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Latest "Grand Bargain" Compromise Shifts 'Rich' Threshold

Tyler Durden's picture




 

The rumor mill on unnamed sources and strawmen is full tonight with Reuters, Bloomberg, and WaPo all reporting on a new new deal from Obama that 'meets the Republicans more than halfway' apparently. The crux appears to be a $1.2tn tax increase (over 10 years of course) thanks to higher rates on households earning over $400k (up from his original $250k but below Boehner's $1mm) and $930bn in spending reductions, including the much-discussed 'accounting' gimmick of cost-of-living-adjustments (and unChained CPI - see below) in Social Security. The offer also has a 'debt ceiling' proviso to increase the borrowing capability for two years via McConnell's proposal. S&P futures got a lift from this great 'austerity' news (that will perplex the Keynesians) but seemingly got most of the excitement out of the way this afternoon.

Boehner appears to have seen through the guise of accounting jiggery-pokery and debt-ceiling removery and responded:

  • OBAMA BUDGET OFFER STILL NOT 'BALANCED,' BOEHNER AIDE SAYS

More from Bloomberg:

Boehner spokesman Brendan Buck, in an e-mailed statement tonight, called the offer “a step in the right direction” though he said it “cannot be considered balanced.” He said the offer included $1.3 trillion in revenue and $930 billion in spending cuts.

 

That calculation doesn’t count $290 billion in lower interest payments as part of the spending cut. Interest savings are a byproduct of tax and spending decisions. Buck said the speaker hopes to continue negotiations.

 

Boehner and Majority Leader Eric Cantor will give House Republicans an update on the negotiations at their weekly conference meeting tomorrow, according to a leadership aide who requested anonymity to talk about the leaders’ plans.

 

Obama’s offer would set the top tax rates on dividends and capital gains at 20 percent, the person said. Combined with tax increases from the 2010 health care law scheduled to take effect in January, the top rates would be 23.8 percent.

 

Obama would return the estate tax to 2009 parameters, with a $3.5 million per-person exemption and a 45 percent top rate.

 

The dividend proposal matches the bill Senate Democrats passed in May and would raise less money than Obama’s budget, which called for taxing dividends as ordinary income. The estate proposal is less generous than the parameters backed by many Senate Democrats, who would extend the $5.12 million exemption and 35 percent top rate

 

* * *

 

About $130 billion of the spending savings would come from switching the way that annual inflation increases for Social Security benefits are calculated. Obama’s offer would include protections for the most vulnerable recipients, the person said.

Some more on Chained CPI (via Washington Post):

When President Obama tried to reach a comprehensive bargain with Republicans to pay down the federal deficit last year, he floated the idea of changing the cost-of-living adjustment for Social Security benefits from the traditional consumer price index to something called a chained Consumer Price Index, or “chained CPI.”

 

Economics and policymakers generally make the assumption that when prices rise, people will turn to a less expensive product. They’ll buy chicken instead of more expensive beef, iceberg lettuce instead of arugula, store-brand, instead of name-brand cereal. The chained CPI attempts to account for how people react to inflated prices.

 

It’s an arcane detail in the ongoing budget debate, but the chained CPI is appealing to budget experts and some Republicans and Democrats, because it only slightly tweaks the inflation formula, while building significant savings over time, perhaps more than $100 billion over a decade.

 

Making such a change also means paying out less in Social Security benefits over time — something liberal Democrats can’t stomach. Imagine, for example, a person born in 1935 who retired to full benefits at age 65 in 2000. People in that position had an average initial monthly benefit of $1,435, or $17,220 a year, according to the Social Security Administration. Under the cost-of-living-adjustment formula and 2012 inflation, that benefit would be up to $1,986 a month in 2013, or $23,832 a year. But if payouts were adjusted using chained CPI, the sum would be around $1,880 a month, or $22,560 a year — a cut of more than 5 percent and more as the years go by.

 

As for taxes, the nonpartisan Tax Policy Center has calculated that most Americans would pay a little more than $100 more per year. Families making between $30,000 and $40,000 a year would see the biggest increases — almost six times that faced by millionaires — but that’s because upper-income Americans are already in the top bracket and not being pushed into higher marginal rates because of changing bracket thresholds.

 

All told, chained CPI would lead to a larger across-the-board cut in Social Security benefits and a 0.19 percent income surtax, according to experts. Those changes could make the proposal politically unpalatable for some, which is why some budget watchdog groups have argued that the only fair way to implement such a change would be to couple it with an increase in Social Security benefits and to exempt Supplemental Security Income, which provides support for impoverished elderly, disabled and blind people.

 

Will lawmakers unveil some kind of proposal using chained CPI and other adjustments in federal benefits emerge in the coming days to help strike a deal? Stay tuned.

 

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Mon, 12/17/2012 - 21:36 | 3073418 jeff314
jeff314's picture

probably liesman...

Mon, 12/17/2012 - 21:43 | 3073424 knukles
knukles's picture

I'm so thrilled, I'm going to wee my pants.

(now just be aware, very aware of how they define $400,000 as adjusted gross, modified adjusted, gross, less what deductions and credit, etc.... excluding what types of "ordinary income" a la the hedgie and pvt eqty cap gains, etc...)

