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Does A Republican Sweep Mean Further Expansion Of The Fed's Dovish Policy? Why Expiration Of Bush Tax Cuts Would Cripple GDP
Some interesting observations out of BofA's Jeffrey Rosenberg this morning, who plots the inverse correlation between the 2 Year yield and the Fed Fund futures implied time until the first Fed tightening. No surprise there, as the correlation is pretty much inverse, with the lower the 2 year yield goes, the further out into the future is the Fed's expected first tightening episode. Given the recent (expected and confirmed) collapse in the economy, this is no surprise. What is somewhat interesting, however, is plotting the increasing probability of a Republican control of the House versus the Fed's liquidity mopping expectations. Here, the two correlate almost one to one. This can be interpreted that the longer the economy deteriorates, the greater the revulsion toward the current political regime. Hopefully the consequence of this observation, that the Republicans will endorse a perpetual dovish stance on the Fed, is not true. Although at this point believing that the Fed will ever tighten again before there is a (violent) regime change seems quite naive. Lastly, some very bearish considerations by Rosenberg, who now estimates that the expiration of the Bush tax cuts will have an impact of 2% annualized reduction in household income worth about 1.3% of GDP, and that "such an increase if not reversed could trigger a double-dip recession." Setting aside the fact that we already are in the dreaded double D, the question of just how much worse the economic reality will get unless there is something done on the tax front, bears consideration by whatever is left of Obama's economic team.
First, here is BofA's observation on the 2 Year yield to Fed Fund correlation:
In only three months, expectations for the Fed have shifted from tightening to expansion of Quantitative Easing, reflecting deceleration in the economy and rising deflationary expectations. Correlated to this shift in monetary policy expectations, fiscal policy expectations are similarly shifting, as evidenced by increasing odds of a Republican house. Despite last week’s focus on the next move in monetary policy, fiscal policy shifts – and most notably the expiration of Bush tax cuts – likely hold as great an importance as changes in monetary policy. In the figures below, we highlight two measures of policy expectations.
In Figure 1, “Months to First tightening” is based on Fed Funds futures markets. This measure calculates when market participants first expect the Fed to begin tightening. As recently as June, the markets’ expectation for the first tightening
was November/December of 2010. Over the course of the last three months, that expectation has shifted out a full 12 months. That implies market expectations of the first Fed tightening move not until December of 2011.
Such an extension of expectations for the Fed correlates to the downshift in economic data. As well at the same time, interest rates in the US, reflecting the shift in Fed expectations from tightening to extended easing, went from a period of rising rates to a period of rapidly declining rates.
Yet the more interesting correlation is between the political implications of the mid-term election results and the Fed's actions:
We also can measure shifts in expectations for fiscal policy as well. Measures of political outcomes for the upcoming mid-term elections highlight recent shifts in probability most notablly of republican control of the House. Such measures include the Gallup Election 2010 key indicator that shfited in favor of “Vote for Republican” under the Generic Ballot for Congress on July 26th, the Cook political report measuring a “bottoms up” assessment of a net Republican gain between 35 and 45 seats where 39 seats puts the House into a Republican majority. Cook notes that “the odds of an outcome larger than that range greater than the odds of a lesser outcome.” That means that if the election turns out to be a “wave” election – where the outcome is determined more by national issues than local issues, the number of Republican gains would be greater than the 35 to 45 range, putting the House solidly into a Republican majority. Figure 2 highlights another measure of these shifts towards Republicans based on contracts traded on the Iowa Election Exchange where the most recent probability implied by these prices puts control of the House shifting to Republicans around 70%, up from around 40% at the beginning of June. As Figure 2 highlights, these shifts in expectations for the mid-term election correspond to the shifts in expectations for monetary policy. And both are in response to the weakness in the economic recovery.
And speaking of politics, arguably the most critical issue coming up for the economy, all the daily micro stimulus approaches aside, is the expiration of the Bush tax cuts. The economic impact of this will likely be far greater, and far more deleterious than anything accomplished to the upside in all of 2010 on the fiscal front by the administration.
