Comments on: Fiscal-Cliff-Diving

Fiscal-Cliff-Diving

the man of twists and turns — Sat, 01 Dec 2012 07:19:08 -0800

There's been a lot of talk in the US media about the "Fiscal Cliff" and the "Grand Bargain" What are they?

The "fiscal cliff" is a confluence of three legal changes taking effect Jan. 1: the expiration of a payroll-tax cut, the expiration of the Bush-era tax cuts, and the advent of mandatory spending cuts known as "sequestration."

Fiscal Cliff 101: 5 Basic Questions Answered. What's Happening: Fiscal Cliff Explained

Not all are convinced of the necessity of Congress' self-created problem: 6 Reasons why this Fiscal Cliff Is A Scam. Large numbers get thrown around, making it hard to see what exactly is at stake. How did we get here? Fiscal Cliff Reality Check: Are US Taxes Low Or High? "It's simply a fact that the fiscal cliff was created in response to GOP threats to force the U.S. government to default on its obligations." Or did we already go over the cliff years ago? Who is involved? President Obama; Speaker of the House John Boehner and House Republicans; Minority Leader Nancy Peolsi and House Democrats include the Gang of Six and the Progressive Caucus. Even the CEO of Goldman Sachs has weighed in. The "Fix the Debt" group of is concerned about the growth of deficit spending, while 'the Left is divided' on the Grand Bargain - or the Great Betrayal. What are the sides? The White House's Fiscal Cliff Proposal, delivered by Treasury Secretary Tim Geithner which Speaker Boehner calls "not a serious proposal." Obama's opening bid and the Republican response is all part of the negotiations. The White House plan "is a start, not an end." Obama's proposal appears to be a break from the negotiating in the middle path that he has taken before, though Robert Reich ( who recommended aiming high) thinks not much has changed. And Republicans have yet to make any proposals of their own, preferring to follow the President's lead. The Economist has a brief summary. Paul Krugman characterizes most of those calling for deficit reduction "hawks and hypocrites". And its always good to remember that elections have consequences.

The Long Treacherous Climb Up The Fiscal Cliff. The so-called fiscal cliff is one of those rare issues where everyone has an incentive to predict the worst. Barack Obama thinks it will force Republicans to accept higher taxes on the rich, Republicans think they can back him into a corner and force him to cave to their demands as they did two years ago, and businesses and consumers are wary that the still-fragile economy may take a nosedive. Figuring out how this will play out is Washington's favorite parlor game right now, so let's play.

What will happen now? Obama pushes for stimulus in fiscal cliff deal. 10 easy way to avoid the fiscal cliff. Three Votes Could Make Or Break Fiscal Cliff Deal. Lobbys, like the AARP, the IFA, and various unions, are gearing up. One paper predicts 'lower GDP and higher unemployment' if no deal is struck. The Weekly Standard says Obama's Plan Will Raise Taxes On Small Businesses, Lower Them For Corporations. The White House is apparently worried there won't be a deal by 2013, since prominent politicians like Senator Alan Simpson and Senator Erskine Bowles say falling off fiscal cliff is 'likely.' But perhaps the President should reassure Americans they will survive the fall. But what does the public really want? To "cut military waste, not charitable deductions"? How Obamacare Came To The Fiscal Cliff and The Grand Cynicism Of The Grand Bargain. A failure to reach a bargain may spur 'bond vigilantes' to move, but that may not be a bad thing. Will the Romney-Ryan plan live on? Perhaps a Obamney plan? Of course, the military-industrial complex will be largely spared. What does this mean for you? The Congressional Budget Office outlines options and consequences. Could the 'Fiscal Cliff' Push The US Into A Recession?. But if entitlement programs are your top priority, the fiscal cliff is your friend. 12 Ways the "Grand Bargain" could screw the poor. The mortgage-interest deduction could be on the table. City Journal writes: Localities should worry less about Washington's spending cuts than about how their own state governments handle them. Costco is paying a special dividend, part of 10 tax moves to make now. And maybe we'll get some tax simplification too. Disney's Bob Iger's position has spawned a hashtag: 15 Best Star Wars Fiscal Cliff Tweets

By: the man of twists and turns

the man of twists and turns — Sat, 01 Dec 2012 07:33:26 -0800

whoops: Disney's Iger to DC: Deal with 'Fiscal Cliff' Now, 8 NOV

By: Rock Steady

Rock Steady — Sat, 01 Dec 2012 07:36:40 -0800

You know they haven't announced a December Best Post contest, right? Well done, sir.

By: srboisvert

srboisvert — Sat, 01 Dec 2012 07:38:56 -0800

Mel Brooks predicted this.

By: mikelieman

mikelieman — Sat, 01 Dec 2012 07:45:28 -0800

Mel Brooks predicted this I mark that movie as the turning point of western civilization. It's been downhill from there.

By: 3.2.3

3.2.3 — Sat, 01 Dec 2012 07:49:41 -0800

Senator Erskine Bowles I don't think so.

By: Sys Rq

Sys Rq — Sat, 01 Dec 2012 07:50:44 -0800

The phrase "fiscal cliff" has the stink of Frank Luntz all over it.

By: nebulawindphone

nebulawindphone — Sat, 01 Dec 2012 07:58:56 -0800

The mortgage-interest deduction could be on the table. Please? It doesn't sound like it's actually a realistic possibility — and, the linked article points out, it wouldn't be fair to people who can only afford their current house because of the deduction, so you'd probably need some clever way of phasing it out rather than just eliminating it all at once. But man oh man, that thing is a wart on the current tax code. Just obnoxiously fuck-you regressive. I'd be glad to see it go.

By: peacay

peacay — Sat, 01 Dec 2012 08:04:03 -0800

I've not gone through all the links but wonder if any touch on the reality of what republicans rhetorically call 'broadening the tax base', which sounds just out of focus enough and short on details that it gets serious press play as a "balanced" contribution to the discussion. According to Ezra Klein (sorry, no direct links with me at the mo'), broadening the base means 3 things: making big city democrats lose money by reducing the state/local tax deductions, hurting charities by reducing those deductions and/or preventing mortgage interest write-offs (or that last one might be real estate subsidy, I forget : but it amounts to same thing). In other words, with hitting charities going to be a non-starter and the property write-offs only contributing a relatively small amount, the REAL line of the argument is to hurt democratic voters.

By: codacorolla

codacorolla — Sat, 01 Dec 2012 08:08:51 -0800

Nice post. I've read a handful of these and have been following coverage on NPR. I'm totally against a deal. Obama should go all or nothing, because he wins in either case. The onus for any failure here is on the republicans, and the strategic advantage lies with the Democrats because they're successfully established a narrative of obstructionism.

By: Burhanistan

Burhanistan — Sat, 01 Dec 2012 08:14:22 -0800

It's simply another mechanism by which Congress exerts its stranglehold on the US economy.

By: T.D. Strange

T.D. Strange — Sat, 01 Dec 2012 08:17:08 -0800

You forgot Jon Stewart: An Asteroid Barreling Toward Earth That We Created And Fired At Ourselves

By: ackptui

ackptui — Sat, 01 Dec 2012 08:18:52 -0800

Just wrote the following to my Congressman (a Republican): The three facets of the so-called Fiscal Cliff are expiration of payroll tax cuts and Bush income tax cuts, and the sequester (mandated budget cuts). All of these were voted on by Congress and signed into law by the President. As a resident of your district and these United States, I am going to be affected either way, if you choose to make changes or let the previously enacted law go into effect at the end of the year. What I would like you to do is take action now, and not push this off further down the road, so that we in the world know what to expect with more than a day's notice. You can expect that my vote in future elections will hinge on what you choose to do now. You are a party in creating this situation, so now fix it. Shit or get off the pot!

By: jeffburdges

jeffburdges — Sat, 01 Dec 2012 08:21:25 -0800

I agreed with Krugman's Let's Not Make a Deal frankly, the Bush tax cuts must die.

By: RustyBrooks

RustyBrooks — Sat, 01 Dec 2012 08:21:35 -0800

ackptui, would you like a prediction about the kind of response you'll get?

By: Blazecock Pileon

Blazecock Pileon — Sat, 01 Dec 2012 08:21:45 -0800

If the bank bailouts of 2008/2009 are any indication, Obama will be putting Grover Norquist in charge of tax reform. But, really, corporations will likely end up with lower tax rates out of this, I'll bet. He's not meeting with CEOs for fun and games, after all.

By: eriko

eriko — Sat, 01 Dec 2012 08:28:13 -0800

I agreed with Krugman's Let's Not Make a Deal frankly, the Bush tax cuts must die. More importantly, politically, that gives the Democrats leverage. Put up your package with the middle class cuts, and dare the GOP to block it -- and then, when they do, make sure every time any Democrat is on TV, they mention how the Republicans blocked that tax cut. Alas, this demands competence and consistent messaging from the Congressional Democrats. I've a better chance of shitting gold bricks.

By: larry_darrell

larry_darrell — Sat, 01 Dec 2012 08:45:18 -0800

By: humanfont

humanfont — Sat, 01 Dec 2012 08:52:42 -0800

I've been saying for months that the "fiscal cliff" was the grand bargain, the problem is that any such bargain is going to be politically unpopular. Thus congress and the President created a mechanism where they can universally oppose it, but get what is necessary done. Once the Bush tax cuts expire, then they can vote in the more prudent bipartisan tax cut.

By: Static Vagabond

Static Vagabond — Sat, 01 Dec 2012 08:59:32 -0800

I think Matt Yglesias said it, but how wonderful would it be that instead of these politicians devising ways to create a crisis that harms the entire country, they instead build an agreement that punishes them directly. "If an agreement isn't reached by X date, then salaries of all Congressional and House representatives will be cut to minimum wage, investments will be taxed at 99%, and you'll have to spend two days a week picking up trash from the side of the road." Be interesting to see how the political show would change.

By: spaltavian

spaltavian — Sat, 01 Dec 2012 09:01:33 -0800

But, really, corporations will likely end up with lower tax rates out of this, I'll bet. So? It's the income taxes that need to go up. Anyway, it's not at all surprising that you've somehow constructed an alternate reality where this demonstrates how hapless Obama is, despite the fact that this entire situation is a trap he successfully sprung on the GOP. Either he gets what he wants, or the GOP has to answer for torpedoing the "Middle Class Tax Cut Extension Act of 2012" and then the identical "Middle Class Tax Cut Act of 2013".

By: LooseFilter

LooseFilter — Sat, 01 Dec 2012 09:04:30 -0800

Does USian corporate media talk endlessly of money and economics to divert the masses from war and poverty, or do USians talk endlessly of money and economics to avoid talk of their Empire and its consequences, with the corp media following? Do Canadians always phrase their questions as false dilemmas? Our media is corrupted by the profit motive, so they talk about whatever will keep ears and eyes on their programs so that they have better ratings and make more money. There is no agenda in our public discourse (in regard to how it's shaped by 'the media') other than the profit motive. All of this breathless discussion of "the fiscal cliff" is already too much for me to bear and I've tuned it out. I bought a car recently and it came with three free months of satellite radio so I've been listening to political talk a lot more than I normally do, and WOW is our level of public discourse shockingly stupid. Just dumb and stupid followed by half-informed and breathlessly speculative followed by more stupid. It's been a disheartening couple of months, thanks Sirius/XM. I like the way the president is playing this so far. Make Congressional Republicans own their policy stances by proposing actual policy. Also, thanks for this wonderful post.

By: spaltavian

spaltavian — Sat, 01 Dec 2012 09:08:50 -0800

If the bank bailouts of 2008/2009 are any indication, Obama ... is magic and did this three and a half months before he was president? ... won't allow a financial collapse cause a depression? ... will out also bailout the auto industry, showing that he understands the government has a role in stabilizing important sectors of the economy during a free fall?

By: Blasdelb

Blasdelb — Sat, 01 Dec 2012 09:22:21 -0800

The editorial in Nature makes the case for scientists to be on board with jumping off the cliff if it comes to it

By: Blazecock Pileon

Blazecock Pileon — Sat, 01 Dec 2012 09:23:21 -0800

... is magic and did this three and a half months before he was president? I am talking very precisely and clearly about putting people in charge of the bailout who caused it in the first place, which has to fall squarely on Obama's shoulders, since he was President and actually made that decision. You can blame Bush for the economic collapse, and I would join you in assigning that blame, but you can't keep pointing the finger at Bush for Obama's decisions, afterwards. So? It's the income taxes that need to go up. There is plenty of room for corporations to pay their fair share, what with corporate taxes at a 40-year low.

By: delfin

delfin — Sat, 01 Dec 2012 09:24:35 -0800

BUT DEBT DEBT DEBT LOOKIT ALL THAT DEFICIT ANY MINUTE NOW THE CHINESE ARE GONNA CALL IT ALL IN AND OWN EVERYTHING THEY'RE GONNA TURN NASCAR INTO RICKSHAW RACES DEBT DEBT DEBT IF I'M FIVE MINUTES LATE ON MAH CAR PAYMENT THE LIB'RUL DEMONRAT BANKERS TAKE MAH TRUCK AWAY HOW CAN A GUBMINT PAY WELFARE QUEENS AND GIVE EM PHONES BUT NOT PAY ITS BILLS ON TIME LIKE AH DO IN MY HOUSE IMMA WRITE MY CONGRESSMAN. And that is why I drink.

By: Sticherbeast

Sticherbeast — Sat, 01 Dec 2012 09:56:49 -0800

POLITICAL CARTOON OF DEBT AS A LARGE OBJECT POLITICAL CARTOON OF A CAR DRIVING OFF OF A FISCAL CLIFF PULITZER PRICE ON MY MANTEL

By: sfenders

sfenders — Sat, 01 Dec 2012 10:06:37 -0800

Put up your package with the middle class cuts, and dare the GOP to block it That would be the "middle class" which includes people earning $100-250k per year? On whom a majority of that tax cut was spent? I guess it's "middle" in the sense of being socially mid-way between quite wealthy and outright rich. The actual median income is somewhere else. US politics is so weird.

