News How will the looming fiscal cliff impact the US economy and job market?

[russ_watters]

Let's get our hyperboles in order here. I never said you claimed he deserved to get it, I said you said he deserved to die because he didn't have the means to get the care.

I most certainly never said any such thing. No one "deserves" to get or die from cancer.

Besides which, that is such an extreme case and "deserve" isn't relevant anyway. I could jump out my window right now and would probably break my leg on the landing. Would I deserve a broken leg for doing something so stupid? Definitely. Would universal healthcare cover my medical bills? Yep. Would my current insurance? Yep. "Deserve" just doesn't enter into the equation.

Do I REALLY need to quote A Christmas Carol?

I can't fathom why you would think that is relevant. Please explain.

But by staking out an extreme socially darwinistic position you made it a choice between the unsustainable statist solutions...or nothing. Not everyone who doesn't think those without means should just die is a statist.

Why is my position "extreme" when applied to healthcare but people accept it as just a reality of life when applied to other things that are also a matter of life and death?? Is it just because insurance is already collectivized that it makes for an easier transition to federalize it than other products like cars? Do you want to nationalize the supply of cars?

A new safety feature was just invented for circular table saws that stops the blade in microseconds if your finger gets in the way. This would save thousands of people a year from maimings. Since it was just invented, naturally the government should buy one for everyone who currently owns a table circular saw, right?

You know what cured your sister of cancer? Healthcare. Don't tell me it isn't necessary to live and then tell me about how it saved her life.

Again, you miss the point. If she had lived 50 or perhaps even 30 years ago, this probably would have killed her. And people accepted that as normal back then. People lived with the risk and knowledge that the life expectancy was lower then than it is today.

Now that cancer treatment exists, people think everyone who needs it should have it provided to them. Just because it exists. Even if I agreed with those that think this is a moral imperative, it doesn't matter because of the practical problem: this worldview will bankrupt us if we allow it to continue as currently formulated.

 

[aquitaine]

I can't fathom why you would think that is relevant. Please explain.

People who don't have means don't deserve to live. It's relevant because that's your position on healthcare.

Why is my position "extreme" when applied to healthcare but people accept it as just a reality of life when applied to other things that are also a matter of life and death?? Is it just because insurance is already collectivized that it makes for an easier transition to federalize it than other products like cars? Do you want to nationalize the supply of cars?

If you actually read my proposal you would notice that I didn't collectivize insurance at all. Instead I proposed a solution to the problem of tens of millions of uninsured that doesn't destroy western civilization, that is financially sustainable, and that also solves the underlying problems with our healthcare system all at once to provide people with a free market. I notice you don't say anything about that. It's more or less the Swiss model, and I don't see them going bankrupt any time soon.

A new safety feature was just invented for circular table saws that stops the blade in microseconds if your finger gets in the way. This would save thousands of people a year from maimings. Since it was just invented, naturally the government should buy one for everyone who currently owns a table circular saw, right?

No, because it isn't a direct threat to life thanks to healthcare. Regulations to require it's installation on new table saws, yes, but it's the owners responsibility to upgrade their saws accordingly. If they choose not to, that's their problem.

See, that's the exactly the problem I mentioned with the GOP, and the absurdities in this discussion proves definitively that it is no longer a party capable of governing. The only reason they are opposed to any and all healthcare reform is because the democrats took initiative and put it on their agenda. So we're left with a choice between financially unsustainable statist approaches, such as Obamacare, or nothing at all.

 

[russ_watters]

People who don't have means don't deserve to live. It's relevant because that's your position on healthcare.

You really need to stop saying that because it isn't true. I have, in fact, said exactly the opposite Several times. And it is ad hominem: you're trying to paint me as a bad person instead of dealing with the argument. It seems like you are trolling me here.

It is easy enough to turn it around, though. In my example of jumping out of my window, I would deserve a broken leg. But my insurance and/or nationalized healthcare would still pay for it. So please drop this ridiculous line of argument you are on. "deserve" has nothing to do with any of this.

No, because it isn't a direct threat to life...

See, that's the exactly the problem I mentioned with the GOP, and the absurdities in this discussion proves definitively that it is no longer a party capable of governing.

