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President Obama's proposal to extend the middle-class tax cuts before reforming the tax code and...

President Obama's proposal to extend the middle-class tax cuts before reforming the tax code and entitlements is a "sucker's game," declares Wilbur Ross. There's no trade-off there, it's just the president saying give me what I want, and I'll agree to talk about the rest later. What's being obscured by Washington is that the fiscal cliff issue isn't about taxes and revenue, but that our country is spending way too much. “You can't solve the bulk of the problem with revenues," Ross says. "It’s not going to happen.”
Comments (39)
  • No, but see, we'll cut spending later. Promise.
    15 Nov 2012, 08:05 PM Reply Like
  • I hope the republicans in the house are listening to Wilbur.....get the spending cuts on paper ....before signing up for rate hikes...compromise is a two way street....
    15 Nov 2012, 08:18 PM Reply Like
  • I thought it's more like "let's do what we both agree on" instead of "let's give me what I want", but I can understand that from Wilbur's perspective it's difficult to see reality for what it is.
    15 Nov 2012, 08:22 PM Reply Like
  • I know everybody wants to compromise but where do you compromise in this situation? Massive cuts in entitlement spending (including defense) pushes the economy into recession. Massive tax hikes push the economy into recession. Kicking the can by "compromising" with a bit of this and a bit of that HAS worked over the past five years as the world seems to have bought it. But will it work again or simply lead to currency devaluation, huge inflation and push the economy into recession? I agree with Paul Krugman that it may be best for Obama to "stick to his guns" and do what he thinks is best. At least that will give clarity of direction (after the almost inevitable recession) and Obama can finally take sole responsibility for the economy rather than playing the current political games. This will likely mean that any Republican candidate will win the Presidential race in 2016 and begin the corporate giveaway cycle again, but what can you do?
    15 Nov 2012, 08:50 PM Reply Like
  • Massive cuts in entitlement spending do not cause recession. It may even stimulate the economy. For one, any cuts that happen probably don't take shape for several years. But more importantly, entitlement programs are merely transfer payments. Money goes from one person to another. This isn't like cutting government jobs, where someone is actually out of work (and hence, goes from being a taxpayer into being a service taker). You're merely saying "we're not going to send this money from Person A to Person B."

     

    The entitlement programs are actually redistributing wealth from one class of people to another, and the class that is paying is generally poorer than the class receiving. In this sense, the programs are distortionary and probably hamper GDP growth and create more poverty.
    15 Nov 2012, 10:35 PM Reply Like
  • Honeycutt... "Money goes from one person to another."
    .... and immediately back into the economy where it continues to recirculate. Currently lots of cash is just sittin' idle, doing nuttin'. Just sayin'.

     

    I understand the pressure from Medicare, VA-TRICARE etc. but the 'costs' don't end up in a black hole. Health care is a huge and productive part of our economy.
    16 Nov 2012, 02:22 AM Reply Like
  • The simple fact that entitlement cuts do not come into effect immediately still means that there is an eventual effect on the economy. Aren't you tired of politicians and bankers simply putting off economic realizations? Don't you wish one of them would actually own up to the problem, take the hit now and then we can start actually rebuilding a vibrant economy again? This "kicking the can" is no way to run a country.
    16 Nov 2012, 08:29 AM Reply Like
  • Obama is trying to keep the masses happy by pinning the tax hikes on 2% of the population. Too bad the math doesn't add up. The "middle" class has to pay more too
    15 Nov 2012, 08:55 PM Reply Like
  • Math was not one of his strong subjects ... marxism was
    15 Nov 2012, 09:29 PM Reply Like
  • I think Obama will then pursue slave reparations.
    15 Nov 2012, 09:33 PM Reply Like
  • Hey, "amen Brother Ross." but elections have consequences...and the fiscal cliff is one of those consequences. the job of each party is to convince THE OTHER SIDE of the rightness of their cause...and this the Republicans failed to do. I understand taxes going up across the board is bad for us Republicrats...but hey, i'd rather see the bills getting paid. bottom line for me "i'm saying Uncle"...been saying it for a long time actually. and unlike other plans the one letting the Bush tax cuts expire is something already agreed to. i believe the same is true of sequestration. "already a done deal." it's well past serious time in my view...let's get this so called "austerity ball" rolling.
    15 Nov 2012, 09:34 PM Reply Like
  • Everyone will take a hit. Not just Rs. I say let it happen. I think it would be smarter politically to just let the President get what he wants, whatever that is. He won, so to the victor go the spoils, as they say. Allow him to own this economy, at last, and give him no easy scapegoats to blame again. If it tanks, he gets the blame. If it soars, more power to him. Life will go on in 2016.
    16 Nov 2012, 12:12 AM Reply Like
  • "If it tanks, he gets the blame." Yeah right. He has not even owned the last 4 years or even the last 12 months why would he own the next 4.

