There was a lot of hysteria about the fiscal cliff last month, and partisan hyperbole pretty much ruled the news cycle. So you can imagine my relief to find some actual rational analysis that fleshes out what we actually learned from the exercise. Here Planet Money's Adam Davidson breaks it down for us and it's well worth the watch. Best quote: "Talk about [the economy] like what it is: not an existential crisis, not some battle between two fundamentally different religious views, but a math problem, a really solvable math problem."
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I hate when people equate economics with math, like when Obama says "it's simple arithmetic". It's not. Our fastest supercomputers can't figure it out.
Uh oh, a clip from an NPR guy. Commence countdown to Obama whinefest overreaction by all the original thinking "free market" WSO republicans...3...2...1....
How about you explain to us, which you never did in another thread, how stock prices equate to a healthy economy. I am still waiting for your brilliant analysis.
The reason why economic and budget issues have religious hatred level contention is because there are two ways to do things, one requiring more contribution from people and another requiring less benefit to people. I think government should be smaller and people have property rights. Therefore increasing taxes before decreasing spending makes me sick.
Which is the correct philosophy.
Democrats think government is there to benefit XYZ people and we can simply increase revenue from those who are deemed to have too much. Unfortunately, people always want more and you can always go back to the well which eventually leads to less tax revenue and more schemes to get money from the citizens.
So while the budget and economics are relatively cut and dry, the fact that two possible ways to achieve any one outcome causes the contention.
Thanks for the post Eddie. This information should be part of a public service announcement. Or would it kill the media to run this, just a couple of times?
When the gov't can't pay its obligations. The ratio is irrelevant....and the GOP thinks it's there to benefit ABC people. Pick a side. No one's aiming for the center anymore... Funny, and not too far off, but .....are you a troll? I'd like to think that the purpose of this forum is finance first and politics definitely second. Or am I mistaken?
pretty good find Eddie, I like TED for a good evening of thought provoking entertainment by the most lazy means possible. The gentleman certainly made some good points, it's good to know each side are not the heartless jerks that the others make them seem.
I was disappointed though that there were few numbers about the actual 'solvable math problem' that is the national budget, and that graph showing our Debt as a %of GDP approaching that of Greece in a decade is downright frightening. My question to any bond-raiders out there is, at what Debt to % of GDP ratio does it become a problem and the bond markets start turning against us?
I wish every hyperpartisan bloviator out there would watch this.
Great post Eddie.
You're the one trying to make an economic debate. Show me where I said anything about the economy. And since you care so much, my take is the economy will be fine...not great, but okay. But if I lose my job, or my kids can't find one right away, I'd like to think that this country will provide healthcare for us. That if my kid decides she loves women that she can get married like everyone else. That if she wants to be a teacher or any other government worker you hate so much that she can actually make a living wage. And I'm sorry if I think that millionaires and billionaires need to pay more than they currently do (ACTUAL payments are nowhere near their "bracket"). We do need entitlement reform but republicans aren't going to do it, they just want the rich to get richer and cut the poorest out of the loop. Republicans left alone would destroy the country, but luckily their extremist policies are making them more and more irrelevant. The only reason they have the house is shady redistricting, and they may well lose the house in 2yrs anyway the way things are headed.
Well said. Too many knee-jerk reactions on these pages that obfuscate what this is really about. And I think it's a damn shame most of the media and forum posters keep acting like the grinding gridlock is caused by both parties. It lies largely on the shoulders of a very vocal faction of one party. Venture a guess?
I agree with most of the sentiment you're relating, but I don't think a debate about healthcare reform or gay marriage is germane to this conversation.
Frankly, if you're worried about teachers not making a "living wage", you haven't been reading the news for the past ten years. Public school teachers make considerably more on average than their peers in the private market, they receive more benefits, have consistent power over their employers, and have been negotiating wage increases with frequency. More importantly, tenure practices have the effect of keeping underperforming teachers in the classroom.
