How Much Would It Take?

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Art
Art's picture

This is a sincere question for people who really understand the "fiscal cliff".

Given, that the President is in a pretty strong bargaining position (I don't think he should be offering anything at all), and

given, that  a large portion of the American people are scared of a possible recession, and

given, that we are within a few days of going over the "cliff", and

given, that recalcitrant Republicans have their backs against the wall and may be extremely vulnerable to public pressure,

How much of a deal would it take to technically avoid the fiscal cliff? Would an agreement to lower taxes for the 98% be enough to do the job?

Comments

polycarp2
You do understand that the

You do understand that the Pres. created the "fiscal cliff", don't you?

"I've just done a piece, you know, that asks the question, since everybody agrees now that the fiscal cliff is incredibly stupid and really dangerous, in the sense that it's designed to impose austerity, and they're saying that if we were to continue this austerity for very long, we would throw the nation back into recession,

And it's not only President Obama that insisted on this, but he insisted on the fiscal cliff for the express reason that it would create what he called "discipline"—what I would call extortion—on liberals to vote in favor of beginning to unravel the safety net—Social Security, Medicare, Medicaid, and food stamps—'cause if they didn't, lo and behold, there'd be this fiscal cliff and all kinds of social programs would be gutted. So throw Grandma under the bus was the logic.

The House Republicans in particular said, let's de-fang this fiscal cliff, and Obama fought that and killed it. And then the Republicans, after the so-called supercommittee failed to get budget cuts, said, let's change the law so there's no fiscal cliff, and President Obama issued a veto warning, saying that he would veto any legislation removing the fiscal cliff.

So we're left with the following forms of insanity. First, that President Obama is the leading person who created this fiscal cliff to deliberately create this danger of austerity throwing the nation back into recession. Now he agrees that's insane. So what is his proposed solution? Even greater austerity through an agreement with congressional Republicans." - Bill Black, economist

 

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&I...

Retired Monk - "Ideology is a disease"

 

Art
Art's picture
Quote:You do understand that

Quote:
You do understand that the Pres. created the "fiscal cliff", don't you?
Really doesn't answer my question.

Phaedrus76
Phaedrus76's picture
Obama created the cliff, or

Obama created the cliff, or the house Republicans did? Who was swept into office on the Chicken Little sky is falling ohnos the deficit is too big?

tayl44
tayl44's picture
Calculate the taxes that

Calculate the taxes that would be needed to avoid the cuts should be the answer. What it would take to avoid this "Austerity Strawman" the 1% is using? We need to do what other countries did when they realize they was being "SCAM", "STOP PLAYING THE GAME"!!

Art
Art's picture
Quote:Calculate the taxes

Quote:
Calculate the taxes that would be needed to avoid the cuts should be the answer. 
Was that a statutory requirement for a final resolution of the problem? I didn't think it was that well defined. I read about the "fiscal cliff" and my eyes glaze over. If the Republicans are unable to negotiate anything at all on their terms, does that doom the process? What would it be that rings the final bell?

Phaedrus76
Phaedrus76's picture
The President is already on

The President is already on record in favor of the Senate bill to keep the tax cuts for the 98%, below $250k. So, what will it take for a deal? A Speaker of the House who can lead. At this point he is incapable of leading his caucus. So then for any deal going forward he will need some combination of R's and D's, and the deal as it stands was unpalatable to all D's in the House. 

Pelosi should come back with a new proposal that raises the top rates even more, with deeper cuts to the military and increase funding for SS and M/M. Or she can champion the Peoples' Budget.

darlinedarline1...
darlinedarline1@aol.com's picture
There is no fiscal cliff. It

There is no fiscal cliff. It is all a distort and distract, dog and pony show for the sheeple conjured up by both arms of the corporate/government collusion.

If orombey and the dems and repubs weren't all puppets owned by the MIC and banksters they would be screaming for cuts in military spending and ending our illegal, unconstitutional, immoral warmongering.

chilidog
Art wrote: Given, that the

Art wrote:

Given, that the President is in a pretty strong bargaining position (I don't think he should be offering anything at all),

And yet, he's been "offering" ever since Election Day: He doesn't want estate taxes to revert to 2000, he doesn't want capital gains taxes to revert to 2000, he might let the top bracket apply only to those making over $400k instead of $250k...

