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The Latest On The Fiscal Cliff

We’ll get the latest from the edge as the nation hurtles towards the fiscal cliff.

House Speaker John Boehner, R-Ohio, enters a news conference to speak about the fiscal cliff on Capitol Hill in Washington on Thursday, Dec. 20, 2012. House GOP leaders abruptly canceled a vote on the Plan B measure Thursday night after they failed to round up enough votes for it to pass. (AP)

House Speaker John Boehner, R-Ohio, enters a news conference to speak about the fiscal cliff on Capitol Hill in Washington on Thursday, Dec. 20, 2012. House GOP leaders abruptly canceled a vote on the Plan B measure Thursday night after they failed to round up enough votes for it to pass. (AP)

Well now, here we are.  Christmas Eve, and our fearless leaders in Washington have not figured out how to keep us from going over the famous fiscal cliff.  Maybe they think Santa Claus will take care of it.  Or Christmas elves.  Or Rudolph.  But the reality is, next week higher tax rates kick in across the board without some intervention.

Broad-axe spending cuts.  Millions of unemployment checks will stop.  Economists warn it’s a recipe for recession.  And we’ve had enough of that.  Merry Christmas!

This hour, On Point:  staring at our cliff-dive.

-Tom Ashbrook

Guests

Major Garrett, Chief White House correspondent for CBS News.

Nancy Cook, budget and tax correspondent for National Journal.

From Tom’s Reading List

New York Review Of Books “This is all the more distressing since it is not at all clear that a $2 trillion deficit reduction over ten years is even necessary to stabilize America’s finances. The projections are based on a conservative estimate of potential economic growth by the Congressional Budget Office. Yet even the $2 trillion objective is well below proposals made by others. Erskine Bowles and Alan Simpson, the chairmen of Obama’s budget balancing commission, are seeking, according to their original plan, another $4.6 trillion in spending cuts and tax increases.”

New York Times “With House Republicans’ revolt over their leader’s tax plan the evening before, President Obama on Friday faced the challenge of finding a new tax-and-spending solution — perhaps working now with Senate Republicans — to prevent a looming fiscal crisis in January.”

Wall Street Journal “House Speaker Boehner, facing a rebellion in his party, abandoned plan to avert tax increases for most Americans, throwing budget negotiations into disarray.”

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  • Wm_James_from_Missouri

    Recently there was an internet news commentary that said the number of 100 dollar bills was increasing dramatically throughout the world and that the US Treasury was benefiting in a big way. * There is no doubt, the form money takes plays a role in how money is spent and used and hoarded . I would once again like to suggest that the US Treasury develop a new type of currency that would double as a commodity in some meaningful way. To help generate revenue for the treasury and value to the citizenry.

    Examples:
    _ A solar cell coin that could be inserted into a device with other “coins” to produce power while not being used as currency.
    _ A computer “chip” that could be “ganged” with other chip-coins to provide processing power.
    _ Coins that provided educational information, say; science or mathematical equations and methods that would help boost literacy in these difficult subjects.
    _ Coins that provided some useful measurements, for health, say, or even acted as a time piece.

    I welcome any ideas you may have or comments.

     
     
    * This is also an implicit sign that inflation will be picking up in the future ! This is not good, considering that wages have been stagnating and, in fact, declining in real terms for some 30 years now !

     

    • hennorama

      Wm_James – this is an interesting and creative idea.  There are three problems, however – costs, time, and the largest of all – people don’t like using coins, especially unfamiliar and NEW coins.

      US currency notes are cheap to produce, costing less than 10 cents/note printed.  $100 bills have an average lifespan of nearly 18 years.  According to the Federal Reserve, “… $100 notes are often used as a store of value. This means that they pass between users less frequently than lower denominations that are more often used for transactions, such as $5 notes. Thus, $100 notes typically last longer than $5 notes.”

      http://www.federalreserve.gov/faqs/how-long-is-the-life-span-of-us-paper-money.htm

      http://www.federalreserve.gov/foia/2012newcurrency.htm (Table 2)

      Coins can be expensive, but this can be offset because they last longer – typically 30 years or more.  Oddly, for the last 7 years, it has been more expensive to mint the penny and nickel than their face value, and in 2011, costs were more than DOUBLE their face value.  There’s also the problem that people use far fewer coins these days.

      Then we have the various failed attempts to “replace the dollar bill” with a dollar coin.  The latest failure is the Presidential Dollar coin – billions have been minted, but about 40% have been returned, with at least $1.4 billion worth sitting in Federal reserve vaults, uncirculated.  At least production is now going to be limited to collector’s editions.

      http://news.coinupdate.com/cost-to-make-penny-and-nickel-declines-but-still-double-face-value-1751/

      http://usatoday30.usatoday.com/news/washington/story/2011-12-13/dollar-coins/51885500/1

      Getting a new coin design into circulation is a long process, with no guarantee that the public will ever adopt the new coin.  This has been shown over and over with $1 coins, whether they bear the likeness of Pres. Eisenhower, Susan B. Anthony, Sacagawea, or U.S. Presidents.

      • Wm_James_from_Missouri

        Just for the record, the coins I am proposing would be high dollar denominations, $50, $ 100, and $ 500 dollar coins.

        • hennorama

          TY Wm. As I said, this is a creative idea. But getting people to USE new and unfamiliar coins is the greatest challenge, IMO

  • Gregg Smith

    The President in his awesome generosity has offered to either raise the top rate and solve nothing or to raise the top rate and solve nothing.

    “Mr. Obama repeatedly lost patience with the speaker as negotiations faltered. In an Oval Office meeting last week, he told Mr. Boehner that if the sides didn’t reach agreement, he would use his inaugural address and his State of the Union speech to tell the country the Republicans were at fault.

    At one point, according to notes taken by a participant, Mr. Boehner told the president, “I put $800 billion [in tax revenue] on the table. What do I get for that?”  “You get nothing,” the president said. “I get that for free.”

    http://online.wsj.com/article/SB10001424127887324731304578193770576333616.html

    Sleazy. Then there is this, from CNBC. It proves revenue isn’t the issue for Obama.

    http://video.cnbc.com/gallery/?play=1&video=3000136750

    • Mike_Card

      The offense has the ball on its own 25, and it’s 4th down, 10 to go.  The punter calls time, shouts to the defensive captain, “Give us a touchdown and we’ll give you the ball.”

      What is sleazy about declining that deal?

      • Gregg Smith

        He’s gotta do what he has to do but the sleazy part is the threat to use the SOTU and Inaugural address to spread propaganda against the Republicans. 

        • jefe68

          Oh the humanity! Heavens forbid!

          Presidents can use the State of The Union Address to frame their position in relation to how the nation is doing, but in the end it’s a speech. What President Obama is doing is called execitive privilege. I seem to remember a former president going on about political capital in his State of The Union address,

          • Gregg Smith

            No, you haven’t seen this kind of politics. He’s famous, he even slammed the SCOTUS at the SOTU. Who’s done that? 

  • 1Brett1

    To all of you on this forum who have offered me stimulating discussions, valuable insights, and interesting perspectives over the years, including Ellen Dibble, jefe68, Ray in VT, Don_B1, hennorama, anamaria23, AC, Acnestes, TF, Mike Card, DrewInGeorgia, Steve_T, JGC, and many others, have the happiest of holidays.

    To all of the Fox News/Rush Limbaugh crowd who come here: Merry Christmas. 

    And to John Boehner, who offers up, for vote, Republican talking points of tax cuts for the wealthy, cuts in Medicaid, Medicare, and Social Security, and other cuts in any and all “entitlement” programs, as “serious” plans to avert the fiscal “cliff,” only to (nearly simultaneously) bench that plan for vote, as he didn’t appear to have checked ahead of time that there weren’t any Republicans who felt compelled to vote for such nonsense, and who led House Republicans out the door to go home for the holidays instead, all while accusing the President of not offering any serious proposals and meaningful action, I wish you a happy Krampus, that mythical beast-like creature who “helps” Santa by attending to boys and girls who’ve been naughty.

    • jefe68

      Happy Holidays to you too. 

      And well said.

    • Steve__T

       All the best to you. Happy Holidays!

    • Acnestes

      Thank you, and the same to all of you!

