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Fri Nov 16, 2012, 01:28 PM

The Fiscal Cliff Is an Exaggerated Crisis

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Higher taxes and less spending would slow the economy if left in place over the next year and could possibly lead to another recession. But that recession will not happen on January 1. The sequester applies to appropriations that may not be spent for years. The higher taxes will not affect every single paycheck at once on New Year's Day. This recession story assumes these spending cuts and higher taxes remain in place all year and absolutely no one thinks that will be the case. If, instead, we reverse the tax increases and spending cuts 10 days after the start of the year, the economic impact will be minimal.

Interestingly, those who insist the loudest that we must act now, call for a "grand bargain" that would savage government spending, particularly Social Security and Medicare, in the name of reforming entitlements. They say it must be done because of our soaring deficits. However, the high deficits we see now are due to the recession. The budget deficit was actually only just over 1 percent of GDP in 2007 and was projected to remain near that level for several years before the Great Recession. There is no need to cut important social insurance programs right now that millions of Americans rely on and essentially voted to protect in November.

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Read more: http://www.usnews.com/debate-club/is-going-over-the-fiscal-cliff-necessarily-the-worst-outcome/the-fiscal-cliff-is-an-exaggerated-crisis

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Reply The Fiscal Cliff Is an Exaggerated Crisis (Original post)
PETRUS Nov 2012 OP
Blue Owl Nov 2012 #1
Prometheus_unbound Nov 2012 #2
RC Nov 2012 #3
Egalitarian Thug Nov 2012 #4

Response to PETRUS (Original post)

Fri Nov 16, 2012, 01:29 PM

1. Turns out the cliff is really just the north face of Bullshit Mountain

n/t

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Response to PETRUS (Original post)

Fri Nov 16, 2012, 01:35 PM

2. Agreed

The whole point is that the fiscal "cliff " (actually several smaller bumps) could send us back in recession by REDUCING THE DEFICIT TOO QUICKLY. Using it as an excuse to cut welfare because "deficits are too high" is an insult to the public's intelligence.

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Response to Prometheus_unbound (Reply #2)

Fri Nov 16, 2012, 03:15 PM

3. Cutting the Social Programs could very well be the trigger for another recession.

 

When you cut the flow of money on main street, everything slows down. Nobody is getting rich off the Social Programs in the first place. But those programs do allow more people to spend on Main Street. Every little but helps. Take it away and in this fragile economy, it will hurt.

The Fix?

1. Read the United States Constitution with comprehension. Paying particular attention to the Preamble and Section 8. The parts about the general welfare of "We the people...".
2. Raise taxes on everyone grossing $100,000 or more, in stepped increments. When the average income is only around 40 to 50 thousand dollars, that makes more sense than starting at $250,000 and up.
3. We need to stop the wasteful wars and look hard at rebuilding this country.
4. WE need to get our heavy industry back into this country. How can we continue to be a Super Power, if we continue to outsource our manufacturing jobs overseas?
5. Single Payer, Universal Health Care. Include Dentistry and eye care in this Universal Health Care. And don't for get help for the hard of hearing.
6. Criminal trials, with harsh sentences for those found guilty for our own war criminals.
7. Investigate Wall Street with the same vigor as we do our war criminals.
8. Make White Collar crime illegal.
9. Stop the For Profit wars on terror and drugs. Apply some common sense for a change.
10. Stop voting for people that have been selected for us. Remove the corrupting money from our elections.
11. Corporations are not people. Regulate them as the predatory entities they are.

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Response to PETRUS (Original post)

Fri Nov 16, 2012, 03:19 PM

4. As virtually every economist with a track record of actually being right says,

 

this is the time to increase deficit spending, a lot, and direct it toward the bottom of the pyramid. But what are we getting? How much to cut.

And then we'll all be shocked and surprised when the economy tanks again...

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