http://www.oecd.org/social/socialpoliciesanddata/societyataglance2011-oecdsocialindicators.htm

12/14/2012 9:07:42 AM

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/19/the-fiscal-cliff-offers-and-counteroffers-in-one-chart/

12/19/2012 2:13:33 PM

OMG that last offer is total bullshit and worthless

12/19/2012 2:47:22 PM

Looks like "Plan B" would be a significant tax increase for some people

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/19/john-boehners-plan-b-would-raise-taxes-on-the-poor/?wprss=rss_ezra-klein

12/20/2012 4:57:25 PM

the GOP sure is doubling down on stupid

12/20/2012 6:40:00 PM

Not that I'm in favor of this plan, but if you want to raise revenue, you literally cannot due it through just "taxing the rich." Raising capital gains taxes and the marginal rate on those making 250k+ won't solve our problems.

If your starting point is "we need to raise revenue and cut spending" you can't grouse about raising revenue by removing deductions that many, many people take. Reducing or eliminating things like negative income tax (receiving more back through credits and deductions than you pay) and making others actually pay income tax needs to be included, and not just for the sake of fairness.

Spending cuts are mandatory from both defense and entitlements, raising revenue must also come from increasing the tax load at the top and broadening the tax base.

If the public can come to terms with this we might actually see a deal.

Quote :

"Of course, if we do nothing, then the 2001 provisions expire as well and poor families are really in for a bruising."

Oh, and then there's that.

[Edited on December 20, 2012 at 9:29 PM. Reason : asdfsf]

12/20/2012 9:28:10 PM

good job, Tea Party, good job

12/20/2012 9:35:12 PM

Oh, and the reason that graph looks like those making over 100k are somehow getting a break is because they aren't eligible to claim that credit anyway. So yeah, those who can't claim that credit anyway aren't going to be effected. It's a factually true, but misleading graph.

That's like claiming that people without cars are somehow getting unfair preferential treatment by raising property tax rates on cars.

12/20/2012 9:47:25 PM

Plan B is off the table anyway now. Got tabled.

12/20/2012 9:54:44 PM

shouldn't "got tabled" mean "on the table"???

mindblown.gif

12/20/2012 9:58:11 PM

Good. I wish they'd actually put together a plan that has better than 1:1 spending cuts to revenue increases. It's complete horseshit that nothing resembling a decent package around 2.5:1 has even been put forward.

12/20/2012 9:58:33 PM

The whole situation is stupid anyway. The economy is still too fragile to starting cutting debt. If the payroll tax holiday expires then get ready for another recession

12/20/2012 10:04:30 PM

And we've potentially got another debt ceiling debate in February regardless if I remember correctly.

12/20/2012 10:06:09 PM

Is it just me or did any of you previously mistake Kurtis for being not a dumbass before?

12/20/2012 10:12:44 PM

^^^ that's the fault of the fucking Republican Party and Grover Norquist for not jumping all over that when it was offered up in the middle of 2011.

I think Obama threw that out there to them, knowing damn well that they wouldn't take even a great deal like that, just to make them look fucking silly and stupid.

12/20/2012 10:15:23 PM

Quote :

"Is it just me or did any of you previously mistake Kurtis for being not a dumbass before?"

Thanks for that useful contribution to this discussion.

There's no doubt that house republicans have to shoulder much of the blame for this mess, but when the democrats control the senate and the white house you would expect to see more in terms of leadership and being proactive from the President, especially on the heels of a pretty strong showing in the last election.

12/20/2012 10:23:07 PM

No doubt. This entire situation has been playing out since 2010 when the Bush tax cuts expired for the first time.

Raising revenue by taxing the wealthiest Americans is, objectively, the best way to cut the deficit for this single, simple reason: it will have the least negative effect on the economy. This is an indisputable fact. Cutting spending to any area at this moment in time increases the chances of a recession. Anyone who is not primarily focused on raising easy revenue first and foremost and instead chooses to trope on about cutting spending has no idea what they are talking about.