      Once again, my enduring Christmas wish is for Baby Jesus to give all the Republicans souls, so they’ll have the opportunity to rot in Hell.

    • Ellen Dibble

      Thanks, Brett.  It’s been great.  This forum hangs in there taking thwacks at this and at that, as if it mattered.  I’m hoping that all the rigid do-nothing feckless right have Twitter accounts and Facebook pages that overflow with good advice, and not just those whose primaries put them into office with the one Great Commandment, “Thou Shalt not Tax,” which is what Boehner says they are “afraid of being accused of.”  Interesting comment.  Feckless government?  We’ve got a piece of that already. How about one with a bit of muscle.  And a lot of spine.  My stocking is hung by the cliff with care, in hopes that Saint Boehner soon will be there.  Or Saint Cantor.

      Happy holidays to all. I look forward to a feisty and furious new year. We’ll see.

  • LinRP

    The Republicans in the House are an abomination, and is what I I have to say about the cliff. That, and, heaven help is if this is now what governing has come to be.

  • jefe68

    This clip from Frank Capra’ 49 classic “It’s Wonderful Life” is still relevant now. 

    http://www.youtube.com/watch?v=O4ne13Zft9Q

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      The funny thing about Mr. Potter is that many people think he’s another business titan. But at almost seventy years removal, I think his future is pretty guessable.

      He wasn’t some sort of business giant, just a hard-driven man who had the stroke of geographic luck to not be near a big city. His empire, methinks, would be put out of business shortly (in the suburbanizing, Levittowning 1950s) by the W. T. Grants and Caldors, the stores who were put out of business by WalMart two generations hence.

      • jefe68

        It was 1949 and film took place during the Depression and WW2.  

        One does need to have a persepctive in these things. The main theme is still very revalant.

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          Of course the main theme is relevant, I never said anything else. (The movie was made in 1946, actually.)

          But in politics today, there exists a need to make heroes out of people who simply are not heroes.

          Any number of writers will pitch the idea of Potter was a hard-eyed businessman with his eye on the big chance, a mogul in the making, a regular J P Morgan or Frank Woolworth (who started retailing in little cities up in rural NY and Penna, I believe.) And that meme gets bonus points for being “politcally incorrect”, since everyone like you and I and our parent love George Bailey.

          My contention is that Potter isn’t anything that special when it comes to business acumen. He’s just the biggest fish in his own small pond, and that pond’s gonna dry up soon.

          (Plus the common emotional issues written about at lenght elsewhere still hold. Potter is a “warped, frustrated old man”, who has no friends, and doesn’t even do anything with his money to bring him joy. Compared to him, Charles Foster Kane was a regular Christmas-morning Ebenezer Scrooge.)

          • jefe68

            Yes, 46 not 49. 
            I always thought George Baily represented hope and the voice of the little guy. Which has pretty much been diminished in the last 40 years. Now that corporations can be George Baily’s as well, this speech seems even more poignant somehow.

            This was posted on Robert Reich’ blog: http://robertreich.org/post/38555865031

            Citizen Kane was much better film.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            But he wasn’t just “the little guy”.

            Remember Potter’s employee reporting about how people were leaving Potter’s crummy shacks? “He’s building the nicest little houses you’ve ever seen. If you don’t do something, one of these days I’m going to be asking George Bailey for a job (paraphrased).”

            George Bailey was “the brightest one of the bunch” with big dreams and no “tragic hero” flaws. He might be described as “not without ambition, but without the evil that should accompany it” which one needs so one’s ambition is not thwarted. (That last line I lifted from Macbeth, speaking of a power couple who didn’t let anything stand in their way.)

            On a strictly cinematic basis, I consider both IAWL and Citizen Kane as attaining heights most movies don’t dream of. Barely a wasted line of dialogue, camera angle, or plot point in either of them.

            There are very few movies that can claim that, Casablanca and The Wizard of Oz (I’m a Hollywood studio era fan) among them.

            Oh, and since it’s the 26th, Happy Boxing Day, Jefe.

          • jefe68

            Well I think he was, he came from modest means, had his dreams and hopes dashed by the death of his father when he had to take over the Building and Loan. I’m a sucker for great 
            dialogue myself.

            For me one of the best for it from that period was the Philadelphia Story and Double Indemnity which was written by James M Cain, screenplay co-written by Wilder and Raymond Chandler. 

            The scene between Barbara Stanwyck and Fred MacMurray when she tells him he was going over the speed limit is a classic.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Yeah, I can see where you are with that idea, but I would like to tangent: George Bailey losing his dreams and hopes didn’t mean penury and
            solitary misery, as it did for his cabbie friend who (in the “never
            born” sequence) was stuck in a crummy shack when he lost his house and
            his wife left and took their kid.

            Of course, the movie was made back when  “modest means” and “solid working class” could well be the same folk. His dad ran a B&L, as did he, and that put them well up into the “mover and shaker” segment of their town, while never getting rich.

            (I’m sorta playing from memory–correct as needed.)

            PS If you think you like The Philadelphia Story, we named our cat C. K. Dexter Haven.

            And sign me up for any On Point show about film noir.

  • Steve__T

    Merry Christmas to all and a happy Fiscal Cliff.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    We should all keep in mind that this evil “fiscal cliff” wasn’t some random event that came up out of nowhere like some asteroid discovered hurtling towards the Earth. It was all proposed and approved by the folks in Washington – one of the very few examples of bipartisanship and cooperation in the past few years. It shows what can be accomplished when both sides  work together.

    • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

      As a side note, given this was all intentionally created in Washington, the fiscal cliff is either the biggest piece of stupidity or the biggest con job ever visited on the American people. And given they are not that stupid, I’m leaning toward the latter.

  • http://www.facebook.com/people/Paolo-Caruso/1778940602 Paolo Caruso

    Yaawn.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    “path of escape”? They took it – they all went home for Christmas.

  • DrewInGeorgia

    Tom said “Did you think it would come to this?”

    Yep.

  • Coastghost

    ‘Twould be a novelty for “On Point” to relate to us just how the pending departure from the edge of the fiscal cliff will more exactly affect and impact the CPB, NPR, even WBUR and even “On Point”. Ten percent off the top means what specifically for these concerned parties? Six minutes off of each hour-long program? “Morning Edition” having to be hosted by Steve Inskeep or Renee Montagne solo one day a week? “ATC” being hosted by ONLY Robert Segal, Melissa Bloch, or Auddie Cornish one day a week? will WBUR/”On Point” news analyst Jack Beatty (who occupies a position that the Poynter Institute has assured no longer actually exists, Jack doubtlessly has an existential tale to tell about this) get furloughed at least once a month? Do tell, since you studiously avoid treating the aftermath of the Benghazi consulate attack with any resolve.

    • DrewInGeorgia

      What, no complaint about the pic of Boehner and an accompanying rant about how he played no role in holding America hostage?

      • Coastghost

        Today, my heart bleeds only for NPR, as it deftly trashes its own credibility. (I’m guessing they’ll axe Michelle Kelemen, her reporting is being actively suppressed already from what I read and hear.)

        • DrewInGeorgia

          Way to miss the frame of reference. You might want to go back and read your own comments following the Sandy Hook slayings. It sure did get quiet on The Coast after the facts came out.

          http://onpoint.wbur.org/2012/12/14/special-report

          • Ellen Dibble

            I’m wondering if NPR semi-knew more than the rest of the media about that semi-automatic rifle.

          • Coastghost

            Regardless, I think we can maintain confidently that NPR will never more than semi-say as much as it either knows or semi-knows.

          • Coastghost

            The facts remain the same: the .223 was not formally linked to the school massacre until the Saturday afternoon presser from the CT Medical Examiner. My comments were contemporaneous to the story, from Friday evening (after 7 pm, when the “On Point” special aired), until whenever Saturday or Sunday, as the record shows. “On Point’s” attempt to implicate the .223 as early as 7:30 pm Friday (when all of us were STILL being told only about the two handguns) AT THE TIME was both premature and misleading. I hardly speak for “On Point’s” able producers, but they sensibly saw fit to take their image of the .223 down by 9 am Saturday. I’m as amazed as you that they didn’t put it back up by the end of Saturday afternoon.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            ^ Looks like someone’s got a new hobbyhorse for Christmas.

