So we toss out $600 billion of $4 trillion in Bush tax cuts...

[dkf]

And the formerly hated Bush tax cuts are now the beloved Obama tax cuts?

And at best the $600 billion would have been $900 billion.

Funny how that works.

I still say we need the entire tax structure we had under Bill Clinton and that should be the final goal.

I worry Democrats have lost their way to fiscal responsibility.

[OldDem2012]

1. Gee, why am I not surprised by your post? nt.

[dkf]

3. Reality check. People are living in fiscal lala land.

[valerief]

6. All our money is spent on WAR SHIT instead of HELPING AMERICANS SHIT. nt

[OldDem2012]

70. Bingo. nt.

[alcibiades_mystery]

2. Conservative dkf agrees with many of our so-called progressives on this point

Go back to the Clinton rates for everybody!

Y'all should get along great!

[Sekhmets Daughter]

7. So how do you propose paying for everything?

And don't propose something as silly as cutting the defense budget by 50%

[Tempest]

15. We could cut defense 50% easily

And we'd still be spending 7X as much as the next country.

[Sekhmets Daughter]

32. Easily? C'mon.

Every $1 billion of Defense spending generates 11,600 jobs. Cut the defense budget by half and eliminate 3,944,000 jobs...with unemployment over 7.5%...Really, is that what you want?

Now here's the thing, because I don't disagree that we should be looking to cut the defense budget, just that we can't cut it by 50% either easily or immediately. Every $1 billion spent could create 17,100 jobs in clean energy jobs, but you'd have to overcome the fossil fuel industry first; 19,600 health care jobs, but you'd have to defeat the morons in congress who object to a rational health care policy; and 29,100 jobs in education but then you'd have to do battle with the fools who want to privatize education and repair a system which already delivers less for the money spent than the educational systems in other countries.

There are no easy fixes and certainly no quick fixes. It's taken 40 years to create this mess.

[Tempest]

37. I never said there wouldn't be any pain

But yes, it can be done.

[Sekhmets Daughter]

43. You said easily...

And I guess as long as you're not employed in the defense industry you'll survive the pain just fine.

My point is that it will take a long process to reverse the course of our economy...it has been a war based economy since 1942.

[AgingAmerican]

72. The military industrial complex

is a corporate welfare system. Get rid of it.

[Sekhmets Daughter]

75. Sure, go ahead.

[AgingAmerican]

78. The powers that be don't have the balls to do it

Sadly.

[Sekhmets Daughter]

80. Everybody knows what is at the heart of the problem...

It takes money to be elected and reelected. If we don't get the money out of politics, permanently, we will continue to muddle along, a war based economy with the rich getting ever richer and the rest of us struggling to get by. But I bet if you ask enough people if they would be willing to spend an extra $50. in taxes in order to fund elections, at least half would say..."I already pay too much in taxes" and not all of them would be republicans.

[AgingAmerican]

81. I agree money has wrecked our political system

We have a bribery system. Pay to play.

[Sekhmets Daughter]

83. Yep

and everyone expects the other guy to fix it.

[valerief]

77. With that money, create jobs that HELP Americans, not hurt the THE WORLD.

Infrastructure job, green energy jobs, jobs that lead to more jobs, not jobs that KILL.

The money can be used productively instead of destructively.

[Sekhmets Daughter]

79. Never said it couldn't...

In fact gave the totals for alternatives. Also stated what would need to be accomplished politically in order to do so.

[Fumesucker]

8. Eh, my life at least was much better during the Clinton administration

I don't think I'm alone in that.

[R. Daneel Olivaw]

13. Not alone by far.

[Sekhmets Daughter]

33. Well, you were younger after all...

[dkf]

9. This is the traditional position of Democrats.

You all are the ones drinking the Republican kool aid of lower taxes despite high deficits.

[JoeBlowToo]

4. They are all workiing within the same Beltway Bubble....

Certain givens are causing a lack of real action, i.e., no meaningful cuts to the military budget.

The Republicans are still parroting the "entitlements cuts" to "save SS and Medicare" crapola.

[Chan790]

5. A rare instance in which I agree with you. (For the most part.)

The Bush tax-rates should have all been reverted to the Clinton tax rates...I'd like to see us go back to pre-Reagan rates...as that's where we need to be to achieve fiscal responsibility...but I think today was a good start as long as we realize rates need to go up from here.