     

    Great at deflection and the press is non existent and a joke. Remember Sam Donaldson? There is nobody like him today. He was a prick but he questioned people at least. No questions today.

     

    Now it's "Mr President are you going to appear on The View? That is so much fun."
    16 Nov 2012, 12:53 AM Reply Like
  • Screw the Bolshevics. I'm clinging to my guns and religion.
    15 Nov 2012, 09:36 PM Reply Like
  • Typical of Wilbur who gets guaranteed loans by the gov't to buy banks that have gone bust. He feeds at the trough like most pigs. If both the dems and repubs want to keep tax cuts for the middle class then it should be signed. Gov't has worked very well for the talking horse and in gratitude he should comply with graciousness. Of course it won't solve the debt problem of the U.S. but it's a small part of a much larger part. A little here, a little there. After all, medicare and social security are going to be asked to give up a litte too.
    15 Nov 2012, 09:56 PM Reply Like
  • Might be a good idea for the fiscal cliff to hit. Obama does not hold many cards. The Reps cannot do much. They really need each other more than either will admit so let the crap hit the fan. The next POTUS election is 4 years away anyways.

     

    People are plenty nervous about the debt so this will only highlight it and then POTUS will come in Jan/Feb and ask for a rise in the debt limit. Those two back to back probably puts more pressure on him than the Reps.

     

    Personally I would rather have the crap hit the fan as it might get us to start taking the debt seriously. And the economy as well. Better now than later. We are heading to $20 Trillion if we don't get serious.
    15 Nov 2012, 10:00 PM Reply Like
  • We could a) raise taxes, b) lower spending and/or c) implement pro-growth policies (cheap energy, lower regulatory burdens for small businesses, less burdensome tax code).
    15 Nov 2012, 10:07 PM Reply Like
  • ironchefw, good idea but more idiots voted against that this election than voted for it.
    15 Nov 2012, 10:18 PM Reply Like
  • So, if you raise taxes, that puts more money into governments hands which you use to encourage more drilling for oil (I presume this is what you mean by cheap energy as natural gas is already pretty cheap and solar, wind, etc. govt investments have not worked very well so far.) Lowering the regulatory burdens and streamlining the tax code leads to some layoffs in the EPA and other government agencies which helps business (hope they don't damage the environment too much more) and reduces the size of govt. This might reduce the annual increase in the size of the debt but I suspect it would simply leave the economy limping along and not do much for unemployment.

     