          • Coastghost

            As I indicated plainly, I’d rather be riding the Benghazi Consulate Attack hobbyhorse, but NPR’s content to leave it wrapped under the tree until January: what IS a mere provincial to do? Merry Christmas to you, too.

          • DrewInGeorgia

            “My commentary was inappropriate and I apologize” would have been sufficient.

            I certainly have no problem admitting it when I am out of line.

          • Coastghost

            My commentary apparently was necessary to help keep the actual chronology straight, so you’ll get no apology from me. Merry Christmas, nonetheless.

          • jefe68

            What, more hyperbolic memes? Right wing rhetoric, the gift that keeps on misleading.

          • Coastghost

            Are you trying to argue that the Left is or should be dismissive of chronology? I see your point, given the Left’s tradition of devotion to idealism; but I thought innocently that the Left had been trying in recent decades to shed its mindless embrace of idealism: the lessons seem not to have taken. I do agree that chronometry is overlooked by both sides as a compelling political issue, I don’t restrict the relevance of chronology and the rhetoric of temporality to one side or the other, however.

          • jefe68

            Can you not make a comment that is not a diatribe or  hyperbolic? 

            I never said a damn thing about the left. 
            You were wrong about the gun thing and refuse to admit due to your ego. That’s how it seems to me. I hope someone got you a shovel for Christmas as you seem found of digging holes.

          • Coastghost

            So according to you and me, the great sin of the right is hyperbole, the great sin of the left is disingenuousness. I doubt either side permits the other a monopoly rhetorically, however (I do claim independence, btw, I may be slightly conservative but am no Republican nor never have been). Funny: all this crowd boasting of my sins in challenging WBUR’s ready depiction of the .223 rifle fails–ALL FAIL–to account for WBUR’s mgmt. decision to take the photo down. The resentment is present and seems to animate and motivate my detractors, or is it only envy?

          • DrewInGeorgia

            Shovel hell, I hope they brought him a Front Loader.

          • Mike_Card

            Might be a teachable moment; sort of like, keep quiet till the facts are in.

          • Coastghost

            Far be it from me to apologize on behalf of “On Point” and WBUR management for depriving you of your visual fetish: reposting the stark image would’ve been apropos any time after the CTME presser, but alas.

    • jefe68

      There it is, the smell of hyperbole in the morning.

  • Jack Acme

    the reality in Washington is that the entire Republican caucus in both houses is hard right. The number of hard left Democrats is paltry by comparison. Any deal in the “middle” will see only a minority of Republican votes.

    • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

      Historically there was a much bigger center in Congress that could be brought together to drown the extremes on either end. That center isn’t big enough to do that anymore.

      • beeste

        All the centrists are on the left, especially in the House.  If Boehner would just release 50-100 Republicans to vote with the Dems and he was willing to bring a vote to the floor, this would be done in days. 

      • Ellen Dibble

        Someone brought this up the Sunday talk shows, and Lindsey Graham was listening, not answering, at the moment, but his face seemed to reveal to me that he thought there was a possibility that this is exactly what’ll happen.  If the House can’t or won’t craft a bill that will be satisfactory to a majority, including those from the left and right, both sides of the aisle, then the Senate will have to do it.  And if the Senate foists a spending on the House, that isn’t what the founding fathers had in mind, but so it goes.  But there seems to me to clearly be a large majority in the House that could get something done.  It’s that there is a Tea Party coalition in the Republican caucus that can block THAT party from presenting an acceptable bill.  In effect, there are three parties in the House.  There are the Left, the Right, and the Far Right.  If the Far Right were left out of it, those 30 or 40 votes, we’d be home free.  It’s time to marginalize the do-nothing part of our representation.  We are not a do-nothing people.  Get On With It.

  • beeste

    This is what drowning the government in the bathtub looks like.  Grover let this beast loose and journalists need to be fair and honest: in this case that means blaming the Republicans.  The deal needs to be cut, and Obama is fair.  Boehner needs to get his colleagues to vote for something fair. 

  • DrewInGeorgia

    Holiday Hymn for Congress:

    I’ll be home for Christmas
    You can’t count on me
    Please just let me go
    I’ve presents under my tree.

    Christmas Eve will find me
    Enjoying the fruits of my schemes
    I’ll be home for Christmas
    Counting all my beans.

    I’ll be home for Christmas
    You can’t count on me
    Please have my rewards ready
    And my presents ‘neath tree.

    Christmas Eve will find me
    Where my wealth tips the beams
    I’ll be home for Christmas
    To hell with American’s Dreams.

    • Ellen Dibble

      Americans’ — plural, Drew.  But thanks.

      • DrewInGeorgia

        My bad, good catch.

  • http://www.facebook.com/jim.crick.35 Jim Crick

    I’ve always assumed we would go over the cliff as none of the parties have the wherewithal to accept responsibility for any cuts or difficult choices.  Once over the cliff, both republicans and democrats can claim credit for any tax cuts or benefits they restore in 2013.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    I find it interesting that we call it a “fiscal cliff” instead of what it really is – our first attempt at austerity measures. More are coming.

  • skeptic150

    One simple action would go a long way – make Grover Norquist politically impotent

  • KeepBiking

    When I studied finance in Graduate Business School, it used to be held as an axiom than US Treasury Bills were a “risk free” asset, whose default was inconceivable. Our models failed to consider that Congress could be both feckless and have a preference for Russian roulette.

    • DrewInGeorgia

      They’d be less enthusiastic to play Russian Roulette if someone could make them realize that all six chambers of the cylinder are loaded. Then again, maybe not.

    • hennorama

      Apologies in advance for repeating myself.  This is from about 3 weeks ago:

      “Congress already has complete control over Federal Spending through the budget process.  They can already impose restrictions if they choose to do so, without risking default on US debt.

      The debt ceiling as a limitation on spending is far too weak to be useful if Congress can simply vote to raise it anytime they wish.  And the downside of violating the debt ceiling is far too disproportionately severe for it to be a reasonable tool just to limit spending.  The potential consequences of DEFAULT on US debt are too catastrophic to entrust the debt ceiling to the whims of politicians, regardless of party.

      Fights over the debt ceiling turn into ridiculous games of “chicken” and reward only the fanatical, who get plenty of attention, rather than the reasonable, who want to make sensible deals.

      Let’s do away with the damned thing, once and for all.”

      The current fiscal conundrum is relatively minor, especially when compared to the Great Recession/near-Great Depression.  If nothing happens to change current law, revenues go up and spending goes down.  This is the desired outcome of the current “negotiations,” albeit a desired outcome far in the future.  The US will likely go into a sharp but shallow and brief recession, then snap right back.  Probably six months or so, maybe nine.

      However, failure to increase the debt ceiling resulting in US Treasury debt default will result in economic calamity worldwide, with unpredictable outcomes speading across the globe.

  • http://profile.yahoo.com/UVPKJL2AC6E6LFB5CGRBOE3SSQ Dan

    I wonder how much of the House GOP lack of support for Boehner’s Plan B has more to do with the significant backtracking on spending cuts as opposed to the small concessions on the taxing side.

  • skeptic150

    Here’s what I don’t like about Washington (or even state/local government):
    1) Partisan politics
    2) Grover Norquist (and a general lack of initiative to raise taxes- which, imo, is ultimately necessary)
    3) The religious right
    4) ”Corruption” via monetary support

    Congressional approval rating in 2004- 48%, currently- ~18%. I would venture to say what I’ve listed above might be listed by many others as reasons for such “disapproval” of Congress.

  • jefe68

    Greek moment? What is it with the Right and Greece?

    The US is not Greece. We are one of the largest economies in the world. Most likely in this part of the Universe.

    The debt and deficit will go down in the long term by adding better paying jobs and dealing with the real issue, health care costs.

  • Coastghost

    Nancy Cook: WHERE overseas is spending being cut? Everything Veronique de Rugy has been reporting suggests that NO spending cuts are occurring overseas (Eurozone, esp.), ONLY tax increases are the constituent of “austerity” abroad.

  • http://wh.gov/IVp4 Yar

    We are a safe haven until we’re not.  The bubble doesn’t start to leak slowly, it pops.
    Yes, we could use our cheap energy to build for the future, only we are not.  We are enjoying the party until we are out of other options.  We are the prodigal son. Who is the father to be responsible.  Maybe we have to go over the cliff to change tracks.