As our economics team has highlighted, the policy implication of most pressing concern is the expiration of Bush tax cuts. They estimate an impact of 2% annualized reduction in household income worth about 1.3% of GDP, and that such an increase if not reversed could trigger a double-dip recession. The political shifts affect that outcome with one school of thought that a divided congress raises the odds of no legislation (and hence a default scenario of expiration). In the face of increasing evidence of a slowing economy, a compromise to avoid a fiscal tightening that could exacerbate the risks of a double dip likely rises, in our view. The question will be one of timing – can a compromise be reached ahead of the election (in our view, unlikely), in a lame duck session (again unlikely). In our view, that leaves a retroactive extension passed in January as the most likely compromise. But the damage to confidence in the intervening period may already be done under such a potential scenario. A further deceleration in the data may yet change that assessment, but in the intervening period, political uncertainty will not positively contribute to the economic outlook already diminished by a successive wave of negative data.
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Dove hunting season opens soon here in SC
Republicons run the FOMC now?
If the Repubs take the House, I'm sure that Ron Paul will make some headway on transparency at the FED and Ft Knox. But do we really want to know?
If his bills passed we would have a revoltion by tomorrow morning as the facts would get exposed and the sheeeple would not have an excuse for their ignorance
you got that right...
The truth, we can't handle the truth.
Mainstream Americans can handle the truth. The ruling class and their media stooges will have exploding heads.
"Mainstream Americans can handle the truth."
Yes We Can ;-)
First the oceans recede...then, comes...the Red Tide...Bwahahahaha !
I wonder how the deficit commission having a VAT conclusion enters into a Dem controlled vs. Republican controlled congress.
It seems spending cuts are not gonna happen anytime soon, I assume the Dems would pass it, not sure how the GOP would vote on it. Any idea which way they would lean.
I personally think a flat tax, no VAT, spending cuts would be best, but that is a wet dream.
Fair Tax...clip the pols wings.
http://www.fairtax.org/site/PageServer
Calling it a "double-D" really wrecks my ability to focus on the balance of the post. This is not a complaint though by any means!
Cry me a river of billionaire trickle down tears. Tax these sobs like it's 1959. Tell them they are lucky they are alive and not wearing socialized orange jumpsuits.
Yet...
Unless you're riding the gravy train, you ARE one of the eeeevil rich.
If you can't understand that they'll never be able to steal enough, and that after you loot the ones above you it'll be your turn to be looted, there's no hope for you.
+1
Thanks Eureka. +1 - the begrudgers (junkers) have pretty skewed sense of history when it comes to the tax rate.
Bad Eureka! Bad, Baaaad Eureka!
You're obviously not drinking enough koolaid....
Our Betters have a hard hard job, prospering so the rest of us don't have to. Now go to your room and don't come out until you attitude has improved.
Obama economic team?? Really....
That would be a an oxymoron.
Yes and much better dressed than the economic teams running the streets, prisons or borders!
So nothing happens until TSHTF, and then the politicians panic? Surely not.
I don't understand why no one points out that there's no such thing as a tax cut when the government is in deficit. All there is is a tax deferment. To be paid later. With interest.
But of course, the rich are assuming that when later arrives their income will be offshore and the debt can be paid by the remaining half dozen members of the middle class.
a republican sweep in november would mean a continuation of the same fraud, corruption, and filth that the democraps have given us. the republicans are owned just as securely as the dems by the banksters.
as much as i hate taxes the only way americans can redeem this god forsaken country is to raise them to redeem their debt....as of now the banksters are the mortgage holders of america and they are highly advanced in their enslavement scheme....
debt is a cancer and it america will not survive the chemo.
Please explain to me in explicit terms how in the world you hope to tax enough to break even, much less actually pay down the debt.
We're already taxed to the hilt...anyone with a career is having half his earnings taken, and that doesn't bring us within a trillion of breakeven ever again. There is no level of taxation that will fund the freebies because the voting block of dependents is expanding to consume everything.
We are not taxed to the hilt. We do have a high corporate tax, but that is the cost if you want your intellectual property protected. If you think we have high income tax, move to Europe and pay income+VAT and let me know if you are over taxed here.
