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President Obama makes it official, announcing a "framework" for extensions of tax cuts,...

President Obama makes it official, announcing a "framework" for extensions of tax cuts, unemployment benefits and estate taxes, plus a one-year payroll tax reduction. But there's a downside: no relief for the ballooning deficit - estimated $830B for extending the tax cuts, $56B for more unemployment benefits.
Comments (44)
  • Is it less expensive to extend the unemployment benefits or pay for the consequences somewhere down the line? I know that some of those receiving benefits are not looking for jobs because the benefits are more and easier but there are not 15 to 20 millions jobs out there waiting to be filled and everyone knows it. Why punish those who legitimately want to work and cannot find work in order to punish those who are not interested in working? This my friends is what is called a dilemma.
    6 Dec 2010, 06:54 PM Reply Like
  • Nice to see compromise in Washington, DC. Both left- and right-wing fanatics will of course be disappointed but lets get together and solve these very, very difficult conditions.


    God Bless America and God Bless our President.
    6 Dec 2010, 07:03 PM Reply Like
  • God bless the fools who lend us money!
    6 Dec 2010, 07:21 PM Reply Like
  • Good one. We have entered the end game. The left wants government to control everything and provide for everyone through taxation while the right tries to preserve a corrupt capitalist system that can't produce enough jobs to satisfy anyone. The goose is cooked.
    6 Dec 2010, 07:29 PM Reply Like
  • where should they invest???
    6 Dec 2010, 08:00 PM Reply Like
  • food!
    6 Dec 2010, 08:07 PM Reply Like
  • bbro: I've been in precious medals since Nov. 2008.
    6 Dec 2010, 09:24 PM Reply Like
  • That would be ourselves at this point....Fed surpassed China in UST holdings.
    7 Dec 2010, 08:09 AM Reply Like
  • No relief for the deficit? The tax cut extension expires in 2 years. After that the deficit goes way down. On the face of it, this is better for the deficit than what either the Democrats or the Republicans wanted. Of course the tax cuts could be extended again after 2 years, but the time to worry about the deficit impact will be when that actually happens (assuming the recovery has made some progress by that time). Cutting the today's deficit would be an unambiguously bad idea.
    6 Dec 2010, 07:25 PM Reply Like
  • Sure it's all good... let's just add another trillion to the debt over the next TWO years. Seems to me the "unambiguously bad idea" is to not face the fact that our "leaders" have screwed us by kicking the can for a while longer. Fantastic display of cowardice by all parties involved. But hey, you're happy so party on brother.
    6 Dec 2010, 09:33 PM Reply Like
  • Andy - What political scenario will unfold in which the tax cuts are allowed to expire? You seem to assume a democrat majority next election cycle.
    6 Dec 2010, 11:53 PM Reply Like
  • These expiring Bush tax cuts have been a sham since the beginning. The stated expiration date of 2011 was merely a device which allowed the CBO to "assume" that they would expire when making it's annual deficit projections. The CBO and the current Administration "assumed" that the tax cuts would expire, and they made pronouncements about cutting the future deficits based on that.


    Everyone knows that they will not expire, ever. The drama leading up to this extension, including the "Nancy Pelosi conniption" are all orchestrated to entertain the American public and nothing more.


    Anybody who thought that these cuts would ever really expire probably think they're going to get their Social Security money too.


    Go read your Oprah magazines and fugeddaboudit.
    7 Dec 2010, 12:00 AM Reply Like
  • The deficit goes way down? The tax cuts equate to $3.4 Trillion over 10 yrs (assuming 3-4% GDP)....$340 Billion a year...$28.3 Billion a month. Govt. over spent by ~$140 Billion in October alone. The Fed is attacking long term rates for a reason. They know if it goes up, the cost to service the debt alone will crush what's left of the budget.
    7 Dec 2010, 08:04 AM Reply Like
  • A democrat majority? What does that have to do with it? The Democrats want to make the bulk of the tax cuts permanent anyhow. But how about a divided government that can't agree on an extension? It didn't happen this time because Obama knew the recovery still needed a lot of help, but that may not be the case 2 years from now. If the recovery is solid by then, they can do a little theatre where they pretend to try passing an extension, and then both parties can conveniently blame each other for letting the tax cuts expire.
    7 Dec 2010, 03:50 PM Reply Like
  • They've screwed us by not raising our taxes? I'm not sure how that works. How would it be to our advantage for them to tax us now rather than taxing us later? Especially with Treasury interest rates so low. At these rates, they're screwing us by not borrowing a lot more on our behalf.
    7 Dec 2010, 03:57 PM Reply Like
  • Dude, take a look at the bond market, that might give you a clue.
    7 Dec 2010, 06:22 PM Reply Like
  • It gives me a clue that this tax package is expected to induce a recovery.
    7 Dec 2010, 07:11 PM Reply Like
  • Last I heard the rich were not going to get one thin dime cut from their taxes. How then could it "cost" 830 billion? The actual cost could have been 4.8 trillion because the government could have raised taxes on the rich by that amount and did not instead of leaving things as they have been for almost a decade. How can they just go spend 4.8 trillion on tax cuts for the rich? How unfair! That would have more than balanced the budget. This makes no sense? Neither does what's going on in Washington.
    And what a HUGE injustice in extending those damn unemployment benefits! Do they have any clue how many of the uneployed never got any of them to begin with? The sit and starve while two talented losers I know are on paid vacions for yet another year. Both will get jobs the day the benefits stop rolling in.
    6 Dec 2010, 07:31 PM Reply Like
  • That is a myth. In WA state at least, you have to apply for three jobs a week to get continued benefits, and you get audited (called into the office) periodically where you have to present paperwork of the applications, rejections, interviews etc..My wife got $400/wk or $2000/month until it ran out..the job she was laid off of paid her $14k per month. Believe me, she liked that better but still can't find a job.
    6 Dec 2010, 10:40 PM Reply Like
  • Suppose these tax cuts actually serve to stimulate investment. The pie gets bigger. Even a smaller slice of that pie might exceed the larger slice of a smaller pie you might get if the tax cuts expired. I know this is not popular thinking, but it is how I lean.