  • Mike_Card

    Feckless Rigidity–huzzah!

    • hennorama

      How long until “Feckless Rigidity” has a Facebook page, Twitter feed and Tumblr posts?
       
      That said – Hippo Holly Daze, Two Ewes …

      • Mike_Card

        Count me in!

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    The current “recovery” has only come about with a trillion or so in new debt every year. If the US was a household, it’s one currently living off of credit cards – it won’t last.

  • Ellen Dibble

    So even Grover Norquist couldn’t free up the Tea Party Republicans to move off zero?  So it’s up to the party honchos?  Who are they?  those who line up prmaries district by district?  Maybe the voters need to weigh in.  And guess what, those who voted for the Republicans are probably weighing in:  ”Don’t give an inch.”  And those Congresspeople know those voices, and heed them.  It’s harder anyway, to tweet in, edge a little this way, or that.  And hard to get recognized when you don’t have an absolute position, the “feckless rigidity position,” which is so easy to tweet.

    • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

      It’s a silly position – it’s the doctor who won’t amputate even when it means the patient will die.

      • Ellen Dibble

        I’m thinking that will make the congressperson think a bit.  If nothing else.  Feckless is not what they are in Congress for, right?  I remember seeing them gather together two years ago to talk with one of the networks, and they said, to a man, to a woman, that they were not in Washington to get re-elected.  They didn’t care about getting re-elected.  (So a primary challenge should carry no weight with them whatsoever.)  They were there to get something done, which was fiscal responsibility.  So.  Here we are two years later, and apparently they have feasted on the pride and glory of being a thumb-in-the-eye, stick-in-the-mud part of a feckless Congress.  And as a result, they don’t want to be primaried.  They want to remain in office to perpetuate their enormous value to the nation.  I know if I were in one of those districts I’d be trying to figure out what the tentacles of the media or the Chamber of Commerce membership were doing, by way of string pulling.  I’d be trying to think how can exemplify the best way to get my Congress and my congressperson to be part of the answer, not part of the problem.  I’m thinking the loudest voices in those districts are saying:  Be part of the problem; it’s the only easy thing to explain and do.

  • DrewInGeorgia

    Biggest Tax Hike in History!!!

    Someone please explain to me how a return to taxation levels present prior to temporary cuts is a Hike?

    • jefe68

      It’s called smoke and mirrors. It is amazing is it not?
      I mean the return to paying FICA is not a hike, it’s who we fund SS and Medicare.

      • Gregg Smith

        Yet it’s still called a “payroll tax cut”.

        • jefe68

          So it’s not hike when it is reinstated. 
          It’s the same as you were paying before.

    • Gregg Smith

      It makes more sense that calling them “tax cuts” if they don’t expire. They’ve already been cut, we can’t cut them again.

  • http://www.facebook.com/people/Paolo-Caruso/1778940602 Paolo Caruso

    All this debate over tax increases to fund public services,  while when Wall Street needs money, their buddies at the Fed just print it.. no voting necessary.   No one discusses the inflation left to the 95%  to pump up these wealthy non-producers.

  • Ellen Dibble

    Try that:  ”I live in Smalltown, Your District, and vote hard right for the reasonable guy in the room; stick to your guns:  feckless rigidity.”  And see if they pay attention. It should fit as a tweet, with a little adjusting. Of course it helps if they have had a chance to know who you are, constituent who throws her weight around and is not a sheep or a wolf. Something like that.

  • hennorama

    A Hope-y Cliffmas Eve to all!

    • Ellen Dibble

      Thanks so much!  I needed that!

      • hennorama

        YW, Ellen Dibble. Happy to help. Hippo Holly Daze, Two Ewes …

  • Ellen Dibble

    I saw Christiane Amanpour on NBC on Friday, in a special on the history of the Near East, talking about how actually the Israelis were not the slaves who built the pyramids; the pyramids were built by regular Egyptians who were paying their taxes by doing this work.  And I’m thinking, I’m doing my work to pay my taxes too.  For anything besides paying taxes?  For living expenses.  But in Egypt, it seems the government provided housing and food, so — same difference. I’m assuming I am of the class that has no lobbyist so I and my ilk will end up paying the whole 16 trillion dollars over the next couple decades. I hope the pyramid I build is impressive 3,000 years from now.

    • DrewInGeorgia

      Unfortunately we don’t build things to last these days, we engineer them to break. We’ve gotta keep our Parts Supply and New Version industries running at full-steam.

    • hennorama

      Countdown to WorriedfortheCountry’s “Where’s Obama’s Hoover Dam?” commentary starts … wait for it …NOW!

  • Minor Heretic

    I”m displeased, but not surprised, that Ashbrook and Co. were going all pearl-clutching about this issue. The fiscal “cliff” is a fiscal pattern in the linoleum. And centrism isn’t fair or smart when the supposed center is far to the right of what right was thirty years ago. The fiscal “cliff” is an attempt to provide cover for pseudo-centrists who want to make the world more pleasant for their CEO financiers.

    If Obama were actually a liberal he could:

    -Let us go over the fiscal linoleum
    -Get Reid to eliminate the filibuster
    -Start spoon feeding individual policies through the Senate for the GOP to chew on

    Middle class tax cuts? Yes or no. GOP?
    Granny’s Medicare benefits? Yes or no, GOP?
    And so on, my way or political suicide.

    Once he had gotten the important policies and denied the GOP most of their leverage he could open the real negotiations.

    But that would require that he wasn’t beholden to the same financial interests as his supposed opponents.

     

    • TomK_in_Boston

      Well put. All the corporate media, including, sadly, NPR, have bought into the false equivalences and false centrisms and “compromise is good regardless of the result” nonsense.

      It makes me wanna puke to hear the endless repetition that, if the TeaOP agrees to a chump change increase in taxes at the top, BHO is obliged to respond with “entitlement reform”, which in English  is “cuts in the retirement programs”. NO NO NO!

      Taxes on the plutocrats are at post-1929 lows and need to go up. We can’t afford the current military spending.  The retirement programs are great programs and do not need to be cut. That should be the basis of the policy, not phony compromise for compromise sake.

      SS is the soundest program on the planet and medicare is expensive because health care in the USA is expensive, but it is more efficient than the private system. No cuts, no “reform”. By all means make medicare as efficient as possible, by doing what is already in the ACA and by letting medicare negotiate drug prices.

      The American voters are strongly against the cuts, even the TeaOP geezers who want gvt off their backs. If the TeaOP wants to fight to the death for them, why stop them? Let them commit political suicide, please.

      Let the disastrous bush tax cuts expire, introduce legislation to cut taxes on under $250K, and let the right dare to vote against tax cuts. Let the “sequester” happen  and give the right back some of their precious weapons systems in exchange for spending what we really need.

      A “grand bargain” on the “fiscal cliff” = a “grand screwing” of average Americans. I’m grateful that the far right is so crazy that they keep preventing Rockefeller republican BHO from selling us out.

  • hennorama

    oldman – (apologies for not replying directly. I seem to be DISQUS-ted again) -

    Each time I hear or read “If the US was a household…” I’m reminded of a June 2011 clip from The Daily Show with Jon Stewart, titled “Cantor Won’t?”  While the entire clip is worth viewing (check out “Dad’s car” at 4:07, for instance), if pressed for time, one might start at about 1:34.
     
    Here’s the relevant quote from Stewart:

    “Actually – you know what, uh … that actually sounds like good common sense until you think about it for two seconds.  And then it just seems like bullsh*t masquerading as common sense.”
     
    http://www.thedailyshow.com/watch/thu-june-2-2011/cantor-won-t-
     
    I’m also reminded of the writings of L. Randall Wray, from 2010 (a shout-out to the poster who originally provided the link).  He said, in part and edited for brevity:
     
    “A sovereign government bears no obvious resemblance to a
    household. Let us enumerate some relevant differences.
     
    1. The US federal government is 221 years old, if we date its birth to the adoption of the Constitution … I don’t know any head of household with such an apparently indefinitely long lifespan. This might appear irrelevant, but it is not. When you die, your debts and assets need to be assumed and resolved. There is no “day of reckoning”, no final piper-paying date for the sovereign government. Nor do I know any household with the power to levy taxes, to give a name to — and issue — the currency we use, and to demand that those taxes are paid in the currency it issues.”
     
