Market Currents
House Republicans won't bring their "Plan B" tax-cut proposal to a vote tonight, as Speaker John...
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Thursday, December 20, 2012, 8:11 PM ETHouse Republicans won't bring their "Plan B" tax-cut proposal to a vote tonight, as Speaker John Boehner says he doesn't have the votes; the House will recess until after Christmas. DJIA futures slip 0.2%. Boehner: "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff." Updated: S&P 500 e-Mini futures dive, limit down.
This news story has 420 comments:
It will take the markets another 3 years to recover from this Black Christmas.
Can't wait to kick all these idiots out of congress to try to get a real job.
Watch the futures... it's NOT funny
This is a full blown political crisis coming on the heels of based on my sentiment measures a blow off top in the market. I believe a nasty correction and possible bear market are at hand. I have been long since last December and am no permabear.
Man of the Year
Not sure why you are blaming the republican party for standing up to Obama and his failed plan to destroy America. We all know that raising taxes will not solve our problem. In fact, it will hurt us. So why do you continue to applaud our president even tho he is doing everything wrong. The republicans are trying to reduce spending, lower taxes, make a smaller government and you think this is bad. Well, unless someone can show where logical financial thinking is bad, then best to take issue with Obama's plans. Haven't you figured out that after 4 years, his plans have not worked?
Amazing.
Most of people I know have 1 cell phone. Under the free cell phone program Obama supports (Bush introduced 1 landline per family), people on foodstamp have 3-4 cell phones.
Billions being handed out to solar companies who donates most to Obama campaign. They files bankruptcy and sell assets to Chinese companies. Great ways to waste tax payers money.
Rule 1 of wealth building is by saving but not by earning. Unless you know how to save, it will never be wealthy. Does not matter how much you earn. Obama knows well how to waste tax-payers money on buying votes.
Let's go over the cliff. We need both massive spending cuts and massive increases in taxes on the rich -- a penalty tax if you wish, not for being succcessful, but for being successful by inflating debt, which is a false wealth.
Cut the debt. Nothing else matters at the moment. Debt is like snow on the roof of your house. A thin layer means nothing; it begins to build up, and one doesn't even sense the damage being done; actually, one has no sense of anything being wrong, until the roof caves in (2008). Bernanke is continuing to add more snow to the broken roof (cheap money is snow, in this sense, more water). We need to dry out (in the alcoholic sense also). There is only one way to dry out the world: higher interest rates.
We need to make several million bumper stickers:
"Obama=Chavez"
Devious plans behind a charismatic front. One positve, he has only 4 years to ruin our economy, while we and our cildren and grandchildren have several life times to fix it.
http://reut.rs/TcAvaZ
http://fxn.ws/12tLOk9
Hugo Chavez
Fidel Castro
Barack Obama
This is about living in reality or living in fantasy land. This is about realizing the effects of your political actions or clinging to idealogical purity. After the "Plan B" fiasco, everyone will rightly blame the GOP for us going over the cliff.
From the Dec. 15th edition of the Economist:
Republicans have little leverage of their own. If the Bush tax cuts expire, Democrats will presumably simply propose to restore them in January for those earning less than $250,000, daring Republicans to block them. A recent poll by the Pew Research Centre and the Washington Post found that 53% of voters would blame Republicans if the nation toppled off the fiscal cliff, while just 27% would blame Mr Obama. Some Republicans have suggested giving up the fight on tax rates, and instead insisting on entitlement cuts as the price of raising the debt ceiling, which the Treasury is expected to hit in February or March. But Democrats consider that an empty threat; if the Republicans don’t want to be blamed for a recession-inducing rise in tax rates, they certainly do not want to be held responsible for a panic over possible default.
These dynamics all work in favour of a deal, largely on Mr Obama’s terms. But there are two big risks. The first is that it will not be big enough. Negotiators have long thought a “grand bargain” would involve cutting spending and raising taxes by $4 trillion over the coming decade, relative to what they otherwise would be. The $4 trillion amounts to roughly 2% of GDP. But when all the future obligations of the federal government are counted, Alan Auerbach, an economist the University of California at Berkeley, reckons it would actually take higher taxes and reduced spending worth 8.4% of GDP to stabilise the debt at its current share of GDP. The reason is that America’s real fiscal problems relate not to the current deficit, which mostly derives from the weakness of the economy, but from the growth of entitlements over future decades. Republicans have been more serious about addressing that problem, but neither party has a credible proposal on the table.
Boehner's playing the strategy well. Push for a deal and come off as the guy trying to make things happen, and once we're over the cliff the focus will be on the guy that sat back and was disengaged and uncompromising, and that guy is Obama.
Boehner did this country a huge favor last night by exposing the Tea Party Patriots for what they are. I salute him!
I agree. The Kenyan Socialist Muslim will bring this country to ruin, just as he did in the last four years. Markets down. Multiple wars abroad. thousands of people dying. That all happens only during Dem administrations. Compare that with GWB's eight years.
Have you ever heard of a saying that hope springs eternal, but options expire?
GWB brought us peace and prosperity..no wars, money, fame, and fortune...absolutely..he was so smart....
The reality is that Obama can't sustain the Big Government socialism he wants without a hefty and broad-based tax increase. The revision to the Clinton tax rates is only a starting point. He actually needs higher rates than that to close the deficit. You and the other saps that thought $50 billion or so was all he wanted were scammed.
