## Fiscal cliff - could be worse

Personally I think we should go off the fiscal cliff as it was negotiated to be mandatory cuts in exchange for the debt limit increase. We have in our hisory often promised cuts inexchange for increased spending or borrowing and historically the cuts have never actually taken place. This time the cuts will happen and all we need to do is nothing.

The debt ceiling is actually going to need to be increased again very soon and the best option may be to set up a second round of mandatory cuts and rate hikes to go with it schedule them for 2014 and see if they negotiate in better faith this time in the debt reduction super committee. This is our only avenue to austerity in this country currently as nobody in Washington is willing to put themselves on the line for the needed measures.

Will it be hard yes will it have some negative outcomes yes but that is why they are tough choices. Without them we are only punishing ourselves and everyone under the age of 40 is going to need to pay or the spending of the past 30 years one way or another. The only question is when and how much extra interest the debt gets to accrue.

Personally I want to see the cuts happen before the rate increases...fool me once shame on you fool me twice shame on me.

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 Quote by Oltz ... The debt ceiling is actually going to need to be increased again very soon and the best option may be to set up a second round of mandatory cuts and rate hikes to go with it schedule them for 2014 ...
Another round of cuts have to come by way of reform to entitlement programs or they really do not do much. The current small cuts in the Jan 1 sequester do not touch entitlements.

As for a second round of tax hikes, I think that's also a one trick pony. This time, Jan 1, federal taxes go up across the board, payroll taxes jump from 4.2 to 6.2%, the top income tax rate will go to 39.6+3.8 = 43.4%, dividends formerly at 15% also go to the income rate, estates worth $1M to$5M go from zero to 55%, and deductions decline so that everyone's income exposed to those rates grows. Source.

I can't see another tax hike to follow this one, at least not one with any expectation of actually bringing in more revenue.

 Quote by Oltz Personally I think we should go off the fiscal cliff as it was negotiated to be mandatory cuts in exchange for the debt limit increase. We have in our hisory often promised cuts inexchange for increased spending or borrowing and historically the cuts have never actually taken place. This time the cuts will happen and all we need to do is nothing. The debt ceiling is actually going to need to be increased again very soon and the best option may be to set up a second round of mandatory cuts and rate hikes to go with it schedule them for 2014 and see if they negotiate in better faith this time in the debt reduction super committee. This is our only avenue to austerity in this country currently as nobody in Washington is willing to put themselves on the line for the needed measures. Will it be hard yes will it have some negative outcomes yes but that is why they are tough choices. Without them we are only punishing ourselves and everyone under the age of 40 is going to need to pay or the spending of the past 30 years one way or another. The only question is when and how much extra interest the debt gets to accrue. Personally I want to see the cuts happen before the rate increases...fool me once shame on you fool me twice shame on me.
I'd rather have more debt than an ounce of austerity. See what austerity has done to Greece and Spain?

Mentor
 Quote by Angry Citizen See what austerity has done to Greece and Spain?
Convinced creditors to waive some existing debt while adding new debt in order to prevent total economic collapse?

The problem you're missing here is that at some point you can't have more debt. In order to get more in debt people have to be willing to lend you money.

Personally, I would prefer that both of them collapse into anarchy for a few years. Westerners need to get slapped into recognition that government spending is not a blank check and bottomless money pit.

As with the couple of opinions above, I am in favor of allowing most of the fiscal cliff to happen, plus reforming "entitlements" (starting by stopping calling them "entitlements").