    Much more here:
     
    http://www.nakedcapitalism.com/2010/02/wray-the-federal-budget-is-not-like-a-household-budget-%E2%80%93-here%E2%80%99s-why.html

    • TomK_in_Boston

      Hahaha – “if the US was a household” or “if the US was a family sittin’ around the kitchen table” – excellent righty spin.

      As you say, a family doesn’t have taxing powers and doesn’t control the world’s reserve currency. Come on, righties! There is no analogy. 

      But if you insist…if the family needed a new roof, and were told they could borrow the money for 10 years at 1.5% interest rate or so, they would do it in a heartbeat. We should be borrowing and spending on infrastructure, too. And, if rich uncle Mitt was freeloading and not paying his fair share, the family would tell him to pony up or get out. We should increase taxes on the romney types, too.

      • hennorama

        TomK – TY for your response. I appreciate and respect your views.

        One could also extend the “If the US was a household/family sittin’ around the kitchen table” to another logical end, but for some reason logic seems to escape one political party (especially their stubbornly radical wing).

        If the household/family saw that their income was still less than it was 4 years ago, and they were spending a lot more too, would they ONLY say “we have a spending problem?” Not very likely, right? They would say “We need more money coming in AND we need to spend less.” They’d go out to find another job, sell some stuff at a garage sale or on Ebay or craigslist, cut back on the triple soy lattes at Starbucks, bake cookies rather than buy holiday gifts, fix the car rather than buy another, move to a cheaper place, etc.

        In other words, they’d try to tackle their budget difficulties from both sides, rather than ignore one part of the equation.

        As I tell anyone who asks about repairing their personal finances – there are only 3 ways to get ahead – earn more, spend less, or do both. Doing both generally has the fastest net result. It’s simple, and it works.

        Of course, logic, simplicity and politics seldom all go together. This is the real problem. I truly think one could select 2 adults at random from each state, put them together in a room, and get this resolved in a day. Or less.

        • DrewInGeorgia

          Good luck finding two adults if by that you mean two rational, reasonable, mature human beings.

          • hennorama

            Drew – TY for your response.

            I hear ya, and there’d no doubt be some arguing and shouting, but 100 random Americans agree on FAR more than they disagree about. They’d figure it out, without fisticuffs.

  • turnerwarehouse

    Some people on this show seem to take it for granted that politicians make decisions based on the effect of their decision on their re-election, rather than doing-the-right-thing. Is this what we’ve come to? We take that FOR GRANTED? Any politician who makes decisions this way should be berated and voted out!

    • hennorama

      turnerwarehouse – There’s a teensy tiny problem with that.  Should your wish be granted (pardon the pun), we’d get an entirely new crop of Representatives every two years, and 33 or 34 new Senators.  This experience vacuum would … on second thought – GREAT IDEA!

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        But wouldn’t the thinktankers and K-Streeters stay the same?

        • hennorama

          TF – well … if logic needn’t get in the way of Congressional inaction, why should logic need to be part of a good joke? And by “good joke” I do NOT mean Congress.

          Although I have found Sen. Mitch “I can’t feel shame” McConnell’s self-filibuster, and House Speaker John “I can’t count votes” Boehner’s Plan B buffoonery to be mildly amusing.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Point well made.

  • Gregg Smith

    IMHO President Bush’s biggest failure was to not defend himself against the barrage of lies that defined him. He was a gentleman that took the long view and history will judge him kindly. It;s sad that the conventional wisdom is a good decent man is evil. That’s the way Democrats roll, the politics of personal destruction. Ditto Romney, it wasn’t good enough to debate the issues they had to paint him as a truly despicable man. He’s not. The Democrat machine will repeat a lie over and over until it is believed and Republicans fecklessly play defense.

    The most ludicrous reasoning is believed as gospel by too many people. It is the result of lies being repeated ad nauseum. I suspect many here believe:

    The Bush tax cuts were for the rich
    President Clinton’s economy was due to tax rates
    Bush squandered the surplus
    There was no Clinton recession
    Our current deficits are due to tax cuts

    And so much more. We should not even be having this debate. It’s a failure of leadership. Congress has failed us. The media has failed us. There is too much emotion and an administration who is more than willing to lie, divide and conquer.
     

    • jefe68

      So all that right wing rhetoric about President Obama is OK in your right wing world. 
      The Bush tax cuts were without a doubt reckless, and they favored the top 5 to 0.01% of Americans.
      You can spin this anyway you want but the facts are there. 

      The rest of list also based on a lot of misinformation
      It’s a shame and a sham. You mentioned Mitt Romney.Now his son Tagg is trying to spin this idea that Mitt Romney did not really want to be president. “He wanted to be president less than anyone I’ve met in my life. He had no desire to . . . run,” said Tagg [Romney], who worked with his mother, Ann, to persuade his father to seek the presidency.

      This is one of the worst spin BS jobs I’ve ever seen about a failed presidential candidate.

      You keep supporting a political party that is failing and will keep on failing for years to come. It’s starting at the national level, but soon it’s going to move to the state and local government level. The GOP is a joke.

      • Gregg Smith

        You have no facts at all. Where one earth did you get that figure? You have proven my point. You believe lies. 

    • TomK_in_Boston

      My ol’ buddy W is a decent human being. If it weren’t for an emotional reaction to 9/11 causing him to make the horrible error of invading iraq, he would have been a decent president. He’s always had a sense of humor, and I enjoy seeing him react to the current TeaOP crazies.

      You’re wrong about taxes, as usual. The tax cuts primarily benefitted the rich and are a big part of turning the surplus into deficit, and in soaring inequality. The other big 2 are the wars and the economic crash itself, cased by ideological righty deregulation. Medicare part D is the 4′th, but I think it’s a good idea, since I like socialized medicine.

      Do you remember the arguments that the tax cuts were justified because we were paying off the debt too fast? I do. Funny how tax hikes aren’t indicated when the right is hysterical about too much debt, huh? Why does the argument work in forward and not in reverse?

      I agree that the media have failed us. Now they’re beating the drums that President Obama must agree to “entitlement reform” (English translation = “cuts to the retirement programs”) as a “compromise” in a deal to fix deficits caused by tax cuts, wars, and an economic crash. This is pure corporate media class warfare. Why isn’t the solution the reverse of what caused the problem – tax hikes, cuts in mil spending, and economic stimulus? Where are the media outlets saying that “entitlement reform” is a bad idea?

      • Gregg Smith

        I don’t know how it’s possible to say the poor didn’t benefit more when 6 million of the poorest saw their tax liability completely disappear, the bottom rate was lowered by 5 points and the top by 4.6 (less), and the result was the rich paid a larger portion of the overall bill. It’s illogical to call them the “tax cuts for the rich”. The logic used to say they caused deficits is bizarre. It assumes much. And we weren’t paying off the debt, we’ve never paid down the debt.

        So no, I disagree with most of it and believe as I said, they are lies that have been repeated until believed. 

        It’s Christmas so I’ll refrain from beating a dead horse on every issue but I’ll answer your questions. The solution is economic growth, the problem was not tax cuts or military spending. Obama’s “stimulus” was a disaster. The media is complicit in furthering the notion that addressing entitlements is mean-spirited and cruel. IT’s throwing granny over a cliff. Have a merry one.

        • TomK_in_Boston

          Gregg, in the spirit of Christmas I won’t try to explain taxes again and I’ll repeat that you are correct about W being a decent human being.

          I have to say, tho, that I’m disappointed to see you buying into the 1984-ish line that cutting the retirement programs (aka “entitlements”) is “saving” them. Ie, if we don’t turn granny’s comprehensive Medicare into a Ryan Groupon, we’re pushing her over the cliff. Don’t you remember the one about destroying the village in order to save it?

          Also I don’t see/hear the corporate media saying that cutting the retirement programs (aka “reforming entitlements”) is cruel. I hear that it’s the necessary, bipartisan, serious, adult thing to do if we don’t want to end up like greece. I hear the media constantly use the loaded term “entitlement”….geez, when I think of “entitled”, retirement programs don’t come to mind, but pampered, overprivileged romney types.

          Have a merry….Tom

    • Mike_Card

      The topic is “Fiscal Cliff,” so I’ll refrain from getting into the issue of draft-dodgers and deserters today.