By: mellow seas

mellow seas — Sat, 01 Dec 2012 10:09:11 -0800

Does USian corporate media talk endlessly of money and economics to divert the masses from war and poverty, or do USians talk endlessly of money and economics to avoid talk of their Empire and its consequences, with the corp media following? US political discourse has not always been overwhelmingly about the economy. It's overwhelmingly about the economy when the economy is shitty. When people are wondering how they're going to pay the bills they don't pay much attention to international affairs, whether Andrea Mitchell and Wolf Blitzer are talking about it or not.

By: Riki tiki

Riki tiki — Sat, 01 Dec 2012 10:16:56 -0800

Regarding Costco et al, aren't dividends founded on the idea of future payouts to investors? Paying money to people who already own your stock doesn't do much good unless it encourages existing shareholders and new investors, which would be based on the assumption that the dividends will continue into the future. Seems like "oh, the law's about to change so that we won't want to offer dividends anymore" undermines that promise of future income, so it just ends up unloading cash without much benefit to the business. Am I misunderstanding something?

By: exogenous

exogenous — Sat, 01 Dec 2012 10:21:00 -0800

Sys Rq: "The phrase "fiscal cliff" has the stink of Frank Luntz all over it." Bernake coined the term "fiscal cliff"

By: eye of newt

eye of newt — Sat, 01 Dec 2012 10:21:31 -0800

I find it hilarious. At one time it seemed that the Republicans couldn't lose with the 'Read my lips. No new taxes" argument. Yet, somehow, now they are arguing very forcefully in favor of taxes. They are using all the 'everyone needs to pay' and 'it is greedy to push for tax cuts' arguments that the Democrats used to use. The first round was a year ago and it was one of the toughest battles Obama has fought. Just think about it: the major battle of Obama vs the GOP consisted of Obama fighting for tax cuts and the GOP fighting against the tax cuts. How can this be? Of course, it is because of the Bush era wealthy tax cuts. The whole tax argument has changed from 'no new taxes' to 'who's taxes are going to go up, the middle class or the wealthy? We think it should be the middle class taxes that increase." At least it is a more honest argument. "No new taxes!....For the rich!"

By: ob1quixote

ob1quixote — Sat, 01 Dec 2012 10:53:18 -0800

I sincerely hope that the rentiers are not allowed to welch on the deal. They got their lower taxes for a few decades. Now the piper must be paid. That my dumb ass "libertarian" friends on Facebook, none of whom are rich and nearly all of whom qualify for refundable tax credits, are on their side sickens me. Even so, all the tax wrangling in the world isn't going to make a bit of difference unless the neoliberal policies that put us in this position in the first place are addressed. The benefits of commerce must not continue to accumulate at the top while the Americans who do the majority of the buying and selling in this country slip ever further down into economic oblivion.

By: cavalier

cavalier — Sat, 01 Dec 2012 10:58:07 -0800

That Bob Iger clip is gold; he can shove it up his ass with "US Corporate Taxes highest in the world" -- hasn't that been debunked like 15 times? It's the loopholes, silly.

By: wuwei

wuwei — Sat, 01 Dec 2012 11:26:42 -0800

I'll keep saying it-- at the federal level taxes don't fund spending.

By: tonycpsu

tonycpsu — Sat, 01 Dec 2012 11:34:13 -0800

I'll keep saying it-- at the federal level taxes don't fund spending. Is there some other thread where you've said it more clearly? Because I have no idea what you're trying to say here. The federal government has a balance sheet with revenues (taxes) on one side and expenditures (spending programs) on the other. The former minus the latter equals the deficit. So taxes are part of funding spending, but so is borrowing. Are you just trying to say we always run deficits?

By: Justinian

Justinian — Sat, 01 Dec 2012 11:38:26 -0800

But man oh man, that thing is a wart on the current tax code. Just obnoxiously fuck-you regressive. I'd be glad to see it go. It's amazing to me how many people like the mortgage income deduction while decrying other bad economic policy. I guess the only good subsidy is our subsidy.

By: deathpanels

deathpanels — Sat, 01 Dec 2012 11:38:26 -0800

I'm not an economist, but having been cognizant for at least a decade worth of American bipartisan political name-calling and general ineffectiveness, here's my prediction of what happened: 2008, oops, economy is broken. Dang, guess we need to generate revenue to pay down some of this debt, huh? I mean, the computer models say that when we hit 100% of GDP horrible things will happen. But politicians like being re-elected, and nobody can agree on how to raise revenue. So in 2010, Republicans and Democrats get together to pass a provision extending the Bush-era tax cuts until 2012, because this will guarantee that the "fiscal cliff" won't be an election topic (nobody wants to risk their party being blamed for causing another recession in 2010; doing so would make 2012 a landslide election, one way or the other). As a bonus, this will leave very little time for action following the 2012 election, so whoever wins will have a great alibi for when they inevitably fail to get any legislation passed and we "go over the cliff." Sort of a brilliant dodge, because each party can blame the other, and Joe Six Pack can keep believing his party of choice is looking out for him. So we go over the cliff. Taxes automatically go up. Spending automatically gets cut. In other words, revenue gets generated. Both parties blame the other for the nasty after effects. Working people get the shaft, but that's nothing new. It's a hit to consumer spending, though. To abate some of the badness, Dems and Republicans pass legislation to lower taxes (maybe increase funding to some select entitlement program), but to a level well above the pre-"cliff" rates. As a result, Democrats can say they saved some entitlements/breaks for "the middle class", and Republicans can claim they actually lowered taxes after Obama raised them. Both parties look pretty good in the eyes of their constituents and ready for another four years of bad policy designed to marginally increase their odds of winning seats in upcoming elections, even as the debt continues to grow and nobody really does anything about it because it's not actually that important to pay it down for the next, oh, half a century, at which point the nation will collapse into a Gibson-esque neoliberal wasteland ruled by a small corporate ruling class of genetically-engineered immortals living in orbital space palaces. Or, you know, something like that.

By: Afroblanco

Afroblanco — Sat, 01 Dec 2012 11:46:13 -0800

Obama should just call the Republicans' bluff. Clinton did it in the 90s and IT FUCKING WORKED.

By: wuwei

wuwei — Sat, 01 Dec 2012 11:53:21 -0800

tonycpsu, here's a link to a bunch of posts I've made about the deficit/debt etc.

By: eye of newt

eye of newt — Sat, 01 Dec 2012 11:54:23 -0800

Obama should just call the Republicans' bluff. Clinton did it in the 90s and IT FUCKING WORKED.--Afroblanco I think that is what he's doing. The Republicans find themselves on the side of dramatically raising taxes on the middle class so that the Bush wealthy tax cuts can stay in place, and it is not a good place to be.

By: anewnadir

anewnadir — Sat, 01 Dec 2012 12:02:55 -0800

"après moi, le déluge."

By: Ironmouth

Ironmouth — Sat, 01 Dec 2012 12:17:33 -0800

Obama should call their bluff. What are they gonna do, spend months denying a tax cut to 98% of voters to preserve it for 2% of voters? Exit polls showed 65% of voters agreed with the President. Obama has his Inaugaration and STOU speeches coming up. The GOP is very, very weak. Each side is trying to win politically--the GOP wants Obama to suggest benefit cuts to entitlements first. Obama wants the principle of tax hikes in the discourse for years to come. But Obama is in the driver's seat. The plain fact is that the GOP House majority is both unwilling to vote for the benefit cuts it wants or tax increases. They are paralyzed and it will take the intense pressure of 98% of Americans paying more on their taxes to strong arm them. It will be devestating to their brand. For years they have relied on brinksmanship and "toughness" as the hallmark of their party. Now they are going to be percieved as weak--it could be fatal. But as a matter of policy, the GOP method of governance, government by blackmail, must be extirpated from our discourse. Our economy and people can no longer take this type of governance. In short, a political victory for the President is critical to American policy going forward.

By: fuse theorem

fuse theorem — Sat, 01 Dec 2012 12:24:20 -0800

POLITICAL CARTOON OF A CAR DRIVING OFF OF A FISCAL CLIFF Coming this Christmas: The Fast and the Furious: Fiscal Cliff. Starring Barack Obama and John Boehner, with a guest appearance by Joe Biden and his bitchin' Trans Am. All of this breathless discussion of "the fiscal cliff" is already too much for me to bear and I've tuned it out. I know, right? The falling or jumping off a cliff metaphor just doesn't work for me. Thelma & Louise was too long ago and that stuff about lemmings has been debunked. Obama should just call the Republicans' bluff. Clinton did it in the 90s and IT FUCKING WORKED. I don't remember, was that before or after they ginned up reasons to impeach him? I agree that Obama should hang tough but afterwards the wingnuts would probably start pulling stuff out of the woodwork in revenge. The House could spend the next two years subpoenaing everybody in the administration, and again, nothing worthwhile would get done. I hope Obama's got the stones to face them down this time.

By: symbioid

symbioid — Sat, 01 Dec 2012 12:31:42 -0800

mellow seas: "Does USian corporate media talk endlessly of money and economics to divert the masses from war and poverty, or do USians talk endlessly of money and economics to avoid talk of their Empire and its consequences, with the corp media following? US political discourse has not always been overwhelmingly about the economy. It's overwhelmingly about the economy when the economy is shitty. When people are wondering how they're going to pay the bills they don't pay much attention to international affairs, whether Andrea Mitchell and Wolf Blitzer are talking about it or not." ------- Really? Because I seem to recall during the "boom" years of the late 90s during Clinton how endlessly it was talk about Wall Street this, the Dow is up that, yada yada. It's always Capitalism everywhere. It never shuts up. It's demanding you turn over your money to it in every way shape and form. It demands you not skip ads during TV, it demands you pay for every single bit you download. It demands to have an ad for water made from glaciers to be put in to look like a news segment, but it's really just one big fucking ad. Consumerism rules the day. If it ain't "we're fucked now" it's "fuck yeah, capitalism, we rule!" Money. Our society genuflects to the Bull on Wall Street. Oh sure, I guess, if it isn't about money, then it's about blonde white girls getting kidnapped or a new fad drug making zombies out of people...

By: Afroblanco

Afroblanco — Sat, 01 Dec 2012 12:38:10 -0800

"Does USian corporate media talk endlessly of money and economics to divert the masses from war and poverty, or do USians talk endlessly of money and economics to avoid talk of their Empire and its consequences, with the corp media following? Generally, we don't like it when you call us names. The correct demonym is American. Use it.

By: angrycat

angrycat — Sat, 01 Dec 2012 12:42:24 -0800

By: Splunge

Splunge — Sat, 01 Dec 2012 12:46:41 -0800

The Fiscal Cliff is actually a Fiscal Molehill that the Republicans made into a Fiscal Mountain.

By: flug

flug — Sat, 01 Dec 2012 13:19:20 -0800

That would be the "middle class" which includes people earning $100-250k per year? On whom a majority of that tax cut was spent? I guess it's "middle" in the sense of being socially mid-way between quite wealthy and outright rich. The actual median income is somewhere else. At some point, actual facts get to come into this discussion, right? Right?? Because, as you say, the median income is somewhere else entirely and nobody on the entire planet seems to have any idea about that basic fact. So here are a few facts to chew on:

The median annual household income in the United States is $50,054. That means half of Households make more than $50K, half make less. That defines the MIDDLE of the middle class.
Households making $35K-$75K are the middle 1/3 of households.

Either of those would be a pretty good definition of the middle class--households making around $50K annually or households with income between $35K and $75K. What the middle class is not:

Households making $250,000 or more: Nope. That's fewer than 2% of households.
Households making $150,000 or more: Still nope. You're in the top 8%!
Over $100,000? Still only 20% of households. That's not middle class, it's upper class--the upper quintile of income, to be precise. Not the middle quintile, not the second-to-top quintile, but the TOP quintile. 4/5 of American households have an income less than $100,000. Absolutely no one should be allowed to make, with a straight face, the argument that the upper 20% of households are actually the "middle".
And what about $75,000--that's pretty average, right? Well, only 1/3 of households earn that much or more. Again, upper 1/3 != middle. By basic math.

If I hear one more reference to the "middle class" when they actually mean "Top 2%," "Top 20%," or even "Top 33%"--I think I'm gonna scream . . . Sources: U.S. Census - NPR - Wikipedia

By: fullerine

fullerine — Sat, 01 Dec 2012 13:24:09 -0800

Mel Brooks predicted this

Mel Brooks may have predicted it but your clip leaves off the most important moment.

By: flug

flug — Sat, 01 Dec 2012 13:27:35 -0800

BTW the rant above was particularly brought on by the recent article by Romney's campaign manager smirking about how they won every economic group but the under-$50K households. Won everything but the middle class, then--right, Mitt?

By: dances_with_sneetches

dances_with_sneetches — Sat, 01 Dec 2012 13:38:27 -0800

Can't we just live on the cliff like the Anasazi? Because that would be cool.

By: dobie

dobie — Sat, 01 Dec 2012 13:44:23 -0800

Every time I hear "fiscal cliff" I get Crystal Ship by the Doors in my head.

By: Ironmouth

Ironmouth — Sat, 01 Dec 2012 13:46:26 -0800

Maybe negotiations will be different this time. I have this fantasy that Obama went into kill mode after debate #1 and is stuck there and now will kick ass like no other I mean really you're going to see a crying orange Boehner flying from Washington D.C. because Obama has levitated him out with his mind and it will be, y'all were afraid of the fed gubmint, watch out because Super Obama is here and mad. Negotiations of this sort are determined by the political position of the parties, not any sort of schoolyard stuff. This is why the claims of toughness and the like are for low-information voters. That's why the GOP uses them. And that's why the deal Obama struck on the debt ceilng was brilliant. He was playing a field position game.

By: Afroblanco

Afroblanco — Sat, 01 Dec 2012 13:53:32 -0800

Can't we just live on the cliff like the Anasazi? Because that would be cool. One theory is that the Anasazi had to leave their homeland because of climate change. So you may just get your wish.

By: OHenryPacey

OHenryPacey — Sat, 01 Dec 2012 14:03:18 -0800

It simply dumbfounds me that the winning side (in the past election cycle) can't or won't reframe this as a way to move toward a balanced budget.

