The Fiscal Cliff

[byu71]

I have heard the meatheads on CNN say over and over that at least the republicans have gotten a permanent tax cut in place for the public. I have even heard some of the republicans and a few dems saying the same thing.

So, I guess I am wrong and it isn't same ole same ole. Dems get their tax increase on some and will then work on cutting spending.

Well, listening to the debate the guy from the republicans keeps lauding vote for this because of the permanent tax cut. Finally the dem guy says, look we should make it clear, no one is saying this is permanent. WE need to take a balanced approach going forward at reducing the defecit. The President alluded to that the other day.

Folks, the dems, with the help of the press and Americans need for immediacy, have rolled the republicans again. Taxes go up and now the debate going forward is to have a balance of tax increases and spending. Not the revenue increase we just had, but future revenue increases balanced against spending.

For the middle class here is a warning, heed it or don't worry about it. The rich aren't rich enough to pay for everyting Obama, Reid and Pelosi want to spend.

The polls will indicate early the public want spending cuts. It will be interesting to watch how artfully the press and Obama avoid this fact until they have been able to dupe enough naive people again.

Watch, 5 years from now the spread between the rich and middle class will be even wider. Sure the rich will get hammered, but the middle class will be poorer.

Honestly, if we took all the wealth in the U.S and divided it out equally, how many years do you think it would be before we would be having this same debate about the rich are screwing the poor. 50 years, 100 years, 200 years. My bet is it would only take 50.

[venkman]

Folks, the dems, with the help of the press and Americans need for immediacy, have rolled the republicans again. Taxes go up and now the debate going forward is to have a balance of tax increases and spending. Not the revenue increase we just had, but future revenue increases balanced against spending.

So basically in two months when we're having the next fight the democrats and the media will act as if the prior tax increases never happened, and it will still be all about "balance"? Wow. I can't say I'm surprised but I didn't see it coming. Makes perfect sense though, I wonder if they get away with it.

[Goatnapper'96]

So basically in two months when we're having the next fight the democrats and the media will act as if the prior tax increases never happened, and it will still be all about "balance"? Wow. I can't say I'm surprised but I didn't see it coming. Makes perfect sense though, I wonder if they get away with it.

They might with the media and they might with people or polls but I don't think they will with the House Republicans. We will see.

[byu71]

So basically in two months when we're having the next fight the democrats and the media will act as if the prior tax increases never happened, and it will still be all about "balance"? Wow. I can't say I'm surprised but I didn't see it coming. Makes perfect sense though, I wonder if they get away with it.

They will get away with it. There will be a parade of people spending cuts will hurt. They will appeal to me as an old person telling me they are saving my SS and medicare. Of course who wants to hurt cops, firemen and teachers. Of course there are our students in college. I can go on and on. It won't be hard to demonize spending cuts, what will be interesting is how they advocate for more revenue. I guess we can discuss how the rich weren't hit hard enough. I suspect we will be going after corporations. Those evil rotten corporations.

[venkman]

They might with the media and they might with people or polls but I don't think they will with the House Republicans. We will see.

Right, with the media against them they tend to cave. They have serious leverage with the debt ceiling and should be prepared to shut the government down but they won't do it. I know the Obama Pravda media is a serious handicap to the GOP but at the same time they are horrible about making their case when given the chance.

[Bo Diddley]

Woooooohooooooooo!!!!!!!!

[Goatnapper'96]

Right, with the media against them they tend to cave. They have serious leverage with the debt ceiling and should be prepared to shut the government down but they won't do it. I know the Obama Pravda media is a serious handicap to the GOP but at the same time they are horrible about making their case when given the chance.

I don't consider this one a cave. The Republicans win this tax argument in totality, IMO. They will take the perspective that this settles the government revenues portion and I don't see them being knocked off of that. Either we will have cuts or continued deficits. Wise picks are on the latter.

[Bo Diddley]

A part of me just wanted us to go over the cliff, because I really do hate big government. I don't know if that makes me, as a government employee, a hypocrite or not. But now that Congress actually passed something, I'm just giddy that they got something done in a bipartisan way. One down, one/three to go shortly.