      However, this is a fiscal topic that deserves more attention in the press, even if the election is over and the course is set:  http://www.examiner.com/article/gop-hides-nonpartisan-report-debunking-trickle-down-economics

      • Gregg Smith

        I read the link and was not impressed. It did not discuss the merits of any theory it just said Mr. Maddow said it said trickle down didn’t work. “Trickle down” was defined as they please and then they link to Krugman. Ugh.

        • Mike_Card

          Maddow reported the CRS study concluded that the Laffer Curve had intuitive appeal, but no empirical evidentiary basis.

          No reputable economist has presented data supporting Laffer’s assertions, including Laffer, himself.

          • Gregg Smith

            I’m sorry, I’m not going to take Maddow at face value regarding her interpretation of the study. Maybe she’s right but it’s MSNBC and she didn’t even give a quote from it, nothing but her proclamation.

            Unless one believes the line between a 0% rate and 100% rate is straight the Laffer curve must exist. The proof is the Harding, Kennedy, Reagan and GWB rate reductions that created more revenue. Maybe it was a coincidence. Or the fact that on average revenue as a percentage of GDP was lower under Eisenhower’a 91% rates than GWB’s rates. A higher rate has not historically brought in proportionately higher revenue. There is a point of diminishing returns, always has been. A curve if you will.

          • Mike_Card

            The Laffer curve is U-shaped; growth diminishes, but there’s no evidence that it recovers and goes positive.

            Here’s the raw CRS report:

            http://www.dpcc.senate.gov/files/documents/CRSTaxesandtheEconomy%20Top%20Rates.pdf

          • Gregg Smith

            The Laffer curve represents revenue not growth and yes it’s U shaped (upside down). I’ll check out the report, thanks, but it already appears Maddow’s conclusion was opinion and I don’t think anyone said that trickle down would cure cancer but it seems there is a lot of misrepresenting what the curve claims to illustrate. 

          • Mike_Card

            The LC poses a relationship between tax receipts and top marginal tax rates; that reductions in rates would first result in tax receipts, then turn around and yield growing tax receipts.  All we’ve ever seen is the part where rates and tax receipts both decline–yielding deficits.

          • Gregg Smith

            That’s only half. The Laffer curve also states higher rates create more revenue. It’s a curve. Growth (GDP) trumps all of it.

          • Mike_Card

            That’s what I said.  But we’ve never seen the 2nd half, where tax receipts grow.

          • TomK_in_Boston

            The “Laffer curve” is what a mathematician would call “trivial”. Since there is no tax revenue at 0% rate and since the economy is paralyzed and produces no revenue at 100% rate, there is an optimal rate somewhere in the middle. Duh. If we’re above that rate, cutting taxes will increase revenue. If we’re below that rate, increasing taxes will increase revenue. Call them range 1 and range 2, respectively.

            The problem is that the right won’t consider that, with rates at or near historic lows, we’re probably in range 2, where tax increases are good. In fact they don’t even want to talk about the two possibilities. In their alt universe, there is nothing but range 1, where tax cuts are good. No matter how low taxes get, more cuts will always produce more revenue. Taxes are always too high.

            Righties love to talk about the Laffer curve, but it’s ideological nonsense with no reference to the crossover point.

          • Gregg Smith

            I agree, obviously the Laffer curve is real. I find the discussion in vacuum silly. It’s about the economy and jobs. You can’t just raise rates and think that’s all there is. If GDP were growing at 5% then yea but the result in an economy like this would be counter productive.

            Maybe you’ll be the first to answer my oft repeated question: When have the top earners ever paid a larger portion of the overall bill?

          • TomK_in_Boston

            But you guys think you can just cut rates and that’s all there is. The laffer curve has 2 regimes.

            I don’t know what % of the overall bill is paid by the 1% or whatever you call the top, but that is not the right question. I do know that the nominal and effective rates paid by the top are at historic lows and their share of the total income is at historic highs, and that’s what makes the USA the paradise of the privileged.

            Here’s why the % of the total bill paid by the top earners is not so interesting. Suppose ALL the income went to 100 aristocrats. Then they would pay all the income tax. Would your reaction be that the system was unjustly screwing these poor plutocrats because a mere 100 were shouldering the entire tax burden?

          • Gregg Smith

            We won’t agree. Income does not “go to” anyone. If someone gets richer that does not mean someone else gets poorer.

    • DrewInGeorgia

      Why the hell are you on about Bush? I was hoping that Santa was real and that out of sympathy he would bring you some higher purpose and a sense of decency for Christmas, guess not.

      It’s amazing you can even utter the phrase “lie, divide, and conquer” without bursting into flames.

      • Gregg Smith

        The current debate is a direct result of people believing Bush is to blame for our fiscal mess. The silly argument about raising the top rate should be laughed out of the debate. It only has traction because so many believe lies. People actually believe Clinton had a higher top rate and a surplus and Bush cut taxes and squandered it, therefore all we need to do is raise the top rate back up. It’s beyond ridiculous. That’s why I bring up Bush. 

  • http://profile.yahoo.com/QBUEO2B26UJ42NYUPDP3VCWPUQ Philip

    I really wish people would understand that the issue is not the budget deficit – ITS THE TRADE DEFICIT…The part of the budged deficit that results from Trade deficit is “future production” that we owe to other countries. The rest of the budget deficit is money that we owe to ourselves. Why is this such a big problem???

  • hennorama

    NORAD’s Santa Cam # 21 for Brazil & Uruguay shows Santa cruising  over Oscar Niemeyer’s Cathedral of Brasilia in this clip.

    http://youtu.be/ddPvnZJDNj0

    Descanse em paz, Senhor Niemeyer.  The world is less vibrant without you, and you are greatly missed.

    The Cathedral of Brasilia (image 02) and other Niemeyer works can be viewed here:

    http://www.telegraph.co.uk/travel/ultratravel/9727010/Oscar-Niemeyer-buildings-around-the-world.html#?frame=2420087

  • Martin12234

    Let’s start to reduce spending and tell the “House Republicans” there is no need to return to Washington after Christmas. They can throw their money wrench at home.  Alternatively, have the chinese run the government, at least they know how to do it.

  • StilllHere

    Lets hope we can cut spending!

  • http://www.facebook.com/rashid.mccown Rashid L McCown

    What is the real problem? Now, no one wants to do what is right.  Everyone has be given this false sense of what is success. We say we have succeeded when we make alot of money, not a quality product. Many will say that does not apply to this… but this does. We haven’t made a quality economy. We haven’t made a quality society. So in the end we dont listen to experts, we listen to the people who have their own crap at stake. I would challenge anyone to spend 1 billion dollars without investing… you can’t.The problem is there is finite wealth. “The Wealth of Nations” is what modern capitalism is founded upon. The rest is greed. No one person should ever have 1 billion dollars ever…
    the Wright brothers did not… niether did Enstein… is Stephen Hawking a billionaire. Inovation does not require an over bundance of money but enginuity. That is how you fix all this, to educate the people but public schools are lacking. Look at the IQ of highschool graduates from the 60′s compared to now. The congress is supposed to be filled with common people but it requires $2million dollars to get a seat. All these things are the part of the problem.

  • hennorama

    Best wishes to all, and here’s to an enjoyable BoxiChriFestiHanuKwaSaintSteYule season for everyone!

  • Gregg Smith

    Just a reminder, raising the top rate will not do squat. Neither will cutting $1.2T over a decade. It’s all a farce, nothing will improve even if they reach a deal. 

    • DrewInGeorgia

      “Nothing will improve unless someone I like is in office”

      And I’m the pessimist…

      • Gregg Smith

        Please don’t tell me what I think.

        • DrewInGeorgia

          Sorry, I know how much you hate that.

          So I gather your comment was driven by your The Only Solution Is To Cut GubbaMint Spending mantra. We can do away with spending while never addressing costs right? No Restriction, No Regulation, No Restraint, and No Responsibility equals Anarchy. That’s going to make things better?

          • Gregg Smith

            No, the only solution is to grow the economy. I do not endorse anarchy. 

    • Mike_Card

      So, according to Reagan and Laffer, lowering the top rate will result in a “rising tide that lifts all boats” prosperity, but raising it won’t do squat.

      • Gregg Smith

        No one is proposing tax cuts and it was Kennedy who said a rising tide lifts all boats. Raising taxes does not stimulate growth.

