View Full Version : The Fiscal Cliff
http://en.wikipedia.org/wiki/United_States_fiscal_cliff
Is anyone worried about the personal repercussions of this, as Mr. Pug and I are?
Obviously, we knew we'd reach this point when Washington passed the ball last year. And I don't see any compromise happening on this now, any more than there was compromise before. A balanced mix of spending cuts and tax management? Not on my watch, mister!
What do you think will happen, and how do you think it will affect you? Do you think it's actually a good thing that Congress will have their hand forced to make such deep and drastic cuts in spending AND let tax cuts expire?
Sorry to skip the election celebration/mourning, not really into it except that some baddies got ousted and some good measures were passed in my community. But this is kind of a big deal to me. Is it to you?
I'm not holding my breath for Congress to all of a sudden set partisan politics aside and do what's right. Spending cuts are great and if they are forced so much the better because it should serve to rattle some cages. But short of closing down the federal government we just can't cut enough from the budget to do it all. Revenue has to come up for progress to be made. If the economy were strong and growing that wouldn't be so hard. In a slow economy the only way to get more revenue is by raising taxes, which unfortunately slows economic growth even further. If its a scenario that is forced by legislation there is some potential good that might come out of it. I figure it at least lets the individual politicians off the hook because their constituents can't hold them responsible for budget cuts. I would personally vote for a whole lot bigger budget cut than .25%, but that's another thread. Long story short? Sometimes it's gonna hurt for a while before you get better.
gimmethesimplelife
11-7-12, 11:51am
I don't know what to make of the fiscal cliff but it's some pretty scary stuff.....I don't have the basic faith that compromises in Washington can be reached, and I wonder fi these peoole get it - a compromise of some kind HAS to be reached, otherwise the credit rating goes down and things get yet more challenging and for no reason other than the egos of follks who don't know what things are like out there for the average person. I just don't have much faith is the nicest way I can put it.
I worry about the unemloyment for many getting shut off in January - scary to me as some people truly don't have much if anything to lose, what kind so drastic acts are such peoople capable of when they have nothing left to lose? And why doesn't Congress get this, really it's basic common sense. This America that we have now really does not work well for many - why can't these people in DC govern with this in mind? Amazing to me that DC can be so oblivioust this, and it sure does not create much faith in someone who can see this. Rob
They could settle in and entrench and send us over the "fiscal cliff".
They could compromise.
What I think will happen will be similar to the bailout - they'll push what the 1% wants under the banner of "we just have to do this now and there is no other option".
If we're talking real world my bet is that they simply pass extension after extension so nothing happens. It's been done before...
ApatheticNoMore
11-7-12, 1:23pm
Yes. I think they'll use it as an excuse to cut Social Security and so on for the younger generation. That will affect me. I'm under 40. I know older people don't care because they've got theirs (why do only the baby boomers get theirs?), but it's fricken unfair you know. I honestly don't know if I will ever retire. I think the compromise we will get from yes this very President will be WORSE than the fiscal cliff. The fiscal cliff is across the board cuts and tax increases. What is probably going to happen is the military will *NOT* be cut, taxes will probalby not be raised, but social security even though it is solvent decades ahead (really) will be put further and further out of our reach (ages raised etc.). I watched the election coverage on t.v. last night, all the stations couldn't wait to talk about how Obama would work with Republicans on the grand bargain. So the guy is just elected and already he's selling out his base.
I don't vote on social security or anything, I vote civil liberties and the environment. But yes it will personally hurt me and means I have to try to save even more to ever retire (even though baby boomers will have it easy). Saving enough to retire would be easier if the medical system wasn't so messed up, oh well they've got you coming and going, no exit.
gimmethesimplelife
11-7-12, 3:18pm
Yes. I think they'll use it as an excuse to cut Social Security and so on for the younger generation. That will affect me. I'm under 40. I know older people don't care because they've got theirs (why do only the baby boomers get theirs?), but it's fricken unfair you know. I honestly don't know if I will ever retire. I think the compromise we will get from yes this very President will be WORSE than the fiscal cliff. The fiscal cliff is across the board cuts and tax increases. What is probably going to happen is the military will *NOT* be cut, taxes will probalby not be raised, but social security even though it is solvent decades ahead (really) will be put further and further out of our reach (ages raised etc.). I watched the election coverage on t.v. last night, all the stations couldn't wait to talk about how Obama would work with Republicans on the grand bargain. So the guy is just elected and already he's selling out his base.
I don't vote on social security or anything, I vote civil liberties and the environment. But yes it will personally hurt me and means I have to try to save even more to ever retire (even though baby boomers will have it easy). Saving enough to retire would be easier if the medical system wasn't so messed up, oh well they've got you coming and going, no exit.I know it's not for everyone, but have you thought of leaving the US to retire early? Something to the south of the US and Spanish speaking maybe? Just an option.....Rob
It IS scary stuff but I don't think it will effect me personally at all. My taxes won't increase because my income (pension & tax deferred investments) is very low already and that won't increase. I won't be getting much in Soc. Sec anyways - even if it IS still there once I'm old enought to collect it 10 -15 years from now - because I have a government pension, and any Soc. Sec amount I do get will be reduced by 3/4ths of what my government pension amount is - which could leave my soc. sec. benefit at $0. I have (or will have soon) a paid for house in a state (Calif) that has a fixed rate for property taxes that can only rise a small amount each year. I can use the VA hospital - assuming it isn't amongst the cuts - for low cost medical care if needed so will not be effected by Obamacare's mandate to purchase what may end up being high cost premiums for many middle income people or cuts to Medicare. Ummm... can't think of any more cuts that will directly effect me but I'm sure there will be many cuts to services I use, libraries, transit, public safety, etc.., that will impact my life for the worse.