By: Ironmouth

Ironmouth — Sat, 01 Dec 2012 14:14:28 -0800

It simply dumbfounds me that the winning side (in the past election cycle) can't or won't reframe this as a way to move toward a balanced budget. That's exactly how it is being framed. Its just that MSNBC isn't bringing it up.

By: evidenceofabsence

evidenceofabsence — Sat, 01 Dec 2012 14:36:22 -0800

I am reluctant to put time into learning what the fiscal cliff actually is, because right now, every time someone says "fiscal cliff," I picture this guy I know named Cliff holiding a cash fan. The fan is mostly ones.

By: jeffburdges

jeffburdges — Sat, 01 Dec 2012 14:43:19 -0800

I'm afraid social class is defined by power and influence, not income, flug. In particular, upper class has traditionally held much more rarified connotations than merely upper quintile, roughly upper 1-2%. Anyone who wields real power basically. At the other end, the term lower class seems synonymous with working class, meaning either anyone dependent on physical labor or else anyone who spends money primarily for sustenance rather than lifestyle. In short, we define the middle class to be anyone who trivially meets their own sustenance needs but wields no real influence. There are several more detailed breakdowns in the lower middle class article on wikipedia, but all place the dividing line between middle and working class between 45% and 52%.

By: relish

relish — Sat, 01 Dec 2012 14:50:06 -0800

reference to the "middle class" If you are making $100k in New York or San Francisco, you are not in the middle and it's not because you are making too much money. You are not making enough. It's a big country. What passes for the middle in one place is not in another. Fortunately for you, the mudslingers on the left and right have figured 47 percent of the country is poor and unworthy and 1 percent is rich and unworthy. Taking the mud from both sides, you can pretty much figure the 52 percent left over is 'the middle'.

By: Orange Pamplemousse

Orange Pamplemousse — Sat, 01 Dec 2012 15:01:42 -0800

If you are making $100k in New York or San Francisco, you are not in the middle and it's not because you are making too much money. You are not making enough. It's a big country. What passes for the middle in one place is not in another. California Locations by Per Capita Income. ($55,221) Demographics of New York City - Income. ($48,631) Nope, top half.

By: Drinky Die

Drinky Die — Sat, 01 Dec 2012 15:03:43 -0800

Obama should call their bluff. What are they gonna do, spend months denying a tax cut to 98% of voters to preserve it for 2% of voters? very weak. I agree, only a political idiot would ever fall for Republican blackmail attempts and extend the Bush tax cuts for the rich.

By: tonycpsu

tonycpsu — Sat, 01 Dec 2012 15:29:59 -0800

wuwei: "tonycpsu, here's a link to a bunch of posts I've made about the deficit/debt etc." OK, so you're an MMT guy. That's fine, but I think it's pedantry to harp on the terminology non-MMTers use in this discussion. I understand that the government owns printing presses and can mint coins, but unless Ben Bernanke and Tim Geithner turn into MMTers tomorrow, minting a couple of trillion dollars worth of coins is not in the cards.

By: jeffburdges

jeffburdges — Sat, 01 Dec 2012 15:46:28 -0800

I'm sure $100k qualifies as middle class anywhere in the country, including NYC and SF, relish. I believe some authors consider $100k the dividing line before upper middle class, maybe they'd retract that assertion in NYC, but certainly still middle class.

By: sfenders

sfenders — Sat, 01 Dec 2012 16:46:08 -0800

Well, there are reasonable definitions of "middle class" that are not based on income and include plenty of high-income people. It's just that these have little to do with tax brackets, so they are misleading to use in a discussion of tax policy.

By: restless_nomad

restless_nomad — Sat, 01 Dec 2012 16:52:49 -0800

[Folks, the USian derail can go to MetaTalk if it needs to continue. Thanks. ]

By: adamdschneider

adamdschneider — Sat, 01 Dec 2012 17:42:09 -0800

By: Justinian

Justinian — Sat, 01 Dec 2012 17:44:51 -0800

Yeah, I can't believe how many people believe that "100k isn't enough to be middle class in New York City!!" crap. Of course it is. Most people in NYC don't make nearly that much and they manage! Unless there are tens of thousands of homeless folks keeping warm next to burning trash cans while making $80,000 a year it's ludicrous to think they aren't doing just fine.

By: tonycpsu

tonycpsu — Sat, 01 Dec 2012 17:47:39 -0800

Yeah, the "100k isn't enough to live on" is just coded language for "LEAVE THE JOB CREATORS ALOOOOOOOOOOOONE." Don't get hung up on it too much.

By: Talez

Talez — Sat, 01 Dec 2012 18:02:26 -0800

Nope, top half. pwnt Don't be deliberately obtuse. Nassau County, New York - $91,414 Putnam County, New York - $90,735 Santa Clara County, California - $84,895 Suffolk County, New York - $84,106 Rockland County, New York - $82,217 San Mateo County, California - $81,657 Nassau, Santa Clara and Suffolk all have well over a million people.

By: Justinian

Justinian — Sat, 01 Dec 2012 18:08:25 -0800

I understand the point you're making but I don't think you can necessarily draw the conclusion you're implying from county level data. Consider someone who lives in a very wealthy neighborhood where the median income is $400,000 a year. This person makes $200,000 a year, half the median. If I provide neighborhood level data showing the median income is $400,000, the fact that a person in that neighborhood makes $200,000 is not any sort of evidence that person is poor or middle class. He just happens to be a well off guy who is significantly less well off than the rich people around him. Similarly, someone making $120,000 in Nassau county isn't middle class. They're just less rich than a lot of the Richie Riches surrounding him or her. Now, they probably feel middle class because they have a lot less stuff than the folks around them, and can't afford the same house or luxuries, but our feelings don't determine if we're middle class.

By: tonycpsu

tonycpsu — Sat, 01 Dec 2012 18:12:45 -0800

This derail is pointless, because what actually happens is that the wealthy live in the wealthy areas and the working poor commute to those wealthy areas to get crumbs from the table. They're still getting minimum wage or perhaps a buck or two more. Cost of living is only relevant to the people who can afford to live in these expensive cities.

By: Ironmouth

Ironmouth — Sat, 01 Dec 2012 18:36:04 -0800

You can always change the frame to neighborhood or even block if you are trying to insist that 100k is not middle class. But it sure the hell is, anywhere in the US. Reminds me of that dumb Republican law professor from the University of Chicago who insisted he was not well off at over 250k a year and his explanation involved having help, living in a tony neighborhood and sending his kids to the most expensive private schools in the nation. Nope.

By: CheeseDigestsAll

CheeseDigestsAll — Sat, 01 Dec 2012 19:11:16 -0800

While I don't have a problem with defining $50K as the middle of middle class, the idea that $100K is therefore upper class doesn't seem reasonable either. Calling it privileged seems OK, but upper class really has connotations of power, i.e., the option not to work, that simply aren't there at $100K. Since income distribution isn't a bell curve, you can't just assign it based on stddev, it's a bit more slippery. Consider also that purchasing power isn't linear. Someone can hold down a job and get by on rice a beans. With a better job they can eat better and have a nicer car but with essentially no increase in political power or economic influence.

By: zangpo

zangpo — Sat, 01 Dec 2012 19:39:49 -0800

Yeah, the message should be that we need more stability for to allow healthy sustained spending by the middle class and that's our plan and throw in a raise to the debt ceiling for good measure or the cliff. Macroeconomic argument, not our belt size or the kitchen table crap.

By: Drinky Die

Drinky Die — Sat, 01 Dec 2012 20:04:46 -0800

I say we need more healthy sustained spending from the poor class. They seem to be lagging behind the middle class and rich for some reason.

By: Talez

Talez — Sat, 01 Dec 2012 22:15:07 -0800

I understand the point you're making but I don't think you can necessarily draw the conclusion you're implying from county level data. Where elsedo you go once you hit the South Bay? And something as big as Santa Clara and San Mateo counties? Santa Clara and San Mateo counties both have astronomical costs of living. Even Alameda County sits on $67,558 for the median household income and closes in on South Bay for expensive. Shit in the bay area is expensive and chases after the massive amount of money sloshing around. If we had what we earned but lived somewhere like Cheyenne, WY we'd live like kings and pay for our house in cash. But instead we get $4/gal gas on days that start with T and middle class houses starting from $400K that are still a 45 minute commute from Palo Alto/Silicon Valley/San Francisco. About the only break you get are on things that are semi-fixed prices nationally like cars.

By: relish

relish — Sun, 02 Dec 2012 00:17:14 -0800

Nope, top half. If you are meaning to suggest flug was right in terms of 100k being "upper class" you are wrong. It might fly as upper class in parts of the US where tax rates are low and the cost of living is low, but it's simply not the case in many traditional Democratic strongholds and that obviously plays into the tax conversation in Washington.

By: eviemath

eviemath — Sun, 02 Dec 2012 05:18:18 -0800

So: some people are saying "middle class" should refer to a certain level of economic power (well enough off to be comfortable and financially secure, but not well enough off to have any actual power/influence); other people are saying that "middle class" should refer to a demographic class relative to median income (second and third quartiles, middle third of incomes by frequency, or some similar scheme). I find this really interesting; I think that the fact that we are having this debate here highlights how much income distribution has changed in the US in the last half-century. At one point in our recent economic past, these two definitions weren't all that different - the groups described by each had a fair amount of overlap (eg. the postwar economy during which many of today's economic theory and models were being developed). Nowadays, they refer to almost mutually exclusive demographics. This debate perhaps indicates that our frame of cultural-economic reference hasn't caught up to this shift. I propose that this has negative consequences for economic policy debates in the US; and thus that we all need to talk more about this major shift and why the fact that the two definitions now produce distinct demographic groups is a very bad thing. So every time you hear someone talk about the middle class, bring up both of these definitions and their now disjointness! Make that the conversation! (At the least, you will get the speaker to define what they mean by middle class, which will help clarify policy discussions and the priorities of those speaking.)

By: Orange Pamplemousse

Orange Pamplemousse — Sun, 02 Dec 2012 08:41:18 -0800

By: Orange Pamplemousse

Orange Pamplemousse — Sun, 02 Dec 2012 08:46:04 -0800

Class =/= tax bracket, but it may help to consider the demarcations in Paul Russell's book, "Class." Top Out of Sight Upper Upper Middle ------------------------- Middle High Proletarian Mid-proletarian Low Proletarian --------------------------------- Destitute Bottom out of sight

By: The Loch Ness Monster

The Loch Ness Monster — Sun, 02 Dec 2012 09:46:17 -0800

Flug's numbers and method of viewing this argument are important, but it seems counterproductive to define "middle class" by choosing the median income (half of all people make more, half of all people make less). I could be wrong, but I think that most people take "middle class" to mean: Able to own a house, able to support and send a couple of kids to college without going into debt, able to take an annual vacation, able to weather a medical or other emergency without going bankrupt, able to retire in relative comfort and without having to work at Wal Mart. There are a couple of reasons I don't think it makes sense to define middle class using the median income: First, as people have mentioned, where you are makes a big difference. $50k in Manhattan means different quality of life than $50k in Duluth. Same deal for how many kids you have, whether you inherited a house, whether your money comes from capitol gains or from a weekly paycheck, whether your employer offers health insurance or child care, etc. Same deal for economic shifts like the cost of fuel, food, and inflation, which are going to have a big impact on people's quality of life without changing their income. Second, if we define "middle class" as "median income", then it means that the middle class always simply is what it is, and arguments for bringing people from poverty to the middle class become nonsensical: we could grow the middle class by crashing the economy and sending the median income to $20k, for example. Maybe it's only semantics: if we define middle class is the median, then we can talk about "raising the median income" rather than "growing the middle class", but there are so many other factors aside from income that have an impact on quality of life (location, family size, cost of fuel, food, health care, inflation) that it doesn't seem useful. Looking at it with a political eye, it doesn't help the progressive cause to work hard to define specific upper and lower income ranges for "middle class". $50k will mean something different in the next presidential election than it does now, and it'll mean something a lot different in the election after that; if "$50k - $200k" (or whatever) becomes conventional wisdom for "middle class" then we'll just have to redefine it again next time around. All that said, I agree in principal with flug's ire at Romney's campaign manager ("On Nov. 6, Romney carried the majority of every economic group except those with less than $50,000 a year in household income. That means he carried the majority of middle-class voters." [...] "Yes, the Republican Party has problems, but as we go forward, let's remember that any party that captures the majority of the middle class must be doing something right."), but what grates is not that Romney (and conservatives in general) are mis-identifying the middle class; rather it's that they conflate wealth with basic human value. The more you are worth financially, the more you are worth as a human. If people earning less than $50k didn't vote for Romney, it's okay; those were clearly bad people and their votes were morally tainted. Anyway, back on topic: this is a great post, and Obama appears to be playing hardball, which is exactly what I hoped he would do (though it's disappointing that even in hardball we're not talking about restoring Clinton-era top marginal rates). Progressives have gained a lot of ground on social issues, but economically we've gone back to the 1930's. I'm not usually one for conspiracies, but it almost makes me believe theory that the insane conservative positions on abortion, rape, religion, and science are really just smoke and mirrors meant to distract from their real agenda, which is rigging the game in favor of the upper class.

By: octothorpe

octothorpe — Sun, 02 Dec 2012 10:19:55 -0800

Coming in late here but great post. I haven't really paid much attention to this issue and the first few links help me understand it a lot better.

By: octothorpe

octothorpe — Sun, 02 Dec 2012 10:29:45 -0800

Geithner: No deal 'without rates going up' Nice to hear things like that from the administration.

By: Talez

Talez — Sun, 02 Dec 2012 11:59:40 -0800

Is the poorest millionaire in Galt's Gulch on food stamps? If your household makes more than $100k/year you are in the top half of Americans in all but three counties and in the top quantile overall. That is a fact. You're "only" upper middle class, trying but to pretend that you're living hand to mouth is ridiculous. I'm trying ridiculously hard to be polite here. I've moved from Perth to South Bay. Out of the frying pan and into the fryer for cost of living. This isn't some enclave of rich families lording over the nearby pleb counties. This is suburban San Francisco comprised of 2 million people. When the person from Winnipeg is telling me how $100K in South Bay is rich I look at them the same way I look at a Brit when they tell me 28C is a heatwave.

