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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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Exactly how many "despots, monarchists, tribalists, and corporatists" have killed more than Obama? And how many more would he have to kill before it would be appropriate to have him charged with murder?
Not quite sure why you're apologizing for him here. He is provably a mass killer who has killed his own people with impunity.
Zeeez, the whole of Congress(including Boehner) are leaving for home and taking some days off for Christmas.
Lighten up and enjoy your Xmas.
If they did not go home there would be no Bonuses for Wall Street this year. The Market cannot take all of these press confrences every day.
"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."
Not really.
It is a shame that at this point we still play the "two parties just don't get along" thing.
I thought ZH was above that game.
Every word of every sentence that anyone utters that props up that theme has wasted energy that could've gone to exposing the Individuals who are sucking the last breaths out of this country.
When the going gets tough, the definition of "enable" begins to change.
When the going gets tough, the tough get going. Fear not. The Republic lives in states, not CONgress whose few voters are going to rip them up.
The Constitution was written by learned worldly men who knew that politicians and democracy is venal. That is why they crafted a Republic.
CONgress and its voters will get what they wish for, and then turn on each other. See the EUSSR for a recent example.
This time it's "one party just doesn't get along".
The headlines that I had been seeing were that the fiscal cliff was not really so much a cliff as a gradual slope and that is was likely that we would go over the cliff but that real pain would only kickin slowly so expect a drawn out battle.
Of course for much of the conventional media the objective is to freak people out - sells more papers.
A famous American writer said: 'I went broke slowly, then suddenly.'
The same will be true for most Americans indebted to CONgress.
Hemingway
Yep :-)
Happy Hannukah. It is time to come home to our beliefs, our judeo-christian Republic. I am sorry for other people's troubles, but it is their trouble, not ours.
You do know that some of their trouble IS US?
So what you're telling me is that there are two parties? Could have fooled me. The tea party is the only element keeping the repubs from just folding into the dem party.
Blechhh..... honestly, who really cares anymore? Anun Mithaleq.
And also,
The 'fiscal cliff' is pantomime, mere political theater, something to amuse the takers.
Christians founded the Republic of the USA. It was not a democracy, mob rule.
Jews assisted when they came to the USA in the 1700s.
Both groups wanted a Republic, not the mob rule 'democracy' now exploited by the AshkeNAZI, their Trilateral Commission, the Zionists, the Rothschild/Rockefeller axis, and the gnomes of Zurich.
Just thought I'd add a bit of light to this season of darkness. Traders will live the consequences of their actions. Good.
Carry on ...
Birchers. LOL
All i want for Christmas is for all the U N, CFR controlled cartoon characters in DC to follow Wile E. (off the cliff)
Here is another great cartoon for y'all...
50-year-old CARTOON TRIED TO WARN US - YouTube
It's rather sad that most Americans are unaware of the judeo-christian tradition which founded a Republic; one for all, all for one. It was not supposed to be a democracy, mob rule or a monarchy, tribalists or corporatists (crypto communists).
Our judeo-christian values gave the world every opportunity, a place for all who believed in the Constitution, and they ruined themselves. Very sad, most especially for the Armed Forces who swore an oath to defend the Constituion at home and abroad...while CONgress wages endless war at a time when fewer politicians served in the military than at any time in the history of the Republic.
It is time to come home, and stop all this political nonsense which only serves the cowards, and their profitable pantomime.
Break up USA Inc.; its time is OVER.
And Jesus was an anarchist.
That nice jewish boy Jesus preached peace, and threw the money changers out of the temple. Love of money is a curse, as is war...a thing pursued mostly by heathens in lands ruled by despots, monarchists and tribes. They kill their people routinely and in greater numbers than the USA does.
Be grateful if you live in the USA. Mind your tone.
Because the US has never prosecuted wars or killed people in great numbers?
I'm sure people from dozens of countries from the Phillipines to Iraq could clue you in on the US in the 19th and 20th century.
Suffice to say that the image of American history planted in your pointy head bears almost no resemblance to reality.
Yeah, really "sticking it to the man". ;)
Dual Power
Although really, how much of the New Testament made it through unmolested after 2,000 years of establishment censorship and revision?
I like Mohandis Ghandi's interpretation of Matthew 22:21: Jesus avoided a trap, plain and simple.
I also think we often like to confuse the teachings of Paul with the teachings of Jesus.
Depends, can you read Aramaic? ;)
I prefer diffusion of power...more parliamentary politics, if not individual participation on as much as possible. This is diammetrically opposed to my opinion of man, but the only correct answer for avoiding privileged oligarchies running roughshod over whomever they please, in the end.
