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How The Fiscal Cliff Talks Collapsed
The collapse of the Fiscal Cliff talks should come as no surprise to anyone (except, of course, for all those "expert" political commentators virtually all of whom saw a deal by December 31: a full list of names is forthcoming). The reason: a simple one - a House torn, polarized to a record extreme, and a political environment in which the two parties, in the aftermath of a presidential election humiliating to the GOP, reached unseen before antagonism toward each other. In this context, it was absolutely inevitable that America would see a replica of last summer's debt ceiling collapse, which mandated a market intervention, in the form of a crash, and the wipeout of hundreds of billions in wealth - sadly the only catalyst that both parties and their electorate, understand. We had prefaced this explicitly in early November when we said that "the lame duck congress will posture, prance and pout. And it is a certainty that in the [time] remaining it will get nothing done. Which means, that once again, it will be up to the market, just like last August, just like October of 2008, to implode and to shock Congress into awakening and coming up with a compromise of sorts." Which of course brought us to Thursday night's mini-TARP moment.
If you missed Thursday's ES flash crash, fear not: there will be more "TARP moments" as first the Fed is brought into action (as we reminded yesterday), and then, as the final deadline - that of the expiration of various debt ceiling extension gimmicks which takes place in March, and which is the real deadline for a deal. Nonetheless, there are those forensic detectives who are addicted to every single political twist and turn, and who are curious just where and when the Fiscal Cliff talks broke down in the past week. In this regard, the WSJ provides a useful timeline.
From the WSJ:
Mr. Obama repeatedly lost patience with the speaker as negotiations faltered. In an Oval Office meeting last week, he told Mr. Boehner that if the sides didn't reach agreement, he would use his inaugural address and his State of the Union speech to tell the country the Republicans were at fault.
At one point, according to notes taken by a participant, Mr. Boehner told the president, "I put $800 billion [in tax revenue] on the table. What do I get for that?"
"You get nothing," the president said. "I get that for free."
Well, you can't fault the man at not demonstrating "leadership" at crucial junctions: after all it's only fair he gets something for free.
The White House's first formal offer, presented Nov. 29 left Mr. Boehner incredulous. It included a request for $1.6 trillion in additional tax revenue over 10 years, a permanent increase in the debt ceiling and money for road projects and other year-end priorities. In return it offered spending cuts of $400 billion—25 cents for each dollar in new revenue.
Taking a drag on his cigarette, Mr. Boehner asked Treasury Secretary Timothy Geithner, who had presented the plan, a number of questions but didn't fully engage him. Across the Capitol, Senate Minority Leader Mitch McConnell (R., Ky) said he laughed at the offer.
The same sticking points kept rearing up—the White House insisting on more tax revenue than Republicans could stomach, and the Republicans demanding deeper cuts than the White House would accept.
During one session in the Capitol with White House's legislative liaison Rob Nabors, Mr. Loper from the Boehner camp asked, referring to a near-deal during last year's debt-ceiling fight: "Can you get back into the zone of where you were in July 2011?"
"No," Mr. Nabors replied. "We were probably overextended then, and there's no way we would do it now."
Mr. Nabors said if they couldn't reach a deal, they should keep lines of communication alive. The typically serious Mr. Loper asked, "So, you're breaking up with us?"
On Dec. 13, Mr. Boehner went to the White House at the president's request, joking he was going to the woodshed.
The president told him he could choose one of two doors. The first represented a big deal. If Mr. Boehner chose it, the president said, the country and financial markets would cheer. Door No. 2 represented a spike in interest rates and a global recession.
Mr. Boehner said he wanted a deal along the lines of what the two men had negotiated in the summer of 2011 in a fight over raising the debt ceiling. "You missed your opportunity on that," the president told him.
That night, the speaker and Majority Leader Eric Cantor (R., Va.) decided to make the biggest concession so far.
As the country the next day digested news of a brutal school shooting in Connecticut, Mr. Boehner called the president and for the first time offered to let tax rates rise—on income above $1 million. The president acknowledged the concession but said Mr. Boehner's plan wasn't raising enough revenue.
News broke the next night both about the concession and that the speaker was willing to extend the borrowing limit. On Sunday, the White House sent a plane to fly Mr. Boehner back to Washington for a morning appointment with the president on Monday, the day it now appears the deal fell apart.
In that session, the president held firm for $1.2 trillion in additional tax revenue, a second step down from his original offer. Mr. Boehner asked for another $100 billion in spending cuts but couldn't get a commitment.
Finally, the speaker said, "Well, you and I can sit here and stare at each other," or he could leave and they would talk later.
Eventually, Boehner managed to turn the tables on a president who was convinced he would get all the concession he demanded. Or so Boehner thought:
Back in the Capitol, Mr. Boehner told Mr. Cantor the president wasn't moving. They agreed to call him. On the call, Mr. Boehner restated he needed $1 in spending cuts for every $1 in revenue raised. He dropped a prior demand to increase the Medicare eligibility age.
The president told Mr. Boehner that he was willing to make some concessions on taxes and spending, but cautioned that they needed to retain Democratic votes for the bill to pass.
The speaker raised the prospect of moving a backup bill. White House officials said Mr. Boehner didn't reveal what Plan B comprised. Administration officials expected a few more days of back-and-forth, but the speaker thought the prospects were dim for a big deal.