The only saving grace for this country is to reduce spending while creating a small (like .02%) federal sales tax that goes to debt and cannot be allocated anywhere else. Also during this time, no new pork barrelling can occure nor non-infrastructure spending occur. I know this will never happen, but it really is the only way to get out of our glut.
BTW those that think Repubs are better than Dems at governing our country, look who wrote and sponsered the Graham-Leach-Bliley Act. Would we have TBTF is that bill never passed?
I agree regarding the Rs being as bad as the Ds on the governing. However, the "small" federal sales tax wouldn't stay small for long and our cleptocrats (both Rs & Ds) would have no problem redirecting the revenue into their discretionary budgets. No new taxes are needed, in fact we need less taxes in size and type. Let's close the loopholes, deep six the "progressive" scales, and say goodbye to corporate welfare. We need to choke the flow of money to Washington, not add another tributary.
That is the flaw in my model, assuming that it would stay small and be eliminated once we reach sustainability. We would need some strong individuals to stay independent and keep a focus on what would be good for the overall longevity of the country. It could be done, but not in today's political circus.
1stDIV-no way I can see to have VAT or other tax "stay small", since they would only have to vote on one number. Same view on the "fair tax".
Came out of WWII with huge debt/GDP, answer was growth. They did, we recovered.
This crowd?
Well, I'd like you to investigate your understanding of "sustainable". It has pernicious undertones/implications in my ear.
(but still not as jarring as "unexpected...").
What do you think? Are the policies effective in moving toward a direction that will improve the lot of common people?
What is/are the sustainability condition/set of conditions?
Thanks in advance for your thoughts.
- Ned
Pay attention, people. The Beltway GOP is already in a panic that the great unwashed are taking down incumbent club members. Something is happening here... as Dylan used to say.
what it is is pretty clear--incumbents of both Statist stripes goin' down. Marsha Coakley, VA, NJ, UT, and the beat goes on.
We'll see if it makes any substantial difference. Forlorn hope, but real hope.
Then, well, Plan B.
- Ned
I think there's some causation/correlation mix-up going on here. As the economy weakens, both the time to Fed tightening gets longer and the political fortunes of the party in charge weakens. Doesn't necessarily imply that Republicans want an extended ZIRP. Don't know what they want, and quite honestly there's nothing they can do to stop the collapse...
The Republicans want whatever their paymasters tell them to want. As do the Democrats.
The only way to get Democracy working again and loosen the chokehold of the bankers in America is to bring in campaign spending limits. But its all going the other way with corporations being given more rights than citizens.
There are only two outcomes now: revolution or serfdom
I agree that campaign spending limits must be limited, along though with a ritual burning down of K Street.
Those are not mutually exclusive outcomes.
Don't know what the Republicans want? Mostly to stop Obama in his tracks before he turns us into another mediocre socialist country. There are too many of those already across the pond.
A game of political musical chairs going on. Kick the can, whichever party winds up in the chair when it all goes boom is the secular loser.
the problem remains "not" too little taxes---- the "so called rich" pay over 80% of all federal taxes. the problem remains---- too much government spending. the supposed "ratio" of GDP to tax receipts demonstrates that the USA supposedly under-taxes everyone except that it isn't true. instead, the government over-spends. social security, medicare and medicaid plus federal, state and local taxes bring the total to well north of 50% before you get to sales tax. the "state" meaning the Federal Government gets far too much, actually. the problem is when they (the state) must spend less and have never known anything but "more" and then are cornering themselves with things that "help the people" while at the same time having no discernable way to pay for the last great string of politically inclined "follies" which include $3TLN in unwanted stimulus to REPLACE what we as consumers decided not to spend in an effort to become more personally responsible. to counteract this new "fiscal conservatism" on an individual level, the government went out and "borrowed" $3TLN on our behalf in order to "extend and pretend" while we continue saving money even though its at a zero interest rate. not fair? you bet it's not fair. there used to be an issue with "taxation without representation" and it has turned into "in-debt-as-a-nation" -- "without representation" ---
consider the wisdom. Shawn Mesaros, Pamria, LLC
Excellent. Same old theme "Live within your means".
the reason they pay such a lion-share must be related to their individual productivity, or perhaps their individual ability to harness the fruits of other labor efficiently into their private weirs.