Macro, the issue here is you need someone to hate, and the "rich" make a good target. Obama is in permanent campaign mode, and that means appealing to your tribalist instincts and finding a "they" target to demonize that you can then direct your hate towards. For Obama it's not about solving a problem - the idea that $40 or $50 billion is going to solve Obama's $1.3 trillion deficits is a joke. For Obama it's about finding a target group that he can get the sheeple like you to hate to justify a vote. The "rich" make an easy target for you to blame for your sorry life and lack of purpose.
Also, the markets rallied after Boehner's press conference today because at least someone was trying to do something. Hopefully he and Obama can work out a deal before Congress comes back from Christmas. It should be Reid and Boehner working together though. The President should stop inserting himself in the legislative process. That's not his job.
If I was Obama, I'd be making phone calls to centrist Republican House members tonight to see if he can get enough of them to break away to support a compromise bill. I don't see how anyone can take Boehner serious after this fiasco. Who is Boehner negotiating for?
This marks the beginning of the end of the republican party as a political force in the United States...mark my words..
Whether you are a Dem or a Rep... What Boehner did tonight was really bad. He basically made himself look like he has no political support. Like I said above, Democrats have to be asking themselves "who is in charge over there?" It's hard to strike a deal when you don't know who you are suppose to negotiate with. I guess we will find out how bad Obama wants this to come to some type of reasonable conclusion now. Because he is basically going to have to carry the water for both sides. What a mess.
A bill that all Democrats indicated they wouldn't vote for plus enough Republicans - was shelved. So what.
There is legislation already passed that indicates what will happen in 2013. That bill was a BIPARTISIAN bill. It contains actual spending cuts in defense and tax increases across the board. The only thing missing are the needed deep cuts in entitlements.
Obama has overplayed his hand. During the campaign he kept saying either 2-1/2 spending cuts to one dollar tax increases or 3 to 1. Now he's more tax increases than spending cuts and again the cuts (outside of today's COLA change) are all "allowances" - ie not really identifiable cuts, just promised cuts in the future.
Pretty soon liberals are going to realize that if we don't cut entitlement spending there will be very little discretionary spending left once we get into the next decade.
When Congress reconvenes the republicans are likely to pass Obama's bill - 98% and 2% - with some democrats supporting. But I don't know that the debt ceiling will be included and conservatives will gear up for a huge fight in February on spending. I'm not sure why this wasn't their plan from the beginning - give Obama his tax increases - call them Obamacaresaboutyourmoney tax increases. Then let him own the results..... Trillion dollar deficits as far as the eye can see. And simply refuse to increase the debt ceiling until a balanced budget is proposed by Obama and the Democrats - no proposal simply shut it all down. And keep it shut... for months and months. That would allow all the screaming to subside and an actual debate about the size of our government and whether or not we want to have programs other than entitlements in 10 years.
At this point Republicans have little to lose. They have leaders that can't communicate a vision of success and optimism - without that they've got nothing as the other side are experts at the fear mongering game.
Shut the whole damn thing down!!!
This process started back during the debt ceiling debacle when to get a deal done the President agreed to $1 trillion in spending cuts over the next ten years. The $1 trillion, plus his proposed cuts this time around does indeed constitute a ratio of cuts and revenues very close to what the President has been calling for. For some reason Republicans have been pretending that those previous cuts never happened and they think that this negotiation is brand new and not related to the previous deal that was all cuts and no revenues.
Pure bs. Everyone knows those "cuts" were fiction and only pledged to happen far into the future when Obama was long gone.
Dear Mr. Attorney General:
I note several instances recently in which Administration officials have proceeded civilly against blatant violations of our important financial laws, in part because of the difficulty of proving cases beyond a reasonable doubt, especially where the law may have been somewhat uncertain, but also because of a concern that the criminal conviction—and even indictment—of a major financial institution could have a destabilizing effect. This latter consideration does not apply, similarly, to individuals. It is, of course, the case that no corporation can have engaged in wrongdoing without the active decision of individual officers of that entity. I believe it is also the case that prosecuting individuals has more of a deterrent effect than prosecuting corporations.
I am writing to you as well as to financial regulators, understanding that the decision to pursue criminal proceedings rests with the Justice Department, so I ask that there be a series of consultations involving law enforcement officials and regulators with the goal of increasing prosecution of culpable individuals as an important step in seeing that the laws that protect the stability and integrity of our financial system are better observed.
BARNEY FRANK
Too bad the same solution isn't being pursued for individual legislators for their own blatant violations of our important financial laws and other criminal activities at subverting the nation's economy by transferring title to frn40B per month of real estate to an illegal, unconstitutional and private currency creating enterprise controlled by foreign and domestic terrorists.
End the fed and restore constitutional currency.
imo.
Ask your average Obama voter why they voted for Obama, and all they'll say is that because he isn't a Republican. No other reason. Also, because Obama is Santa Claus- handing out unemployment checks, and food stamps, and healthcare. All at the expense of somebody else. Who? Doesn't matter. Obama is handing out goodies from his stash.
You need to do some research. What occurs when bills are passed promising to cut spending in future years without identifying the programs impacted, is that the CBO enters a line item under allowances to represent cuts to be made that year..... but they are then supposed to become actual cuts WHEN A BUDGET IS PASSED.
When was the last time a budget was passed????? Oh, three years ago.
Even with these allowances showing in out years, the CBO is projecting Trillion dollar deficits as far as the eye can see.
The history of allowance line items turning into spending cuts is ...... nonexistent!!
I read in the news that today Obama said he'd agree to a change in COLA's for SS. That would be the first actual cut proposed by him. If I heard the newscast correctly this is a couple hundred billion over a decade - so about 20-25 Billion a year.