        • DrewInGeorgia

          Neither does lowering them on the most privileged percentage of the population. Apparently the only affect rewarding rapists has is to make their life’s ambition that much easier to pursue. No one is proposing tax-cuts, just clamoring to maintain the temporary hand outs to the biggest beneficiaries. Job Creation? Ego Inflation.

          • Gregg Smith

            Those making 250K are mostly small businesses and not the most privileged of the population. Privilege has nothing to do with it. And there is evidence it creates jobs. The unemployment rate went down for 52 months when Bush lowered the rates. But again, no one is proposing tax cuts.

          • DrewInGeorgia

            Yes, let’s completely ignore ALL of the contributing factors related to the drop in unemployment. It must have been solely a result of lowering taxes…

          • Gregg Smith

            No I’m not, but it helped. The tech bubble had burst and then 9/11. It’s amazing the unemployment rate wasn’t what it is now.

          • Mike_Card

            There’s that false tea party talking point about small business again.  It’s a tax on INCOME, not a gross receipts tax.

          • Gregg Smith

            “According to an NFIB National Small Business Poll, 75 percent of small businesses are structured as pass-through entities (S corporations, limited liability companies, sole proprietorships or partnerships) that must pay tax on their business income at the individual rate.  Most small businesses do not pay the corporate tax.  If the tax rates enacted in 2001 and 2003  are allowed to expire, the small business sector would see its taxes increase significantly in 2012.”http://www.nfib.com/advocacy/item?cmsid=253

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            NFIB is suspect enough all by themselves., but you’re giving away the game when it’s part of their “advocacy”.

            Better sourcing, please. If it’s real, someone else will be saying it.

          • Mike_Card

            That’s unsurprising, coming from a lobbying organization.  If you don’t trust the Congressional Research Service, check this: http://www.decisionsonevidence.com/2011/10/do-tax-cuts-and-trickle-down-economics-work-for-america/

          • Gregg Smith

            It’s not that I don’t believe the study it’s that I don’t think it’s wise to look at tax rates in a bubble. There are many factors. It’s also disingenuous to say “Do tax cuts lead to robust economic growth and greater prosperity for all? According to trickle down economics the answer is in the affirmative.”

            No one says tax cuts always lead to economic growth.

            My arguments simply that the Bush tax cuts did not cause our current deficits. That’s all.

          • jefe68

            A small businesses don’t pay income tax the same way an individual does.  You seem to be confused. To much eggnog perhaps.

          • Gregg Smith

            Many do. I do. No confusion.

        • Mike_Card

          You didn’t read the CRS report.

          Reducing marginal income tax rates doesn’t either, regardless of all the blather about “job creators.”

          • DrewInGeorgia

            He doesn’t need to read the CRS report, he’s already refined Can’t Recall Sh!t down to a science.

          • Gregg Smith

            Did you read it? It’s 20 pages and I read the summary. It’s a homework assignment and I usually like to choose my instructors but Mr. Card has proven to be honest enough. There’s a chance I’ll benefit by reading it so I probably will… when I get around to it. 

          • Gregg Smith

            No one is proposing lowering marginal rates.

        • Mike_Card

          Don’t let Grover hear that.

      • DrewInGeorgia

        A rising yacht lifts all tides…

        • Gregg Smith

          No it doesn’t.

  • TomK_in_Boston

    Gregg, “We won’t agree. Income does not “go to” anyone. If someone gets richer that does not mean someone else gets poorer.”

    If someone gets richer it may not mean that someone else gets poorer, but in our case it does. If the very rich pay less and get richer, the public services that ordinary Americans need to prosper are cut, making them poorer. When real estate tax on the romney castle is capped in CA, it means tuition at UC will rise, making ordinary citizens poorer. If financial con gamers suck the life out of a company and pay themselves extravagant fees and bonuses, the workers get cut. The examples are endless.

    Returning to the laffer, I’m the one who follows it, not you. I constantly say that changes in taxes must depend on the current tax rates – you can’t decide where to go if you don’t consider where you are. When reagan cut taxes from high levels, I applauded. Now after 30 years of tax cutting, taxes are low, so the changes should be tax hikes. I adjust to the situation – cut when too high, raise when too low. OTOH you guys are one-trick ponies, or should I say one-talking-point ponies – cut, cut, cut. You ignore the part of the laffer curve where tax hikes are good. If the top rate was 1% you’d be arguing for a cut to 0.5%.

    And I repeat – if the 1% are paying more of the total bill even as their rate goes down, it doesn’t mean that “Atlas” is bearing a heavy burden and might shrug any minute, it means that he has got all the income!

    • Mike_Card

      With respect to who’s paying the income tax and who’s getting the income, please see the appendices to that CRS report I posted below.
        http://www.dpcc.senate.gov/files/documents/CRSTaxesandtheEconomy%20Top%20Rates.pdf

      As far as I’m concerned, this report is really important, irrespective of the fact that the GOP Senators have done all they can to kill it.

      The report documents how the Laffer curve, and in a larger sense, “trickle down” economics, are mythical constructions.

      The foundation for the so-called Reagan revolution is wishful thinking.  Laffer may be right, but his theory hasn’t been borne out and this CRS study asserts otherwise.

      The corollary of who gets the income tax breaks and where does the benefit accrue was no more than right-wing alchemy.  It’s always been a house of sand & fog–faith-based economics at its cynical worst.

    • Minor Heretic

       Gregg’s ancestor (?) Adam, in Wealth of Nations, noted that the existence of one wealthy person required the existence of 500 indigent. He was right.

      Remember that each year the GDP is a zero sum game. If a few people get a lot, a lot of people get less. A million bucks added to a CEO salary is 20 median incomes unavailable elsewhere.

      The top 1% gets 20% of the national income and control 40% of the national wealth. The other 99% of us have to split the remaining 80% of the income and 60% of the assets. Then the next highest 4% take another 15%, so we’re down to 65% of the income and 95% of the population to go. And so on.

      There’s that old saw, “you can’t make the poor richer by making the rich poorer.” On the contrary, based on elementary math, that’s the only way you can make the poor richer. We can do that via taxation or by enforcing higher wage and benefit standards.

      • Gregg Smith

        GDP is not a zero sum game. The pie can grow. Further, no one is chained to their station in life.

    • Gregg Smith

      Public services expanded under Bush big time. He grew government, he spent like a drunken sailor. Even if he didn’t and your theory is correct government programs are not the source of prosperity. But that’s not the case. The poor are not poor because the rich took their money. No money is given to the rich. It is not distributed.

      In 2000 the top 1% paid 37% of the overall bill now they pay 39%. How much is enough? If government does not take yet more it does not mean the poor got poorer because of it.

      You wrote: “ I constantly say that changes in taxes must depend on the current tax rates – you can’t decide where to go if you don’t consider where you are.”

      I disagree. It’s not where tax rates are it’s where the economy is. The dirty truth is revenue as a percentage of GDP has historically hovered around 17-20% no matter the rate. 

      • pete18

         Tom is never able to answer the question, “how much is enough,” he always runs away when it’s asked. Nor is he ever able to contend with the fact that the rich pay a larger percentage of the tax burden under the Bush rates than they did under the Clinton, Eisenhower or Carter rates.

  • Gregg Smith

    Back in the day you had to have a budget before you asked for more credit.

  • Gregg Smith

    This from a lefty hits the nail on the head regarding my previous claims.

    “The truth is often painful but nonetheless it is important that we live in the real world. Just as little kids have to come to grips with the fact that there is no Santa Claus, it is necessary for millions of liberals, including many who think of themselves as highly knowledgeable about economic matters, to realize that President Clinton’s policies sent the economy seriously off course.”
    http://www.huffingtonpost.com/dean-baker/there-is-no-santa-claus-a_b_2362845.html

    • TomK_in_Boston

      No argument there. Clinton is a righty conservadem who presided over the gingrich-gramm-clinton deregulation of wall st and massive offshoring of our jobs via bogus free trade. We are desperately in need of some liberal pols!

    • Mike_Card

      That was the first paragraph.  It’s instructive to include the last paragraph of that same article:

      “The big difference is that, unlike the Republicans, the Rubin-Clinton crew believes that the rich should have to pay their taxes. That’s something, but until there is someone in this debate who isn’t pushing policies that redistribute before-tax income upward, the vast majority in this country can only lose.”

