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Old 11-08-2012, 08:42 AM
 
Location: Great State of Texas
86,093 posts, read 72,460,873 times
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Quote:
Originally Posted by richrf View Post
I agree. The cuts would be fine with me. However, politically this might be difficult since the stock market would probably react pretty badly if the spigot that keeps it alive (government spending) is cut down. Long term it is good for the market, since it would put the country back on the path to real growth (as opposed to deficit growth) and the market can once become an investment vehicle, as opposed to a gambling vehicle, but I am not sure that politicians want to take the short-term hit. Especially with congressional elections just two years away. I think there is a way to slowly chip away with the debt but I have no problems with just chopping it down quickly.
The stock market is ruled by Institutional traders and their HFT computers.
Take the short term hit now for long term benefits.

Iceland is the only country that told the IMF where to go. They took the hit. Their hit was worse than anything that would hit us.
They have recovered and are doing better than those that kicked the can down the road.

DEBT is a 4 letter word that makes you a slave to the system.
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Old 11-08-2012, 08:42 AM
 
Location: Jewel Lake (Sagle) Idaho
27,487 posts, read 17,613,967 times
Reputation: 15584
Quote:
Originally Posted by richrf View Post
My thoughts:

1) For a variety of political reasons, I think that "raising taxes" on the upper 2% is unpalatable to the Republicans. It is their brand and Bush got solidly punished by his part for his "read my lips" comment and then reneging. But there are other ways to raise taxes. Limiting tax deductions would be one way and I believe that it will raise similar revenues.

2) Yes, the SS Tax holiday will probably end. Too much money is being loss, though this will hit the 99% the most. It may be hard on the economy.

3) Probably some deal can be made that will keep defense spending flat. But since this is such a source of pork for certain areas in our country (e.g. Virginia, Texas) which is important to both parties, I am sure it will not be hacked to hard.
With (1), the liberals have campaigned against the "Bush Tax Cuts" for 12 years. Let them have their way and let them all expire. The tiny bit (comparatively speaking) of extra revenue from the top 2% is trivial in comparision to what will come from the remaining 98%, who benefitted most from the BTC. And by the way, voted for Dems this election. This election was a mandate to support liberal policies...lets do so and see what happens. Oh, and with states approving gay marriage, now gays can experience the "marriage penalty" that went away under the BTC.

Liberals say we'll have lots more revenue come in for the government to spend, while conservatives say that taking all that money from individuals kills economic growth, and thereby actually reduces revenue. Lets see who is right. If the left is correct, fine. If not, we fix things in 2 and 4 years. But lets actually do it instead of just pretending.
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Old 11-08-2012, 08:46 AM
 
Location: Chicago
5,559 posts, read 3,673,817 times
Reputation: 2181
Quote:
Originally Posted by my54ford View Post
Why not let it go over the cliff? I mean really you have to hit bottom before you can climb up out of the hole...
Probably because of possible short term consequences, particularly with the stock market that for some reason has become a proxy for the health of the economy. In reality, the stock market has become a proxy for the amount of speculation and desperation in our economy (it no longer reflects real growth) but I think that politicians don't want to take a chance they they will be beaten up if the market tanks if/when we go over the cliff.

Sort of like what happened when Lehmann expired. Lehmann should have been allowed to go under, but in a more reasonable way without bailing out Goldman and friends. And yes, market speculators should take their lickings if it tanks if we go off the cliff. But I don't think that politicians want the blame.
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Old 11-08-2012, 08:48 AM
 
Location: somewhere in the woods
16,884 posts, read 13,027,423 times
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Quote:
Originally Posted by HappyTexan View Post
But that poster is not a member of Congress.

Congress has 45 days. Not enough time to hammer out anything decent.
I think the best they can do is more emergency bills and kick the can down the road for another 6-12 months.

We also have a debt ceiling to deal with.


just default. get rid of the whole mess of debt and start over. live within our means with no loans from other countries.
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Old 11-08-2012, 08:48 AM
 
Location: Chicago
5,559 posts, read 3,673,817 times
Reputation: 2181
Quote:
Originally Posted by HappyTexan View Post
The stock market is ruled by Institutional traders and their HFT computers.
Take the short term hit now for long term benefits.

Iceland is the only country that told the IMF where to go. They took the hit. Their hit was worse than anything that would hit us.
They have recovered and are doing better than those that kicked the can down the road.