"Growth" is a modern mantra. Especially GDP "GROWTH".
the requirement for growth is intrinsically linked to the nature of "modern money", i.e. ever expanding debt with an interest load factor.
The "modern money" mechanics are broken, which is why we see the desperation of ZIRP, bailouts, and the substitution of public debt for previously volunteered private bondage. The forced public bondage won't work either.
Wonder when the whip will come out.
Agreed, if we didn't feel the need to rule and control the world then the country could grow at a sustainable rate rather than an unsustainable rate. Everything is broken.
True.
Sure, yeah, we know how great the Bush tax cuts have been for the U.S. economy since they were initiated. Let's keep them in place so we can have another decade of . . . wait, nevermind.
tax cuts never fail to deliver.
for billionaires !!!!!!!!!!!
No, please continue. I'd like to understand how if I give the Govt more money from my paycheck, they can be trusted to do something meaningful with it, because apparently the Govt knows how to spend my money better than I do.
As a matter of fact, why don't we toss away any notion of keeping any reward from our hard work and just raise taxes to 100%, and then we can all drive to the Govt grocery stores in our GM cars, paying with our Govt issued food ration cards.
I'd like to understand how if I give the Govt more money from my paycheck, they can be trusted to do something meaningful with it
Look around you, buddy.
Had it not been for government spending (and the associated taxation), you would be reading this in either Japanese or German right now. The internet you surf on was not create by private enterprise, nor were the roads you drive on. Whoever owns the property where you live, their "ownership" would mean nothing without a government to enforce property rights -- they'd only own the property for as long as they could defend it themselves.
I could go on, of course, but what's the point. The elite shirkers of duty have completely convinced much of the miserable underclass that paying for government is an utter waste of resources. This is in their interest, because these same elite are the ones hoarding all of the resources they refuse to reinvest in government -- they'd rather just loan it to the govt., and collect interest.
+1 Chinese GSE loss
There's so much statist bullshit in this post that I'm at a loss as to where to begin, so I'll start at the beginning.
The Germans never had plans to conquer us, sorry. Military spending aside, I'm pretty sure that the "well-regulated mililtia" of this country, i.e. the private owners of firearms, could (and should) repel any land invasion. We wouldn't roll over for the Japanese, federal government or no.
Regarding the Internet: yes, it was once a DoD project which morphed into an academic project. Regardless of the initial, very small, start of the network the fact remains that none of us would be using it today without it having then morphed into a private, capitalist, venture. The academic/defense world already has their own replacement, in fact, that they don't let us use.
Regarding roads: oh puhhhlease. For one, the roads I drive on to get to work are paid for by local taxes: sales, gasoline, etc. I already pay for the roads when I buy, register, and insure my vehicle, and when I buy fuel. Federal monies only go toward (and this is debatable) the interstate system - which is needed for moving goods; but, as anyone who's driven through Florida can attest to, can be better handled by private venture.
The "rich" that people talk about who are bitching so much about Federal taxation are people like me. Single, childless 20-somethings who make a decent wage through both education and very hard work, yet live hand to mouth because we watch half of our income evapourate into thin air - to pay for shit we don't use and didn't ask for, and to pay for the mistakes or entitlements of generations past.
I, frankly, am fucking tired of it. The difference between me living hand to mouth and being able to save, start my own business and provide value to my community while making a comfortable living, is in fact the various Federal taxes.
As long as I bear the largest, completely unfair, burden for the rest of you, I will always remain a debt slave, no matter how far up the ladder I climb. The "elite" know this, and trick people like you into thinking that Federal Income Tax provides for things we all want and need, so that there aren't millions of enabled, community-minded capitalists ready to wrestle the reigns of power back from them.
So please, do go on with your ignorant, misinformed lies of how income taxes on private individuals is entirely essential to the functioning of our country and our way of life.
The difference between me living hand to mouth and being able to save, start my own business and provide value to my community while making a comfortable living, is in fact the various Federal taxes.
