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The U.S. Careens Over the Fiscal Cliff, Reaching Only Half of a Deal
New submitter Jetra wrote with word that the House of Representatives failed to vote on the "fiscal cliff" deal before midnight, technically sending the U.S. over the fiscal cliff. The White House and Senate, however, reached an agreement at the last minute to allow for some tax increases, and a House vote approving it is expected in the next day or two: "The agreement came together after negotiators cleared two final hurdles involving the estate tax and automatic spending cuts set to hit the Pentagon and other federal agencies later this week. Republicans gave ground on the spending cuts, known as the sequester, by agreeing to a two-month delay paid for in part with fresh tax revenue, a condition they had resisted. White House officials yielded to GOP wishes on how to handle estate taxes, aides said."
The battle over required spending cuts has predictably been delayed for another day, making the deal far from complete.
"The American Republic will endure until the day Congress discovers that it can bribe the public with the publics money."
we spend trillions on many useless things - I'd be willing to wager quite a lot that most of these spending cuts won't amount to much for the majority of the population...and, we need to scale our military to what is prescribed by our constitution - a defensive force - some drastic cuts are needed there (spread over a few years to avoid a major shock to the system)
Yes, the fiscal cliff -- the totally preventable budget crisis that we created for ourselves because we couldn't figure out how to work together. And, apparently, still can't. So now our fragile economic recovery is going to be thrown under a bus... because we can't play nice with each other. That's a great way to signal the start of a new year. What next, placing bombs under things with two keys, one given to a republican, the other to a democrat, and then a timer set and they have to figure out how to work together or it explodes? :(
It's stuff like this that make me wonder what the hell is wrong with my country.
#fuckbeta #iamslashdot #dicemustdie
If there are, they are surely on the endangered species list.
"To those who are overly cautious, everything is impossible. "
Won't happen due to the district gerymandering.
http://www.nationaljournal.com/politics/america-s-greatest-economic-weakness-in-2012-was-its-government-20121231
What changed under Obama? Nothing Good
The problem is clear. There are those that "signed" the no new tax vow, which is backed by large money if you break it.
Apparently it is not clear given that you are offering the Norquist red herring. The actual problem is that the current plan being offered is quite light on the spending cuts side. We've seen this before, tax increases now, budget cuts promised for later ... however the budget cuts never happen. The House is actually quite reasonable in wanting to see real spending cuts in the current plan.
Letting a temporary tax cut expire isn't raising taxes, anymore than not continuing to get a Christmas bonus in January isn't cutting your pay. I really have no idea why no one calls them on this nonsense. If you are only interesting in technically not raising taxes then you can play whatever word games you want.
The problem is that Republicans see this as an opportunity to cut every program that they disagree with while continuing to spend just as much or even more on the things they do agree with. This is their opportunity to do with the budget what they can't do with votes or the courts, and they won't accept that their little fantasy isn't possible.
And then when the first big hurricane, tornado or tsunami of Paul's presidency kills tens of thousands because NOAA has been wipes out, I'm sure you will feel proud of having put an ideological fruitcake in the White House.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Please remind eveyone you know that the Republican party were behind the legislation that created this artificial fiscal cliff as an act of political brinksmanship to impose their policies into the budget. Any fallout can be laid at their doorstep. Why the President is negotiating at all is a bit of a mystery to me.
Being a non-Republican conservative, I'm okay with going over the cliff. We need both the reduction in spending and backlash to decimate the extremist Republicans currently in office.
we all have hyper inflation (we are seeing this now in food, insurance, gas, etc).
Hyperinflation has a specific definition (50% or higher monthly inflation, so ~12,900% annual inflation).
No, we are not seeing hyperinflation. We aren't even seeing inflation anywhere close to what has historically been "high" in the US, except in the healthcare field! Hell, up until this weekend, gas prices were dropping.
The Tea Party is trying to undo everything that made the country great back in the 50s and early 60s. What do you call someone trying to undermine the country?
Careens over the cliff? I thought it was a rather graceful slide, myself.
Ehhh, that "fiscal cliff" thing was very over rated. The best thing they can possibly do, is to allow all those things to just kick in. Our government can never be out of debt, so long as they are paying bankers to administer our currency for their own profit. But, still, the best thing we can do is to raise taxes, and cut the many "entitlements". Starting, of course, with the very special entitlements for the rich.
