Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Coronavirus Deviation from Overall Outlook for 2020 - Video - 28th Feb 20
Stock Market SPX to Rise back to 3350 - 28th Feb 20
Stock Performance in the Rising Coronavirus Fever - 28th Feb 20
Stock Market SPY Breaks Below Fibonacci Bearish Trigger Level - 28th Feb 20
Will CoronaVirus Pandemic Trigger Stocks Bear Market 2020? - 28th Feb 20
Dow Long-term Trend Analysis - Coronavirus Triggering a Stocks Bear Market? - 27th Feb 20
Trump or Sanders? Both will pile up the Debt - 27th Feb 20
Oil Price Is Now More Volatile Than Bitcoin - 27th Feb 20
A Digital “Fedcoin” May Be Coming… And It Would Be Terrifying - 27th Feb 20
India's Nifty 50 Stocks: Does the Bad Jobs Outlook Spell Trouble for Stocks? - 27th Feb 20
How Crypto Currencies Are Helping Players Go Private - 27th Feb 20 -
Gold and Silver The Die Is Cast - 27th Feb 20
US Economy Permanently Addicted to Zero Interest Rates - 27th Feb 20
Has the Stock Market Waterfall Event Started Or A Buying Opportunity? - 27th Feb 20
Advantages of Enrolling in a Retirement Plan - 27th Feb 20 - LS
South Korea Coronavirus Outbreak Data Analysis Warning Rate of Infection is Exponential! - 26th Feb 20
Gold Price Long-term Trend Analysis Forecast 2020 - 26th Feb 20
Fake Markets Are on Collision Course with Reality - 26th Feb 20
Microsoft is Crushing the S&P 500, Secret Trait Of Stocks That Soar 1,000%+ - 26th Feb 20
Europe's Best Ski Resorts For The Ultimate Adventure - 26th Feb 20
Samsung Galaxy S20+ vs Galaxy S10+ Which One to Buy? - 26th Feb 20
Gold Is Taking on $1,700 amid Rising Coronavirus Fears - 26th Feb 20
Is This What Falling Through the Floor Looks Like in Stocks? - 26th Feb 20
Gold Minsky Moment Coming - 26th Feb 20
Why Every Student Should Study Economics - 26th Feb 20
Stock Market Correction Over? - 26th Feb 20
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Fiscal Cliff Chicken

Politics / US Politics Dec 28, 2012 - 02:58 AM GMT

By: Walter_Brasch

Politics Talk show hosts and other bloviators have spent hours giving their versions of the fiscal cliff. In fewer than 750 words, I’ll explain the truth.

Taxes and the deficit are intertwined. If Congress can’t come up with a plan to solve those problems, the U.S. will jump into the abyss of a deeper recession than existed under the latter years of the Bush–Cheney administration.


Let’s first look at taxes.

The Bush tax cuts expire at the end of this year.

The idea of the cuts was to spur the economy and give what is loosely called the “jobs creators” a slight push to hire more people.

But, the millionaire “jobs creators” held onto their money. They continued to downsize and outsource jobs, making even more money—which they used to buy whatever trinkets that rich people spend money on.

If Congress can’t agree on tax rates, beginning Jan. 1, 2013, every American will see a restoration of tax rates to a level that is about what they were before the Bush tax cuts. The lower- and middle-classes will be hit harder than the upper class.

President Obama, contrary to what the screaming harpies of the extreme Rightwing claim, doesn’t want to raise taxes. He wants the tax cuts to continue for 98 percent of all Americans—the ones making less than $250,000 a year. He wants to restore—note that word, restore, not raise—the tax liability for the richest 2 percent of Americans. The rate to the rich would still be below the rates they paid during most of the latter half of the 20th century. Even billionaires like Bill Gates and Warren Buffet agree that the rich need to be paying more.

The Republicans, knowing where their financial base is, demand that the tax cuts be extended to everyone. Their compromise was to allow the cuts to apply to everyone making $1 million a year or less. That would be net income, not gross income. Millionaires could still make $3 million a year if they can scam $2 million in deductions. Their rates would still be lower than almost any time since the income tax was first created in 1913.

The President countered with a $400,000 limit. That would include about 99 percent of all Americans. House Speaker John Boehner, however, found that a segment of his Republican party don’t want a compromise; they are determined to uphold some kind of a non-legal pledge to Grover Norquist that there would be no tax increases—ever—even if it is to restore, not raise, tax rates.

The second part of the problem is that of entitlements. The Republicans are willing to do some horse-trading. They won’t continue to hold 99 percent of Americans hostage if there are cuts in “entitlements” and programs that would significantly reduce the deficit. These entitlements benefit mostly the 99 percent. The Republicans even say they’ll consider closing some tax loopholes used extensively by the upper class. But, they won’t tell us what those loopholes are, even though the President has several times asked for specifics. Apparently, the Republicans believe releasing such information is classified, much like battle plans in Afghanistan or the number of toilet paper rolls the Pentagon buys.

The President has already compromised several times, but every time he makes a concession, the Republicans want even more. He has proposed an orderly reduction of the deficit by $1.6 trillion. Not good enough, say the dogma-driven Republicans. They want even more. And they want it now. They are aware that if the tax cuts expire all at once, the deficit immediately decreases, something that makes them drool in ecstasy. However, almost every economist of every political persuasion says a severe decrease in the deficit would lead the U.S. into an even worse recession than the one created by the Bush–Cheney administration.

Behind a wall of political gesturing, the Republicans are doing nothing, while blocking those who can do something. John Boehner now acknowledges he is blocked by party dogma and can’t control the Republican majority in the House who want the government to several cut entitlements while continuing all Bush tax cuts, even to millionaires who, not surprisingly, make up the majority of Congress. Their actions are driving America into fiscal cliff suicide.

The obstructionists in Congress need to realize this isn’t a deserted two-lane highway, and Americans don’t want the Republicans playing chicken with our nest eggs.

[Walter Brasch, a social issues columnist, has covered politics and government for four decades. His latest book is Before the First Snow: Stories from the Revolution.]

[Walter Brasch’s latest book is Before the First Snow, a fact-based novel that looks at the nuclear industry during its critical building boom in the 1970s and 1980s.]

By Walter M Brasch PhD
http://www.walterbrasch.com

Copyright 2012 Walter M Brasch

Walter Brasch is a university journalism professor, syndicated columnist, and author of 17 books. His current books are America's Unpatriotic Acts , The Federal Response to Hurricane Katrina , and Sex and the Single Beer Can: Probing the Media and American Culture . All are available through amazon.com, bn.com, or other bookstores. You may contact Dr. Brasch at walterbrasch@gmail.com

Walter Brasch Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules