Why Are We Arguing?

[Guest]

Maybe our dysfunctional Congress is a good thing.

What's in place right now are things that will happen at the beginning of 2013 that will whack about $7 trillion off the national debt in the coming decade. The changes will drive the annual deficits a lot closer to the targeted level of federal spending accepted by most fiscal experts, without even touching Social Security or Medicare.

Will it hurt? Sure. We'll all be paying noticeably more taxes with the expiration of the Bush tax cuts. And the Defense Department will really be hurting with the deep cuts that will apply to them. And we all will see some noticeable cuts to services and social programs. But diets and budget cuts will always cause some pain and discomfort, so no big deal.

With the automatic changes beginning in 2013, we won't have the money to run around being policeman to the world, then re-building he countries we bomb. And we'll all be paying a fair share of the cost of the government services we demand. And the cuts that will automatically be achieved will be done without touching any entitlement programs. So they will remain as low-hanging fruit for even further cuts. What's wrong with any of that?

So I guess I've given up on Congress ever coming back from the brink of the deep and widening ideological and political divide between the parties. But maybe that's a good thing. They'll never get enough consensus to overturn the automatic spending cuts and tax increases that will happen beginning next year.

What's going to happen will have the result that we all know are necessary. So what are we arguing about?

[Guest]

Maybe our dysfunctional Congress is a good thing.

What's in place right now are things that will happen at the beginning of 2013 that will whack about $7 trillion off the national debt in the coming decade. The changes will drive the annual deficits a lot closer to the targeted level of federal spending accepted by most fiscal experts, without even touching Social Security or Medicare.

Will it hurt? Sure. We'll all be paying noticeably more taxes with the expiration of the Bush tax cuts. And the Defense Department will really be hurting with the deep cuts that will apply to them. And we all will see some noticeable cuts to services and social programs. But diets and budget cuts will always cause some pain and discomfort, so no big deal.

The cuts that will automatically be achieved will be done without touching any entitlement programs. So they will remain as low-hanging fruit for even further cuts.

So I guess I've given up on Congress ever coming back from the brink of the deep and widening ideological and political divide between the parties. But maybe that's a good thing. They'll never get enough consensus to overturn the automatic spending cuts and tax increases that will happen beginning next year.

What's going to happen will have the result that we all know are necessary. So what are we arguing about?

I realize that you look down on my posts but you never responded to post #50 in the thread "What is Obama hiding"...and would like to hear what you think......this is a partial quote...

""Budget policy experts, including former CBO Director Alice Rivlin and Robert Greenstein of the Center on Budget and Policy Priorities, strongly endorsed the idea of giving Congress the first half of next year to come up with a comprehensive package or framework of savings and tax revenues, with the threat of the major tax expirations hanging over them.

“The fiscal cliff is a real cliff,” Rivlin said. “ It would be very bad for the economy and very bad for a lot of things people care about if we let all of the tax cuts expire all at once and the Alternative Minimum Tax and all the things that are in the cliff as well as the sequester.”

“It’s called [by some] kicking the can down the road,” she said. “It shouldn’t be. It is moving the fiscal cliff for a few months. It’s still there.”



And while nobody would disagree on the incompetence of our congress..YOU are not the only one who is aware, but I also in that post pointed out some positive things that are happening. I realize this is the mantra right now for the left..oh that cannot be...they do not play politics..only the Republicans..my bad. BUT lets then talk about all the bills sitting in the Senate that Reid will not even allow to be discussed let alone come to a vote.

You can rail, and you will on Republicans all you want, and THAT is a common theme in all your posts, but the congress is dysfunctional...NOT the Republican side of congress only. That attitude is what got us here.

[Guest]

Maybe our dysfunctional Congress is a good thing.

What's in place right now are things that will happen at the beginning of 2013 that will whack about $7 trillion off the national debt in the coming decade. The changes will drive the annual deficits a lot closer to the targeted level of federal spending accepted by most fiscal experts, without even touching Social Security or Medicare.

Will it hurt? Sure. We'll all be paying noticeably more taxes with the expiration of the Bush tax cuts. And the Defense Department will really be hurting with the deep cuts that will apply to them. And we all will see some noticeable cuts to services and social programs. But diets and budget cuts will always cause some pain and discomfort, so no big deal.

