my fiscal cliff solution

Discussion in 'Economics' started by oldtime, Dec 21, 2012.

  1. let the rates expire on 250K and above
    make the current rates on 98% permanent

    then simply go over the cliff

    we all know we need to cut military and social spending

    what's wrong with that deal?
  2. I think that the deal has been already made. If there was no quick solution immediately after the election, both sides will then posture and dance as they go over the cliff hand-in-hand.

    The real battle now is to see who gets tagged with the "forced" cutbacks and tax increases. It seems to me that the republicans must lose that battle since they held Obama's feet to the fire 18 months ago to get the debt ceiling lifted. Obama can simply "try to negotiate" and wait for the STHTF.

    This is a canary in the world coalmine for the battle between the tax and spend left and the tax and spend right. It's the unstoppable force and immovable object paradox all over again.

    BTW, I think most Americans should turn off their TV news channels. I hear the most outrageous comments made by friends that trace to news channel garbage. It is easily proved to be nonsense by a little research. Very few of those who spout it, actually check if it is true or not.


    So many areas to fix this. Raise taxes on those at either $500K or $750 and above. Cut all government agencies by 10%. There is so much waste there. Cut foreign aid. Modify Social Security, Medicare and Medicaid programs. Cut pork spending; or outlaw it.

    Both parties are to blame; both keep shifting further to the right (left). Compromise for the sake of the country and "us".

    And a perfect example of government waste. Watched CNBC last night and on American Greed was a case where 2 19 cent washers were sold to the government and a $1 million shipping charge went along with it. Bloomberg link below. What kind of incompetent government employee would allow that to occur and/or authorize payment.
  4. everything I know about the world came through that glass tube. If you need to know anything about moslems, just ask me. They dress bad and shoot machine guns in the air. Curious about unions? They hold signs and at times can be violent. I'm an expert on the unemployed. They stand in lines. It's all true! I saw it on tv!
  5. maybe so, but a pragmatic solution is at hand. Nobody is going to stand up and vote for sensible ideas like you present. But when it comes to spending, they could go over the cliff. If this economy can't survive without government spending, especially on defense, it isn't worth saving anyway. No democrat will vote to cut social spending, but they may go over the cliff if they are not blamed. Originally the sequester was supposed to be draconian, to severe for anybody in their right mind to go along with. But now at 16 trillion, it's starting to look a little more modest. Even sensible. They aren't going to cut unless they can wash their hands and go home saying, "Not my fault".

    But you are probably right. The 'do nothing" congress will not finally do what they are good at, namely doing nothing, if it means cutting off their main source of income, namely bribes.
  6. bettles


    Neither side wants to budge. So fine. Here is how to fix the problem and the growing debt permanently. Simply keep all spending exactly where it is now. No cuts, no additions, no adjustment for inflation ever. As long as spending is kept exactly where it is and not raised, inflation over time will make the debt a smaller and smaller percentage of GDP.

    But like one of the other posters said, the cliff is pretty much immaterial except in the short term. Even if nothing is passed this week and some cuts and tax increase were to automatically take effect, they will be be undone retroactively once an agreement is reached next year. So in the hypothetical situation where people actually had more deducted from their pay checks at the start of January, there will just be a temporary slowdown. When the deal is passed, say in February, pay checks will be increased back to what they were plus the amount that was withheld temporarily while there was no agreement. So that could mean (again hypothetically, since I'm not sure the automatic measures will actually kick in) a weaker January made up for with a strong February.
  7. A really unbelievable (BS) scenario is now setting up. It shows the entire governing sham I believe.

    I got back from travelling to read that the US will hit the fiscal debt limit EXACTLY on Dec 31 after reading loads of projections of late Feb early March as the real date. Apparently, it's the only government projection that was hit 100% on time along with the law forcing the fiscal cliff. Amazing!!!(Just how expensive are those Christmas trips for the house and senate anyways?) So, if the house doesn't act the way the senate wants, will someone be "forced" to ignore the spending limit law altogether??? Hollywood couldn't invent this scenario!!

    Obviously, the only real concession the democrats want is control of the spending limit in the senate or presidential office. It would be the final coup de grace. Cunning move! Good way to up the ante. I can feel the pressure rising as we speak.

    Now, an outsider would say, wait a minute, didn't the president very recently indicate (something like) that they were so close and that his hands were tied because of the law? (Hinting that he would honor it?) So it seems there may be some (bad) laws you must follow and others you break (always for good reasons). There is not a chance in a very warm place that all the government workers will not get paid in January.

    So, how does one tell good laws from bad laws? Who gets to decide which ones to follow and which ones to ignore? Who is really in control these days anyways?

    Here is one suggestion. For every week a solution extends over the Dec 31 deadline, deduct 2% of the salaries of all people in negotiation FOREVER (President, senate, house, lobbists, etc.) For every 5% increase in the deficit spending, the same people should lose a month of pay. This plan would start a pay back of the debt along with taxing the rich. Almost everyone in America wins.

    After all, the people sent them all back to resolve this issue, not hold media scrums and make threats.