By: the man of twists and turns

the man of twists and turns — Sun, 02 Dec 2012 15:01:43 -0800

Robert Reich in the Christian Science Monitor: Fiscal cliff would hurt low-wage workers the most

Fiscal cliff drama in Washington coinciding with strikes and work stoppages among America's lowest-paid workers, at Walmart and fast food restaurants, is no coincidence. If Congress goes over, these are the people who will feel the pinch.

Everything is connected.

By: homunculus

homunculus — Sun, 02 Dec 2012 15:04:02 -0800

Exra Klein: The best idea in American politics: Kill the debt ceiling How a sane political system would deal with the fiscal cliff

By: homunculus

homunculus — Sun, 02 Dec 2012 15:05:46 -0800

Dang, I didn't see this thread before I posted those Klein links in the Monster Thread, which has almost reached 8000 comments.

By: the man of twists and turns

the man of twists and turns — Sun, 02 Dec 2012 15:08:10 -0800

I thought it would be nice to have something more specific than The Thread That Ate Metafilter. Krugman: Operation Rolling Tantrum - looks like Boehner and the House Repubs are trying to make good on their goal of keeping Obama to one term.

By: tonycpsu

tonycpsu — Sun, 02 Dec 2012 15:40:06 -0800

The incentives in the House GOP caucus are just plain fucked. Having lost only eight seats despite taking the country to the brink of ruin in the debt ceiling fight, they figure they can just market their intransigence differently and still keep their majority into 2014 and beyond. They simply have no reason to stop doing what they're doing. It's really up to the media at this point -- and not just guys like Ezra Klein, but also the Brian Williamses and Diane Sawyers and David Gregorys and Wolf Blitzers of the world -- to call these fuckers out and let the American people know that the debt ceiling is not the mechanism for enforcing fiscal responsibility we've been led to think it is.

By: the man of twists and turns

the man of twists and turns — Sun, 02 Dec 2012 15:55:48 -0800

I'm still digesting this, but this is a really great, dense post that treats NYC as the prototype for the expansion and control of Capital in the United States, and examines how it came about, and the welfare and labor struggles that happend through NYC's history: Developing and underdeveloping New York: The 'fiscal crisis' and the imposition of austerity

To a great extent, the underdevelopment of the private sector in the city (in response to New York's acute "labor problems") had been in operation for many years: about half-a-million manufacturing jobs were relocated out of the city from 1950 to 1975, and more than 650,000 jobs of all kinds "disappeared" in the seven years following 1969.(1) What is unique about this current crisis is that it concerns the finances and functions of the State and that its leading actors have been, on the one side, the State's managers and creditors, and on the other, its employees and its "clients." It has been through the underdevelopment, the impoverishment of New York's public sector that those in power have sought to end the working class raid on the treasury. Our aim in this article is to recount and analyze both of the processes — the growth of wage struggles against the city administration in the 1960's and capital's imposition of austerity as a means of undermining that struggle — not for the sake of history, but in order to see how we might once again regain the offensive and subvert the "fiscal crisis."

Austerity In Uniform, or, why the military-industrial complex is the last to get cut.

By: Superplin

Superplin — Sun, 02 Dec 2012 18:28:54 -0800

tonycpsu: "It's really up to the media at this point -- and not just guys like Ezra Klein, but also the Brian Williamses and Diane Sawyers and David Gregorys and Wolf Blitzers of the world -- to call these fuckers out and let the American people know that the debt ceiling is not the mechanism for enforcing fiscal responsibility we've been led to think it is." I agree wholeheartedly with this statement. However, although I usually think of myself as an optimist, I'm not very hopeful about the likelihood of it happening. So many journalists have internalized the idea of "objectivity" as synonymous with "never pointing out when a particular position makes acres more sense than others being put forth, for reasons," that the system has become self-regulating in all the wrong ways. The notion that it's important to show "both sides" (an inherently flawed concept, as though every issue has only two "sides") of any argument means that even if one "side" is demonstrably wrong, or at the very least has mountains of evidence against it, most mainstream news outlets will present it on equal footing with other positions. (See: the fact that "intelligent design" was ever a thing.) Fear of the bogeyman of being accused of bias or partisanship is endemic... and not a little scary, frankly. Young journalists are taught that they play an important role in democracy, because they provide information citizens use to make decisions about their government. I believe this is still true. Unfortunately, in the current media environment, there is so much dis- and mis-information mixed in with the good stuff, much of which can be very difficult to parse out for non-experts, that we also now have a (rightfully, alas) deep-rooted distrust of the media apparatus and a reversion to information tribalism. And we've already seen where that leads.

By: braksandwich

braksandwich — Sun, 02 Dec 2012 19:18:56 -0800

Defining the middle class by median income is bad for people in that income range. Since there will always be a median, no matter how low, we will always have a substantial number of middle class households. You can never say the middle class is shrinking. But the reality is so many families who fall in that range are suffering, financially, and face a reality closer to poverty. It's more productive to define a middle class standard of living and its purchasing power and then we can measure how many or few people currently fit in that definition.

By: deathpanels

deathpanels — Sun, 02 Dec 2012 19:34:30 -0800

I'm not sure how this thread derailed into a semantics battle about what constitutes the middle class. In the U.S., almost everybody thinks they're the middle class. Middle class is better defined by what it is not. You are not middle class in the colloquial sense if: - You are born into so much wealth that you will never have to work, and your main source of income for your entire life will come from managing inherited investments. - You are born so destitute and bereft of economic opportunity that it is almost guaranteed you will die in abject poverty. - You are royalty or a child of royalty (Hollywood or the original kind). Yes, I know this doesn't gibe with the definition according to Dr. Economist at the University of Whatever, but this is the definition that matters when we're discussing political talking points. Middle class in American political jargon means someone whose lot might be significantly bettered or worsened by anything short of all-out revolution. It's a stupid, catch-all term employed by people making stupid, catch-all arguments.

By: the man of twists and turns

the man of twists and turns — Mon, 03 Dec 2012 01:42:50 -0800

Why The Fiscal Cliff Is A Scam, Part 2

By: jeffburdges

jeffburdges — Mon, 03 Dec 2012 03:53:05 -0800

Yes, any economic contraction hurts low wage workers the most, but Bush's tax cuts also hurt low wage workers the most. We should keep the fiscal cliff provisions active for as long as possible because (a) they also hurt people and industries that support intransigent republican congress critters and (b) the Bush tax cuts hurt low wage workers much more over the long run. There should be considerably more leeway in resurrecting only the stimulus and middle class tax cuts without the Bush tax cuts once republicans backers have started to feel the consequences for several months.

By: the man of twists and turns

the man of twists and turns — Mon, 03 Dec 2012 04:39:37 -0800

NRO(so, popups): Fiscal Cliff Negotiations

Republicans had better wake up and realize that their negotiations with the White House aren't so much about how to avoid the looming "fiscal cliff" as they are about President Obama's attempt to cement his historical legacy as a great liberal hero by forcing them to repudiate their anti-tax pledges.

Want to Solve the Fiscal Crisis? Expensive oil weighs down the economy.

In addition, there is a simple way to avoid spending more money on oil when oil prices skyrocket: Use it more efficiently. Currently, the transportation sector relies on oil for about 93 percent of its total liquid fuel consumption. The development and adoption of new technologies can allow us to meet our energy needs while increasingly reducing our consumption of oil. Diversifying the fuel base of the transportation sector is one way of achieving that goal.

By: the man of twists and turns

the man of twists and turns — Mon, 03 Dec 2012 04:49:45 -0800

Forget Fairness, Let's Talk About Stupidity How important is the fiscal cliff for investors? Hint: Not very

By: tonycpsu

tonycpsu — Mon, 03 Dec 2012 07:09:11 -0800

jeffburdges: "Yes, any economic contraction hurts low wage workers the most, but Bush's tax cuts also hurt low wage workers the most. We should keep the fiscal cliff provisions active for as long as possible because (a) they also hurt people and industries that support intransigent republican congress critters and (b) the Bush tax cuts hurt low wage workers much more over the long run. " The Bush tax cuts have been very harmful to our economy, but letting all of them expire means a tax increase for just about everyone, which, in a depressed economy, is a bad thing. Combined with the contractionary effect of sudden, deep spending cuts, this would not be a situation that we would want to go on for more than a week or two past the beginning of the year. The good news is that the GOP really has to at least offer up the extension of the Bush tax cuts under $250k, because the Democrats have already passed this bill in the Senate, so everyone's going to know that the Republicans are tanking the economy just to preserve the upper class tax cuts. We do need to shrink the defense budget in the long term, and eventually, I do think a lot of the middle class tax relief is going to have to be phased out, but this would be a terrible time to do these things.

By: jeffburdges

jeffburdges — Mon, 03 Dec 2012 07:40:35 -0800

In fact, there isn't afaik any problem with increasing taxes on people making over say $70k so long as you then spending that money. We'd mostly all agree that you achieve nothing by cutting taxes on the rich, and achieve oodles by cutting taxes on the poor, but the middle class don't magically spend like the poor either. We consider middle class tax cuts competitive with stimulus spending only because so much government spending is so graft ridden. In reality, we need only worry about the 10% spending cuts causing any contraction, but those are so spread out that they mostly hit graft ridden spending like the military, farm subsidies, etc. In an ideal world, we should simply keep all the fiscal cliff provisions in place while allocating new spending more on real stimulus, like infrastructure, renewable energy subsidies, etc. It's obviously good politically the senate has thrown the problem in the house republican's lap, but that's not the ideal solution economically. Anyways breathless fiscal cliff talk is breathless fiscal cliff talk.

By: the man of twists and turns

the man of twists and turns — Mon, 03 Dec 2012 07:47:56 -0800

On the Fiscal Cliff, Republicans Got Nothin'

By: tonycpsu

tonycpsu — Mon, 03 Dec 2012 07:50:54 -0800

In fact, there isn't afaik any problem with increasing taxes on people making over say $70k so long as you then spending that money. But of course that's not what's on the table. The whole context for this Gentle Fiscal Incline (tm) debate is that we need to reduce the deficit, not raise revenue so we can maintain or increase spending. Note that Obama's opening offer basically does exactly what you're asking for (though the size of the stimulus spending component isn't near what it needs to be) and the GOP literally LOLed at his proposal. I do think the Democrats will get more leverage after Jan 1, but the further they go beyond expiration of the >$250k tax cuts, the more they'll look like they're trying to use the crisis to their advantage just as Republicans do.

By: snuffleupagus

snuffleupagus — Mon, 03 Dec 2012 07:57:31 -0800

It seems to me that if "middle class" no longer has any meaning beyond serving as a "stupid, catch-all term employed by people making stupid, catch-all arguments," it's because the actual class position it used to refer to has been....what's the word.....liquidated?

By: the man of twists and turns

the man of twists and turns — Mon, 03 Dec 2012 08:39:56 -0800

The Economist: Hold the chicken: "One month remains in the battle over impending sequestration and tax increases on Capitol Hill, and no one can settle on the right metaphor to capture just what will happen on January 1st if no deal is reached." Reason: Republicans Likely to Stick With Medicare Cuts Romney Criticized

By: tonycpsu

tonycpsu — Mon, 03 Dec 2012 10:48:22 -0800

Looks like the latest GOP trial balloon is showing up for a vote on extending the Bush tax cuts for the middle class and voting "present". The obvious implication is that, from their standpoint, the credit they'll get for passing a tax cut for 98% of all Americans is not worth the downside risk of angering the top 2%. Now, I'm pretty goddamn cynical, but even I thought that, if they ran out of all other options, they'd at least be willing to cast affirmative votes for a tax cut for almost everyone. Maybe they'll come to their senses, but the fact that they're even considering this gambit is really disheartening.

By: homunculus

homunculus — Mon, 03 Dec 2012 11:12:17 -0800

John Boehner's Hostage Crisis: As the fiscal cliff looms, the House speaker finds himself once again at the mercy of the tea partiers within his ranks. White House willing to go over fiscal cliff if absolutely necessary

By: Ironmouth

Ironmouth — Mon, 03 Dec 2012 11:20:28 -0800

The question is, can John Boehner actually deliver his caucus in a deal? Smart money says no.

By: Talez

Talez — Mon, 03 Dec 2012 11:49:53 -0800

The question is, can John Boehner actually deliver his caucus in a deal? He doesn't need to. He only need the sanest two dozen plus himself.

By: Blasdelb

Blasdelb — Mon, 03 Dec 2012 12:15:18 -0800

"He doesn't need to. He only need the sanest two dozen plus himself." Or he can play the villain who lives, and sharpen his knives for the backs of whatever two dozen Republicans realize the things they were elected to not realize.

By: flug

flug — Mon, 03 Dec 2012 12:17:29 -0800

Yes, I know this doesn't gibe with the definition according to Dr. Economist at the University of Whatever, but this is the definition that matters when we're discussing political talking points. Middle class in American political jargon means someone whose lot might be significantly bettered or worsened by anything short of all-out revolution. Thank you for pointing this out--it's one of the reasons I brought up this issue. I don't happen to know anyone in the bottom 1% or the top 1%. I suppose those folks maybe, might, perhaps, do not consider themselves "middle class." But every single person I do know most definitely, absolutely, and unquestionably considers themselves to be part of the middle class. Middle Class is one of those terms politicians use, like "Real America" and "Main Street" that is specifically used so that every one (almost) who hears it assumes, "Hey, that politician is talking about me." No one is going, "Whelp, Romney just said he supports the middle class, but I'm in the HIGH PROLETARIAN CLASS, not middle, so that's not me he's talking about." So during the campaign it's middle class this and middle class that, and then at the end Romney's spokesman pops out with "Well, we won the MIDDLE CLASS" - implying that they won the heartland of American and its only a collection of nuts, wackos, fringers, and destitute homeless folks who took Obama over the top. When the "Middle Class" he's actually talking about is like 20% of the population--so I guess "middle" isn't middle any more. "Middle Class" is the new fringe. Also note that in the recent campaign, both candidates often used the phrase "middle income," which even more clearly does not apply to the top 2%, the top 8%, and so on. Bringing this back to the topic of this post, the current budget and tax situation in the U.S. and its solutions:

A big issue re: taxes is who can pay, who can't pay, and where the bulk of the income and money is in the economy. Most Americans, and American politicians, seem to have an extremely wrong idea of this entire subject. They seem to believe that that vast majority of Americans are living in the $100K-$250K range, with the rich above that and the poor and very poor below it. This is just wrong, and it affects our policy decisions.
I believe that most Americans historically have seen the "middle class"--with all the attributes identified above, like homeownership, access to education, trivially meeting own sustenance needs, and so on, as at least more-or-less corresponding with "middle income." As the discussion above has made abundantly clear, there is almost no overlap at all between the actual middle cohort of American household income and the traditional definitions of "middle class." Most Americans would see this as a serious problem, because we see ourselves as a middle-class nation--not a lower-class or working-class nation.

