Slashdot Mirror
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.
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
Do you wonder, like I do, that the whole fiscal cliff thing is really just some bit of choreographed acting job? It had all the drama, tension and suspense of an action movie. And a last minute, down to the wire, happy ending. Gosh, makes a person feel like our representitives are really sweating for us, and their large salaries/perks. I feel so-o safe in their capable hands.
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.
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
Why are you against voting for a Democrat when a Republican held the country hostage?
NO. The republicans and the ~50% of the people who voted republican are "holding the country hostage". Of course they would say that the democrats and a bunch of crack mothers are holding the country hostage and leading us to financial ruin. That's really the problem.
Blame the other guy all you want, but the numbers are right there for us all to see. As a nation, we do not agree, we do not agree in approximately equal numbers, and haven't changed our positions after several elections. There is no way for Obama nor Boehner to keep their constituents happy, so they must drag this out until we are all pissed off enough to accept concessions. While I agree it is baffling with the election over, why they couldn't come out with a plan that pisses off both sides equally now, rather than drag it on another month, that is going to be the ultimate conclusion. Everyone is going to walk away from this mad, having lost something and gained nothing. It's the only way this ends, and as long as we continue to blame the other guy, it will drag on and on.
Bullshit. US GDP 2011 $15 trillion. US Federal tax receipts 2011 from all sources $2.3 trillion. Divide, and we discover it's 15%. Your parent post thinks it should be 33%, and to be in line with the rest of the first world, he's right. That would finally make it to one third. One half? Not even close.
The United States government gets plenty of taxes already, thanks. What's the figure, something like one-third to one-half of all wealth created in the nation goes to the government? New taxes are not the solution. They aren't even the precipitate. Give them more money, and they will just waste it. Guaranteed.
Nonsense. Taxes in the US are at an all time low. The last time the wealth was this badly skewed in favour of the super rich with such ludicrously low taxes the Great Depression happened.
It's not a coincidence. Funnelling money into the hands of the few and crippling the middle and lower classes brings the economic engine to its knees.
Limited government creates economic prosperity. Government largesse stifles it.
Which is why Somalia and Afghanistan are the most prosperous nations in the world, while Norway and Canada are hopeless dystopian nightmares. Right?
I don't care if it's 90,000 hectares. That lake was not my doing.
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 !
So which of the major spending by the government are you ready to do away with? Defense spending, Social Security, Medicare or Medicaid?
I think I'd start with Defense spending, which could easily be cut in half, and we'd still have by far the largest military on the planet.
I don't care if it's 90,000 hectares. That lake was not my doing.
Well, even if the parents were irresponsible twats, you can't very well leave those children to dry, can you?
I mean, you'd really have to game the system to make a lot more than that. Welfare bonuses are a source of income, so you can't just accumulate a bunch of them and be like, "I MAKE NO MONEYZ GIMMEH MOAR." It doesn't work that way. If you get SNAP you may not receive full electricity reimbursement or some other form of welfare assistance. And yes, workers can look up if you are. So I mean, if you're that good at gaming the system, then you'd probably be good at gaming other systems too, like the markets.
A lot of the problem is that full time workers receiving minimum wage are getting 12k a year. If 6k a year costs rent/utilities in some shoddy apartment. That leaves only 6k to live on. You've got $500 a month to pay for food, gas, and other necessities. They work plenty hard, I've seen them, some with a kid. And they have to have SNAP just to be able to live on something other than ramen.
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.
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.
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.
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.