Isn't the "Fiscal Cliff" the Best Thing for America?

Discussion in 'Economics' started by oldtime, Nov 8, 2012.

  1. I don't get it, Yes short term it could cause a recession, but how long are we going to keep postponing it?

    Everybody pays a little more taxes

    We cut defense

    We cut Discretionary

    Doesn't solve the problem, but it's a step in the right direction
  2. It doesn't really matter anymore. The democrats are back in for four years so it is not even a discussion anymore. They will spend more no matter what people say.

    I reckon the deficit will be $20 - $30 trillion by the time Barack leaves.
  3. TGregg


    Heh, I was figuring 23-25 unless Greece/EU/Japan issues go critical and bring on the next great depression, in which case ~28. But it could be a lot more depending on how ambitious they are with health care and entitlements. Heck, if the democrat midterm strategy of pushing this to the end of 2013 and getting the republicans to stonewall works, they could get the house too, and then we could do 30+ easy.
  4. The rest of the planet keeps giving the US a green light to "borrow" more - so the US may as well keep "borrowing" more.
  5. yeah, that's exactly how I went broke in one of my early businesses. Everytime I would put my hands in my face and just get ready to throw in the towel, someone would come along and loan me money. But then again, I wasn't the United States of America.

    I shouldn't laugh, I've actually loaned them quite bit of money.

    But getting back to the topic, the "Fiscal Cliff" sounds very reasonable to me. Everybody takes a hit. It's always bad at first, but if all you are thinking about is your children, wouldn't the fiscal cliff be a good start for them?
  6. clacy


    The difference is, your business was not a currency issuer. Governments that issue their own currency do not function like households and businesses. Their main constraint is inflation, and I don't see any signs of that happening in the near future.

    Cutting defense is no different than cutting SS. Either way, it's less money in the economy. Raising taxes, is also pulling more money out of the economy.

    I'm not sure the US economy is anywhere nearly strong enough to handle this hit form austerity and tax increases.
  7. Bob111




    sell your gas guzzlers boys..they will be outlawed and taxed to death..
    Europe style-per cc
  8. yes, Modern Monetary Theory states we can create as much money as we need, the only constraint being inflation.

    If governments are so different from households, why don't they just let all of us create our own money? Then nobody would ever have to suffer.
  9. clacy


    Because households aren't governments. Because even though you and I and basically everyone else on the planet will gladly accept $USD, no one person in their right mind would accept oldtime's currency nor mine.

    There has to be some credibility, enforcement mechanism and value behind the currency issuer's wealth and productivity.
  10. the democrats say, the rich need to pay their fair share

    so wouldn't letting the Bush tax cuts expire accomplish that? At least in some small way?

    and the republicans say we need to cut spending

    so wouldn't the defense cuts and the discretionary spending cuts accomplish that? at least in some small way?

    so it sounds like a deal to me

    what are they arguing about?

    How is what they are going to come up with any better than jumping off the fiscal cliff?

    They call it a "Fiscal Cliff" but it actually sounds pretty reasonable to me.
    #10     Nov 8, 2012