With the automatic changes beginning in 2013, we won't have the money to run around being policeman to the world, then re-building he countries we bomb. And we'll all be paying a fair share of the cost of the government services we demand. And the cuts that will automatically be achieved will be done without touching any entitlement programs. So they will remain as low-hanging fruit for even further cuts. What's wrong with any of that?

So I guess I've given up on Congress ever coming back from the brink of the deep and widening ideological and political divide between the parties. But maybe that's a good thing. They'll never get enough consensus to overturn the automatic spending cuts and tax increases that will happen beginning next year.

What's going to happen will have the result that we all know are necessary. So what are we arguing about?

My first post was to chastise you mainly for your overt partisan on this economic issue, and it is blatant, BUT NOT ON THIS THREAD, at least not yet !

You make a good point that perhaps allowing us to tumble off that cliff will be the best thiing in the long run. Forbes has a great article written in terms even a dummy like me can understand.

Fiscal Cliff: Fact or Fiction? - Forbes (http://www.forbes.com/sites/sherylnancenash/2012/06/22/fiscal-cliff-fact-or-fiction/)

I am going to stay positive on the issue and hope the back room stuff that appears to be going on will work.

What I do not understand is the lack of any media talk on this, except perhaps for the sometime rant on a financial channel. Other wise our media is stuck on such crap...they actually on the Holder thing would rather talk about stupid stuff EXCEPT WHAT IS GOING ON. Here you have an issue that is important to the integrity of the country and the media makes it totally partisan. And I believe that the media is the biggest problem we have....politicians play where they are directed by the cameras and the media, and I would assume the listeniing public, only want to hear the stupid stuff. It is very frustrating to hear folks when discussing congress to ask the questions in a partisan manner, and insure that folks stay partisan in the discussion. Nobody debates the ISSUE, they debate which party is right or wrong.

[Guest]

I realize that you look down on my posts but you never responded to post #50 in the thread "What is Obama hiding"...and would like to hear what you think......this is a partial quote...

""Budget policy experts, including former CBO Director Alice Rivlin and Robert Greenstein of the Center on Budget and Policy Priorities, strongly endorsed the idea of giving Congress the first half of next year to come up with a comprehensive package or framework of savings and tax revenues, with the threat of the major tax expirations hanging over them.

“The fiscal cliff is a real cliff,” Rivlin said. “ It would be very bad for the economy and very bad for a lot of things people care about if we let all of the tax cuts expire all at once and the Alternative Minimum Tax and all the things that are in the cliff as well as the sequester.”

“It’s called [by some] kicking the can down the road,” she said. “It shouldn’t be. It is moving the fiscal cliff for a few months. It’s still there.”



And while nobody would disagree on the incompetence of our congress..YOU are not the only one who is aware, but I also in that post pointed out some positive things that are happening. I realize this is the mantra right now for the left..oh that cannot be...they do not play politics..only the Republicans..my bad. BUT lets then talk about all the bills sitting in the Senate that Reid will not even allow to be discussed let alone come to a vote.

You can rail, and you will on Republicans all you want, and THAT is a common theme in all your posts, but the congress is dysfunctional...NOT the Republican side of congress only. That attitude is what got us here.
Bucco, I'm not differentiating between the parties--they're both self-serving to their ideological interests and special interest donors. Together they are dysfunctional.

You continually remind us that you predicted Obama's incompetence and character weaknesses. I'll take the opportunity to remind you that I predicted that there would be no change in spending after the GOP won the House in the 2010 mid-term elections. The House doesn't need a Senate-approved budget to cut appropriation bills. But they haven't. The House, which has the government purse strings, has continued to spend like drunken sailors.

Harry Reid and the Senate? Of course he's serving as the leading political obstructionist in the Congress. But I predict that if the GOP gains the majority in the Senate in a few months and a new GOP Majority leader is elected, there'll be no difference!

Somehow you keep reading a political agenda into my posts. What's more accurate is what I used to use as my "signature" here...never vote for an incumbent!

Let's throw them all out--apply our own version of term limits--and keep throwing them out with each election until we convince those elected to represent us that they should do just that.

[Guest]

....I am going to stay positive on the issue and hope the back room stuff that appears to be going on will work....