And in any case won't be big enough to even matter... last as rounding in the broad scheme of things.... propaganda...

Mon, 12/17/2012 - 22:05 | 3073465 ACP
ACP's picture

I heard recently that movies used to have an excise tax. If the Hollywood crowd wants taxes so bad, how about a 50% excise tax on movies that make over $250k?

Edit: Everyone in the industry knows that Hollywood inflates budgets very consistently by a factor of 4 ($100 mil movie actually costs around $25 mil) in order to evade taxes.

Mon, 12/17/2012 - 22:12 | 3073510 Zer0head
Zer0head's picture

listen Boner, just play along and I'll see that you have a nice landing pad when they turf you as speaker, don't believe me look what I did for that fat ass Christie.

Mon, 12/17/2012 - 22:19 | 3073526 ACP
ACP's picture

I, Boner, would never, ever raise taxes on my base, er, the Hollywood crowd. My utter incompetence in personal investing, despite having access to large amounts of insider information, forces me to have a massive hard-on for Obongwater.

Mon, 12/17/2012 - 23:53 | 3073730 Tijuana Donkey Show
Tijuana Donkey Show's picture

See, I must be a simpleton. I read this, and all I saw was old people eating chinese made cat-food from MallWort. Something about the CPI, or the Catfood Price Index, which lets our precious seniors know how much ash they are getting with their "fish" for dinnertime. Maybe a little Fancy Feast for Christmas, why not spurge and enjoy your golden years? All the seniors I know ate the cat a long time ago, and just use the cat story as a cover for buying all the catfood. They LOVE to take in the occasional stray as well, a little real meat helps round out the house, for those days when Fancy Feast is a distant memory, and nothing makes it's own gravy for dinner. Who says America and China don't have anything in common, think how far a bit of cat and cat food can bring two groups of serfs together in such a touching way. When this crowd says "keep it physical" their investments are still meowing bitchez! You can't eat gold, but you can pet and eat a cat........ 

Tue, 12/18/2012 - 01:04 | 3073886 strannick
strannick's picture

Im gonna paste that into my SHTF Folder. Thanks

Tue, 12/18/2012 - 01:06 | 3073891 GMadScientist
GMadScientist's picture

pussy

Tue, 12/18/2012 - 12:39 | 3074941 BooMushroom
BooMushroom's picture

In our next episode of "Senior Survivalist," watch Arlene get denied for a variance to raise backyard chickens! Then, she and a neighbor realize there's no ordinance on cats, and the nearby abandoned properties are full of mice and rats anyway!

Watch as they learn to farm cats for meat, milk, and fur! Look at the beautiful coats they make and sell, and finally make enough money to turn their air conditioner on for the month of July!

That's next, on "Senior Survivalist!"

Mon, 12/17/2012 - 23:15 | 3073638 duo
duo's picture

$400,000 buys what $250,000 did in 2008, except for real estate.

Tue, 12/18/2012 - 01:01 | 3073877 strannick
strannick's picture

and gold

Tue, 12/18/2012 - 02:37 | 3074010 TraderTimm
TraderTimm's picture

None of this matters, honestly. Another day in the drama-stage known as US Politics.

I'm so fucking sick of this bullshit. They have no vested interest in fixing anything. They have no skin in the game. Forget re-election, they are set with their salaries and benefits and massive contrubutions from admirers far and wide.

Why would we trust these people to make any decision that has ZERO impact on the ones making the decision?

It is fucking lunacy, plain and simple.

 

Tue, 12/18/2012 - 06:07 | 3074134 Nobody For President
Nobody For President's picture

Now, tell us how you really feel, TT.

 

Tue, 12/18/2012 - 09:55 | 3074383 smlbizman
smlbizman's picture

and everyone gets a big raise next year....you wont see extra income, just extra taxes when your provided health care benefit will be considered income to you....so an approx. guess is ...you get a 15 thousand dollar raise and you get a 15 thousand dollar raise and you get a....

Mon, 12/17/2012 - 21:41 | 3073429 MiguelitoRaton
MiguelitoRaton's picture

If it passes, it will make the top...a generational top...like Dolly Parton.

Mon, 12/17/2012 - 22:54 | 3073595 Stock Tips Inve...
Stock Tips Investment's picture

The main problem is government spending. And on this, there is still a lot of commitment to reduce them. We need less government spending for greater personal spending. We have forgotten what made this country great?.

Tue, 12/18/2012 - 00:46 | 3073853 calltoaccount
calltoaccount's picture

you mean gov giveaways to their corporate masters- 

Mon, 12/17/2012 - 21:53 | 3073466 ball-and-chain
ball-and-chain's picture

C'mon.  Let's stop talking bullshit.

The rich act like their being raked over the coals.

All we're talking about it Clinton era tax rates.

Nobody's getting burned at the stake.

Peace.

http://www.angrysinner.blogspot.kr/2012/12/yesterday-i-hiked-ten-miles-through_17.html

Mon, 12/17/2012 - 21:54 | 3073473 MiguelitoRaton
MiguelitoRaton's picture

Clinton Era Spending as % of GDP as well? Do we also get a Dotcom bubble to help generate false revenues?

