How will the looming fiscal cliff impact the US economy and job market?

[Angry Citizen]

Chambliss latest Republican to break with anti-tax lobbyist
http://news.yahoo.com/chambliss-latest-republican-break-anti-tax-lobbyist-195247900.html

What will work? What are the consequences?

Spending cuts? How much and what?

Tax increases? How much and what?

Revenue increases? How and what?

You forgot something: Stimulus spending. If we had something like the American Jobs Act in place a couple years ago, our deficit would be lower because more people would be paying taxes, and some would be paying higher taxes.

A sizable share of our deficit is revenue loss due to the Bush recession. Making up that revenue loss requires an end to the lingering effects of the Bush recession. Keynesian economics dictates that targeted spending increases, not decreases, are key to this.

 

[JonDE]

You forgot something: Stimulus spending. If we had something like the American Jobs Act in place a couple years ago, our deficit would be lower because more people would be paying taxes, and some would be paying higher taxes.

A sizable share of our deficit is revenue loss due to the Bush recession. Making up that revenue loss requires an end to the lingering effects of the Bush recession. Keynesian economics dictates that targeted spending increases, not decreases, are key to this.

We are beyond that point now. The goal now is to immediately shrink the deficit while still allowing the economy to grow. There will most likely be very little stimulus in any form from here on out. IMO stimulus would help the economy to grow but in the short term would lead to bigger deficits, this is not the goal from what I have seen.

 

[Angry Citizen]

We are beyond that point now. The goal now is to immediately shrink the deficit while still allowing the economy to grow. There will most likely be very little stimulus in any form from here on out. IMO stimulus would help the economy to grow but in the short term would lead to bigger deficits, this is not the goal from what I have seen.

Sadly I think you're right. Little political will exists for stimulus spending when we are too busy worshiping the Almighty Altars of Debt and Deficit Reduction.

 

[Astronuc]

Dems Talk Medicare in Fiscal Cliff
http://news.yahoo.com/sen-dick-durbin-medicare-medicaid-fair-game-talks-174347426--abc-news-topstories.html

Sen. Dick Durbin said today that his Democratic colleagues in the House and Senate should be willing to address entitlement programs like Medicare and Medicaid in deficit reduction negotiations.

Well, we'll see.

 

[mheslep]

Dems Talk Medicare in Fiscal Cliff
http://news.yahoo.com/sen-dick-durbin-medicare-medicaid-fair-game-talks-174347426--abc-news-topstories.html
Well, we'll see.

Given his actual statements on the air, I think that summary from ABC News is misleading when it says Democrats should be willing "to address entitlement reform".

Durbin said he wanted "meaningful reforms" on Medicare. To do so requires some simple arithmetic to come forth. In the same segment Durbin i) rejected a voucher system for Medicare ala Ryan, ii) rejected raising the Medicare eligibility age, iii) took social security off the table.

From those statements, I think reform to Durbin is higher taxes, beyond the taxes increase about to happen on January 1, and no spending cuts to entitlements in any form.

http://www.realclearpolitics.com/video/2012/11/25/durbin_open_to_entitlement_reform_says_no_to_touching_medicare_age__social_security.html

 

[SixNein]

Dems Talk Medicare in Fiscal Cliff
http://news.yahoo.com/sen-dick-durbin-medicare-medicaid-fair-game-talks-174347426--abc-news-topstories.html
Well, we'll see.

I don't expect anything other than a gesture. To fix health-care, we either have to socialize it and wipe out a lot of companies, or we have to open it up to the markets and wipe out a lot of companies. Of course, there is always the option of dropping everyone and just have the masses doing without health-care... and wiping out a lot of companies.

 

[Angry Citizen]

I don't expect anything other than a gesture. To fix health-care, we either have to socialize it and wipe out a lot of companies, or we have to open it up to the markets and wipe out a lot of companies. Of course, there is always the option of dropping everyone and just have the masses doing without health-care... and wiping out a lot of companies.

I think the PPACA is "opening it up to the markets" - unfortunately, that is its biggest weakness.

 

[Angry Citizen]

Given his actual statements on the air, I think that summary from ABC News is misleading when it says Democrats should be willing "to address entitlement reform".

