Avoiding The Fiscal Cliff

Discussion in 'Economy' started by PoliticalChic, Nov 16, 2012.

  1. PoliticalChic
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    PoliticalChic Diamond Member

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    1. The looming ‘fiscal cliff’ can be avoided if the parties agree to spending cuts of about $4 trillion over the next decade. “Such an agreement would set specific targets for new tax revenue and spending cuts to reduce deficits by about $4 trillion over a decade, giving Congress and the president more time to work out the details. If they failed to do so, presumably other automatic changes might be in store as an enforcement action — “The ?Fiscal Cliff,? Explained - NYTimes.com

    2. How about we cut "Glitterati Welfare": states offer refundable tax credits which can be paid to the producer whether or not the film has a tax liability. Example: if the state offers a film tax credit of $100,000, but the film only has a federal tax liability of $50,000, the state pays the full $100,000 to the producer. Even better- ‘transferable’ tax credits allow the producer to sell the excess credits to a third party. Get it? The state transfers money from waitresses and truck drivers to celebrity moviemakers.
    Sykes, “A Nation of Moochers,” p. 99.




    3. According to John Stossel, the biggest welfare queens are farmers. Agricultural subsidies including direct payments, marketing loans, counter-cyclical payments, conservation subsidies, insurance, disaster aid, export subsidies, and agricultural research, taken together, have become one of the largest middle- and upper-class welfare programs in the nation.

    a. “Washington paid out a quarter of a trillion dollars in federal farm subsidies between 1995 and 2009, but to characterize the programs as either a “big government” bailout or another form of welfare would be manifestly unfair – to bailouts and welfare.”
    Government’s Continuing Bailout of Corporate Agriculture | Environmental Working Group

    b. “From 1995 to 2009, the largest and wealthiest top 10 percent of farm program recipients collected 74 percent of all farm subsidies, with an average total payment over 15 years of $445,127 per recipient – hardly a safety net for small struggling farmers. The bottom 80 percent of farmers received an average total payment of just $8,682 per recipient.” Ibid.




    4. But if you want to really make your blood boil, check out the transfer payments to owners of beachfront properties. Between 1979 and 2005, Alabama’s Dauphin Island was hammered six times by hurricanes, which destroyed some five hundred pricey vacation home and rental properties. Owners kept rebuilding, and the government paid more than $21 million in insurance.
    http://www.washingtonpost.com/wpdyn/content/article/2005/10/10/AR2005101001465.html

    a. The flood program pays every claim, doesn’t raise premiums after multiple claims, and promises to keep doing so.

    b. A USA TODAY review of FEMA records found that the owners of 19,600 homes and commercial buildings worth $25,000 or more have collected insurance payments that exceed the value of their property. The records exclude property addresses. In Fairhope, Ala., the owner of a $153,000 house has received $2.3 million in claims. A $116,000 Houston home has received $1.6 million. The payments are for damage to homes and what's inside….USA TODAY also found that the owners of 370,000 second homes and rental houses get huge insurance discounts. Wealthy resort areas such as Hilton Head Island, S.C., and Longboat Key, Naples and Sanibel, Fla., have some of the largest numbers of second homes and rentals getting the discounts. USATODAY.com




    5. Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available. Federal workers earning double their private counterparts - USATODAY.com

    a. The disparity has grown from 66% in 2000, to 101% in 2009.
    Federal Employees Continue to Prosper | Cato @ Liberty

    b. When you compare job-to-job, which is difficult as job titles are hard to compare, total compensation for federal employees is 50% higher than private sector counterparts. Even considering skill, education, and seniority, it’s still a large disparity. USAToday, op.cit.

    c. “An apples-to-apples comparison shows that the federal pay system gives many federal workers significantly more compensation than they would get in the private sector. The total premium costs taxpayers $40 billion (according to Richwine and Biggs) or $47 billion (Sherk) per year above market rates.” Federal Pay Still Inflated After Accounting for Skills




    6. Then, there’s this: ]Government waste at it's finest
    a. Government auditors spent the past five years examining all federal programs and found that 22 percent of them–costing taxpayers a total of $123 billion annually–fail to show any positive impact on the populations they serve

    b. Examples from multiple Government Accountability Office (GAO) reports of wasteful duplication include 342 economic development programs; 130 programs serving the disabled; 130 programs serving at-risk youth; 90 early childhood development programs; 75 programs funding international education, cultural, and training exchange activities; and 72 safe water programs

    c. A GAO audit classified nearly half of all purchases on government credit cards as improper, fraudulent, or embezzled. Examples of taxpayer-funded purchases include gambling, mortgage payments, liquor, lingerie, iPods, Xboxes, jewelry, Internet dating services, and Hawaiian vacations. In one extraordinary example, the Postal Service spent $13,500 on one dinner at a Ruth’s Chris Steakhouse, including “over 200 appetizers and over $3,000 of alcohol, including more than 40 bottles of wine costing more than $50 each and brand-name liquor such as Courvoisier, Belvedere and Johnny Walker Gold.” The 81 guests consumed an average of $167 worth of food and drink apiece.