Are you suggesting that healthcare should only pay for life threatening conditions? The absurdity is in your posts, not mine.

If you actually read my proposal you would notice that I didn't collectivize insurance at all. Instead I proposed a solution to the problem of tens of millions of uninsured that doesn't destroy western civilization, that is financially sustainable, and that also solves the underlying problems with our healthcare system all at once to provide people with a free market. I notice you don't say anything about that.

I didn't comment on it because it just looks like handwaving to me. I don't accept that the things you say would happen would happen and I don't want to get into a "will not/will to" type of argument. The fundamental issue to me is that it does not address the logical flaw in healthcare, overall; the fact that people want everything that exists because it exists.

It's more or less the Swiss model, and I don't see them going bankrupt any time soon.

Their financial unsustainability is the same as everyone else's:

A 50% increase in costs in 12 years. Unsustainable.

 

[mheslep]

...I think the American Enterprise Institute has summed up the current state of the GOP quite correctly:

Ornstein and Mann are not the same thing as the American Enterprise Institute.

 

[mheslep]

... the problem I mentioned with the GOP, ... The only reason they are opposed to any and all healthcare reform is because ...

Sen McCain 2008 health care plan, or pg 47 here.

Rep Ryan health care plan

Ron Wyden (D-Oregon) and Robert F. Bennett (R-Utah) health care plan

 

[lisab]

People who don't have means don't deserve to live. It's relevant because that's your position on healthcare.

Please stick to stating your own opinion. Putting words into others' mouths is one way discussions here in P&WA go down the tubes.

 

[Astronuc]

Reid says fiscal cliff dive likely
http://news.yahoo.com/blogs/ticket/...ikely-blasts-boehner-171600314--politics.html

Pointing fingers doesn't help.

Meanwhile - Memphis mayor recommends feds, 'Do something!'
http://www.marketplace.org/topics/economy/fiscal-cliff/memphis-mayor-feds-do-something



Congress will apparently return on Sunday. Let's see what happens.

 

[ImaLooser]

Congress will apparently return on Sunday. Let's see what happens.

Could it be that they will heroically save the world from the problem they themselves created?

 

[Astronuc]

Could it be that they will heroically save the world from the problem they themselves created?

Somehow, I don't see heroic.

. . . .
Absent a solution — or even a pathway to a bill — senators whiled away the hours without any agreement, debating and voting on amendments to a surveillance measure, pondering hurricane aid, and swearing in a new senator from Hawaii. Retiring senators, who had anticipated that their services would no longer be needed, worked in offices in varying states of disassembly, their staffs pecking out e-mails on iPads because their computers had been carted away.
. . . .
The Congressional impasse over how to avoid tax increases and spending cuts has left this entire city gripping Starbucks cups procured from Georgetown to Capitol Hill, bearing the message “come together,” to wait in low-grade misery for the next chapter in the drama. This would be Sunday night, when House members arrive, just ahead of New Year’s Eve at the summons of their leaders, who decided Thursday that they could not afford to be home killing time while Senate Democratic leaders took to C-Span to take shots at the absent House.

. . . .

http://www.nytimes.com/2012/12/28/u...ators-chafe-at-inaction-over-fiscal-deal.html

They'll take it to the brink, and maybe drop over the edge.

Apparently the US government will reach the current debt ceiling, but then the Treasury can raid other funds ( ), which probably won't be repaid anytime soon, until Congress raises the debt ceiling yet again - and the nation goes deeper into debt.

 

[AlephZero]

Could it be that they will heroically save the world from the problem they themselves created?

I expect they are mostly just counting the days to when they can stop having to pretend to understand economics, and get back to what all politicians like doing best: blaming each other for what happened.

 

[Astronuc]

Monday morning will be interesting. I imagine the equities markets will pop up with a deal, and tank if there is no deal.

The last several days have been pretty volatile.

 

[lisab]

Monday morning will be interesting. I imagine the equities markets will pop up with a deal, and tank if there is no deal.

The last several days have been pretty volatile.

I've been watching the markets, too, for clues into what's really happening. A couple weeks before Christmas they were going gangbusters, which I interpreted to mean there must be a back-room deal in the works.