^ Two words: filibuster, gerrymander

[Edited on December 20, 2012 at 10:28 PM. Reason : ]

12/20/2012 10:27:11 PM

Quote :

"Raising revenue by taxing the wealthiest Americans is, objectively, the best way to cut the deficit for this single, simple reason: it will have the least negative effect on the economy. This is an indisputable fact."

It is, but it's not going to do it alone, nor is it an effective long term strategy given the rates of spending growth and projected revenue growth.

What I'm getting at is, that without addressing our spending issues we will just be revisiting this or a similar issue over and over again.

[Edited on December 20, 2012 at 10:38 PM. Reason : sfdsdf]

12/20/2012 10:35:35 PM

2.5:1 spending cuts to revenue increases? Are you insane? The United States already spends less money on social programs than every single industrialized nation in the world and the most glaring result of that is the massive inequality which creates higher crime, poverty, and disease. Cutting spending will not solve these problems. Cutting spending will weaken the economy which will decrease revenue further and worsen the deficit problem. The debt problem will be solved simply by balancing the budget. You don't have to run 40 years of surpluses and carry a debt of $0 to fix that problem.

Ideally, taxes would remain at a constant rate which would lead to automatic surpluses during economic expansions and would lead to automatic deficit spending in economic recessions. Bill Clinton came close to achieving this and going back to at least this level of taxation would be a no-brainer if it weren't for the psychotic faction of voters who want to kill gay people.

12/20/2012 10:50:16 PM

Look, in order to run a balanced budget you need about a trillion dollars. I fail to see the issue with 300 billion in tax revenue increases and 700-750 billion in spending cuts, especially if if comes from a balance of military and discretionary/entitlement cuts. Military spending is massively out of control and could easily be cut without much negative economic impact.

12/20/2012 10:55:24 PM

What entitlements and discretionary spending, specifically, would you be willing to cut in order to achieve this and what effects do you think this would have on the economy? Keep in mind a recession decreases revenue even further.

I don't even need exact figures, just get close.

12/20/2012 11:02:10 PM

Yeah, I'm not going to do that. I will say that we could cut defense spending to 2003 levels and save about 300-400 billion there. If we then reduced total federal spending by 10% across the board you're just about there. It would require doing things like increasing SS age and/or decreasing benefits, maybe by means testing it. It would mean major changes to medicare and medicaid. It would mean cutting pretty much all the bullshit like farm subsidies (which primarily go to large corps anyway) to zero.

I'm not sure what the economic impact would be, but I have no doubt that there would be significant short term impacts that could have a recessionary effect.

Now, if you stretch those cuts out over time and go gradually towards a balanced budget over 5-10 years it's much, much easier to get there.

[Edited on December 20, 2012 at 11:51 PM. Reason : asfsf]

12/20/2012 11:49:59 PM

Honestly, I'm not that concerned if we do go over the cliff. I think the overall impact/damage to the economy as a whole will be pretty short term.

12/20/2012 11:55:17 PM

Plan B? I thought Republicans were against birth control.




Has anyone made that joke yet? I don't feel like reading this thread.

12/21/2012 1:17:04 AM

Just as I guessed... You. Have. No. Idea. What. You. Are. Talking. About.

Quote :

"Yeah, I'm not going to do that. I will say that we could cut defense spending to 2003 levels and save about 300-400 billion there."

This, by itself, would likely create a recession. If you cut this amount of spending out of the military, even if you include the remaining spending for the two wars, you're cutting about 50% of the budget. Not only are you firing tens of thousands of highly skilled, well paid employees, you're massively reducing one of the only sectors of the economy that still manufactures anything and the country as a whole would instantly begin to lose its technological advantage.

Quote :

"If we then reduced total federal spending by 10% across the board you're just about there. It would require doing things like increasing SS age and/or decreasing benefits, maybe by means testing it. It would mean major changes to medicare and medicaid. It would mean cutting pretty much all the bullshit like farm subsidies (which primarily go to large corps anyway) to zero."

Cutting 10% of the budget across the board would be a disaster. Education, health care, food stamps, unemployment benefits, retirement funds, law enforcement, etc. These are programs that mostly affect the lower and middle class, who incidentally, are also the people who spend most of their income on goods and services. This would cripple the economy. I'm sure you've heard about Greece. This would be Greece. The main drivers of the economy would have less money to spend and everyone would suffer.