Durbin said he wanted "meaningful reforms" on Medicare. To do so requires some simple arithmetic to come forth. In the same segment Durbin i) rejected a voucher system for Medicare ala Ryan, ii) rejected raising the Medicare eligibility age, iii) took social security off the table.

From those statements, I think reform to Durbin is higher taxes, beyond the taxes increase about to happen on January 1, and no spending cuts to entitlements in any form.

http://www.realclearpolitics.com/video/2012/11/25/durbin_open_to_entitlement_reform_says_no_to_touching_medicare_age__social_security.html

i) Thank goodness.

ii) Thank goodness.

iii) Thank goodness.

Why is it that Republicans want to balance the budget on the backs of the poor? Why isn't defense spending even being considered next to subsidies for people who have trouble putting FOOD on their plate? Defense is the first place you should look for massive budget cuts, yet Republicans stand in firm opposition to it.

 

[mheslep]

i) Thank goodness.

ii) Thank goodness.

iii) Thank goodness.

Why is it that Republicans want to balance the budget on the backs of the poor?

The US federal government spends $0.8T a year on healthcare, which is increasing rapidly, and another $0.5T per year in other safety net spending like food stamps and unemployment insurance. Fifty years ago the federal government did almost none of this. So I don't accept the premise.

Why isn't defense spending even being considered next to subsidies for people who have trouble putting FOOD on their plate? Defense is the first place you should look for massive budget cuts,

Defense spending has already lost some planned increases, and is being cut as of January 1. I would cut it more, but that doesn't matter much with regards to the deficit long term. The rate of of entitlement spending increase has to decrease, otherwise in two, three decades all revenue will be spent on interest.

yet Republicans stand in firm opposition to it.

I think many oppose defense cuts, and some do not. Notably Sen Paul and Rep. Paul propose significant cuts in defense spending, much sharper than what's on the table now. And some Democrats like Sen. Boxer (Ca) are defenders of big budget military items like the F-35.

 

[aquitaine]

The US federal government spends $0.8T a year on healthcare, which is increasing rapidly, and another $0.5T per year in other safety net spending like food stamps and unemployment insurance. Fifty years ago the federal government did almost none of this. So I don't accept the premise.

The problem is, we need those things. Healthcare is a necessity. 100 years ago it didn't matter much because medicine was not that effective. But now? You can't live without it. If you have a serious health problem, and you can't afford to get it treated, what should you do? Die? Lives depend on how this problem is resolved. Without food stamps, we'd have millions of people who are malnourished and many who would just starve to death. Starving and desperate people are the seedbed of violence, it shouldn't be so surprising that the murder rate during the last Great Depression was twice what it is today.

There has to be a better way to deal with this issue than just re instituting social darwinism.

 

[russ_watters]

The problem is, we need those things. Healthcare is a necessity. 100 years ago it didn't matter much because medicine was not that effective. But now? You can't live without it. If you have a serious health problem, and you can't afford to get it treated, what should you do? Die?

That's self-contradictory: people with serious health problems couldn't live without it 100 years ago either. Yes, they died.

The problem to me is that people think/talk about needs without taking into account the cost.

This moral model for deciding that healthcare should be a "right" is awesome if you're a pharma company: You can spend however many billions of dollars you feel like to develop drugs for ever rarer illnesses and if you succeed, you can charge whatever it takes to turn a profit because as soon as the treatment is invented, it becomes a "right" for people who need it to get it, so the government pays whatever it costs. Clearly, this model is unsustainable.

If this were applied to cars -- which are also a matter of life and death as well as standard of living -- the government would be buying us all $100,000 cars, simply because they exist. On second thought, that's a great idea!

I'm seriously concerned that this logic could be the downfall of Western civilization.

No, the reality is that if someone invents a new TV or car or medical treatment, but you can't afford it, you haven't actually lost anything. We have to get back to the idea that you have to pay for what you get and if you can't afford something, you don't get it, except for absolute, immediate essentials like food.

 

[BobG]

Chambliss latest Republican to break with anti-tax lobbyist
http://news.yahoo.com/chambliss-latest-republican-break-anti-tax-lobbyist-195247900.html

What will work? What are the consequences?

Spending cuts? How much and what?

Tax increases? How much and what?

Revenue increases? How and what?

I expect Saxby Chambliss to join Lindsey Graham on the target list of the Club for Growth. (And Shelley Moore Capito in the WV Republican primary if Rockefeller retires, as expected.)

