Official Fiscal Cliff Discussion

[zerozero]

Lo I turn on the idiot tube and I see all the anchors pontificating about some Fiscal Cliff. I gaze upon them in puzzlement for in all the brouhaha of the electoral politics I haven't heard a thing about this 'Cliff'. What is this Cliff? So I turn to google and I discover this:

The United States fiscal cliff refers to the effect of a series of enacted legislation which, if unchanged, will result in tax increases, spending cuts, and a corresponding reduction in the budget deficit.[1] These laws include tax increases due to the expiration of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and the spending reductions ("sequestrations") under the Budget Control Act of 2011.

The year-over-year changes for fiscal years 2012-2013 include a 19.63% increase in revenue and 0.25% reduction in spending.[2]

Some major domestic programs, like Social Security, federal pensions and veterans' benefits, are exempted from the spending cuts. Spending for federal agencies and cabinet departments, including defense, would be reduced through budget sequestration.

The deficit for 2013 is projected to be reduced by roughly half, with the cumulative deficit over the next ten years to be lowered by as much as $7.1 trillion. However, it is also projected to cause a double-dip recession in the first half of 2013.[3]

The Budget Control Act of 2011 was passed under the political environment of a partisan stalemate, in which Democrats and Republicans could not agree on how to reduce the deficit. It was thought that the blunt cuts of budget sequestration and sharp revenue increases would be mutually undesirable to both parties and provide an impetus and deadline to bring the sides together to solve the deficit problem.

The projected effects of these changes have led to calls both inside and outside of Congress to extend some or all of the tax cuts, and to replace the across-the-board reductions with more targeted cutbacks. It has been speculated that any change is unlikely to come until the period roughly between the 2012 federal elections and the end of the year. Additionally, the debate may be exacerbated by the expectation that the debt ceiling is expected to be reached before the end of 2012,[note 1] unless "extraordinary measures" are used.[4]

Nearly all proposals to avoid the fiscal cliff involve extending certain parts of the 2010 Tax Relief Act or changing the 2011 Budget Control Act or both, thus making the deficit larger by reducing taxes and/or increasing spending.

so they gotta handle this by the 1st of January?

 

[Skooby]

Markets are falling because of this...

 

[zerozero]

Markets are falling because of this...

the stock market is a terrible place to look for governance opinions... those gambling dudes stay swinging back and forth on some manufactured centrist consent thing

but I agree they need to get moving on this

 

[TLR Is Mental Poison]

I hope it goes through. We need this kind of discipline + swift action.

 

[zerozero]

I hope it goes through. We need this kind of discipline + swift action.

word? how'd that work out for Europe?

Now would be a terrible time to enact a bunch of automatic tax increases and spending cuts and just put the economy back in danger of recession

 

[Mr swag]

Obama doesn't have to do shyt to raise taxes on the rich Since it expires at the end of the year.

All Obama has to do is tell them that "I'm not running for reelection but you guys are. What u gonna do???"

 

[TLR Is Mental Poison]

word? how'd that work out for Europe?

Now would be a terrible time to enact a bunch of automatic tax increases and spending cuts and just put the economy back in danger of recession

You consider a 0.25% spending cut (~80B) "a whole bunch"?

How would you deal with the deficit?

 

[zerozero]

You consider a 0.25% spending cut (~80B) "a whole bunch"?

How would you deal with the deficit?

obviously if there's a budget shortfall you need to raise revenue and cut spending. that's not the question. the question is what, when and how

I think more spending is needed for now... massive infrastructure and public transportation projects are needed in the US to make it future-competitive with the rise of the non-West countries and that would help the economy grow more , decreasing joblessness and increasing tax revenue from successful construction and related businesses

Bush tax cuts need to expire too

Social Security, Medicare and Medicaid need to be not touched the slightest but the healthcare costs they're paying need to be reined in

So basically my plan is 2 years of growth are needed before you can start to close the deficit (should also start paying back the debt once you're in surplus)

 

[TLR Is Mental Poison]

obviously if there's a budget shortfall you need to raise revenue and cut spending. that's not the question. the question is what, when and how

I think more spending is needed for now... massive infrastructure and public transportation projects are needed in the US to make it future-competitive with the rise of the non-West countries and that would help the economy grow more , decreasing joblessness and increasing tax revenue from successful construction and related businesses

Bush tax cuts need to expire too

Social Security, Medicare and Medicaid need to be not touched the slightest but the healthcare costs they're paying need to be reined in

So basically my plan is 2 years of growth are needed before you can start to close the deficit (should also start paying back the debt once you're in surplus)

I think we are at the limit of what we can call reasonable public spending. What % of economic activity should the govt be printing out of thin air? Right now we are at like 15%. Where do we stop? 30%? 50%?

And we have a ton of room to cut... I think the military budget is like $750B? I dont think the rest of the world spends that much on their military in total

I think the goal should be to legitimately stimulate the private sector. Yes we need to fix our infrastructure, but we also need to become competitive and foster confidence. I still think doing away w/corporate taxes and implementing a revenue neutral individual tax overhaul is the way to do that. The complexity of the tax system is a huge drain that benefits nobody but politicians and accountants.

