Senate Passes Bill To Avert Fiscal Cliff

[ElasticNinja]

I read somewhere that this was a 154 page document that the senators signed after only receiving it 3 minutes earlier.. is that really enough time for them to decide its a good plan? sure I know they were cutting it close for time, but 3 minutes to review 154 page document?? How is that enough time to even read the first few pages? Its not like this is the Apple iTunes terms that comes up every week when you need to update iTunes. I just don't see how they think it is acceptable to pass something they didn't even read if it is true..

Well, I understand that parties mean nothing in the US, but nonetheless, representatives of their party negotiated it, and there was a lot of pressure. Seems reasonable that they would vote yes to it.

 

[Gmash]

I think they rarely read the whole bills they vote on. What I find amazing is the very bill that is supposed to be about having a shred of fiscal responsibility is loaded up with pork. Not surprising, but ridiculously shameless.

 

[Speed Daemon]

Defining millionaires based on income and not actual wealth is ridiculous right there.

That's your opinion. I didn't make the new definition But considering how many people in the US are worth $1,000,000 or more, and how inflation has made the million-dollar milestone less of a big deal, I don't find any reason myself to ridicule the new definition.

 

[A.Nonymous]

That's your opinion. I didn't make the new definition But considering how many people in the US are worth $1,000,000 or more, and how inflation has made the million-dollar milestone less of a big deal, I don't find any reason myself to ridicule the new definition.

 
Millionaire - a person whose wealth amounts to a million or more in some unit of currency, as dollars.

That's not my definition, that's dictionary.com's definition. There are (according to Boston Consulting Group) 5.1 million households with a net worth of over a million dollars. That's out of about 132 million households in the US (2012 census). By my math, that's about 4% of US households are millionaires. That's not a huge percentage at all no matter how you look at it. The definition of millionaire has always been based on net worth. There is a reason for that. Wealth doesn't necessarily have any correlation with earning.

 

[Speed Daemon]

And the drumbeat goes on...

Like it or not, but the creditors of US sovereign debt will not be swayed by misdirection, misinformation or anything other than the interest payments that are due to them.

Refusing to keep up this mandatory responsibility is not a legitimate political issue; it's mandatory!

 

[ElasticNinja]

And the drumbeat goes on...

Like it or not, but the creditors of US sovereign debt will not be swayed by misdirection, misinformation or anything other than the interest payments that are due to them.

Refusing to keep up this mandatory responsibility is not a legitimate political issue; it's mandatory!

You see, I think there are elected officials in the US who think default wouldnt be too bad, who subscribe to some sort of ultraliberal economic philosophy on this. The US doesn't have a credible plan for reducing its deficit, nor its debt to GDP ratio.

The US does not have an economic plan as such. In every other country there are people crunching numbers regarding the future - health costs, retirees, etc, and looking for ways to deal with this. They exist in America too, except the people with power don't care.

 

[A.Nonymous]

I don't think it's that the US has no plan to reduce it's debt. I think it's that the US has no interest in reducing it's debt. Reducing the debt is going to mean taking cuts in all kinds of areas and NO ONE who talks about actual spending cuts is likely to be re-elected.

 

[Speed Daemon]

You see, I think there are elected officials in the US who think default wouldnt be too bad, who subscribe to some sort of ultraliberal economic philosophy on this. The US doesn't have a credible plan for reducing its deficit, nor its debt to GDP ratio.

It's easy to criticize as an outsider, and be misled by phony "issues" that don't matter nearly as much as preventing the US from falling into a deep economic depression. The truth is that the US government almost always operates runs a deficit. It's no big deal, and even less important right now, with interest rates in negative numbers.

The last time the US federal budget was balanced was three years during Bill Clinton's Presidency. Why was there no hue and cry when the Bush administration was racking up massive deficits?

The fact of the matter is that there are numerous economic plans floating around. The credulity of the plans matters far less than the efficacy of each. We need a plan that actually works!

President Obama's stimulus plan (which is based on FDR's plan to raise the US out of the Great Depression) worked. It worked once, and can work again. That's all that matters.

 

[Speed Daemon]

I don't think it's that the US has no plan to reduce it's debt. I think it's that the US has no interest in reducing it's debt. Reducing the debt is going to mean taking cuts in all kinds of areas and NO ONE who talks about actual spending cuts is likely to be re-elected.

Cutting spending today does absolutely nothing to pay debts that were run up in the past. Only one thing will reduce US sovereign debt: enough revenue to pay more than the minimum interest payments.