Club for Growth is different than the Tea Party. Club for Growth, like Grover Norquist, only focuses on taxes. They also don't waste their efforts on candidates like Christine O'Donnell. The goal is to put more conservative Republicans in Congress, so Republicans perceived as not conservative enough that occupy almost sure Republican seats in Congress (such as Lindsey Graham in South Carolina - do you really think a Dem would defeat whoever beats Graham in the Repbulican primaries?). They have their defeats (Mourdock in IN), but they have a much better track record than Tea Party candidates (actually, quite a few overlap and are backed by both groups).

By the way, the threat from the Club for Growth is part of the reason you see Lindsey Graham on TV attacking Obama so often. If he becomes synonymous with "anti-Obama", it's harder to attack him on the issues he has a more moderate stance on (such as immigration reform and resistance to the Norquist pledge).

 

[aquitaine]

That's self-contradictory: people with serious health problems couldn't live without it 100 years ago either. Yes, they died.

The problem to me is that people think/talk about needs without taking into account the cost.

This moral model for deciding that healthcare should be a "right" is awesome if you're a pharma company: You can spend however many billions of dollars you feel like to develop drugs for ever rarer illnesses and if you succeed, you can charge whatever it takes to turn a profit because as soon as the treatment is invented, it becomes a "right" for people who need it to get it, so the government pays whatever it costs. Clearly, this model is unsustainable.

If this were applied to cars -- which are also a matter of life and death as well as standard of living -- the government would be buying us all $100,000 cars, simply because they exist. On second thought, that's a great idea!

I'm seriously concerned that this logic could be the downfall of Western civilization.

No, the reality is that if someone invents a new TV or car or medical treatment, but you can't afford it, you haven't actually lost anything. We have to get back to the idea that you have to pay for what you get and if you can't afford something, you don't get it, except for absolute, immediate essentials like food.

My cousin didnt have healthcare. So he ended up with a stage 4 cancer diagnosis. There were many warning signs before that as the cancer developed, but because he was poor he didn't have them investigated. It was a testicular cancer, the same type that has a +90% survival rate. His death was almost certainly preventable. The result was he was dead and buried at the age of 22. He never had a chance to make something of himself, are you really telling me that he deserved this? You're wrong, you do lose something by not getting serious conditions treated: Your life.

You're making a reductio ad absurdum by comparing healthcare with cars. You can live without a car, but with serious medical conditions, like cancer, you literally cannot live without it. I somehow don't think treating cancer is going to cause the downfall of western civilization.

 

[mheslep]

The problem is, we need those things. Healthcare is a necessity. 100 years ago it didn't matter much because medicine was not that effective. But now? You can't live without it. If you have a serious health problem, and you can't afford to get it treated, what should you do? Die? Lives depend on how this problem is resolved. Without food stamps, we'd have millions of people who are malnourished and many who would just starve to death. Starving and desperate people are the seedbed of violence, it shouldn't be so surprising that the murder rate during the last Great Depression was twice what it is today.

There has to be a better way to deal with this issue than just re instituting social darwinism.

The safety net programs were created with the idea that they would help the truly destitute with costs on the order of a few tens of billions in today's dollars. Today, the costs of those programs consume most of government spending and are on track to consume all spending not paid to debt interest. Then, instead of consideration of the effectiveness of these programs or of simply slowing their growth, the response at any level of spending, $80 billion or $800 billion, is social darwinism, starvation, violence* by the desperate (without evidence).

Even if one accepts the catastrophic outcomes from reforming spending on those programs, and I do not, as a matter of simple arithmetic those programs will collapse if they continue unchanged, as even Sen Durbin admitted Sunday, insuring the outcomes those supporting the status quo claimed they wanted to prevent.

* http://marginalrevolution.com/wp-content/uploads/2011/05/Violence-Stylized-2.png

 

[russ_watters]

My cousin didnt have healthcare. So he ended up with a stage 4 cancer diagnosis. There were many warning signs before that as the cancer developed, but because he was poor he didn't have them investigated. It was a testicular cancer, the same type that has a +90% survival rate. His death was almost certainly preventable. The result was he was dead and buried at the age of 22. He never had a chance to make something of himself, are you really telling me that he deserved this? You're wrong, you do lose something by not getting serious conditions treated: Your life.