What I do not understand is the lack of any media talk on this, except perhaps for the sometime rant on a financial channel....I'm glad given all that we've seen and experienced from our government in the last few years, maybe longer, that you can remain optimistic that our political parties will reach a compromise solution...on anything! I'm sorry that I can't share your positive hopes.

As far as what the media reports on, to a huge degree they feed the public what the public wants to hear. The conservative media reports on events or actions by the liberals designed to enrage and embitter their readers and listeners against the liberals. The liberal media does exactly the opposite. The "din" between the two makes it difficult to find a really balanced media source. Conservatives listen to the conservative media sources, and the liberals listen to the liberals. The result is that the partisans, and the people they elect to represent them, are driven farther and farther apart. And it definitely gives one a headache!

Why does the public continue to endure and empower a "fourth estate" like this? For a public that either refuses or is incapable of doing the arithmetic on fiscal issues, fails to understand the broader implications of foreign relations, and has limited understanding on how economics really works, why would you expect anything different?

[Guest]

I predict a legal tactical reason will be presented to delay the automatic cuts.......as predictable as the sun (or daylight) in the morning.

btk

[Guest]

I'm glad given all that we've seen and experienced from our government in the last few years, maybe longer, that you can remain optimistic that our political parties will reach a compromise solution...on anything! I'm sorry that I can't share your positive hopes.

As far as what the media reports on, to a huge degree they feed the public what the public wants to hear. The conservative media reports on events or actions by the liberals designed to enrage and embitter their readers and listeners against the liberals. The liberal media does exactly the opposite. The "din" between the two makes it difficult to find a really balanced media source. Conservatives listen to the conservative media sources, and the liberals listen to the liberals. The result is that the partisans, and the people they elect to represent them, are driven farther and farther apart. And it definitely gives one a headache!

Why does the public continue to endure and empower a "fourth estate" like this? For a public that either refuses or is incapable of doing the arithmetic on fiscal issues, fails to understand the broader implications of foreign relations, and has limited understanding on how economics really works, why would you expect anything different?


First, since you are so pessimistic, are you making moves to shelter yourself during the fall off the cliff ? :)

The media is awful, just plain awful so much so it is a disgrace. I have begun a few threads on this and brought it up in a number of other posts within threads. NOBODY seems to care on here anyway, and as I said earlier today and you have just said also, the media is NOT informing us correctly...NOT even close and it appears that people watch/read only the media that will confirm what they want confirmed OR where the most likeable folks are presenting the news.


As a thought, I am half way complete with the new book CONKRITE and it does in fact give examples of how administrations, both parties, try to manipulate the news.

THAT makes for a very uninformed public and certainly answers how we get such ineffective leadership.

[Guest]

I predict a legal tactical reason will be presented to delay the automatic cuts.......as predictable as the sun (or daylight) in the morning.

btk
While I don't disagree, Billie..I would be deeply disappointed if that's the outcome.

Were that the development, I think it would raise the question of how could it happen?

The GOP has overwhelming control of the House and can stop about any fiscal legislation the Senate might initiate. But if the House initiated legislation first, would the more fiscally conservative House actually pass an extension of the Bush tax cuts without accompanying legislation to seriously cut spending, maybe even including Social Security and Medicare? Without serious cuts, such legislation would significantly increase the annual deficits and accelerate the growth of the national debt. That kind if one-sided bill would be DOA in the Senate.

But let's say the House extends the tax cuts and actually takes an intelligent slash at spending (yeah, yeah, I know..."intelligent" as regards Congress is an oxymoron). Then what would the Senate do?

There's no chance that the GOP can gain enough Senate seats to force cloture (that is, gain 10-11 seats in the November election). So what might 60 Senators actually agree on? I'm assuming there might be a new majority leader that would put such questions up for a vote. The GOP Senators, assuming they'd be in the majority, would try to force extension of the tax cuts, elimination if the defense cuts, and who knows what spending cuts they might embrace. The Democrats will demand increased taxes on the rich and resist cuts to favorite social programs. The Dems would be willing to filibuster any such GOP-initiated legislation, refusing to let it come up for a vote. Neither party is likely to be willing to attack entitlements. This situation describes a continued stalemate in the Senate.

So I guess I might ask, how could an extension of the status quo happen? With the control the more fiscally-conservative Republicans have, how could Congress "kick he can down the road" yet another time? Would the Republicans in both houses vote for a package that would actually increase the deficit and national debt? Or will they stick to their guns this time and force the parties to move towards some compromise solution?