ApatheticNoMore
11-7-12, 4:22pm
I know almost noone my age who has a pension. All we have are 401ks (if we are lucky, and employer matches are almost not existent in every single job I have worked, it's all our own money we are saving) and social security. That's the bad news, the good news is the world may end before then.
Yes. I think they'll use it as an excuse to cut Social Security and so on for the younger generation. That will affect me. I'm under 40. I know older people don't care because they've got theirs (why do only the baby boomers get theirs?), but it's fricken unfair you know. I honestly don't know if I will ever retire. I think the compromise we will get from yes this very President will be WORSE than the fiscal cliff. The fiscal cliff is across the board cuts and tax increases. What is probably going to happen is the military will *NOT* be cut, taxes will probalby not be raised, but social security even though it is solvent decades ahead (really) will be put further and further out of our reach (ages raised etc.). I watched the election coverage on t.v. last night, all the stations couldn't wait to talk about how Obama would work with Republicans on the grand bargain. So the guy is just elected and already he's selling out his base.
I don't vote on social security or anything, I vote civil liberties and the environment. But yes it will personally hurt me and means I have to try to save even more to ever retire (even though baby boomers will have it easy). Saving enough to retire would be easier if the medical system wasn't so messed up, oh well they've got you coming and going, no exit.
I care deeply about Social Security and Medicare being available for my young relatives and everyone else, so I keep the heat on my representatives, and I wish everyone else would do the same. Get rid of the $106,000 cap, raise the FICA percentage if necessary, and bring back the "lock box" Al Gore was so roundly lampooned over. What's with all the boomer bashing here lately? I don't get it. Parent issues, maybe. Whatever, I've never done anything to earn your scorn.
And--call me a crazy optimist--I believe we'll come through the storm OK. It's hard to tell the serious threats from Chicken Little noise, but we've got the means to meet any challenge, IMO.
When I picked up my tax return from my accountant a few weeks ago, and mentioned (very tongue-in-cheek!) what a bummer it is to make a decent salary, he said, "Wait until the fiscal cliff" and I said, "What's that?" At that point he looked at me as if I were on another planet.
I really didn't get then (and still don't), what that means. He said it means I pay more taxes. So, what does it really mean?
I think it's a FOX thing. Maybe they mean if the Bush tax cut isn't extended, we'll go back to the not-quite-as-low taxes we paid back then. Big deal.
I really didn't get then (and still don't), what that means. He said it means I pay more taxes. So, what does it really mean?
It means that the Bush-era tax cuts for those earning a lot of money will expire if not renewed, and it will look like a tax increase. Which will be, of course, the end of the world as we know it. Or so it seems if you listen to some people. >8)
Anyway. It would be educational to know what the effects of these things might be on people of different echelons of society, from poverty line to top 0.1%. Not sure where to look for those kinds of guesstimates.
This was interesting: http://www.csmonitor.com/USA/DC-Decoder/2012/1001/How-much-will-your-taxes-go-up-if-US-falls-off-fiscal-cliff-video/ (http://www.csmonitor.com/USA/DC-Decoder/2012/1001/How-much-will-your-taxes-go-up-if-US-falls-off-fiscal-cliff-video/%28page%29/2)
It means that the Bush-era tax cuts for those earning a lot of money will expire if not renewed, and it will look like a tax increase. Which will be, of course, the end of the world as we know it. Or so it seems if you listen to some people. >8)
Anyway. It would be educational to know what the effects of these things might be on people of different echelons of society, from poverty line to top 0.1%. Not sure where to look for those kinds of guesstimates.
The accountant had just presented me with a rather large tax bill when we had that conversation. He noted, "You seem to be taking this well. Some people sit and yell and scream in my office that they can't afford it."
I told him, "If I got stressed out in the face of every financial crisis in my life, I'd be dead by now. It's only money." I don't want to be the person who is yelling and screaming at my accountant because I haven't figured out that if I earn a lot of money, I pay a lot of taxes. Duh. Are these the people in the cars they can't afford and in the homes they can't afford?
Instead, I prefer to Thank God Almighty that I was able to earn this money in the face of a long recession, with an unchanging wonderment that I actually can make this money at an age at which a lot of people are deemed "over the hill."
Give me the work. Give me the tax bill. I am very fortunate.
Catherine, I agree, from one "over the hill" to another. I do hills. I just had to change my sneakers.
I have friends who are firmly in the top 1% who seem very much like you, who I've never heard whine about paying taxes, but they DO stay active in lobbying to make sure their money is spent right. Pressuring lawmakers to close loopholes in social programs, eliminating unnecessary wars, wasteful spending, move certain things to the states, etc. I tend to have a great deal of respect for these people.