You've allowed yourself to get into this situation, even though the Bush tax cuts are in place. How do you know you wouldn't be in the same pushing-the-margin, living-paycheck-to-paycheck style with a 50 percent marginal rate instead of a 28 percent rate?
If you are living hand-to-mouth, it's because you chose at some point to spend your money instead of save it. The U.S. has one of the lowest marginal tax rates in the developed world, and still you whine about taxes oppressing you.
And you have debt? Why do you have debt? Let me guess -- you borrowed student loans. Way to go buddy -- carp about that awfull government as you slurp up its bennies. Or maybe you have a large mortgage? I bet you still take that interest deduction, and I bet you appreciate the low rates made possible by, wait for it, government.
This is not to say I agree with any of these policies, or would say they aren't wasteful and misguided. But I hold people responsible for their own actions. The Federal tax rate isn't causing you to live hand to mouth -- your consumption/borrowing choices are.
Thrash
You are a young, intelligent and productive addition to society. Otherwise known as the host. They need you to shut up and support their habit. They have spent more than they earned and now they want you to help them pay it back. You are supposed to give up the dream of what you could of had so that they can keep what they acquired but couldn't afford!
Quite frankly, I'm really sick of this 'hard work' metaphor. You make over 250k? Congrats! What the hell are you doing here? It's your country, and you're part of the 1-2% that run it. Get out and enjoy your country on Labor Day weekend. You own it.(or you already sold it to foreign nationals)
How very nice for you that you have become so good at consolidating your wealth that you can buy media outlets that can influence the other 98% that your 'hard work' must not be taken away from you. This debate isn't about the welfare state, as it is constantly getting derailed to. This is about the unprecedented gap between the rich and everyone else in the US - which is no mistake - the consolidation game has reached such a fever pitch, that somehow a minor uptick in the tax rate for a tiny portion of the population, who have siphoned most of the wealth out of the US, generates this kind of debate.
The gap between the rich and everyone else is wider than any other point in US history. This is a fact. You want to defend the wealth consolidators? be my guest. You want to cry communism and socialism simply because the oligarchs aren't getting everything they want? Fine. But let's be clear - you are defending 1-2% of the population. That's it. This isn't about the welfare state. This is about the ruling class.
You think the ruling class are making $250K? HAHAHAHA, The people making $200 - $400k are working their butts off, missing kids sports games and doing overtime to catch up so they can take vacation or enjoy x-mas. The taxes will take all their incentive away, they will work less and pay less. THE TAX REVENUE WILL GO DOWN NOT UP! If you want to pay off the debt you are going to have to stop creating government agencies, stop giving grants away and stop letting government workers get pensions before they are even 50 yrs old so they can go get another full time job! This is the double dip double dip.
People making 400k don't 'work', they order. As in, order other people to 'work'. As in, 'work harder, longer or I will fire your butt. Or just send your job to India.'
Good god, you make me so sorry for those Elites struggling to get by on a meager quarter mil a year. Meanwhile, those slack little people, the one's with two and three jobs and, yes, kids, who cares all that they're missing. The needs of the Masters must be met.
"Oh piss boy, fetch me that bucket!"
I share your sentiment at times anon. But then I consider that there are ways to improve one's state in life. If you're not happy with your work or your pay, ask yourself what can I do to make it better? That's what it's all about. Everyone needs to be responsible for themselves. Figure out a way to go back to school, or start a business, or whatever. Then once you get to the next step (in school, new business, etc.) don't piss it away. Do not allow yourself to fail. That may mean working 4 hours sleep per day for a while, but so what. That USED to be the American way.
Stop with the indignant whining & go make something of yourself for yourself. The choice is yours. Deal with your current situation or decide to do something about it. Uncle Sugar don't give a fuck about you.
I leave you with Judge Smails' words: "well, the world needs ditchdiggers too".
http://www.youtube.com/watch?v=cwYJxNnABp4
Spose you're right. Should really try to make something of myself. Is it too late to get an important, respectable job? Like an economist, or central banker or maybe a stockbroker? Oh, I've got it, I can spend my time learning to design nifty new algorithims, one tick faster than the last, which will of course make the world a whole lot better. Check that, it won't make the world any better, hell, a lot worse, but at least I'll be rich, right? Fuck everybody else, I'll be wealthy and that, in America, is quite surely all that counts.
