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Guest Post: About Raising Taxes As The "Solution" To The Fiscal Cliff...

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Raising taxes is the "solution." Too bad incomes are declining. What will raising taxes do to household savings, spending and the economy? 

We all know cutting Federal spending is politically impossible, so that leaves raising taxes as the only "solution" to the "fiscal cliff."


Since most income tax revenues flow from household income, let's look at some charts of the workforce and household income:
As a percentage of the population, the workforce has contracted to levels of the late 1970s.
As a percentage of national income, labor's share is in a free-fall:
Hourly earnings have been trending down for years:
Income for every age group other than 65+ seniors has declined sharply:
The income of those in their peak earning years 45-54 have been slammed:
Household debt loads have soared far above wages:
Meanwhile, government expenditures are up, up and away:
Yes, I know: the solution is to "tax the rich." The Problem with "Tax The Rich": It Won't Work (May 28, 2010)
The parasitic Elites should certainly pay as much as the heavily taxed middle class (The Real-World Middle Class Tax Rate: 75% (July 5, 2012), but since the parasitic Elites have captured the machinery of governance, the chances of Congress actually raising taxes on the top 1/10th of 1% are nil.
There will be noises made, of course, for perception management and public relations, but when April 15th rolls around we will find tax revenues are stagnant: loopholes and tax breaks will have blossomed like mushrooms, magically enabling the parasitic Elites to escape any serious reduction in their income.
Even if we were able to squeeze some additional taxes out of the parasitic Elites, their income stream is dwarfed by the Federal spending that looms ahead: The Fiscal Cliff and Demographic Drag. The top 1/10th of 1% cannot pay the rapidly expanding Federal benefits of the 99.9%, even if we confiscated every dollar of their incomes.
How can tax revenues increase when household incomes are declining? Transfer more of the national income to taxes and that leaves less for savings, investment and consumption. The economy contracts, reducing the workforce and wages further.
If that isn't a death spiral, it is a close approximation of one.

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Fri, 10/26/2012 - 10:50 | 2921478 mrktwtch2
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hear is a novel idea how about we grow the getting rid of some of the stupid regulations we impose on  buisness??..oops sorry i forgot that may actually

Fri, 10/26/2012 - 10:54 | 2921498 GetZeeGold
GetZeeGold's picture



Clearly you hate polar bears.

Fri, 10/26/2012 - 11:01 | 2921526 Precious
Precious's picture

Raising taxes also prevents cancer, lowers blood pressure and reduces premature ejacuation.

Fri, 10/26/2012 - 11:05 | 2921544 MillionDollarBonus_
MillionDollarBonus_'s picture


Fri, 10/26/2012 - 11:06 | 2921550 Precious
Precious's picture

Coming from you, -1 is considered a complement.

Fri, 10/26/2012 - 11:43 | 2921720 MillionDollarBogus_
MillionDollarBogus_'s picture

That . was a test to see how well I am respected around here.

You people are pathetic...!!!

Fri, 10/26/2012 - 11:55 | 2921780 Theosebes Goodfellow
Theosebes Goodfellow's picture

Aw, come on, MDB, it's Friday for Pete's sake! Consider the good you do just putting up a blank post! It has absolutely nothing to do with respect, really. We love you, man. You're beautiful, don't ever change.

/tongue out of cheek

/smirk off face

Fri, 10/26/2012 - 11:30 | 2921653 fuu
fuu's picture

This may be your best post ever. I was starting to think you had lost your mojo but then you come screaming back with a barn burner like this.

Sat, 10/27/2012 - 01:08 | 2923459 MeelionDollerBogus
MeelionDollerBogus's picture

that's the second time I've been witness to you having your "period" in public.


This is just too much, MillionDollerDouche


Fri, 10/26/2012 - 11:03 | 2921533 MillionDollarBonus_
MillionDollarBonus_'s picture

Nice job failing to mention tax free offshore corporate accounts.  If politicians had taxed offshore corporate accounts, they almost certainly would have used that money to balance the budget, and we wouldn't have so much debt. Trickle down economics has failed, and there's no denying it. Where's my share of the wealth? What do I get? If CEOs get to make millions then why can't I earn more and get more vacation?

Fri, 10/26/2012 - 11:05 | 2921542 Precious
Precious's picture

Yah ... and corpurashuns are not peeples !