I have other folks in my life (relatives mostly) who complain, scream, threaten, and send a never-ending stream of chain emails about how they're going to starve (or whatever) because "Obama's stealing our money." Most are doing extremely well -- several European vacations a year, second and third homes and cars, offshore accounts to hide money, etc. It's very mysterious.
I guess it's all in how you're raised.
I have friends who are firmly in the top 1% who seem very much like you, who I've never heard whine about paying taxes, but they DO stay active in lobbying to make sure their money is spent right. Pressuring lawmakers to close loopholes in social programs, eliminating unnecessary wars, wasteful spending, move certain things to the states, etc. I tend to have a great deal of respect for these people.
Absolutely.. I can do more, and I should do more. Not sure if I'm in the 1%, but still, grassroots efforts are very important no matter where you are.
I care deeply about Social Security and Medicare being available for my young relatives and everyone else, so I keep the heat on my representatives, and I wish everyone else would do the same. Get rid of the $106,000 cap, raise the FICA percentage if necessary, and bring back the "lock box" Al Gore was so roundly lampooned over. What's with all the boomer bashing here lately? I don't get it. Parent issues, maybe. Whatever, I've never done anything to earn your scorn.
And--call me a crazy optimist--I believe we'll come through the storm OK. It's hard to tell the serious threats from Chicken Little noise, but we've got the means to meet any challenge, IMO.
Why are many of the boomers opposed to raising the retirement age a year or 2? Losing the cap and raising FICA %'s all impact those who are in their working years much more than the baby boomers. I'm under 40 and perceive boomers as wanting to pass all the pain on to those who are still working (or their granchildren).
Midwest
I'm 63, my husband is 69, and we are both retired. It is sad that there is so much acrimony between the generations. My husband and I have 5 children between us, and all of them (except for the full time doctoral student) is living much better than we ever did. Their houses, cars, vacations, and spending in general reflect a much higher (financially) standard of living than we experienced. We are thrilled for all of them and they are happy for us...but, I'm not sure why there is so much resentment from others about our being able to retire on Social Security. All of the decisions we made along the way were predicated on getting our social security checks when our time came. To ask us to want to receive less so that future recipients can receive more is unrealistic and unfair. We need to think bigger and more creatively to solve the large problems that our country is facing...but turning one generation against another does nothing but create animosity! We can do this...we just need to work together toward some common goals!
I'm under 40 and perceive boomers as wanting to pass all the pain on to those who are still working (or their granchildren).
Midwest
That's a shame. I've read some great articles by journalists of my generation who are admonishing the Boomers to do what's right by the next generation. Not all of us are stealing the donuts at the AARP conventions. :)
Why are many of the boomers opposed to raising the retirement age a year or 2? Losing the cap and raising FICA %'s all impact those who are in their working years much more than the baby boomers. I'm under 40 and perceive boomers as wanting to pass all the pain on to those who are still working (or their granchildren).
Midwest
In many jobs that get public pensions there have been huge reforms. In Calif, they raised the retirement age for new employees from 55 (50 for public safety workers) to 67 (and 63 for public safety ). They also require a larger contribution towards pensions by the employees (a 7% increase I believe) as well as medical insurance both for current employees and retirees. Lots of other pension reforms as well such as not being able to use time from other public jobs - including military time which I used. I have a Calif public pension I was able to get when I turned 50 (public safety worker) although no medical benefits. So waiting until age 63 to collect that pension would certainly save the state alot of money and probably kept those funds intact for others - something I would have willingly done. I left paid employment 8 years before I was eligible for a pension and funded those years from my savings. If I had to wait until age 63 or 67 to collect a pension (or SoC Sec) and wanted to quit work before hand, I would expect to fund that myself too.
ApatheticNoMore
11-7-12, 6:33pm
Why are many of the boomers opposed to raising the retirement age a year or 2? Losing the cap and raising FICA %'s all impact those who are in their working years much more than the baby boomers. I'm under 40 and perceive boomers as wanting to pass all the pain on to those who are still working (or their granchildren).
that's how I preceive raising the age, I fear people in my generation are really not going to be able to collect until 70 or something. Then why are there people now collecting at 60 something? Why is it ok just to raise the age for younger people but not stop payments to the 60 somethings collecting now? You can raise my FICA if you want, what else am I going to do with the money? Oh put it in the bank at 0% interest? Put it in 401ks that never yield any return (literally I have what I've put in). I don't believe in relying on SS as your only retirement strategy, that's silly, but you know 401ks as your ONLY retirement strategy (no SS and who has a pensions these days) is pretty silly as well, these things haven't even performed well in the years I've had them.
My parents lived better than I ever will. I mostly accept it. They bought a house. I rent. They collect pensions now, I just recently learned that so many people had pensions! Mom retired when she had her second kid at 42 and dad retired at 65, I'll probably work until I can collect medicare at least (65 now but they'll probalby try to raise that as well). Some of them were unionized (dad was), we're not. Their employers paid for them to go to grad school. Younger people try hard to afford public colleges in which they can't get classes. Oh well, I live with it. But now although they could collect SS at 65 or 66, and our age is already at 67-68, there are plans being floated to raise it to 70 for us (but of course they conveniently don't apply to the current retirees). Ugh, enough already!