I guess the question that will be answered is whether those that claim they are fiscally conservative really are. Lordy, I hope they've been serious about what they've been saying. If not, this country is in a world of hurt.

[Guest]

First, since you are so pessimistic, are you making moves to shelter yourself during the fall off the cliff ? :)....Allready done, Bucco. I work with one of the top financial advisors in the country. What we've done won't completely protect me from losing money, but it will certainly minimize losses on the downside and accelerate upside profit potential. It already has.

By the way, my advisor and I as well as most who make their livings in the financial markets share the opinion that the financial markets don't listen to the politicians too seriously. What Congress says or does can have a short-term effect on the markets, but any such fluctuations often provide profit-making opportunities. Government's only long-term influence on business is more in the area of tax policy and regulation than what they choose as long term fiscal, social or foreign policy. Business can simply avoid the negative effect of taxation and regulation by doing business elsewhere....which they've done at increasing rates. Business feels no responsibility for national economic well-being unless it has an effect on their ability to make profits. None.

Think about it. When's the last time you've heard any serious leader in the financial industry get all exorcised about what Congress is or isn't doing? Only Warren Buffett that I can think of--and he's simply made his feelings known and gone back to making money for Berkshire Hathaway. How much did you ever hear from Mitt Romney on political issues before he cashed out of Bain Capital, protected his wealth with top advisors and accountants, and went on to a political career?

Investors can survive pretty well by investing in the companies which have demonstrated that they know how to insulate themselves from Congressional dysfunction and stupidity.

People tend to forget that governments can have a long-term effect on the economic health and competitiveness of the country, and the satisfaction and standard of living of citizens. But the financial markets have a very short-term and profit-driven horizon. It's when people get the two mixed up that they lose money.

What I post here, Bucco, I do as a citizen, more in the interest of future generations than for myself. What I do personally as an investor has little to do with my political opinions. My personal horizon is getting closer with each birthday.

By the way, you don't think members of Congress act differently than me, do you?

[Guest]

The GOP has overwhelming control of the House and can stop about any fiscal legislation the Senate might initiate. But if the House initiated legislation first, would the more fiscally conservative House actually pass an extension of the Bush tax cuts without accompanying legislation to seriously cut spending, maybe even including Social Security and Medicare? Without serious cuts, such legislation would significantly increase the annual deficits and accelerate the growth of the national debt. That kind if one-sided bill would be DOA in the Senate.


VK, You writings seem to echo Obama'a rhetoric in this case - blame the GOP house for the lack of a budget. The House has passed several budget bills, only to have the Democrat controlled Senate not only fail to bring them to a vote, but to not allow discussion of them on the Senate floor. Let's be honest for a change - the reason we do not have a budget that starts to deal with our problems exists because Harry Reid and Hussein Obama do not want to work towards a resolution.

[Guest]

VK, You writings seem to echo Obama'a rhetoric in this case - blame the GOP house for the lack of a budget. The House has passed several budget bills, only to have the Democrat controlled Senate not only fail to bring them to a vote, but to not allow discussion of them on the Senate floor. Let's be honest for a change - the reason we do not have a budget that starts to deal with our problems exists because Harry Reid and Hussein Obama do not want to work towards a resolution.
I wasn't talking about budgets. I'm talking about spending! Appropriation bills are largely in the control of the House of Representatives. The absence of a Senate-approved budget has little effect.

[Guest]

Nancy Pelosi has many of our problems covered. Just read today that she ventures that the President should unilaterally eliminate the debt ceiling,

"She was endorsing the idea that Obama should use the 14th Amendment — which states that “The validity of the public debt of the United States . . . shall not be questioned” — to circumvent House Republicans who want spending cuts in exchange for another debt ceiling hike."

Pelosi: Obama should unilaterally eliminate the debt ceiling | WashingtonExaminer.com (http://washingtonexaminer.com/pelosi-obama-should-unilaterally-eliminate-the-debt-ceiling/article/2500408)

Wonder if her thoughts apply only to this administration !!!!! This sort of gives you a feel where she stands on us spending and spending !!