Guess that was all just wishful thinking !

 

[Borg]

Monday morning will be interesting. I imagine the equities markets will pop up with a deal, and tank if there is no deal.

The last several days have been pretty volatile.

I expect that anything that might be signed in the next week or two still won't be viewed favorably by the markets.

 

[Astronuc]

I expect that anything that might be signed in the next week or two still won't be viewed favorably by the markets.

Monday could be a double whammy!

The U.S. Will Hit the Debt Ceiling on Monday
http://news.yahoo.com/u-hit-debt-ceiling-monday-124731632.html


http://live.wsj.com/video/us-to-hit...41.html#!71D6FEC5-760F-4F6B-A67C-1FEF3867FA41

 

[mheslep]

Monday could be a double whammy!

The U.S. Will Hit the Debt Ceiling on Monday
http://news.yahoo.com/u-hit-debt-ceiling-monday-124731632.html


http://live.wsj.com/video/us-to-hit...41.html#!71D6FEC5-760F-4F6B-A67C-1FEF3867FA41

Then the deficit has grown worse. Some months ago the next debt ceiling was not to be reached before late January.

 

[Astronuc]

Then the deficit has grown worse. Some months ago the next debt ceiling was not to be reached before late January.

I wonder if that has to do with the supplemental bill for Hurricane Sandy.

Senate votes in favor of $60B Hurricane Sandy emergency-spending bill
By Ramsey Cox - 12/28/12

The Senate passed the emergency-spending bill for Hurricane Sandy relief efforts on Friday night.

The 62-32 vote came after the Senate worked all day Friday on amendments to H.R. 1, a vehicle to provide $60.4 billion to storm recovery efforts.

. . .

http://thehill.com/blogs/floor-acti...r-60b-hurricane-sandy-emergency-spending-bill

 

[mheslep]

I wonder if that has to do with the supplemental bill for Hurricane Sandy.

Senate votes in favor of $60B Hurricane Sandy emergency-spending bill...

That fits. The deficit is on the order of $90B/month.

 

[BobG]

I wonder how many wealthy patients near death get life support removed on New Year's Eve. The fiscal cliff includes a pretty large change to estate taxes. Keeping a person alive for one or two more days could get very expensive.

The exemption drops from $5 million dollars to $1 million dollars and the rates increase to 55% for the amount above the exemption. For a person with an estate worth $3 million dollars, dying on New Year's Day instead of New Year's Eve could cost $1.1 million dollars.

 

[Astronuc]

Wall Street Week Ahead: Cliff may be a fear, but debt ceiling much scarier
http://news.yahoo.com/wall-street-week-ahead-cliff-may-fear-debt-150342441--sector.html

(Reuters) - Investors fearing a stock market plunge - if the United States tumbles off the "fiscal cliff" next week - may want to relax.

But they should be scared if a few weeks later, Washington fails to reach a deal to increase the nation's debt ceiling because that raises the threat of a default, another credit downgrade and a panic in the financial markets.

. . . .

Except that Geitner, US Secy of Treasury, indicated that the US government would hit the debt ceiling on Mon - or maybe Tuesday.

Makes one wonder if anyone in Washington is paying attention.

At this point, I would expect debt ceiling as well as the tax law would be under discussion.

 

[JonDE]

Wall Street Week Ahead: Cliff may be a fear, but debt ceiling much scarier
http://news.yahoo.com/wall-street-week-ahead-cliff-may-fear-debt-150342441--sector.html
Except that Geitner, US Secy of Treasury, indicated that the US government would hit the debt ceiling on Mon - or maybe Tuesday.

Makes one wonder if anyone in Washington is paying attention.

At this point, I would expect debt ceiling as well as the tax law would be under discussion.

If the author is suggesting that we could go over the fiscal cliff and have congress go through another round of debate over the debt ceiling, I would doubt that very much. So soon after going over the "cliff" I doubt there would be much support at all to do it again. Then again, with politicians, you never know.

 

[BobG]

If the author is suggesting that we could go over the fiscal cliff and have congress go through another round of debate over the debt ceiling, I would doubt that very much. So soon after going over the "cliff" I doubt there would be much support at all to do it again. Then again, with politicians, you never know.