And again relevant to the topic of this post, assuming we actually want to address and fix this situation, the most powerful tools we have to do so--or, contrarily, to worsen it--are through exactly the mechanisms we are discussion in re: the Fiscal Cliff (or as Krugman more accurately characterizes it, the Austerity Bomb):

Retain Bush tax cuts or do anything to make our current tax system less progressive. Result: Worse for middle income brackets.
Cut government services and programs. Result: Worse for middle income brackets.
Implement very progressive tax increases and retain as many services and programs as possible. Result: Better for middle income brackets.
etc.

This is simplified of course and the devil is in the details. But all of the Republican proposals are guarantee to benefit the hyper-rich at the expense of the rest of us and accelerate the growth of the chasm between what we think the Middle Class should be and where actual middle-income America actually is. And that is exactly what this "Fiscal Cliff" debate is all about.

By: Ironmouth

Ironmouth — Mon, 03 Dec 2012 12:19:05 -0800

The question is, can John Boehner actually deliver his caucus in a deal? He doesn't need to. He only need the sanest two dozen plus himself. If it is going to come to major spending cuts, he will have to deliver a sizeable part of his caucus. Remember that first TARP bill? He was required to bring a certain percentage of his people to the table, even though the Dems had the votes. When he didn't, Pelosi ordered enough Dems to vote against it to make his contribution decisive. Nobody makes major cuts or any grand bargain without enough people signing on to make both parties own it.

By: flug

flug — Mon, 03 Dec 2012 12:34:08 -0800

And that is exactly what this "Fiscal Cliff" debate is all about. Republicans are extraordinarily adept at seizing on these moments of supposed 'crisis' in order to ramrod through their long-term social and political goals. In fact often they generate the crisis--like they did this one--with the ultimate goal of using it to move their agenda forward. Rationale is always, well, we don't really want to eliminate health care/eliminate women's rights/destroy this entire-ecosystem/cut all these basic services/eliminate support for the poor/destroy the health of half the population/ruin the world's climate/etc/etc/etc but we're in a CRISIS right now so we JUST HAVE TO! And every time, we fall for it. Is there any, ANY chance that just for once, the Democrats could do the same? And we could fall for that, instead?

By: tonycpsu

tonycpsu — Mon, 03 Dec 2012 12:42:03 -0800

There's really no reason the Democrats have to settle for a deal that involves any more spending cuts than Obama's opening offer, an offer I'm certain Pelosi could deliver nearly all of her votes for. If the House GOP starts to demand more cuts, I can imagine she'd lose some Progressive Caucus types who'd have to be replaced with some of the more "reasonable" House Republicans.

By: winna

winna — Mon, 03 Dec 2012 13:36:27 -0800

I could be wrong, but I think that most people take "middle class" to mean: Able to own a house, able to support and send a couple of kids to college without going into debt, able to take an annual vacation, able to weather a medical or other emergency without going bankrupt, able to retire in relative comfort and without having to work at Wal Mart. Then no one I know outside of my bosses are middle class. Seriously, that list reads like a pipe dream from fantasyland to me.

By: Talez

Talez — Mon, 03 Dec 2012 14:19:55 -0800

If it is going to come to major spending cuts, he will have to deliver a sizeable part of his caucus. Remember that first TARP bill? He was required to bring a certain percentage of his people to the table, even though the Dems had the votes. When he didn't, Pelosi ordered enough Dems to vote against it to make his contribution decisive. Nobody makes major cuts or any grand bargain without enough people signing on to make both parties own it. This would be correct if it was like the TARP bill. Without any action whatsoever the spending cuts are an absolutely done deal at this point. The question is whether spending gets increased and the middle class gets their taxes lowered. The threat isn't from the Ds saying the deal isn't good enough. Because the Ds have the right over a barrel at this point. A barrel that's floating towards Niagra Falls. The threat that faces the "moderate" Rs that are left are from the crazy right Rs that will primary the hell out of the 25 people that cross the aisle.

By: the man of twists and turns

the man of twists and turns — Mon, 03 Dec 2012 15:52:09 -0800

Senator: 'Increasingly Clear [Obama's] Comfortable Going Off the Cliff' Republicans to Obama: How About the Bowles Plan?

This afternoon Republicans came back[PDF] with a counteroffer: No pony, no income tax rate hikes, but they could perhaps agree to $800 billion in new revenue to be generated by tax reform as laid out last year by Erskine Bowles, the co-chair along with Alan Simpson of the president's own deficit reduction commission. The Bowles proposal was a modified version of the original Simpson-Bowles plan, lighter on new tax revenues and somewhat heavier on spending cuts. Here's Politico's summary of the proposal that Bowles alone made to the debt-reduction Supercommittee—not to be confused with the original presidential debt commission—at the end of 2011:

Erskine Bowles on the GOP's 'Bowles Plan' Offer: That's Not My Plan!

The GOP's offer letter described the "Bowles plan" as "exactly the kind of imperfect, but fair middle ground" the might allow the two sides to come to a deal and avert the fiscal cliff. Democrats didn't like Bowles' proposal all that much when he delivered his testimony last year, and weren't likely to find it much improved since. But now the idea has a notable new detractor: Erskine Bowles, who distanced himself from the GOP's offer late this afternoon.

GOP 'fiscal cliff' counteroffer: What's in it? Boehner Sends Cliff Counter, But Revenue Too Light for White House

By: the man of twists and turns

the man of twists and turns — Mon, 03 Dec 2012 16:10:00 -0800

In Brief: The House GOP Offered Jackshit on the Budget Today:

By: homunculus

homunculus — Mon, 03 Dec 2012 16:21:09 -0800

The End Of Simpson-Bowles

By: Sys Rq

Sys Rq — Mon, 03 Dec 2012 17:11:52 -0800

The End Of Simpson-Bowles Oh no! Now where will British kings find their non-queens?

By: tonycpsu

tonycpsu — Mon, 03 Dec 2012 19:51:38 -0800

Not sure how much to read into this, but the GOP leadership has pushed two far-right members out of the House Budget committee. It just so happens that both of them voted against the Paul Ryan budget because it wasn't wingnutty enough. Are the establishment guys trying to take control from the teabaggers?

By: kirkaracha

kirkaracha — Mon, 03 Dec 2012 20:34:30 -0800

Defense cuts, defense cuts, defense cuts.

By: the man of twists and turns

the man of twists and turns — Tue, 04 Dec 2012 01:49:39 -0800

Asia Times: 'Debtpocalypse' and hollow society

After all, there is no fiscal cliff, or at least there was none - until the two parties built it. And yet the pit exists. It goes by the name of "austerity". However, it didn't just appear in time for the last election season or the lame-duck session of congress to follow. It was dug more than a generation ago, and has been getting wider and deeper ever since. Millions of people have long made it their home. "Debtpocalypse" is merely the latest installment in a tragic, 40-year-old story of the dispossession of American working people.

By: the man of twists and turns

the man of twists and turns — Tue, 04 Dec 2012 04:18:07 -0800

Boehner Backlash Begins

By: the man of twists and turns

the man of twists and turns — Tue, 04 Dec 2012 05:56:33 -0800

Charles P. Pierce: The End Of Simpson-Bowles

The Simpson-Bowles Commission was a perfect example of what went wrong with the first Obama Administration. The notion that what we needed to solve the economic damage done to the country over the previous decade was a gathering of Wise Men led by a prickish member of the Republican Undead and a charter member of the Democrats For Plutocrats Club. It was another attempt at bipartisanship for its own sake and an attempt at a deal for a deal's sake and it was shot through with the kind of political naivete and magical thinking that drove people — well, me — crazy over the way the president did things. You could see what was coming from a mile away. Even though the commission failed utterly, its obvious bipartisanish Beltway green-room cred guaranteed that "Simpson-Bowles" would become a fetish object within the political elite and the courtier press. And that is exactly what happened. The thing has hung around the president's neck for two years.

By: jadepearl

jadepearl — Tue, 04 Dec 2012 06:01:49 -0800

You know, I just assumed that all this is political theater and we go over the cliff, which then changes the terms of the situation. Now it just becomes voting for tax cuts. There is this theory of the two Santas that I think is relevant if only dealing with perceptions. The unknowable is whether the economy takes the tank over the cliff but if people are expecting it then maybe all the grandstanding pays off with tax cutting in January. The real game is to blame whichever party for the pain. Because there will be pain, the question is simply how much and whose under a new tax cutting, loophole closing, entitlement reform process in January.

By: DynamiteToast

DynamiteToast — Tue, 04 Dec 2012 10:45:23 -0800

Krugman: Three Card Budget Monte

By: eviemath

eviemath — Tue, 04 Dec 2012 17:38:45 -0800

The Bush tax cuts have been very harmful to our economy, but letting all of them expire means a tax increase for just about everyone, which, in a depressed economy, is a bad thing. Why? Suppose I'm middle income aka working/lower class aka over half of the actual US population. Then I pay an extra less than $200/year in taxes if the Bush tax cuts expire. If I recall correctly, there was a slice of people in this category who actually ended up paying slightly more in taxes under the Bush tax "cuts". Regardless, for about half of the US population the expiration of the Bush tax cuts changes their annual tax burden by no more than +/- $100. Is this a bad thing? Rounding up, that's no more than +/1 $10/month. That is a significant change in the monthly budgets of quite a few folks, but those folks generally earn little enough that they are exempt from taxes, might be in that sliver who will actually get a larger tax refund with the expiry of the Bush tax cuts, or else will actually end up seeing a correspondingly smaller net change in their tax burden. Whether this change is good or bad for hypothetical me depends largely on what I get in return for those taxes. The original Bush tax cuts were accompanied by significant spending cuts on social welfare programs, which was a net bad for this over half of the US population demographic that I'm concerned with in this comment. A net very, very bad, in many cases. It was a Bush "wealth distribution upward via tax policy package". Letting the Bush Regressive Wealth Redistribution Scheme - Tax Component expire will allow the US government to generate more revenue, which it could theoretically use to restore the Bush social welfare funding cuts. That would be very very good. Without any action whatsoever the spending cuts are an absolutely done deal at this point. The question is whether spending gets increased and the middle class gets their taxes lowered. Now, this first sentence - this is the problem. It is being lumped in with the expiration of the Bush Regressive Wealth Redistribution Scheme - Tax Component (I see in Talez' second sentence here even, using this ill-defined and now misleading term "middle class"), even though it's in many ways a separate issue. If we don't use the restored federal revenue to also restore spending on social welfare programs, well, the change in tax burden with the expiration of the Bush Regressive Wealth Redistribution Scheme - Tax Component will have a very small negative effect for some of the folks in the middle income aka working/lower class category, but mostly won't have any effect at all. The new spending cuts to social welfare programs as part of this sequestration thing will definitely have a negative effect. Sadly, what's the alternative? If the choice is between that and some radical right wing tax-spending scheme that redistributes wealth upward even more aggressively, then not making a deal and allowing the sequestration as well as the expiry of the Bush Regressive Wealth Redistribution Scheme - Tax Component will be less bad for most folks in the US. It will be less bad both in terms of the short term household finances of the over half of folks in the US who I'm concerned with in this comment, and it will also be less bad in terms of shifting the political-economic debate in the US away from one where the underlying assumptions focus on the benefit to an actually somewhat small proportion of the US population, where regressive wealth redistribution is seen as a good thing, where taxation is seen as a bad thing in and of itself without considering the use that tax revenue is put to, and where social spending to build strong infrastructure and a healthy population and society is seen as a bad thing rather than oh I dunno kind of the whole point of government in the first place. Of course, rolling back the Bush Regressive Wealth Redistribution Scheme - Spending Component as well as letting the Tax Component expire - or better yet, moving toward an even more progressive tax system along with an adequately funded social welfare system - would be an actually good option, as opposed to all of the bad versus less bad options that seem to be currently on the table.

By: homunculus

homunculus — Tue, 04 Dec 2012 19:10:03 -0800

Montgomery Burns explains the "Fiscal Cliff"

By: homunculus

homunculus — Tue, 04 Dec 2012 19:14:49 -0800

Our Mr. Brooks Bargains Grandly

By: Ironmouth

Ironmouth — Tue, 04 Dec 2012 20:41:36 -0800

Good lord. Gallup came out with insane numbers today: Approval/disapproval on conduct of fiscal cliff negotiations: Obama 53/42 GOP 26/63 63% disapproval. They are fucked.

By: Drinky Die

Drinky Die — Tue, 04 Dec 2012 21:11:00 -0800

By: Talez

Talez — Tue, 04 Dec 2012 23:09:27 -0800

Why? Suppose I'm middle income aka working/lower class aka over half of the actual US population. Then I pay an extra less than $200/year in taxes if the Bush tax cuts expire. If I recall correctly, there was a slice of people in this category who actually ended up paying slightly more in taxes under the Bush tax "cuts". Regardless, for about half of the US population the expiration of the Bush tax cuts changes their annual tax burden by no more than +/- $100. Is this a bad thing? On its own it wouldn't be. But the payroll tax holiday is going to expire, the child care credit is being cut in half, the marriage penalty is coming back and the AMT is kicking in all at the same time. Your average family of four earning $50,000 per year is going to be $80/month lighter when the payroll tax holiday comes to an end little alone the bush tax cuts piling on and losing a massive deduction. And these are people who spend in the region of 100% of their income. Taking money out of their pocket is going to be a direct hit to any demand and stunt any recovery. Sadly, what's the alternative? If the choice is between that and some radical right wing tax-spending scheme that redistributes wealth upward even more aggressively, then not making a deal and allowing the sequestration as well as the expiry of the Bush Regressive Wealth Redistribution Scheme - Tax Component will be less bad for most folks in the US. What can we do now? Well we fucked up the countercyclical part of the equation back in 2003. We have to basically eat the deficit, restore growth as best we can and hope that the Austrian doomsayers continue to be wrong. We have to pull more taxes out of the upper middle class DINKs (~$80K+ with no kids? We sure as hell can do more) and stuff money back into the families that will go out and spend any money we can give them. Better for them to spend it doing something useful in the economy than it just sitting there being pissed away in a fund chasing 1-2% in a climate of 2-3% inflation. Everything in the 87K bracket and above going up two or three points probably wouldn't go astray. Treating capital gains as earned income and getting rid of the carried interest rule would also close a truck sized loophole. Half tax holiday for December and January for the Christmas spending binge and hangover? They do that kind of thing in Norway in November and it works pretty well.