A balanced budget amendment is what we need, more than anything else. The onl y sensible thing to do, is to ensure that our debt shrinks a little bit every year. GROWING the debt is just plain suicide.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
There is no common ground. The far-left Democrats who have captured the party believe in spending and taxing. Period. Republicans believe in protecting the middle class from over-taxation, believing that the private sectors better allocates money than do the various levels of government. You can't reconcile fire and water. Try and you'll get steaming ashes.
What did you pay for gas 10 years ago? It went up 300%. How much was your house worth in 1999? My guess is 40% its current value.
That is inflation and why did it go up? Because the fed pumped money into banks. The investors made bank and they used that money to flip homes. Your health insurance company can't make a profit with interest rates near 0%. So they charge you more to make up for the low interest rates. Banks and rich with extra fed printed money just go buy up things like fuel, gold, or loan it back to the government where you pay the interest to them later etc. Gee thanks.
I do not agree iwth the Tea Party 100%. But when you have 15,000,000,000,000 something has to give. Yes, austerity is needed to pay it back. That money wont just vanish. It will be used to invest in small business again. Why should MegaBank invest in your dream home when it can loan it back to the government and be gauranteed paid! You can't compete with the US treasury so your employer can't expand etc. It is classic economics 101 and not this keysenian stuff they try to do today.
I see nothing wrong with saying NO! Show me you are going to pay back and I will sign the check?
A fiscal cliff is A HELL OF ALOT BETTER than the alternative of a currency crises. The US would collapse and I am not exgerating either. Every bank would close with every corporate and personal savings account where 90% unemployment would happen within a few months as each bank would collapse like dominos in such a frightening scenario. The 1930s would not be as bad as debt was not as contagious or as widespread as today. It is too ingrained.
http://saveie6.com/
No, a balanced budget is the last freaking thing we or any country needs.
I am stunned at the depth of your denial.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Careen over the fiscal cliff?
Oh, c'mon !
When tomorrow arrives, the sun still rises from the East, tides still ebb and flow, and billions of people still go to work (or looking for work), just as usual.
It doesn't matter if the US politicians have failed to come up with a compromised.
The world still goes on, as usual.
Muchas Gracias, Señor Edward Snowden !
The main thing is that the corporate welfare beneficiaries also have a lot of influence in DC.
Which means that threatening their gravy train is going to derail a lot more than corporate welfare.
The rich threatening to throw a hissy fit if the budget is balanced are the only ones making it not a slam dunk.
Or you can just save your money and spend more as the economy increases. Instead of spending on interest, just spend it on things that we care about.
testing out my trending skills
Balanced budgets are good things.
So, however, is capital investment. If you can make more money later by getting into debt now, you can come out ahead later even if you get behind now. The trick is to run the numbers and only use debt when it will beat the interest charges in return on investment.
If the economy is in the toilet it's quite profitable for a government to cut taxes and raise spending to prime the pumps.
Once the fields of the market get watered and the economy starts growing, the feds can harvest a bumper crop in tax revenues later without causing a famine from harvesting it too early.
Government spending to improve the economy is a capital investment just like someone spending money now on better equipment to make more money later. Governments earn their taxes taking care of their citizens just like companies earn their revenues providing products.
Staring only at the balance sheet for one year at a time is short term thinking.
The only time in the history of Humanity where the medium of exchange had its own value was when some guy exchanged an arrowhead for a piece of lether string.
Money is nothing magical. You do some work, I do some, those things never intersect but are both necessary in society.Thus some mode of accounting is necessary that you and I exchange, within the confines of society, the product of our labour.
We call this accounting method momey, and it is just a convention that little counters serve as markers of how desirable our work is to others at large. There is no reason -- in fact it would be terrible -- that the counters themselves have value. If you think fiat money is a scam, you are an idiot who missed the train some 4000 years ago.
While I tend to agree with you that taxes need to rise and spending needs to fall, but there were some real consequences (or still are actually) if the deal doesn't go through. The Alternative Minimum Tax, which was once upon a time designed to make sure the wealthiest Americans would pay at least some taxes, is not indexed for inflation and has to be reset manually every year. If it doesn't get reset right now, couples who earned $45k per year in __2012__ (this means this coming tax bill, not next years (there is not a whole year to fix it)) will get hit with the AMT. That's $33750 for you slashdotters (filing single).
http://online.wsj.com/article/SB10001424127887324731304578191863373273492.html
You also don't get use your standard deduction or other deductions when calculating your income subject to the AMT. Plus, if you're expecting a refund to pay for Christmas, you might not even be able to file your taxes till March because the IRS has to mess around with its computers.
