What do you make of the coming fiscal cliff?

myp · May 23, 2012

The end of this year will see an expiration of the Bush tax cuts, extended stimulus tax cuts, and extended unemployment benefits. It is what many are starting to call the "fiscal cliff".

For more on that and CBO projections on it, you can check out this link: http://cbo.gov/sites/default/files/cbofiles/attachments/FiscalRestraint_0.pdf

Do you think the deficit cuts will be a positive thing? Or will it hurt the recovery? Should some of these things be extended and if they aren't how much will the Fed make up for it?

On the other side, if they are extended, will the Fed tighten money if the CBO's projections appear to be true?

A lot of interesting scenarios here...

zoldos · May 23, 2012

What is "CBO"? I'm on disability and don't pay taxes anymore so I suppose I won't notice much...

myp · May 23, 2012

zoldos said:
What is "CBO"? I'm on disability and don't pay taxes anymore so I suppose I won't notice much...

The CBO is the non-partisan Congressional Budget Office.

zoldos · May 24, 2012

Ah. I don't know too much about that stuff....

mogur · May 24, 2012

Well, we had pretty good growth during the three decades of 90% top income tax bracket, although loopholes kept anyone from actually paying that much. Now that the top rate has been ratcheted down to 20% effective top tax rate (http://en.wikipedia.org/wiki/Income_tax_in_the_United_States), the loopholes are still there (Romney pays less than 15% on his vast income). Doesn't seem quite fair that minimum wage earners pay over 15% in payroll taxes alone, much less the regressive state and local taxes and fees. Oh well, my brother (the tea partyer) still has bags of beans and rice from when Fox told him that the economy was going to collapse as soon as Obama took office (the Dow actually climbed back from 8,000 to over 12,000).

Go figure.

zoldos · May 24, 2012

I don't mind Obama. I didn't vote tho but I'm glad he's at least trying to make change...

myp · May 24, 2012

zoldos said:
I don't mind Obama. I didn't vote tho but I'm glad he's at least trying to make change...

Is he? That point is very arguable

Action often does not follow rhetoric in politics.

zoldos · May 24, 2012

hehehe I think he is. At least the president isn't some conservative old man who likes to start wars...

myp · May 24, 2012

zoldos said:
hehehe I think he is. At least the president isn't some conservative old man who likes to start wars...

Except that his foreign policy has largely been the same as his predeccesor's?

zoldos · May 24, 2012

hehehehehe Perhaps!

mogur · May 24, 2012

It takes a war monger to start wars. I think Bush was a war monger. I think Obama is a war squasher. Your opinion may vary, but tell me about Obama starting wars. Libya? I don't think so, but if you are of the Fox mentality, then Obama is a huge war monger.

myp · May 24, 2012

mogur said:
It takes a war monger to start wars. I think Bush was a war monger. I think Obama is a war squasher. Your opinion may vary, but tell me about Obama starting wars. Libya? I don't think so, but if you are of the Fox mentality, then Obama is a huge war monger.

You can label them what you want, but for over 2 years into his presidency policies in Iraq and Afghanistan were virtually unchanged (for better or for worse I suppose, but it shows he might not be as different from Bush in that regard as some might want to make him out as being). He has not made progress in moving out of a lot of the other areas we still occupy and he is the status quo. Bush and Obama would have gone into Afghanistan and rightfully so. We don't know that Obama would not have gone into Iraq had he been in Bush's spot or that had Iraq not happened whether we would be in Iran right now. It is not like Bush was going to go to Iran after Iraq- politically it was impossible for him.