    7. George Washington had four cabinet departments. Since then we’ve added fourteen new departments, and reduced by two (Navy Department became part of Defense, and US Post Office became a quasi-corporation). How many are in line with constitutional requirements, and how many could be dispersed as state functions?

    a. Department of Energy could be eliminated; President Carter created it to minimize our dependence on foreign oil, and to regulate oil prices. Good job? This department is tasked with maintaining and producing nuclear weapons. Why? What does the Pentagon do? And management of the Strategic Petroleum Reserve could, as Clinton suggested, become an outside entity. It also disperses ‘stimulus package’ funds. And it runs an appliance-rebate program, and ‘Weatherization Assistance Program,” and for this it received an additional $37 billion in ‘stimulus’ money, doubling its annual budget.

    b. Department of Education is, of course, unconstitutional. The Constitution clearly states that powers not granted to the federal government belong to the states. So where is the impetus for its creation? Unions. The National Education Association (NEA) “In 1972, the massive union formed a political action committee…released ‘Needed: A Cabinet Department of Education’ in 1975, but its most significant step was to endorse a presidential candidate- Jimmy Carter- for the first time in the history of the organization.” D.T. Stallngs, “A Brief History of the Department of Education: 1979-2002,” p. 3. When formed, its budget was $13.1 billion (in 2007 dollars) and it employed 450 people. IN 2010, the estimated budget is $107 billion, and there are 4,800 employees. http://crunchycon.nationalreview.co...-department-education-not-radical/mona-charen

    “In November 1995, when the federal government shut down over a budget crisis, 89.4 percent of the department’s employees were deemed ‘nonessential’ and sent home.” Beck and Balfe, “Broke,” p.304


    Hey....how about we hold the federal government to the enumerated powers, Article I, section 8??

    Bye, bye, Fannie and Freddie.....
     
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  2. Freemason9
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    Freemason9 Gold Member

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    The problem with this idea has to do with how the United States creates money--and the need for a capitalist economy to continue growing. When the fiscal crisis of 2007-08 occurred, we lost several trillions of dollars in value from our economy. That's essentially why we had to incur massive deficits--in the federal reserve system, money is created from debt issuance. If we cut $4 trillion, we will actually cut our money supply by that amount--and this will certainly cause economic collapse.

    That's fine with me, this is another form of corporate welfare that "gifts" the five giant corporate media companies. But why are you focusing on just those corporations?

    Yes, let's cut subsidies to farmers. Absolutely--it will never happen, though, because you can trace a tremendous amount of inherited wealth to original farmland ownership that has been passed down. I wonder if there is even one U.S. senator that does not enjoy farm subsidies somewhere in his family lineage.

    I'm not certain what the economic value is if you cut worker wages even more. The right wing seems to think that raising taxes on the rich is a bad thing (presumably because it reduces their buying power), but cutting worker wages is a good thing (doesn't that also reduce buying power). Why do Republicans hate American workers?

    6. I think your main point is that it is hard to audit an economic system that expends trillions of dollars per year. I agree--so what? Although there is no systemic audit per se, there are plenty of program audits. Defense, by the way, is probably the most wasteful organization.

    He also had wooden dentures.

    Please, let's not get silly. By using this analogy, the U.S. Government cannot prevent Georgia from building nuclear warheads and pointing them at Florida--if you adhere to a simplistic approach to literal interpretation. Thank God we can actually progress from the late 1700's!!
     
  3. JWBooth
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    JWBooth Gold Member

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    It'll be papered over and the can kicked down the road.
    There will be much back slapping for the coming together to reach a bipartisan solution. Then back to the same old same old.

    [​IMG]
     
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  4. Freemason9
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    Freemason9 Gold Member

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    Actually, this provides Obama with a golden opportunity. He should stand by his demands--he should strongly increase marginal tax rates to the pre-Reagan levels. Raising marginal tax rates has ALWAYS resulted in strong and broad economic growth. If Congress does not go along, he should refuse to sign any spending/budgetary authorizations and allow the "fiscal cliff" to arrive. This will automatically restore tax rates at least to pre-Bush, finally allow meaningful cuts in the defense behemoth, and allow American citizens to witness firsthand the effects of "fiscal austerity." He can then blame the GOP congress for intransigence.
     