[dkf]

11. The reason Clinton rates are the optimal is because we saw an economy that worked.

Taxes were decently high but still allowed economic incentive to innovate. Too high and there are disincentives, too low and you don't collect enough.

[NoOneMan]

52. It was a different time and a different economy

Less globalization and more manufacturing. The genie is out of the bottle.

Hell, some of the trade and financial policies enacted during that time contributed to changing this very world we live in today.

[Puzzledtraveller]

82. You said it!

[bhikkhu]

56. There much more to a working economy than tax rates

While the immediate thought might be that higher taxes spur growth, even in this small sample you might ask - why did growth slow after 1995? Why did it stabilize after the first Bush tax cuts? Why did it plummet after the second tax cuts? Why did it grow again under Obama, with no changes in tax structure?

And so forth...for the most part, there is no strong correlation between taxes and the economy, especially since we're only talking about 2 or 3% here and there to begin with. Other factors have much stronger impacts.

To some extent, the imagined strong correlation is a manufactured one, usually pushed by the RW.

[rufus dog]

65. Focusing on the tax rate is ignoring the biggest (by far) reason for the expansion in the 90's

A once in a Century innovation. The internet.

It is akin to ignoring the Industrial Revolution.

[ProSense]

10. It would have been $800 billion and

you don't know what other tax increases are coming. So this isn't the end all. BTW, this is new:

New Affordable Care Act tax hike for high earners kicks in with the new year

by Joan McCarter

With or without going over the fiscal cliff curb, high earners are going to see a little bit more taken out of their paychecks beginning Jan. 1 to help pay for the Affordable Care Act.

Currently, wage earners pay a Medicare tax of 1.45%, which is automatically taken out of their paychecks. Employers pay a matching 1.45% rate. Those taxes won't change.

But come Jan. 1, individuals earning more than $200,000 in wages and married couples with wages of more than $250,000 will pay an additional payroll tax of 0.9% for Medicare on income that exceeds those amounts.

Employers will be able to deduct the extra 0.9% tax for individual employees on the portion of income that exceeds $200,000, but they won't be allowed to withhold additional payroll taxes to account for a combined income.

That means that couples filing jointly who make more than $250,000 combined will have to pay that additional 0.9 percent, because it won't be automatically withheld. Other new fees/taxes kicking in are a new tax deduction cap of $2,500 on flexible spending accounts, and for medical-device manufacturers, a 2.3 percent tax on products. All this is in preparation for 2014, when the health insurance exchanges are open for business and subsidies begin.

http://www.dailykos.com/story/2012/12/29/1173940/-New-Affordable-Care-Act-tax-hike-for-high-earners-kicks-in-with-the-new-year

That's President Obama's doing too.

[dkf]

12. Geez I was the one who kept on mentioning Obama already raised taxes on the top and was bashed.

Still that is miniscule compared to the problem and the ACA taxes only make Medicare look marginally better.

But just think...If you keep that kind of revenue, do you know how much you need to cut to get to a balanced budget?

Democrats are setting themselves up for a whole lot of pain by making the middle class unwilling to pay more taxes.

[stevenleser]

24. You were bashed because it was a Republican talking point that you were parroting. And it was wrong.

nt

[dkf]

25. Lol it was just posted by an avid Obama supporter

The loyal of the loyal.

You crack me up...

[stevenleser]

51. Thats right, a Republican talking point, and a tax that had not yet gone into effect. You were wrong

[Tempest]

14. The difference is .001% of GDP

Is it perfect? No.

Is it better than alternatives the Republicans presented? Absofuckinglutely.

[dkf]

16. I'm beginning to think the best deal is no deal.

Take the pain now, blame it collectively on congress and get on with it.

[Tempest]

17. No deal means another credit downgrade

And do you remember how much the last credit downgrade cost us?

[dkf]

19. No it's the opposite. No deal fixes our problems instantly.

It brings in more revenue and cuts spending. Ironically it's a fiscally sound plan, but it's painful in the beginning.

[PSPS]

20. It didn't "cost us" anything

Every note auction since the tea party downgrade has been fully subscribed and will continue to be.

[Tempest]

26. It didn't cost us anything only to the uninformed

However, based on historical information from Bloomberg the cost to insure U.S. debts against default has risen from an average of around 25 basis points in 2007 to a range from 55 to 75 basis points in 2011.