Mon, 12/17/2012 - 23:10 | 3073630 GeorgeHayduke
GeorgeHayduke's picture

No. This time around they get a Fed printing press. This new method limits participation much more than some stock bubble where anyone might get to join the club.

Mon, 12/17/2012 - 23:34 | 3073691 FL_Conservative
FL_Conservative's picture

Exactly!  Everyone's using their allotment of oxygen on what the tax rates are when that doesn't even fucking matter.  What matters is SPENDING, not revenue.  When are we going to cut SPENDING?????????????????????????????????????????????????????????????????????????

 

Probably not until the market forces us to, would be my guess.

Tue, 12/18/2012 - 00:21 | 3073797 Beam Me Up Scotty
Beam Me Up Scotty's picture

The answer is never.  And if and when the market tries to force a spending reduction, they will spend more money and spend it faster.  IMO, the hyperinflation comes soon after the hyperdeflation.

Tue, 12/18/2012 - 12:59 | 3075066 BooMushroom
BooMushroom's picture

Spending in nominal dollars will never decrease.

In real dollars, however, they must. Politicians will manipulate the numbers, but real spending must fall.

Mon, 12/17/2012 - 22:13 | 3073506 knukles
knukles's picture

All I know are a lot of "unrich" folks who're piss worried WTF is gonna happen to them with everything going on.... Cliff or No Cliff....
Way too much "noise" out there....
And yes, the so called sheeple know full well there's something wrong.  Radically wrong and they're getting shafted big time.  They might not be able to elucidate it or have similar perspectives... but there's big shit wrong, amigos, is the feeling I get.
Stoicism... Lot of that around and undercurrents of frustration and anger.
People are hunkering down... except government workers who don't see a cloud on the horizon...

Mon, 12/17/2012 - 22:24 | 3073533 Everybodys All ...
Everybodys All American's picture

Give me a Clinton era size government and we got a deal.

Mon, 12/17/2012 - 22:31 | 3073547 knukles
knukles's picture

"Oh, I remember when I was a lad back in the good olde days...."

Clinton good old days
LOL

Oh, how times have gone to shit, eh?

Mon, 12/17/2012 - 23:09 | 3073626 HurricaneSeason
HurricaneSeason's picture

It was his BJs and cigars. There is an aura that the commander in chief needs to maintain, like Kennedy.

Mon, 12/17/2012 - 23:10 | 3073631 HurricaneSeason
HurricaneSeason's picture

If we get Marion Barry in there as president, watch which countries get scared shitless.

Tue, 12/18/2012 - 00:09 | 3073766 eatthebanksters
eatthebanksters's picture

Daz right! No crack pipe or stanky skank and da Mayor gets pissed!

Tue, 12/18/2012 - 01:54 | 3073946 icanhasbailout
icanhasbailout's picture

in my carefree and innocent days I was protesting things like Clinton lying in court and suffering no real consequences

Mon, 12/17/2012 - 23:43 | 3073711 Newager23
Newager23's picture

This is a deficit / debt reduction plan? I don't think so. The deficit in 2013 will still be huge, likely around $1 trillion. All they are doing is kicking the can.

This plan in conjunction with the recently announced QE4 (where they raised their monthly purchases of Treasuries and mortgage backed securities to $85 billion per month), is not a solution. QE4 has the effect of misallocating risk (where people buy overvalued real estate) and misdirecting the use of capital towards U.S Treasuries. Moreover, it undermines the ability of markets to value assets appropriately (especially corporate stocks). To use an analogy: it creates a big mess that eventually has to be cleaned up. The Fed is throwing a big party of bailing out both the U.S. Government and the financial system, and the hangover is coming.

The printing press is now officially going full blast, and fiscal policy (by way of this new deal) is not helping. It is just a matter of time before investors tire of buying U.S. Treasuries and holding U.S. dollars. After all, you can’t borrow .45 cents of every dollar you spend. That simply cannot be sustained. If this economic methodology worked, there would be no need for taxes and deficits would not matter. You could just print what you needed. Clearly such a system is not possible, and the road we are going down has a cliff at the end.

Why are we using such insane economic policies? Because it is human nature to avoid pain, even if that means there is a possibility of intense pain. We would rather feel good for as long as possible. So if we can kick the can down the road to avoid pain that is what we will do. In the meantime, the Fed and the ECB will pretend that these policies are the best choice available. From their perspective, the alternative is simply not a viable choice: allowing the markets to rebalance on their own.

The markets have become completely manipulated because of the road we have chosen via quantitative easing. Now that we have started down this road the fear of getting off the road is no longer an option. We have literally past the point of no return. Now we have to literally pray that it works. Or, that is a better outcome that if we would have allow the markets to rebalance on their own.

The fear back in 2008 and 2009 was that we could not allow the financial system to collapse, because the outcome could be so chaotic that we might not be able to bring it back to life. In actuality, the fear was more greed oriented. Those with all of the money did not want lose it. They lobbied the U.S. government and the Fed to make sure that the system did not collapse. Thus, we started down the road of bailouts and quantitative easing. This is the road that we can no longer get off. And thus we have reached QE4.  