You're making a reductio ad absurdum by comparing healthcare with cars. You can live without a car, but with serious medical conditions, like cancer, you literally cannot live without it. I somehow don't think treating cancer is going to cause the downfall of western civilization.

1. "Deserve" is a completely irrelevant question. There are lots and lots of things in life that are an utter crapshoot. Yeah, it sucks that he died from cancer. A close friend of mine died from a rare form of cancer when he was in 2nd grade and he had the best available care. Definitely unlucky. My sister got and beat breast cancer last year at the relatively young age of 37. Was she lucky or unlucky? Neither of them "deserved" to get cancer, but that's life. Sometimes it is unfair. Sometimes you get cancer. Sometimes (well -- ultimately, always) you die.

2. It was you who used 100 years ago as a baseline, so please don't switch back and forth. Any treatment beyond the virtually nothing that existed back then is extra. Not getting to take advantage of all of the extras is not a negative, it is just a lack of a positve. And no, that's not the same thing.

Try it this way: I have $20. I give that $20 to the person standing next to you. Did you lose $20 or did you just gain nothing? Again, this mindset that people have that they are entitled to everything possible just because it exists is dangerous.

Regarding the car, you're missing the point of the analogy. Yes, you can live without a car, but that's not the point. The point is that if you have a car, spending more money can result in more safety. The same exists for planes, not to mention stairs. If two people are in an accident -- and yes, both could have possibly found an alternative to driving -- and the rich one has a modern car with a dozen airbags while the poor one is driving a beat-up 20 year old car without modern safety features, the rich one may live while the poor one dies. Does the poor guy deserve to die? No. Does that mean the rich guy should have bought him a better car? IMO, no. Both as a matter of morality and practicality.

At the same time, you are trying to create a false dichotomy by saying "you can't live without it" with healthcare because implies that you can live with it. Sometimes you can and sometimes you can't -- both live with it and live without it.

I don't know if you're purposely belittling the point by focusing just on cancer alone vs the downfall of Western civilization or if you just don't see it, but you are aware that we have a serious debt crisis, in part because of paying for things like cancer treatments (not to mention paying people to get rid of old cars...), right? You are posting in this thread, which is partly about that problem. The current economic downturn and related debt crisis, which is worse in Europe, exists largely because of overindulgence in entitlements. And you are aware that the problem is currently getting worse and not better, right? I'm not suggesting that we're going to collapse back to a hunter-gatherer society, but I think there is a significant non-zero risk of a long-term, significant decline in average standard of living. The healthcare cost problem is going to keep getting worse because the economic model we've chosen is flawed. Do you have a suggestion for how to fix it?

The spiral can't continue forever, of course. Either we'll fix it or it will fix itself:

1. It will fix itself by consuming (as mhselp said) a larger and larger fraction of our tax dollars until we simply can't afford to pay for more healthcare and as a result, drug compaines will stop doing research and healthcare quality will stop improving. Or:

2. (also as mhselp said) The reductions in other areas that have to be made to compensate for the "mandatory" spending on healthcare become too great to bear. You want free cancer treatment for everyone, regardless of the cost? Fine: then you can't have your roads maintained and you can't a have a police force and you can't have decent schools for your kids. Those things are not "entitlements". They aren't "mandatory spending". So they'll have to go. When our standard of living drops enough that we can't stand it anymore, we'll start to make the hard choices on "entitlements". Think that's far fetched? The consistently worst city in the US - Camden, NJ - slashed its police force by half in 2011, which significantly increased crime even more. Why would anyone do anything so idiotic? Police forces cost money and if you don't have it, you cut it. It is time we face-up to the economic and moral realities that healthcare is not a more important government function than such basics as police and that if the economy isn't doing well, everything has to take a hit.

You cannot pay for things you don't have the money to pay for. So you tell me: would you trade a lower chance of dying of cancer for a lower chance of being murdered? That's the type of choice we're already making.

 

[Oltz]

Personally I think we should go off the fiscal cliff as it was negotiated to be mandatory cuts in exchange for the debt limit increase. We have in our hisory often promised cuts inexchange for increased spending or borrowing and historically the cuts have never actually taken place. This time the cuts will happen and all we need to do is nothing.