Meeting with his leadership team in the afternoon, Mr. Boehner read from a script prepared by his staff, telling lawmakers he still wanted a big deal but the rank and file needed to know the plan by a 9 a.m. conference meeting the next morning, Tuesday. He encouraged his colleagues to accept the backup plan.
"I'm going to keep the proposal on the table," he said of the broader deal. "As I told the president, I'm not making an ultimatum. The offer stays on the table, even if we move on Plan B."
His lieutenants made clear they preferred Plan B to the one Mr. Boehner was trying to broker.
The speaker called the president with news the House would move ahead with the backup bill, which would preserve Bush-era rates for all income below $1 million. The president was incensed.
Everyone knows what happened what Boehner was finally unable to get even the votes needed for "Plan B." And what happened after that too:
On Friday afternoon, the president spoke to both Mr. Boehner and Senate Democratic leader Harry Reid in a bid to resurrect a deal. Soon afterward he left the White House for his annual family vacation in Hawaii.
And from Reuters:
The president is expected to indulge in some of his favorite pastimes on the island where he was born and raised: golf, an expedition for the local treat "shave ice," and an evening out with family and friends. He hit the links at the nearby Marine Corps base under sunny skies on Saturday afternoon.
Needless to say no deal will be "resurrected", and the US economy, like the Coyote, will go right off the cliff, with hopes for a prompt fix in the early days of January, at which point, the thinking supposedly goes, all those managers who fired tens of thousands of workers due to the new "post-Cliff" reality will miraculously rehire them back. After all the market said so: the same "efficient" market which continued to plow higher for three days after it is now clear the deal had fallen apart.
Next steps: nothing out of Washington for three months, even as Obama crucifies the GOP at every possible public opportunity, and another credit downgrade of the US, which initiates the early 2013 risk off phase, and the scramble into the "safety" of US bonds once more as was the case in 2011. In doing so it will provide a cover to all those sell side "strategists" (all of them) who once again, erroneously, predicted a recovery for the US in the coming year. After all who could have possibly anticipated the most perfectly logical political outcome... Because the one thing that is most important to both parties is to maintain demand for US paper, as that, and not taxes, in both the coming year and decade, will consistently be primary source of 'funding' for the US government.
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This is a guy who is seriously talking about running for Prez based on his "record and accomplishments". If he is allowed to get away with such BS then the voters have only themselves to blame. Unless MD is flush with cash next year he should resign from sheer embarrassment.
Instead, even if this is an abysmal failure, the MSM will present it as a great political act. What else is new?
You begin to wonder if it's worth it. My wife and I got degrees, worked hard, went out on our own and made money in the private sector. We never asked for anything, lived frugally, saved, raised a family and now our leader talks as if we are the problem. (The ability to glide through this crisis without a mention of the real problem is an incredible coup for Obama.)
Taxes of all varieties, health care, SS, etc take 55%. I pulled a Galt five years ago and now my wife is seriously considering the same. We can pare expenses to the bone and with a garden, solar and other changes we don't need to toil for 45% of our income.
I think you are right. Many will plan not to make over $250,000. a year. Maybe they will do a deferred comp plan. Many of the Wealthy will find a way to make their money Overseas where it is not Taxed.
Anyone that Owns a Rental Property will not Sell (especially if it has been owned for 20 or 30 years), as the gains will wipe out a life time of savings and will definitely put them in the $250,000. income tax bracket for that year. How about people that bought Stock 20 or 30 years ago? Like Aapl at $80. How could they Sell as it would mean that close to 50% of their gains would be wiped out? The only way to get out of a Rental Property would be to borrow against it to the hilt and then do a Bankruptcy. Or, die and leave it to your Children. But, if you own over $1,000,000. worth they are after that too, thru estate taxes.
Somehow the Wealthy will find a way around the Taxes. It will be the Middle class again that will shoulder the burden.
but you called the sequence of events incorrectly Tyler. you assumed plan b would pass before you started in with c. no one is perfect, esp when calling the ponzi.
I think there's a large segment of the GOP tired of being hectored all the time by such an incompetent
incompetent what?
At this point in the empire, incompetent becomes a noun.
He noted it as a scenario in an article he posted from Citi: http://www.zerohedge.com/news/2012-12-20/three-plan-b-fx-response-scenar...
The talks collapsed because there are no solutions.
Austerity leads to a deflationary collapse.
Money printing and taxing leads to endless recession.
We're screwed.
I know it. You know it. Obama knows it. Boehner knows it.
http://www.angrysinner.blogspot.kr/2012/12/yesterday-i-walked-five-miles-to-my.html
"The talks collapsed because there are no solutions."
We have a winner!
So many posts on here deal with the Obama and the Dems as Marxists (who suck corporate banker butt. Yeah, i don't understand that reasoning either), but the reality is there's no way out of this trap that does not inflict severe pain, or potential bloodshed, on the owners, their minions, and their financial backers. Hence none of the political shills want to be the ones who make the wrong move and piss off their owners or turn the masses in to rioting, destructive mobs.
Sure, there have been points in history where leaders made hard decision and accepted the results of those decisions. We are not in one of those historic moments right now. Sure, we have loud talkers and boasters, but when it comes to actually making the real, hard choice, well now, that's a different thing entirely. It would have been the same with Mittney as Prez, although I know you diehard Rethugs will not accept that reality.