What does this mean for gold? It means we can expect much higher prices. Everyone should be dollar cost averaging and buying as much physical gold and silver, or mining stocks as they can. You should be building a portfolio of mining stocks to protect yourself against a major dollar devaluation. Or, perhaps be preparing for the possible investment of a lifetime. Who knows how high gold and silver prices will go. My estimation is that the range will be something between $3000 and $10,000 for gold and $150 and $500 for silver. Those are huge numbers that are going to drive stock prices much higher.

Between QE4 and central bank buying of gold, I think the floor for gold and silver prices continue to rise. Today I would place the floor for gold at $1400 and silver at $22. This lowers the risk of mining stocks. Of course, the financial system is needed to finance the building of mines. Thus, the risk for stocks without cash flow is increasing. However, this is not necessarily bad for mining stocks, because those mining companies with cash flow will be able to purchase gold in the ground cheap and grow at a fast rate. Thus, I expect the mid tiers to be the big winners and explode in value and growth. The majors also have a good chance to do well as the price of gold and silver heads higher. They will be very profitable, and dividend payouts could be substantial.

www.goldsilverdata.com (for mining stocks)

 

 

Mon, 12/17/2012 - 23:56 | 3073738 dikfr
dikfr's picture

jesus - start a blog... oh wait sorry.

Tue, 12/18/2012 - 00:25 | 3073809 Beam Me Up Scotty
Beam Me Up Scotty's picture

Gold at 1400 and silver at 22.  That only happens if the market tanks big time.  I'd love to be able to buy silver at 22 an ounce again!!  Same with gold at 1400.  Back up the truck.

Mon, 12/17/2012 - 21:39 | 3073425 fonzannoon
fonzannoon's picture

This deal sounds plausable. It punts the debt ceiling two years and each side claims victory. Nothing is solved but we avoid a debt downgrade.

Mon, 12/17/2012 - 21:51 | 3073459 michiganmaven
michiganmaven's picture

what in that plan makes you think we avoid a downgrade? Cause we came to an agreement? This "agreement" is still a joke...

Mon, 12/17/2012 - 21:59 | 3073482 fonzannoon
fonzannoon's picture

Because the US has all the ratings agencies in a giant headlock. Otherwise we would be rated a lot lower already.

Tue, 12/18/2012 - 00:25 | 3073814 Beam Me Up Scotty
Beam Me Up Scotty's picture

Thats about all they can do, kick the can.  Meanwhile, 20 trillion in debt will approach very quickly.

Mon, 12/17/2012 - 22:01 | 3073485 vote_libertaria...
vote_libertarian_party's picture

'avoid a debt downgrade'?  Only because the Big 3 rating agencies won't do their jobs.  This plan would reduce the deficits by 5-10% at best.

Mon, 12/17/2012 - 22:09 | 3073503 fonzannoon
fonzannoon's picture

did you think I meant we would avoid a downgrade for any other reason?

Mon, 12/17/2012 - 22:32 | 3073551 knukles
knukles's picture

"When you've got 'em by the balls their ratings inevitably follow."

Mon, 12/17/2012 - 22:36 | 3073554 fonzannoon
fonzannoon's picture

That is my 2013 white swan. US gets upgraded.

Mon, 12/17/2012 - 22:35 | 3073553 Everybodys All ...
Everybodys All American's picture

Nothing leads me to believe that a debt downgrade will not happen, but we shall see. This is a spending problem that in reality neither side is addressing and is especially being put off by the president. All these numbers are based on a ten year budget plan that no one could guarantee beng enacted over the next ten years. Ten year plan. Since when have we been able to plan ten years out. This is simply to make the numbers seem larger. It's a joke.

If any of the spending cuts are real I'll be surprised. Remember the tax revenues they are talking about can run the government for less than ten days.

Mon, 12/17/2012 - 22:37 | 3073557 fonzannoon
fonzannoon's picture

You are saying all that as if the ratings agencies are actually an independant organization capable of unobstructed thought.

Mon, 12/17/2012 - 22:41 | 3073566 Everybodys All ...
Everybodys All American's picture

Wait and see.

Mon, 12/17/2012 - 22:45 | 3073572 fonzannoon
fonzannoon's picture

Like it matters if the US gets pushed to AA+ by all three agencies?

Mon, 12/17/2012 - 22:58 | 3073611 Everybodys All ...
Everybodys All American's picture

Sooner or later the credit rating downgrades will cause a collapse in confidence in the dollar. Once that happens the reserve currency is lost forever. That will matter in all international trade. This is no small outcome but you must recognize that it's incremental and it's inevitable with Bernanke running the Fed.

In the near term, many bond and mutual funds trade with a prospectus that mandates that they only deal with AAA securities where at least two or three agencies maintain the AAA rating of a country. This can force selling pressure in the markets. Again it's going to be incremental.

Mon, 12/17/2012 - 23:01 | 3073613 fonzannoon
fonzannoon's picture

Those prospectuses will be altered to read "AAA securities and US debt". They will just keep moving the goalposts. The dollar may fail, but it sure as hell won't be because the ratings agencies caused it.