    I realize that's also not very positive, so here's one thing that I suspect would help though it amounts to another gift for the wealthy. Give a one year tax amnesty to large global corporations to allow them to repatriate offshore profits at 0%. That would lead to increased dividends in one year and an incentive to invest in new American companies. While I find this distasteful, I bet it would lead to a flood of money back into the country.
    16 Nov 2012, 08:39 AM Reply Like
  • The "cliff" is not really such a big deal anyways. Let's hit it, pick up the pieces and go from there. Anything else is just can-kicking.
    15 Nov 2012, 10:30 PM Reply Like
  • So let me get this right, the rich don't want to go back to the Clinton area rates? Is the only thing people remember about Bubba is the blue dress? Because what I remember is unemployment under 4%, balanced budget and a surplus. Isn't that a good thing?
    Also, for those who want spending cuts, look to Europe and understand that austerity does not work. The EU growth last quarter -.1 which is an improvement form the quarter before -.2 growth rate. You need more examples look at Greece & Spain extreme austerity and still no growth.
    And if we are going to cut the Military is the perfect place to start and medicare and social security. We spend more on our military than the next 10 countries combined. Our government spends money on the F-22 which doesn't really work that great since it cuts of the oxygen to the pilots, doesn't fly in sand which means it can't be used where we need it to be used right now. We are about to see a brand new navy war ship the runs on a smaller crew but is more useful than current destroyers.
    Do you want to know how much cutting Social Security benefits would save our country deficit a Whopping $0. You may me saying this guy is full of it but, the Social Security TAX that is taken out of you pay check pays for it.
    I invite you to rip me a part since I am one of the few liberal on here but when you be respectful and use non partisan information
    15 Nov 2012, 10:36 PM Reply Like
  • It will be higher than Clinton-era rates when you consider the Obamacare care taxes that will also hit next year
    15 Nov 2012, 10:43 PM Reply Like
  • You should be very happy. Because if doing nothing and going over the cliff is to happen, it will be just what you are calling for above.
    15 Nov 2012, 10:44 PM Reply Like
  • jd

     

    Actually austerity is forced on the borrowing countries. They don't choose it but rather they are told "No and pay us back now." That creates huge stresses on the borrowing country but they lost control over their destiny when the borrowed more than they could pay back comfortably. We could get to that point although we still have some wiggle room as we borrow in dollars and manage our own currency. But we will get to some flavor of that eventually. It seems like all democracies are destined for it as we look around the globe. It is the gravity of votes and free stuff from the government. It is just a natural force.

     

    Cutting SSA benefits makes our government more credit worth so cut 'em. If we only had 16 Trillion in debt and no SSA, Medicare and future ACA we could relax and hit the beach.
    15 Nov 2012, 11:57 PM Reply Like
  • What our bought and paid for politicians are looking for is a "solution" that will still result in deficit spending and a growing mountain of debt. The drama involved to this point is just a sideshow to give the huddled masses the impression that our leaders will 'save the world' before we jump off that dreaded cliff.

     

    The Fiscal Cliff is that big bad wolf that no one really wants to confront, because it will cripple economic growth in the near term. Problem is, there were two parties that spent like drunken sailors over the past decade that literally built the steep cliff we are peering over.

     

    As long as the Fed enables this behavior through zero interest rates and debt monetization, our Congresscritters will continue to find a away to spend excessively. The behavior is already well-etrenched in the status quo. And these destructive behaviors do not just do a 180-degree turn overnight.
    15 Nov 2012, 11:36 PM Reply Like
  • Votes are tied to deficit spending. Look around the globe. End of story.
    15 Nov 2012, 11:58 PM Reply Like
  • Votes are also tied to money... at least until the money becomes worthless.

     

    I'm with one other commenter (on another thread): this isn't a "Fiscal Cliff"; this is a "Spending Problem". The ratio of spending decreases to tax increases should be about 10-to-1 to make any real advance. And the latter needs to be meaningful.
    17 Nov 2012, 12:10 PM Reply Like
  • I am a simple minded fellow. As such, I believe the way to reduce deficits is to do them the way the average American does. Tighten the belt. Stop spending. I do not believe we should work to simply return 1/3 of our pay in some way or another to the government. If that is truly necessary then the need to spend by the government is completely out of line. How is it with a straight face that we ask people to pay more when some do not contribute at all? As far as entitlements, we need to look at some of our programs. Certain benefits should be used as a stop gap measure to get people over the hump. Based on what I have seen as a kid growing up in Brooklyn, it's not situational, it's generational. It is wasted money. And any mention of it just pushes the political winds to start spouting about unfairness and inequality. What could be more unfair then enabling this mentality with other peoples money?
    16 Nov 2012, 03:02 AM Reply Like
  • “You can't solve the bulk of the problem with revenues," Ross says. "It’s not going to happen.”