The debt ceiling is actually going to need to be increased again very soon and the best option may be to set up a second round of mandatory cuts and rate hikes to go with it schedule them for 2014 and see if they negotiate in better faith this time in the debt reduction super committee. This is our only avenue to austerity in this country currently as nobody in Washington is willing to put themselves on the line for the needed measures.

Will it be hard yes will it have some negative outcomes yes but that is why they are tough choices. Without them we are only punishing ourselves and everyone under the age of 40 is going to need to pay or the spending of the past 30 years one way or another. The only question is when and how much extra interest the debt gets to accrue.

Personally I want to see the cuts happen before the rate increases...fool me once shame on you fool me twice shame on me.

 

[mheslep]

...
The debt ceiling is actually going to need to be increased again very soon and the best option may be to set up a second round of mandatory cuts and rate hikes to go with it schedule them for 2014 ...

Another round of cuts have to come by way of reform to entitlement programs or they really do not do much. The current small cuts in the Jan 1 sequester do not touch entitlements.

As for a second round of tax hikes, I think that's also a one trick pony. This time, Jan 1, federal taxes go up across the board, payroll taxes jump from 4.2 to 6.2%, the top income tax rate will go to 39.6+3.8 = 43.4%, dividends formerly at 15% also go to the income rate, estates worth $1M to $5M go from zero to 55%, and deductions decline so that everyone's income exposed to those rates grows. Source.

I can't see another tax hike to follow this one, at least not one with any expectation of actually bringing in more revenue.

 

[Angry Citizen]

Personally I think we should go off the fiscal cliff as it was negotiated to be mandatory cuts in exchange for the debt limit increase. We have in our hisory often promised cuts inexchange for increased spending or borrowing and historically the cuts have never actually taken place. This time the cuts will happen and all we need to do is nothing.

The debt ceiling is actually going to need to be increased again very soon and the best option may be to set up a second round of mandatory cuts and rate hikes to go with it schedule them for 2014 and see if they negotiate in better faith this time in the debt reduction super committee. This is our only avenue to austerity in this country currently as nobody in Washington is willing to put themselves on the line for the needed measures.

Will it be hard yes will it have some negative outcomes yes but that is why they are tough choices. Without them we are only punishing ourselves and everyone under the age of 40 is going to need to pay or the spending of the past 30 years one way or another. The only question is when and how much extra interest the debt gets to accrue.

Personally I want to see the cuts happen before the rate increases...fool me once shame on you fool me twice shame on me.

I'd rather have more debt than an ounce of austerity. See what austerity has done to Greece and Spain?

 

[russ_watters]

See what austerity has done to Greece and Spain?

Convinced creditors to waive some existing debt while adding new debt in order to prevent total economic collapse?

The problem you're missing here is that at some point you can't have more debt. In order to get more in debt people have to be willing to lend you money.

Personally, I would prefer that both of them collapse into anarchy for a few years. Westerners need to get slapped into recognition that government spending is not a blank check and bottomless money pit.

As with the couple of opinions above, I am in favor of allowing most of the fiscal cliff to happen, plus reforming "entitlements" (starting by stopping calling them "entitlements").

 

[SixNein]

That's self-contradictory: people with serious health problems couldn't live without it 100 years ago either. Yes, they died.

The problem to me is that people think/talk about needs without taking into account the cost.

This moral model for deciding that healthcare should be a "right" is awesome if you're a pharma company: You can spend however many billions of dollars you feel like to develop drugs for ever rarer illnesses and if you succeed, you can charge whatever it takes to turn a profit because as soon as the treatment is invented, it becomes a "right" for people who need it to get it, so the government pays whatever it costs. Clearly, this model is unsustainable.

If this were applied to cars -- which are also a matter of life and death as well as standard of living -- the government would be buying us all $100,000 cars, simply because they exist. On second thought, that's a great idea!

I'm seriously concerned that this logic could be the downfall of Western civilization.

No, the reality is that if someone invents a new TV or car or medical treatment, but you can't afford it, you haven't actually lost anything. We have to get back to the idea that you have to pay for what you get and if you can't afford something, you don't get it, except for absolute, immediate essentials like food.