      • Gregg Smith

        That’s why I posted the link. Notice the factual basis of the first paragraph and the pure mind-reading opinion of the last. I said it was lefty.

  • TomK_in_Boston

    I’m so glad Laffer has come up. The right are total Laffer phonies. Laffer says cutting rates will increase revenue IF the rates are already above a crossover point. I have never ONCE seen a righty include an estimate of that crossover point in their tax cutting arguments. In fact their agenda is to redistribute ever more income to the top, so tax cuts are always good. They just use Laffer to justify tax cuts, without any mention of the fact that Laffer says tax hikes will increase revenue if rates are below the crossover.

    The estimates I’ve seen of the crossover are about 50%, so given our current low tax environment Laffer says we should increase rates to increase revenue. Deal with it, righties. If you want to invoke Laffer to justify tax cuts, say what you think the crossover point is or STFU.

    • Gregg Smith

      No “righty” invoked Laffer here. No one is proposing tax cuts. There is no magic crossover rate that trumps all else.

      • TomK_in_Boston

        The Laffer curve that you guys love so much says there is an optimal tax rate that produces maximal revenues. Above this rate that I called “crossover rate” cutting taxes will increase revenues, below it increasing rates will increase revenues. It’s the latter part you guys ignore.

        The “curve” is both oversimplified and obvious: cutting taxes is good when they’re too high and raising taxes is good when they’re too low. It’s dishonest of the right to reference the reagan and kennedy tax cuts re the current situation. Then taxes were very high, now they are very very low. Laffer says we should have a different response, but all you say is cut, cut, cut.

        No one is proposing tax cuts? Did you hear what the RR boys proposed? 

        • Gregg Smith

          Yes exactly, the curve is oversimplified as is Obama’s claim. A hike on the top rate is senseless. It does nothing but harm.

        • Mike_Card

          The problem with the curve is that Laffer introduced it to be interpreted temporally; first, tax receipts decline until the GDP growth gains a head of steam, then tax receipts grow.  All this occurs without a change in the income tax rates, according to Laffer.

          He pitched to Reagan, and Reagan interpreted it as, “You mean we get free economic growth by lowering income tax rates?  Bring it on!”

          The only problem is that Congress reduced income tax rates and tax receipts declined on schedule.  But the increased tax receipts never materialized.  In the meantime, the economic geniuses in Congress kept spending in anticipation of the bonanza.

          What DID materialize were budget deficits and increases in the national debt, which only became a problem on Jan 22, 2009.  Nobody has gotten an answer from Bush 43 or Cheney about how they intended to pay down their ideological peccadillos.

          As an aside, I have deep respect for Bush 41 and wish him all the best in recovering from his medical difficulties.  He recognized this nonsense for the Voodoo economics that it is.

          • Gregg Smith

            After the rates were lowered in 2003 revenue increased by over a half Trillion dollars by 2007. It did materialize. 

      • Mike_Card

        No, not on this discussion board.  There are, however, enough knuckle-dragger teabaggers in the House calling for tax cuts that Boner can’t put a deal together.

        • Gregg Smith

          No, they just oppose tax hikes at this time. Boehner put $800 billion in new revenue on the table and Obama said no. No one is calling for tax cuts.

  • hennorama

    When discussing Federal revenues, it’s important to remember that Federal Income taxes (FIT) are not the only source.  Here are ALL the sources of Federal Revenue, by percentage (2011):
     
    47.4% Individual Taxes
    35.6% Payroll Taxes
    7.9% Corporate Taxes
    5.7% Customs & Duties
    3.1% Excise Taxes
    0.3% Estate/Gift Taxes

    Source:http://www.heritage.org/federalbudget/federal-revenue-sources
     
    The most accurate thing one is able say regarding changing tax rates is this – there’s no extended correlation between changing tax rates and GDP growth.  Lowering rates does not lead to extended growth, and raising rates does not lead to extended decline.
     
    There are obvious short-term correlations between changing rates and revenues, but this is also not an extended correlation.  Revenues can indeed go up when rates decline, most notably when capital gains rates decline.  This is due to transactional timing.  When a rate changes, whether up or down, it prompts those sitting on capital gains to either accelerate sales to avoid a higher rate, or delay sales to take advantage of a lower rate.  Over time, revenue from capital gains more closely tracks the changes in stock markets.
     
    The top marginal Federal tax rate shows no correlation to GDP growth over time.  The charts in these links show data from 1946 to 2011, and 1930 to 2009:
     
    http://news.yahoo.com/blogs/signal/does-28-top-marginal-tax-rate-mean-175706337.html#wsJGDCG

    http://filipspagnoli.wordpress.com/stats-on-human-rights/statistics-on-gross-domestic-product-correlations/#23
     
    Top Federal long-term capital gains tax rates also have no apparent correlation to GDP growth.  The 10th chart in this link shows data from 1950 to 2011:
     
    http://filipspagnoli.wordpress.com/stats-on-human-rights/statistics-on-gross-domestic-product-correlations/#23
     
    One important caveat, in the words of Filip Spagnoli, the originator of some of the above links:
     
    “I repeat, we should be careful with correlations. Just as correlation does not imply causation,absence of correlation also does not imply absence of causation. It could be the case that low taxes or tax cuts do in fact promote economic growth, but that we don’t see the effect in the data because the growth is offset by other forces. Still, that sounds far-fetched. The data collected in this paper argue against the assumption that low taxes promote growth, and at least put the burden of proof on those wanting to defend that assumption.”
     
    When there is a large differential between tax rates on different income types, those who are able to will shift their income to the type with the lower tax rate.  This is especially clear when, as is true at present, there is an ENORMOUS difference between the tax rates on dividends (DIVs) and long-term capital gains (LTCGs), and earned income (wages and self-employment), for those in the highest tax brackets.
     
    Currently, for those in the highest four Federal tax brackets, DIVs & LTCGs are taxed at a maximum rate of 15%.  For those in the top 35% bracket, the DIV/LTCG rate is more than 57% lower than the rate on wages & SE,; in the 33% bracket this is over 54% lower; in the 28% bracket this saves more than 46%; in the 25% bracket it’s 40% lower.  These much lower rates practically beg one to derive more income from the type of income with the lower rate, and vice versa.
     
    This does not take into account the added savings due to the fact that wages and SE income are also subject to payroll taxes, and there is no corresponding tax on DIV/LTCG.
     
    So what has happened?  Those with the highest incomes in the US have been getting more of their income from dividends and capital gains than wages & SE.  According to a CRS report from December 2011, between 1996 and 2006 their income share from wages & SE has dropped, and their income share from DIV/LTCG has increased, while the shares for the bottom 80% have barely moved: (graph below shows the 2006 data).
    Year    Wages  Div&CG  Bus. Inc.  Retire  Other

    Bottom 80%  
    1996      82.0       1.4       2.6        6.9       7.1
    2006      82.0       0.7       1.8        7.2       8.3

    Top 20%
    1996      60.2     13.4     10.2        8.5       7.8
    2006      50.4     18.8     12.0      11.8       7.1
     
    Top 5%
    1996      46.9     21.1     15.1        8.7       8.2
    2006      36.3     28.1     16.9      11.8       7.0

    Top 1%
    1996      34.4     30.8     17.7       8.2        8.9
    2006      26.0     38.2     19.0       9.6        7.1
    Top 0.1%
    1996     23.0     45.8      17.9       4.2       9.1
    2006     18.6     51.9      17.9       4.0       7.6

    http://filipspagnoli.files.wordpress.com/2012/01/wages-vs-capital-gains.jpg

    Sources:http://taxprof.typepad.com/files/crs-1.pdf

    http://www.forbes.com/sites/robertwood/2012/01/26/tax-gap-grows-between-haves-and-have-nots/

  • Gregg Smith

    Here is a story listing 10 lottery winners who won millions and were flat broke soon after. 

    http://www.businessinsider.com/10-lottery-winners-who-lost-it-all-2010-5?op=1

    The late Michael Jackson was broke when he died.

    http://www.telegraph.co.uk/culture/music/michael-jackson/5643818/MIchael-Jackson-his-mad-spending-left-him-broke.html

    These people very obviously had a revenue problem.

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