By: the man of twists and turns

the man of twists and turns — Wed, 05 Dec 2012 00:53:23 -0800

Frustrated by White House PR Gains, House Republicans Call in K Street Big Guns

"They'd rather win the political victory on this. How can we fight back against that and how can we make that point and how can we message that we're the party of small business owners and we're not defending the rich?" asked a meeting participant.

I present without comment.

By: homunculus

homunculus — Wed, 05 Dec 2012 11:35:17 -0800

Paul Krugman: Hasty Fiscal Fix to the Deficit Would Cause 'Austerity Bomb'

By: Ironmouth

Ironmouth — Wed, 05 Dec 2012 11:59:44 -0800

21% approved of the Republican behavior during the 2011 debt ceiling battle. The only thing that has changed here is Obama's realization (that many of us were screaming for him to have earlier) that they won't actually shoot the hostage because of the political repercussions, nothing else. It was a huge blunder before, and I'm glad there is hope he has learned from it. I totally disagree. He bet with the house's money then. His approval rating was lower, and he faced a reelection battle and a House that refused to be herded on anything. He gave up nothing and punted to when it would count. And if he lost, it wouldn't have counted anyway. He had a lot to lose--especially when you look at the fact nobody really wants medicare cuts at all--even the GOP wants to have Obama cover them for that. In short there was no deal to be had and he didn't make any deal at all. Don't see how he would get anything better out of it than he did.

By: homunculus

homunculus — Wed, 05 Dec 2012 12:45:08 -0800

Obama: No More Debt Ceiling Extortion

By: Drinky Die

Drinky Die — Wed, 05 Dec 2012 13:43:02 -0800

By: Ironmouth

Ironmouth — Wed, 05 Dec 2012 13:49:22 -0800

When your opponents are doing something massively unpopular the time to capitalize on it is before the election, not after the election when their position has actually become more popular and they have less to lose. If you thought the Republicans were willing to shoot the hostages before, nothing stops them from doing it now. It's just spin to suggest otherwise. I think that's not true. The reason is that the middle class tax cuts will expire if they do nothing. If they let his happen, then Obama will give two huge speeches in a row--the second inaugural and the STOU stating succinctly--These guys are the reason your taxes are going up, so call your Congressman. And the congressmen (only 20 GOP women!) will be inundated with calls. The pressure will be immense. And they will crack. Because of the discharge petition, Boehner will have two options, fight the petition, or cave in and allow the vote. And enough of his caucus and every single dem, to a man and woman, will vote for it. Some GOPers, especially in suburban districts, which can swing will cave, vote for the petition and the bill will be on the floor and will pass. 2014 would then be a disaster for the GOP. They are on a real edge here. There are some potentially existential issues that their previous strategy has put into play for them.

By: Drinky Die

Drinky Die — Wed, 05 Dec 2012 16:59:56 -0800

I think that's not true. The reason is that the middle class tax cuts will expire if they do nothing. The tax cuts were set to expire before in 2010. It was even December with a SOTU coming up! There was an upcoming Presidential election season where Republican tax hikes on the middle class could have led to an even more devastating result than we got. There is zero reason we should be having to go through this again and we wouldn't have to if it was handled this way the first time. The logic at the time, and in several other bouts with the Republicans, was that they were crazy enough to kill the country for their tax cuts and even if we weren't sure they were the President could never take the chance, for the good of the country. If you thought that at the time, you should think it now. I don't have quite that uncharitable a view of Republicans so it was pretty maddening at the time.

By: homunculus

homunculus — Wed, 05 Dec 2012 19:03:27 -0800

3 real "cliffs" facing America: Forget the budget crisis hysteria. Obama has sterner challenges in child poverty, health care and global warming

By: homunculus

homunculus — Wed, 05 Dec 2012 22:31:30 -0800

Bernie Sanders Rips John Boehner for Calling for Cuts to Disabled Veterans' Benefits

By: the man of twists and turns

the man of twists and turns — Thu, 06 Dec 2012 02:22:32 -0800

AJE: Obama Prepared To Go Over "Fiscal Cliff" The Fiscal Cliff Is a Sideshow, but the Debt Ceiling Is the Main Event: If House Republicans Refuse to Raise It, the President Should Show Them What Discretion Really Looks Like

Recent news reports indicate, however, that Republicans have become uncomfortable with allowing the scheduled tax increases and spending cuts to take effect as planned at the beginning of the New Year. Instead, they are now openly threatening to create another contrived political showdown over the debt ceiling. Even though last year's debt ceiling debacle is part of what led to the current political standoff, Republicans are apparently maneuvering to get the spending cuts that they want—and avoid the tax hikes on the rich that they abhor—by refusing to increase the limit on the national debt, which would make it impossible to accommodate spending and tax cuts that Republicans have already approved. ... What should President Obama do? Republicans think that they can force him to cut spending, in order to avoid breaking through the debt ceiling. The President, however, has several options. And, as I will explain below, none of those options will be appealing to Republicans who imagine that they can put Mr. Obama in a corner.

Don't Fear The Debt ... Just Yet

By: the man of twists and turns

the man of twists and turns — Thu, 06 Dec 2012 10:11:10 -0800

What Will the Fiscal Cliff Mean for Me? This article has a few scenarios and outlines the major provisions of the "cliff." It also has a link to the Tax Policy Center's calculator that allows you to select a typical household and a potential deal or lack thereof.

By: Ironmouth

Ironmouth — Thu, 06 Dec 2012 12:47:43 -0800

I think that's not true. The reason is that the middle class tax cuts will expire if they do nothing. The tax cuts were set to expire before in 2010. It was even December with a SOTU coming up! There was an upcoming Presidential election season where Republican tax hikes on the middle class could have led to an even more devastating result than we got. Hello, the Dems got walloped in the mid-terms a month earlier! They lost 63 seats in that election and the GOP won by 9% nationally! Now the President won by 3% and Dems got 1.1 million more votes for the House than the GOP did. It was a different situation then. They had a head of steam and Obama would have been taking a huge (titanic) risk vetoing the bill they would have passed to restore all cuts. The Dems in Congress would have caved. This dumb fantasy the President's critics to the left have--that if he would have just said "no" louder it would have been better. The GOP was a popular party in December 2010 and the Dems were unpopular. Risks existed for Obama then. Now the situation is different. The President publicly made his re-election campaign about taxes and proved it with the win. The Dems had just lost. This is basic politics 101.

By: Drinky Die

Drinky Die — Thu, 06 Dec 2012 22:01:51 -0800

Please try and and discuss this matter like an adult rather than lashing out and accusing me of having dumb fantasies. In general this thread has been very polite and reasoned and there is no reason to change that now. I am disappointed you feel that is a productive or mature reaction to a disagreement with your point of view. the Dems got walloped in the mid-terms a month earlier! They lost 63 seats in that election and the GOP won by 9% nationally! That would be a great reason to turn the tables on them by nailing them to the wall with their debt ceiling actions that had only 21% approval and take that momentum into the SOTU. What risk is there in that? That you might lose seats? Already done. Elections and popularity do not matter in the middle of a lame duck session. What matters is building yourself up for future elections. What was at stake in these debates is the economy itself, no matter how many seats Republicans had picked up, they would not survive driving the economy to the gutter overnight with a plan with 21% approval. They wouldn't do it then, they wouldn't do it now. The country was not behind them. Doesn't matter how many seats changed in November. Doesn't matter how quietly or loudly they are told no. - Debt ceiling debate twist: Sen. Mitch McConnell filibusters himself

By: Drinky Die

Drinky Die — Thu, 06 Dec 2012 22:11:27 -0800

Oops, the tax cut extension was the lame duck one, of course. Need longer edit window.

By: jeffburdges

jeffburdges — Fri, 07 Dec 2012 06:44:17 -0800

Anyone know if we'd even hit the debt ceiling again with the fiscal cliff provisions active?

By: exogenous

exogenous — Fri, 07 Dec 2012 08:34:43 -0800

Yes - either way (see slide 3) there will continue to be a substantial deficit. The US is close enough now to the borrowing limit that I don't foresee any way to avoid either raising the debt ceiling or default.

By: Ironmouth

Ironmouth — Fri, 07 Dec 2012 11:16:06 -0800

That would be a great reason to turn the tables on them by nailing them to the wall with their debt ceiling actions that had only 21% approval and take that momentum into the SOTU. What risk is there in that? That you might lose seats? Already done. Elections and popularity do not matter in the middle of a lame duck session. What matters is building yourself up for future elections. What was at stake in these debates is the economy itself, no matter how many seats Republicans had picked up, they would not survive driving the economy to the gutter overnight with a plan with 21% approval. I disagree. Getting whipped in an election makes a huge difference. Especially when the President doesn't have to worry about being re-elected. He's over that hump. They can't touch him. If this weren't true, why are the Republicans acting like they are whipped? Bill Kristol, Ann Coulter, a lot of them are saying they are beat and they are right. In 2008 only 48% were in favor of raising taxes on the rich. In 2012? 65%. That's a crushing majority and 17% higher than in 2010. in 2010, the GOP could ignore that and say the country elected them to not raise taxes. They would have been right. There is simply no way to dispute that Obama is in a far stronger position now than he was then--structurally, he is stronger because he doesn't need to worry about reelection, electorally because he specifically made the tax hikes the centerpiece of his winning campaign and Dems won the Presidency, increased their majority in the Senate, won 8 House seats rather than losing 63 of them and are +4.3% rather than -9%. Dems actually won 1.1 million more votes for their candidates for the House than the Republicans did. The polling is much stronger and Dems are in a much stronger position. Most importantly the downside risks are much higher for the GOP. It is literally indisputable based on the numbers. You watch, GOP is going over the cliff. Obama wants them to go over the cliff. He wants them to try debt default. He wants them to destroy themselves.

By: tonycpsu

tonycpsu — Fri, 07 Dec 2012 11:21:00 -0800

The US is close enough now to the borrowing limit that I don't foresee any way to avoid either raising the debt ceiling or default. The executive branch still has two cards up its sleeve that can forestall those scenarios. The "easier" of the two is probably the Treasury department minting a platinum coin, valuing it at $1 trillion dollars and then depositing it. The other is for the executive branch to simply state that the 14th amendment guarantee of the validity of public debt requires them to issue bonds beyond the debt ceiling. Both of these approaches have their problems, but there are no great options on the table right now, and I'd certainly rather have a short constitutional crisis moment than have some 11th hour deal that causes even worse harm to the economy in the long term.

By: exogenous

exogenous — Fri, 07 Dec 2012 11:53:20 -0800

Good points, tonycpsu - I agree.

By: jeffburdges

jeffburdges — Fri, 07 Dec 2012 12:30:57 -0800

There is an awful lot of federal spending that one could pause before or when issuing bonds contrary to the debt ceiling, try defense contractors based in tea party held districts.

By: tonycpsu

tonycpsu — Fri, 07 Dec 2012 13:14:21 -0800

There is an awful lot of federal spending that one could pause before or when issuing bonds contrary to the debt ceiling, try defense contractors based in tea party held districts. I'm not as sanguine about the "allocate spending cuts for maximum political advantage" strategy. It may work, but the very fact that these districts voted for the Tea Party lunatics in the first place makes me wonder if they'll appreciate the finer points of who caused this mess and why they're being furloughed / laid off.

By: tonycpsu

tonycpsu — Fri, 07 Dec 2012 14:18:52 -0800

DO NOT WANT

By: Drinky Die

Drinky Die — Fri, 07 Dec 2012 14:55:42 -0800

I disagree. Getting whipped in an election makes a huge difference. Of course it does, if you are talking about finally passing my proposal to change the 4th of July into mandatory gay abortions flag burning day. You can't do that without riding a strong liberal wave. If you just lost seats in Congress, don't try it! That isn't what we are dealing with though. There is no popular support for raising taxes on the middle class. People never liked tax cuts for the rich enough that they would tolerate Republicans allowing the middle class to pay more (and the associated damage to the economy) as part of a hostage shooting. They would never have done it. It doesn't matter what the election results are, nobody is going to tolerate the Republicans making the country default on our debt and causing a worldwide economic catastrophe overnight. They would never have done it. You may have not picked this up in your Politics 101 class since it's so obvious they don't teach it, but destroying the country is seen as a bad political move. There is simply no way to dispute that Obama is in a far stronger position now than he was then--structurally, he is stronger because he doesn't need to worry about reelection You haven't seen me deny that. What you have seen is pointing out that his position, while weaker, was strong enough to deal with these matters without falling victim to the hostage taking strategy. Had he done so, this current popularity and strength could have been used for something more productive than re-fighting old battles.

