Couldn't find a subject on the fiscal cliff

[Prebe]

So, could someone please enlighten me? WTF is going on over there?

What's with the cuts? What's it going to mean to the average Joe?

[SoulBiter]

Perspective. Its 85 billion which is nothing in the terms of the full govt.

The Dems and the President are making a huge miscalculation that is certain to backfire. They drew a hard line in the sand and basically have this strategy of, if they dont get everything they want then they dont do anything. Then they blame the Republicans. However the Reps are right. They gave the Dems and Obama their tax increase in January and now its time for them to give up some spending cuts.

[Cail]

Much ado about nothing. The president and Congress have been playing a game of brinksmanship for a while, and this is just the latest set-piece. Spending levels have been reduced to what they were about 18 months ago. No cuts were made, the rate of increase was reduced.

The president, in typical fashion, has spent the last few months scaring people about this. DHS has released a bunch of detained illegals, a carrier group didn't deploy due to "fuel costs", and various apparatchiks have made sweeping statements about teachers getting laid off, FDA inspectors getting furloughed, border patrol agents being reduced, and the like.

Another manufactured crisis brought to you by the Obama White House and the 535 blithering idiots in Congress.

[Vraith]

I'm not sure this first round has a huge impact. But what impact it does have will be negative...
If no one pays attention to that and it continues, then it will push us back into recession.
People are fickle, so I don't know who will get BLAMED, it could be either side...but the results will be bad, and it won't be cuz Dem's "miscalculated," it will be because the Rep's who made it happen are just plain wrong with their deficit paranoia as the economy stands.

[SoulBiter]

This is totally within their control to manage. I dont see less than 2% of our spending putting us back into a recession. Its just not a signifcant amount.

The other side of this, is that Congress can easily cut spending in the right places and make this painless. Yet Congress (The Senate in particular) has shown that it is NEVER going to cut spending. The only thing the Senate will get on board with is tax increases. The House made the first move by letting the Senate get a tax increase on all households making more than 500K. The Senate was supposed to come back with cuts. Instead they just came back with another demand for more tax increases.

Who's the party of 'No' now?

[Vraith]

This is totally within their control to manage. I dont see less than 2% of our spending putting us back into a recession. Its just not a signifcant amount.

The other side of this, is that Congress can easily cut spending in the right places and make this painless. Yet Congress (The Senate in particular) has shown that it is NEVER going to cut spending. The only thing the Senate will get on board with is tax increases. The House made the first move by letting the Senate get a tax increase on all households making more than 500K. The Senate was supposed to come back with cuts. Instead they just came back with another demand for more tax increases.

Who's the party of 'No' now?

We'll see who is right on the first.

The Senate DID include spending cuts. They ALSO had a majority in favor [51 votes] but the new "filibuster everything rule" means a majority is never enough.
The deficit is ALREADY dropping.
More cuts than than increases have already happened.
[And slightly off-topic, that's a significant reason for the lackadaisical recovery]
Almost every economist in the world says the sequester will harm the economy.
Even Republican governors hate it.

[Cail]

This is totally within their control to manage. I dont see less than 2% of our spending putting us back into a recession. Its just not a signifcant amount.

The other side of this, is that Congress can easily cut spending in the right places and make this painless. Yet Congress (The Senate in particular) has shown that it is NEVER going to cut spending. The only thing the Senate will get on board with is tax increases. The House made the first move by letting the Senate get a tax increase on all households making more than 500K. The Senate was supposed to come back with cuts. Instead they just came back with another demand for more tax increases.

Who's the party of 'No' now?

'Zactly. The White House and the Dems promised a "balanced approach". The GOP agreed to tax increases, the Dems are refusing to cut spending, and Obama's moved the goalpost.

But ultimately, there's not going to be anything negative (economically speaking) from this. It's yet another scare tactic.

[Rawedge Rim]

I seem to remember a Republican who, after pledging not to raise taxes, finally relented, on the pledge from Democrats to also cut spending. This Republican raised taxes, and the Democrats renegged on thier pledge, and in turn used the Republicans pledge against him in the next election.

Who was that by the way................... , and why would the current crop want to go down that road again?

[SoulBiter]

This is totally within their control to manage. I dont see less than 2% of our spending putting us back into a recession. Its just not a signifcant amount.

The other side of this, is that Congress can easily cut spending in the right places and make this painless. Yet Congress (The Senate in particular) has shown that it is NEVER going to cut spending. The only thing the Senate will get on board with is tax increases. The House made the first move by letting the Senate get a tax increase on all households making more than 500K. The Senate was supposed to come back with cuts. Instead they just came back with another demand for more tax increases.

Who's the party of 'No' now?

We'll see who is right on the first.