If anyone expects anything proactive from DC that might actually negatively affect the upper 5%, Wall Street, Military contractors, insurance, etc... you are not living in this reality. The only thing to expect from the DC crowd is delayed reaction, rhetoric, spin and blame across the aisle. I may be wrong, but let's see how the facts play out over the next weeks and months.
.
TPTB and the Marxists both have the same goal- dismantle the current system.
TPTB allow the Marxists to do their dirty work. Many Marxists will later be surprised to find out, that they ainT the pigs on the animal farm.
Yea..it's all a political pony show as to who can make the other side look like they are to blame for breaking the deal.
This could be taken straight out of Bob Woodward's book "The Price of Politics" detailing the negotiations between Obama and Boehner et al from summer, 2011.
In other words, since neither the situation nor the players have changed, neither has the result.
Can meet foot meet road. Oh, except there's that cliff no one seems too concerned about.
What a surprise he's going to blame Republicans because clearly he has no hand in creating the impasse. If only he could sneak in a reference to how Bush left him this mess the blame game would be complete.
It's the Central Bank that is to blame, and people are slowly and quitely understanding that and adjusting their lives and priorities, in the same way that the sick and diseased are quitely realizing it is not really their doctors who are keeping them sick, but a small group of psychopathic nazis. Occasionally they watch an old movie from the 40's and wonder how things could have changed so radically and quickly without a guiding hand. The Great Awakening is upon us, and the hoarders of secrets are watching them float to the surface for all to see, powerless to stop them. Take heart, brothers! And best wishes in the New Year!
They are either going to tax us through inflationary money printing or by direct taxes. Gun to the head for a quick death or one in the gut for a slow and painful bleed out. Probably both. The double tap.
With all due respect, Tyler, don't you think these clowns in Washington are quickly becoming irrelevent in terms of meaningful policies? A wild, rabid animal is on the loose, no doubt, but can the speculation be much more than taking bets if its next move is to strike left or right?
That would be the amount reflected by Shrubya's cuts expiring, que no?
Yes, except they are playing with our money and futures. Obama believes its all his to do with as he wishes. Anyone who tries to stop him or even moderate him is a terribly flawed obstructionist. I pray for obstruction.
Narcissism ... lead the country to the abyss, "save it" and be cited as the first "something or other" savior a la FDR.
So, "through the looking glass" you live in, temporary is not temporary.
I pity you your lack of depth perception.
Sorry, too cryptic for me. my perception is that we be broke, going broker and these asses will not hesitate in robbing us of everything, wealth and liberty. is that too shallow for you?
That was a good argument in 2001, but we wanted free drugs and two wars for some reason.
If we hadn't passed (supposedly) temporary tax cuts, we wouldn't be as broke now, would we?
At the margin, you are wrong.
The debt generated by borrowing assets that don't exist is larger than could ever be repaid through taxation rates of 100%.
We've been broke for years based on real accounting standards. This tax cut hoohah is just a distraction to feed the class envy and keep the red and blue teams on separate sides of the field.
The "tax cut hoohah" was Dubya's attempt to keep the red and blue teams in the mall.
Tax revenues increased under Bush, but spending grew even more. And it would be good to recall that most of the bills that passed unber Bush, even the ones where they controlled both houses, were bipartisan, unlike what we have now. Its not like the dems were fighting spending increases, so don't go all superior on us. Constantly yanking around on tax rates is not a stabilizing factor for our economy. But of course, stability is the enemy of chaos and chaos is the friend of crisis and of fundamental change. And away we go!
Blowing 3T in blood and treasure has a much more drastic effect on the economy than minor changes to published tax rates.
Stop pretending that people actually fucking pay the rates you see in the news and not the historical average effective rate (which has remained in a very narrow band below 25% even for Romney, Soros, and the Koch Bros).
sorry the world didn't fall apart
Please stand by......
The Republicans have the same problem they had in the election: they are trying to use stealth and procedural manuveres to implement policies that the overwhelming majority of Americans would oppose if the Republicans came clean with what they were trying to do.
The only way to sensibly move the discussions forward is for Obama (and the rest of the country) to say to the Republicans "tell us specifically what you want to cut and by how much?" Negotiations without that statement of priorities are pointless.
Scroll down to my post. It doesn't matter who puts forth a mathematically inadequate proposal.
No solution means no solution.
plu eeze, they did start with Obamacare. Insisting on the Republicans show their hand on what cuts they want to do? Hello, what is the President willing to do? A federal freeze in spending is considered a 9 trillion USD cut. All the GOP gets from the President and Democrats from as far back as the GH Bush days are token, promised cuts in the future. No more from those Communist party endorsed Democrats and their deficits.
Of course we have the sequestration cuts now, hows that working out for everyone if the President allows the deductions to revert back to the Clinton rates on the first day of the year? How is it the President and most are talking recession when the Democrats are insisting for awhile that those rates were good for the economy?
1) Obama, Boehner, and the rest of the country are for the most part mathematically incompetent idiots.
2) A decrease in rate of increase is NOT a cut, it is verbal maneuvering to fool the stupid.
Is Obama a sociopath by the technical definition?
Anyone really think that Obama really cares? He has been silent on all of the negioations. Other than a few press confrences. Now he is vacationing in Hawaii.
his behavior in office, and especially his wife's has been, let's say...typical of the demographic
Right about now at least a half dozen Whitehouse aids are scrambling saying "Who the hell is Trav....and how the hell can we stop him?"
