The Fiscal Cliff -- Is it time?


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Profile KWSN - MajorKong
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Message 1306543 - Posted: 15 Nov 2012, 19:44:45 UTC

I am sure that most all of you have heard, by now, of the so-called fiscal cliff that the USA is facing Jan. 1, 2013. It is a combination of expiration of temporary tax cuts, new taxes on various things going into effect, and spending cuts mandated by the failure of a Congressional committee to find an alternative in a deal made by Congress to raise the Government Debt ceiling.

Perhaps we should just take our medicine and let the fiscal cliff take effect instead of trying to find some compromise to avoid it. Think about it. The Democrats want nothing but tax rate increases. While the Republicans might accept some revenue enhancements through elimination of various deductions, etc., they want the bulk of the 'savings' to come through spending cuts, namely to entitlements.

Both the Democrats and the Republicans have something to love in the 'cliff', and something to hate. The Democrats get cuts in defense spending and higher tax rates at the cost of cuts to entitlements. The Republicans get cuts to entitlements at the cost of higher tax rates and cuts to defense spending. The best part is that it is already a done deal. Both sides need to agree to just let it hit and to not try to undo it.

Yes, going off over the cliff would likely push us into recession rather quickly, but it is likely we would go into recession anyway at some point in 2013. The bad effects of the tax increases (remember, even President Obama once said you shouldn't raise taxes during economic hard times) pale in comparison to the harm that the huge federal deficits are doing to the economy.

The bad part is that the fiscal cliff is only about 10% of what we need. ~ US$100 billion per year down, ~US$900 billion per year to go...

The best way out of the deficit hole is to grow our way out through private sector economic growth. The main engine of economic growth is small business. After all, small business accounts for about 60% of the private sector jobs. Someone needs to sit down and educate President Obama on this. His much touted figure of $250,000.00 / year for phase in of tax hikes is somewhat too low. If that figure of $250k stands, it will eviscerate small business.

I can see the need for some revenue enhancements, preferably coupled with reform of the tax code. Yes, we spend more than we need to on defense. But, no matter how you slice it, we must make some meaningful cuts to social programs/entitlements.

In the past, I have suggested across the board spending cuts of x%. This would avoid a lot of debates and arguing about various sacred cow programs, and likely be easier to get passed. Then let each social program decide whether to reduce benefit size, tighten eligibility, or some combination of both. If we exempt some programs from cuts that will require even more massive cuts in others, maybe even eliminating them altogether. And remember, the programs you would wish to be cut deeply or eliminated to save your sacred cow program will be someone else's sacred cow.

No, the way I see it is that while an across the board spending cut by a fixed percentage combined with some amount of revenue enhancement in order to eliminate the deficit (and hopefully have a surplus to pay off the non-US Government held portion of the national debt over time) would hurt almost everyone in the short term, over the long term we would ALL be better off.

If we continue on doing what we are doing now and not eliminate the deficit and pay down the national debt, the thought of what kind of nation/world my three little children (7 months through 4 1/2 years) will have to live in when they are grown up just burns my backside.
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Message 1306554 - Posted: 15 Nov 2012, 20:13:40 UTC

As far as the Bush tax cuts, they very much favored the wealthiest. Time to give up on any compromise and let them expire.

After that maybe we can talk about some real tax reform.
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Profile Gary Charpentier
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Message 1306566 - Posted: 15 Nov 2012, 20:38:12 UTC - in response to Message 1306554.

As far as the Bush tax cuts, they very much favored the wealthiest. Time to give up on any compromise and let them expire.

After that maybe we can talk about some real tax reform.

Yes, the mandatory cuts to welfare, unemployment insurance, social security and medicare are so needed. Let's go over the cliff with Bush. Let's go over the cliff with Bush. Makes a nice jingle don't you think?

The rich absolutely can't see this coming. The Dow Jones must be exploding up on the fantastic news that Obama has come to save us from the Bush cuts. I mean they wouldn't be selling out and going to gold before the Bush cuts expire, now would they? That would mean massive unemployment and 401(k)'s being wiped out. No they are responsible socialists and would never do anything in their own self interest and will happily pay the highest tax possible.

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Message 1306570 - Posted: 15 Nov 2012, 20:47:01 UTC
Last modified: 21 Mar 2014, 18:04:52 UTC

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Message 1306616 - Posted: 16 Nov 2012, 0:21:29 UTC

You didn't pay your taxes, way back when, and yet you still come looking for handouts when the going gets tough.

Barack Obama can live without Churchill's bust, but not UK cash

Yes, the UK. Britain accounted for $46.7bn of the $226bn the US attracted in foreign direct investment last year. It has been the single biggest source of foreign investment for seven out of the past 10 years, according to the Bureau of Economic Analysis.


And like Oliver Twist you want more.

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Message 1306818 - Posted: 16 Nov 2012, 17:08:05 UTC

They'll only get it if they deserve it. Just please ask them to stop sending their cockeyed ideas over the pond. We DON'T want a Mayor of London, we DON'T want Police Commissioners, what other bright ideas have they got? Oh gawd, just don't ask .....

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Message 1307212 - Posted: 17 Nov 2012, 23:54:38 UTC

Double the sales tax on any purchase made on Thanksgiving Day.