To ask us to want to receive less so that future recipients can receive more is unrealistic and unfair.
No, to ask future generations to wait until 70 to collect what current generations merrily collect at 60 something is unfair. Period.
We need to think bigger and more creatively to solve the large problems that our country is facing...but turning one generation against another does nothing but create animosity! We can do this...we just need to work together toward some common goals!
Social Security isn't even in that much trouble that we should be having this discussion. But if our politicians want to cut that they will.
flowerseverywhere
11-7-12, 7:06pm
I would willingly (and happily) take a little less ss each month and have lower cost of living increases as the years go by if it would help future generations. I also live very simply to be able to leave money for my children and hopefully help put my grandchildren through higher education. I think many many others who are about to receive or are receiving ss would do so willingly.
The problem is if we take less, will the money go towards helping future generations or be squandered
I don't like that they keep raising the bar to collect. Maybe some 65-year-olds are running marathons, but a lot more are tired and sick at that age--and after paying into the program for thirty or forty years, you shouldn't have to be a couple of years from death to collect.. There's no reason we can't fully fund SS, if we keep the pressure on Congress.
I don't like that they keep raising the bar to collect. Maybe some 65-year-olds are running marathons, but a lot more are tired and sick at that age--and after paying into the program for thirty or forty years, you shouldn't have to be a couple of years from death to collect.. There's no reason we can't fully fund SS, if we keep the pressure on Congress.
Jane:
As an under 40 person, I'm not thrilled with that option either. I'm less thrilled, however, with option B of raising taxes so that I might be able to collect some sort of retirement from social security.
Midwest
I'm 63, my husband is 69, and we are both retired. It is sad that there is so much acrimony between the generations. My husband and I have 5 children between us, and all of them (except for the full time doctoral student) is living much better than we ever did. Their houses, cars, vacations, and spending in general reflect a much higher (financially) standard of living than we experienced. We are thrilled for all of them and they are happy for us...but, I'm not sure why there is so much resentment from others about our being able to retire on Social Security. All of the decisions we made along the way were predicated on getting our social security checks when our time came. To ask us to want to receive less so that future recipients can receive more is unrealistic and unfair. We need to think bigger and more creatively to solve the large problems that our country is facing...but turning one generation against another does nothing but create animosity! We can do this...we just need to work together toward some common goals!
I don't fault you for retiring on social security. I do, however, question the fairness of allowing younger generations to fund your social security at current levels/ages when at some point either the trust fund will be exhausted, their taxes will increase, or the age will go up. I'm willing to sacrifice, those near retirement should too.
Social Security isn't even in that much trouble that we should be having this discussion. But if our politicians want to cut that they will.
Apathetic:
Well said, with the exception of the above. Social security for the under 40 set is in trouble unless we act. The question is do we impact only the under 40 crowd or do we have shared sacrifice? I'm willing (not thrilled but willing)to wait a few more years for social security to help my generations and future generations. Don't understand why 60 year olds should get a pass. Shared sacrifice seems fair to me.
Midwest
It's perplexing to me that the blame for reduced standard of living should lie anywhere but on corporate greed, union busting, and gutless politicians--but I guess if our overlords can get us to fight among themselves, they're home free, so baby boomers--tag, you're it!.
Again, we could remove the FICA cap, adjust contributions (perhaps a progressive adjustment, according to income), and put an absolute ban on "borrowing" from the fund. We're fully funded for thirty years or so, I understand, and then at 75% for some time after that. Thirty years should give us enough time to make the system robust and bulletproof. Or we can just grouse and point fingers, rarely a winning strategy.
60-year-olds will likely still be paying into the system, as you have to be 62 to collect (at a reduced payout).
ETA: There isn't much "shared sacrifice" from the top, so I'd go there first. "Sacrifice" has real meaning to the average retiree, who's living modestly to begin with. But if you think I should pay higher federal income taxes or something to "do my share," I could live with that. After the overlords kick in.
It's perplexing to me that the blame for reduced standard of living should lie anywhere but on corporate greed, union busting, and gutless politicians--but I guess if our overlords can get us to fight among themselves, they're home free, so baby boomers--tag, you're it!.
Again, we could remove the FICA cap, adjust contributions (perhaps a progressive adjustment, according to income), and put an absolute ban on "borrowing" from the fund. We're fully funded for thirty years or so, I understand, and then at 75% for some time after that. Thirty years should give us enough time to make the system robust and bulletproof. Or we can just grouse and point fingers, rarely a winning strategy.
60-year-olds will likely still be paying into the system, as you have to be 62 to collect (at a reduced payout).
Exactly.. The normal 65 age to collect full benefits has moved up, too. I will be 66 before I collect full benefits, but plan to work until 70 to get the maximum benefits.
that's how I preceive raising the age, I fear people in my generation are really not going to be able to collect until 70 or something. Then why are there people now collecting at 60 something? Why is it ok just to raise the age for younger people but not stop payments to the 60 somethings collecting now? You can raise my FICA if you want, what else am I going to do with the money? Oh put it in the bank at 0% interest? Put it in 401ks that never yield any return (literally I have what I've put in). I don't believe in relying on SS as your only retirement strategy, that's silly, but you know 401ks as your ONLY retirement strategy (no SS and who has a pensions these days) is pretty silly as well, these things haven't even performed well in the years I've had them.
