the coming "fiscal cliff"

so, this is going to happen right? as in, we are going to go over it...? I'm having a hard time envisioning any scenario in which the terminally irresponsible GOP (who will presumably still control the House following Nov elections) actually compromises to avert catastrophe. Obama (assuming he wins reelection) might but that scenario's almost as bad imho.

thread title needs more -POCALYPSE

don't know why they're so bothered about fiscal cliff, he only had like two hits there in the seventies.

*rimshot*

Fiscal Lars

we hate this thing we all voted for!

lol

Greenwald > Silver

http://www.guardian.co.uk/commentisfree/2012/nov/07/obama-progressives-left-entitlements

*donates $13 to Obama*

Dean Baker here - https://www.youtube.com/watch?v=4l9C29tglhI

and here - http://www.cepr.net/index.php/blogs/beat-the-press/a-heaping-helping-of-ridicule-for-ruth-marcus

"In short, there is nothing resembling a cliff or a Wile E. Coyote moment, these are fictions that only exist in the Washington Post and similar locations. The purpose of this fabrication is to advance their agenda for their preferred plan for spending cuts and tax increases."

Obama and all the democrats in Congress know that, even though letting ALL the Bush tax cuts expire would be a perfectly sensible thing to do in terms of raising revenue, the plain people of the USA (thx Myles nG) have grown accustomed to their current low tax rates and the dems would get their brains beaten out in 2014 if they took this route.

Unfortunately, the timing of an across the board tax hike is still premature in terms of the slow, weak recovery. If GDP growth were above 3.5% and unemployment closer to 6%, then letting all the taxes cuts expire wouldn't strangle the recovery. As of today, it carries some real risks of killing economic growth.

so, Chuck Schumer's floor of $1 million/year at best.

the lasting joys of 'victory'

btw, I agree strongly that health care costs are a HUGE unecessary burden on the US economy, but mainly because it leads to gross misallocations of resources. It isn't like the unnecessary hundreds of billions of unearned dollars are heaped up and lit on fire by companies like Humana and Glaxo.

lol @ everyone publicly striking a "conciliatory tone" while adhering to the exact same proposals they've been bandying about all along

http://www.slate.com/blogs/moneybox/2012/11/07/fiscal_cliff_it_s_not_a_cliff.html

Yglesias:

But if the Bush tax cuts fully expire on a Tuesday morning it's not as if some catastrophe strikes on Wednesday where suddenly middle class families have no money. It's true that if the new higher rates were to be locked in, then the medium-term drag on middle class take home pay would delay the deleveraging cycle and damage the recovery. But to resolve that, all you need to do is introduce a new package of middle class tax cuts on Wednesday afternoon, have congress pass it on Thursday, and then the president signs it on Friday. The fact that taxes were higher for three days—or even three weeks—is simply not that consequential.

otm, i'm starting to think we should go over the cliff

interesting suggestion from Matt there - but O would still need to peel off House GOP support for any replacement plan and what are the odds of that

I guess House GOP would vote against any replacement plan that does NOT include lowering taxes for rich people, and the Dems and mainstream media would not have the courage to fight this battle or point out what is being done. Meanwhile, capital gains taxes will remain much lower than they were 30 years ago and the Social Security payroll taxcap will not change.

and the Dems and mainstream media would not have the courage to fight this battle or point out what is being done

I dunno. Dems seem pretty cocksure atm.

smh at anybody who can't see what's gonna happen

Its worth noting that pretty much the entirety of the paltry economic growth in the past few months seems to be from Federal expenditures, with the bulk from the Pentagon pulling some 2013 durable goods orders into 2012 before any mandated cuts.

