before the wars were a twinkle in Osama's eye. Congress created and passed them, and it was a bipartisan effort. The senate was 50/50, and the republicans only held 9 more seats in the house than the democrats.

If anything, blame Obama who came in on a recovery act, then extended them in 2010 - again, passed by congress and signed by Obama.

If you're going to say that a president should have acted differently, then you should be blaming Obama, who saw both wars and didn't let them expire as they would have if congress and Obama simply not acted.

Quite frankly, though, it appears that they are simply flying by the seat of their pants. There's no US Federal Budget. If there were, it most certainly wouldn't be balanced. Right now they seem to be making the best decisions they can in the face of absolutely no planning, or even economic direction for the future.

This has been going on for so long that we're past considering their actions negligence, and well into gross negligence.
I do firmly place the blame for our current predicament on all presidents for the last 20 or so years, regardless of party affiliation. They've all allowed the banks to whittle away at the restrictions set up by FDR in the New Deal. It's entirely the reason we had the housing market crash due to all the junk loans that were allowed to go through and out of control loan policies that would have previously been not allowed. Regan, Clinton, Bush Sr, Bush Jr, all these presidents are responsible for allowing this to happen.


#18

Adam

Adam

I wish people would stop comparing government budgets to household budgets. Every time I see it I feel myself getting dumber by proxy.
I know what you mean. If the government ran their budget like some people run their household, we'd be several decades past the fiscal cliff and well and truly at the bottom of the fiscal Laurentians.


#19

Krisken

Krisken

...which is why I solicit an alternative. I know that when I try to discuss finances with people, I can see that once I try to talk about anything outside their personal finances, they just stop paying attention. It's my experience that your average person doesn't seem to realize that their financial universe is just a raft in a big, big ocean, and they pay so much attention to their little bubble that they can't see how the motion of that ocean pushes their raft about in whorls too big for them to directly see. In order to explain the Ocean, I could try and build something really, really complicated, but it seems easier to just talk about something they're more familiar with, like their bathtub.

--Patrick
Except the alternative doesn't help. It's so oversimplified it might as well be "Spend bad, tax bad!"


#20

CrimsonSoul

CrimsonSoul

I wish people would stop comparing government budgets to household budgets. Every time I see it I feel myself getting dumber by proxy.


#21

Krisken

Krisken

All I can glean from this episode CrimsonSoul is you wish to turn me into a muppet.

Let me explain why I feel this oversimplification is bad for the discussion by comparing it to how we in the US learned history. Think back to what we were taught. Wonderful pilgrims, happy natives see they are starving and help them recover by teaching them to make use of crops. Isn't that lovely? Nevermind how wrong it is, it's what most of us remember. Of course, Squanto was there because he had been taken to Europe to be a slave, escaped, found passage back to his village only to discover they were all wiped out by plague, it was in his self interest to help these people who just showed up.

Now, why did I tell this story? Because it shows that oversimplificatin of complex relationships does us a disservice. We are stupider for believing the simple version. It isn't a building block to learning the complexities of the issues since most people are happy to spew the bumper sticker slogans they hear from the festering blight of cable news. Any conversation involving the simplified story is pointless because it doesn't mean anything. Like the Thanksgiving myth. I don't know about you, but I find the complex story more fascinating and relatable than the simple one.


#22

Charlie Don't Surf

Charlie Don't Surf

that is, by far, the dumbest two analogies I've read to date on the situation. congratulations, CrimsonSoul, that post is dumber than freep


#23

TommiR

TommiR

Let me try an analogy.

I am a very messy person. Over time, and particularly over the last year, my apartment has accumulated a very uncomfortable amount of filth, and I'm thinking I should do something about it. Cleaning all of it at once is not an option, as nobody has enough time to do it all. But I am resolved to do something about it, since if nothing is done, I might soon be swimming in shit.

During Christmas, as I had downed one too many glasses of eggnog, I promised myself to make a New Year's resolution where I'd reform my way of life. I'd both clean my apartment one room at a time over a certain period, and resolved to not be so messy in the future.

The problem is that I am lazy; I hate the mess, but I don't really want to clean, and I kind of like my care-free lifestyle. So now, I'm having second thoughts about this whole New Year's resolution thing. I have three options available to me:

1. I carry through with the promise, the sudden change being shock therapy and bringing about a great deal of personal stress at a time I really don't need any extra worries on my mind;
2. I break my promise and just forget about the whole thing, carrying on as before, hoping I'll get something together somehow at some point in the future;
3. I make a compromise and promise to clean a little bit every now and then, and make a little bit less mess. The Democratic side in me wants me to devote more of my free time to cleaning my apartment, whereas the Republican side in me wants me to not make so much mess in the first place. And I have to decide which side I'm going to listen to.