Fri, 10/26/2012 - 11:10 | 2921568 surf0766
surf0766's picture

End all corporate taxes

Sat, 10/27/2012 - 01:09 | 2923460 MeelionDollerBogus
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and while we're at it end all protection for corporations from any kind of liability for anything, just like every other person and organization.

Fri, 10/26/2012 - 12:14 | 2921848 NidStyles
NidStyles's picture

Yes, you have to violate International laws and just tax assets in foreign nations right? Moron.

Fri, 10/26/2012 - 16:36 | 2922620 Bicycle Repairman
Bicycle Repairman's picture

Yeah, can't see this government violating international law.  Are you out of your freaking mind?

Sat, 10/27/2012 - 01:10 | 2923462 MeelionDollerBogus
MeelionDollerBogus's picture

that's kick-back bribe money FOR the politicians. It is taxed just in a more personal manner, off the books.

Fri, 10/26/2012 - 12:11 | 2921841 NidStyles
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Just like Darwin said, if it's between me and the stupid bears, I will be eating Bear burgers.

Fri, 10/26/2012 - 10:57 | 2921517 kridkrid
kridkrid's picture

Nope. That also won't "work". There is no solution to debt based money with interest attached to it at creation. Every suggestion of a solution works to obscure the predicament.

Fri, 10/26/2012 - 12:05 | 2921740 WhiteChrist
WhiteChrist's picture

The Lord's fee will forever a yield bear. There will be no end to the naughts and ones, His tongue, as He speaketh whenever He will, and as He will. As soon as a fool taketh his fee out of the cheapings, the Lord putteth the same back in again. Yeah, even more. There is no answer, as one is naught needed. There is no Christ but White Christ, and man is His foe. Buy these cheapings till the Kingdom come. If in tweel as to where to begin, begin with homeloan-backed sickerhoods. Blessed be His mains that be!

Fri, 10/26/2012 - 11:24 | 2921624 Spastica Rex
Spastica Rex's picture

But what about all the people employed ensuring that these regulations are followed? What of them?!

Fri, 10/26/2012 - 11:36 | 2921682 kridkrid
kridkrid's picture

I know you say that TiC, but that's part of the mathematical corner we have painted ourselves into. Say we end imperialism and bring back the troops from all four corners? WTF are those guys going to do? There isn't anything for them to come home to, minus the police force for the coming social unrest. The middle east served two purposes... Secure access to oil and train for domestic operations. Maybe throw in control of the poppy fields, for good measure.

Fri, 10/26/2012 - 11:42 | 2921716 Spastica Rex
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I used to be one of those "regulators." I worked as a state bureaucrat in public education. My job was to threaten school districts if they didn't pay my agency money. I then used that money to make the jobs of classroom teachers much harder. I quit becuase I couldn't live with myself. The end result for me has been long term unemployment - without bennefits, of course. We have baked ourselves a rather unappetizing cake, haven't we?

Fri, 10/26/2012 - 11:50 | 2921752 kridkrid
kridkrid's picture

Yeah, I remember you telling me about the whole sordid affair. I have immense respect for you.

Fri, 10/26/2012 - 15:27 | 2922433 Whiner
Whiner's picture

Rex, I feel your pain. I was a senior executive in the DOJ. All we did was have DC types fly us around to develop new regulations, like how many times our subjects could fart and how we could hire more minorities who could give a shit less about the system. All the efforts of congress to localize our oversight was swalloed up by DC expansion and controls. Government is like a toe fungus. It just grows and grows, choking out all innovation and productivity. Can you name a government agency that was ever dissolved?

Sat, 10/27/2012 - 00:49 | 2923444 Tijuana Donkey Show
Tijuana Donkey Show's picture

The SEC. More figurative than litteral, but WTF.

Fri, 10/26/2012 - 12:03 | 2921806 XitSam
XitSam's picture

What of the people that are unemployed now? What of the people that have lost their skills through lack of use? The government parasites will need to tough it out like everybody else. The short sighted view that so commonly prevails now ignores the longer term view that the country will be better off and more productive.

I know your comment wasn't literal, I'm just venting.

Fri, 10/26/2012 - 11:35 | 2921670 DaveyJones
DaveyJones's picture

better yet, lets jail some of the "stupid" regulators

Fri, 10/26/2012 - 14:47 | 2922339 RKDS
RKDS's picture

That would depend on whether or not you're talking about regulations that're actually stupid and not just what you happen to find inconvenient...