Obama is probably the least peaceful Nobel Peace Prize winner to date. Just saying.

mogur · May 24, 2012

Okay, Obummmer isn't the godsend to anti-war advocates that they wanted, but do you really think that he would have gone off on Iraq? I guess that you didn't hear any of his speeches against the Iraq invasion. There is a difference between killing our enemies and killing our friends. Remember that Iraq had weapons of mass destruction, according to Bush and Blair? Not happening, not true. The weapons of mass destruction was Rummy. He found them north, east, south, and west of Baghdad. He was insane. And if you still believe his crap, then you just might be insane.

myp · May 24, 2012

mogur said:
Okay, Obummmer isn't the godsend to anti-war advocates that they wanted, but do you really think that he would have gone off on Iraq? I guess that you didn't hear any of his speeches against the Iraq invasion. There is a difference between killing our enemies and killing our friends. Remember that Iraq had weapons of mass destruction, according to Bush and Blair? Not happening, not true. The weapons of mass destruction was Rummy. He found them north, east, south, and west of Baghdad. He was insane. And if you still believe his crap, then you just might be insane.

You don't know that Obama would not have gotten the same wrong intelligence Bush got on the WMDs. I also don't see why it is so farfetched that Obama might have done the same thing considering Clinton's support of the Iraq Liberation Act and general relations between the US and the Hussein regime.

Edit: It really doesn't matter whether or not Obama would have gone. What matters is what he did and what he will do.

mogur · May 24, 2012

And Clinton is continually blasted by Fox for not having gotten Bin Laden. But Obama is being bashed for bragging about it. Bush is known for his claim that he doesn't really care about Osama, yet he is now the actual 'getter' of Osama, since he authorized torture, and therefore the intelligence that led to the shooting in the face of Osama. How is this even real? COME ON, as Hank, jr would say. Bash Obama on what he screwed up on, but to bash him for Osama is unreal. Get a life, my friends, OBAMA got OSAMA... get on with your lives.

myp · May 24, 2012

Why are you bringing up Fox or Osama? I did not mention either once. I am criticizing Obama for misleading on the campaign trail and for better or worse continuing Bush's foreign policy well into his presidency.

As for Obama being bashed by political opponents, so is Bush, Clinton, or any other politician

myp · Nov 1, 2012

I want to bump this up as we are getting very close. This is something the new President will have to deal with immediately.

tecoyah · Nov 1, 2012

myp said:
The end of this year will see an expiration of the Bush tax cuts, extended stimulus tax cuts, and extended unemployment benefits. It is what many are starting to call the "fiscal cliff".

For more on that and CBO projections on it, you can check out this link: http://cbo.gov/sites/default/files/cbofiles/attachments/FiscalRestraint_0.pdf

Do you think the deficit cuts will be a positive thing? Or will it hurt the recovery? Should some of these things be extended and if they aren't how much will the Fed make up for it?

Deep cuts will inevitable slow the economy...simple reality. Some cuts would likely help, if only by freeing up funds that could be used for infrastructure and Job Growth.

On the other side, if they are extended, will the Fed tighten money if the CBO's projections appear to be true?

The Fed will really have no choice, though it would have extremely limited effect.

A lot of interesting scenarios here...

Should we as a country, fail to avoid this "Fiscal Cliff", the result will be a new recession in my opinion. The implications of this, not just for us but the entire world market would be very bad...fortunately it seems to be more of a steep and long slope than a cliff.

myp · Nov 1, 2012

tecoyah said:
Should we as a country, fail to avoid this "Fiscal Cliff", the result will be a new recession in my opinion. The implications of this, not just for us but the entire world market would be very bad...fortunately it seems to be more of a steep and long slope than a cliff.

It all expires in January, hence the term "cliff". It would certainly be bad- we actually want the slope once we are on firm ground.

I'm not convinced the Fed's effect would be limited if it was willing to do what was needed. Political pressure could be a concern that could hinder that though.

tecoyah · Nov 1, 2012

myp said:
It all expires in January, hence the term "cliff". It would certainly be bad- we actually want the slope once we are on firm ground.

I'm not convinced the Fed's effect would be limited if it was willing to do what was needed. Political pressure could be a concern that could hinder that though.

Indeed, the logjam of congress will fight tooth and nail (still), against the path most economist explain should be taken...which is certainly not austerity measures. Should they fail to compromise and thus damage the economic recovery before it truly begins...I would hope Murdock and the Tea Party have mutual obituaries shortly thereafter.

What do you make of the coming fiscal cliff?

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