Art
Art's picture
Here's the tax changes that

Here's the tax changes that will take place  ifno deal is reached.

Quote:
Americans’ taxes will rise in a few weeks. Though the direction is clear, the exact amount is yet to be determined.

 A payroll tax cut given in the 2011 and 2012 calendar years — intended as a temporary stimulus — is set to expire, and so far both Democrats and Republicans seem ready to let that happen, although there could be some provision made to ease the pain for the lowest earners. . .

the re-election of President Obama, the taxes imposed by his health care overhaulwill also almost certainly remain. . .

Starting in 2013, high-income Americans will pay an additional tax of 0.9 percent on their earnings above $250,000 if they are married and above $200,000 if filing singly. These households will also pay an additional 3.8 percent on capital gains, dividend and interest income over those same thresholds. The average household in the top income quintile — the group of Americans most likely to be hit by these new taxes — will owe an additional $1,141. . . .

 

In particular, Mr. Obama wants to let lapse the lower rates begun in the Bush era on income, capital gains and dividends for higher earners, whom he has defined as those earning more than $250,000 for married couples and $200,000 for others. . .

 In addition, a limitation on itemized deductions is also scheduled to kick in at the end of this year that could add another 1.2 percent.

All these changes could effectively raise the capital gains rate to 25 percent on Jan. 1, from 15 percent on Dec. 31.  . .

While he wants to let taxes rise for the wealthy, President Obama would like to extend some provisions passed in the 2009 stimulus bill that primarily benefit lower-income families. These include expansions of the child tax credit, a tax benefit for college students and the earned-income tax credit for larger families and married couples. . .

The estate tax is another sticking point, though both parties do not want the estate tax to rise as sharply as it is scheduled to under current law. . .

Now, the first $5 million of a person’s estate remains untaxed, and anything above that is taxed at 35 percent. At year-end, the effective exemption will fall to $1 million and the top tax rate will rise to 55 percent. . .Mr. Obama has proposed setting the exemption for the estate tax at $3.5 million, indexed to inflation, while Republicans want to eliminate the tax altogether. . .INCREASES NOBODY WANTS There are two categories of tax increases that are scheduled to kick in but are widely expected to be tamed because neither party wants them: the end of the Bush-era tax cuts for low- and middle-income families and an expansion of the alternative minimum tax that would capture an additional 26 million taxpayers. . .

None of this includes changes caused by a sequestration. What would signal a cancellation of the sequestion?

 

 

 

drc2
Every so often, Darlin really

Every so often, Darlin really nails one.  The only problem with her post here (#8) is that it gets everything too neat and clean.  For example, the conjuring of the cliff is supposedly equally bipartisan and the thrall of those who are "puppets" of the MIC is equal and even among all who fail to stand up against it.  The whole MIC becomes a monolith rather than a complex entity and all are "puppets" without any distinction to how they act or what role they play in a larger drama.

Why do we not see a more contentious peace caucus in Congress?  Are all in favor of the empire and the wars, is there not a minority in this cast of "puppets" who struggle against the strings instead of helping their masters control the others?  Where are "we, the people" on cutting 'defense' and why are our voices not being heard?

These are far more complex questions than frustration can permit or address.  Nonetheless, if we are to do anything about these problems and be effective in moving ahead, we not only have to have clear definitions and diagnoses of the problems, we have to be able to let those frames adjust to the realities of the real world.  

Yes, the empire must end and our wars are the big waste in spending.  Duh.  We have to own our own banks too.  The answers are pretty simple, but how you get there is anything but a straight line.

Art
Art's picture
A lot of stuff that doesn't

A lot of stuff that doesn't really answer my question. If the sequestration thing is, indeed, a manufactured crisis, (of course it is) At what point can the President and Congress just call it a day on sequestration and push it aside? How much of a deal would it take?

Art
Art's picture
I finally figured out the

I finally figured out the right Google search. This article explains it very simply and clearly. The BCA of 2011 stipulates that a plan be achieved that will lower the deficit by $1.2 trillion over ten years.

darlinedarline1...
darlinedarline1@aol.com's picture
That is a whopping $120

That is a whopping $120 billion per year! WOW! That's enough to run the government for less than 2 weeks. What were they thinking when they passed that fiscally irresponsible rule? They are definately going to have to slash medicare, medicaid, and social security benefits, as all other programs are too important and essential, especially the benefits to the MIC boards and stockholders, big pharma and ag subsidies to giant agribusiness, to even consider any spending cuts. Oh, and don't even thinkl about pork!

stuff
stuff's picture
Quote:Why do we not see a

Quote:
Why do we not see a more contentious peace caucus in Congress?