DEBT is a 4 letter word that makes you a slave to the system.
I certainly would support such a decision. I entirely agree with you. It is about time we get back to serious work in building, manufacturing, and servicing and forget about debt and gambling as a source of wealth.
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Old 11-08-2012, 08:50 AM
 
Location: Chicago
5,559 posts, read 3,673,817 times
Reputation: 2181
Quote:
Originally Posted by Toyman at Jewel Lake View Post
With (1), the liberals have campaigned against the "Bush Tax Cuts" for 12 years. Let them have their way and let them all expire. The tiny bit (comparatively speaking) of extra revenue from the top 2% is trivial in comparision to what will come from the remaining 98%, who benefitted most from the BTC. And by the way, voted for Dems this election. This election was a mandate to support liberal policies...lets do so and see what happens. Oh, and with states approving gay marriage, now gays can experience the "marriage penalty" that went away under the BTC.

Liberals say we'll have lots more revenue come in for the government to spend, while conservatives say that taking all that money from individuals kills economic growth, and thereby actually reduces revenue. Lets see who is right. If the left is correct, fine. If not, we fix things in 2 and 4 years. But lets actually do it instead of just pretending.
I would be fine with this. However, there would be heavy political re-election ramifications for certain Republican representatives in the House in two years should this happen. For this reason, I believe it is off the table. But we shall see.
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Old 11-08-2012, 08:51 AM
 
14,298 posts, read 8,103,867 times
Reputation: 4247
Quote:
Originally Posted by richrf View Post
Yesterday I finally heard of possible approach to resolving the fiscal cliff that is palatable to both parties:

Raise revenues by limiting deductions (endorsed by both Obama and Romney. Make some long term cuts to spending particularly Medicare (which is out of control. It seems both sides may be agreement on this as a possible approach.

I think that Obama can make this deal because he is not up for re-election so he can make some bolder moves and I also think that the Republicans do not want to shoulder the blame and consequences if nothing is done. It should be an interesting 45 days. I believe that a reasonable solution can actually benefit the 99% of this country. Maybe one of the first pieces that has done so in the last 20 years.
Maybe 0bama will follow up on his I will "go line by line through the federal budget in order to eliminate wasteful and ineffective programs." His admin started going thru the budget almost four years ago, I'll bet they can cut trillions of fraud, waste and abuse.

"Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we’re starting with the biggest lines. We have already identified two trillion dollars in savings over the next decade."
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Old 11-08-2012, 08:52 AM
 
Location: West Coast of Europe
21,366 posts, read 19,293,025 times
Reputation: 8483
Quote:
Originally Posted by richrf View Post
Yesterday I finally heard of possible approach to resolving the fiscal cliff that is palatable to both parties:

Raise revenues by limiting deductions (endorsed by both Obama and Romney. Make some long term cuts to spending particularly Medicare (which is out of control. It seems both sides may be agreement on this as a possible approach.

I think that Obama can make this deal because he is not up for re-election so he can make some bolder moves and I also think that the Republicans do not want to shoulder the blame and consequences if nothing is done. It should be an interesting 45 days. I believe that a reasonable solution can actually benefit the 99% of this country. Maybe one of the first pieces that has done so in the last 20 years.
From what I have read about that cliff, maybe it would not be such a bad thing after all Shock therapy so to speak...
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Old 11-08-2012, 08:53 AM
 
Location: Chicago
5,559 posts, read 3,673,817 times
Reputation: 2181
Quote:
Originally Posted by monkeywrenching View Post
just default. get rid of the whole mess of debt and start over. live within our means with no loans from other countries.
I am all for living within our means. I believe this is the strongest and healthiest type of economy. The strongest European economies are Germany, Finland, and Netherlands, all of which adopt this approach. We once had this approach until politicians were given unlimited ability to spend money by the Federal Reserve (under Greenspan and Bernanke) who offered unlimited financing from the money printing press.
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Old 11-08-2012, 08:55 AM
 
Location: Chicago
5,559 posts, read 3,673,817 times
Reputation: 2181
Quote:
Originally Posted by OICU812 View Post
Maybe 0bama will follow up on his I will "go line by line through the federal budget in order to eliminate wasteful and ineffective programs." His admin started going thru the budget almost four years ago, I'll bet they can cut trillions of fraud, waste and abuse.

"Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we’re starting with the biggest lines. We have already identified two trillion dollars in savings over the next decade."
I very much hope he does this and there are enough representatives and political backing (both small/medium business and electorate) to actually accomplish this. However, big business, the largest benefactor of enormous Federal spending will probably resist.
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