So, kind of a big deal.
What changed under Obama? Nothing Good
I've got a mortgage (debt), yet my budget is balanced. It's economics 101. If you have a debt, it means you have to use money to pay off the debt. Debts are time-shifted expenses at an additional cost; it's not free money, you still have to pay what you spend.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
a national budget is a much more interesting beast
When I read that, I thought you were going to explain why it is an interesting beast in the next paragraph and tell us exactly what you mean by "interesting".
Simpleminded folk like myself think that spending more than you have is a bad idea, and spending more than you will have is an even worse idea (i.e. ballooning debt). I would love to know if I'm wrong. However, your paragraph #2 is about taxes, R&D, infrastructure and retirement age. Now I'm confused.
The thing is - debt, and the size of government and military, always expands more under conservatives.
Conservatives talk about small government, but they still want a secret policeman in every bedroom. They are by definition a dead end.
Gold standard? What the fuck's that all about?
In 1975 did you walk around with gold in your pocket? Or did you walk around with arbitrary tokens that you could exchange for gold?
Because right now you can take arbitrary tokens out of your pocket and exchange them for gold. Or platinum. Or titanium. Or food, toys, services.
What's so fucking special about gold anyway? Ooh, it's shiny. Oooh, I can have more than him because I'm rich. How are you rich? Because you have more lumps of metal than he does? Hey, those are called 'coins'. You can still get them.
Anyway, there's a limited amount of gold. What happens when there's more cash than gold that you can buy with it? Does the amount of gold you can buy for each $100 bill fall, or does the government fail to meet its obligations? One negates the gold standard, turning gold back into a mere commodity, the other shatters it.
Now, speaking of idiots - we're the ones who auctioned off all of our gold, remember? When the shit hits the fan, we have nothing to fall back on.
Really? You have oil reserves. You have a hell of a lot of land. You have a good supply of skilled labour. You have strong research and development capability. You have an extensive manufacturing base. You have stocks of multiple commodities.
I come back to, what's so fucking special about gold? What are you going to do with it anyway, when you have to fall back on it? Sell it? Shit, you've already had to do that because you're in so much debt.
Please, tell me, because I'm confused as hell, just what's so fucking special about gold.
The top 1% control 43% of the wealth of the nation. ...gosh, that's awfully close to the amount of income tax they pay. Shit, don't let that get out, it might hurt their pity party.
(1) USA is #1 in donations per capita, and #3 in volunteering of time.
(2) Government-forced "aid" should not exist - all charity should be voluntary. When given voluntarily, in a free market environment where charity institutions compete on the basis of merit, aid tends to be far more effective. What is the point of giving money to some third-world dictator if it only strengthens his power and makes his "subjects" worse off in the long run?
(3) You cannot compare a country as large and diverse as the USA to a couple of small hand-picked homogeneous Northern-European nations. These few small countries have a remarkable culture and work ethic; they were the first in the world to go capitalist and industrialize, and they have been coasting off the economic momentum ever since. Why not compare USA to a slice of Europe with a comparable population of 315 million? The per-capita numbers will definitely be in USA's favor!
(4) The "wretched refuse" immigrants from those countries that left for America are now wealthier than those that stayed! Comparing apples to apples, I bet Scandinavian-Americans / Dutch-Americans / etc also give more to charity than their counterparts that have remained in Europe.
(5) A large country is also disadvantaged in "foreign aid" numbers - someone from Utah helping a Hurricane Katrina victim doesn't count, while an Austrian giving to a charity in near-by Albania does.
(6) Lest you forget - it was USA that paid to save the world from a multitude of global socialist threats over the past century, from Fascism to Soviet Communism to Baathism, including clandestine ops that have saved many countries from going socialist in the first place. Chile would be just another Cuba if not for the USA! The same could be said about dozens of other countries as well. But, instead of recognition and gratitude, all USA gets in return is jabs from economically-illiterate punks who once saw an emotionalist Michael Moore movie and now think they have a monopoly on truth!
