USA "falling off the Fiscal Cliff" again

Malibu Sunshine

Every 3-6 months there seems to be another Dollar or Euro scaremongering story,

Surely this is just another?

http://www.bbc.co.uk/news/world-us-canada-20853624

JONJO THE MISER

Only in America.

Just another scare story by wealthy (US) businessmen who are afraid that money isn't passing through the shop tills fast enough!

doomed

Looks like a game of chicken

UCDVet

With any luck this will keep the euro rising to the dollar long enough for me to buy a bunch of dollars; then in two months when someone proclaims the fall of the EU again, I can repurchase a bunch of euro on the cheap.

Of course, with my luck, I'll lose it all....but you can't blame a guy for trying.

9959

doomed wrote: »

Looks like a game of chicken

.....or Lemmings.

pabloh999

Deleted User wrote: »

Just another scare story by wealthy (US) businessmen who are afraid that money isn't passing through the shop tills fast enough!

I though it was more of a stand off between Republicans and Democrats?
Republicans not wanting to raise the debt ceiling or something?

SEPT 23 1989

There will be a massive sell off of stocks and shares before this goes through

Anyone

SEPT 23 1989 wrote: »

There will be a massive sell off of stocks and shares before this goes through

pabloh999

pabloh999 wrote: »

I though it was more of a stand off between Republicans and Democrats?
Republicans not wanting to raise the debt ceiling or something?

Puppets, it's who pulls the strings that matter, who control the flow of money etc.


It's those who pays the politicians are the ones calling the shots!

pabloh999

Deleted User wrote: »

Puppets, it's who pulls the strings that matter, who control the flow of money etc.


It's those who pays the politicians are the ones calling the shots!

Yes, that's politics.
But I think on the face of it the Republicans and Democrats are in a stand off.

Hande hoche!

It's an opportunity for the Democrats to blame the Republicans and vice-verse.

Pottler

Is there anywhere signposted for the start of the queue to help push?

GalwayGuy2

Puppets, it's who pulls the strings that matter, who control the flow of money etc.


It's those who pays the politicians are the ones calling the shots!

I love the simplicity.

KyussBishop

In August last year, congress passed a bill, which set up the whole 'fiscal cliff' faux-crisis, by saying cuts have to happen before 2013; getting rid of the 'fiscal cliff' bullshít is as simple as repealing that bill.

So yes, the problem is an entirely fake political problem (there are no economic consequences to just repealing that bill), which the US political class are using as a fake justification for cutting social security, and other needless cuts; it's exactly what it looks like: An excuse for bullshít rhetoric, trying to justify unjustifiable cuts, that predominantly affect the poor/vulnerable.

The only contentious part of the entire thing for politicians, is that the Republicans are mad about losing tax relief for the wealthy.

Killer Wench

It isn't simply about Republican's not wanting to lose tax relief for the wealthy. Many Republican politicians signed the Grover Nordquist pledge that said while in office, they would not raise taxes on any individual. President Obama won the election on his pledge to renew (and make permanent) the George Bush era tax cuts for the middle class while raising taxes on those families that make over $250,000 a year. The Democrats won the Presidency, maintained the Senate (by gaining more Republican seats), and gained seats in the House. The Republicans argue that the American people wanted them to remain as the House majority because they side with Republicans on not raising taxes for anyone; this is incorrect, as the Republicans took on a redistricting campaign that shifted boundaries so that Republicans would have an advantage. It isn't simply that people chose Republicans again, but that Republicans controlled how and who people could vote for.

The Fiscal Cliff is a series of drastic cuts in certain programs (military and specific discretionary programs) while increasing taxes on individuals. What most people don't realize is that we have already gone over the "cliff", since our politicians are waiting so late in the game to do anything, people will find that their next paycheck (first paycheck of the year) will have increased taxes. Otherwise, the "cliff" is not an abrupt dive over the side, but more like a gradual slope downward. Many, many Americans are actually in favor of going over the cliff because we understand that it is time to generate revenue. Wall Street and major corporations are anxious to move forward, but as long as our politicians keep us in limbo, our markets remain uncertain.