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 Quote by russ_watters That's self-contradictory: people with serious health problems couldn't live without it 100 years ago either. Yes, they died. The problem to me is that people think/talk about needs without taking into account the cost. This moral model for deciding that healthcare should be a "right" is awesome if you're a pharma company: You can spend however many billions of dollars you feel like to develop drugs for ever rarer illnesses and if you succeed, you can charge whatever it takes to turn a profit because as soon as the treatment is invented, it becomes a "right" for people who need it to get it, so the government pays whatever it costs. Clearly, this model is unsustainable. If this were applied to cars -- which are also a matter of life and death as well as standard of living -- the government would be buying us all $100,000 cars, simply because they exist. On second thought, that's a great idea! I'm seriously concerned that this logic could be the downfall of Western civilization. No, the reality is that if someone invents a new TV or car or medical treatment, but you can't afford it, you haven't actually lost anything. We have to get back to the idea that you have to pay for what you get and if you can't afford something, you don't get it, except for absolute, immediate essentials like food. I think universal health-care is worthwhile to pursue for a variety of reasons, and it can be done fairly efficiently. Even the most basic health-care access can help to prevent conditions and diseases that require intensive and life long treatments. In addition, it can help health experts identify and isolate bugs quicker. And I would even go so far as to say it's a national security risk. Overall, universal health-care should help increase our participation rate in the overall-economy due to the early prevent of conditions and diseases that takes people out of the marketplace. And a higher participation rate should lead to a more optimal economy. But I do agree that under the existing model, such an effort will be unable to manifest itself into reality; instead, it will cause a lot of people grief. A model built on socialized crony capitalism is bound to fail.  Quote by SixNein I think universal health-care is worthwhile to pursue for a variety of reasons, and it can be done fairly efficiently. Even the most basic health-care access can help to prevent conditions and diseases that require intensive and life long treatments. In addition, it can help health experts identify and isolate bugs quicker. And I would even go so far as to say it's a national security risk. Overall, universal health-care should help increase our participation rate in the overall-economy due to the early prevent of conditions and diseases that takes people out of the marketplace. And a higher participation rate should lead to a more optimal economy. you forgot to mention it'll bring about world peace... do you have sources for any of those claims?  Mentor Lets talk a little about the political gamesmanship going on because I really don't understand what the various players are after, particularly Obama. Obama is repeating (CNN report I'll link when I get home) his campaign refrain of "lets begin our work with where we agree", which is the extension of the Bush Tax cuts for all but the upper bracket -- and oh, by the way also include a debt ceiling increase. He follows that with "don't call my bluff". What bluff? I don't get it. Is he saying that if Republicans don't give him the middle class tax cut extension he's going to let taxes go up for everyone? Is that what he wants anyway? Is he trying to spin a potential win-win situation by getting what he wants either way and/or blaming Republicans for a tax increase even if he actually wants it? Beyond that, what is not on the table for Obama is interesting to me: any proposal to not raise taxes. That includes the two options for raising income taxes and also allowing the social security tax reduction to expire. So Obama is apparently not considering any proposal that doesn't raise taxes. Let me rephrase: Obama wants to raise taxes in the middle of a weak economic situation. It just isn't clear to me by how much or if he's trying to blame it on others. And as I said, he wants a debt ceiling extension. Is there any room for negotiation and does anything else about the fiscal cliff and debt issues concern him? "Entitlement" reform? Spending cuts? Are they on the table at all? What bothers me is that doing nothing makes something happen at least on the spending cuts and he is not clearly articulating what he really wants. Now that he doesn't have to campaign anymore, he has that "flexibility" he told Russia to wait for, so why isn't he using that flexibility to actually do bipartisan negotiation and even do things that may be politically unpopular but fiscally necessary? Instead, he seems to be doing the same leading-from-behind-while-muscle-flexing he did with his healthcare reform: make provocative, politicized, inflexible statements about a small and/or vague part of the issue and let other people figure out the rest of it. Republicans for their part seem to be willing to deal. Several have rebuffed their Norquist pledge, to their credit (though better would have been to never sign it in the first place ) and stated explicitly that they may be willing to raise taxes. And there may be enough for an actual vote to raise taxes to pass in the House. What worries me is a repeat of the '80s where Republicans gave concessions on tax increases and Democrats reneged on promises of spending cuts that were supposed to follow. That's what "just pass what we agree on now" really says to me. Maybe that's his plan? The problem with that though is I don't think politicians really have the stomach to accept the cuts of the "sequestration". Its just that no one is talking about it, so I have no idea at this point where that is going. We're not in an active campaign and Obama never has to campaign again. It should not be this hard to figure out what people want. Why is this so hard? Opinions? Opinions? why ask ... unless backed by some 'authority' ... they seem-to-be not allowed here.  do you have sources for any of those claims? Mentor  Quote by Alfi Opinions? why ask ... unless backed by some 'authority' ... they seem-to-be not allowed here. That is very, very wrong. In fact, I'd say you've mostly missed the point of the politics forum: it exists largely to share opinions on world events. Otherwise, it would just be a repository for links to news articles. Assertions of facts must be supported. Opinions, by definition, do not require factual support/citation. As-worded in the guidelines at the top of the forum:  2) Citations of sources for any factual claims (primary sources should be used whenever possible). 4) When stating an opinion on an issue, make sure it is clearly stated to be an opinion and not asserted as fact. Recognitions: Gold Member  Quote by russ_watters ... Republicans for their part seem to be willing to deal. Several have rebuffed their Norquist pledge, to their credit (though better would have been to never sign it in the first place ) and stated explicitly that they may be willing to raise taxes. And there may be enough for an actual vote to raise taxes to pass in the House. Not just several. If Boehner speaks for the GOP, then the GOP position is a yes to raising tax revenues, though maybe not via rates:  Quote by Spkr Boehner , WSJ, Nov 8 ... said Republicans are willing to accept "new revenue, under the right conditions" to get a bipartisan agreement. He repeated his opposition to raising marginal tax rates, as Mr. Obama has proposed, but opened the door to bringing in more revenue by "closing special-interest loopholes and deductions, and moving to a fairer, simpler system." But to get those increases in new law, Obama and Reid have to address some cuts. So far, nothing. Democrats like Durbin have explicitly rejected cuts to Medicare and SS. Recognitions: Gold Member  Quote by BobG .... And, personally, I wouldn't like to see such drastic cuts in defense spending. Might I ask why not? The US spends 60% more today than what it spent at the height of the Reagan defense build up in the cold war (constant dollars) The pending defense cuts would be on the order of$40 billion / year for ten years, against the spending of ~800B. Is that drastic?