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Message 1307228 - Posted: 18 Nov 2012, 0:38:57 UTC
Last modified: 22 Mar 2014, 12:47:17 UTC

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Message 1307233 - Posted: 18 Nov 2012, 1:24:06 UTC - in response to Message 1307228.

Excellent idea!

Better yet, double it on black Friday!

It should be double on all those federal holidays everyone else has to work on.

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Message 1307935 - Posted: 19 Nov 2012, 23:04:28 UTC - in response to Message 1306818.

They'll only get it if they deserve it. Just please ask them to stop sending their cockeyed ideas over the pond. We DON'T want a Mayor of London, we DON'T want Police Commissioners, what other bright ideas have they got? Oh gawd, just don't ask .....

Their nicking our ideas now, social spending policies like we have that are
guaranteed to be ruinous to their economy over the coming years....God help
America!!

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Profile Gary Charpentier
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Message 1307938 - Posted: 19 Nov 2012, 23:10:49 UTC - in response to Message 1306818.

Just please ask them to stop sending their cockeyed ideas over the pond.

I have your purchase order right here where you clearly are asking for ideas. BTW your invoice is overdue, please remit payment ASAP.

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Message 1307961 - Posted: 19 Nov 2012, 23:59:32 UTC - in response to Message 1307938.
Last modified: 20 Nov 2012, 0:02:16 UTC

Just please ask them to stop sending their cockeyed ideas over the pond.

I have your purchase order right here where you clearly are asking for ideas. BTW your invoice is overdue, please remit payment ASAP.

In keeping with current international finances please accept this IOU...and it's
mortgaged back too by Mannie Fae or is that Mr-eddie Fac?

Our word is our 'Bond', just as long as it hasn't got the word Government written
before it?
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Message 1307963 - Posted: 20 Nov 2012, 0:02:23 UTC - in response to Message 1307961.

Just please ask them to stop sending their cockeyed ideas over the pond.

I have your purchase order right here where you clearly are asking for ideas. BTW your invoice is overdue, please remit payment ASAP.

In keeping with current international finances please accept this IOU...and it's
mortgaged back too by Mannie Fae or is that Mr-eddie Fac?


Ah, but isn't that a sub-prime mortgage? You know, the crapola that got them into the mess in the 1st place.
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Message 1307965 - Posted: 20 Nov 2012, 0:05:10 UTC - in response to Message 1307963.
Last modified: 20 Nov 2012, 0:05:29 UTC

Just please ask them to stop sending their cockeyed ideas over the pond.

I have your purchase order right here where you clearly are asking for ideas. BTW your invoice is overdue, please remit payment ASAP.

In keeping with current international finances please accept this IOU...and it's
mortgaged back too by Mannie Fae or is that Mr-eddie Fac?


Ah, but isn't that a sub-prime mortgage? You know, the crapola that got them into the mess in the 1st place.

Well it's certainly not a "Sub-lime mortgage"..
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Profile Gary Charpentier
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Message 1307997 - Posted: 20 Nov 2012, 2:04:54 UTC - in response to Message 1307961.

Just please ask them to stop sending their cockeyed ideas over the pond.

I have your purchase order right here where you clearly are asking for ideas. BTW your invoice is overdue, please remit payment ASAP.

In keeping with current international finances please accept this IOU...and it's
mortgaged back too by Mannie Fae or is that Mr-eddie Fac?

Our word is our 'Bond', just as long as it hasn't got the word Government written
before it?

You will need to submit a credit default swap with that IOU.

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Message 1308011 - Posted: 20 Nov 2012, 5:08:31 UTC

Clearly, it is not time, by order of House Speaker Boehner last week.

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Message 1308131 - Posted: 20 Nov 2012, 16:16:00 UTC - in response to Message 1307997.

Just please ask them to stop sending their cockeyed ideas over the pond.

I have your purchase order right here where you clearly are asking for ideas. BTW your invoice is overdue, please remit payment ASAP.

In keeping with current international finances please accept this IOU...and it's
mortgaged back too by Mannie Fae or is that Mr-eddie Fac?

Our word is our 'Bond', just as long as it hasn't got the word Government written
before it?

You will need to submit a credit default swap with that IOU.

OK, if we default we will give you Scotland...


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The Kite Fliers

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Kite fliers: An imaginary club of solo members, those who don't yet
belong to a formal team so "fly their own kites" - as the saying goes.

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Message 1308214 - Posted: 21 Nov 2012, 1:18:38 UTC - in response to Message 1306543.

last years interest on the debt was almost 1/2 trillion dollars this year will be higher if nothing fundamentally changes in about a decade the interest will be more than the entire budget then what do you cut?
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Message 1308228 - Posted: 21 Nov 2012, 2:16:54 UTC
Last modified: 21 Mar 2014, 18:14:31 UTC

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Message 1308232 - Posted: 21 Nov 2012, 2:45:30 UTC - in response to Message 1308228.

yea well they are lying to you over half and maybe as much as 2 thirds of the budget congress does not vote on the funds they are already appropriated because congress vues them as third rail votes and want to keep their seats.so they are vary limited on what they can cut and it won't be enough. and while taxing the rich sounds good and probably should be done the middle class pays the bulk of the tax's. so if they substantially raise tax's on the middle class they have not shown the ability to refrain from sending the new money and paying the bills, that is why alot of people are scared.
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