So you see the conundrum.


#24

Krisken

Krisken

Ok, lets use your cleaning analogy. Right now some Republicans are suggesting we bleach the whole house, never mind the fumes and that in the long term it would actually be bad for us.


#25

TommiR

TommiR

Well, the Republicans value their free time and prefer it if they don't have to spend more of it cleaning the house (no new taxes). They'd rather I should stop making such a mess in the first place (cut budget expenses). The Democrats want to keep on partying and making a mess (not reduce budget expenses), preferring to pressgang those who have a lot of free time into cleaning the house (hike taxes for the rich).

The two sides talk, and hopefully reach a compromise, likely consisting of less partying and more cleaning up. Too bad that, at this time, one would sort of really like to party and have a lot of free time, as the parents are coming over for a visit pretty soon. Which means no more partying, and no free time anymore.


#26

Krisken

Krisken

Looking over the last fourty years, I call bullshit. Republicans are fiscally conservative until they hold the purse strings.

And what you call "partying" is grossly insulting to those who rely on that spending just to survive.


#27

Tress

Tress

What 3 things eat up the majority of the federal budget? Medicare, Social Security, and defense spending. What three things do Republicans defend fanatically, to the detriment of all other things in this country? Medicare, Social Security, and defense spending. But sure, it's all those evil Democrats and their "partying".

Stop trying to make this a partisan problem.


#28

Ravenpoe

Ravenpoe

Looking over the last fourty years, I call bullshit. Republicans are fiscally conservative until they hold the purse strings.

And what you call "partying" is grossly insulting to those who rely on that spending just to survive.
I do have a friend that refers to taking his insulin as 'partying' so..


#29

Krisken

Krisken

What 3 things eat up the majority of the federal budget? Medicare, Social Security, and defense spending. What three things do Republicans defend fanatically, to the detriment of all other things in this country? Medicare, Social Security, and defense spending. But sure, it's all those evil Democrats and their "partying".

Stop trying to make this a partisan problem.
And that's just it, both parties are complacent in what has happened. Democrats need to be willing to cut spending while Republicans need to be willing to raise taxes. All of this should be done in small increments so as to prevent an economic free fall from the shock.


#30

Officer_Charon

Officer_Charon

I don't pretend that the "household budget" analogy explains everything... merely that it makes the crisis easier to understand for the layman. Like me.

CrimsonSoul's graphic doesn't offer an explanation or a way out... it simply makes the problem easier to comprehend, rather than quoting a bunch of figures and leaving people like me scratching their heads.

I know that no solution will be simple, there will doubtless be some form of pain involved (and when you're juuuuust above breaking even as it is, that pain gets magnified a hundred-fold), and I can't pretend that I have the answers.

But now I understand the question better.


#31

Krisken

Krisken

I don't see it as helpful, though. It would be as if I suggested taking care of the infrastructure in the country is like doing upkeep on a house, only with more zeros in the cost. It just doesn't work like that.


#32

TommiR

TommiR

Looking over the last fourty years, I call bullshit. Republicans are fiscally conservative until they hold the purse strings.

And what you call "partying" is grossly insulting to those who rely on that spending just to survive.
Isn't the Republican position on this light on tax rises and heavier on spending cuts/freezes, though? I believe the fiscal cliff is what was under discussion here.

Regarding the partying comment, why so serious? That was only a light-hearted little story. But if somebody was really offended by it, then I retract 'partying' and replace it with 'spending'.
What 3 things eat up the majority of the federal budget? Medicare, Social Security, and defense spending. What three things do Republicans defend fanatically, to the detriment of all other things in this country? Medicare, Social Security, and defense spending. But sure, it's all those evil Democrats and their "partying".

Stop trying to make this a partisan problem.
Defence yes, though it is my understanding that the Republicans are generally viewed to be against entitlement programs, and have on several occasions been accused of 'attacking' Medicare and Social Security, Romney's campaign rhetoric to the contrary. I could of course be wrong, seeing as US domestic politics is of limited interest to me, but my quick google search does seem to support this.

As far as partisanship goes, I think you have two principle sides negotiating on this fiscal cliff, the Democrats and the Republicans. And both are engaging heavily in brinkmanship. So I imagine partisanship might be a part of the problem.
And that's just it, both parties are complacent in what has happened. Democrats need to be willing to cut spending while Republicans need to be willing to raise taxes. All of this should be done in small increments so as to prevent an economic free fall from the shock.
Agreed, a balanced approach would seem like the best way forward. Now we'll just have to see if sufficient political will exists to bring that compromise about.