It seemed a very poignant example of paying attention to one's spiritual needs ahead of one's worldly needs to me, but I'm a heathen!
You're the kind of heathen I like.
;)
On every major aspect of our country and our economy we have a major departure from the ideal scene. Based on actual statistics alone, all our politicians and leaders should be removed from post. The system is so diseased and corrupted is it like 4th stage cancer... better get your affairs in order. No rush. The decline of an empire is a slow and painful thing. Narcotics are best for the slow dying so that they don't suffer.
A fitting sound track compliments of Bob Dylan:
You must leave now, take what you need, you think will last
But whatever you wish to keep, you better grab it fast
Yonder stands your orphan with his gun
Crying like a fire in the sun
Look out the saints are comin' through
And it's all over now, Baby Blue
The carpet, too, is moving under you
And it's all over now, Baby Blue
The sky, too, is folding under you
And it's all over now, Baby Blue
So strike another match, go start anew
And it's all over now, Baby Blue
Bob Dylan? Meh. What a self serving putz. Not the Republic, just another mob ruler democrat whiner.
Jews believe that the messiah is a warrior. Christians believe that the messiah is a peace maker. We made the Republic.
Dylan is just a whiner, showbiz money maker, much like his 60s generation two-faced debt slaves, and CONgress. Oh so very Clintonesque schmucks.
the day u produce anything, even an ifinitessimal thimble of his contribution to world culture, will be the day you can tell your left foot from your mouth.
What New England tribe produced an arrogant fool of your calibre?
"We know, we this, we that, we never forget"; what is there to forget when you've learnt nothing, except virulent biais?
John Birchers don't recognize thought as a valuable way to spend time.
You know the old saying...
"It's all over but the shouting."
Yeah..that's kinda where we are now.
I disagree that nothing will get done before Jan. They will do something meaningless just us many of us suspected....ie nothing that changes the debt trajectory...but the masses will be so happy that "their" taxes are not going up that they will care little about the rest of the details. The big fight will be on the debt ceiling. Until then: more printing, more false/fudged numbers about the economy, more "risk on" pumping by most of the financial media, more theatrics that politicians orchestrate so they and their groupies can go long or short the market accordingly etc
Debt ceiling? What a joke. It's been raised over 100 times. A real display of self-discipline and fiscal responsibility. US Government belongs in debtor's prison. Would you ever give your checkbook and your credit cards to a stranger noted for being a spendthrift and a credit addict? Well... you did.
We have the wit, the will and the resources to overcome such folly. Do you?
Compromise = Continuation. Hang in there tea baggers.
If the American people (actually the youth) are not educated with the truth and trained to be responsible and critical thinkers, we will continue to descend into debt slavery and wind up within a totalitarian regime. And American's standard of living will continue to spiral downwards.
At least Ron Paul is working for the future by focusing and addressing the people currently attending high school and college (the future of this country).
The system is broke and can't be fixed. It must die and a new system must erupt. Will it be a Hitler that leads us into the new system or a benevolent leader? Only a responsible, vigilant and well educated population can prevent a Hitler. We don't have a population like that. We need to make one.
http://thearchdruidreport.blogspot.com.au/2012_12_01_archive.html
The Democrats won. The party of fools lost. Get over it.
Negotiations with the party of fools just got very hard for the fools and the fools they represent.
Get used to it, it's going to go on for years.
mas,
Silly ninny. It is one Party, as it is in the EUSSR. Most Americans realise this. Most Americans did not vote.
Pity you and your sort. Big Brother hates you who voted for debt slavery. You are a 'useful idiot or educated fool' (Lenin).
Your political master uses you, pet.
"Most Americans" were lazy, not protesting (speaking of being "used", precious).
Not with mail-in voting etc. Most just are apathetic about two of the same choices. Shills for the Repubs and Demos are both deluded.
I'd offer that most don't even have time or inclination to posit the two choices, much less actively avoid participation.
I say this as someone who registered CA Pirate Party, if only to get their name on future ballots (not that my dissent is meaningful in gerrymanderland).
I voted for the High Speed Rail. I am glad I did. Now, welfare dependent and non high school graduates can get jobs. All thanks to my simple vote as a fellow American. I pledged to fight for the small fella so to bring much needed productivity into their lives. The foundations of which build fruitful lives under this glorious technological society that all other nations look to with reverence. With my newly raised taxes we will over come any adversary. Even this new terrorist-enemy by the name of "Fiscal Cliff."
