Best of the Week
Most Popular
1.U.S. Housing Bull Market Over? House Prices Trend Forecast Current State - Nadeem_Walayat
2.The Coming U.S. Economic Collapse Will Trigger a Revolution - Harry_Dent
3. Stock Market Crash a Historical Pattern? - Wim_Grommen
4.Global Panic - U.S. Federal Government Stockpiling Ammo – Here’s What We’re Going to Do - Shah Gilani
5.AI, Robotics, and the Future of Jobs - Aaron Smith
6.This is Your Economic Recovery With and Without Drugs - James_Quinn
7.Gold and Silver Price Getting Set To Explode Higher - Austin_Galt
8.The Something for Nothing Society - Lifecycle of Bureaucracy - Ty_Andros
9.Another Interesting Stock Market Juncture - Tony_Caldaro
10.Inflation vs the Deflationary Straw Man - Gary_Tanashian
Last 5 days
The Ultimate Demise Of The Euro Union - 1st Sep 14
Palladium Price Breaks Multi-Year High Over $900 - 1st Sep 14
When Complexity Becomes Chaos - 1st Sep 14
Designer War By Default - 1st Sep 14
Islamic State or Russia? Ten Key Questions Towards Pragmatism - 1st Sep 14
Mixed Emotions for the Gold Market - 1st Sep 14
These Clowns Are Dragging Us Into War with Russia - 1st Sep 14
Marx And The Capitalist Cancer Of Overproduction - 1st Sep 14
Scottish Banks Salivating at the Prospects for an Independent Scotland of 6 Million Debt Slaves - 1st Sep 14
Small Man Europe Is Now In “Effective State Of War” With Russia - 31st Aug 14
The Unintended Blowback Of False Flags - 31st Aug 14
Tesco Supermarket Death Spiral Latest Profits Warning and Dividend Slashed - 31st Aug 14
Dow, Gold and Silver - A Last Stand, A Fake Out And A Surge - 31st Aug 14
If U.S. Consumers are so Confident Why aren't They Spending? - 31st Aug 14
Scotland Independence House Prices Crash, Deflationary Debt Death Spiral - 31st Aug 14
Obama’s “Catastrophic Defeat” in Ukraine - 30th Aug 14
Stock Market Inflection Point Approaching - 30th Aug 14
Gold And Silver - Elite's NWO Losing Traction. Expect More War - 30th Aug 14
Corporations Join Droves of Americans Renouncing US Citizenship - 30th Aug 14
Peter Schiff U.S. Housing Market, House Prices Bubble Warning - 30th Aug 14
Russia, Ukraine War - It’s Time to Play the “Gazprom Card” - 29th Aug 14
The One Tech Stock Investment You Should Never Sell - 29th Aug 14
Bitcoin Price $500 as Current Downside Barrier - 29th Aug 14
Don't Get Ruined by These 10 Popular Stock Market Investment Myths - 29th Aug 14
Low Cost Transcontinental Gold - 29th Aug 14
Gold Bullish Central Banks Should Give Money Directly To The People - Helicopter Janet? - 29th Aug 14
US House Prices Bull Market Over? Trend Forecast Video - 29th Aug 14
The Fed Meeting at Jackson Hole Exposed Yellen’s Greatest Weakness - 29th Aug 14
AAPL Apple Stock About To Get sMACked - 29th Aug 14
A History of Unlimited Money: Learn From It or Repeat Its Mistakes - 29th Aug 14
How You Can Play to Win When Market Makers Are Calling the Shots - 28th Aug 14
EU Gas Supply Is In Real And Imminent Danger - 28th Aug 14
Central Banks at the Root of Evil - 28th Aug 14
European Bond Market: Bubble of all Bubbles! - 28th Aug 14
Employers Aren’t Just Whining: The “Skills Gap” Is Real - 28th Aug 14
The ISIS Menace - Just What We Need, Another War - 27th Aug 14
The Risky Business of Methane-Rich “Fire Ice” - 27th Aug 14
CFR Recommends Policy Shift that is Very Bullish for Gold - 27th Aug 14
Ukraine Standoff Signals Global Power Shift - 27th Aug 14
Stock Market Panic Decline Begins - 27th Aug 14
The Monopoly of the Government Education Cartel - 27th Aug 14
How to Invest in Silver Today for Double-Digit Gains - 27th Aug 14
The Big Solar Energy Breakthrough We've Been Waiting For - 27th Aug 14
U.S. Empire’s Bumpy Ride - 27th Aug 14
Gold Market and the Interest Rate Trap - 27th Aug 14
Stock Market Staring Into the Great Abyss - 27th Aug 14
A Look at the Coming 30-year Inflation Cycle - 27th Aug 14
Forex Trading - Will USD/CHF Rally Above 0.9200? - 27th Aug 14
Europe’s Depressing Economy Dog Days of Summer - 27th Aug 14
How The Coming Silver Price Bubble Will Develop - 26th Aug 14
A Nation of Shopkeepers - Supply-Side (Voodoo) Economics? - 26th Aug 14
Stock Market Bear Tracks Abound In Wall Street - 26th Aug 14
65,000 U.S. Marines Hold up a Mirror to the Economy - 26th Aug 14
Bitcoin Market Provides Clues for Investors - 26th Aug 14
The Key to Trading Success - 26th Aug 14
Will The US Succeed in Breaking Russia to Maintain Dollar Hegemony?... - 26th Aug 14
Even Mainstream Academia Worried about Massive Bubbles in Markets - 26th Aug 14
Iraq and Syria Follow Lebanon's Precedent - 26th Aug 14
Colonization by Bankruptcy: The High-stakes Chess Match for Argentina - 26th Aug 14
Dow Stock Index On The Cusp - 26th Aug 14
Prohibition Laws and Agency Regulations - 26th Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

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

© 2005-2014 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

Free Report - Financial Markets 2014