Screw that, I'm happy to be your little ditch digger.
At least it's a profession with some honor. And allows me and the other ditch diggers to load up on guns, gasoline and heavy rope.
Your "boot-strap" model has always been pie in the sky, Harvey. The oligarchs that rule the US have been handing out that same tired line since good ole de Tocqueville visited in 1830. Have you ever actually talked to anyone who lives in the wreckage of the American nightmare? ..or do you just drive through their burnt-out neighborhoods with your windows rolled up on the way to the mall?
But just for fun, please elaborate on what time period the majority of the population in the US had enough agency and freedom from the forces that consolidate wealth and spread tyranny to constitute a successful "American Way" - you said, "this is the way it USED to be.." When, exactly? I'm honestly curious. Was it the 1950s? the 60s? 1870s?
Anony-can you spell "S" Corp? - Ned
I'm surprised Glen Beck forgot to mention this at his rally on Saturday:
Remember, tomorrow, Sept. 1 is:
"National Pray that an Asteroid Hits Washington D.C. Day"
Just tryin' to lighten things up
Vinz
Vinz-
flunked.
- Ned
Duplicate
'Freedom's just another word for nothing left to lose'.
- Bobby McGee
Who wrote this article? Oh, right. Another member of the glorious 'Elite'.
"Oh, no, the wealthy will have to kick in a little more from their bloated winnings. And some, gasp, may flee the country! What shall we ever do without our noble lords?"
The wealthy should kick in more because they have the most to lose and hence should pay appropriately for their 'protection'. The system protects with all its might the well-heeled and well-placed, up to and including a de facto alternative justice system; for the little one's, it's 'no more soup for you!'
Yeah, back in the day, like slipping a pill inside a chunk of hamburger to give to the dog, BushCo slipped a 300-600 dollar pill(bribe) inside the chunk of beef to get the little poodles to 'take their medicine'; their, in this case, being the elite's medicine. C'mon, that chunk of hamburger was a rotten ploy to give the important people even more of America's ass.
Well, this little hound's puking up the rotten meat and shitting all over the carpets.
I say, make 'em pay!
"They" aren't going to pay. They are going to quit and enjoy the time they missed while they were working hard to improve the lives of their families. You will miss the fruits of their labor. All the freebies will be gone and the takers will have to fight over who has to go to work!
Fruits of their 'labor'? Ha ha. Now that's 'rich'. Collecting dividends and interest of lent money, inheriting gobs of wealth, figuring out how to screw people out of their retirement money in various financial innovation scams, off-shoring good paying jobs for bottom line profit, enhancing 'productivity' by redundancies, speculatin' in the casino, things of that ilk, are not 'labor'. That's parasitism.
Laboring is building a house, turning a wrench, walking the beat, delivering the mail, developing vaccines, perfecting fusion, healing the sick, etc, et al. 'Labor' doesn't sit at the top of the tax bracket, it toils in the middle.
So, I will not miss the fruits of their 'labor', but will be happy, in any fashion possible, to be free of the opportunistic blowflies at the top. As for the parasites at the bottom, yes, they will be forced to do more than collect their dole. And that will be a wonderful by product of dealing with the Elites.
Oh yea- the jealous will always be with us - Hey whiner some of us make money the old fashion way - busting our butt - and yea - that's why you don't read our posts 97 times a day
Busting your butt doesn't mean working in a fucking office, pushing paper. Get a real job, bitch. Try sweating for a living.
the arguments about not giving the so-called rich tax breaks miss the point and the problem. regardless of tax rates, the monster problem is out of control government spending other peoples money for social engineering and political kickbacks and corruption. the current admin is the king of such problems. funny that those who voted for the current disasterous regime now spout the old cliches that all politicans are the same and republicans are no different - that is patently false and a tactic to evade responsbility for the current crop of misfits.
But the GOP proved they're no different just four years ago. You have a short memory.