There has been some talk that Boehner's failed efforts to get some kind of Republican bill introduced means his days as Speaker of the House are numbered. The only problem is that the House Republicans best positioned to succeed him all stand with him in spite of his weakened position.

Who in the world is stupid enough to want his job?!

Actually, I could see Boehner failing to get a majority of votes for Speaker of the House, at least on the first vote. It's just that there's probably no other willing candidate that can get a majority in what's essentially become a three party House.

Paul Ryan could possibly get a majority if he was brave enough/foolish enough to risk replacing a strong reputation with a reputation as 'Failed Speaker of the House', but why in the world would he do that?

On the other hand, 8 of the last 11 Republican VP candidates prior to Ryan never won another election. Perhaps Ryan could find an entirely unique way to extend the curse.

 

[Astronuc]

Senate Seeks Bipartisan Formula to Reach Tax Deal
http://www.nytimes.com/2012/12/30/us/politics/president-obama-urges-last-minute-tax-deal.html

Senate leaders and their aides spent Saturday searching for a formula to extend tax cuts for most Americans that could win bipartisan support in the Senate and final approval in the fractious House by the new year, hoping to prevent large tax increases and budget cuts that could threaten the fragile economy.

As part of the last-minute negotiations, the lawmakers were haggling over unemployment benefits, cuts in Medicare payments to doctors, taxes on large inheritances and how to limit the impact of the alternative minimum tax, . . . that is increasingly encroaching on the middle class.

President Obama said that if talks between the Senate leaders broke down, he wanted the Senate to schedule an up-or-down vote on a narrower measure that would extend only the middle-class tax breaks and unemployment benefits.
. . . .

Today is the day, or perhaps tomorrow.


Update: Don't expect much - http://news.yahoo.com/cut-fiscal-deal-pale-against-140752956.html

. . . .
The so-called "continuing resolutions" to which a divided Congress has increasingly resorted to keep the government operating, provide a "very powerful tool" to pry out spending cuts, said Norquist, president of Americans for Tax Reform.

Republican Senator Bob Corker of Tennessee said he will not be satisfied until there are substantial cuts to federal retirement and healthcare benefits known as entitlements, producing savings in the $4.5 trillion to $5 trillion range.

"Unfortunately for America," said Corker, "the next line in the sand will be the debt ceiling."

Most observers see the $16.4 trillion debt limit as the true fiscal cliff in the new year because if not increased, it would eventually lead to a default on U.S. Treasury debt, an event that could prove cataclysmic for financial markets.

. . . .

http://news.yahoo.com/analysis-fiscal-cliff-dive-more-battles-cliffs-212008912--business.html

Some assessements and perspectives from Brad Blakeman and Joe Sestak
http://news.yahoo.com/video/fiscal-cliff-deal-could-leave-201112547.html

 

[Windowmaker]

On the other hand, 8 of the last 11 Republican VP candidates prior to Ryan never won another election. Perhaps Ryan could find an entirely unique way to extend the curse.

http://www.reuters.com/article/2012/11/07/us-usa-campaign-house-ryan-idUSBRE8A60MV20121107

Hasnt extended it yet.

 

[encorp]

I wanted to bring a little humour to this thread. :)

 

[Alfi]

Sixteen trillion Two Hundred and Fifty Four Million Six hundred and Eighty Two Thousand One Hundred and Fifty Four ...


... Before I can finish saying it ... I'm wrong. ... I feel obsolete. :(

 

[Astronuc]

Inching closer to an agreement - Progress seen in last-minute 'fiscal cliff' talks
http://news.yahoo.com/progress-seen-last-minute-fiscal-cliff-talks-141404187--finance.html

WASHINGTON (AP) — Working against a midnight deadline, negotiators for the White House and congressional Republicans narrowed their differences Monday on legislation to avert across-the-board tax increases.

Congressional officials familiar with talks between Vice President Joe Biden and Senate Republican leader Mitch McConnell said one major remaining sticking point was whether to postpone spending cuts that are scheduled to begin on Jan 1.