Mon, 12/17/2012 - 23:09 | 3073622 Everybodys All ...
Everybodys All American's picture

Ratings agencies simply evaluate the ability of governments in this case to pay back the debt. They are not the cause of anything. Just because they messed up the ratings on MBS in 2007 and prior doesn't mean they are totally useless.

Mon, 12/17/2012 - 23:09 | 3073628 fonzannoon
fonzannoon's picture

"Ratings agecies simply evaluate the ability of governments in this case to pay back the debt"

If that were the case would the US still be investment grade across th board? If the answer is "yes because they can print money" then S&P should upgrade is back to AAA.

Mon, 12/17/2012 - 23:17 | 3073651 Everybodys All ...
Everybodys All American's picture

Tell that to Zimbabwe. Argentina. Greece. Spain. The Wiemar Republic.

Mon, 12/17/2012 - 23:24 | 3073669 fonzannoon
fonzannoon's picture

Excactly. Tell it to lehman etc. too. How were the ratings agencies doing with them prior to them blowing up?

Mon, 12/17/2012 - 23:17 | 3073649 gjp
gjp's picture

They are in fact worse than useless. Just another bunch of cronies.

Mon, 12/17/2012 - 23:19 | 3073654 HurricaneSeason
HurricaneSeason's picture

The Bernank is buying the whole annual deficit.  What difference does it make what the ratings say?  As he frees up bogus mortgages, the banks can use that money to buy treasuries. If China and Russia start dumping faster or The Bernank chokes when it gets to too many trillion, then it goes, not ratings.

Mon, 12/17/2012 - 22:54 | 3073596 Freddie
Freddie's picture

Moodys is a buffett company and S&P aka McGraw Hill makes it real money on textbooks which is another scam.   Fitch is owned by Hearst (as in starting the Spanish American war hearst) and a French company.

Anyone who downgrads O Amerika will get visits by the FBI, SEC and probably SEIU.

Mon, 12/17/2012 - 23:02 | 3073619 Everybodys All ...
Everybodys All American's picture

Obama will not have any say in this outcome. What makes you think he doesn't want this? Come on Freddie you know Obama better than this. He wants the crisis. He wants America downgraded. How else do you explain six trillion in debt in four yrs? And still no acknowledgement of a spending problem.

Mon, 12/17/2012 - 21:42 | 3073428 CrashisOptimistic
CrashisOptimistic's picture

Those numbers are over 10 years, and back loaded for the spending cuts.

It looks like deficit reduction of maybe 100 billion in 2013, max.  

Out of 1.1 Trillion.  Leaving the deficit at 1 Trillion, almost to the penny what the Fed will lend.

Less than 1% of GDP drag.  Pathetic.

Mon, 12/17/2012 - 21:43 | 3073435 fonzannoon
fonzannoon's picture

Totally pathetic. You were expecting something other than that?

Mon, 12/17/2012 - 21:46 | 3073441 CrashisOptimistic
CrashisOptimistic's picture

Well, there could be some additions.  Like letting the payroll tax cut expire.  And extended unemployment.  If those were tacked on, we'd get over 1% of GDP drag.  

Mon, 12/17/2012 - 21:47 | 3073447 fonzannoon
fonzannoon's picture

why bother? They are so far from close it's pointless.

Mon, 12/17/2012 - 23:01 | 3073614 kito
kito's picture

They have chosen the inevitable massive coronary instead of the much needed quadruple bypass............grab a defibrillator.....or two.....or three.....

Mon, 12/17/2012 - 21:45 | 3073439 1100-TACTICAL-12
1100-TACTICAL-12's picture

Whop de fuckin do.. $211 trillion give or take a littlt unfunded libilities. How they gonna comprmise their stuipid asses outa that ?

Mon, 12/17/2012 - 21:46 | 3073443 Cursive
Cursive's picture

Phew.  At least it's finally over.  Now Obama can get back to the business of governing the American sheeple.   -_-

Mon, 12/17/2012 - 21:56 | 3073476 klockwerks
klockwerks's picture

Well not exactly, he will be basking in the Hawaiian sun.

Mon, 12/17/2012 - 22:11 | 3073481 Cursive
Cursive's picture

@klockwerks

LOL.  It ain't over by a long shot.  We'll be subjected to this sorry ass soap opera for at least another two weeks, probably longer.  Anyone who is tired of the Greece melodrama will be craving gyros before this is all over.

 

ETA:

OBAMA BUDGET OFFER STILL NOT ‘BALANCED,’ BOEHNER AIDE SAYS

Mon, 12/17/2012 - 22:51 | 3073589 1fortheroad
1fortheroad's picture

Deal or no Deal, should be good for another 100 handles up on the S&P

Mon, 12/17/2012 - 21:49 | 3073449 lolmao500
lolmao500's picture

Congress giving Obama the power to the raise the debt ceiling is total treason. If you gonna do that, GET RID OF IT ENTIRELY WHILE YOU'RE AT IT.

Who are the dumbfucks reelecting McConnell and Boehner??? Nuke their districts from orbit, it's the only way.