The Republicans are pretending that the only thing to do is to mess with the public trust funds. That's a lie. The trust funds are sacred; untouchable. Harming the poorest, oldest and weakest Americans will solve nothing, and only create more problems.

There are plenty of wasteful spending for war materiel that the US simply doesn't need in a post-Cold War era that we as a nation can do without. The US does not owe defense contractors a living.

 

[ElasticNinja]

It's easy to criticize as an outsider

Certainly.

It's easy to criticize as an outsider, and be misled by phony "issues" that don't matter nearly as much as preventing the US from falling into a deep economic depression.

That is true, and I agree that economic stimulus is important. However it is important to plan how to finance such a stimulus, and some of that stimulus needs be introduced right away, via taxation that does not have sharp negative fiscal multipliers.

The truth is that the US government almost always operates runs a deficit. It's no big deal, and even less important right now, with interest rates in negative numbers.

Almost every government does indeed run a deficit. However deficits of around 8% are not sustainable. Certainly not with low inflation and a developed economy. Deficits should be kept below 3% at the very least. Its good housekeeping. If one wants to spend, taxation should be increased. Spending should not be willy-nilly. It should have socioeconomic benefits.

I'm not saying that the US government should not borrow heavily right now. If it was running a surplus it should borrow right now. What I am saying is that there needs to be a plan to converge outgoings and incomes, a plan to restructure the economy.

The last time the US federal budget was balanced was three years during Bill Clinton's Presidency. Why was there no hue and cry when the Bush administration was racking up massive deficits?

I don't know why so many countries have been so lax on such things. I think it was to do with the lack of realisation that the post-WWII boom is over. 5%+ growth rates are over.

The fact of the matter is that there are numerous economic plans floating around. The credulity of the plans matters far less than the efficacy of each. We need a plan that actually works!

I agree, and thats what I am saying.

President Obama's stimulus plan (which is based on FDR's plan to raise the US out of the Great Depression) worked. It worked once, and can work again. That's all that matters.

Certainly deficit spending is important during a downturn, to make up for wasted output potential, and to keep driving up output potential. Basic Keynesian. The current stimulus is quite different to FDR's (the success of which is debatable, I would be inclined to think of it as a qualified success), and it must be remembered that FDR actually kept the debt to GDP ratio steady!

 

[ElasticNinja]

Cutting spending today does absolutely nothing to pay debts that were run up in the past. Only one thing will reduce US sovereign debt: enough revenue to pay more than the minimum interest payments.

Well one must remember that debt is rolled over, so cutting spending is important with regards to reducing US sovereign debt.

The Republicans are pretending that the only thing to do is to mess with the public trust funds. That's a lie. The trust funds are sacred; untouchable. Harming the poorest, oldest and weakest Americans will solve nothing, and only create more problems.

Trust funds are a bad idea though really imo. Sure, start a few sovereign wealth funds. But I think that social and health spending should be right on the budget.

There are plenty of wasteful spending for war materiel that the US simply doesn't need in a post-Cold War era that we as a nation can do without. The US does not owe defense contractors a living.

Well military spending is quite an effective way of directing the US economy to be fair. Better of putting it into infrastructure however.

 

[Speed Daemon]

That is true, and I agree that economic stimulus is important. However it is important to plan how to finance such a stimulus, and some of that stimulus needs be introduced right away, via taxation that does not have sharp negative fiscal multipliers.

Sharp negative fiscal multipliers? Please define that.

I already explained the plan to finance stimulus spending: take advantage of the negative interest rates while the US government can.

President Obama did introduce a stimulus plan "right away". But the Republicans in Congress stopped it before it could fully restore growth. The longer we wait to resume repairs, the more it will cost us.

Almost every government does indeed run a deficit. However deficits of around 8% are not sustainable.

That's the difference between President Obama (and President Clinton before him) and the Republicans who seek to destroy our country for their political gain. The good guys in this true story want to turn the deficit around, not sustain it.

I'm not saying that the US government should not borrow heavily right now. If it was running a surplus it should borrow right now. What I am saying is that there needs to be a plan to converge outgoings and incomes, a plan to restructure the economy.

For those of us who are US citizens living in the US, this isn't a game for amateurs to play. Here in the US, the government does not plan or control the economy. That's not going to change...unless the GOP-led Congress defaults on US sovereign debt and we lose our sovereignty.

I don't know why so many countries have been so lax on such things. I think it was to do with the lack of realisation that the post-WWII boom is over. 5%+ growth rates are over.