 Recognitions: Gold Member The President gave speech today on the fiscal cliff topics. He mentioned the deficit seven times, used 'balance' seven times, referenced 'tax'es several dozen times, but not a word on reducing spending. Not for anything. He did mention working on the deficit "next year". http://www.whitehouse.gov/the-press-...s-middle-class

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 Quote by mheslep Not just several. If Boehner speaks for the GOP, then the GOP position is a yes to raising tax revenues, though maybe not via rates:
Boehner's interpretation of increased revenue:

 While Boehner suggested that Republicans would still oppose Obama’s plan to take “a larger share of what the American people earn through higher tax rates,” he said the party is open to “increased revenue . . . as the byproduct of a growing economy, energized by a simpler, cleaner, fairer tax code, with fewer loopholes, and lower rates for all.”
In other words, Boehner's position is the country needs tax cuts to increase government revenue.

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 Quote by mheslep Might I ask why not?
Sadly, it's because I'm as optimistic about Congress's ability to cut defense smartly (vs cut defense anywhere it doesn't affect jobs in my district) as I am about their capability to balance a budget.

I wouldn't say it's a drop dead issue for me. But it would definitely raise some trepidation.

And, full disclosure, I'm a defense contractor living in a city with five military installations.

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 Quote by BobG Boehner's interpretation of increased revenue: In other words, Boehner's position is the country needs tax cuts to increase government revenue.
I don't think that's accurate:
 Quote by Boehner "closing special-interest loopholes and deductions"
 Quote by Boehner with fewer loopholes
Other GOP politicians have cited the $trillion/10 years of deduction cuts found by Simpson-Bowles commission as a possible target. Cutting deductions and leaving marginal rates as they are, would dollar for dollar be better for the economy in my view. Recognitions: Gold Member  Quote by boomtrain you forgot to mention it'll bring about world peace... do you have sources for any of those claims? Honestly, this should be just common sense.... But.... On prevention:  Primary preventive measures in a clinical setting are those provided to individuals to prevent the onset of a targeted condition (for example, the routine immunization of healthy children), whereas secondary preventive measures identify and treat asymptomatic persons who have already developed risk factors or preclinical disease but in whom the condition has not become clinically apparent (for example, screening for diabetes or colon cancer). http://www.uspreventiveservicestaskf...procmanual.pdf For example, here is a list of vaccinations of preventable diseases: http://www.cdc.gov/vaccines/vpd-vac/ Something as simple as oral checkups can go a long way. For example, http://www.telegraph.co.uk/health/he...-suggests.html As far as national security, have you ever stopped to think about the prospects of a bio-terror attack?  In the area of patient access to health care, more challenging dilemmas arise. Strong ethical reasons have long been recognized as supporting universal access to a decent minimal set of health care services,19 yet our nation has been unable or unwilling to accomplish this.20 Perhaps if policymakers understand that inadequate access to care poses a threat to national security, progress can be made.21,22 In the United States, more than 40 million Americans lack health insurance, and this number is rising.23,24 Although some uninsured individuals use emergency rooms to obtain care when they are acutely ill, many of the uninsured and underinsured avoid the health care system for as long as possible.20 Some have argued that bioterror-related illnesses are so severe that anyone affected would surely seek care.25 But uninsured patients discriminate poorly between appropriate and inappropriate care and tend to avoid both equally.26 Numerous studies demonstrate that the uninsured are more likely to present in an advanced stage of illness, and many die without ever being evaluated http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1448404/ Explanation of participation rates in the economy: http://en.wikipedia.org/wiki/Labor_force Mentor  Quote by mheslep Might I ask why not? The US spends 60% more today than what it spent at the height of the Reagan defense build up in the cold war (constant dollars) The pending defense cuts would be on the order of$40 billion / year for ten years, against the spending of ~800B. Is that drastic?
Does that include and/or is the difference based on the two wars? If I remember correctly, one of Obama's spending cutting claims was based on the winding-down of the wars. I'd like to see it cut by perhaps a third from 800B but as with Bob I have no confidence whatsoever in Congress's ability to make smart cuts. Defense spending is in many ways the largest boondoggle we have.