IF we kept the 100 Billion in defense dept cuts (and through in another 10-20 billion from related agencies like CIA, Homeland Security, etc, etc) that leaves about 900 Billion left. That requires real, actual cuts - to real, actual programs and agencies.
When Obama makes a proposal that identifies the agencies consolidated and eliminated.... the programs to be slashed by 50%..... the reduction in disability rolls by 50%..... etc, etc. I'll be the first person to stand up and support his plan. But since he vilified the only person to actually propose a plan (which IMO still fell far short of what is needed), I'm not holding my breath.
We don't need more political BS - we need actual, practical, tough decisions that result in less government spending by large percentages - and not in the distant future - now.
Obama won in 2012 on identifying the board and dividing it up and making sure the pieces that were blue all got to the polls.
Very different. He convinced a small majority of voters that somehow they need the government to economically protect them from their fellow citizens. And he benefitted from running against someone that was so out of touch with the average citizen that it wasn't funny. Romney became rich by trading other people's debt for his equity - folks might not truly understand private equity - but they understood that he wasn't the one really taking risks - that he identified how to make the game heads he wins, tails he wins.
I know of very few people that really have any idea of what Obama wants to accomplish in his second term - raise taxes and then what?
I am just saying.
That's the most irrational statement I've ever seen. The US isn't perpetual, we just don't know when it will end.
Regards
http://1.usa.gov/Ultvup
No mention of budget surplusses.
November report:
http://1.usa.gov/U44aBP
No mention of surplusses.
Please direct me to the CBO report that shows budget surplusses in 10 years.
http://1.usa.gov/Wybd7R
And remember this report assumes all promised spending cuts happen - and that leaves you between 2.9 to 3.4 % according to the CBO. Thats ALL promised spending cuts - including all the make believe allowances that have never actually turned into a reduction in spending. So even fantasy land budgetting doesn't get you a surplus!
Please share the report with us that shows budget surplusses.
Well, the House Republicans can rightly point to the fact they have passed budgets each of the past three years. The Senate has refused to pass a budget. The legislative process is that the House originates spending bills and they go to the Senate. The Senate then passes a bill and the two houses get together and reconcile the bill and each pass the agreement.
So while I think both sides are crooks and idiots, I don't think its unreasonable that the Republicans simply say they are fine with the law as it exists and if the President wants something different he proposes something that the Democrats in the Senate might actually act on.
Personally, if I were the House Republicans I would have passed Obama's exact campaign request and raise the rates on those making over 200K to whatever number he promised. I would have done it November 7th. With no strings attached. No spending cuts. No entitlement reform. Nothing. Then two weeks later after the CBO produced their latest budget scoring I'd ask the president "ok you promised the American people to get a handle on fiscal situation - you've got your tax increase - now what do you want done to balance the budget???" And I'd keep repeating it ad nauseum for the next six months and continually show people that the Democrats aren't intending on cutting a dime of social spending.
We are not insolvent nor bankrupt or even close on either account.
I was alive in 1980 and life was pretty good. We had much smaller government involvement in our daily lives. Local organizations had much fewer regulations to discourage them from helping their fellow citizens. People saved 10% of their incomes. We had inflation, but Volker took care of that (with a recession by the way).
Tell me that any citizen can ever hope to have an idea of what our federal government does. How many cabinets are there today? Does anyone actually know?
The government declared war on poverty in the 1960's.... I'd say we lost. We have multiples of government programs compared to 40 years ago and yet solved what exactly? I guess we have enriched a bunch of bureaucrats but somehow I missed that as the goal.
The budget can't be balanced by just cutting the military despite your simple attempts to portray the choice as military or social programs. Cut overseas bases by 50%. Get rid of one command next year and another in three years. Cut the amount of weapons purchased by 50% over the next two-three years. Cut the amount of support personnel by 50% (and that includes contractors). Leave Iraq and Afghanistan totally. The army should be used to fight wars - which means actually fighting and destruction I might add - not to chase ivory tower dreams of what might happen in a foreign land.
So its perfectly ok with me to balance the budget by cutting the military, Social Security, and Medicare.
In case you weren't alive, Paul Volker incurred a deep recession to cure inflation. If we need to do the same to turn around our fiscal situation then thats what is needed.
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Please show how the numbers work. They don't.
So that means the top 5% paid approximately 600-700 Billion in taxes in round numbers.
Raising their taxes by 20% (assuming you got the 20%) results in........drum roll please........120-140 Billion in additional revenue.
So your already 400 Billion short.
We spend approx 700 Billion on defense (again depending on what is classified as defense). I would agree we can reduce by 1/3 to 1/2 over a three to four year time period. Keep in mind that I've seen estimates that we will spend approximately $50 billion a year on medical services for our returning servicemen from 2015 through 2035. So its likely that a goal of getting to 400 billion a year on defense in today's dollars is probably an aggressive goal.
So $300 Billion is probably achievable with effort. That leaves you 100Billion short there.
Means testing SS & Medicare - to what extent? I think SS spending (on both disability and retirement) is about 800 billion (thats off the top of my head so if I'm wrong feel free to find the right numbers). HHS data shows that 15% of seniors report income of over 50K. Its much better if you look at households where 45% report income over 50K. So maybe you can cut out the top 10% - not sure where the cut off would be but my guess is somewhere around 75K - and you have the problem of do you measure (and penalize) married couples - ie household income or do you measure individual income.
Medicare means testing will be similarly complicated but I'd agree you can cut off the top 3-5% without much pushback. The problem will become are you going to measure income and is it household income.