My parents lived better than I ever will. I mostly accept it. They bought a house. I rent. They collect pensions now, I just recently learned that so many people had pensions! Mom retired when she had her second kid at 42 and dad retired at 65, I'll probably work until I can collect medicare at least (65 now but they'll probalby try to raise that as well). Some of them were unionized (dad was), we're not. Their employers paid for them to go to grad school. Younger people try hard to afford public colleges in which they can't get classes. Oh well, I live with it. But now although they could collect SS at 65 or 66, and our age is already at 67-68, there are plans being floated to raise it to 70 for us (but of course they conveniently don't apply to the current retirees). Ugh, enough already!
No, to ask future generations to wait until 70 to collect what current generations merrily collect at 60 something is unfair. Period.
Social Security isn't even in that much trouble that we should be having this discussion. But if our politicians want to cut that they will.
I hear your frustration, but it is pretty unrealistic to ask someone who has already retired to unretire and get another job. And, when I left my position I enabled someone from the next generation to step into "my job". Social Security is not the "real" problem...but how the government mispends so much of our money on the war machine is part of the problem. Clean up and simplify the tax code and close some of the obscene deductions before we expect the public to accept that the Social Security System is irreparably broken. This is just my opinion....but, I still regret that we have developed such a rift between the generations!
If you might have caught Boehner's talk, he has a proposition that he claims will offer a long term solution and a start to compromise between the parties over taxes. He sounded like a new and different man willing to compromise. I had to listen to it twice to figure out what he was actually saying. My understanding is that he is proposing some form of tax reform that would reshuffle tax rates and probably some tax cuts. Which would then stimulate growth and increase the tax base. He mentioned the Reagan tax reform of 1986, which some said worked but also probably shifted tax burden on the wealthy to the lower incomes.
To me it sounded like the same economic plan Romney was pushing. My best guess is that nothing has changed and we are in for more bi-partisan gridlock over the budget and taxes.
Here is his talk:
http://video.msnbc.msn.com/nbc-news/49731318#49731318
Why are many of the boomers opposed to raising the retirement age a year or 2? Losing the cap and raising FICA %'s all impact those who are in their working years much more than the baby boomers. I'm under 40 and perceive boomers as wanting to pass all the pain on to those who are still working (or their granchildren).
Midwest
If payouts are based on what you paid in, why have a "retirement age" at all? The cap is arbitrary and silly and serves no purpose beyond protecting high earners. It should go away as long as the cap on payouts goes away at the same time.
Except payouts aren't based on what you paid in. Low income earners tend to get more, and high income earners get much less. The more you put in does not translate to the amount you get out, there's a maximum cap and its not all that high.
Exactly herbgeek. Caps on both sides of the equation need to be removed and payout calculations need to be a function (not necessarily dollar for dollar) of what an individual paid in if this thing is going to remain solvent.
iris lily
11-8-12, 12:12pm
Gregg, while that's all well and good, in the practical world I very much doubt that any low income earner would have much money from SS if we used only what they put in. Even if not dollar for dollar. But the devil is in the details. I suspect that any program that would reduce benefits at the lower level would require YET ANOTHER goobermet program to provide other stuff (money, housing, whatever) to the low earners. But I could be wrong, show me the numbers!
In any even I thought that one easy step toward fixing SS is to means test to receive benefits. Annoying as hell to me, it would be, but that 's the gooberment.
iris lily
11-8-12, 12:13pm
Wall Street is non too happy at the moment. Fiscal Cliff? Same set of clowns in the White House and Congress? Probably a mix of both.
Gregg, while that's all well and good, in the practical world I very much doubt that any low income earner would have much money from SS if we used only what they put in. Even if not dollar for dollar. But the devil is in the details. I suspect that any program that would reduce benefits at the lower level would require YET ANOTHER goobermet program to provide other stuff (money, housing, whatever) to the low earners. But I could be wrong, show me the numbers!
In any even I thought that one easy step toward fixing SS is to means test to receive benefits. Annoying as hell to me, it would be, but that 's the gooberment.
We are in agreement regarding yet another failing government program. I don't understand why giving the government more money for social security is a good idea given their track record with what they've been given.
On the means testing, social security is already heavily weighted towards low earners. Wouldn't means testing further increase this? Even worse, wouldn't it reduce the incentive to save and further increase dependence on social security?
To those already retired, realistically I don't see your current benefits being reduced and as a practical matter don't know that they should be. For those that are about to retire, however, I would have no empathy if they were forced to work a year or 2 longer.
Finally, we can blame wars, taxing policies, evil corps etc. None of that matters. This country is 16 trillion in debt and growing. Everyone is going to need to kick in and seniors shouldn't be totally exempted.
.
Finally, we can blame wars, taxing policies, evil corps etc. None of that matters. This country is 16 trillion in debt and growing. Everyone is going to need to kick in and seniors shouldn't be totally exempted.
Actually, we shouldn't blame any of those things. Social Security is supposed to be self-sustaining, outside the normal tax & spend function of government.
The Storyteller
11-8-12, 1:32pm
If you might have caught Boehner's talk, he has a proposition that he claims will offer a long term solution and a start to compromise between the parties over taxes. He sounded like a new and different man willing to compromise.