[PSPS]

54. Sorry, but that's a canard.

I'd accept what you said as germane if, perhaps, I missed the wholesale dumping of US bonds for the coveted Greek or other bonds.

[Tempest]

58. Insurance costs are a canard?

Is that how you explain your increase in insurance costs?

[Sekhmets Daughter]

34. What did it cost? n/t

[Tempest]

40. See my response above your post. 25 points on the insurance cost. n/t

[Sekhmets Daughter]

44. Thank you....

I knew something had gone up while interest rates remained low. Don't the people buying the debt pay for the insurance? Do you know whether the SS Trust Funds buys insurance on our debt? The Federal Reserve? Our TBTF banks?

[Tempest]

47. The issuer of the debt pays the insurance costs

Just as a corporation pays the insurance premiums placed on capital loans.

[Sekhmets Daughter]

53. So backwards of other types of insurance....

I never knew how it worked. So 40 to 50 basis points...that's rich. I guess it gets so little coverage because the republicans don't want to fess up to how much they cost the nation and Dems still want people to believe the cost of borrowing is cheap. Wonderful.

[Tempest]

60. Not backwards, the same as.

Not sure how you got backwards out of it.

[Sekhmets Daughter]

63. When you buy a house with a mortgage

you pay for the insurance, not the bank.

[muriel_volestrangler]

18. Tossing out all the tax cuts would have put the economy back into recession

and increased unemployment by 1%. There is such a thing as economic stewardship, as well as your beloved fiscal responsibility. Final golas don't have to be arrived at as fast as possible.

[dkf]

21. CBO estimated it would last 6 months.

If the economists are any good, that seems like a feasible amount of time to weather a storm if future insolvency is the other side of that choice.

It's really a fork in the road. Decision time.

[muriel_volestrangler]

30. You see 'insolvency' as the result of this decision

I think you're alone in that. A sovereign government, especially one that controls the world's reserve currency, is not going to go insolvent.

[dkf]

31. Oh we are going to lose that title sooner or later.

Printing money already seems inevitable. So in the end it's insolvency or bad inflation. Financially it's hard to survive either. No happy ending there.

[muriel_volestrangler]

38. But you're claiming this specific decision will end in the US government being insolvent

You seem to think the US economy is already a basket-case, and that its only chance is austerity right now. I don't think any economist would agree with you.

[Sekhmets Daughter]

35. It won't be the reserve currency for much longer.

The dollar is used for 76% of world trade and accounts for 63% of global reserves. Meanwhile China has begun selling oil using the Yuan.

[Tempest]

41. It will always be used as the reserve currency.

Even during the credit downgrade in 2011, currency trading increased.

U.S. currency as held as reserves hit a record high last year.

China is only selling oil using the Yuan on a small amount of the oil they import.

[Sekhmets Daughter]

46. I don't think you can really say that with such certainty.... n/t

[Tempest]

48. Actually, I can.

The U.S. dollar and economy has been in worse shape and the dollar survived as the reserve of choice.

I can't think of any rational situation occurring which would change that. Can you?

[Sekhmets Daughter]

55. Yep, several....

China, India, Brazil...

[Tempest]

59. Not even close to a comparison

Firstly, our economy dwarfs all but China's.

Secondly is in the sheer amount of currency in circulation. We have China beat by a very large amount on that count.

And with China's government manipulating their currency, no foreign government (the largest purchasers of currency) is going to invest in a currency that a government controls with a heavy hand like China.



So again I ask, do you have any reasonable situations that would occur?

[Sekhmets Daughter]

62. Yes, but China may overtake us as early as 2020...

There is nothing in China's recent history to indicate they are stagnant...or unwilling to learn.

You are optimistic that we will get our economy going again? Full employment and lot's of people making enough money that they have plenty of disposable income? Does your calculation take into account that China and the US are on opposite trajectories? That they are building a middle class while we are destroying ours? Or that we were not much of a player until after WW II when our own middle class exploded due to progressive policies that have pretty much been abandoned over the past 30 years.

[bowens43]

22. you really believe that?

that's more bullshit from both sides in DC

[muriel_volestrangler]

29. Decrease most people's spending ability by 2%? Yes, that could cause a recession

As it is, the end of the payroll tax cut will hit a typical household hard enough.


http://www.theatlantic.com/business/archive/2012/12/this-is-how-much-your-taxes-will-rise-if-we-fall-off-the-fiscal-cliff/266696/

[AgingAmerican]

74. Thats 20$ out of every thousand $

It wont cause a recession. That's the republican position. All these tax cuts are ruining our economy.