I agree that the govt spends too much. But the problems are Social Security, Medicare and the military. Welfare and "social engineering", however wasteful they may be, don't come close to accounting for the deficit.
you prove my point. your argument is obama=palin, rand paul = barney frank and, apparently, ZH = cnbc.
think - you can do it.
I don't know what this comment means. You'll have to speak more plainly.
TARP was welfare and it cost more than the Iraq war! Letting people live off of others has only worked because the money was being borrowed. Now we get to pay it back with interest. You can't force people to work for others, they refuse and things deteriorate. The class of people busting their butts to exist just above welfare give up. You will end up with more people taking out than putting in and it collapses!
you are confusing TARP, which except for the misuse for Auto companies and AIG has essentially been paid back, with the Economic Stimulus and Recovery act, which hasn't worked at all.
As I have been harping on these threads many many times....
If there is no TAX STRUCTURE CHANGE...the economy is a no go...
The current political structure and size of government has to be radically changed as well....that is the size of government has to be diminished to no more than 10%....this means big defense cuts...SS cuts....etc...
This also means the elimination of the income tax to individuals and corporations....
Remember Wayne Angel....????
He thinks the same way as I do....eliminate the income taxes....
The GOP will make a show of not cooperating with Obama. They will send him a bunch of stuff that they know he'll veto. We can say for sure there won't be any more stimulus to speak of, which is fine with me.
However, since they won't be doing anything proactive, what they will do is gladly let the Fed stay in the driver's seat, setting the policy. They may even blame the Fed publically and make showy speeches, but the last thing they'll want is to actually take any real responsibility back from the Fed. When the bus crashes, let someone else be at the wheel.
And those of you who say that Rand Paul will have any more influence iin a GOP house than a Democratic house are smoking something....
... er ... they won't cooperate. They have no direct access to MSM of any kind (McNews included.) Make a show?
Only to the extent that O wants to parade them as the "do-nothing" congress. But they don't have any majority, so where are the Make a Show Demos?
Machs Nix
- Ned
Oh puleeeeze! I am so tired of hearing that meme. "Why Expiration Of Bush Tax Cuts Would Cripple GDP." Red herring.
Jeffrey Rosenberg road the short yellow bus to school. What a frickin retard! Jeffrey Retardenberg
Government taking your money good, people keeping their money and spending how they want bad.
Since BofA received the bailout, who would be dumb enough to pay attention to any crap coming from BofA? What qualifies them to speak on any policy? The Bush tax cuts' stated purpose was "job creation." All Republican senators should be going through the cities and towns in their states, along with the Faux camera crews, and looking for jobs. Document. Show us exactly where the Bush tax cuts created jobs or small businesses.
Visit the Republican office in your district. Confront the staff and demand they show you exactly where the Bush tax cuts have created jobs in your state. We need to get to the linguistic recognition where we can point to Republican and Faux are liars.
I've requested the Dems make the Bush tax cuts and jobs sent offshori a key theme of the ads they run three days prior to the November elections.
Dems can't bring back offshored jobs unless they make the cost of doing business comparable with other countries. That means no more Social Security, Medicare, and Medicaid.
Only four junks for saying "tax the rich like it's 1959" on ZH? You junkers are falling down on the job.
Country "A": Marginal tax rate: 15% Property tax rate: 0%
Country "B": Marginal tax rate: 55% (incl. state) Property tax rate: $20/$1,000
One country is socialist/communist, the other ostensibly is not
One country is the USA, the other is China
I hate the fact that that is true.
Capital Gains taxes are stupidly high, other developed nations have much lower ones as well. Hell, Costa Rica has no Capital Gains tax whatsoever.
Jeez, what's with this 'Press Flow' thing?
Dupe.
Then move there, if that's what really matters to you. There should be no income tax, at least not in regards to taxes on wages, as that is an exchange of labor for money, and should cancel out.
Double the capital gains tax to make up for the abolished income tax.
Don't worry. Us 'reglar folks' will make up for the difference by having more money to spend and, maybe, starting to build things again, instead of spekulatin' in the casino.
bye have fun !!!!!! take Dick Cheney with you !!!!!!!!!!