#33

Krisken

Krisken

I don't think it will happen. The GOP is calling for medicare cuts and the Dems are saying no. Meanwhile, even the goofy plan B couldn't pass the house this past month, and that was a Republican party wet dream.

Get ready for that cliff (which is more like being a snowball at the top of a hill). We'll be rolling over that edge soon I believe.

What will happen is these clowns will do nothing and then the Dems will introduce tax cuts for those who make under a certain amount. There's no way the Republicans won't vote for a tax cut, so they'll get nothing in return for it. Honestly, the whole thing leaves me baffled.


#34

TommiR

TommiR

It's possible a deal won't happen. Though if that becomes likely, I'd expect Obama to finish with a modest proposal that is unacceptable to the Republican position. They'll shoot it down, after which they get the blame for causing the fiscal cliff to happen, and Obama makes the best political advantage out of a bad situation.


#35

jwhouk

jwhouk

...until the next major political crisis, which will happen in about two weeks or so - depending on the attention span of Fox News and/or CNN.


#36

Krisken

Krisken

Don't forget MSNBC. We still have filibuster reform, immigration reform, gun debates...


#37

jwhouk

jwhouk

Oh, yeah, gun debates. That'll start up again the next time we have a mass shooting.


#38

Krisken

Krisken

Oh, yeah, gun debates. That'll start up again the next time we have a mass shooting.
Which, at the rate we are going will be sometime this week.


#39

Krisken

Krisken

And called it, deadline missed. GOP said their widdle feelings were hurt.


#40

Zappit

Zappit

We're going over the cliff.

I really don't care if Republican feelings got hurt. I'd LOVE to see their careers hurt now, given how utterly pathetic they were in this entire process. The Dems gave them ground and were negotiating, but they just decided to hold their breath until they passed out unless everyone else did everything they wanted.


#41

Krisken

Krisken

I think Boehner would have taken the deal if the rest of the House wasn't nuts. He knows now he's not getting jack squat.

Don't be surprised if he loses the speakership over this. Cantor has been gunning for it for a while and unlike on the Dem side (between Pelosi and Hoyer, who notoriously don't get along) he's less likely to put aside his ambition in favor of making gains.


#42

strawman

strawman

The Dems gave them ground and were negotiating
:rofl:


#43

Zappit

Zappit

I think Boehner would have taken the deal if the rest of the House wasn't nuts. He knows now he's not getting jack squat.

Don't be surprised if he loses the speakership over this. Cantor has been gunning for it for a while and unlike on the Dem side (between Pelosi and Hoyer, who notoriously don't get along) he's less likely to put aside his ambition in favor of making gains.
I wouldn't be surprised. Putting Cantor up front is treating a cut with a chainsaw, which is pretty much how the more extreme elements in the GOP want to operate.

Don't laugh, Stein, they cut out a lot of the top earners from the increases in their proposal, which is a hell of a lot more than the GOP did.


#44

strawman

strawman

Don't laugh, Stein, they cut out a lot of the top earners from the increases in their proposal, which is a hell of a lot more than the GOP did.
They moved from one completely unacceptable position to another completely unacceptable position. Obama said, "It's my way or the highway" knowing that there's no way they could agree to it, then made some insincere "attempts to negotiate" knowing that it was still unacceptable, and is trying to frame the debate in terms of the republicans not meeting at the negotiation table.

There is no negotiation. It's one side saying "come over here and talk on our terms about accepting our proposal."

The republicans are saying, "Cuts and increases are ok. Increases alone are not."

The democrats are saying, "Let's do increases now, and cuts later. Like, never. Because we never do cuts."


#45

Krisken

Krisken

I don't know what you have been reading, but that's certainly now how I've seen it. Generally both sides have made demands the other side doesn't like. Too fucking bad, figure something out and stop being babies.


#46

strawman

strawman

I think it's actually in the dems best interests to let everything expire anyway.

- They can get rid of all the tax cuts (ie, increase taxes on everyone, especially the cash cow middle class)
- They can blame it on the republicans
- They can offer significantly reduced cuts early next year and make everyone feel like they got something
- They don't have to cut any pork

It wouldn't surprise me if this was the game plan all along.