The Senate DID include spending cuts. They ALSO had a majority in favor [51 votes] but the new "filibuster everything rule" means a majority is never enough.
The deficit is ALREADY dropping.
More cuts than than increases have already happened.
[And slightly off-topic, that's a significant reason for the lackadaisical recovery]
Almost every economist in the world says the sequester will harm the economy.
Even Republican governors hate it.

Those arent cuts to spending, those are more revenues due to more people working and the tax increase on 500K and above.

As far as spending cuts in that bill, the cuts were so small as to be meaningless but the tax increases they wanted with those cuts meant more of the same. The Dems have shown their hand. They are only interested in tax increases not cutting spending.

The sequester doesnt have to harm the economy. The lack of a plan to run the economy and the govt is the issue. 5 years....no budget and no plan to have a budget. None.

[SoulBiter]

This is totally within their control to manage. I dont see less than 2% of our spending putting us back into a recession. Its just not a signifcant amount.

The other side of this, is that Congress can easily cut spending in the right places and make this painless. Yet Congress (The Senate in particular) has shown that it is NEVER going to cut spending. The only thing the Senate will get on board with is tax increases. The House made the first move by letting the Senate get a tax increase on all households making more than 500K. The Senate was supposed to come back with cuts. Instead they just came back with another demand for more tax increases.

Who's the party of 'No' now?

We'll see who is right on the first.

The Senate DID include spending cuts. They ALSO had a majority in favor [51 votes] but the new "filibuster everything rule" means a majority is never enough.
The deficit is ALREADY dropping.
More cuts than than increases have already happened.
[And slightly off-topic, that's a significant reason for the lackadaisical recovery]
Almost every economist in the world says the sequester will harm the economy.
Even Republican governors hate it.

Those arent cuts to spending, those are more revenues due to more people working and the tax increase on 500K and above.

As far as spending cuts in that bill, the cuts were so small as to be meaningless but the tax increases they wanted with those cuts meant more of the same. The Dems have shown their hand. They are only interested in tax increases not cutting spending.

The sequester doesnt have to harm the economy. The lack of a plan to run the economy and the govt is the issue. 5 years....no budget and no plan to have a budget. None.

The Republican bill, which would have given President Barack Obama the opportunity to pick which cuts he’d make, garnered just 38 “yes” votes; the Democratic bill, which would have replaced the cuts with alternative spending cuts and tax hikes on the wealthy, received 51 “yes” votes; 60 were needed to cut off debate

. - See more at: articles.marketwatch.com/2013-02-28/economy/37346517_1_sequester-cuts-budget-cuts-senate-leaders#sthash.vO9ZK570.dpuf

[Prebe]

Interesting. Thanks all. Nice to get a "local" perspectiv on things. The media here are really afflicted by the "scare tactics" as you seem to think it is.

[Avatar]

Prebe! Nice to see you around man.

I didn't even know there was another one of these going on. Of course, our own budget has just come out, so news probably more interested in that.

--A

[Cybrweez]

neweconomicperspectives.org/2013/02/why ... ester.html
A bit of an objective look at this sequestration mess. Hard to know what the affect will be, but, generally, austerity is bad idea. It's another solution to a made up crisis (which even some here adhere to) - that big deficit is bad. So, pubs want to cut spending, dems want to increase taxes.

It's a good show to watch. Even here on the Watch, people who know better fall into the trap. We want to blame someone, or something (like a party). We know better, both parties are to blame, they suck, period. Yet, we fall into, well, this one is MORE to blame. Who cares? Honestly, who cares whether one is MORE to blame, they both are, and they both suck. And the American people have voted for them (not me all my candidates lost )

[SoulBiter]

Cybr, regardless of how you look at govt spending, and MMT, or lack thereof, the govt has to spend on the right things or we are just putting doing things that are causing inflation. Even now, the things that people 'need' to spend on are going up at a faster rate while at the same time, wages are stagnant. This inflation is sneaky because as inflation (grocery inflation for 2013 is predicted to be more than 4%) wages are flat or declining.

And yet govt spending on the things its spending on is doing very little to enable real recovery. The Senate continues to want to stick it to the rich and they have done nothing as far as setting an actual budget and having a real plan. The only real plan they have is to add more social nets, additional unemployment, increase welfare checks. But no plan for how this spending is going to aid the recovery. The spending they are doing now is doing nothing but getting more and more people dependent on the govt for a check.

The Reps for all their faults have continued to ask for the govt to pass a budget and yet 5 years, no budget.

[Vraith]

Cybr, regardless of how you look at govt spending, and MMT, or lack thereof, the govt has to spend on the right things or we are just putting doing things that are causing inflation. Even now, the things that people 'need' to spend on are going up at a faster rate while at the same time, wages are stagnant. This inflation is sneaky because as inflation (grocery inflation for 2013 is predicted to be more than 4%) wages are flat or declining.