Fri, 10/26/2012 - 10:50 | 2921482 Hulk
Hulk's picture

There is no fiscal cliff (near term) as the printing will continue...

Fri, 10/26/2012 - 11:05 | 2921547 kridkrid
kridkrid's picture

That will work, until it doesn't, then look the fuck out.

Fri, 10/26/2012 - 11:33 | 2921665 DaveyJones
DaveyJones's picture

I'll trade you four lemmings for that ounce of silver

Fri, 10/26/2012 - 11:55 | 2921757 HungryPorkChop
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Everyone is beginning to change into Yuan and regional currencies for international swaps. There's near $12 Trillion in dollars floating around for these swaps and if those start coming home then buckle up cowboy, Infinity And Beyond.

So forget the national debt, that's just a long term fiasco versus the oil and trading swaps.

Fri, 10/26/2012 - 10:51 | 2921484 Stuck on Zero
Stuck on Zero's picture

Is this another editorial bought and paid for by the parasitic rich?


Fri, 10/26/2012 - 10:51 | 2921488 e1618978
e1618978's picture

That hourly earnings chart is BS - you need to adjust it for inflation.  Why do you think that there is a spike in 1980?  Because inflation had a spike then.

Fri, 10/26/2012 - 16:01 | 2922549 Nehweh Gahnin
Nehweh Gahnin's picture

I suspect the chart does in fact reflect inflation-adjusted dollars.  I think CHS just didn't get that part of the key in there.  If not, it would have trended upward.  Inflation-adjusted, that trend-line looks correct.

Fri, 10/26/2012 - 10:53 | 2921489 fonzannoon
fonzannoon's picture

Not to pimp Schiff but the conversation he is having with Bob Prector on his radio show right now is epic. I think you can go to and listen to it live. Otherwise you have to subscribe to hear a rerun later.

(hyperinflation vs deflation hard default)

Fri, 10/26/2012 - 11:02 | 2921535 Quinvarius
Quinvarius's picture

Prector is wrong.  I don't even have to listen.

Fri, 10/26/2012 - 11:03 | 2921540 fonzannoon
fonzannoon's picture

Yeah I agree, Schiff calmed down and then bent him into a pretzel.

Fri, 10/26/2012 - 10:52 | 2921494 odatruf
odatruf's picture

Jesus Charles, it's like I'm reading something written by my brother's retarded kids.

Fri, 10/26/2012 - 12:33 | 2921781 socalbeach
socalbeach's picture

Unfortunately you are right.

For example, his chart (3rd from top) of "Average Hourly Earnings Y/Y % Change" is accompanied by the text,
"Hourly earnings have been trending down for years"

So if his chart is showing the % change in earnings, then what it shows is that earnings are increasing at a decreasing rate, not that earnings are decreasing, since the % change is positive.

Stopped reading at that point...


Fri, 10/26/2012 - 13:26 | 2922074 odatruf
odatruf's picture

That's only one example of his corruption. I say corruption rather then incompetence because I believe he knows what he is doing.

Fri, 10/26/2012 - 10:55 | 2921503 JPM Hater001
JPM Hater001's picture

"The top 1/10th of 1% cannot pay the rapidly expanding Federal benefits of the 99.9%, even if we confiscated every dollar of their incomes."

I dont want their income.  I want Rothchilds entire net worth.

I think that would cover half.

Fri, 10/26/2012 - 10:55 | 2921506 WhiteChrist
WhiteChrist's picture

There is no cliff. The Lord can rear fee from naught. AAPL at 610 and AMZN at 230 are great buys. The Lord will uphold these stocks. We should fear the Lord's anger if the S&P were to reach 1400. As soon as the fool putteth in a stop, the Lord runneth him over.

Fri, 10/26/2012 - 11:02 | 2921537 Thisson
Thisson's picture

That, sir, is pure genius.  Carry on!

Fri, 10/26/2012 - 10:55 | 2921507 redd_green
redd_green's picture

"The top 1/10th of 1% cannot pay the rapidly expanding Federal benefits of the 99.9%, even if we confiscated every dollar of their incomes."


Not even close, Tylers.   Look at the real spending explosion since 2001: Military, and you have to look at ALL of the on and off budget military spending, it is absolutely insane.   


But, somebody sure will like your analysis, however wrong it is.