A poll test would be ironically appropriate.
and your pathetic behavior, as always, is typical of your demographic (self-hatin' white guys who like to project).
He is getting measured for his Marshall's uniform. He does look good in black with red piping. But who doesn't. Homos like him can wear anything and make it look good.
Spend a lot of time checking out "homo" suits, do ya?
Obama wishes he knew how to quit you.
I thought Obama was an egomaniac.. but sociopath works too.
He's the only cat I know that can pose like Mussolini.......and totally pull it off.
No, u r............
That's one hell of a comeback.....mind you don't put someone's eye out with that.
It seems to me that we need to know which stocks the Congress and the Senate hold.
We all know that Nancy Pelosi holds a lot of Aapl Stock. Someone knows which stocks these Senators and Congress people hold and are running them into the ground trying to silently persuade the elected officials to do what they want.
This almost seems like reverse Bribery to me.
could the President reassure the markets with a retroactive offer of any deal? He could leave deductions the same by telling Timmie to leave the GW deductions the same until a deal is reached for all workers. As long as the Dems insist on wanting to destroy the GOP with demanding tax rate rises, then there will be no deal with the GOP rank and file.
There is no mood for compromise like 1986. All we have is Bernnie with his all sufficient finger in the dike by saying he will buy bonds and there is no bearish movement, by much.
It really is ITS the SPENDING STUPID.
But then the Democrats do have something up their sleeves in January by insisting on the GOPs poison pill now.
This is what happens when lawyers are faced with an unsolvable mathematics problem.
They would LOVE for it to be about politics, but it's not. It's about math. Unsolvable math. So they will go out and fight a political battle because that's what they know, and in the end the math will not be affected.
You could give Obama his 1.2 Trillion (over 10 years) of taxes and it would still result in 1 Trillion deficits because that 1.2 T is only 120 billion per year. The deficit is about 1.12 Trillion. Take off the 0.12 and you still have 1 Trillion.
Cut spending? Their bold, aggressive spending cut plan involving chained CPI only provides 120 billion in spending cuts OVER TEN YEARS -- 12 B per year. Out of 1 Trillion deficit.
They are pathetic. They will remain pathetic. There is no solution.
This is what happens when lawyers are faced with an unsolvable mathematics problem.
Dead. On.
there is no solution with these dickheads "negotiating" numbers when they can't do maths.
there are many solutions ot correct the fucked up logic of corrupt voyter habits and their politicians.
here is one.
for the deficit.today.cut spending by 30% to save $750 billion and raise revenue by 25% to raise $350 billion; that stabilises the debt situation of runnining > trillion dollar a year deficits.
that leaves the $16 trillion of debt. this can be tackled by charging finance companies, private equity firms, shareborkers, HFT's and banks (not their customers) a per transaction tax of 100 bucks each time they deal in fx, debt or equity markets. there are millions of trades a day, so this should easily raise a five billion a week (the same size as fed QE4 interventions currently). it will take around ten years to reduce debt to gdp from 100% to 50%.
another alternative is to get companies to shut down overseas subsidiaries of US companies which would generate the employment, growth and taxes that are required. Clinton was a douche and bankrupted the country with his ridiculous trade policies. the trade deficit would also be corrected and trade could be unertaken from a position of need (and strength).
I have to ask you guys, all of you "rationals"...why the fuck do you act like this is some kind of math problem?
It's NOT. The budget CANNOT and is not EVER meant to balance! The fucking 400-year history of the BOE proves that. The system CANNOT balance.
It's goddamned imaginary money, ok? It's NOT a math problem. It's a confidence racket. We are ALREADY bankrupt...mathematically bankrupt. Everyone knows. Yet, I'm about to go to 3rd world places where our USD is the currency used.
I understand that it defies your belief, but it is what it is. This money we use is a fiction; it's not real. It's just sort of based on reality.
The money will never be paid back in anything we would realize as having the same value as it does now. Simple as that. The game plays on.
I say run this fucker to the max, put as much in my pockets as possible...demographically, morally, everything-ly, the USA as presently constituted has been...DESTROYED. And it cannot be saved. You cannot evict the 25% 3rd world demographic and "restore America." the birth rate projections show a white minority in the 2050 timeframe...nevermind globally where whites have dwindled to a tiny minority. You really think the hordes of Africans and hispanics are going to carry on the exclusively white traditions that built this nation, the law and morality and ethics, and all the other things whites invented? If you do, you're insane and should just STFU. Their nations are like they are because of them and nobody else.
whites and ALL of the trappings of white culture, the music, architecture, art, law, philosophy, etc., are declining and being replaced by aspects of other cultures. It's simple population dynamics. The notion that these things that whites call "rights" are universally shared is ABSURD.
Trav, can't disagree with that. Although it will be somewhat painful for many posters hear to accept.
Western world 'Civil War Redux' it is then.... I cannot see any other option. Using the over used red vs blue state meme for the US I cannot see either team going quietly into the night and accepting the new normal.
I'll see how it all plays out in my part of the world. Perhaps I will end up retired in HK afterall.
Good luck to you ALL.
hey trav, a willingness to look at race says this:
Blacks and Hispanics have shorter life expectancy. They are becoming more and more a majority of the workforce. So the SS payroll tax jack that is about a week away goes out of minority pockets to fund white retirements that are longer than their own will ever be.
I somewhat doubt this is going to remain quiet much longer.
not blacks...their percent share is flat. Hispanics have been the ones that have grown.