I think universal health-care is worthwhile to pursue for a variety of reasons, and it can be done fairly efficiently. Even the most basic health-care access can help to prevent conditions and diseases that require intensive and life long treatments. In addition, it can help health experts identify and isolate bugs quicker. And I would even go so far as to say it's a national security risk. Overall, universal health-care should help increase our participation rate in the overall-economy due to the early prevent of conditions and diseases that takes people out of the marketplace. And a higher participation rate should lead to a more optimal economy.

But I do agree that under the existing model, such an effort will be unable to manifest itself into reality; instead, it will cause a lot of people grief. A model built on socialized crony capitalism is bound to fail.

 

[boomtrain]

I think universal health-care is worthwhile to pursue for a variety of reasons, and it can be done fairly efficiently. Even the most basic health-care access can help to prevent conditions and diseases that require intensive and life long treatments. In addition, it can help health experts identify and isolate bugs quicker. And I would even go so far as to say it's a national security risk. Overall, universal health-care should help increase our participation rate in the overall-economy due to the early prevent of conditions and diseases that takes people out of the marketplace. And a higher participation rate should lead to a more optimal economy.

you forgot to mention it'll bring about world peace...

do you have sources for any of those claims?

 

[russ_watters]

Lets talk a little about the political gamesmanship going on because I really don't understand what the various players are after, particularly Obama.

Obama is repeating (CNN report I'll link when I get home) his campaign refrain of "lets begin our work with where we agree", which is the extension of the Bush Tax cuts for all but the upper bracket -- and oh, by the way also include a debt ceiling increase. He follows that with "don't call my bluff". What bluff? I don't get it. Is he saying that if Republicans don't give him the middle class tax cut extension he's going to let taxes go up for everyone? Is that what he wants anyway? Is he trying to spin a potential win-win situation by getting what he wants either way and/or blaming Republicans for a tax increase even if he actually wants it?

Beyond that, what is not on the table for Obama is interesting to me: any proposal to not raise taxes. That includes the two options for raising income taxes and also allowing the social security tax reduction to expire. So Obama is apparently not considering any proposal that doesn't raise taxes. Let me rephrase: Obama wants to raise taxes in the middle of a weak economic situation. It just isn't clear to me by how much or if he's trying to blame it on others.

And as I said, he wants a debt ceiling extension. Is there any room for negotiation and does anything else about the fiscal cliff and debt issues concern him? "Entitlement" reform? Spending cuts? Are they on the table at all?

What bothers me is that doing nothing makes something happen at least on the spending cuts and he is not clearly articulating what he really wants. Now that he doesn't have to campaign anymore, he has that "flexibility" he told Russia to wait for, so why isn't he using that flexibility to actually do bipartisan negotiation and even do things that may be politically unpopular but fiscally necessary? Instead, he seems to be doing the same leading-from-behind-while-muscle-flexing he did with his healthcare reform: make provocative, politicized, inflexible statements about a small and/or vague part of the issue and let other people figure out the rest of it.

Republicans for their part seem to be willing to deal. Several have rebuffed their Norquist pledge, to their credit (though better would have been to never sign it in the first place ) and stated explicitly that they may be willing to raise taxes. And there may be enough for an actual vote to raise taxes to pass in the House.

What worries me is a repeat of the '80s where Republicans gave concessions on tax increases and Democrats reneged on promises of spending cuts that were supposed to follow. That's what "just pass what we agree on now" really says to me. Maybe that's his plan? The problem with that though is I don't think politicians really have the stomach to accept the cuts of the "sequestration". Its just that no one is talking about it, so I have no idea at this point where that is going. We're not in an active campaign and Obama never has to campaign again. It should not be this hard to figure out what people want. Why is this so hard?

Opinions?

 

[Alfi]

Opinions?


why ask ...


unless backed by some 'authority' ... they seem-to-be not allowed here.

do you have sources for any of those claims?

 

[russ_watters]

Opinions?why ask ... unless backed by some 'authority' ... they seem-to-be not allowed here.

That is very, very wrong. In fact, I'd say you've mostly missed the point of the politics forum: it exists largely to share opinions on world events. Otherwise, it would just be a repository for links to news articles.

Assertions of facts must be supported. Opinions, by definition, do not require factual support/citation. As-worded in the guidelines at the top of the forum:

2) Citations of sources for any factual claims (primary sources should be used whenever possible).