What this emphasizes is that our Congress is composed of career politicians who are more concerned about preserving their legacy and keeping their hopes of re-election alive, particularly on the Republican side. Most of them do not want to be seen as rebuking their Nordquist pledge and supporting the increase of taxes, so they will fight it to the end. We will go over the cliff and people outside of the US will think it is a major catastrophe but we'll probably think it is a sigh of relief to have the "worst" happen. Because if all tax cuts expire, then our politicians look like heroes coming in and proposing new tax cuts. Those who will suffer the most will be individuals who are on unemployment as the extensions will expire on the first of the year.

Richard Hillman

This is why I voted Romney





(in an online poll)

KyussBishop

Killer Wench wrote: »

It isn't simply about Republican's not wanting to lose tax relief for the wealthy. Many Republican politicians signed the Grover Nordquist pledge that said while in office, they would not raise taxes on any individual. President Obama won the election on his pledge to renew (and make permanent) the George Bush era tax cuts for the middle class while raising taxes on those families that make over $250,000 a year. The Democrats won the Presidency, maintained the Senate (by gaining more Republican seats), and gained seats in the House. The Republicans argue that the American people wanted them to remain as the House majority because they side with Republicans on not raising taxes for anyone; this is incorrect, as the Republicans took on a redistricting campaign that shifted boundaries so that Republicans would have an advantage. It isn't simply that people chose Republicans again, but that Republicans controlled how and who people could vote for.

The Fiscal Cliff is a series of drastic cuts in certain programs (military and specific discretionary programs) while increasing taxes on individuals. What most people don't realize is that we have already gone over the "cliff", since our politicians are waiting so late in the game to do anything, people will find that their next paycheck (first paycheck of the year) will have increased taxes. Otherwise, the "cliff" is not an abrupt dive over the side, but more like a gradual slope downward. Many, many Americans are actually in favor of going over the cliff because we understand that it is time to generate revenue. Wall Street and major corporations are anxious to move forward, but as long as our politicians keep us in limbo, our markets remain uncertain.

What this emphasizes is that our Congress is composed of career politicians who are more concerned about preserving their legacy and keeping their hopes of re-election alive, particularly on the Republican side. Most of them do not want to be seen as rebuking their Nordquist pledge and supporting the increase of taxes, so they will fight it to the end. We will go over the cliff and people outside of the US will think it is a major catastrophe but we'll probably think it is a sigh of relief to have the "worst" happen. Because if all tax cuts expire, then our politicians look like heroes coming in and proposing new tax cuts. Those who will suffer the most will be individuals who are on unemployment as the extensions will expire on the first of the year.

The 'cliff' doesn't exist though, it is totally made up; if the bill from August last year creating the artificial cliff, is simply repealed, then nothing happens and things go on as normal.

If any cuts happen, you will see the US go straight into recession, pulling Europe further down as well.

Killer Wench

KyussBishop wrote: »

The 'cliff' doesn't exist though, it is totally made up; if the bill from August last year creating the artificial cliff, is simply repealed, then nothing happens and things go on as normal.

If any cuts happen, you will see the US go straight into recession, pulling Europe further down as well.

As I said, the cuts would happen gradually. The most immediate changes would be taxes are raised (already happened) and unemployment benefits terminated for millions. The spending cuts happen over a period of time thus why the "cliff" is a slope.

Malibu Sunshine

Deleted User wrote: »

Puppets, it's who pulls the strings that matter, who control the flow of money etc.


It's those who pays the politicians are the ones calling the shots!

And they are?

KyussBishop

Killer Wench wrote: »

As I said, the cuts would happen gradually. The most immediate changes would be taxes are raised (already happened) and unemployment benefits terminated for millions. The spending cuts happen over a period of time thus why the "cliff" is a slope.