 

Mon, 12/17/2012 - 21:51 | 3073458 fonzannoon
fonzannoon's picture

it's just for two years,. they will get the debt stuff squared away by then.

Mon, 12/17/2012 - 21:48 | 3073453 surf0766
surf0766's picture

New cpi for social security.. Great do it  . let the baby boomers soak through them diapers when they hear the news..........

Mon, 12/17/2012 - 22:08 | 3073500 Cursive
Cursive's picture

@surf0766

 

Trust nothing that begins with, "Economics (sic) and policymakers generally make the assumption...."  Holy shit!  We're dealing with general assumptions of the pointiest-headed dimwits on earth.  To borrow a thought from William F. Buckley, I would rather be governed by the first 10 names in the phone book than these hapless, evil motherfuckers.  Have these people seen what the store brands such as Kroger's private label and Target's Archer Farms cost?  Newsflash - the private label goods are as much if not more than the brand name goods.  Adam Lanza is one form of evil, Ben BernanQE and the Washington politicians are yet another form of evil and much, much more powerful form at that.

Mon, 12/17/2012 - 23:54 | 3073732 Insideher Trading
Insideher Trading's picture

Term limits need to be taken to the table.

The founders envisaged 4 years as President as a lenghty term. They didn't envisage GPS, Phones, E-mail, search engines, cell phones, planes, cars etc.

You can do more in 1 month today than you could in 4 years - 300 years ago.

Mon, 12/17/2012 - 21:49 | 3073454 knowless
knowless's picture

I still don't get why tax rates are determined by nominal yearly gross income, why isn't percentage based on extraction rates in a weighted basket of commodities? Food, energy, etc..

If your relevant "income" ex weighted commodities is within a multiple range above subsistance/relevance/opulence you pay in, nominal rates are extremely arbitrary and not feasible long term when dealing with fiat currencies..

Like, i get that it's practically a useless distinction, but it seems like it would streamline the tax code for a fiat system to remove nominal targets.. Might even provide added price stability and "equality" "fair share".

Mon, 12/17/2012 - 22:54 | 3073593 1fortheroad
1fortheroad's picture

Get rid of the FED and no taxes are needed

Tue, 12/18/2012 - 01:16 | 3073910 GMadScientist
GMadScientist's picture

Because they are easier to game; next question.

 

Tue, 12/18/2012 - 01:37 | 3073938 knowless
knowless's picture

im in, trust me; but for reals, designing a tax code that reflects market principles, bainers all around. 

 

think of limited systems, communities if you will, how do you mathematically allocate value based on disparate contribution? you can gloss over it with "fuck taxes" or you can address how a community allocates voluntary shared resource/skills. it's up to you. personally, i want ideas for building a sound structure in my own life that isn't pointless, attribute this to federal politics if you wish.

Mon, 12/17/2012 - 22:07 | 3073490 ptoemmes
ptoemmes's picture

Damn...now I am an additonal $150,000 away from being considered rich.  Talk about the Red Queen...I'll never get there if this keeps up.  Maybe I don't want to..hmmm.

Mon, 12/17/2012 - 22:08 | 3073501 LongSoupLine
LongSoupLine's picture

A fucking shit stack of trillions in debt... And these assholes are making "deals". We are way beyond fucking deals. It's max pain on both sides to even get a ticket into the fucking recovery show.

Mon, 12/17/2012 - 22:11 | 3073507 Joe moneybags
Joe moneybags's picture

Obama is eating Boner's lunch.  The  POTUS protected his big spending plans, in perpetuity (his final term), and gets to keep his wealthy friends (his wealthy friends are the same as Boner's) happy with the most modest of all tax hikes.  No budget, and no spending ceiling forever!

Mon, 12/17/2012 - 22:28 | 3073536 knukles
knukles's picture

The American Dream

No budget, no spending ceiling and a Fed to buy every dollar of debt for free, forever!

Mon, 12/17/2012 - 22:15 | 3073518 pragmatic hobo
pragmatic hobo's picture

yup, ... steal from the poor to pay the well to do.

Mon, 12/17/2012 - 22:26 | 3073537 batterycharged
batterycharged's picture

I have a question for all the people that say "$250,000 ain't rich in NYC or San Francisco".

What is the min wage in those cities? Is it $50/hr?

I mean if $250K ain't rich in those cities, no one should be making less than say $60K in those locations, right?

So do people at McDonalds in the bay area make $30/hr? That would make sense since making 7x that amount would not be rich.

In other areas McDonald workers make 1/3rd of the mean income.

$250K is rich, please stop saying it ain't. It's a bit like saying $200 per month for food is not enough....for someone that eats nothing but lobster and caviar.

Mon, 12/17/2012 - 23:18 | 3073653 Freddie
Freddie's picture

The cost of living, housing and  taxes in NYC/San Fran is pretty insane.  My guess is taxes are easily 50%.  When you add up all the taxes many people pay - it is staggering. Maybe 60%.   This is payroll, state, property, sales tax, utilities, gas, and the list is really endless.