Fri, 10/26/2012 - 11:32 | 2921662 NotApplicable
NotApplicable's picture

Speaking of wrong, you're critiquing CHS, not any Tyler.

But, somebody sure will like your analysis, however wrong it is. ;)

Fri, 10/26/2012 - 10:56 | 2921508 Akrunner907
Akrunner907's picture

As Gordon Ramsey says, "We're in the shit!"

Fri, 10/26/2012 - 10:57 | 2921518 HurricaneSeason
HurricaneSeason's picture

The only jobs to protect are military, teachers, firemen, police, automotive and solar power. All the other jobs can be in China or Laos for $2 an hour. We just need to put heavier import taxes on foreign products until the "system" finally fails. It'll be foreign countries that will announce the failure with the value of the dollar cut in half, which is what The Bernank, Republicans and Democrats want.

Fri, 10/26/2012 - 11:33 | 2921658 Tirpitz
Tirpitz's picture

"The only jobs to protect are military,"

The North Koreans or Chinese will gladly defend our country for the right price. They may, however, hesitate to send their platoons for defending a failing empire.


Can be had cheaper right from some Indian slums.


Each shack burning down, each national park cleaned out by wild fires offers unique opportunities for well-heeled 'development.' In a free market, after all, Darwin reigns. And money.


Some Arab companies of the Blackwater kind will gladly send their paid killer thugs to do such essential governmental jobs as harassing innocent citizen and protecting the rich. Without lavish pension benefits and averse headlines.


Didn't the Hyunday car long ago surpass the Mexican GMC trucks in quality and reliability?

"and solar power."

China beat us long ago here as well... So what's to be kept and well protected, essentially, that's the undertaker jobs. For what's left of a once flourishing economy, and to dispose of the oversized baby boomers.

Fri, 10/26/2012 - 11:41 | 2921712 Urban Redneck
Urban Redneck's picture

Surprised Krugman hasn't come out for a federal regulation or law banning all firefighting to be enforced by 100,000 new paper-pushing bureaucrats...

Fri, 10/26/2012 - 11:01 | 2921529 Thisson
Thisson's picture

If fiscal stimulus hasn't grown the economy, why should we expect fiscal-cliff anti-stimulus to contact the economy?  It will contract government income, but that is not the same thing.

Fri, 10/26/2012 - 11:22 | 2921616 odatruf
odatruf's picture

They say fiscal cliff, I say small step towards fiscal stewardship.

Let's recap: after 1/1/13 we will spend less and raise more, which means we will be closer to (but not at) a balanced budget.  Seem like a good start.

I hope we get as much accidentally responsible action as a result of the next debt ceiling "crisis" in March.

Fri, 10/26/2012 - 11:36 | 2921679 NotApplicable
NotApplicable's picture

Why are you wasting effort applying logic to a scam? If anything, you only give it credence by speaking of it in serious tones, as it creates the opportunity for rebuttal by the sophists.

It should be spoken of only in terms of a crime in progress, NEVER as an attempt to stimulate the economy.

Otherwise the terrorists, such as Krugman, win (which is why we can't have nice things).

Fri, 10/26/2012 - 11:05 | 2921546 earleflorida
earleflorida's picture

as per usual c h-s, great read!

*sometimes people have to be knocked on their ass many, many times before reality sets in... always, always worth repeating!

thankyou :-))

Fri, 10/26/2012 - 11:07 | 2921552 Peter Pan
Peter Pan's picture

It has now become a logistical problem because the sum of all expectations on the system far exceed the sum of all the means because even if the whole of the US government debt disappeared, the government is still in a big black hole.

Either we all get used to a whole lot less or we have to figure out how to do a lot more with what we have as a nation. This implies a lot less waste (ie war and unproductive government expenditure) and some major scientific breakthroughs or energy sources.

The alternative is euthanasia for anyone turning 65 who cannot support themselves. Sounds callous but the alternative will be just as grim.

Fri, 10/26/2012 - 11:37 | 2921687 Tirpitz
Tirpitz's picture

"even if the whole of the US government debt disappeared..."

Heretic thought here. Even if the entire debt disappeared by white magic over night, them Washington fellows would find ways to dig us deeply into bonded slavery fresh debt within a couple of years anew.

Debt, the enemy of free man.