Those cuts are only happening because of the bill signed in 2011 though; it is an artificial problem, which can be bypassed completely by repealing the bill from 2011. Not cuts need to happen if the bill is repealed.

Malibu Sunshine

Malibu Sunshine wrote: »

And they are?

Most of the richest people in the US, those who can affort to pay millions to get politicians elected and to run the country the way that suits their interests.

This video gives an insight to (a small part of) how they work.

https://www.youtube.com/watch?v=OmUzwRCyTSo

Killer Wench

KyussBishop wrote: »

Those cuts are only happening because of the bill signed in 2011 though; it is an artificial problem, which can be bypassed completely by repealing the bill from 2011. Not cuts need to happen if the bill is repealed.

It isn't an artificial problem when people's paychecks will be less, unemployed individuals have no fall back, and our economy remains stagnate because corporations are too afraid to move in one direction or another. Yes, the government created this problem but creating this austerity measure, but it has real impact on individuals.

KyussBishop

Killer Wench wrote: »

It isn't an artificial problem when people's paychecks will be less, unemployed individuals have no fall back, and our economy remains stagnate because corporations are too afraid to move in one direction or another. Yes, the government created this problem but creating this austerity measure, but it has real impact on individuals.

I think there might be a bit of miscommunication here: The fiscal cliff itself is an artificial, made-up problem.

What that means, is there do not have to be any cuts at all, Reps and Dems do not have to negotiate together to decide on cuts, and there do not have to be automatic cuts happening; paychecks do not have to fall, unemployed do not need to have reduced income.

If the bill necessitating cuts is simply repealed, and the US continues funding the budget deficit through debt, then nothing bad happens at all; the US continues its slow climb out of economic trouble.

Pottler

KyussBishop wrote: »

I think there might be a bit of miscommunication here: The fiscal cliff itself is an artificial, made-up problem.

What that means, is there do not have to be any cuts at all, Reps and Dems do not have to negotiate together to decide on cuts, and there do not have to be automatic cuts happening; paychecks do not have to fall, unemployed do not need to have reduced income.

If the bill necessitating cuts is simply repealed, and the US continues funding the budget deficit through debt, then nothing bad happens at all; the US continues its slow climb out of economic trouble.

I agree fully, up to the bit in bold. "into" might be better.

Pottler

Pottler wrote: »

I agree fully, up to the bit in bold. "into" might be better.

Yes, from one crisis into the next!

goingpostal1

Those Republicans are like the Nazi Party for the 21st Century. Democrats are sucking at the same corporate teat.

AlmightyCushion

Pottler wrote: »

I agree fully, up to the bit in bold. "into" might be better.

Didn't you hear. You can print free magic money that solves all these problems and has no negative effects. Strangely enough no government has started doing it despite it solving all our problems with no negative effects.

Pottler

[QUOTE=AlmightyCushion;82423260]Didn't you hear. You can print free magic money that solves all these problems and has no negative effects. Strangely enough no government has started doing it despite it solving all our problems with no negative effects.[/QUOTE]
Hmm, have a goo(gle) at quantative easing. It's a posh way of saying "print lots of banknotes". It's well and truly done at this stage. Still in full flight too.:) Considering they are trillions in Debt, it's all nonsense anyway. A trillion dollar annual defecit is just a joke tbh. Compared to America, I'm loaded. Compared to America, Sean Quinn is a raging success.

Hande hoche!

goingpostal1 wrote: »

Those Republicans are like the Nazi Party for the 21st Century. Democrats are sucking at the same corporate teat.

Godwinned.

AlmightyCushion

Pottler wrote: »

Hmm, have a goo(gle) at quantative easing. It's a posh way of saying "print lots of banknotes". It's well and truly done at this stage. Still in full flight too.:) Considering they are trillions in Debt, it's all nonsense anyway. A trillion dollar annual defecit is just a joke tbh. Compared to America, I'm loaded. Compared to America, Sean Quinn is a raging success.

I'm not talking about QE. I'm talking about another of Kyuss' theories where we print a load of money instead of borrowing and then print more money to take everyone of the dole and employ them. It's completely inflation free too.