"Contentious peace caucus"?

Ha-ha! The best oxymoron I've read on this Board in years!

Keep 'em coming, drc.

stuff
stuff's picture
Art wrote:If the

Art wrote:
If the sequestration thing is, indeed, a manufactured crisis, (of course it is) At what point can the President and Congress just call it a day on sequestration and push it aside? How much of a deal would it take?

It's a game of chicken. The guy who swerves first loses his base.

Art
Art's picture
Quote:It's a game of

Quote:
It's a game of chicken.
It's more uncertain than even that. The OMB says that Obama's 2013 budget alne reduces the deficit by around $3 trillion, more than twice what is needed, but that doesn't account for expected growth from unexpected stimulus spending along with all kinds of other undetermined stuff. It's going to come down to "We say this, you say that. Yes it will, no it won't. You are lying, no, YOU are lying. Ane, BTW, what about that debt ceiling"? 

polycarp2
darlinedarline1@aol.com

darlinedarline1@aol.com wrote:

That is a whopping $120 billion per year! WOW! That's enough to run the government for less than 2 weeks. What were they thinking when they passed that fiscally irresponsible rule? They are definately going to have to slash medicare, medicaid, and social security benefits, as all other programs are too important and essential, especially the benefits to the MIC boards and stockholders, big pharma and ag subsidies to giant agribusiness, to even consider any spending cuts. Oh, and don't even thinkl about pork!

True. However, government simply created many trillions without debt to throw at finance...Quantitative Easing One, Two and Three.

I understand it is unwilling to do the same for Main Street. If ever there was an excuse to gut the social safety net and put a neo-liberal ideology in place, it's now.  A once in a lifetime opportunity.

Reciprocal  economic systems didn't require on-going government safety nets. Market economic systems do.

When market economies replaced reciprocal and re-distributive economic systems...safety nets were part and parcel of it from day one. They tended to prevent revolutions. Market economies can't function without safetey nets regardless of ideological posturing that they can. They collapse. Destitution becomes rampant; hunger common ,revolutions follow..

We've been working towards a full-fledged collapse ever since the elections of Reagan and Clinton. They were the greatest enablers of it. Obama is doing his part. Romney would have done his.

Move over Greece, here we come. Ideology wins over what is actually so. An imperative destruction of the planet's capability to maintain human life is a part of market economic systems...tied to it.

Example of a reciprocal economic system. Documentary first posted by Douglaslee.

 

http://thoughtmaybe.com/ancient-futures-learning-from-ladakh/

Retired Monk - "Ideology is a disease"

 

tayl44
tayl44's picture
We won`t know what will ring

We won`t know what will ring the final bell in our present dictatorship. What they say about "Rome is burning", the Rome economic system is "burn down"! The political system is hanging by a thread, if Obama would have lost, even that thread would have been gone. The only "ringing bell" i`m looking forward to is, "the knock out bell for this corrupt system"! 

polycarp2
Probably with the merging of

Probably with the merging of economic, resource and environmental collapse, people will finally get it. Our system has reached the end of its rope. The trajectory towards a global warming catastrophe has pretty much been set. The market system itself precluded addressing it. Now it's irreversible.

Systems have been set in place to deal with the civil discord beginning with the repeal of habeus corpus....guaranteed by the Constitution.....the cornerstone of western law since the signing of the Magna Carta in 1215. Gone. Dems and Repugnants did their duty.

Probably defining nearly every American citizen as a terrorist suspect in the Defense Authorization Act of 2012 will be of great benefit in the endeaver to maintain a system that's in its death knell.

As Ren once noted, "A dying elephant when it falls makes a big mess."

In the big picture, the "fiscal cliff" is a minor issue.