Agreed. The mindset that things are supposed to grow without interruption isn't based in reality. However, after two near-depressions in two decades, the US does need to grow its economy by producing things again. Selling off the industrial infrastructure that used to produce those goods for a one-time quick profit is not sustainable...obviously.

I agree, and thats what I am saying.

You are now, but not before.

The current stimulus is quite different to FDR's (the success of which is debatable, I would be inclined to think of it as a qualified success), and it must be remembered that FDR actually kept the debt to GDP ratio steady!

The last time I checked, the US did emerge from the Great Depression. Of course it was successful!

The big difference today is that FDR didn't have a political party committing mutiny in government.

Well one must remember that debt is rolled over, so cutting spending is important with regards to reducing US sovereign debt.

That's a non sequitur. The only way to pay off a debt is to spend more than the bare minimum debt payments, not less!

Trust funds are a bad idea though really imo.

You can do as you please over there in Ireland. I have paid a lot of money into those trust funds, with the promise that I'll get it back when I need it. Good, bad or indifferent, I'm not going to walk away from it and let the Republicans give my money to their cronies.

Well military spending is quite an effective way of directing the US economy to be fair. Better of putting it into infrastructure however.

No, military spending on boondoggles is how wealthy and dishonest politicians abuse their power to make huge profits for themselves at the expense of the rest of the US taxpayers. It's a criminal enterprise that needs to stop. Infrastructure repairs OTOH benefit all Americans equally.

 

[A.Nonymous]

Here's the thing. You don't get out of debt by borrowing money. Doesn't matter how much money you borrow or where you borrow it from. That's not how you get out of debt.

You get out of debt by actually cutting spending and taking those cuts and spending that money on debt reduction. Yes you need to cut military spending. But you also need to cut spending on Medicare, Medicaid, Social Security and all the other social programs that the everyone is so fond of. You have to cut stuff all the way across the board. Not just the cuts that politicians talk about where you're cutting how much you are going to increase spending, but you have to actually cut stuff.

Honestly, I've given up on the idea that I'll ever get anything out of Social Security, Medicare, etc..... Those entire systems are a scam. If I could, I would opt out today and let them keep everything I've already put in. I am perfectly capable of planning my own retirement thank you very much.

 

[ElasticNinja]

Honestly, I've given up on the idea that I'll ever get anything out of Social Security, Medicare, etc..... Those entire systems are a scam. If I could, I would opt out today and let them keep everything I've already put in. I am perfectly capable of planning my own retirement thank you very much.

People seem to have no idea how much they need these programs, and how unable they are to plan these things for themselves. Case in point.

 

[A.Nonymous]

People seem to have no idea how much they need these programs, and how unable they are to plan these things for themselves. Case in point.

Why do you say people are unable to plan these things themselves? For one thing it's not rocket science and for another thing there are many qualified professionals to help out in these areas.

 

[cjr72]

Now that the definition of a millionaire is someone who has an income of at least $1,000,000/year, taxing at $250,000/year is only 25% of the limit. How is that stretching? It's not even pushing the limit.

I agree with you. I was taking a very charitable view... I suppose if cornered someone trying to defend 250k income getting lumped in with millionaires/billionaires could argue that if they are frugal, live in a low cost area of the country and so on they could be millionaires. Generally I think people like that should be admired and not be singled out as a problem for not paying their fair share, etc.

 

[Speed Daemon]

Here's the thing. You don't get out of debt by borrowing money. Doesn't matter how much money you borrow or where you borrow it from. That's not how you get out of debt.

Not if I stick to that over-simplified version that all-too-conveniently leaves out some key steps. In the real world, large fortunes have been made out of borrowed money that is invested into projects that bring in revenue.

It should go without saying that an individual's personal budget is not the same as that of a large national government. But alas I find myself having to say it again. The truth is that FDR and President Obama did in fact increase revenues to the US Treasury by borrowing money, putting people to work, building infrastructure and therefore giving American industry the tools it needs to make profits. And those profits do in fact result in increased revenue for the US government.

You get out of debt by actually cutting spending and taking those cuts and spending that money on debt reduction.

What money?

Any assumption that there's cash just sitting around, waiting to be spent is a false one in this case. Every last cent in the US Treasury is money that's owed to one party or another. The spending is going to service the US sovereign debt!

But you also need to cut spending on Medicare, Medicaid, Social Security and all the other social programs that the everyone is so fond of.

The reason why people are so fond of these trust funds is because it's their money, being held in trust. What is is most certainly not is a "get out of jail free" card for legislators who want to steal that money.

