Taxes, Spending, the Fiscal Cliff, and Austerity

[oldfart]

Democrats say they will compromise, but don't

Democrats say give us a list of cuts to make, they get them and reject it.

Democrats say its the Republican's fault, they say a lot don't they?

OK, let’s talk about efforts to reduce the deficit. Start by taking Simpson—Bowles as a baseline. It proposed $2.9 trillion in spending cuts and $2.6 trillion in tax increases.
This is almost an even split, so the idea that most of the deficit reduction should be on the spending side and that we can do deficit reduction without tax increases is a novel idea, but it is certainly contrary to the actual Simpson—Bowles plan.

So what has happened on the spending side? Congress has already passed and the President has already signed 70 percent of the discretionary cuts. Under the Budget Control Act, discretionary spending will be $1.5 trillion lower from 2013 to 2022 than was projected in the Congressional Budget Office’s 2010 baseliner. That means that 70 percent of S-B’s cuts to discretionary spending are already done. But the $1.4 trillion of security spending cuts have not even been spelled out.

So which of the S—B tax increases have been implemented? Let’s look:
1) End the Bush tax cuts for those making over $250,000 before tax reform talks.—NOT DONE
2) 15 cents per gallon increase in federal gasoline tax—NOT DONE
3) Tax dividends and capital gains as ordinary income—NOT DONE
4) Converting itemized deductions for charitable contributions and mortgage interest into a 12% non-refundable credit—NOT DONE
5) Phase out the exclusion of health care insurance from employee’s income by 2038—NOT DONE
6) Eliminate income exemption for interest on state and local bonds—NOT DONE
7) The change in taxation of Social Security benefits which would raise $238 billion over ten years—NOT DONE

In all, of the $2.6 trillion of tax increases in Simpson—Bowles, precisely zero has been enacted into law. I wonder why?

So the fact is that since 2010, most of the non-security spending cuts have been enacted while none of the tax increases have been enacted. Democrats have been serious about spending cuts and have delivered; Republicans have been vague about revenues and have neither proposed any revenue increases nor agreed to any.

 

[saveliberty]

No oldfart, the act you speak of projects the spending cuts through 2022, with most actual cuts occurring after Obama's reign. See, its easy to shove supposed cuts off on the next person. That is exactly what the Democrats did.

 

[Trajan]

Since the national debt is growing at over 1 trillion dollars a year I doubt that 2 trillion dollars in cuts and taxes over ten years is going to make much difference. In the last year of his first term the Obama administation added 3 trillion dollars to the debt.

Its already over folks - we are hemaraging our life away and darn few are paying attention. In less than twenty years we will go bankrupt. A nation cannot go on spending trillions more than they bring in in taxes - borrowing what they don't bring in and paying only the interest on the loans. Eventually you have to borrow to pay the interest - Bankrupt!

Paul you are right but the problem rest squarely with the GOP. The are prioritizing tax cuts for the wealthy over spending cuts and reforming entitlements. If the GOP reversed those priorities we would have a deal done quickly and between the tax increase and spending cuts we would have made real progress on the deficit.

This model was followed by Clinton and the Republican congress to make real progress and the deficit and the economy did well as a result as people believed we would not be spending ourselves into bankrauptcy.

The Clinton era surplus was due to TAX CUTS and SPENDING CUTS that Clinton had to swallow. Guys like you always blame the GOP, but I don't see the democrats offering any reforms to the entitlement programs. Every deomcrat I see on TV is saying hell no, we can't have that!

The truth is that you guys want complete capitulation, total surrender. You don't want cooperation or compromise, you want it all your way. Sorry dude, Obama may have been re-elected but so did the House republicans.

Any Clintonesque centrism etc. has gone by the wayside bro- like the Old Guard marching up that slope to oblivion at Waterloo, Pelosi marched every blue dog into the cannon of obamacare, yet its the extremist gop that wants to cut back the $830Bn and then some from every obama spending year there after 2009, as he attmpts to enshrine it in a new baseline for the future, thats why they won't do a budget, they can't, so we roll on Continuing Resolutions.

 

[Foxfyre]

Paul you are right but the problem rest squarely with the GOP. The are prioritizing tax cuts for the wealthy over spending cuts and reforming entitlements. If the GOP reversed those priorities we would have a deal done quickly and between the tax increase and spending cuts we would have made real progress on the deficit.