Sounded to me like he was regurgitating some of Romney's stump speech. We'll grow our way out and eliminate a bunch of exemptions. Guess he didn't hear that argument lost Tuesday night.
But that could just be code for, "I'm willing to work with you, but this is what I have to say."
Actually, we shouldn't blame any of those things. Social Security is supposed to be self-sustaining, outside the normal tax & spend function of government.
Unfortunately, things don't always work the way they are supposed to. I believe this would be one of those cases. Not defending the right or the wrong of the situation, but we this is where we are.
For those that are about to retire, however, I would have no empathy if they were forced to work a year or 2 longer
I have a feeling you might feel differently when you are 62.
ApatheticNoMore
11-8-12, 2:33pm
Actually social security is for the most part sustaining (given current assumptions blah blah). I'm worried that corrupt politicians (but I repeat myself) are going to use the fiscal cliff as an EXCUSE to cut programs like Social Security and Medicare. The other things we are sold as ways to save for retirement are clearly not dependable. 401ks and Roth IRAs are supposed to be rock hard retirement plans, you have got to be kidding me.
Actually social security is for the most part sustaining (given current assumptions blah blah). I'm worried that corrupt politicians (but I repeat myself) are going to use the fiscal cliff as an EXCUSE to cut programs like Social Security and Medicare. The other things we are sold as ways to save for retirement are clearly not dependable. 401ks and Roth IRAs are supposed to be rock hard retirement plans, you have got to be kidding me.
This is definitely going to be another "we have to do what we've decided to put on the table now, ram it down your throat, maybe we can fix it later" moment. The media has been hammering "fiscal cliff" and "we have to avoid this at any cost" into people's brains for months - when actually what it is is a (one of the only) bipartisan agreements of spending cuts and tax increases to put us on a more fiscally responsible footing. Apparently that is just too radical a plan to implement.
It's ironic that the main reason they are all going to work together is to abort a plan they all agreed to.
This morning Boener said he has a plan to delay the "fiscal cliff' (i.e. keep the tax cuts, etc...), but Reid said "nope" won't happen. I doubt he is correct and, as Gregg said above, they will probably end up having delay after delay after delay until 2016! I fully support both increasing taxes - or at least ending the Bush-era cuts - as well as big budget cuts and over hauling the military and alot of entitlement programs to make them more financial viable and accountable to preserve Soc. Sec, medicare, pay off the Nat debt, etc...
I agree with Spartana -- in terms of what i support too.
The Storyteller
11-9-12, 8:34pm
This is not getting kicked down the road. Obama is in too strong a position to let that happen. It is his strongest chip to play, along with the tax cut for those making less than $250k. I am certain he will make some compromises, but he will not let go of his strongest positions. That is the only way he is going to get the House to work with him.
I think what Beohner is proposing is basically the Romney plan. Cut taxes, close loopholes, and hope for the resulting economic growth to increase the tax base. I guess we will learn more. He cloaked it in compromise and a new attitude, but he seems to have put his foot down on any tax increase or allowing any Bush tax cuts to expire.
It seems to me like the gridlock has the Republicans over a barrel. If the Bush tax cuts are allowed to expire, no only will Obama's request for allowing these to expire for the upper two rates be met, but they will also expire for everyone. Which would be unfortunate.
Obama has the gas pedal if he has the guts. If the Republicans won't compromise let the Bush tax cuts expire and let them get all of the blame for rising taxes on the middle class.
I hope Obama has more guts in his second term. He has nothing to lose.
Wall Street is non too happy at the moment. Fiscal Cliff? Same set of clowns in the White House and Congress? Probably a mix of both.
And the same set of clowns on Wall Street. They're not happy you say? Oh no ...
you shouldn't have to be a couple of years from death to collect..
i think thats the whole point of social security, its not supposed to be something you live another thirty years on. compare life expectancy when it was created to retirement age. LE has gone up, so should SS.
The Storyteller
11-10-12, 12:06pm
i think thats the whole point of social security, its not supposed to be something you live another thirty years on. compare life expectancy when it was created to retirement age. LE has gone up, so should SS.
People are living slightly longer than when social security's began, but not by all that much. Better child survival rate has contributed a great deal to the longer life expectancy. One of my surprises when I began studying my family history was just how long my family in the 1700s and even 1600s lived. I thought they were supposed to keel over in their 40s or 50s, but most of them lived into their 70s and even 80s.
It was that so many people died so unfortunately young than folks not living long once they reached adulthood that contributed to low life expectancy.
I'm guessing with so many health problems attributable to the modern diet and lifestyle, though, the actual length older folks live will begin to shrink in the coming years.
The Storyteller
11-10-12, 12:12pm
I'm wondering how much pressure the primary GOP constituencies will begin to put on House Republicans as the deadline nears. I doubt many CEOs and corporate board types would stomach another GOP-caused recession. My guess is they have a great deal more influence than the Tea Partiers.
Better a few more points added to your tax rate than massive business losses, I should think.
i think thats the whole point of social security, its not supposed to be something you live another thirty years on. compare life expectancy when it was created to retirement age. LE has gone up, so should SS.