Pottler

Hande hoche! wrote: »

Godwinned.

And it only took 27 posts. If America were a family, they'd be eating out of bins and sleeping in a stolen car. They need to wake up and implement real systemic reforms, but so do we, so who am we to tell them what to do?

LostBoy101

This is just a scare tactics by the Republicans they will come around to it eventually.

electrobanana

They just should just move the fence from the Mexican border and put it at the edge of the cliff and they'll be grand.

Pottler

Pottler wrote: »

Hmm, have a goo(gle) at quantative easing. It's a posh way of saying "print lots of banknotes". It's well and truly done at this stage. Still in full flight too.:) Considering they are trillions in Debt, it's all nonsense anyway. A trillion dollar annual defecit is just a joke tbh. Compared to America, I'm loaded. Compared to America, Sean Quinn is a raging success.

The problem with QE is that doesn't actually reach the people who are skint, it goes to the banks who lend it to governments to give to the banks to stop them from failing.

Tiocfaidh Armani

Killer Wench wrote: »

It isn't simply about Republican's not wanting to lose tax relief for the wealthy. Many Republican politicians signed the Grover Nordquist pledge that said while in office, they would not raise taxes on any individual. President Obama won the election on his pledge to renew (and make permanent) the George Bush era tax cuts for the middle class while raising taxes on those families that make over $250,000 a year. The Democrats won the Presidency, maintained the Senate (by gaining more Republican seats), and gained seats in the House. The Republicans argue that the American people wanted them to remain as the House majority because they side with Republicans on not raising taxes for anyone; this is incorrect, as the Republicans took on a redistricting campaign that shifted boundaries so that Republicans would have an advantage. It isn't simply that people chose Republicans again, but that Republicans controlled how and who people could vote for.

Just to back up what you're saying there is that various polls are showing a majority of Americans want to see the Bush tax cuts expire on those who make over $250,000 per annum.

KyussBishop

Pottler wrote: »

I agree fully, up to the bit in bold. "into" might be better.

That's a common view alright, and yes, if they fund it through debt, it's going to need to be payed back in the future; avoiding going into recession again now though (through cuts), means they can get out of the crisis faster, and be in an even better position to pay back debts than they would be otherwise.

Then again, the US can fund the deficit through other means (like money creation, constrained by potential for inflation), though that's more controversial and politically troublesome, than the US just carrying on as is, funding through debt

KyussBishop

AlmightyCushion wrote: »

I'm not talking about QE. I'm talking about another of Kyuss' theories where we print a load of money instead of borrowing and then print more money to take everyone of the dole and employ them. It's completely inflation free too.

Indeed, though it's hard to get people to engage in my actual arguments on this topic, rather than engage in hyperinflation scaremongering or strawmen. Also, QE does actually use printed money.

Pottler

KyussBishop wrote: »

That's a common view alright, and yes, if they fund it through debt, it's going to need to be payed back in the future; avoiding going into recession again now though (through cuts), means they can get out of the crisis faster, and be in an even better position to pay back debts than they would be otherwise.

Then again, the US can fund the deficit through other means (like money creation, constrained by potential for inflation), though that's more controversial and politically troublesome, than the US just carrying on as is, funding through debt

The U.S owes Trillions. There is no realistic "paying it back". None. All that can be hoped for is functional debt servicing, at best. I see China being big in the USA, and an awful, awful lot of U.S unemployment and misery to come.:)

KyussBishop

The US GDP is over $15 trillion though with a debt of $11.5 trillion. Irelands debt vs GDP ratio (not overall amounts, of course) is higher than that.

Why would any of that lead to unemployment? China will be holding US dollars no matter what (because of the trade deficit, with the US buying a lot of Chinese goods), so the US is actually doing them a favour, by offering US bonds (debt) which pay out interest; China has no better place to park all that money.