On the contrary, although I am certainly not a Republican, I believe that the Republican party is also fighting to increase the tax burdens on our wealthiest individuals by closing loopholes. The difference is in methodology. You make the very valid point in your post here that "ACTUAL payments are nowhere near their 'bracket'". If that is the case, what makes you think that raising the tax rate on their "bracket" will make any progress towards changing the status quo? Indeed, the most effective way of increasing tax burdens in a fair and rational way that promotes efficient economic behavior is to simplify the tax code and eliminate complex deductions and loopholes that cause high-income earners to pay effective rates far below their statutory rate.
Additionally, I have a fundamental issue with labeling high-income individuals as "the wealthy" or "millionaires and billionaires", but that's an entirely different issue.
Wonderful Democrat talking points. Glad to know we are piping MSNBC onto WSO right now.
Increasing taxes on people who have more than an arbitrary amount isn't going to balance the budget at all, let alone reduce our deficit. It is a political maneuver. And national healthcare sounds real nice until you realize 1) someone has to pay for it and 2) costs continue to increase at dramatic rates.
Public workers make far more than just a living wage and if you equate unions to anything other than a power and money grab you aren't paying attention.
And I am not the one trying to make this an economic debate. You chime in with your attack on Republicans without offering any content, much like you did in the other post you created "bragging" about how the market is doing great and how we should thank Obama. All without touching on other things which inflate an equities market or how even if Obama helped the stock market increase, it isn't a reflection on the overall economy.
We need spending cuts. Absolutely fact. It is not the governments role to play Robin Hood or redistribute wealth under some 3 year old's concept of fairness. We have ample opportunity in this country for someone to educate themselves, work and raise themselves up. Only thing holding people back is an overly expansive government, one that runs up soon to be over $20T in debt (that will eventually be paid through higher taxes or inflation) and a government that continually thinks it has first dibs on the money that we EARN, instead of coming to its citizens, hat in hand, humbling asking us to give it only the barest minimum it needs.
Life, Liberty and Property. As it was intended and should have been. Probably one of the only failings of Ben Franklin.
I don't care what either party says, they both circlejerked us into the current situation. It's like taking sides with a couple arguing on the Jerry Springer show: uhhhmmmm, it's kind of both of them, and you'd look ridiculous by association.
This 'fiscal cliff' nonsense was contrived and everyone knows this. Plan for a crisis. A real one.
Look for ways to profit from the chaos while protecting yourself.
The rest is noise.
Are you serious with this? I hope you're being facetious. There are ZERO practical arguments against gay marriage.
Zero.
OP, I disagree with how you've interpreted this statement and I think you've misunderstood the speaker. From where I'm sitting, he said:
Which, given the overall tone of his talk, is far more likely.
His points are great and all, but as long as we have limitless money in politics, extreme gerrymandering of congressional districts, media conglomerates that focus on ratings over non-partisan reporting, and a populace that is either too apathetic or too moronic to care, nothing will change.
I think that having more objectively created congressional districts would go a long way towards leading to compromises.
Instead, we're stuck with a bunch of intransigent babies, many of which are on the far right (but not all, some Dems are disgraceful in all of this), who are incapable of compromise and making the actual decisions we need to fix our long-term problems.
What a complete disgrace.
Love those guys over at planet money... one of the few news sources out there that applies rational thought to their reporting.
Can't wait to watch this tonight.
Don't know if anyone listens to their podcast, but their mini-series on creating a presidential candidate based off of conclusions that well regarded economist from all ends of the spectrum was refreshing. Listening to all that populist crap about "47%" and "you didn't build that" back in the fall was turning my mind to jelly. Discussing the fact that the mortgage interest rate deduction is one of the most regressive features of our tax system and it should be eliminated (in the long term) as an objective fact was refreshingly rational.
And lets not forget, Republicans compromised and tax rates have increased. Now it is time for Obama to compromise and cut entitlement spending.
Which is a disgusting name in and of itself since no one is entitled to anything.
So, make a prediction my friend. Obama is in, you know where we're going. Are we going into recession? Will the stock market or bond market collapse? You hoot and holler about the disaster we're facing, but what's going to happen. Ill put my chips down...economy will continue a slow recovery, stocks will rise, we'll see some more corp defaults as interest rates normalize but nothing outside a normal cycle? Our currency and debt will remain rock solid as relative to the rest of the world we are in great shape , while we continue to move toward energy independence, further helping the economy, all the while maintaining a safety net for ppl who fall on hard times. So, now Mr. Fiscal Doomsday, tell us what happens as Obama destroys the free market?