So you can probably get your 100 Billion by means testing SS/Medicare (probably more if we'd sweep clean the bloated disability rolls - just remove everyone jumping out of their SUV at the grocery store).
The longer term problem with the means testing is now its another welfare program - especially on the SS side.
So optimistically using your ideas your halfway home. Now you have to either find another 500 Billion in revenue or another 500 billion in cuts........
Raise taxes on the top-5% - get $150B
Cut DoD budget to $200B (still the highest in the world by a long shot) - get $500B
Means test SS and Medicare - get $300B
Eliminate cap on payroll taxes - get $100B
So we got slightly $1.05T so far, is that right? Almost makes up for the 2012 budget deficit of $1.1T.
I guess adjusting estate taxes for estates above a couple million dollars will do the trick?
This is not very satisfying for me though, as I would have liked to spend some money on education. That I guess will have to wait till we come out of the recession and the social safety net spending drops.
Anyway, it is entirely doable. The real deal is cutting the defense budget.
Leaving to one side the issue of whether cuts of the scope and magnitude you describe should be made, we should be cautious about assuming that such cuts could be achieved within the short timeframes you envision without incuring many unintended negative consequences. The old saying that one can never really go home comes to mind.
For starters, international trade patterns have changed radically during the intervening years since the 1980s. It is highly doubtful that the US, a without painful transition over several decades, could service its public debt and international obligations faced with the cuts in question. The capacity to buy foreign inputs and finance the selling of exports would be seriously disrupted if the pace of reductions was forced as you suggest.
Similar observations can be made concerning the management of public debt at the federal, state and local level. Likewise, the management of personal debt obligations and credit arrangements.
The economic, monitary and fiscal environment together with the nature of economic production have changed radically and this fact precludes a return to a 1980s state of affairs. Even an approximation of the 1980s involves a long term and difficult period of transition and adjustment.
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I agree the Defense budget needs to be cut - but can you provide some details on how you get down to $200 Billion? Keeping in mind we will spend 50 billion on health services yearly for wounded veterans for at least the next two decades.
I'm not an expert at defense spending and there is a lot to be cut, but I find it hard to see us getting much below $400 billion in a short time frame.
I'm sure your correct that there would be unintended consequences (I'd argue over the long haul the vast majority would be positive).
But what about the consequences about what are currently doing? I'm certainly not excited about the prospects for my grandchildren in comparing them to the opportunities I had in my life. And I think it is entirely wrong that we leave our children and grandchildren in a fiscal position that leaves them living in a weakened country with fewer opportunities than we had.... all because we want to vote ourselves programs to take care of everything and tell no-one the word NO.
I'll take my chances with the consequences. I should shoulder them - not my children and certainly not my granchildren.
I will believe to my dying day that the removal of government from our health care system would remove so much "costs" its not even funny. And yes, you would be able to find the people that don't receive "free" care that they now receive.
Our federal workforce is huge and overpaid in general. I have no issue gutting things like Homeland security, cutting Defense over three to four years, capping federal pensions at 55K period - no exceptions, raising the SS retirement age to 70, raising Medicare retirement age the same amount, and even the small things like Congressional pay by 50% and removing all of their lifetime "benefits". I'd try to remove 70-80% non-violent people from our prisons. I'd break the teacher's union. The list could go on and on!!
Money spent would be what is needed to protect OUR country - not the entire world. NASA, NIH for research, Education loans for actual universities and colleges (not the I can attend college in my pajamas for profit crap) - with reasonable limits - which would constrain tuition and force higher education to cut administrations. Infrastructure directed towards things like a new electricity grid, preserving our fresh water, RESEARCH for renewable energy, Justice department. I'd totally reorganize our bureaucracy - we need to eliminate and combine departments and agencies and move from paper pusher to regulators in the field where they are needed.
The list of "opportunities" in our federal government is beyond belief - and until we start doing some drastic things in regards to change we will continue on our downwards slope in comparison to the rest of the world, and more importantly in regards to our liberty and freedom.
If I was magically the Vladimir Putin of the USA we would get to find out what all those unitended consequences are.
But that's just it, you won't raise 550B. You have to understand how our system works. The gov is not like you or me, it doesn't close deficits by earning more. A gov is not like a person or a collection of people in a business activity. Additional revenue is not more earnings. When a gov under, especially under our monetary system, raises revenue it doesn't do it by producing more products for the economy, it does it by taking from the collective savings accounts of the populace. Our gov is more of an accounting entity like a HC with a bunch of subs.
What you are saying with this statement is that a company with a loss on a consolidated basis can fix that loss by having the HC charge more mgmt fees to subs. This just simply can't be done with the system that we have. We are not using gold as money mediums and we don't have a currency backed by gold anymore. You have to leave these archaic notions and start understanding how our system works.
Look, other countries are doing it just fine, the USA can as well. No one asks the question how the kids whose food stamps got cut is going to buy food, but everyone worries how the DoD is going to make their ends meet. It is rather eye opening.
The DoD budget apart from Iraq and Afghanistan (which I agree can basically be cut to zero simply by packing up and leaving - we do have some commitments to Central Asia bases where we have leases), is about $550 Billion.
$53 Billion is for the military hospital system. By reducing our force size there is some residual savings. But that number isn't going to change much
1/3 of the budget is basically pay, health care, pensions for our forces. By reducing the size of the force you get a corresponding savings. If we cut our forces in half we'll save about $65-$70 Billion in this category.