Fri, 10/26/2012 - 11:37 | 2921688 Bobportlandor
Bobportlandor's picture

Soylent Green, Yummy.

Fri, 10/26/2012 - 11:07 | 2921555 Dr. Engali
Dr. Engali's picture

There is nothing...nothing that will save this system. No amount of taxes and no amount of spending reductions. Both options will send the system spiraling downwards.

Fri, 10/26/2012 - 11:10 | 2921570 SmallerGovNow2
SmallerGovNow2's picture

Doc, you're right, except perhaps more "hope and change"....

Here's a novel idea, how about we return to a constitutionally limited federal government?

Fri, 10/26/2012 - 11:15 | 2921591 Dr. Engali
Dr. Engali's picture

Agreed, however those days are behind us. I don't think we are going like what comes next...dictatorships always follow the down fall of democracies. The police state is gearing itself up.

Fri, 10/26/2012 - 11:27 | 2921644 SmallerGovNow2
SmallerGovNow2's picture

Fear you are right Doc, it may not be the answer the majority wants to hear, but it is the only answer that would do the job...

Fri, 10/26/2012 - 11:35 | 2921667 Bobportlandor
Bobportlandor's picture

The one way out is for the States to disavow the authority of the federal government and start again.

Fri, 10/26/2012 - 11:38 | 2921694 odatruf
odatruf's picture

Is there any evidence that any state does better? They are as corrupt and petty as the Feds. It's only the balanced budget mandates that force them to be craftier with the looting.


Fri, 10/26/2012 - 11:48 | 2921747 Urban Redneck
Urban Redneck's picture

Look at it this way, which is easier to remove or overthrow when it steps out of line?  The physical proximity of large numbers of people within walking distance with torches, pitchforks, and ropes can breed a consciousness of consequences that does not exist in DC.

Fri, 10/26/2012 - 13:25 | 2922069 odatruf
odatruf's picture

That is absolutely true. As it is true that each state would follow different, if still corrupt, paths. And perhaps one would be somewhat better than another.


Fri, 10/26/2012 - 11:40 | 2921706 Tirpitz
Tirpitz's picture

Just wondering how the single states can resist the combined banking power if even the federal government can be bought on the cheap...

Fri, 10/26/2012 - 11:28 | 2921649 kridkrid
kridkrid's picture

Let me control the money, I care not who makes the laws... Or something like that. The form of govt doesn't matter much if it will provide monopoly power to itself or some other entity to create "money".

Fri, 10/26/2012 - 12:45 | 2921867 WhiteChrist
WhiteChrist's picture

White Christ steereth the fee, and His fellowship is the law. If in tweel, look to His great men of the Borough and the Street. Go long forever. Everything will take care of itself.

Fri, 10/26/2012 - 11:40 | 2921703 DaveyJones
DaveyJones's picture

This Time is Different. A rose by any other color

Fri, 10/26/2012 - 11:15 | 2921576 Two dogs
Two dogs's picture

If the Gov't gets short of money - why can't it just nationalise the Federal Reserve?  They've got lots and can always counterfeit / print more if needed.  Yes I know it's only a dream - but what if one day some politicians were to come along with the balls to do it?

Fri, 10/26/2012 - 11:30 | 2921652 SmallerGovNow2
SmallerGovNow2's picture

Think Lincoln, Garfield, McKinley, JFK, all assasinated, all opposed to or tried to eliminate the central banks of their day...

Fri, 10/26/2012 - 11:38 | 2921689 DaveyJones
DaveyJones's picture

oh you conspiracy theorists relying on physics and math and history and all that other silly stuff

Fri, 10/26/2012 - 11:53 | 2921763 Urban Redneck
Urban Redneck's picture

You don't actually need to nationalize the Fed directly.  The Secretary of the Treasury has the authority to nationalize the TBTF's already, you just have to get a non-banker or banker-lackey in the Secretary's office.  With control of a majority of the voting equity of the NY Fed, you can control the entire system.

Fri, 10/26/2012 - 13:02 | 2921969 WhiteChrist
WhiteChrist's picture

The Bandish Back-up Bank is a homely body, and not openly, in that the Lord owneth it. What is His cannot be taken away. No one hath balls like the Lord and His midmost steerers. Theirs is the world, and their work His. Put thy full troth in Him and His fellowship, and buy every dip in His cheapings.