Btw, everyone would be well served to listen to planet money.
Perhaps, then, you should listen to what your buddy at Planet Money is saying in the very video that instigated this discussion. He answers this question quite clearly: if significant measures aren't taken to reduce the federal deficit, our debt / GDP ratio will continue to rise until we end up in a situation not dissimilar to Europe or Japan. At some point, the bond markets reduce their appetite for Treasuries and the FR is forced to monetize our debt, at which point we run into some serious currency issues.
Europe is yet another case study in disproving the thesis that sovereign debt is immune to leverage problems. I don't see economic doom on the horizon, but there can be little doubt that our current trajectory needs to be shifted.
Any point you wanted to make starts diminishing the second you start throwing names around. I laid out my stance pretty well in the previous post. I also made no predictions on the economy as that was not the discussion. You were championing Obama because the stock market increased. My stance was that the market was increasing because of other reasons (QE being one) and that an increased stock market does not mean the economy is necessarily doing much better.
What do I think will happen? Eventually you will have tax rates across the board rise substantially or inflation will take hold. The debt will not be paid down any other way. We have no desire to decrease spending and a $1T or more delta between what we bring in and what we spend. I have little to no confidence in the government projections regarding Obama care which I expect to cost more than is planned.
Unless the consumer comes back, which will happen slowly, companies will not expand. Their wonderful deleveraging and increased profits is driven by uncertainty, fear and less staff doing more. Not optimal for people out of work. So you have a weak consumer demand and a slow housing recovery, the two big drivers of this economy.
Nice to know that when someone questions your stance or political statement you resort to deriding others. Maybe if you laid out an argument in the beginning you wouldn't have drawn my ire and others, as was found in your previous cheer leading post.
Gay marriage ... here are the brilliant talking points.
http://www.nationformarriage.org/site/c.omL2KeN0LzH/b.4475595/k.566A/Ma…
Keep in mind that a gay marriage ban ammendment petition written by this group was signed by all the republican presidential candidates (expect Ron Paul), including Romney. Quite a party...
A man can marry a man (or a woman can marry a woman), but the gov't will not recognize the marriage as equal to that of a man marrying a woman. And thus, will give the heterosexual marriage benefits and standing under the law that it won't give to a gay marriage.
There are no practical arguments as to why this should be. Your semantics are laughable. If you are against gay marriage, don't get one.
I repeat. There are no practical, fact-based arguments against treating gay marriage as equal under the law to straight marriage. None. Zero. Zip.
I have a feeling you'll misconstrue this post as anti-gay, so let me make this clear up front: I fully support the gay community and believe that equal rights for all is a necessity.
I think the problem is that people often have the knee-jerk reaction to bring everyone up into the same government benefits category, rather than considering the possibility that it could be more beneficial to bring everyone down and eliminate a benefit that discriminates against unmarried individuals.
Giving people tax cuts just because they are in a (many times temporary) monogamous relationship sanctioned by the government is insanely unfair to everyone in this country that has no desire to be married. It's nothing more than a large transfer of wealth away from single Americans into the pockets of married couples. There is no sensible defense to such a policy.
The popular response to marriage inequality illuminates a larger problem with the mindset of Americans and Congress today: the solution to every problem is to bring everyone up to the same level of benefits rather than eliminate needless benefits programs for everyone. Both achieve increased fairness, and one is considerably cheaper than the other. A no brainer.
Since government got involved with married it has discriminated against race, ethnicity, religion and no sex. The way to solve this is not to have government accept anything, but to remove government from it.
Real simple. And this is about economic benefit, not marriage. You can go to the lawyer and get your name changed and legal affairs intermingled.
Semantics. Yes, you can get your name changed, but as long as the benefits exist, they should be given to both straight marriages and gay marriages. Otherwise, you're creating a set of second-class citizens.
And, let's be serious, we're not getting rid of marriage benefits anytime soon. I agree that we should, but we aren't. So make gay marriage equal to straight marriage in the eyes of the tax code.
Romney was all about limiting deductions. Romdizzle probably could have eliminated this and made marriage fair again.