By: Ironmouth

Ironmouth — Fri, 07 Dec 2012 16:26:06 -0800

That isn't what we are dealing with though. There is no popular support for raising taxes on the middle class. People never liked tax cuts for the rich enough that they would tolerate Republicans allowing the middle class to pay more (and the associated damage to the economy) as part of a hostage shooting. They would never have done it. The Republicans don't want to raise taxes on the middle class. They just don't want to raise taxes on the top 2%. The fact of the matter was that there was nowhere near the support for raising taxes on the rich 2 years ago that there is now. And the GOP may have very well been able to cow enough Dems after that 63 seat whipping to undercut the President. You may have not picked this up in your Politics 101 class since it's so obvious they don't teach it, but destroying the country is seen as a bad political move. The question would have been who was destroying the country in 2010. The GOP could have easily convinced the country, given their position, that it was Obama who was being obstructionist and that he was the one "destroying the country."And when you get whipped in a huge election, people tend to assume it is the loser who is killing the country. And the Dems weren't with Obama then. He pressed them to vote on the tax cuts moving into the election and they didn't. And Obama needed the middle class cuts to continue bad, as well as the payroll tax holiday--if the economy stopped recovering, he would not have been re-elected. What you have seen is pointing out that his position, while weaker, was strong enough to deal with these matters without falling victim to the hostage taking strategy. It is the height of folly to think that the GOP would have automatically lost the debate on who was "destroying the country." What basis do you have to believe that somehow the GOP would have been automatically blamed for such a strategy. Generally the loser of the last election is quite likely to be blamed for holding up the problem, given that the other party has the support of the electorate.

By: Drinky Die

Drinky Die — Fri, 07 Dec 2012 16:52:58 -0800

The Republicans don't want to raise taxes on the middle class. Of course not, so when it was clear their hostage taking has not worked they would have backed down. It doesn't matter what happens with the rich, shooting the middle class hostage would have been counterproductive. The question would have been who was destroying the country in 2010. And I provided the answer already. The GOP actions were less popular at the time than their current actions that you think leave them "fucked". They had no magic powers of persuasion that would have made them more popular by causing an economic collapse. On what basis do you think "who won more votes in the recent election?" is a better indicator of where the public is on a specific issue than polling on that specific issue? Obama won more votes! That means gun control will pass! Let's not worry about polling on gun control! It is the height of folly to think that the GOP would have automatically lost the debate on who was "destroying the country." What basis do you have to believe that somehow the GOP would have been automatically blamed for such a strategy. I think we have to be done here. I cited the polls first when I engaged you in this conversation. I have no idea why you want to go back and forth making the same points over and over in hopes the polls stop existing while making condescending comments about idiotic fantasies and the "height of folly". It's pointless and boring bickering.

By: Drinky Die

Drinky Die — Fri, 07 Dec 2012 17:55:07 -0800

(also, the presumption that Republicans would be willing to cause a global economic catastrophe even if Obama took the blame is flawed. They are not cartoon supervillians and their own fortunes would be at risk in a collapse as well.)

By: the man of twists and turns

the man of twists and turns — Sat, 08 Dec 2012 01:58:34 -0800

Bernanke Cliff Analogy Overstates Immediate Economic Harm "Fiscal Slope" or "Fiscal Staircase" just doesn't have the same ring to it. Al Sharpton: If We Did Not Share in the Prosperity, Why Should We Have to Share in the Sacrifice?

By: jeffburdges

jeffburdges — Sat, 08 Dec 2012 03:36:41 -0800

Your audience would be the federal contractors who financed intransigent Tea party house member's campaigns largely as a business decision, tonycpsu, not ideological Tea party supporters.

By: tonycpsu

tonycpsu — Sat, 08 Dec 2012 07:18:43 -0800

Point taken, jeffburdges. I do think that if the impasse drags on well past January 1, being selective about where the limited money goes is a no-brainer. I just think that it's more likely to backfire politically and economically than some other solutions. At this point, the debt ceiling should simply be ignored as the unnecessary and unconstitutional relic it is. If congress wants the Fed to stop issuing bonds, it shouldn't pass spending programs that require us to borrow more money.

By: Ironmouth

Ironmouth — Sat, 08 Dec 2012 12:02:11 -0800

The question would have been who was destroying the country in 2010. And I provided the answer already. The GOP actions were less popular at the time than their current actions that you think leave them "fucked". They had no magic powers of persuasion that would have made them more popular by causing an economic collapse. I disagree with your assumptions and premise. An election is far, far more convincing than any poll. It tells you what people actually think rather than what they are telling a pollster. A poll is an attempt to determine how people think about things. An election conclusively demonstrates it, because it isn't a snapshot of 1800 voters--it is the will of the voters. Handwaiving away the incredible political impact of an actual election simply makes no sense. But the real problem is that Obama did not have the support of the Dem House majority in late 2010 before the election. He repeatedly urged them to extend only the middle class tax cuts and run on that in the election. They refused. Pelosi refused to put a bill out there, likely because she can count votes and knew it didn't have enough. So he can suddenly count on them after they get whipped in the lame duck. Consistently I see this "big daddy" theme in these sorts of complaints. In this view, the President snaps his fingers and the votes appear. In truth, its the opposite. In order to win you have to demonstrate to the President and the House leadership that you have the votes first before it is put to a vote. Indeed, many legislators will sit on their ass, hoping nobody will bring anything controversial to a vote, or that it won't have anywhere near enough votes for them to do anything more to than abstain. It is only when things appear to get close to passage that the mass of legislators will decide to commit to a vote for or against. This is the reality of politics in this town. And Obama had no assurances his own party would hold the line. Whereas now, it is obvious it will hold. Obama has proven, solidly, to Dem legislators that the populace is behind his plan. He had a chance to put his entire Presidency on the line and a chance to force them to follow his lead. They won, they gained seats and he did. He has his party in his pocket.

By: Sys Rq

Sys Rq — Sat, 08 Dec 2012 12:41:05 -0800

As a True Conservative, I long for the good old days of the 1950s, when every American was strait-laced and clean-cut and a-OK with the rich paying 91% tax.

By: tonycpsu

tonycpsu — Sat, 08 Dec 2012 13:03:27 -0800

Ironmouth: "But the real problem is that Obama did not have the support of the Dem House majority in late 2010 before the election. He repeatedly urged them to extend only the middle class tax cuts and run on that in the election. They refused. Pelosi refused to put a bill out there, likely because she can count votes and knew it didn't have enough." Right. With all of the Ben Nelson/Blanche Lincoln/Joe Lieberman-related dysfunction in the Senate in 2009-2010, Pelosi's problems with her House caucus flew a bit under the radar. The House may not have the malapportionment problems the Senate does, but it sure does have a lot of reddish districts that are tough for Democrats to gain and hold during normal times. Once you factor in the Republican wave election that everyone knew was coming, Nancy could have offered each of the Blue Dog Democrats a million dollars and a campaign visit from Obama, and they would have all responded that they'd rather pay her two million dollars to keep Obama away. Consistently I see this "big daddy" theme in these sorts of complaints. In this view, the President snaps his fingers and the votes appear. Ah, yes, the Green Lantern theory of politics. The idea that Obama could have won the debt ceiling fight in the post-Tea Party wave election environment requires a healthy dose of belief in Green Lanternism. Polling data would be an appropriate defense of this position if we governed by referendum, but given the realities of the legislative branch, and knowing that any economic calamity would be blamed on the President heading into the 2012 Presidential election, the Republicans were quite ready to shoot the hostages.

By: Drinky Die

Drinky Die — Sat, 08 Dec 2012 14:51:33 -0800

Consistently I see this "big daddy" theme in these sorts of complaints. In this view, the President snaps his fingers and the votes appear. I have not argued any such thing and I have asked you politely two times to try and avoid the condescending accusations of childishness. I don't see any point in this.

By: eviemath

eviemath — Sat, 08 Dec 2012 15:49:46 -0800

Two slightly different definitions of class

By: the man of twists and turns

the man of twists and turns — Sun, 09 Dec 2012 11:42:11 -0800

Washington Post: The fiscal cliff deal comes clearer: a 37% top tax rate and a higher Medicare eligibility age

Talk to smart folks in Washington, and here's what they think will happen: The final tax deal will raise rates a bit, giving Democrats a win, but not all the way back to 39.6 percent, giving Republicans a win. That won't raise enough revenue on its own, so it will be combined with some policy to cap tax deductions, perhaps at $25,000 or $50,000, with a substantial phase-in and an exemption for charitable contributions.

But why should the Dems deal at all? Why not hold the line and let the Reps sink?

By: tonycpsu

tonycpsu — Sun, 09 Dec 2012 16:13:12 -0800

Yeah, that was my "DO NOT WANT" link above, and, indeed, I do not want. The good news is I'm pretty sure they won't do that deal. A reporter saying "smart folks in Washington are saying X" on his blog is about as credible as the drunk at the track who's giving you advice on "guaranteed winners." There's nearly no penalty if he's wrong, (it's just his blog after all) but if he's right, he looks like he got a major scoop. I respect Klein's political analysis, but in terms of knowing what deal is going to happen this far ahead of the deadline, I just don't buy it. However, if it is true, it will be time to burn this motherfucker down.

By: the man of twists and turns

the man of twists and turns — Tue, 11 Dec 2012 03:16:40 -0800

The Game to Play Is Compromise Solution

Talking to plugged-in Republicans over the weekend, I got a couple overarching impressions. The first is a real, and not merely theatrical, pessimism that lawmakers in Washington are going to be spending Christmas with each other, and that we very well may go over the "fiscal cliff." Republicans see in these negotiations an asymmetry of incentives. It's not simply that President Obama has more leverage than House Republicans, or that he "holds all the cards," or that he's willing to go over the cliff. It's that Obama wants to go over the cliff. He gets what he's after with no resistance: more revenue, cuts to defense, and entitlements untouched.

By: jeffburdges

jeffburdges — Tue, 11 Dec 2012 08:16:12 -0800

I've vaguely imagined theamericanconservative.com represented the paleo/fiscal conservative position, who'd obviously support going over the fiscal cliff, but apparently no.

By: the man of twists and turns

the man of twists and turns — Wed, 12 Dec 2012 07:24:14 -0800

Some Republicans OK With Defense Cuts

By: ob1quixote

ob1quixote — Wed, 12 Dec 2012 10:49:28 -0800

Fed Announces Bombshell New Stimulus Policy, Brian Beutler, Talking Points Memo, 12 December 2012 (It's QE∞ until the unemployment rate drops below 6.5 percent or the inflation rate rises above 2.5 percent.)

By: the man of twists and turns

the man of twists and turns — Thu, 13 Dec 2012 13:49:40 -0800

Progressives Ready to Go Over the Fiscal Cliff

By: the man of twists and turns

the man of twists and turns — Sun, 16 Dec 2012 02:40:44 -0800

The Economist has a roundup: What the cliff means, and why America's deficit woes are so intractable

By: homunculus

homunculus — Sun, 16 Dec 2012 09:24:15 -0800

Tea Party Report: Let's Go Fiscal Cliff Diving

By: the man of twists and turns

the man of twists and turns — Mon, 17 Dec 2012 03:12:55 -0800

It's Official: Austerity Economics Doesn't Work

By: Ironmouth

Ironmouth — Mon, 17 Dec 2012 22:21:44 -0800

As we get closer, a few questions: what is the over the cliff endgame like? Both sides say "massive cave by the other side." But what are the contours of that?

By: tonycpsu

tonycpsu — Tue, 18 Dec 2012 08:22:58 -0800

It's looking like the White House is willing to index Social Security to "chained CPI", which ends up being a smallish but very regressive cut to SS benefits. This is not going over well with the left, including myself, especially when the trophy for such a concession is rumored to not even be the $250k tax increase, but something higher, like $500k. I do like adding new brackets, but the $250k bracket should be near 40%, and any brackets above that should be higher than that -- topping out at something like 45%. It's also sounding like the debt ceiling fight is only going to be put off for a couple of years. The "good" news is that raising the Medicare eligibility age seems to be off the table for now. But this does not sound like a deal I would accept if I were running the show.

By: tonycpsu

tonycpsu — Tue, 18 Dec 2012 08:49:26 -0800

More context on the countours of the latest dealings. The expiration of the payroll tax cut is probably the worst part of this deal for progressives, and would outweigh nearly anything Republicans would be willing to give up.

By: Drinky Die

Drinky Die — Tue, 18 Dec 2012 23:46:43 -0800

If we go over the cliff, we will be on pace for a 2013 recession and 2 million lost jobs. Nobody has leverage, and nobody wants to go over. This was what it was designed to do even if partisan diehards on both sides claimed the advantage when they made this nonsense deal.

By: tonycpsu

tonycpsu — Wed, 19 Dec 2012 07:22:45 -0800

The sequester deal is indeed nonsense, but going over the cliff only causes the problems you've outlined if no deal is made in the early days of 2013, which is a political impossibility. At that point, the GOP would at a minimum pass the tax cut for everyone under $250k as well as many components of the deals Obama has already put on the table. Things like the payroll tax holiday might go away, but they're set to go away under these shitty deals as well, so I see no reason to make a deal before 12/31 -- and my salary is paid for by defense/security spending.

By: Drinky Die

Drinky Die — Thu, 20 Dec 2012 17:45:29 -0800

Boehner's Plan B has failed, the House is going home for Christmas, we are essentially over the cliff. Fiscal cliff could impact low-income families the most How will falling off the 'fiscal cliff' impact average Americans? What effect does the Fiscal Cliff have on public schools? Fiscal Cliff: 100 Million Taxpayers Could Face Delays, IRS Says Military contractors brace for impact of 'fiscal cliff' "The impact of [the fiscal cliff] would be immediate," said Blair Senior Services President Steve Williamson. He said programs assist more than 10,000 people agencywide, noting there could be cuts to the number of home-delivered meals and senior-center programs if funding were slashed for programs under the Older Americans Act. "We are in the fortunate position that we can bridge a temporary gap [with funds], but it's exactly that," he said. He estimated that the organization could last perhaps a few weeks or a month before running into financial trouble.

By: Drinky Die

Drinky Die — Thu, 20 Dec 2012 19:29:23 -0800

OTOH: "It's always darkest before the dawn," said Senator Charles E. Schumer of New York, the third-ranking Democrat. "A grand bargain is more likely than not before the end of the year."

By: Drinky Die

Drinky Die — Thu, 20 Dec 2012 19:55:14 -0800

House Conservatives in the Mood for Gumbo, Not Plan B "Plan B?" said Gowdy. "To gumbo?" "I hope there isn't a plan B. I was really counting on the gumbo," said Southerland with a laugh.