Fri, 10/26/2012 - 11:13 | 2921581 Tirpitz
Tirpitz's picture

"The income of those in their peak earning years 45-54 have been slammed"

And this despite them hedge fund billionaires's massive intake being counted as 'household income.' Meanwhile

"loopholes and tax breaks will have blossomed like mushrooms, magically enabling the parasitic Elites to escape any serious reduction in their income."

may lead some to suggest, incorrectly:

"The top 1/10th of 1% cannot pay the rapidly expanding Federal benefits of the 99.9%, even if we confiscated every dollar of their incomes."

instead of grabbing the trillions right where they are to be found. Tax their vast capital base itself! Destroy the Cayman Islands et al, strip all citizen rights from those tax dodgers, and open labor camps for everybody with improperly acquired wealth.

Otherwise, if our current way of protecting giant illegal fortunes "isn't a death spiral, it is a close approximation of one."

Fri, 10/26/2012 - 11:14 | 2921583 Kreditanstalt
Kreditanstalt's picture

Your "parasitic elites" are only a part of the problem.  Governments are the other part: without the collusion of government, the elites would get no special treatment and your "evil corporations" would be powerless.

So why let governments off the hook?  [Government: a body holding a monopoly on violence within a given territory]  To wit: GOVERNMENTS have the GUNS.  They have the power and the responsibility yet do nothing and esape criticism.

Why?  Because the masses are too busy painting themselves as "victims" and searching for "villains" - which is anyone with more wealth than themselves.

Blame the governments, not capitalism!

Fri, 10/26/2012 - 11:38 | 2921697 Hacked Economy
Hacked Economy's picture

The simplest definition of government is that it is "an agreement among men".  As long as people trust those they *elect* to maintain the wheels of governance, society has the ability to flourish.  But when those in power develop delusions of grandeur and believe they're better than those they are sworn to protect, the balance begins to sway, and eventually the people's trust will begin to erode.

For example, when the U.S.A. was founded, the common man possessed (and was encouraged to possess!) the same armaments as the military.  This kept the balance of power and trust between the people and the government.  But now the government(s) at all levels (military, federal, state, city) allow themselves to have equipment they'll never let you have.  I'm not talking about the obvious exceptions like nuclear weapons, but if they say *they* can have APCs, specialized communications, and exotic small arms, but *you* cannot because they don't trust you, they're keeping you in a disadvantaged (weaker) position by design.  If the masses lose enough trust that they actually dare to follow the Declaration of Independence to the letter and exercise their "right, and their duty" to throw off such oppressive government, that will mean another Revolutionary War.  To suppress that possibility, the government(s) become less about "We The People" and more about "Rule by the Strongest".  And that is when true hard tyranny is birthed.

I fear we're on the cusp of that happening within the near future.

Fri, 10/26/2012 - 11:21 | 2921590 haskelslocal
haskelslocal's picture

 "Transfer more of the national income to taxes and that leaves less for savings, investment and consumption. The economy contracts, reducing the workforce and wages further. "

This statement is full of holes for savings is only a form of economic growth IF loans are made with those saved dollars. (We've already tried the non-qualtifying loan way and to few qualify with a weak asset base.)

You're also ignoring the economy generated (like it or not) by government spending of tax dollars.

We cannot have both a growing and contracting economy at the same time. To reduce costs, the only outcome is contraction and efficiency. There's no way around it.


Fri, 10/26/2012 - 11:25 | 2921634 odatruf
odatruf's picture

True, the entire economy can't be both contracting and expanding. But different sectors might be moving in opposite directions. For example, public sector contracting and private sector expanding. Even if one washes the other, I prefer a smaller public sector, so it's a win nonetheless.


Fri, 10/26/2012 - 11:56 | 2921783 Bob
Bob's picture

The dark truth is that most "growth" in the much-idealized private sector is in the financial industry.  Private parasites are no friendlier or more genuinely productive than public ones.  

Fri, 10/26/2012 - 13:27 | 2922081 odatruf
odatruf's picture

Although I don't fully buy into your premise, at least I can not be compelled by the private parasite to participate.


Fri, 10/26/2012 - 11:18 | 2921602 Crtrvlt
Crtrvlt's picture

what happened to avg hrly earnings in the 80s?