(7) Foreign aid might be a national religion in places like Norwaystan, which has so much natural resources per capita that they're ridden with guilt over it, but most Americans make their money the hard way. USA has no ancient monarchies and noble houses passing wealth from generation to generation. It also doesn't have a history of colonial tyranny on the scale of the Belgians, and no ghosts of war and genocide like the Germans. We (and I'm a naturalized USA'ian, by choice and conviction) don't need to use foreign aid to fig-leaf our guilt!
(8) What most people fail to understand is that, before being redistributed, wealth must be created in the first place, and therein lies the chief virtue! Putting your money into the private sector (including "microcredit") instead of giving it away also does tremendous good. Poor people of this world benefit from technological innovation and investment far more than they do from simple handouts of aid! Give a man a fish, and he may eat for a day; give him freedom and a more rational way of life, and he will never be hungry again!
--libman
Where is the "72 hour" rule in any of this? We've had two months of Fiscal Cliff drumbeat, and it comes down to a Yet Another Congressional Drive-by.
In summary, confining our Federal Government to federal tasks will see us relatively less fed up.
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
Given you replied to my post, I'll respond. I'm sure Bubba will reply if he has anything to say too.
Theoretically, a nation on a gold standard has gold in a vault somewhere that is equal in value to all the currency it has in circulation.
The US would have to buy around 45% of the gold ever mined to cover its issued currency at current prices. Forgive me for finding that laughable.
If we weren't paying private banking for the privilege of using their fiat money, the government wouldn't be in debt.
When the UK came off the gold standard, it's because they couldn't borrow enough money to buy the gold needed to meet the demands of people wanting the gold.
Governments borrow money. They don't have to borrow it from banks, they could borrow it from other countries. This is one reason you have sovereign wealth funds.
Not to mention that the fiat money merely exists, it doesn't belong to bankers any more than it belongs to you or me (specific quantities aside). The government doesn't have to pay the bankers a penny to use it, although they may deem the bankers' services to be valuable, in which case payment is the traditional mechanism for acquiring those services.
A gold standard has it's own strengths, one of which, you can remove some from your pocket, or your vault, and give it to a creditor, who can carry it home with him. Standards. Today, we have none.
I still don't understand. Why gold? Why not platinum? Why not pieces of slate? I like slate, I'd rather have a slate bed to my snooker table than a gold one.
Why not whatever commodity you happen to have hanging around at the time? Where minerals, elements (including but not limited to gold), labour (yes, labour) and frankly anything that can be sold and re-sold can be a commodity.
And why not a piece of paper that can be used to acquire those commodities? Why not an electronic record that allows instantaneous, convenient and efficient exchange of value?
Please, I'm still confused. What's so fucking special about gold?
You're confused as hell, Bubba. Google for "gold standard". Theoretically, a nation on a gold standard has gold in a vault somewhere that is equal in value to all the currency it has in circulation.
Well yes, that's the problem. There is absolutely no reason why the total value of the economy should have any particular relationship with the total value of all of the gold in existence, which leads to all kinds of fun when the economy expands and you have to somehow convice everyone that gold is now worth more not because it's actually more useful for anything (it isn't) but because we need it to be worth more in order to have enough currency in circulation to support the actual value of the parts of the economy that are genuinely worth more.
The problem is that is does not get paid back. Even the Keynesian purists would not hold that the money supply should forever increase faster than the economy actually grows. I think Keynesian economics is a whole lots snake oil myself but I will concede we don't have a good test lab for it. Our economy as its been engineered today makes it structurally impossible to actually pay down the debt even in good times.
A budget surplus is only run during the most spectacular booms, and only than by accident when the Congress critters are caught flat footed and failed to ratchet down tax rates and or create new spending in anticipation of it. When it does happen as it ( debatably did - depends on your accounting methods ) during the Clinton years its almost looked as a problem. Why?
The root of all inflation really is government debt. The money supply is the FEDs balance sheet by and large and Treasury debt makes up the credit side. Paying off debt means you collect taxes and don't reinvest those dollars back into the economy. People are in practice okay with paying taxes when they feel they are getting something for it. They get angry when the perceive the government taking a whole bunch of money and not doing anything for them. That is why we have a T.E.A Party.
I don't think most citizens have thought much about it but there is a subconscious reason government deficits and inflation don't bother them as much as many of us Slashdoters think it should. Hint: Its good for them. No they don't like it when the groceries and gasoline gets more expensive but historically what comes of their front pocket leaves more in their rear in real terms. How?
