1.6 trillion in tax hikes, a change to the debt ceiling, payroll tax extensions and further stimulus seem to be the basis of the first salvo in the fiscal cliff talks... or at leas the first details we are aware of. All of this comes while Obama is embarking on his presidential victory tour trying to drum of public outcry to solve the fiscal cliff; as if we need anymore awareness of the coming issues. Many of the questions we've been getting here from clients revolve around the likely impacts of the cliff and potential pitfalls should we go over full bore. Everyone by now has probably seen the fiscal cliff chart from Goldman spelling doom and gloom should we just let everything happen. I personally don't find it a dire issue if we head over the cliff all told. Frankly, spending cuts are absolutely necessary and it will wake many people up to the fact that taxes are going up regardless of whether we like it or not. I think everyone needs to feel the effect of tax increases to fully understand the issues at hand. Spending cuts suck because no one likes when the party is coming to an end, and I hate to tell you that the music is quickly slowing down.
Really and truly, what is the worst that can happen if we just let the spending cuts hit and tax hikes it full bore? Sure, we will see GDP numbers start to sag a bit and growth will slow but I would argue that we need to take the hit now and it will be easier to stomach now than it will be in the future. What really bugs me in all this is the idea that we might give them full on power to only block debt ceiling raises rather than try and vote to raise it. Obviously we raise it any time we need to, but I think the discussion and understanding of the consequences of mounting debt needs to be addressed and pounded into our heads every single time.
Either way, if you can't tell, I'm not exactly chafing at the bit for higher tax rates and not reducing our long term spending to make up for our deficits. It makes no sense to me to spend wanton-ly over the next decades. But enough from me, if any of you aren't jaded already What do you guys think of the Cliff? Spend less or tax more?
WE WILL NEVER REACH AN AGREEMENT. I want to beat the shit out of Romney campaign for not taking the fiscal cliff seriously. All they had to say was, "Elect Obama, and you will all be completely fucked." It's going to have the biggest impact on the poor in America, which is ironic since they're the ones who put Obama in office.
And the answer is spend less and tax more. Both are needed to get things done. Both will hurt the economy in the short-run. My vote would be for a major rehaul of the tax code with everybody's exemptions getting gored and some cuts to defence and especially a complete restructuring of Medicare, Medicaid and Social Security. That should be more than enough to close the deficit and takes care of the fiscal gap (which is a much more important long-term challenge). I would even vet a temporary $1-2T infrastructure fund to recoup some of the 1 million construction jobs lost while housing keeps on firming. That's a lot of money but compared to the unfunded liabilities we have in our social programs, it's a drop in the bucket.
This. The problem is, anyone in a position of power who even suggests touching SS gets crucified. I will personally never see a dime of SS taken out of my paycheck, but Social Security was never meant to be a long standing program in the first place. When it was enacted there were 16 workers for every retiree. Now there are 3, and falling. Even if you disregard all the IOUs from congress (which are significant), the SS fund simply has too many unfunded liabilities. How much would you be willing to forego? 50 cents on the dollar? Paying out dollar for dollar is just not a feasible option anymore.
I'd be interested in hearing your rationale for this line of thinking, outside of simply making assertions.
Also, the idea that Obama only won because of minorities and poor people has a few issues:
1.) Obama was completely CRUSHED by voters in deep red states (i.e. Mississippi, Alabama, etc.) This isn't because he's Obama so much as these states simply do not vote for Democrats, period. Romney won with white voters in these states by MASSIVE figures, but these voters weren't going to vote for a Democrat at all.
2.) In the States that Obama won, the white vote was much closer (with Obama winning the white vote in several swing states.) But, because it was close in the swing states and Romney easily won the deep red states, the % of white vote he won looks very strong. In reality, he dominated in the southern conservative white vote.
3.) I believe that, overall, Obama won amongst educated whites, hardly the poor of the country.
4.) Romney's campaign (and Romney himself) talk about Obama's gifts to poor people. But, Romney overwhelmingly won in the poorest states. In the less poor states, Obama won, and he either won or almost won whites.
Now, I don't see why there is any reason to believe there won't be an agreement. The GOP will posture, but the public overwhelmingly wants the top 2% to see slight tax increases and has shown in polls that they will blame the GOP if ALL tax rates go up. Going over the cliff won't help the GOP protect rates for the top 2% of tax payers.
QFT
Senator McConnell: "Obama's offer is almost comical."
Open your fucking eyes buddy. You shouldn't be so naive to think either Obama or the GOP with give up their stance.
Another thing you fail to comprehend is the amount of student loans "educated white men" are strapped with. They are the poorest of them all! You think a poor minority with no education has 200-300k in debt like some of my friends do? Another thing; since when the hell do we consider people with a degree from Devry "educated"? I know many people at my target school who are complete idiots. Please stop with the "educated Americans vote Democrat" bullshit. It's been used ad nauseum by the young leftists.
Both spending cuts and tax hikes are necessary however, they must be done gradually. Any major shock like the fiscal cliff likely send us into another recession which likely decrease tax revenues even more as employers layoff and hire more part timers. And as tax revenues decline, spending decline rate won't be able to match it.
Of course a lot of companies and investors already have factored in some likely hood of the fiscal cliff, and the US gov won't actually let it happen, they will just kick the can down the road Europe style.
PS here's a tax revenue by income breakdown. Its interesting data. http://taxfoundation.org/article/summary-latest-federal-income-tax-data… The table shows 97% of income tax paid by top 50% (cut off line AGI of only $34k!)