And in terms of UE rate, you can see some broad discontinuities in those across demographic lines.
There aren't enough blacks and hispanics to fund white retirements...they are only 25% now. Assuming they become a majority, they're gonna roll that shit back using political power. Bank on it. Or they will just Mugabe their way to eliminating it. But whichever, it will be the hispanics that do so, not blacks.
There is nothing wrong with having a nation of like people doing things their own way. I would recommend that if you believe in this coming demographic wave, you should plan to get the fuck out. Unless you like how things work in central america.
Hispanics can sneak across our border all they want....as soon as I get the Canadians drunk enough....I'm sneaking across theirs. If we play our cards right, we can take over that place without firing a shot.
I look forward to the hilarity of white men doing manual labor again.
agreed, but the point is..it doesnt have to be that way. but i agree with you for the status quo that results in corruption, impoverishment and obesity.
OK, agreed. So what is the difference between those that believe in the Piper and those that don't?
I already know i am a fucking schmuck for living within my means. That is what I have learned over the past 5 years. I was trying hard to learn something else, but there you have it.
I still can't do IT though, but I can now reason that if i have to eat another 5 years of this bullshit sandwich, I might have the chops to leverage my way into some serious pseudo-wealth. Fuck it.
In the end it will boil down to what Europeans truly excel at- war.
Agreed TRAV. It is a game whereby the rules keep changing, and will continue to change. Gold confiscation will come up on the table with no warning and all the well planned "savers" will get poked again. Knowing it is a game, con game, what strategy one employs must take into account that rules are like money, they too will be diluted, deflated or inflated. Identifying the game in 2001 got me this far, the gold grab will come, where will I be then? I am already opening that door.
why would they confiscate gold? I just can't see that being more effective than a wealth tax on all those accounts sitting out there.
there is the 47% right now who have no net worth who would totally be ALL IN FAVOR of a wealth tax to fuck those rich people who, in the narrative, stole all their wealth from the poor...somehow. Because, like, they did, ok? Nevermind that the poor never had anything to steal and they spend every dime they take in and never save, it's the evil rich who stole it from THEM, and so it's high time to fuck them back.
I agree, they won't confiscate gold.
Until they've taken everything else. Then, they'll come for the gold.
They have to conficate the Guns before they confiscate the Gold.
Why conficate it when you can print money and use it to short it?
Do it enough times.....you can afford to buy it legally.
Nope, they'll take 'em both at the same time. Saves trips, that way.
Now that's some damn solid thinking there.
heh whitey both your wife and daughter love ATM from my BBC!!!
. . . and just for the crock of illiterate BS you have spouted i am boycotting white vendors with my food stamp purchases.
CUNT
Cool, and let me be the first to welcome to ZH Jamie Foxx under the handle WTFUD. But don't be tryin' to foolin' us wid da Food Stamp JIVE. Youse be a RICH house Niggar and be working for da MAN! I bet you wear a $100 suit and be drivin a $5,000 Car WORD!
LONG Chrome Mags BiTcHez
Gotta love this site.... keep the CHOOM comin'
Quito or Cuenca?
Whitey has only himself to blame-he isn't bothering to reproduce himself at stable levels.
It's not like Blackie and Brownie are forcing white women to get sterilizations.
That is what happens when you have to WORK for a living and support YOURSELF and the children you bring into the World.
Your comment is spot on. Some don't seem to get that our money is backed only by DEBT! No Debt, no money! Its really that simple and has been since 1913 (the year both the income tax and FED were created). If you want to solve the problem you have to take the Ron Paul approach. Limited constitutional government, no FED, no TSA, no DOE, no FEMA, no foreign aid, nothing except national defense (no foreign bases allowed). Money would then be backed by gold and thus guaranteed to be finite. Worthless losers on various forms for welfare would then be subject to the natural forces of evolution. That's the only solution to the modern welfare state. Unfortunately, there are a large number of worthless losers with little or no skills or abilities to offer the private market.
Or to summarize using the great Maggie Thatcher: "The problem with socialism is that pretty soon you run out of other people's money". That's what has happened since the creation of the FED and debt backed money.
Milton Friedman said that the biggest problem was the minimum wage. As it does not allow employers to take a chance, hire and train unskilled workers.
That statement in itself is true assuming the stability of Money in itself. But Friedman and his ChiCONgo SKOOL Monetarist CHOOM are part the problem that got us into this mess. Fuck em all... If anything Krugman is a Monetarist as are all the third way 'progressive' Blairist, Clintonsita parties. No differentiation between red or blue just who gets to fight over the crumbs left on the table...
If anyone needs reminding here do not vote: Gold, Guns, Grub, other essential items only and take what FIAT while you can.
Let me see.
1) unsolvable .... check
2) mathmatics ..... check
3) trillion ....... check
4) spending ....... check
5) problem ......check
Thats 5 down on my card
BINGO! do I win!
Yes, please pay the cashier.
Politicians use math -- the political calculus. They aren't as stupid as they appear. They use it every election, and it adds up.
Exponential debt curve, the trend is set
Tyler(s) let me get my simple mind around the math.
Soon to be trounced by end of March and reversed after 'intense' negotiations ....?
All they need is to defy the Laffer Curve and solve those 'unfunded' liabilities....
In the meantime Ben get's to work. It's a start, albeit a pathetic one, none the less.
Not quite.