$50 Billion is for the Reserves. If we said we'd cut that in half thats another $25 Billion.
200 Billion is Operations and Maintenance. This includes all our bases, maintaining our equipment, running our ships, planes, etc. Although there would be a time lag we could theoretically draw that down by half as troops were drawn down. I think you'd find this challenging but lets say it can be done. Thats another $100 Billion.
$100 Billion on procurement - about half of that I believe is for weapons, planes, ships, etc. Lets say we can cut weapons purchases by 75%. And the other 50 billion can be cut in half due to troops being cut in half. That would get you another $60 Billion.
$70 Billion on Research & Development and Testing. This is where you have.to decide, personally I want to keep developing the latest technology and weapons but buy much less of them. But lets be generous and say we can cut it 50%. Thats another 35 Billion.
The rest of the budget is $15 Billion. Lets just say another 7 Billion there.
That all adds up to about 300 billion in savings. To achieve that we have to have our allies take over many duties and activities (which I'm all in favor of) and it would bring our defense spending to a level of about 1.6% of GDP for defense spending. For comparison sake Russia spends 2.8%, UK 2.7%, China 2.4% (estimate), Germany 1.3%.
All this leaves you with $250 Billion in spending. I don't believe it can be physically done tomorrow but the majority could be done quickly - say in 2-3 years. I would argue that $300 billion allows you to fully keep developing the latest military technology and maintain security while having a much smaller force.
Practically speaking I don't see a path to $200 billion. We'd have to eliminate all our nuclear weapons, have no overseas bases, eliminate much R&D, have no reserves, etc. At a higher level I like 2% of GDP as opposed to the 1.3% your 200 billion represents.
And finally, I'd also add that I'm all in favor of doing the tough stuff to reduce our military spending. Along with that comes the tough stuff to reduce health care spending, Social Security spending (especially cleaning out the disability rolls), and doing the same type of reform and downsizing throughout our federal bureaucracy.
My real point was simply that cutting too rapidly and too deeply now would be destabilizing and that this would have negative consequences that would, amongst other bad things, even thwart many of the positive outcomes you envision. I would agree with you that there should be no delay in identifying programs and services that no longer serve a justifiable purpose or that are ill-designed to serve their purposes and that savings or reallocations there should be vigorously pursued.
That said, there are many programs and services in the public sector that are needed and underfunded at present and this should also be addressed as part of the rebalancing process. Further, cutting public sector expenditure at a pace that exceeds the capacity of the private sector to pick up the resulting slack would itself slow the economy and, in addition to the resulting growth in unemployment etc., would itself cut tax revenue thereby increasing public deficits and debt. This needs to be avoided.
In short, this all needs to be done intelligently over time.
I agree with much of what you say, but you replied without answering the one question I asked - But what about the consequences about what are currently doing?
How intelligent is our current fiscal situation. I'll suffer the consequences of too quick of an action rather than suffer the consequences of more of the same.
And sadly, those not interested in change will take your rationale (which I largely agree is true), and use it as the excuse to not change anything and string things along until the next diversion comes along and allows them to continue the path we are on.
No solution will be pain free - and those in the generations that have created this mess should shoulder that pain - myself included. Lets get it over with!
I am all for Medicare cuts as well. The way I would do it is give Medicare the right to bargain with the pharma companies. That will reduce Medicare spending tremendously. Medicare is the 800 lb gorilla and trust me, if unleashed it can negotiate down prices for doctors, hospitals, pharma companies, what have you. The Republicans have forbidden Medicare form negotiating with pharma companies, however. Remove that restriction see the costs fall.
I tried to show what other countries are spending in comparison - and where your 200 Billion would put us from a practical perspective.
However, I agree completely that we need deep spending cuts in all programs and areas of our federal budget.
Merry Christmas
Few if any, and certainly not me, would suggest that the fiscal pattern of the past four years (or of the last 40 years, for that matter) can or should continue into the future. The real question is how best to change direction. Arguably the optimum short and longer term measures differ and this paradox makes, I suggest, debate about annual US federal budgeting so fraught.
Some, treating the question as largely one of bookkeeping, advocate steep cuts in government expenditure, the sooner the better. Within this group heated debate takes place whether such cuts should be accompanied by various mixes of tax cuts or increases. To my mind, focusing excessively on some version of this bookkeeping fixation poses the real and immanent risk of triggering a deflationary recession or depression for the reasons suggested in my earlier comments. On the other hand, serious efforts along the lines I suggested in my preceding comment to reassess public program suitability, efficiency and effectiveness and reassign fiscal resources accordingly should not be delayed and I agree with you that defense spending should be a prime target for such a streamlining review.
The paradox rests on the current need, I would argue, for targeted increased fiscal expenditure on public infrastructure and to shore up transfer payments of a safety net nature in order that employment and necessary consumer spending by low income sectors of society are not savaged in the effort to begin addressing the longer term necessity of achieving a better fiscal balance.
More controversially, I would also argue that to better achieve the longer term goal of a better fiscal, social and economic balance, the US needs to seriously consider increasing taxation focused upon corporations and the top 20% (with special attention to the top 1%) of the population. I’m a Canadian and I generally therefore try not to become too embroiled in the details of the heated US debate about the role of government; It’s for you Americans to work out after all. However, this is a question that we in Canada have, on balance, tended to resolve somewhat differently than you have and, arguably, we have benefited thereby.
In short, a willingness to make hard choices and suffer the consequences where warranted is commendable but, if done without sufficient forethought and care, this can itself cause serious and depressing results.
stop all these F-35 projects and all the other stupid huge military expenses.