This model was followed by Clinton and the Republican congress to make real progress and the deficit and the economy did well as a result as people believed we would not be spending ourselves into bankrauptcy.

The Clinton era surplus was due to TAX CUTS and SPENDING CUTS that Clinton had to swallow. Guys like you always blame the GOP, but I don't see the democrats offering any reforms to the entitlement programs. Every deomcrat I see on TV is saying hell no, we can't have that!

The truth is that you guys want complete capitulation, total surrender. You don't want cooperation or compromise, you want it all your way. Sorry dude, Obama may have been re-elected but so did the House republicans.

Any Clintonesque centrism etc. has gone by the wayside bro- like the Old Guard marching up that slope to oblivion at Waterloo, Pelosi marched every blue dog into the cannon of obamacare, yet its the extremist gop that wants to cut back the $830Bn and then some from every obama spending year there after 2009, as he attmpts to enshrine it in a new baseline for the future, thats why they won't do a budget, they can't, so we roll on Continuing Resolutions.

And that is the problem. The Democrats have veered so far left, there is little common ground anywhere with the Republicans who have also shifted left but not far enough to find any middle ground. Plus many Republicans have the additional problem of making a solemn promise of fiscal responsibility in order to get elected in the first place, and if they capitulate on raising income taxes and some other measures, they break that pledge.

 

[PaulS1950]

The feds are already talking about raising the debt ceiling again in October. Last October it was raised from 13 trillion dollars to 16 trillion dollars and the debt immediately jumped to 16.3 trillion dollars. Will it be raised another three trillion this october?

Lets do some easy math: If the interest was forgiven and the country paid 1 million dollars a day on the principal alone it would take over 44.6 thousand years to pay the loan off. Now if you add to that the several billion we pay in interest each year it would continue to grow and never get smaller.
We don't need to do anything but wait another ten to twenty years and the problem will destroy the USA. When the feds have no money most states will go bust too. The large cities that rely on federal and state funds will also go broke.
No electricity, military, police or firefighters. No trains to haul groceries and so no groceries at your local supermarkets. No jobs, no income, nothing but your survival skills which will leave most of the population dead in the first six months - and they will be the lucky ones.
Those who live in small farming commuities will fair slightly better for a while but they are likely to be taken over by armed groups and anarchy will rule.
We need to stop spending. We need to keep US funds at home. We need to stop being the world's police force and concentrate on getting our expenses in line so the debt can be paid off.
In the near future we will see milk prices double, bread prices will jump and meat prices will jump too.
Our power production is going to cost more and even natural gas will climb sharply if we don't reign in the spending to about 1/2 of what it is now. That is what it will take to pay the loan down and even at that it will take many lifetimes to pay it off and get the country back to where it should be.

 

[The Rabbi]

Paul that isnt entirely true. First off, much of the debt is internal, not foreign owned. Second, if we simply maintain the current deficit but allow the economy to grow we will grow our way out of it. Typically that doesnt happen. Rising tax revenues (and revenues are higher now than 4 years ago) simply mean more spending. That's what has to stop. Along with economy-killing policies like over-regulation and union rules.

 

[Foxfyre]

Paul that isnt entirely true. First off, much of the debt is internal, not foreign owned. Second, if we simply maintain the current deficit but allow the economy to grow we will grow our way out of it. Typically that doesnt happen. Rising tax revenues (and revenues are higher now than 4 years ago) simply mean more spending. That's what has to stop. Along with economy-killing policies like over-regulation and union rules.

That indeed has been the history of the U.S. Congress for some time now no matter which party is in power. The more money you give Congress, the more they spend. They just don't seem to have it in them to pay down the debt with it. If it goes into the treasury, they spend it plus borrow more against it. On what planet does anybody believe Obama and the current Congress will be any different if the tax increases go into effect?

The only time that the deficit is reduced or the budget balanced has been due to economic growth that funnels trillions into the treasury. We don't seem to have a President or Senate who understand that or have a clue how to make that happen even if they wanted to. And it seems that lovers of big, authoritarian, 'benevolent' government don't even want to.