Extracting 600B from the economy via taxes and spending cut is DESTIMULATIVE. GDP will drop. TAX REVS WILL DROP.
The deficit doesn't improve.
Agreed. I was more trying to unravell what 'demonocracy' put out around the projected $607 Cut in their colorful graphic...
http://demonocracy.info/infographics/usa/fiscal_cliff/fiscal_cliff.html
Thanks RT
doesn't it follow that, given deficits and debt reflect the diminishing returns of each dollar spent of job creation and growth (1 dollar of debt generates 30 cents) that reversing the deal has the opposite effect (each dollar NOT spent saves 70 cents of waste)?
In general you need to embrace the hopelessness embodied in
No Solution.
sounds as hopeless as I am at not working!
"TAX REVS will DROP" Good! You seem to be under the illusion the government produces useful goods and services. Even their welfare services like foodstamps, medicare and medicaid are run by the private sector, just inefficiently since there's no profit motive and its OTHER PEOPLE's MONEY. That's just crazy.
Starve the beast-no increase in the debt ceiling-this is the trump card the house has to call Obama's bluff. Then .gov will operate on cash flow.
The Bernank is looking to use the Fiscal Cliff as an excuse to boost QE. QE5 is coming as early as Jan. 25 and as late as March 13, likely for and additional $20B to $60B in additionaly QE. It won't be long until the market starts front running this boost to QE.
No, he isn't. 85B/mo is more than enough when it's not transmitted.
Stop talking your book.
If you haven't noticed, the world's monetary system is a giant fiat ponzi scheme. Ponzies must inflate or die and now that the entire world is sucked into the scheme and 0% rates have been achieved, the only thing left is to increase the rate of QE. There is a half life aspect to QE. The rate of QE must increase at an increasing rate, or else fiat implodes. Fiat ends now, or it ends later in hyperinflation, those are the only two choices. Once a bubble is created, the only resolution is for that bubble to pop. The fiat bubble is about to pop. It will be the greatest and swiftest transfer of wealth in history. The counterfeit notes are about to be found worthless, and the creator of those notes are about to become powerless. Housing is set to drop at least 75% and the service sector will implode. Those dependent on government will get crushed. Depositors will lose their money and the service sector supported by dollar exports will be devastated.
Clearly, I am not talking my book. Save in bonds and watch your life savings evaporate. Ignore the bond/fiat/credit/debt/housing/service sector/government/consumer bubble your own peril.
I'm going to give you the benefit of the doubt on this.
You do realize that after a paragraph or two of fiat buzzzzzzzzz hyperinflation buzzzzzzzzzz bubble buzzzzzzzzz it means nothing?
Money isn't real. No money is real. It didn't exist in the Garden of Eden. Gold had no value in the Garden of Eden. It's all imaginary.
Learn the lesson of Greece. If things look absolutely unsolvable, then that which is imaginary can be redefined by edict. If gold or silver is a threat, an edict will tax transactions. If demand for bond repayment threaten erasure, then those without connections who hold bonds will be wiped out -- but those WITH connections will not be. Greece has written down zero official sector bond holdings, because the official sector makes the edicts.
Stop thinking you can analyze what fiat ponzi bubble hyperinflation buzzzzzzzzzzzz means what, because you can't. There is no market. There is no economy. It's all edict now.
he is correct though...the monetary base must grow or it will implode.
Why do you think Bernank is doing 85B/mo?
But the Garden of Eden had a talking snake, a naked chick, and an apple tree.
"Money isn't real"
Thank you for those grand words of wisdom. I can stop reading this blog now that I know that money isn't real, it has no impact on how resources are distributed and no effect on the price of assets. Oh wait, there's no such thing as a price. Everything is bountiful and there's no reason to do anything. Just press the order button for what I want and some person delivers goods to my doorstep. Simple as that.
Pretty much. If you read nothing and concentrate on nothing, you can do analysis no less likely to be accurate. That's what government whimsy does -- randomness.
As for just press the order button -- that's what debt is, student or otherwise.
Government doesn't do randomness, government does fiat ponzies.
What's going to happen when that button goes away because the printing press is rendered worthless?
Pretty much. If you read nothing and concentrate on nothing, you can do analysis no less likely to be accurate. That's what government whimsy does -- randomness.
As for just press the order button -- that's what debt is, student or otherwise.
'The scheme' results in what is called a "Debt Saturation Phase Transition"
The ponzi results in the collapse of fiat, either through the stopping of fiat creation now, or hyperinflation later. Those are the only two outcomes.
LOL...it's been priced in for months!
Clearly, all of the coming QE is not priced in. If it was, the dollar would already be worthless. Inflate or implode.
I think that Obama is acting like a Dictator. This is what I want and if you do not give it to me I will refuse to compromise. Even if it means the Country goes off the so called Fiscal Cliff.
So come up with a solution and in the mean time I will be in Hawaii on Vaction.
already over the fiscal cliff..dont be fooled..what else would you call a government that runs trillion dollar defciits? this is a fiscal wreck.
the sequestrations, cuts and tax increases are part of the solution...they are not the problem.
you jus' beez rayciss. that's what the HP commenters tell me when I talk about his being on vacation like this.
All those black mens BUILT america and sheeit, so here's one getting something back for all the hard work over the centuries. And they are happy to live vicariously through the chief and hope he kicks some their way. That's how african governance works, ok?