But stimulation through printing is dead. We need to get creative and figure out how to jump start the economy without printing. We can't print anymore.

 

[zerozero]

I think we are at the limit of what we can call reasonable public spending. What % of economic activity should the govt be printing out of thin air? Right now we are at like 15%. Where do we stop? 30%? 50%?

And we have a ton of room to cut... I think the military budget is like $750B? I dont think the rest of the world spends that much on their military in total

I think the goal should be to legitimately stimulate the private sector. Yes we need to fix our infrastructure, but we also need to become competitive and foster confidence. I still think doing away w/corporate taxes and implementing a revenue neutral individual tax overhaul is the way to do that. The complexity of the tax system is a huge drain that benefits nobody but politicians and accountants.

But stimulation through printing is dead. We need to get creative and figure out how to jump start the economy without printing. We can't print anymore.

you're mixing spending with Fed policy when you say "printing". I'm talking about financing through the regular debt mechanism... let's buy some US Infrastructure bonds

When you say "stimulate the private sector" you're ignoring the fact that the only thing that the private sector has been running on is fumes for 20 years... bubble and bust cycles based on consumer and corporate debt is not legitimate stimulation .. how can the US build a new economy? It's a tough problem

I'm the first person to say that military spending needs to be reined in.. they don't need whole fleets of new planes that can fight China Russia and the EU at the same time... lol

 

[bscott85]

I'm glad Obama won, but they need to decide on the Bush tax cuts ASAP.

As of January 1st 2013 all of our taxes go up, not just the rich.

If you make less than $34,550, your tax bracket goes from 10% to 15%.

They need to extend this for us lower folks at the very least.

A lot of people forget this and think they were only for the rich.

 

[TLR Is Mental Poison]

I'm glad Obama won, but they need to decide on the Bush tax cuts ASAP.

As of January 1st 2013 all of our taxes go up, not just the rich.

If you make less than $34,550, your tax bracket goes from 10% to 15%.

They need to extend this for us lower folks at the very least.

A lot of people forget this and think they were only for the rich.

A lot of brays in that income range don't pay any taxes. If people werent crying about that theyd be crying about them getting rid of deductions. One way or another they gotta generate revenue... I think a good place to start would be w/folks that pay no taxes. I would go for deductions over rates

 

[The_Sheff]

This is going to end up being a good thing. Its doing exactly what it was designed to do and thats force these stubborn a$$holes to actually do their job for once.

 

[GoPro]

You consider a 0.25% spending cut (~80B) "a whole bunch"?

How would you deal with the deficit?

Simple:

- Raise taxes on the rich to 60/70%. If they have a problem with it, tell em to kick rocks. 30% of their current income would still be vastly more than the median in any other country in the world, including this one. You would still have the incentive to succeed. The results just wouldn't have such astronomical disparity.
- Cut military spending
- The majority of this added revenue to go immediately to reducing the debt
- The rest would go towards educating the populous in various contributory fields free of charge (no lib arts degrees)

• Sciences
• Construction
• Engineering
• Manufacturing

This new educated populous will be the entrepreneurs of small businesses and their employees. America would become a FUBU Nation. Only thing imported from China is rice. It will also be your new majority tax base, taxed at, well, 15-30% (no exceptions or pandering deductions for kids and such. You brought that kid into the world, you can afford it). People would have paid off their loans in maybe 10 years. The rest of their taxes would go to basic gov services, but mainly to reducing the debt. Most importantly, you would have gotten rid of the "welfare queens" and increased the workforce. Slowly but surely, the debt would reduce. May take 50 to 100 years, but it took 50-100 years for it to get to this point anyway.

But republicans dont want this. They have no problems with corporations laying off workers while recording increasing profits and dispersing said profits amongst the elite. Theyre perfectly content with the immorality of the current income/wealth disparity. I've heard from rich repubs that greed is a positive trait, and from poor repubs that excess is a gift from God .

Of course I haven't crunched the actual numbers, but I think the general premise would work. You have a fairer, less-divided, more-content America. You'd still have a lavish upper class, but now there'd be a thriving and expansive middle class, and a supporting lower class that can live comfortably while performing the menial tasks that are required in society.

 

[TLR Is Mental Poison]

Simple:

- Raise taxes on the rich to 60/70%.
...

Of course I haven't crunched the actual numbers

You realize after a 60% federal income tax, you have another 5% tax for MC/SS, and then state + local taxes, AND THEN sales taxes.....

When its all said and done you are talking about 80-90% taxes on "the rich"... which will do nothing but encourage tax evasion and expatriation

If you made $500K a year and taxes whittled that down to $50K a year would you sit and take that? So some other people making $50K a year could pay zero taxes????

You prob should "crunch the numbers" before this goes through... makes no fcking sense

A more logical solution would be to make capital gains taxes the same curve as regular income and ditch business/corporate taxes in a revenue neutral way.....