     

    This arguement is one of the dumbest being floated right now. There's lots of things on the table, tax increases for 250k+ is just one of them.

     

    Issues need to be addressed, and this Act 1 of a long play. Obama has already suggested he'll look at entitlement cuts and tax reform. The point Obama is making is that they should push through what Dems and Repubs already agree on.

     

    At the end of the day Repubs lost. No amount of maneuvering will change that. They have zero clout to fight the fiscal cliff so they are crying and whining.

     

    It absolutely is the Obama-way or the highway right now.

     

    And I think, for once, Obama gets it. And maybe he will lead, for once, instead of letting himself get pushed around like he has for the last 4 years.
    16 Nov 2012, 05:51 AM Reply Like
  • Yep... Yep... Yep

     

    For those not aware the drop dead date is not till the middle to end of February.

     

    Many Dems believe that they can go back to making the Repubs the "Party of No" which might make the 2014 elections the opposite of 2010.

     

    So who's in and who's folding. Place your bets early.
    16 Nov 2012, 06:35 AM Reply Like
  • "Issues need to be addressed, and this Act 1 of a long play. Obama has already suggested he'll look at entitlement cuts and tax reform. The point Obama is making is that they should push through what Dems and Repubs already agree on."
    Obama has no intention of oil following through with entitlement cuts and tax reform. If the Reps. cave on taxes, they have lost any leverage they would have in the negotiations. Politicians have no character or personal integrity. Believe them at your peril.
    16 Nov 2012, 07:37 AM Reply Like
  • kmi,
    "At the end of the day the Repubs lost". No they did not. The balance of power is the same today as before the election. Nothing has changed.
    President - Dem
    Senate - Dem controlled
    House - Rep controlled.
    16 Nov 2012, 08:39 AM Reply Like
  • " If the Reps. cave on taxes, they have lost any leverage they would have in the negotiations"

     

    What leverage? Wake up.
    16 Nov 2012, 09:31 AM Reply Like
  • "Nothing has changed."

     

    Right.

     

    So. Repubs can continue to obstruct -everything- coming into Congress, and we can continue stalemated till 2014. That's an AWESOME plan.
    16 Nov 2012, 09:33 AM Reply Like
  • kmi

     

    If Obama pulls a Clinton he could have a very successful 2nd term. However Clinton was a pragmatist and was not wedded too deeply to ideology. Clinton talked left but governed in the center.

     

    If Obama stays left or goes further left he will run himself off the cliff as the large debt number will be tattooed on his forehead. Reps don't need to do much of anything.

     

    And the power is not in the parties anyways. It is in the size of the debt. Eventually debt always rules. It is a steamroller.

     

    Welcome to Greece. It is starting.
    16 Nov 2012, 02:10 PM Reply Like
  • Eventually, real reality always trumps political reality. And real reality usually brings an ass whupping with it. Political reality has been having itself a fine romp for several years now, but sooner or later the party is going to come to a big fat painful end...
    16 Nov 2012, 02:23 PM Reply Like
  • Are you incapable of objective analysis?
    16 Nov 2012, 07:45 PM Reply Like
  • Ross and others of a plutocratic frame of mind miss the point:

     

    Our United States of America is a democratic republic that will continue to reject a usurpation of national wealth by the few who flex the whim of the House and various political organizations.

     

    The best thing about the RRR campaign is that it clearly exposed to public view the venality, disdain for personal liberty and co-existant interests of great wealth plus good old 1930s politics.

     

    Congress will have to realize the fact that they are elected to represent each district citizen, not the personhood of corporations, or look forward to a super majority for the DNC in 2014.

     

    My guess is a compromise for Thanksgiving.
    16 Nov 2012, 08:37 AM Reply Like
  • My guess is 'kicking the can down the road' for Thanksgiving.

     

    FIFY.
    17 Nov 2012, 12:12 PM Reply Like
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