One of the simplest solutions to the SS shortfalls would probably be to push back the age of eligibility. But, I wonder how many hard working folks in the mainstream of typical jobs are just plum tuckered out at age 65, is spite of their eventual longevity.
SS was never intended to be a full retirement plan but an aid to the poor and a supplement to other workers. It and Medicare seem like a pretty decent benefit of living in one of the wealthiest nations on the planet. It may be coming down to the simple math of "you can't have your cake and eat it too". Paul Krugman said that one fourth of the Bush tax cuts would be enough to make SS solvent into the next century.
I wonder where the majority of Americans stand if you put it into the basic choice of paying a little more tax or reducing the benefits, without all the political rhetoric.
One of the simplest solutions to the SS shortfalls would probably be to push back the age of eligibility. I wonder how many hard working folks in the mainstream of typical jobs are just plum tuckered out at age 65, is spite of their eventual longevity.
Maybe - although I think the biggest problem is much of the SS fund is sitting in a pile of IOU's. How do those get converted back to cash without taking the money from somewhere? If they up the eligibility age without changing this don't we just end up with a bigger pile of IOU's that they have to convert back to cash in the future?
Gregg, while that's all well and good, in the practical world I very much doubt that any low income earner would have much money from SS if we used only what they put in. Even if not dollar for dollar. But the devil is in the details. I suspect that any program that would reduce benefits at the lower level would require YET ANOTHER goobermet program to provide other stuff (money, housing, whatever) to the low earners. But I could be wrong, show me the numbers!
In any even I thought that one easy step toward fixing SS is to means test to receive benefits. Annoying as hell to me, it would be, but that 's the gooberment.
Since it is suppose to be a social benefit or entitlement, why not treat it as such and make it a true socialist payout - a flat rate for everyone irregardless of how much you paid into it. That means Donald Trump will get the same $1,000/month as poor impoverished widow Brown who has no other source of income. My understanding from a New Deal perspective was that was the intent of SS in the first place. Something for the poor and elderly (and near death at age 65 back almost a century ago when few people made it into their 70's or 80's) who were unable to work any longer and had no other resources. It has changed to become a "pension plan" for all irregardless of their income when at retirement age.
"The Social Security Act was drafted under FDR's first term, passed Congress as part of the New Deal, and was signed by FDR on August 14, 1935. The Act responded to the pitfalls of old age, poverty, unemployment, and dependent widows and fatherless children by providing benefits to retirees and the unemployed, as well as a lump-sum at death."
awakenedsoul
11-14-12, 1:36pm
I think raising the age makes sense. People are living so much longer now than they did back when it was designed. I am fine with living off my savings as I get older and having SS as a supplement when I'm say, 75.
People are living slightly longer than when social security's began, but not by all that much. .
I just looked it up online and it said that in 1934, when the SS Act was established, that the life expectancy for men was 53.5 and 63 for women. Based on that (assuming it's correct) then most people died befiore they could ever even collect SS.
SS was never intended to be a full retirement plan but an aid to the poor and a supplement to other workers. It and Medicare seem like a pretty decent benefit of living in one of the wealthiest nations on the planet.
I wonder where the majority of Americans stand if you put it into the basic choice of paying a little more tax or reducing the benefits, without all the political rhetoric.
I agree. I look at SS the same as I other public programs, including our free public education system - something everyone is taxed for even if you don't ever use it or need it. I don't any see middle-income or wealthy parents stepping up to pay extra into the public education system their kids use for free for almost 18 years. Yet many childless people who will never use it pay into the system. I don't have kids but pay for public education willingly as I see that education is a positive for everyone. So maybe if more people who paid into the SS system looked at in the vein of "helping those in need" rather than as a personal pension plan with an expectation that they should get back everything they put into it, then there wouldn't be such a burden on the system.
Life expectancy rates include people dying in childhood--which was very common a century or two ago. My ancestors mostly lived long lives; my great-grandfather died at ninety. 65 is fair. People shouldn't have to pay into a fund for 30 or 40 or 50 years so they can collect for five. Get rid of the cap: people who make $106,000 in an hour or a day or a week should have to pungle up all year long just like the rest of us do or did. Make rates progressive too. Billionaires surely won't miss the extra pittance they'll pay so old people won't be reduced to working until they drop. Social Security should be inviolate, as Al Gore famously reminded us. It's not part of the budget, and shouldn't be held hostage.
The Storyteller
11-14-12, 2:14pm
I just looked it up online and it said that in 1934, when the SS Act was established, that the life expectancy for men was 53.5 and 63 for women. Based on that (assuming it's correct) then most people died befiore they could ever even collect SS.
What Jane said. Infant and child mortality are averaged into life expectancy, and a lot of children died young back then. Especially during a depression.
In all my research, I found very few of my ancestors who did not live into their 70s and 80s, going all the way back to the 1600s.
The Storyteller
11-14-12, 2:15pm
Social Security should be inviolate, as Al Gore famously reminded us. It's not part of the budget, and shouldn't be held hostage.
Put it in a Lock Box.
ApatheticNoMore
11-14-12, 2:17pm
One of the simplest solutions to the SS shortfalls would probably be to push back the age of eligibility. But, I wonder how many hard working folks in the mainstream of typical jobs are just plum tuckered out at age 65, is spite of their eventual longevity.
