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What's the big deal? The fiscal cliff cuts the debt by a mere $100 billion and raises some new revenue by ending the Bush tax cut. The net effect will be less debt, which is exactly what everyone has been asking for? Or do people want less debt without reducing debt? I don't get it.
What's the big deal? The fiscal cliff cuts the debt by a mere $100 billion and raises some new revenue by ending the Bush tax cut. The net effect will be less debt, which is exactly what everyone has been asking for? Or do people want less debt without reducing debt? I don't get it.
When $500 billion is sucked out of the economy every year no one really wants to take credit for that and that's what all the posturing has been.
Obama had a chance to raise taxes on all of that extra money laying around not doing anything in the "rich" people's hands and when he had that chance he conceded that doing so would take demand out of the economy. Apparently it only takes demand out of the economy in a recession and not when the economy is booming at 1.6% a year.
This should be encouraged even if deep down he knows he has no choice. If no compromise is reached then all the Bush tax cuts expire but if a compromise is reached some may be allowed to stay on the books. Either way he's bent over, his pants are at his ankles, and he's all lubed up.
This should be encouraged even if deep down he knows he has no choice. If no compromise is reached then all the Bush tax cuts expire but if a compromise is reached some may be allowed to stay on the books. Either way he's bent over, his pants are at his ankles, and he's all lubed up.
I'd suggest you navigate through the CBO website. They do all sorts of predictions regarding the economy and there's one called fiscal cliff.
However, eliminating or reducing the fiscal restraint scheduled to occur next year without imposing comparable restraint in future years would reduce output and income in the longer run relative to what would occur if the scheduled fiscal restraint remained in place. If all current policies were extended for a prolonged period, federal debt held by the public—currently about 70 percent of GDP, its highest mark since 1950—would continue to rise much faster than GDP. Such a path for federal debt could not be sustained indefinitely, and policy changes would be required at some point.
The more that debt increased before policies were changed, the greater would be the negative conse- quences.3 Large budget deficits would reduce national saving, thereby curtailing investment in productive capi- tal and diminishing future output and income. Interest payments on the debt would consume a growing share of the federal budget, eventually requiring either higher taxes or a reduction in government benefits and services. In addition, rising debt would increasingly restrict policy- makers’ ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or international crises. Growing debt also would increase the likelihood of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget and the gov- ernment would lose its ability to borrow at affordable rates. Moreover, the longer the necessary adjustments in policies were delayed, the more uncertain individuals and businesses would be about future government policies, and the more drastic the ultimate changes in policy would need to be.
I'd suggest you navigate through the CBO website. They do all sorts of predictions regarding the economy and there's one called fiscal cliff.
However, eliminating or reducing the fiscal restraint scheduled to occur next year without imposing comparable restraint in future years would reduce output and income in the longer run relative to what would occur if the scheduled fiscal restraint remained in place. If all current policies were extended for a prolonged period, federal debt held by the public—currently about 70 percent of GDP, its highest mark since 1950—would continue to rise much faster than GDP. Such a path for federal debt could not be sustained indefinitely, and policy changes would be required at some point.
The more that debt increased before policies were changed, the greater would be the negative conse- quences.3 Large budget deficits would reduce national saving, thereby curtailing investment in productive capi- tal and diminishing future output and income. Interest payments on the debt would consume a growing share of the federal budget, eventually requiring either higher taxes or a reduction in government benefits and services. In addition, rising debt would increasingly restrict policy- makers’ ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or international crises. Growing debt also would increase the likelihood of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget and the gov- ernment would lose its ability to borrow at affordable rates. Moreover, the longer the necessary adjustments in policies were delayed, the more uncertain individuals and businesses would be about future government policies, and the more drastic the ultimate changes in policy would need to be.
Anyways, take a read for yourself, It's from May, 2012.
Then ask yourself, do you want to stay at the strip club a little longer on the credit card since you ran out of money 30 years ago?
It should also be noted that the CBO anticipates growth in the second half of 2013 if we go over the fiscal cliff in January, and only projects a recession of 1.3% at an annual rate the first half of the year. So we're talking about a .5% contraction of the economy in total for 1/2 of the year, then potentially making up for it the second half PLUS we'll slash our deficit in half. Let's do it.
When $500 billion is sucked out of the economy every year no one really wants to take credit for that and that's what all the posturing has been.
Obama had a chance to raise taxes on all of that extra money laying around not doing anything in the "rich" people's hands and when he had that chance he conceded that doing so would take demand out of the economy. Apparently it only takes demand out of the economy in a recession and not when the economy is booming at 1.6% a year.
Sounds like posturing to me by everyone, including the big shot investors on CNBC. On one hand they talk about the desperate need to cut the debt. So, now the debt will be cut. What's the beef?
It should also be noted that the CBO anticipates growth in the second half of 2013 if we go over the fiscal cliff in January, and only projects a recession of 1.3% at an annual rate the first half of the year. So we're talking about a .5% contraction of the economy in total for 1/2 of the year, then potentially making up for it the second half PLUS we'll slash our deficit in half. Let's do it.
Well that's where the rubber meets the road.
Does Obama have the guts to ignore his needy ego for a temporary downturn? Everything I've seen so far says he doesn't have the guts or the willpower and to be honest the American people haven't exactly shown much of a backbone either.
It should be noted though that the CBO predicted something like 4% growth after a dive off the fiscal cliff in the second half of that year. They're basing that off previous recessions and how quickly we make our way out of them. They can't really base a recovery on that model now because you have things like Odd-Frankenstein and Obamacare which still has employers all freaked out over new laws, regulations, compliance and cost.
From what I have been hearing, it may be that a cap on deductions may be the compromise as well as a lowering of corporate taxes coupled with closing corporate subsidies and loop holes. I am not sure that it can be worked out before the fiscal cliff but it should be interesting to watch. I don't think the President will approve another extension of the Bush cuts without a firm plan in place.
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