Every time Romney brought up new Jobs the Obama crowd panicked.
But, you bring up a good point in that if we could find a way to get the Welfare people off the pay rolls and into Jobs where they would pay taxes, then we could create the revenue needed to pay down the debt.
So, maybe the solution is not in Taxing the Wealthy more but to get every American gainfully employed so they can pay taxes. Instead of receiving benefits.
Try both...the drain from the unemployed is nowhere near as big as the sick and the old.
Very dry comedy.
You voted for bonds...and to dole money out in large bags to people other than those you mentioned.
Connecting two cities with no need to be connected in a world of telecommuting, is madness, not a works program.
Better clues are repubs love big brother and commie dems love an even bigger brother
If the American people (actually the youth) are not educated with the truth and trained to be responsible and critical thinkers, we will continue to descend into debt slavery and wind up within a totalitarian regime. And American's standard of living will continue to spiral downwards.
At least Ron Paul is working for the future by focusing and addressing the people currently attending high school and college (the future of this country).
The system is broke and can't be fixed. It must die and a new system must erupt. Will it be a Hitler that leads us into the new system or a benevolent leader? Only a responsible, vigilant and well educated population can prevent a Hitler. We don't have a population like that. We need to make one.
51% of the populace has already chosen Hitler.
51% of the populace has already chosen Hitler.
Almost certainly a new Hitler...or more likely a fascist like Mussolini because he wasn't anti-semitic.
America's already going down that road with Obama. And as the economy deteriorates and the USD/markets implode, a strong man - a mouth on legs - will eventually emerge and promise to lead the nation out of the swamp. He will do nothing of the sort, but by then it'll be too late to change him. The only political fight left between the Reps/Dems will be over which nail on the coffin to bang in next.
The EU is going down the same road. Mr Tony 'Teflon' Blair is the man who wants to emerge as Leader.
All of this spells the end of free market capitalism and political accountability.
Watched an old CNN interview with Peter Schiff yesterday where he was debating their house clown on the GM bailout. CNN house clown was saying that Obama would be using tax money to create green jobs and high-efficiency vehicles at GM.
http://www.youtube.com/watch?v=l5TCdJO0d2o
The USA is SO fucked.
I would love to see the Republicans grow a pair and if Obama starts demonizing them in the Inagural Address or the State of the Union Address, all stand up and walk out en masse
Shouting "You Lie" optional.
Not one of those self-serving, favor-paying-backing, only in it for the money and power and connections politicians in Congress give a damn for this country. They've all sold out. Ethics, morals, social responsibility, the American ideal... gone.
by design......
Let's face it. If the House Republicans aren't going to pass the Republican Sweetheart Deal known as Plan B, then they aren't going to pass anything.
They want to move the country toward a balanced budget. This is required to have any chance of long term solvency. Plan B doesn't do that nor does any of Obamma's dumb ideas that are only meant to continue to bamboozle the public into thinking that raising taxes on rich is all that is required to get our fiscal house in order. It's an intellectual tax on those who can't do basic math.
The Mayans were right all along. The time of "great change" is upon us.
Hold on to your spears....
Ok, so if I got this right, there's a fall over the cliff, in which absolutely nothing happened?
Just want to predict in advance that in three months time they'll say "yes", to whatever, and nothing will happen again.
Confucius say....
Man who fall from Friscal Criff, has been pushed by Congwess Dip-Shiffs.
I'm feeling a means test for your tax return until republicans agree to a debt ceiling increase.
Despite what the media will have you believe, I think the conservative wing of the GOP is about to take over. After the plan B fallout I think JB knows this. He can stand firm on bigger spending cuts or get voted out as speaker.....I don't think there is anything else. Obama doesn't have enough inner city sheep to change the outcome of GOP elections in 2014...ie the Tea Party etc is not going away. This cliff thing is fodder. The battle royale will be the debt ceiling. How can Obama claim his goal is to bring the budget deficit in line and at the same time ask for carte blanch on the debt ceiling. If the conservative GOP's pound this day after day it will start to ring in peoples mind that Obama's statements are contradictory. The GOP should request that the debt ceiling be lowered over time...not raised.
Nope, sorry.
"The Debt Ceiling" only has Pavlovian effect for your beloved TeaPotDome Express; the rest of America is tired of hearing about it and would love nothing more than to have the vestigial tail of the limit permanently expunged so as to never hear about it or be witness to congressional obstructionist grandstanding ever again.
A balanced budget would be a beautiful thing, but America knows that has fuck all to do with the pro forma debt ceiling and a lot to do with cooperation and better governance.