    On the other hand, as much as I believe yet another extension of unemployment benefits is wrongheaded, if they stimulate more spending [which they do], then it will lead to more tax revenues which will help with the deficit.


    So actually I see both of these tactics as having proponents who claim they help with the deficit.


    A while back, a lot of economists [liberal and conservative] were advising selective gov't spending coupled with tax cuts to boost the economy.


    This is what we got after the mid-term elections.


    Let's hope it is right.
    6 Dec 2010, 07:37 PM Reply Like
  • I like keeping the tax rates lower, everyone wants to say its not fair the rich get to keep their tax cut also but if only the middle and lower class gets to keep theirs hows it unfair that the rich get to keeps theirs??


    As for unemployment benefits, dear golly another 13 months seriously when does it become Welfare?? Vast majority of these people will never go back to work EVER because nothing will live up to their standards.


    This is getting old, we are adults time to have some dignity ang get a job and take care of ones self instead of waiting for mommy and daddy (aka government) to solve our self created problems.
    6 Dec 2010, 07:47 PM Reply Like
  • IMO that any increase in consumer spending is from those who aren't paying their $2500 mortgage payments, and haven't been for an average of 2 years. Unless you live in NY or another NE state that pays up to $600 monthly , UC benefits provide only for necessities and not certainly, for many discretionary purchases.
    6 Dec 2010, 07:52 PM Reply Like
  • The maximum in New York is $405/week:


    Unless you've saved a lot or have a prosperous spouse, $405 a week will not deter you from accepting a job.
    6 Dec 2010, 08:48 PM Reply Like
  • O should have stood firm, let the cuts expire across the board -both Bush's and his - and taken the heat for it next election. At least he could have hung it on the Reps.


    Now, he looks bad to the left for providing welfare for the rich, he looks bad to the right for providing welfare for the poor, and he looks bad to the center for not trying to keep the deficit in check.


    My sense is he is worried the economy is on the brink of collapse and wants to prop it some with money that would otherwise have been called "stimulus" but this way he appears to be a "consensus builder."


    Unfortunately that's a very Carter thing to do.
    6 Dec 2010, 08:15 PM Reply Like
  • Why not get rid of welfare for everybody and let nature take its course?
    6 Dec 2010, 09:34 PM Reply Like
  • Anytime the government is destined to get less, it is a good day for the private citizen.
    6 Dec 2010, 08:47 PM Reply Like
  • They will just print more....
    6 Dec 2010, 11:20 PM Reply Like
  • With the Social Security trust fund running a deficit this year, well ahead of previous projections of 2017 we might just as well throw in the towel and make the situation worse.


    And after the payroll tax reduction expires, how much resistance will there be to raising it back to where it was?


    6 Dec 2010, 08:49 PM Reply Like
  • News Flash! The Social Security Trust Fund has been broke for many years. All that money from payroll deductions that was funnelled into the social security account, was withdrawn by Treasury for use by the government and replaced with Treasury inter-governmental bonds. There's absolutely nothing in the social security account but 'hot air'!
    Now that "crunch time" is here - all the baby boomers are retiring over the next six years, starting now. And they all want their SS that they have paid into for their entire work life. This is what is known as, governmental unfunded liability! Projected cost is 1 - 2 trillion dollars when factoring in medicaid.
    If the money is not there... guess what? Big time trouble!
    7 Dec 2010, 01:58 AM Reply Like
  • Right on, except its not 1-2 T its more like >$80T in unfunded liabilities...
    7 Dec 2010, 01:05 PM Reply Like
  • If we only have the Bush tax cuts extended for another 2 years, then we can expect to have a huge political discussion about whether they should be extended again in time for the 2012 elections, which will again polarize the country.