Then housing is crazy along with gas prices.  Usually if someone is making that - they buy a lot of stupid crap too.   If they have kids, they probably go to private school and that is probably a minimum of $12,000 a year.

I am not disagreeing with you but $250,000 in those areas goes very very fast.

I would bet McDonalds workers are making maybe $10 an hour.

Mon, 12/17/2012 - 22:30 | 3073548 justsayin2u
justsayin2u's picture

No AMT fix?

Mon, 12/17/2012 - 22:48 | 3073581 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

There will be that too.  That and a VAT. 

Mon, 12/17/2012 - 22:30 | 3073549 Joe moneybags
Joe moneybags's picture

No bankers, brokers, war-profiteers, or other 1 percenters were harmed during the filming of this travesty.

Mon, 12/17/2012 - 22:34 | 3073552 andrew123
andrew123's picture

What is the two year McConnell proposal? Is it give Obama everything he wants, but have a meaningless vote so he can tell the folks back home he was against it?

Mon, 12/17/2012 - 22:53 | 3073591 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It's totally awesome.

So Congress will automatically not increase the debt ceiling.  Then Obama can veto that.  Then Congress needs a 2/3rds majority to not increase it.

Mon, 12/17/2012 - 23:46 | 3073717 Bazza McKenzie
Bazza McKenzie's picture

I understand this was the arrangement proposed by McConnell LAST time the debt ceiling debate occurred, to get through to the end of 2012.  It was proposed as a one-off for that occasion and he is, apparently, opposed to any perpetuation.  But Obama, who of course wants no control on spending, is promoting its continuation as the "McConnell proposal" to show how bipartisan he is by accepting something that his opponents are actually not advocating.

Mon, 12/17/2012 - 22:43 | 3073567 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Like goods" making convenient replacements on CPI is a nod to coming inflation.

Eat your peas.

Mon, 12/17/2012 - 23:37 | 3073698 Mentaliusanything
Mentaliusanything's picture

Oh Mr Hendrix, you have both answers -  Beranke prints so inflation is inevitable down the track so change the way the CPI is measured.Then introduce a consumption tax to gear off the inflation. once its in you can shear the sheep right to the flesh.

Your before your time 

Mon, 12/17/2012 - 22:54 | 3073597 moroots
moroots's picture

Is the $930 billion in spending reductions actually a decrease in year-over-year spending or is it just a slowdown in the projected/scheduled growth of spending?  

Tue, 12/18/2012 - 00:05 | 3073756 Cthonic
Cthonic's picture

 fiscal 'cliff' -> "From fiscal year 2012 to 2013, federal tax revenue is expected to increase by 19.63%, while spending outlays are expected to decline by 0.25%" -- wikipedia

Point being that $930B in reductions spread over 10 ten years isn't jack shit however you wish to calculate it...

Mon, 12/17/2012 - 23:02 | 3073618 andrew123
andrew123's picture

Are the people of Kentucky complete idiots? They were smart enough to elect Rand Paul, but why do they continue to support McConnell?

Mon, 12/17/2012 - 23:12 | 3073636 GlenD
GlenD's picture

Instead of reducing war spending ... 3.7 trillion spent on wars fighting people that cannot fight back, they go after the poorer american people, to make them even poorer.

Perhaps someone will find the 2.3 trillion that rumsfled lost and save the day.

Or perhaps all talk of budget cuts and fiscal cliffs are bullshit given that US is prining its way into oblivion.

 

 

 

 

 

Mon, 12/17/2012 - 23:14 | 3073637 Zer0head
Zer0head's picture

 

I bet some were wondering how a mentally handicapped mass murderer story could be transformed into it's all the fault of right wing extremists. I myself was surprised that they were not blamed in the first 5 minutes as they have been (incorrectly) in other recent massacres.  But have no fear as thhis SMH article should address all your concerns with a cameo by none other than  Ted Kaczynski, yes the new meme is that the SandyHook massacre was derivative of right wing extremism.

 

http://www.smh.com.au/world/preparing-for-teotwawki-how-a-disparate-grou...

Mon, 12/17/2012 - 23:22 | 3073660 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I blame liberals. 

I don't know why but I do.

Tue, 12/18/2012 - 00:54 | 3073722 ZeroAvatar
ZeroAvatar's picture

Edit, wrong thread.

Mon, 12/17/2012 - 23:16 | 3073643 Old Poor Richard
Old Poor Richard's picture

Who's the lying dickhead who took a bi-partisan deficit-cutting agreement and renamed it "The Fiscal Cliff", implying that this sensible plan to help balance the budget was anything but a good idea?

Instead of bi-partisan deficit reduction we get $10 Trillion in new taxes.

Can we draft Ron Paul back into the House as Speaker?

 

Mon, 12/17/2012 - 23:21 | 3073656 bobert
bobert's picture

I've a bright idea <sarc on>:

Let me appear to defend the rich against increasing tax rates and be in favor of cutting Medicare benefits instead.

<sarc off>

How could the Republicans be so stupid to get themselves painted into this corner???

Their opposition takes the position that the rich should incur higher taxes and Medicare should be defended against cuts.

Which is the position that will garner votes in the 2014 mid term elections?