But is this really a huge issue? I mean some states are allowing it, some aren't, some eventually will. I am much more focused on our debt, over spending, wars, slow economy, regulation, things like that. This is at the top of the maslow pyramid. Lets get the foundation right.
Gay, straight, tranny, whatever. If you have no job, can't pay your bills, are in debt, food prices increasing, you don't care about marriage or whatever other higher order good there is.
I don't see why you're so defeatist re: eliminating marriage tax breaks. The movement to simplify the tax code has made significant strides in recent years. Part of simplifying our tax system could very well be eliminating the distinction between "married filing jointly", "married filing separately", "single", "head of household", etc. It's not a lost cause, and we shouldn't treat it that way.
This is another issue I have with the current state of politics in the U.S. We seem to be under the mindset that "We probably couldn't hold a vote tomorrow and end xyz benefits, so we should just extend them to everyone."
You could apply this same logic to any debate about eliminating benefits: "We aren't going to pass a bill eliminating Medicare benefits anytime soon, so we should just extend them to xyz," "We aren't going to pass a bill eliminating FEMA spending anytime soon, so we should just add xyz into the qualified disaster category," "We aren't going to pass a bill simplifying the tax code anytime soon to eliminate the loopholes that wealthy individuals exploit, so we should just raise the rates." This isn't a sustainable mindset.
When two sides disagree on a policy, the correct answer doesn't always lie somewhere in between. You recognize this regarding the fair and equal treatment of the LGBT community, but ignore it when talking about legislating tax breaks that will continue to discriminate against a large swath of the American population.
I died laughing at "Romdizzle."
I think gay marriage is something that becomes an issue if you know any gay people that you consider friends or family. I do, and I think it's a disgrace that so many people consider them second class citizens because of bronze-age non-sense and a fear of the unknown. Obviously, you don't fall into this group at all because you aren't a tard.
As long as we're on the topic, it's worth pointing out that marriage tax breaks are among the most regressive parts of our tax code. High-income households are far more likely to be led by a married couple than are low-income households. Extending tax breaks to married individuals, then, exists as a large transfer of wealth away from single (often poorer) individuals towards married (often wealthier) couples. It's unfair to the highest degree. Adding married LGBT couples to the list of those receiving benefits doesn't address the much larger issue. What for the single LGBT individuals, who will only be hurt more by having to bear the burden of increased taxes to offset the new benefits handed to married LGBT couples??
So, you seem to be implying that regressive taxation is unfair. Do you believe the same thing about progressive taxation? How do you feel about cigarette taxes?
I'm not saying I disagree with you, I'm just trying to pin down what you're suggesting.
I do believe the same thing about the progressive tax system, and would favor doing away with sin taxes. Taxes, much like protection under the law, should be equal in all places and for all people.
My major point with this comment is that dismissing the most rational policy on the grounds that isn't the prevailing belief of Washington right now is a wrong-headed principle. Once we eliminate all of the deductions and breaks (which often favor the well-connected) that make marriage so lucrative, the discussion about marriage equality becomes moot. Why does the government recognize a religious institution anyways?
Oh dude, I'm totally against tax breaks for married couples. I'm also against mortgage interest tax deductions. I think it's bullshit social engineering crap on one hand, and subsidizing of mcmansions on the other. Let's get rid of all of that bullshit.
I just think it takes a whole lot of political will to make it happen. I'd honestly be for phasing these thing out. Let the baby boomer types that already enjoy these things keep them, us younger folks will deal without them. We'll bear the responsibility that the older generation can't handle.
These two sentances perfectly described the next +50 years.
And speaking of engineered reality, that's what this fiscal cliff was. The real crisis and real changes haven't happened yet.
http://onlinelibrary.wiley.com/doi/10.1111/j.1939-0025.2012.01176.x/abs…
Here's one study, lil binky. Finding these doesn't take long. Pull up Google and do a few searches. Just be sure to put your sky wizard-induced prejudiced bullshit aside before you do.
Nice try, though.
I'm pretty sure a scientific study from a "non-target" is more reputable than your assertions, binky.
inkybinky reminds me of this old Christopher Hitchens quote:
I think you're late for your Klan rally, bro.
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