    Is that the President's intention? To occupy everybody's time and energy with divisive distractions?
    6 Dec 2010, 09:00 PM Reply Like
  • Yes. This is what the debate is all about. The Constitution was supposed to settle it but we don't seem to want to rely upon ourselves and would trade liberty for security. As our Founders knew, we'll get neither.
    6 Dec 2010, 09:39 PM Reply Like
  • Bingo....keep people pointing fingers at each the mean time the POMO bank pump keeps on coming.
    7 Dec 2010, 08:07 AM Reply Like
  • Why should the deficit grow?


    To fund THIS?



    Why should our hard earned go to fund redundant alphabetical nonsense?


    Cut taxes, keep cutting them and then cut them s'more.


    Then, cut them again.


    I don't care if we BK.


    Its better than them stealing our money to fund the ALPHABETS!
    6 Dec 2010, 10:06 PM Reply Like
  • Obama did the right thing. He knows he and Dems will get killed in the next election if the job market does not improve. Unemployment extension will help the people AND create jobs as they spend that money. The other business credits look good as well. He is gambling that the improving economy will be rolling in two years.
    6 Dec 2010, 10:42 PM Reply Like
  • Increase estate tax: This penalizes savers/investors, reducing capital available for new business investment.


    Decrease social security taxes: This provides more cash to the tax-eaters, further accelerating the collapse of FDR's Ponzi scheme. This has zero growth impact, since there is no reduction in top marginal rates.


    Extend unemployment taxes to 3 years: Again, more cash to the tax-eaters, but this also raises the barriers to labor market equilibration through relocation, industry changes, career changes and wage reductions.


    Extend the current top marginal rates for 2 years: Two more years of uncertainty for the people who create jobs, aggravating the disincentive for capital investment.


    Obama's bill has four actions and each one of them reduces the long term structural growth rate of the economy. The economic ignoramuses in Washington are batting a thousand. Obama is moving forward rapidly with his plan to make everyone dependent on the total state.


    Anybody surprised?


    Filibuster this monstrosity.
    6 Dec 2010, 10:46 PM Reply Like
  • Serious question - do you have evidence that the estate tax has a net drag on the economy that is greater than an equivalent amount of money drawn from somewhere else?
    6 Dec 2010, 11:58 PM Reply Like
  • There is a large body of economic literature about tax efficiency. The general idea is that in comparing two different taxing schemes that raise the same amount of money for the government, you should choose the one that negatively impacts economic growth the least.


    If you'd like to read an understandable explanation of why the estate tax is an economic disaster (because it collects almost no money but has a disproportionately bad impact on economic growth), read "The Economic Case Against the Death Tax" published at on July 20, 2010 by Curtis Dubay (click on the link below).



    Of course, Warren Buffet (an inveterate leftist) loves the estate tax because a) he gets to sell life insurance to the small businesses and farms that would otherwise have to sell out at the original owner's death to pay the punitive estate tax, or b) for those individuals who die without his insurance product, he gets to buy their businesses a fire-sale prices.


    Also read William Nack's book "Secretariat" to get an idea of the stupid and wealth-destroying things people have to do to survive the estate tax.
    7 Dec 2010, 08:21 AM Reply Like
  • Both parties figured out the least painful way (until the next election) is to let Federal Reserve print money and to force Asians to buy our treasuries (through troubles in Korea).
    6 Dec 2010, 10:48 PM Reply Like
  • Spend, spend, spend.


    What happened to all that deficit reduction rhetoric before the last election? Oh yeah, the election is over.


    6 Dec 2010, 11:13 PM Reply Like
  • Conversation with a friend:
    Why should I take a job that pays $480 per week (12/hr) when I can sit home and do nothing while earning $400???


    6 Dec 2010, 11:14 PM Reply Like
  • It may be the problem, but let's pretend you were reviewing prospects to hire for a job.


    Would you hire the person who was unemployed for a year or the person who collected benefits for a month? And if you did hire the person who was longer term unemployed, how much would you pay them compared to the person who was not, more or less?


    Yes it is a problem for the economy but it sure looks like a problem for the benefits collectors as well.


    Anecdotally, let me give you some advice. REALLY look into people's resumes, there's a LOT of lies in them these days.
    7 Dec 2010, 08:12 AM Reply Like
  • Investors are missing the 600lb gorilla in the front room - the Lehman-style financial crisis about to erupt iin the eurozone. Forget non-farm payrolls and look at the biggest issue, see:
    7 Dec 2010, 12:45 AM Reply Like
  • This will goose the markets so everyone can enjoy the Holidays and the New Year, then reality and the European debt and the currency devaluations and deficits, etc., will rear their ugly heads come January.


    They are really shooting the moon here, not good.


    I wish there was an answer, but that would have been ten years ago at the least.
    7 Dec 2010, 02:07 AM Reply Like
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