  5. PoliticalChic
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    PoliticalChic Diamond Member

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    1. "That's essentially why we had to incur massive deficits--"
    Provably untrue.

    If you require same, I'd be happy to document how same by a different administration, has been handled in American economic history without the same result.




    2. "But why are you focusing on just those corporations?"
    Not so.
    This is not a brief post....and you'll notice I've selected a number of venues.

    3. "let's cut subsidies to farmers."
    We agree, but for far different reasons. Checks and balances are designed to restrain corruption. Sadly, since FDR, the Constitution has been obviated.




    4. "I'm not certain what the economic value is if you cut worker wages even more."
    That's because you don't understand the nature of government employment.
    Notice: you wrote worker: I make no such suggestion for the private economy.
    Government workers have traded higher wages for predictable employment. They should not expect higher wages as well.

    a. "The right wing seems to think that raising taxes on the rich is a bad thing."
    False. First of all, there is no perennial category of 'the rich' in America.
    Second, the Left engages in a perpetual war on success.
    Proof? Sure: the babble is 'they must pay their fair share," but never announces what that share is.
    In actuality, the meaning is the first half of 'From each according to his ability, to each according to his needs.'
    You recognize that, don't you?


    5. "Defense, by the way, is probably the most wasteful organization."
    Bet you also believe 'Better Red than dead.'
    What did you learn from President Reagan's defeat of the Evil Empire without firing a shot, due to his defense spending?

    a. "I think your main point is...."
    Cut to the chase: my 'main point' is that the Constitution lists the authorized areas of spending for the federal government.
    Article I, section 8.
    Read it...learn from it.



    6. You wrote "Thank God we can actually progress..."
    You also wrote "we lost several trillions of dollars in value from our economy. That's essentially why we had to incur massive deficits-..."

    Too bad you are unable to see the connection.
     
  6. Sallow
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    Sallow The Big Bad Wolf. Supporting Member

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    Go go go..Fiscal Cliff!
     
  7. PoliticalChic
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    PoliticalChic Diamond Member

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    1. For the Right, taxes are designed to pay for those things appropriate for government to do; excess is returned as tax cuts. To the Left, taxes are the means of equalizing material wealth; they shift power from the individual to the state, and serves as the vehicle by which to solve all of society’s problems.



    2. "Raising marginal tax rates has ALWAYS resulted in strong and broad economic growth."

    “Just for fun, find a Marxist professor- who scoffs at the idea that people work less if they lose the incentive of money- how he would feel if his name were not put on the academic articles he published. Instead the articles would be published under the name of another academic who needed the recognition more than he did. After all…he would still have the satisfaction of having written the articles….

    His completely reasonable response would be that he 'earned’ the right to have his name on those articles, and denying him that measure of earned success is viciously unfair. Exactly.”
    Arthur Brooks, “The Road to Freedom,” p. 26.




    3. From Prager, "Still The Best Hope," chapter one:

    a. While the Judeo-Christian society labels actions as ‘good’ or ‘evil,’ due to morality and/or self-control, the Left sees the results as due to material inequality, i.e., violent crime due to poverty.

    b. The Left has been far more interested in fighting material inequality than tyranny, which is why Lenin, Mao, Pol Pot, Ho Chi Minh, Castro, etc., tend to have the support of Leftists around the world.

    c. The Left is less interested in creating wealth than in distributing it.



    4. The Left, in fact, doesn't believe in private property at all...and therefore, the collective can take whatever they wish...and call it 'fair share'...or 'taxes.'

    [ame=http://www.youtube.com/watch?feature=player_embedded&v=YFK2_D3aBXo]President Obama: If you've got a business -- you didn't build that, somebody else made that happen - YouTube[/ame]
     
  8. PoliticalChic
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    PoliticalChic Diamond Member

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    It seems that you are working as hard as you can for an advanced degree in Stupid.
     
  9. Freemason9
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    Freemason9 Gold Member

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    Thanks for the discussion, PoliticalChic. This would be easier if we could restrict discussion to fewer issues at once--but, your thoughts are well presented.
     
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  10. Mr. Shaman
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    Mr. Shaman Senior Member

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    .....When everyone knows you "conservatives" already have a lifetime-patent on Stupidity.

    Relax-everyone.....it's merely a......

     
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    Last edited: Nov 19, 2012

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