All these Republican Macho's who send the poor/immigrants to fight stupid wars in places we never heard off, all for the Republican Industries' earnings.
Or... we can continue to make these stupid killing machines and have a $1T deficit. yes?
And where do I take the missing $320? the tax rate above 250K gives what? 1.2T?
Wall St, the banks, The Fed, The tea party ... all can go to...
Looks like someone stopped going to school in the 3rd grade...
Yes, the military budget needs to be cut, I'd like to see it cut gradually, over the next 10 years, by 2/3rds. Far too much money being spent to be the worlds police force, but we need to get energy independent before we go down to the skeleton crew that can defend our borders...
http://bit.ly/UgKbDo
http://huff.to/UL3XUO
We have been in a nearly continuous state of distance foreign warfare for at least 4 decades.
How many Democracies have we setup in that time? How good are we, really, at nation building post WW2? Why do we go to war, spending trillions and losing the lives or our sons and daughters based on, at the best, shoddy intel?
Why is it that most fiscal conservatives on the right want to continue to expand the military? 70% of us, that is most of us and includes both sides, are tired of all this damn war mongering. I'm glad people are finally starting to talk about this huge bloated elephant in the room.
I'd vote tomorrow for closing 50% of our overseas bases over the next two years. I'd vote tomorrow for reducing our weapons purchases by 50% over the next 2-4 years (keep developing but buy much less). I'd vote tomorrow to remove a command next year from the military infastructure with another one three years out.
The goal should be to spend 50% less in three to four years.
But the same is true for Medicare, and to a lesser extent SS.
SS disability has become a truly abusive program. It is functioning as early retirement for those folks who go to the right judges. Medicare/Medicaid is simply driving UP prices and directing doctors to perform the medicine best rewarded by the government. Government needs to try to remove itself as much as possible and allow the marketplace to function.
SS was introduced under FDR. The program was established to provide minimum level of income for those whose lives exceeded the average life expectancy. Over the years it was turned into a retirement program. Its fair to revisit this.
Fiscal conservatives are ready, willing and able to address ALL spending. Its the politicians on both sides that want to look out for whomever is lining their pockets that week.
The ground assault version is too brittle and too fast. We have the A-10 which has performed like a champ in Afghanistan when helicopters could not provide air support due to the harsh mountain cross winds. It's a working system that is cheap and has performed admirably.
The vertical takeoff engine also defeats the entire purpose of using an interchangable design to reduce cost.
You could have stayed with the F-22 for air superiority and gone with a naval variant to meet the Navy requirement.
It would also save a few trillion dollars if we didn't get into these stupid wars in the first place. I agree with icandoitdon, we have been totally irresponsible with our military.
Good observations, but that's not how fascism works....government and BIG business, regardless of party affiliation, working together to make as much profit for themselves, at the expense of the country...
Seems to me people are on food stamps because they need a job. Are you more likely to get a job from filling out a government form and having a swipe card sent to you every month (or however it works)? Or are you more likely to get a job by going to a food kitchen and interacting with people from your community - you know like the wife of a small business owner? The cousin of a HR manager at a local plant? The pastor that knows many local business people?
Lets see government form versus interactions in your community?
Your attempt to frame the question as one or the other is misplaced. All spending needs to be reduced.
This should be the campaign platform for Republicans in 2014. Cut all spending that helps anyone, especially the poor and the middle class.
I see absolutely no suggest from yourself as to how to get to a balanced budget. Just more of the campaign of calling your opponent a hateful person.
Lets see, which type of life is better...... struggle, scrimp by, struggle, persistence, struggle, learn, advance, getting by a little better, learn, advance, achieve, live fairly well, hard work, hard work, adance, live well...... OR Fill out form, stand in that line, you missed a box, get a new form, go into that line, these are the instructions on what you can do, fill out another form next week, go to this agency, go to that agency, we'll mail you something, come back next week, fill out this form, go to that building, we put you on the list, go here, go there, do this, fill out this form.....
Yeah, now who is it that actually cares about people - and who is willing to sacrifice lives so they can say they "care".
Get in early and cover your position(s).....no other way!
This is gonna be a big screw up...Playing chicken just ain't right!!
Get them all out of office!!
The solution to this is to go over the fiscal cliff. This is only going to be turned around by shock therapy for the mass of sheeple. They need to feel the consequences of a bloated government before they'll be willing to take real solutions.
And Alex, it's foolish to believe the Republicans have anything to lose here. If they cave they're not going to pick up any voters that aren't already with them, and they'll lose those that know that the fantasy that is Obama's bloated government will end soon enough.
shortsighted liberals never thought about that when they passed it in the 60s.
Would solve things much more than some class warfare TaxCut.
I dont think the speaker ever thought it could pass, thats why its called "plan b"....it wasnt a realistic plan....
Haven't we seen this across the pond?
I think Wall street has been believing this is going to be yet another mediocre compromise and kick the can down the road scenario.
Maybe this time will be different, maybe we will go off the cliff.
As far as me, I guess I'm just a "dirty/filthy" main street guy working his way up the "dirty/filthy" ladder - my only connection to wall street is the stock I own....other than that, I do feel a little "dirty/filthy" when I take advantage of harvard/yale/ivy league graduates who let their emotions dictate their investment decisions...yeah, I feel pretty dirty about that...
And how is disagreeing with the President racist? Seems to me the Governor of Arizona (whether you agree with her position or not) was attempting to address an issue that the federal government was purposely ignoring.... and then she got to listen to the president lecture her from afar and have people in his administration basically denigrate her. I think you might have had a thing or two to say if you were in the same position.