Everything has consequences. Starting two Vietnam-style wars and at the same time doing a big tax give-away (essentially bribing the American people to accept the wars) has consequences. The consequences should fall on those who caused them. Making even more innocent victims to save the dirty politicians' careers is NOT acceptable. Picking on the people who really need their money, and are least able to defend themselves against marauding GOP politicians who want to take food off their tables will never be a permissible option.

Congress has borrowed against these trust funds for too long, and now they must pay the piper. That money absolutely must be repaid to the trust funds, not ifs, ands or buts!

You have to cut stuff all the way across the board.

Maybe, maybe not. Cutting "stuff" that would have a consequence of plunging the US into pre-industrial age conditions is not good stewardship; it has consequences that can ruin the nation.

Once again, the trust funds are not on "the board". There's a reason why they're held in trust, and not in the General Fund, and this is why.

Honestly, I've given up on the idea that I'll ever get anything out of Social Security, Medicare, etc..... Those entire systems are a scam.

You're welcome to try to prove that claim/GOP talking point. I know that you can't, but you're welcome to try.

The truth is that the trust funds and the related insurance policies are perfectly legal, and even moral. What's more, they work far more efficiently than anything that the private sector wants to do.

 

[Speed Daemon]

I agree with you. I was taking a very charitable view... I suppose if cornered someone trying to defend 250k income getting lumped in with millionaires/billionaires could argue that if they are frugal, live in a low cost area of the country and so on they could be millionaires. Generally I think people like that should be admired and not be singled out as a problem for not paying their fair share, etc.

A personal income in excess of $250,000 a year is plenty of income, no matter where they live.

I don't see anything that's intrinsically admirable about people giving themselves massive incomes, earned or otherwise. When that money comes at the expense of others, that's not admirable at all.

While nobody is singling out the very wealthy, or villainizing them without just cause, basic arithmetic shows that taking only from the middle class and the poor:

1. Will never raise enough revenues to solve the problem;
2. Will soon exhaust that revenue source when they go broke.

Common sense dictates that only the people (and corporations) who have far more money than they need to survive can be taxed in ways that actually solve the problem and doesn't "kill the goose that lays golden eggs".

 

[Gmash]

Remember how Al Gore got ridiculed for his "lock box" proposal? Not so funny now. Not to mention we wouldn't have started a war in Iraq for no reason. The Supreme Court really screwed us giving the presidency to Cowboy Bush.

 

[copestag]

Congress has borrowed against these trust funds for too long, and now they must pay the piper. That money absolutely must be repaid to the trust funds, not ifs, ands or buts!

but I thought you said the way to repay debt is to borrow more............ the trust funds cannot be repaid until every last dime has been borrowed using your logic on borrowing

 

[Speed Daemon]

but I thought you said the way to repay debt is to borrow more............ the trust funds cannot be repaid until every last dime has been borrowed using your logic on borrowing

Please do NOT attribute your logic to me!!!

What you wrote is nonsensical. Obviously the trust funds are among the creditors for the US sovereign debt. This is very simple.

 

[A.Nonymous]

Not if I stick to that over-simplified version that all-too-conveniently leaves out some key steps. In the real world, large fortunes have been made out of borrowed money that is invested into projects that bring in revenue.

It should go without saying that an individual's personal budget is not the same as that of a large national government. But alas I find myself having to say it again. The truth is that FDR and President Obama did in fact increase revenues to the US Treasury by borrowing money, putting people to work, building infrastructure and therefore giving American industry the tools it needs to make profits. And those profits do in fact result in increased revenue for the US government.

The financial principles are the same. I'm not going to get out of debt by borrowing money to invest in things that will (hopefully) bring me more money to pay off my debt. That's just voodoo and wishful thinking.

What money?

Any assumption that there's cash just sitting around, waiting to be spent is a false one in this case. Every last cent in the US Treasury is money that's owed to one party or another. The spending is going to service the US sovereign debt!

No, there's not just money sitting around. Which is why we have to actually cut services. It's not a complex formula. We've got more going out than we have coming in.

The reason why people are so fond of these trust funds is because it's their money, being held in trust. What is is most certainly not is a "get out of jail free" card for legislators who want to steal that money.

Everything has consequences. Starting two Vietnam-style wars and at the same time doing a big tax give-away (essentially bribing the American people to accept the wars) has consequences. The consequences should fall on those who caused them. Making even more innocent victims to save the dirty politicians' careers is NOT acceptable. Picking on the people who really need their money, and are least able to defend themselves against marauding GOP politicians who want to take food off their tables will never be a permissible option.