 

[oldfart]

No oldfart, the act you speak of projects the spending cuts through 2022, with most actual cuts occurring after Obama's reign. See, its easy to shove supposed cuts off on the next person. That is exactly what the Democrats did.

The scoring projections including the ten year benchmark are established by Congress. If you want to use some other figure, all CBO scoring breaks out effect on the deficit for each year, for the first five years and for ten years. Simpson--Bowles does contain illustrative benchmarks, if you want to go there.

The report gave benchmarks assuming passage in 2011 and implementation by 2012. Here are their figures:

CUTS IN DISCRETIONARY SPENDING: $102 b in 2013, $172 b in 2015, $291 b in 2020

CUTS IN MANDATORY SPENDING: $32 b in 2013, $54 b in 2015, $104 b in 2020

REDUCTIONS IN TAX EXPENDITURES: $20 b in 2013, $80 b in 2015, $180 b in 2020

OTHER REVENUE MEASURES & INTEREST SAVINGS: $10 IN 2013, $51 b IN 2015, $242 b in 2020

TOTAL DE3FICIT REDUCTION: $164 b in 2013, $357 b in 2015, $817 b in 2020

CUMULATIVE DEFICIT REDUCTION BY 2020: $ 3,885 billion

So like virtually every budget proposal, S--B is loaded in the outyears. Have you seen any plan that DOESN'T load savings in the outyears? So this is clearly a specious argument on your part and you should be ashamed to have brought it up. Think about talking points before you parrot them.

So are we meeting the S--B targets? I'll have to crunch CBO numbers (the baseline changed in Dec 2011) and post later, but I think it's safe to say that spending cuts for 2012 and 2013 will be small in absolute size but significant compared to goals, while the progress on revenue measures right now is absolutely ZIP.

So sharpen your pencils, fire up your spreadsheet, and read the footnotes in the published reports. And remember that political bloggers of any stripe are not going to help you any in this; you have to understand and be able to explain the conclusions they arrive at.

 

[Trajan]

I saw this at Cato, says a lot for a pretty simple chart, David Gregory on Meet the Depressed was doing his level best to misrepresent what really happened and the other mouthpiece at Fake the Nation did same....



Its spending folks, and always has been and defense is not the villain and never has been. I am NOT saying Defense cannot take some cuts, lord yes they can, but it is NOT and never has been a panacea.

Meet the Press, Check the Facts | Cato @ Liberty

 

[saveliberty]

It would be helpful to see how GDP grew during those same time periods was well.

 

[Trajan]

It would be helpful to see how GDP grew during those same time periods was well.

dude, gee whiz thats a lot of work....google

I have this;


you can go to the site and zero in further by changing the data sets, I ran the federal fiscal years- oct 47 to nov. 2012-

http://www.tradingeconomics.com/united-states/gdp-growth

 

[saveliberty]

I see Clinton experienced pretty high GDP growth during his term. It magnifies his negative growth.

 

[Wiseacre]

I see Clinton experienced pretty high GDP growth during his term. It magnifies his negative growth.

Clinton was one lucky SOB, first he gets Ross Perot to divide the conservative vote and get elected, at a time when the US economy was just starting to boom. At least he was smart enough to work with the Gingrich House to get something done in his 2nd term. I remember they had something of a standoff for awhile, before they found a way to compromise. Wonder if Obama will do the same; kinda doubt it but we'll see.

 

[Trajan]

I see Clinton experienced pretty high GDP growth during his term. It magnifies his negative growth.

Negative Growth?

 

[Sactowndog]

Since the national debt is growing at over 1 trillion dollars a year I doubt that 2 trillion dollars in cuts and taxes over ten years is going to make much difference. In the last year of his first term the Obama administation added 3 trillion dollars to the debt.

Its already over folks - we are hemaraging our life away and darn few are paying attention. In less than twenty years we will go bankrupt. A nation cannot go on spending trillions more than they bring in in taxes - borrowing what they don't bring in and paying only the interest on the loans. Eventually you have to borrow to pay the interest - Bankrupt!

Paul you are right but the problem rest squarely with the GOP. The are prioritizing tax cuts for the wealthy over spending cuts and reforming entitlements. If the GOP reversed those priorities we would have a deal done quickly and between the tax increase and spending cuts we would have made real progress on the deficit.