Republicans want to replace across-the-board reductions with targeted cuts elsewhere in the budget, and the White House and Democrats were resisting.

. . . .

They have to cut expenditures in line with revenue. They need to stop pretending about optimistic growth.

 

[mheslep]

Inching closer to an agreement - Progress seen in last-minute 'fiscal cliff' talks
http://news.yahoo.com/progress-seen-last-minute-fiscal-cliff-talks-141404187--finance.html
They have to cut expenditures in line with revenue. They need to stop pretending about optimistic growth.

Clearly there will be no new spending cuts by January under this President, nor are the pending small cuts in current law secure.

But he [McConnell] claimed the White House called in the morning "demanding" to avert the automatic spending cuts, $110 billion of which is set to take effect in 2013.

http://www.foxnews.com/politics/201...l-deal-as-ball-drop-set-to-ring-in-tax-hikes/

To force the issue, would you favor not raising the debt limit?

 

[Astronuc]

Clearly there will be no new spending cuts by January under this President, nor are the pending small cuts in current law secure.


http://www.foxnews.com/politics/201...l-deal-as-ball-drop-set-to-ring-in-tax-hikes/

To force the issue, would you favor not raising the debt limit?

If the plan is to keep running deficits - they have to raise the debt ceiling. It appears the deficit spending is the plan.

2012 Projected Deficit: $1.33 trillion, 8.5 percent of GDP; 2013 Projected Deficit: $901 billion, 5.5 percent of GDP; 2018 Projected Deficit: $575 billion, 2.7 percent of GDP; 2022 Projected Deficit: $704 billion, 2.8 percent of GDP.

That's ridiculous, IMO.

FY2013 started with a projected ~$900 billion deficit, but Congress just approved a $60 billion emergency supplemental bill to cover the damage done by Sandy. And if we have another similar event this year?
http://www.whitehouse.gov/omb/overview
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/tables.pdf
http://www.cbo.gov/publication/43083 - back in March 2012.

I'd go with $3 cut in expenditures for every $1 of tax increase.

Actually, I think Tom Harkin has it right -

“No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up,” Democratic Senator Tom Harkin of Iowa said in the chamber. “So we go back to the tax system that we had under Bill Clinton. I ask: What’s so bad about that?”

http://news.yahoo.com/blogs/ticket/...cconnell-pursue-deal-150143841--politics.html

If they can't eliminate the deficit, then at some point the US government will have to default on it's debt. The deficits are currently exceeding the typical annual growth rate of the US economy.

Apparently the House will wait until Wednesday to vote on whatever the Senate produces, i.e., after the expiration of the Bush tax cuts. That way, they can claim that they reduced the tax rates, which their inaction had allowed to increase anyway.

The time to stop the nonsense is overdue - by a several decades.

 

[mheslep]

It appears to me that this (on which I agree)

...
I'd go with $3 cut in expenditures for every $1 of tax increase.

is contradictory with this

Actually, I think Tom Harkin has it right -

“No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up,” Democratic Senator Tom Harkin of Iowa said in the chamber. “So we go back to the tax system that we had under Bill Clinton. I ask: What’s so bad about that?”

There are no cuts to expenditures with a do nothing, default back-to-Clinton-rates, no-plan plan as Harkin calls for. Therefore after an initial one year decrease, the deficit would continue to increase.

The time to stop the nonsense is overdue - by a several decades.

Is it? Supporting Harkin's proposal is more of the same.

 

[Astronuc]

With respect to Harkin's comment, I was referring to the tax increases and mandatory cuts, in the absence of an agreement. I was not referring to Harkin's proposal or any specifics.

I'd prefer a sensible agreement on tax increases and expenditure reduction - and entitlement (SS, Medicare, Medicaid) reform.

I'd prefer to see the patriotic millions/billions hiring people or supporting entrepreneurs rather than simply sending their money in the form of taxes to Washington DC.

As of now, apparently the plan is to add another ~$7 trillion to the debt over the next decade. How would investor react to a company where the management indicated that they were planning to operate this way over the next 10 years. And if the interest rates increase? It is not in the long term benefit of the country to continue the way it has for the last 12 years.