Congress has borrowed against these trust funds for too long, and now they must pay the piper. That money absolutely must be repaid to the trust funds, not ifs, ands or buts!

Yes. It is our money. But it's already gone. You can kiss it goodbye at this point. Perfect example is a guy who smashed into my car recently. He had no insurance. He was 18. He was unemployed and he was getting ready to go to jail for beating his girlfriend. He had no money. He did several thousand dollars of damage to my car. Was he liable for it? Yes he was. If I sued him in small claims court would I win? Yes. Hands down win. Would I ever get any money out of an unemployed, imprisoned, broke, 18 yr old? No. I wouldn't. So I didn't bother suing him. Wasn't worth the time and I'd never get anything out of it. That's the same thing with Social Security, etc..... We are never going to see that money. It's gone. What has been done has been done. You're wasting time/effort chasing money that is already gone.

Maybe, maybe not. Cutting "stuff" that would have a consequence of plunging the US into pre-industrial age conditions is not good stewardship; it has consequences that can ruin the nation.

Then you're never going to fix the problem. Ever. Because, as I said earlier, you have to cut stuff across the board and probably raise taxes across the board as well. Both are unacceptable to just about everyone.

You're welcome to try to prove that claim/GOP talking point. I know that you can't, but you're welcome to try.

The truth is that the trust funds and the related insurance policies are perfectly legal, and even moral. What's more, they work far more efficiently than anything that the private sector wants to do.

The idea that Social Security is more efficient or effective than the private sector is laughable. Beyond laughable. The math just isn't there at all. Keep believing that though. Keep believing that these programs are solvent as well despite the fact that they aren't in the long term.

 

[cjr72]

A personal income in excess of $250,000 a year is plenty of income, no matter where they live.

I don't see anything that's intrinsically admirable about people giving themselves massive incomes, earned or otherwise. When that money comes at the expense of others, that's not admirable at all.

While nobody is singling out the very wealthy, or villainizing them without just cause, basic arithmetic shows that taking only from the middle class and the poor:

1. Will never raise enough revenues to solve the problem;
2. Will soon exhaust that revenue source when they go broke.

Common sense dictates that only the people (and corporations) who have far more money than they need to survive can be taxed in ways that actually solve the problem and doesn't "kill the goose that lays golden eggs".

As to admiration I meant for those who are frugal with their money and not simply because of the amount of money they make.

I don't know who is advocating raising taxes only from the middle class or poor, but certainly over the long term rates across the board could be raised to what they were previous to the villainous Bush era tax cuts, right?

 

[A.Nonymous]

A personal income in excess of $250,000 a year is plenty of income, no matter where they live.

I don't see anything that's intrinsically admirable about people giving themselves massive incomes, earned or otherwise. When that money comes at the expense of others, that's not admirable at all.

While nobody is singling out the very wealthy, or villainizing them without just cause, basic arithmetic shows that taking only from the middle class and the poor:

1. Will never raise enough revenues to solve the problem;
2. Will soon exhaust that revenue source when they go broke.

Common sense dictates that only the people (and corporations) who have far more money than they need to survive can be taxed in ways that actually solve the problem and doesn't "kill the goose that lays golden eggs".

You do realize that you don't earn that kind of money soley by exploiting others. Just pointing out the obvious.

 

[Speed Daemon]

As to admiration I meant for those who are frugal with their money and not simply because of the amount of money they make.

What does that have to do with the topic? Are you saying that people who make in excess of $250,000/year shouldn't have to pay taxes because they're frugal? I've had to live on a lot less than $250,000 (a lot less than $25,000 in fact) and had no other option than to be frugal with my money. Why is that not admirable?

I don't know who is advocating raising taxes only from the middle class or poor...

It's the Republican Party. If you don't know the names of any Republican legislators, you can find plenty at the gop.gov website, and many others. If you want the Cliffs Notes version, Mitch McConnell (R, KY), John Boehner (R, OH), Eric Cantor (R, VA) and Paul Ryan (R, WI) are the ringleaders in Congress.

...but certainly over the long term rates across the board could be raised to what they were previous to the villainous [sic] Bush era tax cuts, right?

Ahh...the Bush tax give-away expired on January 1. It was a major news story here in the US.

Since you apparently missed the biggest news story of the year, I'm guessing that you're another non-American. Is that correct?

As you can see (because they list their location), there are others form outside the US who are commenting on what is literally not their business as non-Americans. I don't mind their input, but do think it's only fair for people to disclose whether or not the advice I'm reading is coming from someone with "skin in the game".

I'm a life-long US citizen, and have earned every cent in the US. What about you?