"Who knows, though? Obama has already decided to “work his way around Congress,” as he did with last week’s illegal immigration enforcement maneuver. He has also declared that Congress is out of session, in order to make ‘recess’ appointments, even though Congress said it was in session. Maybe he’ll decide to “borrow Money on the credit of the United States,” too."

You cannot make this stuff up !!!

[Guest]

The solution would be??????......a GENUINE Third Party???? or what????

[Guest]

The solution would be??????......a GENUINE Third Party???? or what????Hey, Hillary said that "it takes a village". Why not start The Villagers party?

[Guest]

Nancy Pelosi has many of our problems covered. Just read today that she ventures that the President should unilaterally eliminate the debt ceiling,

"She was endorsing the idea that Obama should use the 14th Amendment — which states that “The validity of the public debt of the United States . . . shall not be questioned” — to circumvent House Republicans who want spending cuts in exchange for another debt ceiling hike."

Pelosi: Obama should unilaterally eliminate the debt ceiling | WashingtonExaminer.com (http://washingtonexaminer.com/pelosi-obama-should-unilaterally-eliminate-the-debt-ceiling/article/2500408)

Wonder if her thoughts apply only to this administration !!!!! This sort of gives you a feel where she stands on us spending and spending !!

"Who knows, though? Obama has already decided to “work his way around Congress,” as he did with last week’s illegal immigration enforcement maneuver. He has also declared that Congress is out of session, in order to make ‘recess’ appointments, even though Congress said it was in session. Maybe he’ll decide to “borrow Money on the credit of the United States,” too."

You cannot make this stuff up !!!It wouldn't surprise me at all if that happened. If you recall, the last time Congress had a "debate" over raising the debt ceiling, the arguing and recalcitrant school children who serve in Congress waited until the very last minute, spooking the credit rating agencies, who dropped our AAA rating to AA for the first time in history.

The financial situation is more dire now than back then. The annual deficits are larger, the national debt is growing faster, and Congress was so dysfunctional that it formed a supercommittee to do what the full Congress couldn't, and even then they failed to reach any meaningful agreement on anything. After months of negotiations, the Joint Select Committee on Deficit Reduction (the "supercommittee") announced that it could not reach agreement, stating: "we have come to the conclusion today that it will not be possible to make any bipartisan agreement before the committee's deadline." Congress is broken and that press release confirmed it.

The result is there will be a number of damaging changes that will take effect automatically beginning in 2013. Included are...
$1.3 trillion in spending cuts--half from the defense budget and half from discretionary spending. (Congress specifically exempted Social Security or Medicare from such cuts.)

The Bush tax cuts will expire. On average, individuals will pay about 10% more in federal income taxes.

The most immediate and noticeable tax increase will be seen by almost everyone in the first week of 2013. Topping the list is the 2011 payroll tax cut. In 2011, the amount of payroll taxes an employee saw taken out of each paycheck was reduced from 6.2% to 4.2%, but that amount is set to revert to 6.2% on January 1, 2013.

Businesses are particularly concerned about the expiration of the research and development tax credit, and several other expiring business tax provisions.

In addition to increases in individual tax rates, among other items set to expire are the deduction for state and local sales tax, the deduction for college tuition and the IRA charitable rollover. Also expiring at the end of this year is the Alternative Minimum Tax (AMT) "patch". Without a renewal of this temporary patch by Congress, the exempted amount would tumble, exposing an estimated 20-30 million Americans to higher taxes.
So basically, Bucco, Congressional inaction and dysfunction will have dire effects on our economy and unemployment. The debt rating agencies know this and will be moving to further downgrade the U.S. debt rating shortly after January 1. It doesn't take a registered financial analyst to understand that if these things happen, the country will be less able to service its growing debt.

So, as Nancy Pelosi suggested, it might not be a bad idea for the POTUS to simply do what most Constitutional lawyers have said is within his power and responsibility. It's pretty clear that Congress will again fail to agree on increasing the limit in a timely manner, so it looks like the POTUS will have to do it.

It'll cause another giant political flap, probably a multiple of the outrage expressed by his recent immigration executive order. But there's lots of legal opinion that such action by Obama would be legal.

But let's not forget...all this could be avoided by timely action by the Congress. It would probably require negotiation and compromise, but any flap like this is perfectly avoidable. If it happens, President Obama will have done the right thing for the country. The Congress will complain loudly, but they will be the party at fault.