What I'm very sure of though, is the Obama's non-'budget' deficit in 2016 will be an unimaginably staggeringly incomprehensibly gigantic stack ... of ... freshly ... printed ... fiat.
This aint a mere fall-off-a-cliff, this is a fall from orbit, and you're going to burn up on the way in. The USSA hasn't even touched the damn atmosphere yet! Not even getting any appreciable friction yet.
Wait for it ... you'll know it when it finally happens.
Element is right and while the debt ceiling is more of a psychological barrier...it is still an unwritten contract between the govt and people that the govt cannot (theoretically) spend it's way to oblivion without some checks and balances...or at least pause to debate the issue. To eliminate the debt ceiling is to fully agree that debt and deficit's don't matter. That would make Krugman and wacked out Keynesians happy, but in reality debts and deficits DO matter because when someone can't pay than someone doesn't get paid. You can continue to print and punish savers but that creates financial repression which over the long run drastically reduces the spending power of the private sector middle class...which lowers gdp, tax revenue etc.
It is why Japan, Argentina, and most of sothern Europe are where they are. They have believed the fanatsy that you can always grow your way out of debt. That's true...until it isn't. Spain was booming and invested heavily in infrastrucure and everything else under the sun. When growth slowed their economy began to fall apart and now at 26% unenemployment will staggering debt. Japan's debt to GDP is over 200%. 67% of all tax revenue is to pay interest on debt. The govt has intervened 5 times in 2012 and the situation continues to get worse. For Japan, Argentina, Europe, and the US it is now virtually mathmatically impossible to grow our way out debt. So it's now or soon to be down to restructuring that debt or defaulting in Japan, Greece, Spain, Italy etc and soon to be that way here. You can be spending 50% more than you take in and have 121 T in unfunded liabilities and expect anything short of drastic spending cuts to and restructuring to fixc the issue....especially in an environment that restricts innovation and small business creation. The "fair share" argument is complete nonsense because what you would raise on the revenue side is a pittance or as I like to say...a scratch on the titanic. Take out loopholes, yes....GE paid zero in taxes last year but after that the majority has to be a reduction in spending.
Who wants it raised? Not me. We need to stop this over-spending....now. Big pain...yes, but lets get it over with and quit dragging this stupidity out.
I need a Hawaiian Vacation paid by my company or taxpayers.
Yes we can , Yes we can.
WTF. Get back to work you fucking morons.
Barack Obama is a fucktard
If the politicians and wallstreet get pulled off the cliff as well then let it rip.
Seems to be one major bullshit issue after another lately of mass proportions, 21s eow, gun control, the fiscal cliff etc etc etc please lord, please have some alien abduct my ass and get the fuck off this looney rock.
"I didn't ask for the anal probe"
"I didn't ask for the anal probe"
"I didn't ask for the anal probe"
"I didn't ask for the anal probe"
The article is an odd mixture of selected fact and inserted propaganda. Then, adding insult to injury, we are given a forecast of events yet to happen, based on conjecture arising from the slanted, incomplete facts and the agenda driven propaganda inserts that inform the article.
What a waste.
The article is a perfect example of economic deception, based on hyperbole and political agenda drivel of which this quote is an example:
"Everyone knows what happened what Boehner was finally unable to get even the votes needed for "Plan B." And what happened after that too:"
The "everyone knows..." Splurb serves to excuse the article from saying what happened, let alone a proper assessment of the significance of what everyone knows happened.
What happened should have been stated and not inferred; and, more importantly, the consequences of what happened should have been made a central part of the forecast of events yet to happen.
Instead, we are given a stupidly incomplete forecast of political direction.
The exclusion of the plan b consequences is equivalent to overlooking Gettysburg when discussing the outcome of the civil war.
But then they'd have to admit that 'Plan B' was both an abortion AND poison pill (never meant to pass muster, just provide cover fire on the network snooze).
What needs to be done can only be done in a crisis...bring it on!
A "fiscal cliff" would provide an excellent smokescreen for all kinds of mischief the government and Fed can engage in.
Not to mention a late-breaking pork and earmark marathon.
From the beginning the deal has always been to go for automatic cuts and tax hikes on the conclusion of no deal.
This is the status quo for the political blame game, both sides get to say we didn't want this and American tax payer gets the fallout.
Well, just wait until the AMT starts kicking in on people who 'earned' 50k from selling a house due to putting a spouse in the hospital, or a farmer passing land to his son and paying a huge inheritance tax. Then we'll see how much both sides 'won'.