Fri, 10/26/2012 - 11:35 | 2921669 1eyedman
1eyedman's picture

we outspent the soviets to end the cold war......govt spending at its best, just like apollo

Fri, 10/26/2012 - 11:25 | 2921617 jjsilver
jjsilver's picture

You could tax the people 100% and still not pay off the debt. What they really are doing is impoverishing the people so they will be dependent on government. So they may bring in their technocratic one world government. And start eliminating the useless eaters.(committee of 300)

1st step abolish the federal reserve

Fri, 10/26/2012 - 11:27 | 2921639 1eyedman
1eyedman's picture 1/10 of 1%?? please dont take the class-warfare bait here folks.   

however the top 3% of income earners could.....these are the people whose annual incomes start in the hundreds of thousands of dollars per year.   is this is 5million people, each paying 50k each in more taxes (remember this guys make 500K+ if not millions..increase their true tax rate by 10%)  would raise 255billion in revenue.   reduce military and reduce medicare ....all three together balances the budger---and unless you are very well off, on medicare or a defencse contractor...this wouldnt really impact you directly.

Fri, 10/26/2012 - 11:35 | 2921668 SmallerGovNow2
SmallerGovNow2's picture

Absolutely FALSE.  SS/MC/MC, welfare, interest on the debt, and federal pensions exceed current tax receipts.  You could eliminate ALL government including the military and not balance the books.  It is simply IMPOSSIBLE to save the current system as Doc mentioned before...

Fri, 10/26/2012 - 11:40 | 2921705 1eyedman
1eyedman's picture

current annual deficit of 1.2T:  less 255B in new taxes from top3%; 500B each medicare and military  (684B was 2010 militry budget include DEA and other para-police types..TSA etc); 560billion was medicare in 2010)   

we have plenty of guns, no one is invading us, and why does the govt pay for old peoples medicine anyway?  

Fri, 10/26/2012 - 11:44 | 2921721 riphowardkatz
riphowardkatz's picture

because they vote in huge numbers. and duty guilt.

Fri, 10/26/2012 - 11:36 | 2921678 RSBriggs
RSBriggs's picture

This is less than one million people, and you wouldn't like the unintended consequences much - loss of approximately 4 million jobs...

Fri, 10/26/2012 - 11:43 | 2921717 1eyedman
1eyedman's picture

jobs for jobs sake?  go break some windows then.


total economic restructuring and greater effeciency in the use and pricing of capital;  massive deflation== liquid capital is worth more...

Fri, 10/26/2012 - 11:49 | 2921751 Vince Clortho
Vince Clortho's picture

No American should have to pay a single penny on the debt that was created by the Central bankers and for the bankers.

The banksters need to repay the entire debt, along with damages and interest, and then get their diseased asses outta Dodge, permanently.

Fri, 10/26/2012 - 12:46 | 2921923 Bearish News
Bearish News's picture

Bravo, encore.

Fri, 10/26/2012 - 13:33 | 2922107 Walt D.
Walt D.'s picture

The most important thing to understand is why high marginal tax rates do not work - it has to do with work ethic.

Ronald Reagan understood this from his days in Hollywood - "we would only make two films a year."

The same in France - why do people only work 7 hours a day?  Because the extra take-home-pay for the eigth hour is not worth it.

In the US, the Federal Goverenment collects roughly 20% of GDP in taxes, regardless of the tax code. So tax policies that discourage working are counter productive.

When all is said and done, it is not a good idea to try to come up with more money to pay an alcoholic's bar tab.

Fri, 10/26/2012 - 16:42 | 2922635 Bicycle Repairman
Bicycle Repairman's picture

Stop looking at the income statement and take a gander at the balance sheet.

Fri, 10/26/2012 - 17:03 | 2922698 John_Coltrane
John_Coltrane's picture

The solution to the so-called fiscal cliff is to restore the government to its state when Eisenhower was president in the 50s.  No great society programs-none.  No one can contend seriously that people in the 1950s were doing worse than currently.  No one dying in the streets, starving etc., and very little obesity.  As a nation we were substantially healthily, weathily and wiser.  Naturally, parasites and incompetents would have some temporary problems but perhaps their family members would aid them-I certainly don't care.   But that's the reason for survival of the fittest and evolution.    

To be exact:  no Dept. of Education, Energy, EPA, Homeland Security, TSA etc.  A budget that was less than 20% of GDP.  In short, Ron Paul's proposals.  Of course, no banking or other cartels allowed so the FED would have to go.  Let the markets set the price of money for a change. 

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