The times when our government actually paid off the national debt were before a time when most of the middle class tied up all of their savings in an asset, their home, while using a debt instrument structured to take what may be their entire working life time to pay, for which they ultimately pay back between two and four time the original borrowed amount. Although stair stepped so they lose the advantage of compounding their wages typically get some cost of living growth meanwhile the interest rate paid on the debt and the principle remain the same. So with inflation a traditional 'fixed' rate mortgage actually behaves as if the interest rate declined over the life of the loan. This is why the flat wage growth over the past decade has been so hard on the middle working age middle class. Its transferred some of the cost of the borrowing from banks and rich folks with equity in banks back onto them. They'd probably be all for that except in practice other forces have many of these borrowers stretched so thin and the prior greed of lenders in pushing them to over borrow in the first place means that lack of inflation or deflation actually breaks many of these borrowers resulting in defaults and further money supply destruction, compounding the problem. Hence the almost manic fear of deflation from these folks, even though ordinarily it would be beneficent for dollar holders.
So there it is the bulks of people who reliably vote stand to gain from inflation, they like "gifts" from the government and they don't really want to pay taxes even if they may be willing. By extension no real motivation exists in Washington to address the national debt, the reality is the public demands more of it, even if they don't know it. The trouble is and what I think may be what causes the music to stop at some point is that as the number keep getting bigger events that might have made for little ripples in the past create tsunamis. It creates perverse opportunities to arbitrage billions of security instruments for tiny changes in individual valuations you see flash crashes. You have situations where a few bad economic turns lead to really destructive positive feedback ala the mortgage crisis. In the end it won't work
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
Stunting growth is the entire idea. Keynesian economics is all about smoothing out the boom bust cycle. The government uses deficit spending in bust years to reduce the magnitude of the downswing. The government uses a budget surplus to in the boom years to reduce the magnitude of the boom (and also to save the money it'll need for deficit spending later).
Running a deficit at all times is terrible under Keynesian economics. It's terrible under every school of economics except the fairy land one the US seems to be trying out.
These cuts were not fast, they have been on the books for a long time. Everybody knew this was coming. Though of course the government has built a reputation for bailing everyone out at the last minute and hence, surprise surprise, businesses run with that expectation in mind and don't plan for such things and take more risks in general.
If we were in a short term dip, then sure put it off a little. I don't think we are though (that's opinion of course, many economists disagree - of course they also thought everything was doing just great in 2005...) and putting it off will just mean it has to be done when the economy is in even worse shape.
Government isn't authorised to run a highway system
You don't know much about the interstate highway system, do you? The federal government does little to run it. They dole out the money to the states, who are free to do what they want with it within rather broad confines. The federal government suggests speed limits but doesn't actually force them to be at their suggested levels.
Obviously driving licenses are a private matter between private road operators and the drivers
And you are free to drive on private land as much as you like, provided you have permission from the land owner. Government has no say on that matter.
Actually nobody needs to be forced to own a license
And nobody is "forced to own a license". If you don't want to drive on public roads, you don't need a driver's license. Amazing how that works, isn't it?
government is not supposed to be able to use it as identification either
The federal government does not recognize a driver's license as identification as they are issued by states. States have the freedom to use them for what they want.
Actually 911 shouldn't be federal issue at all
The only thing federal about 911 is the number itself. If you would prefer that every state or county have its own emergency number, you can make that argument, but the federal government doesn't do squat with the 911 system.
There is plenty of business opportunity there as well.
You mean like the large number of private ambulance companies in this country? Indeed lots of people are making money off of 911. There are also companies like ADT and lifeline that are making money by sending automated requests to 911.
three comments and I am forever at terrible karma
If the economy is in the toilet it is quite profitable for a government to cut taxes and raise spending to prime the pumps.
NO. It can be profitable, but it often isn't. You must consider two things:
1) What the money is being spent on. If you spend it to build a road everyone drives on, you'll have a good multiplier effect. If you spend it to build a road no one drives on, you'll have a negative effect on the economy.
2) Where the money comes from. If you take it from someone who would expand their business to hire more people, you've just hurt the economy. If you take it from someone who was going to just hoard it in the ground, then you helped the economy.
You must consider where the money comes from, and where it goes. If you don't consider those two things, then you can't know if your spending will help or hurt the economy.
"First they came for the slanderers and i said nothing."