I'm a lot less anxious about the fiscal cliff than most. Its simply deficit reduction in a hurry (rather than spanning a decade or more), and the danger to a fragile recovery is offset by pretty real reductions in future interest payments (the 10yr T yield is not going stay at 1.75% forever). Pay now or pay more later. A lot of safety net programs are exempted, I'm not persuaded that Bush tax rates created meaningful consumption/economic stimulus vs Clinton tax rates, and actually cutting the defense budget for the first time since 1998 is better than a lot of compromises the House might offer. Ie, the 2011 Budget Control Act mandates may just be the best deal for progressive aims, though obviously not partisan gains. Course who am I kidding. There is a can to be kicked, and a road.

x-post
Dems are already doing the compromise talk, and the mainstream media is screaming the sky is falling without mentioning that Congress could do something right after letting the tax rates go back.

That's to Johnny

Dems are already doing the compromise talk

So are Repubs

Oh right, Boehner's lipservice using carefully chosen words

lipservice using carefully chosen words

right. that's called "compromise talk"

Uh no. It's a game for the media

There is a can to be kicked, and a road.

^^^^

there is no compromise when both sides want to do the same thing

Boehner's made clear now that beyond kicking the can, the only thing he is willing to do is to get revenue via a Romney-like plan closing unidentified tax loopholes, not via raising any tax rates.

kicking the can down the road, or at least past the expiration of the bush tax cuts, benefits democrats as far as i can tell

Last night i looked up who actually holds the US debt. About 2/3 are held IN the US. China, our biggest foreign debtor, only holds 8% of our debt. Maybe some Dems can bring that up the next time Repubs start freaking out about selling our grandkids to China.

yeah, whenever someone says we are burdening our grandchildren with this mountain of debt i always think ok, but the bondholders are... our grandchildren

Well, Mitt Romney's grandchildren...

odds that none of the Bush tax cuts expire?

GOP doesn't have the votes to override O's threatened veto

I don't think that was exactly Morbius's angle...

Liberal Dems in the house don't have the votes to pass a bill to the liberal Dems liking (Boehner won't cave), and the mainstream media is screaming that the cliff is bad, so Dems and Obama may cave

oh, "cave" again....

you people.

I'm kinda agreeing with you Morbs

But you're suggesting there's a difference between the parties!

http://livewire.talkingpointsmemo.com/entry/white-house-spox-obama-would-veto-bill-extending

"for the wealthiest Americans"

so, Jaime Dimon and above

interesting suggestion from Matt there - but O would still need to peel off House GOP support for any replacement plan and what are the odds of that

― Force Boxman (Shakey Mo Collier), Thursday, November 8, 2012 12:15 PM (2 days ago)

as of january everyone's taxes will be higher and across-the-board spending cuts - including on defense - would be put into place. that would be the new law of the land. this new normal - along with the fact that dems have stronger numbers in both houses - greatly increases the dems' bargaining power. in return for nixing some of the defense cuts, the GOP will have to agree to leaving the $250k+ out of the tax cuts (they should be all for a middle class tax cut anyway...) and probably spare a good chunk of domesting spending as well. we will figure out a way to fuck this up obviously, but going over the cliff is the only way we can make it work

But you're suggesting there's a difference between the parties!

Indeed, there is no material difference among the parties, including the best-known minor parties. There are only different vocabularies of denial.

http://market-ticker.org/akcs-www?post=213731
http://market-ticker.org/akcs-www?post=213787

zurprize

4. Triumph of Bush: Until now, Obama’s bottom-line on tax rates has been adamant, and not that unreasonable: A return to the Clinton-era rates for income over $250,000. For everyone else – 98 percent of Americans – the Bush tax cuts would be made permanent. Given that the Clinton rates did absolutely nothing to harm the economy in the 1990s, and given the deficit reduction goals that both parties have set, Obama’s tax posture was really pretty modest. And now it’s apparently getting more modest – with only income over $400,000 subject to a rate hike. If that’s the deal, then the Bush tax cuts will go away for only about 1 percent of Americans.

http://www.salon.com/2012/12/18/is_this_what_winning_looks_like/

Shocked. Good thing we won't have to watch him capitulate again in a few months re: the debt ceiling. Oh, wait.

On bipartisan cowardice and the Magic Asterisk:

http://www.nytimes.com/2012/12/19/business/say-goodbye-to-the-government-under-either-fiscal-plan.html

lol Boehner.