This model was followed by Clinton and the Republican congress to make real progress and the deficit and the economy did well as a result as people believed we would not be spending ourselves into bankrauptcy.

The Clinton era surplus was due to TAX CUTS and SPENDING CUTS that Clinton had to swallow. Guys like you always blame the GOP, but I don't see the democrats offering any reforms to the entitlement programs. Every deomcrat I see on TV is saying hell no, we can't have that!

The truth is that you guys want complete capitulation, total surrender. You don't want cooperation or compromise, you want it all your way. Sorry dude, Obama may have been re-elected but so did the House republicans.

This is incorrect on many levels. Clinton raised them to 39%. You also state "you guys want complete capitulation". Well I would agree that liberal democrats like Nancy Pelosi want complete capitulation but that certainly isn't what I want. I want to see the budget deficit addressed.

To me that means Republicans should prioritize spending cuts and entitlement reform first. If they really cared about the deficit this would be their focus instead of preventing us from returning to the tax rates of the Clinton era.

When I see the Republicans really prioritizing spending cuts and entitlement reform by making those the key trade-offs instead of taxes for the wealthy.

 

[Wiseacre]

Paul you are right but the problem rest squarely with the GOP. The are prioritizing tax cuts for the wealthy over spending cuts and reforming entitlements. If the GOP reversed those priorities we would have a deal done quickly and between the tax increase and spending cuts we would have made real progress on the deficit.

This model was followed by Clinton and the Republican congress to make real progress and the deficit and the economy did well as a result as people believed we would not be spending ourselves into bankrauptcy.

The Clinton era surplus was due to TAX CUTS and SPENDING CUTS that Clinton had to swallow. Guys like you always blame the GOP, but I don't see the democrats offering any reforms to the entitlement programs. Every deomcrat I see on TV is saying hell no, we can't have that!

The truth is that you guys want complete capitulation, total surrender. You don't want cooperation or compromise, you want it all your way. Sorry dude, Obama may have been re-elected but so did the House republicans.

This is incorrect on many levels. Clinton raised them to 39%. You also state "you guys want complete capitulation". Well I would agree that liberal democrats like Nancy Pelosi want complete capitulation but that certainly isn't what I want. I want to see the budget deficit addressed.

You do know the repubs got some tax cuts passed under Clinton, right? Not on the top rate, actually it wasn't that much EXCEPT they lowered the cap gains tax, and that makes a difference to investors. From 28% down to 20%, and after that was when Clinton got his surplus. Of sorts.

To me that means Republicans should prioritize spending cuts and entitlement reform first. If they really cared about the deficit this would be their focus instead of preventing us from returning to the tax rates of the Clinton era.

When I see the Republicans really prioritizing spending cuts and entitlement reform by making those the key trade-offs instead of taxes for the wealthy.

Will it make much difference what the repubs do about spending cuts and entitlement reform if the democrats will not negotiate over it? I mean real cuts now instead of in the future. I'd like to think people from both sides are dickering over what to cut, and also how to reform the entitlements AND the tax code. Why do you put the onus just on the repubs, don't the dems have an equal duty to bargain in good faith?

 

[The Rabbi]

Paul you are right but the problem rest squarely with the GOP. The are prioritizing tax cuts for the wealthy over spending cuts and reforming entitlements. If the GOP reversed those priorities we would have a deal done quickly and between the tax increase and spending cuts we would have made real progress on the deficit.

This model was followed by Clinton and the Republican congress to make real progress and the deficit and the economy did well as a result as people believed we would not be spending ourselves into bankrauptcy.

The Clinton era surplus was due to TAX CUTS and SPENDING CUTS that Clinton had to swallow. Guys like you always blame the GOP, but I don't see the democrats offering any reforms to the entitlement programs. Every deomcrat I see on TV is saying hell no, we can't have that!

The truth is that you guys want complete capitulation, total surrender. You don't want cooperation or compromise, you want it all your way. Sorry dude, Obama may have been re-elected but so did the House republicans.

This is incorrect on many levels. Clinton raised them to 39%. You also state "you guys want complete capitulation". Well I would agree that liberal democrats like Nancy Pelosi want complete capitulation but that certainly isn't what I want. I want to see the budget deficit addressed.