Pottler

Pottler wrote: »

The U.S owes Trillions. There is no realistic "paying it back". None. All that can be hoped for is functional debt servicing, at best. I see China being big in the USA, and an awful, awful lot of U.S unemployment and misery to come.:)

Yes, paying it back from their children’s taxes assumes growth over and above the steady state growth that's needed just to stand still.

If they discover something dilithium crystals to solve the upcoming energy crisis then they'll get real growth, otherwise they're toast!

Killer Wench

KyussBishop wrote: »

I think there might be a bit of miscommunication here: The fiscal cliff itself is an artificial, made-up problem.

What that means, is there do not have to be any cuts at all, Reps and Dems do not have to negotiate together to decide on cuts, and there do not have to be automatic cuts happening; paychecks do not have to fall, unemployed do not need to have reduced income.

If the bill necessitating cuts is simply repealed, and the US continues funding the budget deficit through debt, then nothing bad happens at all; the US continues its slow climb out of economic trouble.

I know that the fiscal cliff was created by my own government. I friggen know that. As a manager working in government, what I am saying is that payroll has already been affected for many people, particularly if their pay period ended this past week. Their very first paycheck - next week - will have the adjusted taxes. My own payroll department remained late Friday hoping some resolution would happen so that they didn't have to adjust the rate of taxes coming out people's paychecks; but, it didn't happen so they had to assume that the payroll tax cuts expire and they adjusted it to 6.2%.

If people got their paycheck today, tomorrow, or Monday, and they come to a deal at 11:58, then their next pay check will be fine. But, if they are expecting their paycheck on the Tuesday, Wednesday, Thursday, or Friday of next week, they may find that their paychecks will have an additional 2% taken.

B.A._Baracus

https://www.youtube.com/watch?v=c91usT4P1u0

Burnsie says it all.

twinytwo

KyussBishop wrote: »

The US GDP is over $15 trillion though with a debt of $11.5 trillion. Irelands debt vs GDP ratio (not overall amounts, of course) is higher than that.

Why would any of that lead to unemployment? China will be holding US dollars no matter what (because of the trade deficit, with the US buying a lot of Chinese goods), so the US is actually doing them a favour, by offering US bonds (debt) which pay out interest; China has no better place to park all that money.

But is the problem not that america in a state of consistant increased borrowings they went from 6 trill debt in 2000 to almost 15? trill now..Which is fine because the entire world banking system works on the idea that America "can" pay back its debt.... if this changes however we are in serious trouble.

Pottler

twinytwo wrote: »

But is the problem not that america in a state of consistant increased borrowings they went from 6 trill debt in 2000 to almost 15? trill now..Which is fine because the entire world banking system works on the idea that America "can" pay back its debt.... if this changes however we are in serious trouble.

It's a spoof, a bluff, a false deadline. The issue is serious, but the reality is that it's just a manipulation of semantics which will be further played to kick the can down the road. Obama won't deal with it, he'll parlay, deal and wheedle and let his successor sink or swim with the situation he passes on.

twinytwo

twinytwo wrote: »

But is the problem not that america in a state of consistant increased borrowings they went from 6 trill debt in 2000 to almost 15? trill now..Which is fine because the entire world banking system works on the idea that America "can" pay back its debt.... if this changes however we are in serious trouble.

When they can't, they'll be in serious trouble, other countries will demand (re)payment in goods or other valuable resources rather than dollars. Commodities currently priced in dollars could be traded in another currency, if that happens, then, it's game over for the USA as the top dog economy. Their military will be king for quite some time though!

KyussBishop

twinytwo wrote: »

But is the problem not that america in a state of consistant increased borrowings they went from 6 trill debt in 2000 to almost 15? trill now..Which is fine because the entire world banking system works on the idea that America "can" pay back its debt.... if this changes however we are in serious trouble.

The US debt is denominated in US dollars, which the US has control over; it's impossible for the US to involuntarily default on their national debt.

The won't pay it all off in one go (that wouldn't be a good idea), but being the issuer of their own currency, they can never fail to pay it off gradually.