#47

Krisken

Krisken

I think if there was something the President (who despite the stupidity by right wing tabloids is centrist) could accept and still keep the Dems on board, he would have taken it. They offered, as of December 17th, according to Ezra Klein-

The White House made a new offer to House Speaker John Boehner (R-Ohio) on Monday to avoid the so-called fiscal cliff. The proposal matches the amount of spending cuts with revenue-raisers, calls for two stimulus measures and seeks an avoidance of a debt limit fight for the next two years.
The details of the offer were sent to The Huffington Post on condition of the source's anonymity.
The White House has moved off of its initial and second revenue demands of $1.6 trillion and $1.4 trillion respectively. As of now, the president would be fine raising $1.2 trillion in revenue. He also is no longer insisting that taxes increase on families with income above $250,000. Instead, he is calling for a permanent extension of the Bush tax cuts for incomes of less than $400,000.
To meet the $1.2 trillion revenue goals, the White House proposal calls for limiting the tax benefit of itemized deductions to 28 percent for taxpayers. It would return the estate tax to 2009 parameters, which would mean that estates worth more than $3.5 million would be taxed at a 45 percent rate.
The compromise on revenue may be difficult for some in the president's own party to swallow, though few would have imagined the White House scoring such a victory just one year ago. The spending cuts in the new proposal could be a harder sale.
In his latest offer to Boehner, the president proposes $800 billion in savings, including $290 billion in interest savings, $100 billion in defense cuts, and $130 billion in savings that would come from an adjustment to the inflation index for Social Security benefits. The administration insisted that there would be "protections for most-vulnerable populations" perhaps by indexing the changes so that they don't affect those with low-income.
The president has refused to give in on another Republican demand: that he gradually raise the eligibility age for Medicare from 65 to 67. There is, however, $400 billion in health care savings included in his offer.
Additional components of the proposal include language that would call for the fast track pursuit of corporate and individual tax reform as well as "spending reform." The White House proposal calls for a permanent extension of certain tax extenders (which ones weren't made entirely clear) and the alternative minimum tax. The payroll tax cut passed two years ago would, under this proposal, be allowed to lapse without an apparent replacement -– a major blow for progressive economists, who argue that the economy is too fragile to take such a hit.
The president is, however, pursuing some provisions that would make his base pleased. His plan calls for an extension of unemployment benefits -- set to expire at the end of this year -– and money for infrastructure spending. How much money is unclear, though the president's first offer asked for $50 billion. Finally, he is demanding that the nation's debt limit be increased for two years. He will continue to allow Congress the right to periodically vote not to raise the ceiling, but he would grant himself veto power over those votes.
That may be too much for Boehner to swallow. In his last offer, the speaker signaled comfort with a yearlong extension of the debt ceiling, but nothing more.
An administration official said that this was not the president's "final offer," but one that the White House viewed as a legitimate halfway point between the two sides. The official noted that the president already agreed to a trillion dollars in spending cuts as part of the first debt-ceiling standoff. When adding those figures to this plan, one gets to $3.4 trillion in deficit reduction. When considering war savings, that number goes up to well over $4 trillion over a 10-year period.
Boehner's office did not immediately return a request for comment
the response by Boehner's office was
Any movement away from the unrealistic offers the President has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced. We hope to continue discussions with the President so we can reach an agreement that is truly balanced and begins to solve our spending problem.
Seems like Boehner has no one to blame but himself and his party. Sometimes it's better to eat at McDonalds than to starve.


#48

Krisken

Krisken

And now I eat crow as they decided to strike a deal. Keep in mind this doesn't mean it's been voted on and is ready to sign. Leadership is in on the deal, but who knows with the little children in the House and Senate.

And, as always, for fuck's sake, don't read the comments.


#49

DarkAudit

DarkAudit

House won't vote tonight, so ooooover we go!

Serves everyone right.


#50

Tress

Tress

We won't actually be going over any "cliff" tonight. The provisions were not going to take effect until Wednesday, meaning Congress can vote tomorrow to retroactively approve the deal and avoid the penalties. Apparently McConnell and Reid have signed off, as well as Pelosi, but Boehner is still making noise about screwing it all up if the GOP doesn't get everything they want.


#51

PatrThom

PatrThom

I would just like to say that, even as someone who makes less than $250,000/yr (and therefore the lowest tax burden), I really don't appreciate having my ability to provide for me and mine taken and burned on some altar by someone claiming to be my servant in the hopes that he will get what he wants.

--Patrick


#52

Tress

Tress

...and in the end, Congress sort of comes up with a solution, and sort of kicks the can down the road. A most imperfect "solution" with hardly any spending cuts. Just a tax increase for households earning $450,000 or more.

Blech.


#53

Terrik

Terrik

Well gee, lets pop the champagne bottles for that one.


#54

Espy

Espy

Good job congress. Way to stay stupid. Wouldn't want to ruin that great streak you guys have been on. I can't wait till the debt ceiling debate of 2013!


#55

Krisken

Krisken



#56

GasBandit

GasBandit

And the can is kicked a little farther out onto that rickety, rickety bridge.


Top