I honestly can’t believe the Obama administration’s proposal yesterday. A net increase to the deficit despite $1.6T of new tax revenue with no meaningful changes to the entitlement programs (is his head really that far up his ass?)... Especially after the GOP previously conceded on $800B of new revenues from limiting deductions.
Honestly though, I’ve pretty much lost hope in both parties. I say we head over the ‘fiscal cliff’. Let everyone feel the pain of the idiotic governments we've endured the last 8 years, maybe then there’ll be some real change.
Just because you know a few people with student loans that voted Obama doesn't mean that it is the main reason that they opted for him, or that the majority of educated people voted for him because of that, or that the majority of educated people that voted for Obama went to online schools. Also, your "argument" seems to assume that educated Obama voters are all in their twenties and strapped with student loans. And what does that even matter? No one is going to forgive student loans. Talk about a red herring.
You haven't even begun to make a legitimate counter-argument.
And, what does McConnell expect? It's called a negotiation. Each party puts out an ask, each party has a floor for what it will accept, and they negotiate from there to reach an agreement. The GOP ought to counter with a specific plan. Then, each side can market their plan to the American people.
I don't know how old you were at the time, but back in 2004, President Bush pushed for privatizing Social Security. He used the bully pulpit of the Presidency to travel the country explaining his plan and arguing for it. Only problem for him was that it wasn't popular enough to get the people to push Congress to do it. Arguably, it was unpopular.
Obama, on the other hand, is pushing for things that have more support, at least in terms of letting the top rates go back to Clinton era levels. Whether we, upper -income Wall Street folks, like it or not, it's got a fair amount of popular support.
The GOP would probably be best agreeing to only raise the top two rates now in exchange for legitimate cuts to entitlements and spending. They can't expect Obama, who just won re-election with 332 EVs and 51%+ popular vote, to negotiate with himself. Add in the fact that the House popular vote went to the Dems and the GOP kept many seats due to gerrymandering, it's tough for the Republicans to claim any sort of mandate.
They ought to get what they can now and then work on REAL tax reform next year after the fiscal cliff has been averted.
Dude, why do you have to be so damn stubborn? I guess we don't have a student loan bubble going on right now, and it's only my friends who are the idiots who took on loans. Average household pay is what, 40k? I consider that to be poor since you can't exactly raise a family on that without taking on some serious debt. I netted more income than the average school teacher last year, but I'm still in college. It's my opinion that most people are poor, and most people are idiots.
1940- Only 5% of adult Americans held a 4-year degree 2011- About 28% of adult Americans hold a 4-year degree
All I'm saying is the education argument doesn't mean anything anymore since EVERYONE has a degree, including the guy who took my Starbucks order this morning. When all the sudden it becomes easy to obtain something, it no longer holds any value to society. Do we really need another "non-target struggling to find work" thread for you to see that?
So...28% = everyone?
I'm not sure how I'm being stubborn at all, you're not making an effective argument based on anything other than some lazy inferences and your own personal biases.
--Plenty of people who take college loans aren't idiots. I have multiple friends in the industry with student loans who make good money and are some of the smartest people I know. Almost every job that pays a decent salary (and isn't at risk of being off-shored in a heart beat) requires at least some post-high school education. Again, you knowing a few people is not some sort of scientific survey of the greater population.
--It is entirely possible to raise a family on the median income ($50K for a family of four) without taking on debt (excluding a reasonably mortgage.) It's called not keeping up with the joneses, plenty of people do it, you've just never had to so you assume no one can (based on nothing.)
--Who cares if the guy that took your Starbucks order has a degree? What is your point? Better he's working at all than doing nothing. Maybe he got laid off like millions of other people during the downturn. Would you rather him not work and collect unemployment / welfare?
--Student loans are not going to be forgiven. End of story. Your entire argument is predicated on this idea that people with student loans voted for Obama as though student loans would be forgiven. It is not based on anything at all.
--"Most people are idiots." Why? Because of how they voted? Do you even understand the "plan" Romney put forth? Not only would it not have balanced the budget, it had potential to explode the deficit / debt.
In the end, your issues with Obama come down to not wanting the top two brackets to go back to Clinton era levels. Honestly, sit back and watch over the next month, Obama showed his ask, the GOP needs to show their ask, and they'll move from there. What do you think is happening behind closed doors, anyway?
---Regarding the family of four living on 50k... I'm curious to see how they will ever send their two kids to college, not to mention retire before they reach 80. It's going to be tough to get their kids into a good high school if they don't live in a nice area, so scholarships will be a long shot. Sure, they won't be living in poverty and can put food on the table, but I guarantee you they carry a balance on their credit card(s). So, you take a mortgage + student loans + cc debt + maybe a car loan, and you're pretty much a slave to society.
Again, you've got to break this stuff down by state. Things look a lot different when you look at the swing states vs. the pure red states. And, let's be honest, wealthier people tend to vote Republican, this isn't some new thing that just started happening in the 2012 election. Add to that the fact that the number of people in the top brackets is extremely small vs. the greater population. And even within those brackets, it wasn't a Romney landslide.
Also, since when does having a higher income make you better suited to picking the President? The idea that money = worth of a human being is foolish. Not to mention, the President doesn't just serve one class of people, it's the President of the United States, not the "President of the Portion of the Top 2% That Don't Want Tax Hikes No Matter What."
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