Retired Monk - "Ideology is a disease"

 

nimblecivet
nimblecivet's picture
The only tentative answer is

The only tentative answer is that nothing but everything will be good enough for the Republicans. If a certain amount of damage is done and people pay even more attention than they are then some Republicans might finally start to defect. But despite the purported splits between hard-core Tea Partiers and -the more dainty ones?- as far as I know (correct me if I'm wrong) Republicans tend to vote as a bloc and don't compromise. Its worked well for them because it appeases their base. I think its quite likely that Republicans will be happy to go of the cliff. The poor and lower middle class will suffer the most, so to go over the cliff will be a punishment of sorts for not doing things the easy way. But it might be what's necessary to get people to realize the system is broken. IMHO, we need a third party. But either way, we need some way to vet candidates who are trustworthy and will fight just as hard for what they believe in as the Republicans.

drc2
Having people recognize that

Having people recognize that the system is broken is better than having them invested in it, but when they get the broken part, are they energized, scared to death or looking for a narcotic?  The answers and solutions you desire are beyond the linear problem to solution model.  What has 'worked' for the GOPimps may not work any more.  The Republicans are far more invested in the system than the Democrats, and while the Democrats fail to have a unified opposition, the Right is coming apart rather than consolidating its strength.  

The idea that we need a Third Party is typical of problem to solution thinking.  What we need to think about in the short-term of electoral politics is how to take over the Democratic Party wtih a Green/Progressive movement.  We can also aid the Whig Re-enactors on the Right as they act out their "know nothing" farce.  If there is a party of Corporate left, it will be where conservative Dems go along with the remnants of the bankster faction.  The Culture War becomes a cult.

Unfortunately, this does not get us out of empire or address climate change by electoral shifts.  This is more like the symptoms of what is going on at deeper levels, and that is what we ought to be about.

Art
Art's picture
Quote:The answers and

Quote:
The answers and solutions you desire are beyond the linear problem to solution model.
You have misunderstood the question I posed. A simple explanation of the rules of the sequestration game was all I was seeking. 

Here's how it looks to me. Congress cooked up the game. According to the rules, both sides got to decide what the other side would suffer if if Congress failed to find a way to cut the debt by $1.2 trillion over 10 years. Republicans designated huge cuts in social spending for the Democrats to suffer.  President Obama designated huge cuts in the military budget for the Republicans to suffer. Apparently, Bob Woodward was the only one present when this happened. This is why the President is designated by some people as "owning" the fiscal cliff. There is a tremendous lack of clarity as to what things would reduce the debt by $1.2 trillion over 10 years.

drc2
It was also reported as too

It was also reported as too much castor oil for either side to swallow so surely there would be a deal worked out.  Surely.

Ironically, the Righties are getting all huffy about how Obama is destroying the Republican Party with his deficit cliff tactics.  He is so partisan!  And what a powerful and adept player he is, according to them!  I sure wish I had a genius like Obama working for a Progressive Agenda.  Krauthammer just about puked.  I loved it, not that I think Obama is that great a player.  I mean, how could the Boner and his crew refuse a deal that looked like Romney had won the election?  Obama gets to look like he was really reaching across the aisle and got his hand bitten.  He does not have to offer as much any more, but because appearance is more important than substance in DC, he most likely will.

This whole charade and fandango revolves around a self-imposed "debt ceiling" but not really a vow not to go and use that credit card on another binge, a refusal to pay for last year's binge.  Really, from the pious saints of fiscal integrity and deficit paydown.  Their moral line in the sand is to refuse to pay for their party and the motel room they trashed.  Wonderful, if you are a comedian.

Phaedrus76
Phaedrus76's picture
If we were serious about

If we were serious about reducing the deficit, we could enact a financial services transaction tax, and a carbon tax. We could quit wasting money on the empire, and invest in our labor force through more trade schools and colleges, mandated as free for US citizens, who would pay more taxes, and create and innovate here. 

polycarp2
Well, goverments ran into a

Well, goverments ran into a fiscal cliff in World War I. It was thought the war would end within 4 months because governments would run out of money to fight it. They simply did what all sovereign governments can do. They printed it.

It was spent producing/buying  tangible stuff. Bullets, uniforms and foodstuffs. The production backed the money. No inflation.

It was a secret Hitler remembered...and the rest of the world forgot. A "broke" Germany re-armed. The rest of the world nearly ended up speaking German.

World class  economist Michael Hudson's take on the nonsensical fiscal cliff:

 

http://www.counterpunch.org/2012/12/28/americas-deceptive-2012-fiscal-cl...

Retired Monk - "Ideology is a disease"

 

 

drc2
The only problem is that

The only problem is that people get hurt playing Russian Roulette even if it is a self-inflicted idiocy.