Yeah, I know, in all those pictures of people doing high rise construction, not one black face, never seen one of them holding any complex tools really, digging ditches, hoover dam, power lines, but I digress...you just beez rayciss
Because people were all about hiring black faces in the 30s and 40s!
LOL
You're black envy is downright palpable. It's okay Trav, it's not about your tiny dick; women hate you because you're a fuckin' asshole!
LOL...the "muh dick" response? WOW...that's so highly original.
WTF does the 40s have to do with now? We've had 50 years of affirmative action and it hasn't closed a single one of the race gaps. It's just made idiots like you even more stupid and some other people I guess finally had to wake up and acknowledge that asians tend to do better at math. Besides, why the fuck is it anyone's responsibility to hire fucking blacks!??! Why don't they hire each other? Why don't they start their OWN businesses and manage their own countries where they've had sole political power for in some cases (Haiti) centuries?
but, really, keep those racial stereotypes coming, man, I can always use a laugh. Women don't hate me, especially black women...they loves me. LOL. It's a total hoot in fact.
The 30s and 40s would be when the Hoover Dam and the other projects you mentioned were built, shitwit.
You're the one using magical thinking that my toddler would laugh down to infer laziness where there was lack of opportunity; very difficult to contribute when you're not allowed to work.
If you're so fucking smart, why do you think I'm black, "Cuz"?
Why such nasty wars between these 2 parties over reducing the deficit by .0000005 percent, oh yeah, I have to keep reminding myself
the sheeple need a circus for entertainment before it all explodes.
Not that I think they are capable of any real fix, but by everything i hear we are at a substantial risk of entering another recession (if you can believe we ever left the last one) and tax increases will slow the economy. We can't know for sure how much, but there is a real chance we are approaching stall speed, where just a little more might be enough. They would be better off doing nothing. No tax increases and no cuts, until we can see what Europe, Japan and many other players are going to do. Any cuts that even the "cliff" creates is not enough to change our circumstances. But tax increases pose a greater threat than cuts in expenditures. So...do nothing.
So what I am hearing, if the left "well enough" alone, in other words don't touch any of the dials now, at least we would be at we are at today. Until we are not. I actualy agree if that is what you are saying. Any more meddling on their part is only worsening from here on out. I even think they ought to just raise the debt limit to unlimited. This frikin show they put on every time we hit the limit is stupid. They think if they tell us "we have a limit" it actually means something to us.....lol....these guys know no bounds.
If congress actually had the ability to use debt ceiling negotiations to cause some meaningful reduction in spending, that debate might have value, but as it is it becomes another destabilizer, that only precipitates more madness, and therefore more destabilization. While all of us could come up with something better than what we have for a economic system, the main thing is stability. None of us can productively invest in anything with the mess we have now. Everything now is short term bets that produce nothing other than oocasional quick profits that do nothing to build an economy. I fear the stability that Obama seeks is the economic justice model where there is no economic activity other than what HE deems appropriate.
even Keynes said that you need deficits to "bail out" an economy that wasn't performing. by that standard, we have been in "recession" for thirty years; saved only by constant deficits (or by Clinton cooking the books to get SS off balance sheet and the annual fiscal books).
Why would Obama care? Lobster, Steak and parties with entertainment from all of the famous Singers and Stars almost every night of the week? 10 or more all paid vacations around the World every year (with his friends and family) with the best security anyone could ever imagine. Air Force one at his beck and call any time of the day or night. He has just won another tax payer 4 year vacation.
big ass skrimps and white men suckin his dick...he in heaven. that's the merican dream nigga...well ain't it?
this is the negro ideal of having "arrived." It's always about lounging and recreating. No concept of actual work to build things. Being rich = spending money lavishly and ostentatiously like Mustafa Mansa or something, makin it rain and all o' that. When you don't actually have any real competence and can't actually build anything, all you have is peacocking.
Romney who?
Mitt is now slugging a whiskey and wipping his brow.......THAT WAS TOO DAMN CLOSE!
http://www.urbandictionary.com/define.php?term=Nigger%20Rich&page=3
Speaking of minorities and people having their Second Amendment rights taken away, I would like to remind everyone that the Black Panthers walked around armed and observed by police to ensure they were acting honorably when dealing with the public back in the day.
The police were so intimidated by a bunch of SBM (Scary Black Men) carrying Assault Rifles that Holy Saint Reagan helped push through a law directly restricting the Black Panthers from carrying these guns.
The NRA? Said absolutely nothing about this.
It's only a crime against the Second Amendment when you're an ignorant and entitled white guy.
Hey give the guy a break-he just reduced the amount of official presidential inaugural balls from ten! in '08 to two (plus concert for military families, as in '08) this year.
Clinton leads the pack so far in celebrating his win with 14 in one night.
I agree with the guy who earlier stated that we're fucked.
Hard to get rid of the crap when you have two assholes.
Please return to remedial logic.
I woulda thunk it meant twice as much crap ;-)
Obama, better be careful come March !!!
"on the island he was born and raised" how quaint.
duplicate
i feel like such a manipulated eliteless.