Quote :

"I'm not sure what the economic impact would be, but I have no doubt that there would be significant short term impacts that could have a recessionary effect."

So basically, I'm right and you're talking straight out of your asshole. This would not be short term. This would create a depression. How, you ask? Because people spending less money would mean that more people get laid off, even less people would have money to spend, and you've just gutted the safety net. Massive human suffering. And guess what, you've still got a deficit problem because of the decreased revenue and increased social welfare spending. You have literally done nothing to fix the deficit problem and you've destroyed the economy.


Look, the deficit is a huge problem that needs to be addressed. But you have got to understand the impacts it will have, not only on the lives of Americans, but on the entire world. This problem was created by tax cuts, two wars on a credit card, and absolutely fucking ridiculous financial regulatory policies which created the biggest recession since the Great Depression. This is not a problem that was created in a day and it certainly is not a problem that can be fixed in a day. Also, any measure which can be used to address the deficit, tax hikes or spending cuts, is very unpopular and is a reality which must be realized. If the federal government is serious about fixing this problem there are two solutions:

1) Freeze spending. This is basically what is already happening. Believe it or not, the federal government has grown at a slower rate under Obama than any president since before World War II. Cutting spending sounds good if your head is well inside of your ass, but to people who know what's going on, they know that cutting spending in a weak economy is a recipe for recession. Even Mitt Romney acknowledged this at one point.

2) Progressive taxation. This means higher rates on high incomes, limiting deductions on high incomes, and for the love of god, going after capital gains taxes, which disproportionately benefit the very wealthy. The capital gains rate means that millionaires and billionaires who obtain most of their income from moving electronic dollars around in an imaginary casino pay half the rate that they normally would while stealing a fraction of a penny from other people millions of times a day while producing nothing. These people do not create jobs, these people create financial bubbles and then extract wealth from the actual working people. Giving them tax advantages is utterly indefensible and undeniably undemocratic.

If your position is that the government should be as small as possible and should do as little as possible, I disagree entirely and there is nothing I can say to you to convince you otherwise. If, however, you believe that the world is incredibly complex and needs some level of macro-level management then my points stand. In that case, you should be trying to make government better and more efficient by educating yourself on how it actually works instead of harping on about some feel-good policy you read in The Economist.

12/21/2012 5:37:24 AM

Quote :

"It's a factually true, but misleading graph. "

There is nothing misleading there, the point is Boehner's Back-out plan would have required lower and medium income people to pay more in taxes, period. I don't really want to argue about it though because he couldn't convince anyone to vote for it anyway.




Now that the stocks are starting to freefall, will the GOP's main constituency finally convince them to negotiatie? Will congress take Christmas off? Will we be alive by the end of today?

12/21/2012 8:02:29 AM

Quote :

"that nothing resembling a decent package around 2.5:1 has even been put forward"

What's the matter with 1:1 with about a trillion in each? Seems extremely fair, especially considering the democrats are coming off a successful election.

[Edited on December 21, 2012 at 10:03 AM. Reason : ]

12/21/2012 10:01:03 AM

Tax the churches. Fix'd.

Actually no, that's nowhere near enough but it's a start.

12/21/2012 10:06:30 AM

I know why the Plan B vote got tabled, but I wish it would go through a vote anyway. Everyone is so concerned with protecting their voting record that they'd rather not vote if the results aren't automatically in their favor. It's misleading to the general public (not like most would notice) but I'd be interested in finding out which representatives were standing their ground and which ones weren't.

12/21/2012 2:14:04 PM

Boehner has completely lost control of this situation. I can't wait for Eric cantor to step into this fight and get bitch slapped by Obama again.

12/22/2012 1:49:55 AM

I'm somewhat inclined to think that's not going to happen.

I'm far from expecting a deal, but I would lean towards expecting Cantor and friends not to openly revolt in the way that they did last time.

12/23/2012 3:03:17 PM

Quote :

"The capital gains rate means that millionaires and billionaires who obtain most of their income from moving electronic dollars around in an imaginary casino pay half the rate that they normally would while stealing a fraction of a penny from other people millions of times a day while producing nothing. Giving them tax advantages is utterly indefensible and undeniably undemocratic."