Of course, with half of the US sucking off the gubment teat, who the hell knows anymore?
It is all very easy, we (US of A) start another fucking war. Iran, Syria, some fucking shithole country in Africa, Pakistan, they were harboring that 911 guy! We have been doing it for years, decades. Put a do-the-right-thing face on it and a way we go! Ideas: WMD, you need democracy, stop the killing, we well do it for you. Examples: Vietnam, stop the fucking spread of communism! Iran, WMD, Korea, OMG, the commie's are overrunning the pennisula! Our super-socialist military can be fucking prima donnas and say their saving the world. Please note that I left out WWII. That was a just cause because we had a couple of fuckers (Hitler, Muso, those Japs) trying to conquer the world like Alex the great. Happy Holidays!
I almost forgot. Make sure the CIA (Dept. of War) is involved like they were in the making of the Panama Canal. Provide support for those fucking rebels in Columbia, so they can create their own country called Panama. Oh, lets see, we'll calll it manifest destiny! Oh, oh wait a minute, that was when we were land grabbing in the West and slaughtering the Indians. Oh fuck we'll think of some other justification. Was'nt it neat that all we had to do do is buy Alaska from the those damm Ruskies. And buy Lousyana from those stupid Frenchies. Buying is easier than fighting. Use Burma Shave!
'Fiscal Cliff' summary:
"We all know what to do, but we don’t know how to get reelected once we have done it."
Jean-Claude Juncker.
Guess who doesn't have to worry about being re-elected?
Doesn't really matter anyway because as Knuckles points out so succinctly, any kind of viable 'fix' would insure that either party would never be elected for another 50 years and would possibly have be escorted out of Washington by armed guards in fear of their very lives.
Fixing anything is politically impossible, so it shall remain unfixed.
Until...The End.
A more useful discussion would be what will be it's replacement and how to implement it.
Not sure what anybody is surprised about? The federal govt controls more of the economy than it is mandated to, by the US Constitution. Now it has mismanaged the economy because it has eliminated the free market; and the incentives of politicians and bureaucrats are not conducive to managing the US and the worlds economy. Surprised?!
Now you say things like, "boner isn't smart enough" or " Bathhouse barry is overstepping". No shit, and you probably think you are smart.
We fucked ourselves.
Whats so impossible about coming up with a figure for the additional (net) gov´t revenue needed and split it $1 of tax hikes for every $1 of expenditure cuts. I can´t help thinking that the voters would understand it.
Because you couldn't possibly raise taxes enough and keep the country out of recession. There is a 1.2T budget deficit and 10K being added to entitlements a day. That would require 1 M in revenue/spending cuts to balance the discretionary side. Then there is the 251 B a hole the non-discretionary side is running and with 10k being added to entitlements and the interest on national debt both growing dailey the non-discretionary side will continue to go up exponentially. The hole was 171B ion fiscal 2011 and 251B in fiscal 2012...see the trajectory?
So just on discretionary side, to balance and stop the bleeding, you'd need an influx of 500 B a year...or about a 20% tax hike in ALL taxes. And you'd need to cut the discretionary budget 50% (that is everything except entitlements and interest on debt). That's your 1 for 1. Then there is the historical link between revenue and GDP....which has stayed in range of 15-20% no matter what the tax rates. WHy? Because taxes hurt GDP by taking money out of more efficient private sector and let the inefficient govt use it less effectively. So the actual revenue you get from taxation is much less once it starts detracting from GDP. And since 70% of gdp comes from consumer spending what would a 20% tax hike do to most people's discretionary budgets?
Take the loopholes out of the indy and corporate tax code and raise some revenue on internet taxation ect but you really need 3-5 times spending cut for every $1 in revenue to even have a chance of making a dent. To get anything balanced on nod-discretionary side you have to reform entitlements and change the tax code. And if inflation ever really takes off, good luck getting the govt to raise rates. Every 1% rise in interest rates will cost taxpayers an additional 150 B a year on interest on debt. If rates rose to 3% you'd be spending about 700B a year on debt interest alone (about 30% of all tax revenue) It's not politics it's just simple math....and the math does not work unless you think the US can grow at 8-15 a year gdp for at least a decade.
TEA PARTY NEWSLETTER.....SHORT THE MARKET GO LONG TVIX......THEN AWAIT NEW ORDERS...
So, when we go off the fiscal cliff, what is the appropriate attire for such an event? Formal evening wear? Business casual? Halloween costume? I favor an old-fashioned leather flying helmet and goggles. And nothing else.