[stevenleser]

23. Your touching concern for adherence to Democratic values wasn't there for Medicare, or SS or...

I'm sure someone is surprised that you are attacking President Obama and Democrats in general. That someone is not me.

[Chathamization]

27. You're right, it's a terrible deal

A temporary extension of tax cuts for those on the lower end of the income scale makes sense at the moment because we are in a recession. But we'll eventually get out of it, and at that point it would make a lot of sense to go back to the Clinton era rates. But from my reading, it makes the tax cuts for those making below $450k permanent. Which means if we ever want to go back to Clinton era rates, we now need to have politicians that are willing to raise taxes on the middle class - think we'll see that any time soon?

Horrible.

[Sekhmets Daughter]

36. There is no such thing as a permanent tax...

What congress voted in, congress can vote out. Don't become confused because the Bush Tax cuts had an expiration date...that was because the cuts were passed using "reconciliation"

[Chathamization]

50. Congress can

But I doubt congress will. I don't have much faith in congress raising taxes on people making less than $450k anytime soon, and think that it's much more likely that they'll cut spending instead.

[Sekhmets Daughter]

61. Perhaps...

But the current trajectory is just not sustainable. We can't keep spending and keep low tax rates. We can't raise taxes for 53% of the nation, when 47% don't pay federal income tax because they don't earn enough or have enough on which to pay tax. So the bottom line is that we have to figure out a way to raise income for the bottom 80%, particularly the bottom 40%. One of the things no one talks about when they talk about the people who don't pay federal income tax, but do pay FICA taxes is that many of those people actually get a good portion of their FICA taxes refunded.

It all comes back to the same reality...taxes are too low for everyone and wages are too low for all but the top 20% of earners.

I betcha' the republicans would be happy to raise taxes if the Dems proposed doubling the minimum wage as an alternative.... That would set up a fine cacophony coming out of the Capitol.

[Chathamization]

67. I don't disagree

that the current trajectory is unsustainable. And there's also the disconnect between what we would like to do and what's politically feasible. That's why it's maddening when something that we both want to do and is possible, like getting rid of the Bush tax cuts, is so casually thrown away. If we got rid of the Bush tax cuts, got out of this recession, and got healthcare costs under control, that'd take care of most of our long term problems.

[Sekhmets Daughter]

68. We are on the same page, you and I.

Happy New Year!

[Chathamization]

69. Thanks, you too! n/t

[Democrats_win]

28. Not yet on the entire Clinton tax levels.

We're still deep in the bush depression and Keynesianism demands no tax increases. The reason for the tax increase on the non-job creating "job creators" is self evident.

Perhaps one day the entire Clinton (or even the pre-reagan) tax scheme will be brought back. However, I can't imagine that people making less than $30,000 or so should ever be asked to pay more since the bush pResidency hit this group so hard that they owe their lives to the banksters! It would be immoral to bring further taxes on this working poor group until we've had a stable economy for 15-20 years.

[Motown_Johnny]

39. The tax structure under Carter should be the final goal, not Clinton.

[Tempest]

42. Under the current economy, you are correct

Clinton's tax rates were during economic expansion.

Carter's tax rates pulled us out of the 1970s recession.

[Cali_Democrat]

45. dkf worries Dems have lost their way to fiscal responsibility?

touching

[Rex]

49. Sure ya do.

[subterranean]

57. You may get your wish if the House GOP rejects the Senate plan

an outcome that seems likely according to the latest news reports.

[grahamhgreen]

64. kick

[mzmolly]

66. You must have missed Obama saying he wanted to extend the tax cuts

for those making < a specific dollar amount?

[AgingAmerican]

71. The Bush tax cuts were a tragic mistake

When did the Democratic party become the party of tax cuts? The Bush tax cuts represent almost half of the yearly deficit. Get rid of all of them and be done with it.

[mzmolly]

76. Obama has been saying for years he supported tax cuts for those in

lower income brackets. It's stimulative for the economy.

[gto]

73. Inflation

Know what that means?

Incomes are not the same as they were under Clinton.

In Clinton years, $250,000 was only maybe $165,000. Why would we revert back to that?