By: Drinky Die

Drinky Die — Thu, 20 Dec 2012 20:54:16 -0800

Politico: "Things were so bad for Speaker John Boehner Thursday night, support for his Plan B tax bill so diminished, the limits of his power with his own party laid bare, that he stood in front of the House Republican Conference and recited the Serenity Prayer. "God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference." Boehner nearly cried."

By: eviemath

eviemath — Thu, 20 Dec 2012 22:10:03 -0800

So... Boehner couldn't get enough of his colleagues in the party of the War on Women to support Plan B eh?

By: exogenous

exogenous — Fri, 21 Dec 2012 03:59:20 -0800

House Republicans humiliate their leader "In one vote (or nonvote), the all-or-nothing crowd handed the high ground back to the president, who can now rightly claim that House Republicans would rather raise everyone's taxes than raise them on millionaires. It is a stunning miscalculation, one that allows the president and Senate Majority Leader Harry Reid (D-Nev.) to essentially write whatever bill they can get through the Senate and then watch House Republicans either cave (to a deal that will certainly be worse) or effectively raise taxes for the entire country." On the "certainly be worse" terminology, the above is from the "Right Turn" conservative blog on the Post.

By: Drinky Die

Drinky Die — Fri, 21 Dec 2012 04:45:46 -0800

CNBC: Stock futures fell sharply Thursday evening after House Speaker John Boehner said he failed to mount support for his "Plan B" version of a bill that would raise taxes only on families earning more than $1 million, a plan already opposed by the White House. GOP leaders said the House would not take up any other votes until after Christmas, meaning the fiscal cliff talks could now count down to the new year's deadline or later. Dow futures saw triple digit losses Thursday evening, while Asian markets gave up early gains.

By: jeffburdges

jeffburdges — Fri, 21 Dec 2012 14:26:12 -0800

I suppose it's time to plan those January 1st parties celebrating the fiscal cliff! Progressives can celebrate the expiration of the Bush tax cuts. Libertarians can celebrate the more balanced budget. woot! :)

By: tonycpsu

tonycpsu — Sat, 22 Dec 2012 22:35:22 -0800

Charles Pierce brings the pain:

John Boehner's Career Sank Last Night There is no possible definition by which the Republicans can be considered an actual political party any more. They can be defined as a loose universe of inchoate hatreds, or a sprawling confederation of collected resentments, or an unwieldy conglomeration of self-negating orthodoxies, or an atonal choir of rabid complaint, or a cargo cult of quasi-religious politics and quasi-political religion, or simply the deafening abandoned YAWP of our bitter national Id. But they are not a political party because they have rendered themselves incapable of politics. [...] He had to have watched what happened thereafter, when the president put a deal on the table in 2011 that made him look like Dwight Eisenhower on a bad day, and Boehner couldn't sell it to the vandals in his caucus. He had to have watched as a vulnerable Democratic president got re-elected with ease, and brought a more liberal Democratic senatorial majority along with him, largely because the Republican presidential primary field was such a carnival of the politically insane that it even made an useless windsock like Willard Romney look like the wildest hair across Barry Goldwater's ass. [...] He is Speaker because somebody has to be, and he may not be Speaker for long, because it doesn't matter who is. [...] He couldn't do it because he is a Republican pretending to be a fanatic who went hat in hand to a bunch of fanatics pretending to be Republicans. [...] There is no deal the president can offer that Boehner can sell. If he stays, he's impotent. If he goes, he will be replaced by someone infinitely worse.

By: jeffburdges

jeffburdges — Sun, 23 Dec 2012 05:41:34 -0800

There is ultimately an extremely simple solution here : sane Republicans should make bigger sacrifices on position so that the Democrats are willing to supply more of the votes. Yet, any such deal is politically risky because the country elected those wing nuts for a reason. We must make it politically less risky by spending several months with the fiscal cliff changes in place, ideally with the administration directing as much of the 10% cuts towards Republican pork as possible. We'll eventually clarify more which cuts create the greatest drag on the economy, heck maybe even the middle class tax cuts aren't nearly as important as certain spending cuts. At that point, sane Republicans might find less political risk in implementing an Democrat stimulus plan.

By: tonycpsu

tonycpsu — Wed, 26 Dec 2012 11:59:30 -0800

My favorite part was the part where you said "Republicans should make ... sacrifices."

By: empath

empath — Thu, 27 Dec 2012 09:12:47 -0800

sane Republicans should make bigger sacrifices on position so that the Democrats are willing to supply more of the votes. They'll just wait for the tax cuts to expire and then pass a bill to lower taxes for people making <$400k, as the president offered, thus being the tax cutting heroes.

By: tonycpsu

tonycpsu — Fri, 28 Dec 2012 10:13:16 -0800

Krugman: A Double Shot of Misunderstanding The only thing more dangerous than Congressional nihilism is the false "both sides do it" narrative that lets the nihilists avoid accountability for their actions. If John Boehner were literally setting demolition charges around the perimeter of the Capitol building, the media would criticize Harry Reid for not coming up with an alternative plan whereby half of the building is left intact as long as it's repurposed as a shrine to Ronald Reagan.

By: Drinky Die

Drinky Die — Fri, 28 Dec 2012 21:55:31 -0800

The New Yorker: The international terror group known as Al Qaeda announced its dissolution today, saying that "our mission of destroying the American economy is now in the capable hands of the U.S. Congress."

By: homunculus

homunculus — Sun, 30 Dec 2012 09:45:51 -0800

GOP Senators Want To Take Debt Ceiling Hostage In Order To Raise Retirement Age Lindsay Graham: I Will Destroy America's Solvency Unless The Social Security Retirement Age Is Raised

By: the man of twists and turns

the man of twists and turns — Sun, 30 Dec 2012 12:04:53 -0800

For Republicans, It's All About the Rich, the Very Rich, and the Super-Rich

By: Drinky Die

Drinky Die — Mon, 31 Dec 2012 10:05:20 -0800

Last minute deal in the works: 1. Details on the deal: 39.6% tax rate for individual income over 400k/family income over $450k. AMT patched permanently. 2. Dividends and cap gains taxes at 20% of the $400k/$450k levels. PEP at $250k. Pease at $300k. 3. UI and business cuts extended through 2013. Stimulus cuts for 5 years. Medicare cuts stopped with offsets. Payroll cut expires. 4. Sequester unclear. Prez wants to offset with taxes and spending cuts. R's only want to offset with spending cuts. 5. Estate tax set at $10m exemption but 40% rate. 6. Deal raises about $600b -- and maybe a bit more -- in taxes over 10 years. As always details can change, but that's where it is now. Obama will speak at 1:30 EST. The deal has less revenue than Boehner's last offer (800 billion) but it doesn't have the spending cuts either.

By: Sys Rq

Sys Rq — Mon, 31 Dec 2012 10:09:56 -0800

MetaFilter: an useless windsock

By: Justinian

Justinian — Mon, 31 Dec 2012 10:50:08 -0800

In the long run I'm convinced we'd be better off just doing nothing, letting all the tax cuts expire, and letting all the spending cuts happen. Short term pain for long term benefit.

By: Burhanistan

Burhanistan — Mon, 31 Dec 2012 10:53:01 -0800

But, but, consumer spending!

By: eye of newt

eye of newt — Mon, 31 Dec 2012 11:19:37 -0800

Drinky Die, you hid that 'Payroll cut expires' point--it doesn't even get its own number! It represents a $2000 tax hike for 125 million Americans. "No taxes" Republicans have been pushing for this tax hike for years--it was the biggest fight Obama had last year. Why would they push it? So that the extremely wealthy can continue to pay very low taxes. I am disgusted. It looks like the government enforced redistribution of the wealth from the average citizen to the extremely wealthy continues its course. The Democrats, as always, show themselves to be weak willed and quick to give in under pressure even when they are holding all the cards.

By: Justinian

Justinian — Mon, 31 Dec 2012 11:29:24 -0800

They're now talking about whether the potential compromise will actually increase the deficit rather than rein it in. Congress are a bunch of keystone cops.

By: tonycpsu

tonycpsu — Mon, 31 Dec 2012 12:47:03 -0800

Conceder in Chief? Obama's wrong: This 'cliff' deal still raises taxes on the middle class

By: tonycpsu

tonycpsu — Mon, 31 Dec 2012 13:25:25 -0800

An Afternoon On the Cliff

It was going to be people making over $250,000 a year. That was the line in the sand. You couldn't go 15 minutes at an Obama rally anywhere in America in the year about to pass from us without his expressing an ironclad committment to that number. [...] Little did I know that the line in the sand was adjustable by 60 percent. Personally, I'd like to welcome every one of you making over $400,000 a year to The Middle Class. Never thought we'd see you all around here. (Nice shoes. Payless?) C'mon over and bowl a couple of frames, will you? Next bucket of Buds is on you, by the way. We got room in the RV when we go to Talladega next summer. You in? This old thing? Hell, Costco, $8.95. Pass me the cheese fries, will you, Trip? And, for Chrissakes, loosen your tie. [...] Whatever happened to The Deficit, by the way? Anybody see it recently? Did it fall behind the couch? Harkin is right. In this deal, everything that benefits the middle-class as would be defined by common sense has a sunset date, while everything that benefits the Beltway's endlessly negotiable definition of middle-class is made permanent.

By: fullerine

fullerine — Mon, 31 Dec 2012 14:24:55 -0800

So let me get this right, you have roughly a 2/3 to 3/4 majority of Americans who want to raise taxes on "the rich" (earning 5K a week sounds pretty fucking rich to me) and you have a party who just lost an election saying "nope, that's unfair, we'd rather everyone suffer". And the economy crashing dudes are winning? This is more bewildering than the guns thing.

By: ob1quixote

ob1quixote — Mon, 31 Dec 2012 15:37:24 -0800

fullerine: And the economy crashing dudes are winning?

I think the piece of the puzzle you're missing is that a not insignificant proportion of the people who vote for the "economy crashing dudes" think, despite ample evidence to the contrary, that the tax that they pay goes mainly to "encouraging dependency" among the "undeserving poor" and that the "economy crashing dudes" will implement "spending cuts," viz. put an end to government payments to the "welfare queens", the "47%", and those to whom President Obama has "given gifts." That these are the same people who misunderstand the nature of the federal budget and its relationship with the debt ceiling is not an accident.

By: octothorpe

octothorpe — Mon, 31 Dec 2012 17:08:52 -0800

Fullerine, unfortunately the "economy crashing dudes" won a majority of the House of Representatives and enough seats in the Senate to uphold a filibuster so they have a lot of power to keep anything constructive from happening. A majority of public opinion doesn't always translate into a majority of representation for a number of reasons.

By: Justinian

Justinian — Mon, 31 Dec 2012 20:44:17 -0800

I'm still unclear on how the leadership are going to get rank and file Republican House members to go along with this deal. I'm sure it'll pass the Senate but what leverage is there to be used on the looney nutbar types in the other chamber? Are we hoping there is a sudden outbreak of sanity among the drooling masses?

By: Drinky Die

Drinky Die — Mon, 31 Dec 2012 22:06:55 -0800

Just bumped into Grover Norquist. Said he's cool with the emerging deal because it locks in 84% of the Bush tax cuts.

By: tonycpsu

tonycpsu — Mon, 31 Dec 2012 22:22:46 -0800

Justinian: "I'm still unclear on how the leadership are going to get rank and file Republican House members to go along with this deal. " As-is, it could probably get a fair number of centrist Democratic votes to offset any GOP nutters, but Boehner's already talking about amendments, so it's possible that it'll get larded up with GOP-friendly amendments and sent back to the Senate. I'd bet on it passing as-is, but you never know with those clowns. Drinky Die: " Just bumped into Grover Norquist. Said he's cool with the emerging deal because it locks in 84% of the Bush tax cuts." The pledge signers thought they signed a pledge to never raise taxes, but it turns out through the magic of not wanting to hurt their Americans for Tax Reform ratings that it was actually a pledge to protect at least 84% of the Bush tax cuts.

By: Drinky Die

Drinky Die — Mon, 31 Dec 2012 22:25:28 -0800

We are technically over the cliff now so it isn't even a tax hike in that sense. They will be voting for a big tax cut for most Americans.

By: tonycpsu

tonycpsu — Mon, 31 Dec 2012 22:41:57 -0800

Yeah, except Grover didn't decide that was true until it was clear they were going to have to accept the expiration of the Bush tax cuts.

By: Drinky Die

Drinky Die — Mon, 31 Dec 2012 23:08:44 -0800

The deal has passed in the Senate 89-8. Here are the White House talking points on the deal: At this make or break moment for the middle class, the President achieved a bipartisan solution that keeps income taxes low for the middle class and grows the economy. For the first time in 20 years,Congress will have acted on a bipartisan basis to vote for significant new revenue. This means millionaires and billionaires will pay their fair share to reduce the deficit through a combination of permanent tax rate increases and reduced tax benefits. And this agreement ensures that we can continue to make investments in education, clean energy, and manufacturing that create jobs and strengthen the middle class.

By: Drinky Die

Drinky Die — Tue, 01 Jan 2013 02:03:24 -0800

Mitch McConnell talking points: "I know I can speak for my entire conference when I say we don't think taxes should be going up on anyone, but we all knew that if we did nothing they'd be going up on everyone today. We weren't going to let that happen. "Each of us could spend the rest of the week discussing what a perfect solution would have looked like, but the end result would have been the largest tax increase in American history. "The President wanted tax increases, but thanks to this imperfect agreement, 99% of my constituents won't be hit by those hikes. "So it took an imperfect solution to prevent our constituents from very real financial pain. But in my view, it was worth the effort. - "Now it's time to get serious about reducing Washington's out-of-control spending. That's a debate the American people want. It's the debate we'll have next. And it's a debate Republicans are ready for." Basically he is planning to screw back as hard as he can during the debt ceiling negotiations, which will now include the sequester cuts as an issue since they were only delayed two months. It's gonna be rough. NBC: Investors fearing a stock market plunge if the U.S. tumbles off the "fiscal cliff" next week may want to relax. But they should be scared if a few weeks later Washington fails to reach a deal to raise the nation's debt ceiling as that threatens a default, another credit downgrade and a financial markets panic.