To me that means Republicans should prioritize spending cuts and entitlement reform first. If they really cared about the deficit this would be their focus instead of preventing us from returning to the tax rates of the Clinton era.

When I see the Republicans really prioritizing spending cuts and entitlement reform by making those the key trade-offs instead of taxes for the wealthy.

The GOP has proposed reforms that will bring in more money than simply raising rates. It is the Dems who are fixated on raising rates, esp on cap gains, even though even they acknowledge it will bring in less money. They want to ride to victory in elections telling middle and low income voters how they punished the wealthy. That's all it is.

 

[saveliberty]

...or they could just push this off til midterm elections...

 

[Trajan]

Paul you are right but the problem rest squarely with the GOP. The are prioritizing tax cuts for the wealthy over spending cuts and reforming entitlements. If the GOP reversed those priorities we would have a deal done quickly and between the tax increase and spending cuts we would have made real progress on the deficit.

This model was followed by Clinton and the Republican congress to make real progress and the deficit and the economy did well as a result as people believed we would not be spending ourselves into bankrauptcy.

The Clinton era surplus was due to TAX CUTS and SPENDING CUTS that Clinton had to swallow. Guys like you always blame the GOP, but I don't see the democrats offering any reforms to the entitlement programs. Every deomcrat I see on TV is saying hell no, we can't have that!

The truth is that you guys want complete capitulation, total surrender. You don't want cooperation or compromise, you want it all your way. Sorry dude, Obama may have been re-elected but so did the House republicans.

This is incorrect on many levels. Clinton raised them to 39%. You also state "you guys want complete capitulation". Well I would agree that liberal democrats like Nancy Pelosi want complete capitulation but that certainly isn't what I want. I want to see the budget deficit addressed.

To me that means Republicans should prioritize spending cuts and entitlement reform first. If they really cared about the deficit this would be their focus instead of preventing us from returning to the tax rates of the Clinton era.

When I see the Republicans really prioritizing spending cuts and entitlement reform by making those the key trade-offs instead of taxes for the wealthy.

they are fighting the battle before them, they want entitlement reform and have said so, and they have said they want to change the appropriation structure process to curtail Baseline spending, which is the REAL issue. the rate change is the smoke screen , and thats what obama is still campaigning on, if you want to blame someone blame the media how just want the red meat. .

 

[Trajan]

The Clinton era surplus was due to TAX CUTS and SPENDING CUTS that Clinton had to swallow. Guys like you always blame the GOP, but I don't see the democrats offering any reforms to the entitlement programs. Every deomcrat I see on TV is saying hell no, we can't have that!

The truth is that you guys want complete capitulation, total surrender. You don't want cooperation or compromise, you want it all your way. Sorry dude, Obama may have been re-elected but so did the House republicans.

This is incorrect on many levels. Clinton raised them to 39%. You also state "you guys want complete capitulation". Well I would agree that liberal democrats like Nancy Pelosi want complete capitulation but that certainly isn't what I want. I want to see the budget deficit addressed.

You do know the repubs got some tax cuts passed under Clinton, right? Not on the top rate, actually it wasn't that much EXCEPT they lowered the cap gains tax, and that makes a difference to investors. From 28% down to 20%, and after that was when Clinton got his surplus. Of sorts.

To me that means Republicans should prioritize spending cuts and entitlement reform first. If they really cared about the deficit this would be their focus instead of preventing us from returning to the tax rates of the Clinton era.

When I see the Republicans really prioritizing spending cuts and entitlement reform by making those the key trade-offs instead of taxes for the wealthy.

Will it make much difference what the repubs do about spending cuts and entitlement reform if the democrats will not negotiate over it? I mean real cuts now instead of in the future. I'd like to think people from both sides are dickering over what to cut, and also how to reform the entitlements AND the tax code. Why do you put the onus just on the repubs, don't the dems have an equal duty to bargain in good faith?

if the media were playing this fairly, they would have burped up that debate where in obama even after being told by Gibson that cap gains being jacked lowers receipts in the long run and obama said it was a a matter of fairness........not economics mind you, but 'fairness'.


GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton," which was 28 percent. It's now 15 percent. That's almost a doubling, if you went to 28 percent.

But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.

So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.

that last comment is outrageous, seriously....


but they focus on Grover Norquist who has been repudiated to the point here its just a smokescreen now.....