[byu71]

A part of me just wanted us to go over the cliff, because I really do hate big government. I don't know if that makes me, as a government employee, a hypocrite or not. But now that Congress actually passed something, I'm just giddy that they got something done in a bipartisan way. One down, one/three to go shortly.

I also have mixed emotions. I made a short term bet this would pass. I guess we will see tomorrow if the short term fix causes the move in the market most expect will happen.

IMHO, this hasn't fixed the economy in a way that one can with surety think of the bounce as the start of something that will be sustained. I know the investor class is going to make some adjustments, but nothing significant until we see how the next few months play out.

I hope the republicans stand their ground in the next two rounds. It will be tough to go up against a very astute political President and a admiring press. I hope they don't cave to the political forces that line up against them. If Obama wins round two and three, I know what my long term investing philosophy will be, short term bounce or not.

One last thing I have to smile at and yet, well I guess keep smiling. The financial guy on CNN is really a fool. I decided to go read up on his resume.
From Canada, worked for a democrat House Representitive and been a reporter. He is analyzing all this as it has to do with the economy and financial markets.


Note: I have 3 kids who work for the federal or state government. They deserve what they get paid. It does bug me that one of them has won an award two years in a row for superior performance. Yet, she doesn't get any better raise than those who work with her and show up just in time for work and bust out of the room when the last bell rings.

[LA Ute]

John Hinderaker:

It will soon become apparent that the fiscal cliff deal, including precisely the tax increases that Obama has been demanding for four years, makes hardly a dent in the deficit. At best, it will reduce the deficit by five or six percent. We will continue to run up deficits of close to $1 trillion a year, and the national debt will continue to grow, as Obama has always intended. This fact can’t be hidden; it will be reported. . . . All of this is another way of saying that, with the Democrats’ BS about raising taxes on the rich out of the way, we can have a rational debate about the country’s fiscal future. And that is a debate the GOP can win, as most voters continue to believe that it is better to cut spending than to raise taxes on them.

[frank ryan]

John Hinderaker:

ya I'm not sure about assertion that the majority of people didn't want the tax increases. I think the opposite is true.

Regardless, if the House balked it would have tainted everything they tried to budget wise moving forward.

Now the GOP needs to make a case for their economic philosophy that doesn't involve calling their opponents dipshits or communists. They need to venture out into the hostile mainstream media and away from the old white hatemongers of talk radio. It is time for them to be a relevant but responsive and flexible opposition.

[mUUser]

ya I'm not sure about assertion that the majority of people didn't want the tax increases. I think the opposite is true....

Makes sense. The likelihood that those making below $450K care about limiting taxes for those above $450K is low.

[The_Douger]

ya I'm not sure about assertion that the majority of people didn't want the tax increases. I think the opposite is true.

Regardless, if the House balked it would have tainted everything they tried to budget wise moving forward.

Now the GOP needs to make a case for their economic philosophy that doesn't involve calling their opponents dipshits or communists. They need to venture out into the hostile mainstream media and away from the old white hatemongers of talk radio. It is time for them to be a relevant but responsive and flexible opposition.

I'm willing to pay a tax increase if everyone is all in with me.

That said, we won't be able to tax our way out of these deficits.

[frank ryan]

I'm willing to pay a tax increase if everyone is all in with me.

That said, we won't be able to tax our way out of these deficits.

Their has to be cuts, even pinko commies like me see that.

[Sleeping in EQ]

Their has to be cuts, even pinko commies like me see that.

I can see it too. The place I don't want cuts is to education. Young people didn't make the choices that got Wall Street in trouble. Young people didn't have any say in our wars. They haven't had power, and thus shouldn't shoulder the responsibility.

The first things I'd consider would be to cut military spending. Hawks talk about taking bullets away from soldiers, but most military spending goes to fat cats in the defense industry. There are lots of R&D benefits to this spending (as there is to NASA spending) but this is the place to begin.

Next I'd look at raising the retirement age and cutting social security.