Many of the jr. miners bailed out just after mid day. I was watching SLW resist moving up with the silver spot price. Profit taking by non believers, I guess. I moved all my stops up and then the rally stalled and I sold at market. It's nice being in cash for a change, yet it makes me feel uneasy not having many shares in positions cause I still think we're not at the top of this leg up. Let there be a little dip and I'm wading in. The cartel is getting punched every day and more people are watching. The bull snorts and paws the ground...
Let the tax cuts expire. It will save the Government some revenue.
There is probably millions who wont be able to make any kind of meaningful income to pay any taxes on anyway in 2011.
Any way we can get money going to the USA Budget and pay the Nation's bills with a little bit left over helps.
We are in a position to withstand tax cuts (Increased taxes due each year) simply by being in a lower income bracket or two than where we were before. Our taxes are not expected to change much.
Disclaimer: We have increased withholding first 6 months of the year to offset rising State taxes as well as to have a little over the expected Federal tax. It's the State tax that worries us more than the Fed tax.
There will be no real change only superficial change whether Dems or Rep control the government or have the majority. Its all a farce. When people believe this you remain ununited thus lacking any real power to change anything.
We are in debt to the tune of $14.5 trillion (you really have to consider the net PV of the GSEs here, not their gross debt). By definition we either spent too much or taxed too little. Dems and Republicans have spent like madmen. Republicans always call for lower taxes - listen to Kudlow as he barely ever talks specifics on spending cuts - on the wealthy (call them family small businesses for the sheeples sake). Dems want to soak the rich and give it to their grateful voters. What is a consistent theme in the media is that no one dares focus on the specifics of spending cuts. There has been only one American pol out there who has had the balls to cut spending and that is Gov. Christie in NJ. Everyone else is focused on the idiocy of the notion that raising the top rate from 35% to 39.6% is going to doom business.
And then there is this..
The Economists' statement opposing the Bush tax cuts was a statement signed by roughly 450 economists, including ten of the twenty four American Nobel Prize Laureates alive at the time, in February 2003 who urged the U.S. President George W. Bush not to enact the 2003 tax cuts; seeking and sought to gather public support for the position. The statement was printed as a full-page ad in The New York Times and released to the public through the Economic Policy Institute. According to the statement, the 450 plus economists who signed the statement believe that the 2003 Bush tax cuts will increase inequality and the budget deficit, decreasing the ability of the U.S. government to fund essential services, while failing to produce economic growth.[1][2]
In rebuttal, 250 plus economists who supported the tax plan wrote that the new plan would "create more employment, economic growth, and opportunities for all Americans.."
Both scenarios played out in many ways except that the deficit soared even as GDP - albeit inflated real estate construction - showed solid gains until 2007. The deficit was $5.5 trillion in 2001 when Bush got in and he left it at $11.5 so the notion that there are any real conservatives in Washington is bull. While the wars were $1 trillion of this $6 trillion bender, the Pentagon budget increased from an already bloated $350 billion to $750 billion now. Obama has grown that to $13.5 (with zero reduction in the Pentagon budget) and another $1 trillion is deterioration of the GSEs net position reinforcing there reputation as convenient Keynesian practitioners. The difference between now and any other time in the history of our country is that we are collapsing under the weight of...
A) intensive global demographic changes.... net is that cheap labor is sucking the growth from beneath our feet and with zero environmental laws, the irony is that we are buying cancer from these places (see C) when we buy food and anything that we touch (toys, furniture, dryboard, medicine, vitamins, mercury filled corn syrup and fish, etc, etc, etc, etc, etc). Mercury today is Rome's lead.
B) an unavoidable massive debt event/collision - its immiment impact is stifling any recovery
C) record level of inepitude in Washington, a direct reflection of a comically loafish society
D) the growing acceptance that we will always be at war and somehow be able to pay for it (again see C)
E) the impact of yet another election cycle and its lies and general hideous circus freak show qualities
So, sure, in the big picture of things, if top rates go up 4% then I guess that is the reason that GDP will be crippled... because they say so... Or would that money be going right to the BRICS anyway... come now people....cut the shit..
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