And yet govt spending on the things its spending on is doing very little to enable real recovery. The Senate continues to want to stick it to the rich and they have done nothing as far as setting an actual budget and having a real plan. The only real plan they have is to add more social nets, additional unemployment, increase welfare checks. But no plan for how this spending is going to aid the recovery. The spending they are doing now is doing nothing but getting more and more people dependent on the govt for a check.

The Reps for all their faults have continued to ask for the govt to pass a budget and yet 5 years, no budget.

I agree that some kinds of spending are productive, some debatable, some a waste or even counter-productive. But most inflation that exists is tied to oil. And producing more oil didn't keep costs down...the oil folk just increased exports. [Tangential issue: Natural gas prices have fallen roughly 90% in the last decade or so...how come my, and the 60million other home heaters, and all the other folk using it for various things, don't have 90% lower bills?...or even a measly 50%?]

The Senate Dems HAVE included cuts. Just not the kind the Rep's want, and not ONLY cuts...and things like loophole-closing were Rep ideas.

And the Senate can't pass a budget that will actually happen cuz to do so they need EITHER 60 votes OR the House to pass the identical budget. Neither of those is possible without Republican votes.

[Cybrweez]

Agree w/vraith.

And here's how you know the dems don't really care about fixing problems. Why isn't the payroll tax a major issue? Aren't the dems the party of the poor/middle class? Fighting against the rich? The payroll tax should be high on their agenda every year. You make 10k/year? 6.2% tax. 100k? 6.2%. And everyone let the 2% cut expire. All the talk was about the income tax rates.

The dems' problem is they want more tax revenue, even from poor/middle class. Many have said so, in congress or dem supporting media. More revenue in order to have more govt. It's pretty stupid really. The pubs are ok w/more govt too, just govt that votes pub, like defense. Or the drug war, which they are ok with, tho not sure why.

It's natural, and a hard thing to combat. If the govt directly helps you, you'll keep that party around. I don't know if Av is right, an ideology will collapse (paraphrase there, don't remember exactly), but I do agree empires follow the cycle thruout centuries, and US on the way out.

[Hashi Lebwohl]

What ever happened to the whole "governments simply print the money they need for their spending projects; taxes are only to regulate the money supply" thing? Or do politicians still try to convince people that the government can spend only the money it takes in from taxes?

note: on the one hand, I think the government should be able to spend only as much as it takes in from taxes...but the logical conclusion to that is ever-increasing tax burdens as people allow the government to increase spending for all the little pet projects.

[Vraith]

What ever happened to the whole "governments simply print the money they need for their spending projects; taxes are only to regulate the money supply" thing? Or do politicians still try to convince people that the government can spend only the money it takes in from taxes?

note: on the one hand, I think the government should be able to spend only as much as it takes in from taxes...but the logical conclusion to that is ever-increasing tax burdens as people allow the government to increase spending for all the little pet projects.

On the first...that is true, but almost no one believes it, and I don't think there is anyone in a position of power/influence who believes it [or at least will say out loud that they do] That's why everyone on both sides is blathering about fixing the deficit right now [and no matter what anyone says, the numbers show Obama has been reducing the deficit.]

on the second...sure, constantly rising tax burden is a likely outcome of that, though not a necessary one. [cuz it could be decided to keep both flat. Wouldn't...but could.] The necessary one is zero net growth in monetary wealth at BEST...and I won't even start on the nasty effects of that except to say bad for 6-18 months, terrible by 3 years at the outside, total collapse of U.S. economy within 5 years or less.

[Hashi Lebwohl]

On the first...that is true, but almost no one believes it, and I don't think there is anyone in a position of power/influence who believes it [or at least will say out loud that they do] That's why everyone on both sides is blathering about fixing the deficit right now [and no matter what anyone says, the numbers show Obama has been reducing the deficit.]

on the second...sure, constantly rising tax burden is a likely outcome of that, though not a necessary one. [cuz it could be decided to keep both flat. Wouldn't...but could.] The necessary one is zero net growth in monetary wealth at BEST...and I won't even start on the nasty effects of that except to say bad for 6-18 months, terrible by 3 years at the outside, total collapse of U.S. economy within 5 years or less.

Agreed--the newest manufactured catastrophe that won't ever actually occur is the result of all that political blathering.

Probably so on the second. I suspect there must be some equilibrium point--if we could get a really good mathematical model of the taxation/spending system we could number-crunch until we find the answer. Once we find it we apply it then quit trying to micro-manage the economy so much, which typically winds up causing more problems than it solves.

[SoulBiter]

[and no matter what anyone says, the numbers show Obama has been reducing the deficit.]

Minimally yes. Instead of 1.4 trillion per year in deficit spending, we are now at 1.1 trillion per year of deficit spending. He has a long way to go to show me he is getting the country in any type of fiscal order. Its like saying "Grats me! Instead of buying 200 BMW's I only bought 199. I really did a great job controlling my spending!"