1) Norquist is a fascist because he is supported by big business, which in partnership with the government, wishes to keep labor down and corporate profits (even profits obtained from white collar welfare - a good fascist government business social program)
2) The Nazi's killed all the socialists.....any questions?
But I don't believe that somehow means Norquist is a facist. He's a single issue lobbyist - deserving to be thrown on the trash heap along with all the rest of K street.
I'm not sure I follow your statement about Nazis as I don't believe I reference them in any post. But I think the Nazi's attempted to kill all the Jews not all the socialists.
Powerful and continuing expressions of nationalism
Disdain for the importance of human rights
Identification of enemies/scapegoats as a unifying cause
The supremacy of the military/avid militarism
Rampant sexism
A controlled mass media
Obsession with national security
Religion and ruling elite tied together
Power of corporations protected
Power of labor suppressed or eliminated
Disdain and suppression of intellectuals and the arts
Obsession with crime and punishment
Rampant cronyism and corruption
Fraudulent elections
So which party does this sound like?
I don’t disagree with the thrust of your comment but do take issue with your use of ‘fascist’ which I suggest is excessive.
Denigration like “fascist” and “communist” are thrown around in promiscuous hyperbole and this excess only serves to muddy debates. While a great case can be made that Norquist adds little of merit to the US economic and fiscal debates and that the strange power and leverage he has attained over the internal politics within the US Republican Party is unwarranted and destructive and is threatening to lead that party and possibly the US itself into a highly damaging dead end. He is not a fascist.
While arguably something of a thug in the way that he threatens individual elected Republican officeholders with primary opposition for straying from this simplistic pledge, his thuggery does not include advocacy of the ‘take it to the streets’ physical intimidation of the Italian Blackshirt squadristi, Nazis Brownshirt, and other paramilitary private arm style of classic 1930s fascist advocates (and, for that matter, of several Western European Communist Parties of that period) . Arguably it is only when a political demagogue crosses the line and becomes an advocate usurping the role of democratic institutions in favour of physical intimidation by private paramilitary thugs that designations like “fascist” or “communist” are warranted.
I therefore agree with the response davidbcd has given to your comment.
14 points of fascism
Powerful and continuing expressions of nationalism - both parties speak of American exceptionalism and tell the masses its their god-given right as opposed to earned through actions.
Disdain for the importance of human rights - both. I see no difference between Bush and Obama on human rights.
Identification of enemies/scapegoats as a unifying cause - you mean like the 2%?
The supremacy of the military/avid militarism - both, and I'll even give you the extreme ivory tower idiots that led us into Iraq were Republicans
Rampant sexism - Democrats. the entire war on women was entirely declared by Democrats.
A controlled mass media - Democrats
Obsession with national security - both parties are very willing to sacrifice our freedoms and liberties to suit their desires.
Religion and ruling elite tied together - Replace religion with bureaucrat and you'll be on to something.
Power of corporations protected - both
Power of labor suppressed or eliminated - Public labor at the expense of private labor.
Disdain and suppression of intellectuals and the arts - disdain for self identified elites is healthy. I believe rich Republicans and Democrats support the arts.
Obsession with crime and punishment - both when running for re-election. And neither party is willing to state the obvious - that far too many non-violent people are in prison.
Rampant cronyism and corruption - Both
Fraudulent elections - while I believe we accurately count the vote - I see both sides trying to change things to benefit themeselves when it comes to actually voting.
So which party does this sound like? - sounds mainly like both parties. With those that want to expand government having built a media to support their views and a strong base of bureaucrats with their own interests to offer the same support.
And rather than focus on parties that have only the party's interests at heart, you should focus on our liberties and freedoms - because as they are chipped away day by day, week by week, law by law, bureaucrat by bureaucrat they become much much harder to get back.
http://bit.ly/N29kza
It is very similar to Marx's 10 points.
http://bit.ly/R9ce6J
Not to mention the similarities to the US.
Socialism, Marxism, Communism, Stalinism, Fascism, etc. They are all the same thing. They are basically systems that rationalize the oppression of the individual instead of protection for the individual. The problem with these systems is that whenever you try to establish a collective that subjucates the individual, in order to do so, some of the individuals in these so called collectives must be given the power of coercion to decide who gets what. As soon as this occurs, the economics are created for a ruling elite and those that are ruled. Europe has been doing this for 1000s of years. The US was an attempt to avoid this mistake.
That attempt is now over. Oppression will now return all in the name of the common good, as it has always been.
P.S. The debt ceiling issue was never going to get resolved properly. Both sides put this fiasco into motion, and neither side has the balls to get us out realistically. Cheers.
.they (republicans) have made such a big, useless, pointless argument about the bush tax cuts....they will NOT affect the 47% or most of the 99%, nor will they really affect small business..and, most large corporations will still be living off the welfare (white collar welfare) that they've been living off the last 50 years (higher taxes or not)...the biggest hit will be on the average Joe Six-pack worker with the reinstatement of the payroll tax (from 4.2 to 6.2%).
Everybody needs to have skin in the game. The unions and the bottom 50% (actually more like 60 to 65% if you include those that pay some but still relatively little) need to be kicked in the butt and start carrying their own weight. Their days of freeloading is coming to an end. The Chinese and other creditors will make sure of that.
Well, then reverting back to the Clinton tax rates will likewise shift nothing to no one. Very astute observation jimmy.
By the way, I can tell why you need a union to keep a job.
See you gentlemen at the bottom!