From reading all these comments, you might think these guys cannot find anything to agree on. The fact is there is an agreement and we call it the Fiscal Cliff proposal. They found agreement on this and it is the bitter pill. It seems everyone agrees this option is the worst of all options, and will cause economic havoc. To me it seems the greater havoc is the inability to make responsible decisions / legislation when they should be made. At the very least letting this agreement come into play in January will release a log jam of legislative constipation on matters that need attention. I am willing, even eager to see decisive action and that, ZH fans is the deal that is on the table. Don't you worry though, if and when it takes effect, those idiots in Washington will find a way to FIUP even worse than it already is. Thinking Washington will act on your and my behalf is the illusion.
we are here because of "agreements" "bipartisanship" and "working together" is it too much to ask that they all DON'T GET ALONG. Anytime they agree on anything we take it up the ass. Are you not seeing a pattern here?
i was under the impression we are here do to a bunch of political rubes who found they could enrich themselves and lie about it with impunity
there is no shame, consequence you expect solutions?
this has to be beyond "thier" control at this point....
"They" said that Ron Paul was the worst of all options.
He would have fixed the problem.
Sorry, but no. He would not have been permitted to fix the problem, and if he tried to unwind the ponzi, they'd have killed him.
Stop looking for heros to save you. It's up to you now.
I thought the Clinton tax rates were magical, that's why the economy boomed in the Nineties. So what's the problem with going back to them?
Or could it be that even a President as clueless as Obama understands a massive tax increase is not actually going to create "boom" times, and our financial collapse had absolutely nothing to do with "the rich" paying 35% instead of 39% in marginal tax rates.
Obama and Boehner = multiplying fractions
Dividing it by zero.....hey this damn calculator doesn't work!
What you need is someone like Allen West in their negotiating with Obuma (was that a gun shot I heard no just a car backfire) two minutes later "We've reached an agreement"
You know Obama has a nacissism problem when even the Slate calls him out on it. http://www.slate.com/articles/news_and_politics/politics/2012/12/barack_...
now its only 9 days , for Boner and the Droner.....tells us 10 days, whats an asshole !!!!
since no-one works weekends, or xmas day or half of xmas eve and only half of new years eve..there are actually pnly four days
that is my point
my bad...im a bit slow...not stupid though...hopefully!
http://www.youtube.com/watch?v=uik-l7jgtiE
"Because the one thing that is most important to both parties is to maintain demand for US paper, as that, and not taxes, in both the coming year and decade, will consistently be primary source of 'funding' for the US government."
Yeah Tyler, that "works until it doesn't" as the expression goes.
Maybe they think this time is different...until it's not!
Anyone think that Obama wants a solution? I do not. If we go over the so called Fiscal Cliff, Obama gets every thing he wants. That is Taxes go up on everyone. More money to distribute.
Why would he want a deal if going over the so called Fiscal Cliff Taxes everyone substancially more? More Money to give away to the so called disadvantaged.
As Marchall Davis said "Take the Money from the careless fists of the Money drunk. Place it in the hands of the little people."
Even though you have been down voted twice, I think this is spot-on except for one small correction. Obama doesn't think this will impact everyone, only 'the rich' ultimately. Of course, we are now finding out that his definition of 'the rich' is anyone who owns land, has equity invested, or has a large 'one-time' unemployment check that pushes them into AMT land.
Obama ultimately doesn't care about the economy in this case, he simply wants to use this to score more political points with his base. He isn't even smart enough (or doesn't give a shit) to care about the real problem which is the insolvency of the sovereign debt, as he feels he can gain power and ultimately 55% will blame the republicans. He wins, they lose.
In fact we all lose long-term, but who gives a shit, right? This is about him and his power.
I have no sympathy for CONgress or the people who voted for them. The Party has a hangover, and the debt drunks will fight among themselves.
They have no interest in the Republic, the Constitution and Declaration of Independence.
They will drown, together, by their own ways. Their voters will turn against them. This last election saw record low voting because most honest people dislike liars.
The BIS is more trustworthy than most governments, east, west, south and north. And that's a terrible situation for the West to be in.
The really funny thing about this is that the only people who care are those that pay taxes. The people who voted for Obama do not have a care in the world. the could care less about a fiscal cliff as their checks will still keep comming not mater what.
True, and even the lowly bureaucrat who does pay tax doesn't care because s/he thinks CONgress will save their jobs.
Hubris ends, suddenly and violently. History says so.
Obamas, smiley happy in Hawaii, yet only this week they claimed to be upset about children killed in the USA and elsewhere. They are actors, and the BIS appoints them.
I just think that the idea that he is on vacation in Hawaii especially at this time is offensive. Many would think of Hawaii as a paradise. So it gives the impression that Obama and his Family are in paradise while all Americans (that are tax payers) are worried about their future standard of living and their tax liability.
Somehow it just gives the wrong picture. I think if he went to Alaska or Camp David I would feel better. But to Paradise while we are suffering with so many unknowns?
Waterfallls,
Yes. For a CONgress that ruthlessly manages PR when it suits itself, it is obvious to most honest people that the President in Hawaii cried fake tears(an actor appointed by the BIS, serving the money men, and any war, in my opinion).
The Obamas are disgracing themselves, although they appear to be unaware of that.
The President and Commander in Chief should be at the White House, his constant wars, mourning the dead and praying for them, rather than running to his paradise home in an offshore island.
The Presidency disgraces itself, and it's no wonder that voting numbers were at a record low in November 2012.
1%ers can party where they want.
...Bob,
Despots, monarchists, tribalists and corporatists kill with impunity abroad. Many Americans will dislike the sight of the President at war pleasing himself on a sunny island, but he has done less harm than the mass killers abroad who kill their own people with impunity.