4) When stating an opinion on an issue, make sure it is clearly stated to be an opinion and not asserted as fact.

 

[mheslep]

...
Republicans for their part seem to be willing to deal. Several have rebuffed their Norquist pledge, to their credit (though better would have been to never sign it in the first place ) and stated explicitly that they may be willing to raise taxes. And there may be enough for an actual vote to raise taxes to pass in the House.

Not just several. If Boehner speaks for the GOP, then the GOP position is a yes to raising tax revenues, though maybe not via rates:

... said Republicans are willing to accept "new revenue, under the right conditions" to get a bipartisan agreement. He repeated his opposition to raising marginal tax rates, as Mr. Obama has proposed, but opened the door to bringing in more revenue by "closing special-interest loopholes and deductions, and moving to a fairer, simpler system."

But to get those increases in new law, Obama and Reid have to address some cuts. So far, nothing. Democrats like Durbin have explicitly rejected cuts to Medicare and SS.

 

[mheslep]

...
And, personally, I wouldn't like to see such drastic cuts in defense spending.

Might I ask why not? The US spends 60% more today than what it spent at the height of the Reagan defense build up in the cold war (constant dollars)

The pending defense cuts would be on the order of $40 billion / year for ten years, against the spending of ~800B. Is that drastic?

 

[mheslep]

The President gave speech today on the fiscal cliff topics. He mentioned the deficit seven times, used 'balance' seven times, referenced 'tax'es several dozen times, but not a word on reducing spending. Not for anything. He did mention working on the deficit "next year".

http://www.whitehouse.gov/the-press...rks-president-extending-tax-cuts-middle-class

 

[BobG]

Not just several. If Boehner speaks for the GOP, then the GOP position is a yes to raising tax revenues, though maybe not via rates:

Boehner's interpretation of increased revenue:

While Boehner suggested that Republicans would still oppose Obama’s plan to take “a larger share of what the American people earn through higher tax rates,” he said the party is open to “increased revenue . . . as the byproduct of a growing economy, energized by a simpler, cleaner, fairer tax code, with fewer loopholes, and lower rates for all.”

In other words, Boehner's position is the country needs tax cuts to increase government revenue.

 

[BobG]

Might I ask why not?

Sadly, it's because I'm as optimistic about Congress's ability to cut defense smartly (vs cut defense anywhere it doesn't affect jobs in my district) as I am about their capability to balance a budget.

I wouldn't say it's a drop dead issue for me. But it would definitely raise some trepidation.

And, full disclosure, I'm a defense contractor living in a city with five military installations.

 

[mheslep]

Boehner's interpretation of increased revenue:



In other words, Boehner's position is the country needs tax cuts to increase government revenue.

I don't think that's accurate:

"closing special-interest loopholes and deductions"

with fewer loopholes

Other GOP politicians have cited the $trillion/10 years of deduction cuts found by Simpson-Bowles commission as a possible target.

Cutting deductions and leaving marginal rates as they are, would dollar for dollar be better for the economy in my view.

 

[SixNein]

you forgot to mention it'll bring about world peace...

do you have sources for any of those claims?

Honestly, this should be just common sense...

But...

On prevention:

Primary preventive measures in a clinical setting are those provided to individuals to prevent the onset of a targeted condition (for example, the routine immunization of healthy children), whereas secondary preventive measures identify and treat asymptomatic persons who have already developed risk factors or preclinical disease but in whom the condition has not become clinically apparent (for example, screening for diabetes or colon cancer).

http://www.uspreventiveservicestaskforce.org/uspstf08/methods/procmanual.pdf

For example, here is a list of vaccinations of preventable diseases:
http://www.cdc.gov/vaccines/vpd-vac/

Something as simple as oral checkups can go a long way. For example,
http://www.telegraph.co.uk/health/healthnews/8979191/Bad-dental-health-can-lead-to-pneumonia-Yale-study-suggests.html

As far as national security, have you ever stopped to think about the prospects of a bio-terror attack?