If our economy is not in the toilet prior to the above elections it will be soon after.

I'm weary of the stupidity.

Mon, 12/17/2012 - 23:28 | 3073679 JustPrintMoreDuh
JustPrintMoreDuh's picture

It's a Christmas miracle!  God Bless our hard-working honorable "elected" leaders bitchez.

Mon, 12/17/2012 - 23:33 | 3073690 pragmatic hobo
pragmatic hobo's picture

when Bush enacted "temporary" tax cut, which mostly benefited the rich, understanding was that it would expire after due time. So how did it turn into "tax increase" and how did it become bargaining chip for cutting benefit to the needy?

Mon, 12/17/2012 - 23:35 | 3073693 Insideher Trading
Insideher Trading's picture

They've run out of ideas.

You know the rubicon has been crossed when we are trying to tax carbon usage.

carbon tax...puhlease. When the gov. tries to tax you for creating plant food through the process of, uh, living, you know they have simply run out of ideas.

They should try a movement tax. If you move your ass, gov. is gona' tax that ass.

Tue, 12/18/2012 - 00:48 | 3073860 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Carbon trading creates dead weight loss.

Mon, 12/17/2012 - 23:40 | 3073703 Dre4dwolf
Dre4dwolf's picture

The thing that sucks is, earning 1 million a year, isn't even enough to sustain your standard of living depending where you live after taxes.

If you won 1 million dollars right now, before you even spent it , atleast 20~30% of it would of disapeared before you got a dime, and then buy 1 house and boom your too broke to keep the house.

1 Million dollars just isn't a lot of money, a family of 4 ~ 5 with a moderate standard of living (3 Tvs, 2 cars, 1 small house, 1 kid in grade school and another in college (because your "too rich" for financial aid) and boom you burnt through w/e the govt left you of your 1 million within 3 years.... even if your working.

 

They should raise taxes on people earning more than 1.5 Million Dollars, and lower taxes on people earning less than 1.5 Million.

 

They should also exempt higher taxes on the first Million a new Millionare earns , and then tax the following years earnings at a higher rate (the first time you earn a million its tax free or something).

 

So that the new found successful people aren't instantly gobbled up before they have a chance to spend the money they earned into the economy.

 

Some people are just getting at that point in their lives where they actually started earning enough money to live well for once, and Obama wants to go and steal the success they waited 50 years to achieve... which is sad.... that after 30~40 years of working and finaly making it, it all gets stollen by big government.... 

A billion is the new million, and a million is the new 100,000, and 100,000 is the new 50,000.

Tax rates don't adjust for inflation, (inflation forces you into higher tax brackets than you deserve because your earning devalued dollars).

Tax rates should be fixed to the price of gold, so the govt has a reason to keep inflation low.

Tue, 12/18/2012 - 00:21 | 3073795 Cthonic
Cthonic's picture

Downsizing, it's not just for corporations anymore.

Tue, 12/18/2012 - 00:24 | 3073800 newengland
newengland's picture

Income tax is wrong. It is a construct of the old money masters of Britain, and their European monarchists. The only just tax is one decided locally to fund local things, and only fund wars if the Republic is forced to defend itself here.

Tue, 12/18/2012 - 00:55 | 3073866 ZeroAvatar
ZeroAvatar's picture

"First, they came for the millionaires, and I said nothing............."

Mon, 12/17/2012 - 23:47 | 3073721 Dre4dwolf
Dre4dwolf's picture

I can balance the budget, just fire everyone.

 

Problem solved, then these losers in government will suffer like the rest of the country, instead of getting a free ride.

Mon, 12/17/2012 - 23:53 | 3073731 ZeroAvatar
ZeroAvatar's picture

People wonder why boomers weren't able to save enough for retirement.  Well, now they'll find out first hand for themselves.

Mon, 12/17/2012 - 23:55 | 3073739 jim249
jim249's picture

Let's kick the can one more time!

Tue, 12/18/2012 - 00:19 | 3073743 newengland
newengland's picture

The USA was founded as a Republic, by the people, for the people. That  is not a democracy, nor a monarchy,but it has become a corporatist thing: big government,big banks and any big religion that suits it.

Automotic income tax is wrong.

War abroad is wrong.

Uncontrolled immigration is wrong. Only people who believe in the Constitution and learn to speak a common English language can defend the Republic. No country can prosper without one common language and value system, regardless of race, color or religion.

CONgress is filled with ambitious people, sophists.

Anyone who flouts the Constitution and Declaration of Independence will die by their own hands. The Constitution and Declaration of Independence is for all who believe in it.

Tue, 12/18/2012 - 00:04 | 3073758 Theos
Theos's picture

Fuck it i give up.

Tue, 12/18/2012 - 00:12 | 3073771 newengland
newengland's picture

Never give up. Death awaits you if you do. No one owns you.

Tue, 12/18/2012 - 10:15 | 3074451 spanish inquisition
spanish inquisition's picture

With Ben printing they should think of moving the rich line to $30 Billion/year. Of course you will need to be nimble with the presses running on high, maybe a daily tax on income if you make more than the cost of (5K loafs of bread/365).

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