Article I of the U.S. Constitution requires Congress to pass a federal budget. The Congressional Budget Act requires the president to submit a budget to Congress by February 1 every year. Under federal law, the House and Senate are mandated to reach agreement on a concurrent budget resolution by April 15 of each year. President Obama’s last half-hearted attempt to submit a budget was defeated by the Senate 97-0.
Since the President can't seem to provide leadership, perhaps the Supreme Court should get involved?
I salute Boehner and Norquist. They have done the American people a huge favor tonight, even at the dire personal risk of losing all political credibility and donor dollars. You think big business is exactly happy with them right now?
By the way, as a poker player, all one had to do was look at Eric Cantor walking back to his office on a MSNBC tape after this disaster to see he was emasculated. He had the look on his face like he just crapped himself.
Whether you are a Republican or a Democrat, there is absolutely NO WAY you can call what happened tonight anything but a disaster for the Republican Party as a whole. They can thank John Boehner for that.
Play your little poker political games with MSNBC, but leave the real problem solving to the adults.
At this point the sheeple need a clear choice, and shock therapy if they choose to go with the Dems. The last thing we need is the Republicans to be "Dems-lite" yet again - that's gone on far too long as it is. That doesn't solve anything but just kicks the can down the road a few more years.
The Republicans have two clear choices. They can "stay strong" and watch everyone's taxes increase (which is something they say they don't want) and spending on their key positions like defense get hammered --or-- they can bargain from weakness and at least get SOME of what they want. That's it. There is NO OTHER CHOICE. People like @Cincinnatus may wish there was another option, but there isn't and there never will be. Like it or not, that is how the political system in this country is currently setup. Boehner gambled tonight - and he lost big time. Now the ball is completely in Obama's court. I personally don't believe Obama wants to go over the cliff any more then the Republicans do, but I guess we will know for sure in a couple of weeks.
And yes, Obama wants to go over the cliff. He's never had any strategy other than that. He wins either way, but he wins bigger by going over the cliff. That's the only way to get the significant revenue increases that he wants. Any tax on the "rich" only gives him a small step towards the revenues he ultimately needs to pay for the handouts that he's promised his core constituency.
And you're incorrect that their aren't choices here. There are numerous variants. The two that I would go for are (a) no tax raises and deep spending cuts, or (b) go over the cliff and let taxes rise across the board on everyone and the cuts kick in. Given the current state I'd go for (b).
What I'm most against is what you are for - playing a divisive game of divide and conquer, demonizing the few and pandering to the many, all in an effort to further balkanize the country.
Let's raise taxes on the middle class, give tax breaks to the rich, cut spending as it impacts the middle class (e.g., Medicare/SS) and give spending increases to the military.
Better yet, do it while cutting food stamps for kids like was done tonight.
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What is the source of the %'s? The latest I could find this evening is 2007:
#1 California 3.30
#2 Maine 2.37
#3 Tennessee 2,15
#4 Massachusetts 2.09
#5 Vermont 2.02
#6 District of Columbia 1.99
#7 New York 1.92
#8 Minnesota 1.88
#9 Washington 1.86
#10 tie - Indiana 1.83%
#10 tie - New Mexico
It may very well be that those numbers have changed during the recession, but that doesn't appear like a listing of red states. If it were, romney would be president.
But, they also have the highest Marriage rates, so one must consider the whole picture before deciding somehow there are fewer values present.
Your mostly correct about teen pregnancy, but again part of the number of births is to married southern women. Here is a good site for teen pregnancy statistics and it shows many different breakdowns and profiles for each state.
http://bit.ly/TMtQUP
I'll pass on researching std's.....
He stood for.... taxes on millionaires and billionaires.
And?????? Balanced approach? And??????? Uh, hmmm.
As a sidenote, the value of federal bureaucrats pension and health care benefits are more than a million dollars in today's dollars.... so I guess we'll be seeing the Obama bureaucrat tax coming soon?
If government would cut all spending, we'd end up with many fewer "poor" people.
But hey, its much easier to belittle folks than to actually think through the failed policies over the past 4 decades that have done nothing to reduce the number of poor children, despite too many government programs to list.
And its amazing that the folks that supposedly stand for fairness rejected the Republican offer of eliminating deductions - preferring to keep control of handing out freebies to supporters and telling people in general how they should live. After all, fair share is just for campaigns
Definitely seemed less controversial than the $250K+ threshold but the anti-compromise segment of the GOP (just like the anti-compromise segment of the democrats that refuse to reform entitlements) won out
The list is:
Mississippi
Arkansas
Tennessee
West Virginia
Louisanna
Montana
South Carolina
Kentucky
Alabama
North Carolina
My other comments about education levels comes from examining the exit polling information from the last election. You are welcome to go look up the exit polling information.
Oh, yes lets just ignore the fact that charities filled the void just fine.
Perhaps we just have too many people like yourself - that believes they've done their part by paying taxes and the government will take care of it and you just drive right on by and blame it on someone else.
I take it you actually have nothing to contribute other than insults and belittlement.
Why not embrace the Tea Party Patriots and cut food stamps? That way at least there is hope that poor kids die from malnutrition.
Good points all.
You may find the following chart and statistics of interest as well:
http://econ.st/vnJYeR
Your the one the needs to answer the question. Your policies will create more and more poor people. Less economic growth, more bureaucrats = more poor children = more suffering.
Your in favor of lessing opportunity - you just attempt to disguise it by claiming others are hateful.
You obviously still have nothing positive to add - just belittlement and slurs. Pathetic really.