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## Fiscal cliff - could be worse

 Quote by CAC1001 Well the way the Republicans talk, it seems to go like this: "We need to make sizeable spending cuts, but we promise we are NOT going to cut people's Social Security and Medicare.
You misunderstand: Repubs promise not to make changes for CURRENT SENIORS. Dems want to make no changes at all.

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 Quote by mheslep The cliff refers to taxes rates that rise on a given day, Jan 1, and spending cuts below plan that begin on the same day. How is that event characterized as systemic, or developed over decades?
The decisions that created the 'cliff' were all made in the past 4 years, but the motive behind them is mostly debt reduction, a problem decades old.

Still, IIRC, by the time Obama leaves office, he'll have most of the debt too.

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 Quote by Alfi I'm lost here. ... what? Who is this lobbyist Norquist? I don't understand why this person has any say in anything.
He solicited a pledge from most Republicans that they will never raise taxes and he publicizes it loudly.

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 Quote by russ_watters The decisions that created the 'cliff' were all made in the past 4 years, but the motive behind them is mostly debt reduction, a problem decades old. Still, IIRC, by the time Obama leaves office, he'll have most of the debt too.
Will you please say what does "IIRC" mean? Thank you.

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Bobbywhy
 Mentor If I remember correctly
 Blog Entries: 1 Recognitions: Gold Member How about TBD? Has anyone determined what that's going to mean yet?

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 Quote by russ_watters If I remember correctly
Thank you for the translation. That answer could have been found had I only searched for it here: http://www.netlingo.com/acronyms.php

I did, however, search our PF Rules and found this:
“General Posting Guidelines
All posts must be in English. Posts in other languages will be deleted. Pay reasonable attention to written English communication standards. This includes the use of proper grammatical structure, punctuation, capitalization, and spelling. SMS messaging shorthand ("text-message-speak"), such as using "u" for "you", and "plz" for "please", is not acceptable.”

The SMS messaging shorthand described above as “not acceptable” in our PF rules is discussed in detail here: http://en.wikipedia.org/wiki/SMS_language

Cheers,
Bobbywhy

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 Quote by Jimmy Snyder How about TBD? Has anyone determined what that's going to mean yet?
What I meant was "if I remember the latest projections correctly...."

When Obama entered office, it was $6.3 Trillion and today it is$11.4 Trillion.
http://www.treasurydirect.gov/NP/NPGateway

Here's an August 2012 CBO projection that it will pass \$12.6 Trillion in 2015: http://www.cbo.gov/sites/default/fil...to_Outlook.pdf

Of course, such projections tend to be overly optimistic: http://mercatus.org/publication/proj...nue-accelerate

The main source of optimism in the CBO's projection is it is based on current law. In other words, it assumes the fiscal cliff happens. If it doesn't, we'll probably have that doubling point reached next year.

And this does not, of course, include the big elephant in the room: underfunded entitlements such as Social Security and Medicare.

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 Quote by Jimmy Snyder How about TBD? Has anyone determined what that's going to mean yet?
No, that's still to be determined.
 At this point ... 50 trillion doesn't mean anything.

 Quote by russ_watters You misunderstand: Repubs promise not to make changes for CURRENT SENIORS. Dems want to make no changes at all.
Even for future retirees though, I don't see how we can really cut people's benefits by a sizeable amount.

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 Quote by CAC1001 Even for future retirees though, I don't see how we can really cut people's benefits by a sizeable amount.
I don't think a cut in benefits is on the table. What I heard was that for those 54 and younger, the age at which they can take benefits would rise. In my opinion, SS faces a demographic problem and only a demographic solution will work.

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 Quote by CAC1001 Even for future retirees though, I don't see how we can really cut people's benefits by a sizeable amount.
Since the money to pay them does not exist, I don't see how we can keep the benefits the same without a massive tax increase. Something has to change.

 Quote by russ_watters Since the money to pay them does not exist, I don't see how we can keep the benefits the same without a massive tax increase. Something has to change.
Right, that's why I proposed something like removing the cap on the payroll tax and turning the program into a straight up form of welfare program.
 Mentor Welfare for everyone except the top 5%? That's a lot of welfare. Sounds risky to me.
 Well the way I'm thinking is that the program would pretty much function the same as it does now, but that would be one way to shore it up a lot more. It would be turned into a form of welfare program though because if the cap on incomes taxed is removed or increased at least, the benefits would need to be capped.
 Mentor I have several problems with that: 1. Calling it a "welfare" program when for 90+% of people it is not means-tested doesn't seem accurate to me. 2. Having the program work differently for 5-10%% of population doesn't seem fair to me. 3. I don't think there is enough money to be gotten that way to "fix" the program under the typical goal of maintaining the current benefit structure. 4. People tend to view maintaining the benefits output as "fixing" the program, but I look at the input to output ratio and view the program as already badly broken. If the ratio for me is going to be something like 1/5 what it was for people who retired a generation ago, or what a reasonable private retirement account could achieve, then my standard of living today is being lowered by this program.

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