In the area of patient access to health care, more challenging dilemmas arise. Strong ethical reasons have long been recognized as supporting universal access to a decent minimal set of health care services,19 yet our nation has been unable or unwilling to accomplish this.20 Perhaps if policymakers understand that inadequate access to care poses a threat to national security, progress can be made.21,22 In the United States, more than 40 million Americans lack health insurance, and this number is rising.23,24 Although some uninsured individuals use emergency rooms to obtain care when they are acutely ill, many of the uninsured and underinsured avoid the health care system for as long as possible.20 Some have argued that bioterror-related illnesses are so severe that anyone affected would surely seek care.25 But uninsured patients discriminate poorly between appropriate and inappropriate care and tend to avoid both equally.26 Numerous studies demonstrate that the uninsured are more likely to present in an advanced stage of illness, and many die without ever being evaluated

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1448404/


Explanation of participation rates in the economy:
http://en.wikipedia.org/wiki/Labor_force

 

[russ_watters]

Might I ask why not? The US spends 60% more today than what it spent at the height of the Reagan defense build up in the cold war (constant dollars)

The pending defense cuts would be on the order of $40 billion / year for ten years, against the spending of ~800B. Is that drastic?

Does that include and/or is the difference based on the two wars? If I remember correctly, one of Obama's spending cutting claims was based on the winding-down of the wars. I'd like to see it cut by perhaps a third from 800B but as with Bob I have no confidence whatsoever in Congress's ability to make smart cuts. Defense spending is in many ways the largest boondoggle we have.

 

[BobG]

One revenue increaser: http://finance.fortune.cnn.com/2012/11/27/charitable-deduction-reform/?hpt=po_c2 . Not eliminate them entirely. Just 'reform' the tax deductions one gets for tax deductions.

Romney suggested something similar, except his proposal was to cap deductions, period. That would have an inordinate effect on charitable organizations.

And Simpson-Bowles also made a very similar proposal.

You could probably raise about $10 billion/year without affecting donations at all. Or raise more, but then have to address how much of a decrease in charitable donations the country wants to accept (for example, you could probably raise $25 billion with a side effect of reducing donations by around $10 billion).

Obviously, one 'reform' doesn't solve the deficit, but if there is talk of reforming tax deductions, reforming them, and only some of them, is better than eliminating all of them (including mortgage deductions, college deductions, etc).

 

[Astronuc]

or raise revenue 10% and cut expenses 20%,

or raise revenue 20% and cut expenses 10%,

or ?

Examples based on FY12/FY13 numbers

                                                 numbers in $trillion
                                      %revenue increase/%expenditure decrease
(enacted FY12)                 10%/-20%  20%/-10%  20%/-20%   10%/-30%  20%/-30%
revenue      $2.469 trillion    2.7159    2.9628    2.9628     2.7159    2.9628
expend.      $3.796 trillion    3.0368    3.4164    3.0368     2.6572    2.6572

Balance     -$1.327 trillion   -0.3209   -0.4536   -0.0740     0.0587    0.3056

                                   /%expenditure decrease
(requested)                       /-10%     /-20%     /-30%
revenue      $2.902 trillion    2.9020    2.9020    2.9020
expend.      $3.803 trillion    3.4227    3.0424    2.6621

Balance     -$0.901 trillion   -0.5207   -0.1394    0.2399

http://en.wikipedia.org/wiki/2012_United_States_federal_budget
http://en.wikipedia.org/wiki/2013_United_States_federal_budget

Pardon the quick and unverified numbers from Wikipedia.

So let's bite the bullet and adopt austerity measures for the next several decades.

At $300 billion surplus, we can pay down $16 trillion of debt in 53 years.

 

[SixNein]

I have no confidence whatsoever in Congress's ability to make smart cuts.

I agree with you here. One of the reasons that I distrust congress' ability to do anything is due to partisanship. Politics is trumping economics way too often in congress and throughout the world. The global economy is very unstable. The financial system is very unstable. I don't think it would take much at all to push the world back into a depression. Asia looks like a bubble, and Europe looks like a black hole.

I don't think people are fully connecting the dots between government spending and GDP. Moreover, I rarely hear anyone talk about multipliers on our government spending. If we make big cuts to things with high multipliers, we may very well live to regret it as Europe is probably regretting their methods of austerity (which was way less than we are talking about with our fiscal cliff). We need to think about these programs from a pure economic viewpoint instead of an ideological one.

Congress needs to make cuts, reform both health-care and foreign policy, increase taxes, eliminate loopholes, and yes put some serious stimulus spending on infrastructure.