U.S. Fiscal Cliff

[Bregor]

Surprised there's no thread about this already. CliffNotes:

Last summer, during the debt ceiling crisis, Congress passed the Budget Control Act of 2011, which raised the ceiling but recognized the Congress's failure to pass a Federal Budget and included no long-term compromise for debt reduction. It also created an artificial deadline for Congress to compromise on spending and tax issues as the Bush tax cuts expire and automatic spending cuts take effect on January 2nd, 2013. Conveniently, this date is after the recent presidential election. The Republican strategy was to use the growing national debt as a hot-button issue and tout Mitt Romney's history of fiscal success in the private sector, while Obama and Democrats continued to showcase small but significant improvements in the economy and sell their plan of middle class tax relief while allowing the Bush tax cuts to expire for those making over $250,000 annually.

On November 6th, 2012, when President Obama was re-elected and both houses of Congress returned the same party split, the new political battleground shifted to the fiscal cliff. Nightly news plays clips of John Boehner, Mitch McConnell, Eric Cantor, and the like threatening to reject any proposal that includes tax rate increases for anyone, President Obama is back in campaign mode trying to sell the public on a tax hike for the wealthy, and the talking heads on cable squeeze in some finger-pointing between segments about the Benghazi witch hunt. Both sides seem to be digging their heels in, playing chicken with whether or not to raise taxes at all, but the real casualty will be the $900 billion in spending cuts that will hurt pretty much every sector that deals with the federal government.

I don't know much about this outside of what Brian Williams, Jon Stewart, and Stephen Colbert have told me. So what gives, BG? Are doomed to another recession because the GOP made a promise to anit-tax advocate and neckbeard enthusiast Grover Norquist? Are Obama, Harry Reid, and Nancy Pelosi going to come with torches and pitchforks for my off-shore accounts?

[archibaldcrane]

Higher taxes, big cuts to military?

Is this a dream? Cause I never wanna wake up!

[Ksandra]

Higher taxes, big cuts to military?

Is this a dream? Cause I never wanna wake up!

I'm glad you made this thread bregor 'cause when I first heard about this Archi's reaction was basically mine. But everyone I know that's mentioned it are shouting doom and gloom, and most of them being liberals. WHAT AM I MISSING?

[Bregor]

I'm glad you made this thread bregor 'cause when I first heard about this Archi's reaction was basically mine. But everyone I know that's mentioned it are shouting doom and gloom, and most of them being liberals. WHAT AM I MISSING?

I think the Dems are worried about getting dragged through the mud in the media. "Fiscal cliff" sounds big and scary, Stewart just did a thing on the verbiage being used last night. I guess the fear is that the longer stories about paying $4000 more in taxes (or whatever the number is) and defense cuts in the middle of a war (two wars? three? I've lost count) that independents and moderate Repubs who support Obama will bolt.

[Stumblingdrunk]

The problem associated with the fiscal cliff is that it comes at a time when we need more money being spent, not less. While higher taxes and less spending sound great the effect it has is to take money out of the pockets of those that would spend it through both tax increases on the middle class and less federal dollars being poured into the economy. So our slow recovery then becomes a recession.

[Dimmauk]

If we go over the cliff, does it mean I'm not going to get anymore gifts from Obama?

[mallister]

summary i found while looking at random shit.

http://blog.constitutioncenter.org/2...-paycheck-cut/

[Cantih]

The fun thing is, if nothing happens, the date passes, and cuts come into effect.

The very next thing Obama and the Senate are going to do is put NEW legislation on the block comprised of middle class tax relief, and probably a bump in funding back to the entitlements that got hit with automatic cuts (and defense too, lets be honest here, and a bump back for defense makes it easier for the conservative base to swallow). Maybe the top percent will see a tax hike in the package, but it's smarter politically to leave it at just the top rate Bush cuts expiring for now.
All of that is going to have Obama's name and the Dems stamped all over it, it'll never be "the Bush middle class tax cuts".

If the republicans in the House go against that package, it is going to be RIDICULOUSLY easy to turn the electorate against them.

[archibaldcrane]

I'm glad you made this thread bregor 'cause when I first heard about this Archi's reaction was basically mine. But everyone I know that's mentioned it are shouting doom and gloom, and most of them being liberals. WHAT AM I MISSING?

It could very well cause a double dip recession, and also has cuts to SS, Medicare, unemployment, etc.

But it might be worth letting happen to get the bush tax cuts off the board and let Obama take a clean whack at it immediately after.

[Salodin]

Imo, if it had to happen, now would be the best time. Its year 1 of another 4 years of a demo pres, that's more then enough time for people to forget anything bad that might happen.

[guartz]

It could very well cause a double dip recession, and also has cuts to SS, Medicare, unemployment, etc.

But it might be worth letting happen to get the bush tax cuts off the board and let Obama take a clean whack at it immediately after.

..and on the other, fiscal responsibility will strengthen the dollar. And you know, perception is almost everything.

"I do think there's important potential for the economy to strengthen significantly if there's a greater level of security and confidence about where we're going as a country," -Bernanke


Interesting article here him posturing for fiscal responsibility.

http://www.sfgate.com/business/artic...nt-4055021.php

[Pirian]

Higher taxes, big cuts to military?

Is this a dream? Cause I never wanna wake up!

Also cuts to EITC, which is a big


but yeah, from an economist point of view: this is the worst thing that could possibly happen. You increase gov. spending and decrease taxes to correct recessionary gaps, and this would do the exact opposite (it does what you're suppose to do during an inflationary gap, which they never want to do because there is so much money to go around)

[RKenshin]

Part of me wants the fiscal cliff, part of me wants a less extreme compromise... And part of me just doesn't like the idea of paying an overall tax rate of 27.8%. Conflicted.

Seems more and more unlikely a compromise will happen though... And like before, the GOP will likely take the fall for it. Not sure how they see that as the better alternative.

[Jaybar]

Middle-class tax rates go up because of in-action. Republicans attack Obama for not fulfilling his promises to the middle-class. Same tactics different term.

[Drex]

Eleventh hour near-unanimous vote to push back the deadline. Fiscal cliff joins the debt ceiling in our ongoing charade of caring so the debt hawks will stfu and stay out of the way.

[shaggnix]

Eleventh hour near-unanimous vote to push back the deadline. Fiscal cliff joins the debt ceiling in our ongoing charade of caring so the debt hawks will stfu and stay out of the way.

prediction or has this happened? when does congress start their Christmas vacation?

[Cantih]

http://hobnobblog.com/congress-by-th...nal-schedules/

[Phalanx530]

Both sides will offer extremes and then come to the middle. Republicans can't risk Obama bad mouthing them during January State of the Union and can't risk having a recession on their hands for ammo in 2016 election.

[Dantrag]

IIRC my taxes would go up around 150 a paycheck. That's not an amount I can live without but $300 a month would suck really bad. That's my wife's car payment gone. I currently pay $474.94 every 2 weeks to Federal taxes. 181.00 to NC state tax. YTD: Federal Taxes: 12,097.94 YTD State: 4,512.00.

An extra $3k a year would suuuuuuuuuuuuck.

[shaggnix]

i may be overestimating the masses here, but surely even the dumbest americans can see that ~300$/person not being spent on going out to eat, new tires, gadgets/gizmos, etc. would be bad for the economy. to me this just makes the republicans look greedy, and you'd have to spin it pretty hard to make it look otherwise. but somehow i feel that many will just plug their ears, close their eyes, and mumble "nothing gets done, presidents fault, nothing gets done, presidents fault"