No. It doesn't. You're conflating 2 separate issues. The 15% rate on income acquired from capital gains only applies to assets held longer than a year. High-frequency trading is a problem, but any gains produced are taxed at the short-term capital gains rate, which mirrors the rates of the individual income tax code.

Long-term gains are taxed at a lower rate in order to encourage investment. The resultant income inequality has been an unintended side-effect. Now I would agree that ideally, investment income should be taxed at or near the same rate as personal income. There is no justification for our tax code becoming regressive above a certain threshold. But as with other tax increases, we must be wary about the impact on the economy. Immediately raising the long-term cap gains rate to 35-40% would have a very negative effect on investment at a time when we need to focus on growth and employment above deficits or "fairness" of the tax code. Allowing the rate to revert to 20% would cause much less of a shock to financial markets and the economy as a whole.

You might want to ease up on reading Taibbi, or at least fact-check his assertions before going on a rant. He's very effective at rallying angst-ridden progressives such as yourself, but his writing is pretty misleading.

[Edited on December 24, 2012 at 3:37 AM. Reason : 2]

12/24/2012 3:24:14 AM

One of the fundamental misunderstandings in this whole debate is that recessions are a bad thing.

A recession would be welcomed right now to purge the excess spending from the system.

12/24/2012 9:04:33 AM

and purge the recovery we have made to date

12/24/2012 9:12:28 AM

Spending is always a symptom, a recession would cause a contraction in credit. Do you have a problem with the amount of credit available now?

12/24/2012 11:36:15 AM

Quote :

"Do you have a problem with the amount of credit available now?"

There's way too much of it available in the wrong areas and not nearly enough in the right areas. It's easy as fuck to get a loan for any degree at any school. Even home loans are pretty easy to get. Starting a business and need 100k to get off the ground, though? Good luck.

It's not just coincidence that it turned out this way. There are certain types of credit that are relatively less risky than others. In any case, with ZIRP, of course there's going to be to a net excess of credit. That is the stated purpose of ZIRP.

Nassim Taleb, Stabilization Won't Save Us: http://www.nytimes.com/2012/12/24/opinion/stabilization-wont-save-us.html?hp&_r=0

Quote :

"Stabilization, of course, has long been the economic playbook of the United States government; it has kept interest rates low, shored up banks, purchased bad debts and printed money. But the effect is akin to treating metastatic cancer with painkillers. It has not only let deeper problems fester, but also aggravated inequality. Bankers have continued to get rich using taxpayer dollars as both fuel and backstop. And printing money tends to disproportionately benefit a certain class. The rise in asset prices made the superrich even richer, while the median family income has dropped. Overstabilization also corrects problems that ought not to be corrected and renders the economy more fragile; and in a fragile economy, even small errors can lead to crises and plunge the entire system into chaos. That’s what happened in 2008. More than four years after that financial crisis began, nothing has been done to address its root causes. Our goal instead should be an antifragile system — one in which mistakes don’t ricochet throughout the economy, but can instead be used to fuel growth. The key elements to such a system are decentralization of decision making and ensuring that all economic and political actors have some “skin in the game.”"

[Edited on December 24, 2012 at 12:38 PM. Reason : ]

12/24/2012 12:34:22 PM

The system proposed by this guy requires the federal government to use more regulation to make sure banks don't get too large and are not allowed to engage in excessively risky trading.

12/24/2012 1:58:27 PM

It's really more of a change in regulations. There are already a shitload of regulations, all of which failed to prevent the collapse and are failing to improve conditions now. I understand that you believe the only option is more regulation on top of what we already have, but there's actually an intelligent approach out there that doesn't involve nationalization of the entire economy.

[Edited on December 24, 2012 at 2:35 PM. Reason : ]

12/24/2012 2:33:10 PM

fixing regulations is "more regulations" when its a position that is not yours, but when its your position its just a "change in regulations"

12/24/2012 2:42:38 PM

No, it's an important distinction. If we're going to have federal regulation, some policies are laws are demonstrably better (or worse) than others. Some should be repealed, some should be modified, and there should be some institutional restrictions put in place. But, really, we have to address the underlying issues, and that ultimately means eliminating many compromised government institutions.

Feel free to actually read the article and respond to it, though.

12/24/2012 2:55:03 PM

Quote :

"It's easy as fuck to get a loan for any degree at any school."

That's potatoes compared to what we are talking about. When we talk about all the credit in the US, we're talking about the entire stock market, the entire mortgage market, all corporate and government loans. The educational part of the market is pennies.

Quote :

"Even home loans are pretty easy to get. Starting a business and need 100k to get off the ground, though? Good luck."

Proof? From what I've seen they sit somewhere around 6%, which isn't that bad. It's dicey, but the big bank's rejection rates don't seem all that bad from the numbers in this article:
http://www.forbes.com/sites/caroltice/2012/07/06/5-big-banks-reject-the-most-small-business-loans/

12/24/2012 4:29:34 PM

^^ so what regulations should be "changed" in your opinion?

12/24/2012 6:07:28 PM

I'm obviously late to the conversation so this may have been covered. But wasn't this already dealt with last year? Seem to remember them making a deal over raising the debt ceiling... they cut a trillion and 1.3 trillion more in automatic cuts go into effect in January I think it was. Something like 645B from Defense spending and 645B Entitlements? If this were true, couldn't Obama just let the Bush tax cuts expire and he would have the extra revenue he wants and the budget cuts without congress? Sounds weird but it looks like the easiest way to fix the problem is for Obama to do nothing. I'm not advocating this strategy, this post is more of a question in general. But wouldn't be effective, at least as far as avoiding the fiscal cliff? (I realize it would cause numerous other problems)

Merry Christmas!

[Edited on December 25, 2012 at 12:26 AM. Reason : MC]

12/25/2012 12:23:02 AM

What they did was basically put it off because they didn't want to fully deal with it then. The tax cut issue is actually from 2010 when they put dealing with that issue off as well. When you see a number like $645B cut out of the budget, that means over a 10-year period. $64.5B x 2 is a step in the right direction, but doesn't really come close to erasing the deficit. There's still a lot of work to be done and they've more or less set a deadline for themselves to deal with these things now because they couldn't handle dealing with it before.

12/25/2012 5:04:44 AM

I'm starting to be in the school of thought that we should go over the cliff, I'm starting to see it as the only way to break up extremist republicans

12/26/2012 1:01:16 PM

I don't think there is a way to break up extremist Republicans. They just need to be marginalized, but it's a long process.

Unfortunately, there us a sizeable portion of the population which will always buy into their "slash spending!!!" rhetoric.

12/26/2012 1:26:03 PM

I'm not worried about "slash spending" as much as I'm worried about "governing isn't about working across the aisle and compromising, its about winning"

12/26/2012 1:38:21 PM

Looks like we are gonna sail right over! If congress gets their shit together and passes something before the end of January I'm sure we will all laugh about this later this year.

Then we get to move onto the debt limit

12/28/2012 9:09:14 AM

They will just blame it on BO not being able to get a good plan

12/28/2012 12:57:53 PM

BO is already reelected. He doesn't give a fuck.

This whole "Lets just go over the cliff - it will fix things" thing is pure political bullshit.

Its just propaganda to give people doubts about the severity of the issue. Most people are too uninformed to understand the full consequences of the fiscal cliff, and if they have doubts about its severity, then it will be easy for them to forgive their favored politicians for allowing it to happen. Democrats are willing to go over the cliff because it will make Republicans look bad, and if they try too hard to get a compromise, it will make them look desperate and weak. Republicans are willing to go over the cliff because they've sowed the seeds of doubt regarding the severity of the fiscal cliff, and the alternative is compromise, which is a more clearly understood failure, which is another card in their opponent's hand when reelection comes.

Apparently, its easier for politicians to dispell a severe-yet-complicated failure than a marginal-yet-simple compromise. Party before the people.




[Edited on December 28, 2012 at 2:39 PM. Reason : .]

12/28/2012 2:25:39 PM