I want to ask the people that say this, have you ever held a real job? Because I've worked 4 professional jobs at this point and THERE ARE NO OLD PEOPLE THERE. The average age is often 30 something. There's not that many people over 50. And over 60, forget about it! So where are the role models we as 30 somethings or 40 somethings or 20 somethings are supposed to have of staying in the workforce for a long time? Where are they? What are we supposed to do? Why are we supposed to believe anyone would hire us up until age 70 even if we *wanted* to work? We could be Walmart greeters at that age, well maybe if Walmart is still around then we could be Walmart greeters, but much else? Self-employment, yes that's possible, is every 60 something after a lifetime in the workforce really cut out for self-employment?
The Storyteller
11-14-12, 2:18pm
I want to ask the people that say this, have you ever held a real job? Because I've worked 4 professional jobs at this point and THERE ARE NO OLD PEOPLE THERE. The average age is often 30 something. There's not that many people over 50. And over 60, forget about it!
Age discrimination is real.
I want to ask the people that say this, have you ever held a real job? Because I've worked 4 professional jobs at this point and THERE ARE NO OLD PEOPLE THERE.
I worked jobs involving physical labor many years before landing a cushy desk job. People whose skills land in skilled or unskilled manual labor are typically not able to work in their profession into the senior years without some sort of significant physical damage. With the desk jobs, it's brain burnout or other things. With manual labor it comes down to body parts unable to cooperate. Yeah, I guess they can do the Walmart greater thing as I think Walmart has a higher probability of surviving into the future as SS. I actually wonder how many young people and people with desk jobs have done hard physical work, as I think anymore it's mostly done by recent immigrants.
Yeah, utility lineworkers should still be climbing poles, waitstaff should be toting heavy trays, janitors should be stooping and lifting, roofers should be sweating and struggling on rooftops well into their sixties and beyond. Damn takers.
Look--in my long life, we've fought a number of expensive wars--expensive in tax dollars and more importantly in cost in lives and limbs--and not a damn one of them was worth fighting. (Grenada, anyone?) I've personally given up thousands and thousands of dollars to support these wars, much against my will and my principles so that those who would wage war for sport and greed and impulses of imperial derring-do can do so unfettered. I would have preferred--by an infinite factor--to be spending my tax dollars to support the old and needy, rebuild infrastructure, heal the environment, strengthen the safety net, and to help pick up the pieces of the young who are used for cannon fodder in these wars. But I wasn't given an option. I say we return the favor and change the tide.
If Social Security doesn't survive, it's because the collective we sat on our hands instead of keeping constant pressure on our representatives in Congress. What sane person wants to turn their life savings over to Enron-type players who laugh over making a bad bet and sticking it to widows and orphans. A disaster in the making.
sweetana3
11-14-12, 2:55pm
ps: Many Walmarts have gotten rid of greeters and the others have gotten younger.
flowerseverywhere
11-14-12, 3:32pm
[QUOTE=ApatheticNoMore;112519]I want to ask the people that say this, have you ever held a real job? Because I've worked 4 professional jobs at this point and THERE ARE NO OLD PEOPLE THERE. The average age is often 30 something. There's not that many people over 50. And over 60, forget about it! QUOTE]
I worked as a nurse for my real job. It was physically demanding, and you had to be on your toes in order not to kill anyone, as well as work every other weekend and holidays as well as shiftwork. If you were lucky you found a weekday job, but they don't pay nearly as well.
I made it to 52 years old then took a much lower paying job, several of my friends lasted longer. But unless I worked nights on a ward where almost everyone slept I surely could not have done it when I was 68 years old.
My friend who worked in a factory had a lot of health issues from spending his life lifting, standing on cold floors and being in a factory that was very cold in the winter and very hot in the summer. A lot of his coworkers has respiratory issues from years of exposure.
But I don't feel it is right to take it away from younger people. The sacrifice should be across the board. Current retirees have lower COL's each year, nearly retired get a little less etc. And I haven't started to collect but if I knew I was going to take say 10% less to start with and less increases I have time to plan.
The Storyteller
11-14-12, 4:02pm
Yeah, utility lineworkers should still be climbing poles, waitstaff should be toting heavy trays, janitors should be stooping and lifting, roofers should be sweating and struggling on rooftops well into their sixties and beyond. Damn takers.
Look--in my long life, we've fought a number of expensive wars--expensive in tax dollars and more importantly in cost in lives and limbs--and not a damn one of them was worth fighting. (Grenada, anyone?) I've personally given up thousands and thousands of dollars to support these wars, much against my will and my principles so that those who would wage war for sport and greed and impulses of imperial derring-do can do so unfettered. I would have preferred--by an infinite factor--to be spending my tax dollars to support the old and needy, rebuild infrastructure, heal the environment, strengthen the safety net, and to help pick up the pieces of the young who are used for cannon fodder in these wars. But I wasn't given an option. I say we return the favor and change the tide.
If Social Security doesn't survive, it's because the collective we sat on our hands instead of keeping constant pressure on our representatives in Congress. What sane person wants to turn their life savings over to Enron-type players who laugh over making a bad bet and sticking it to widows and orphans. A disaster in the making.
VERY well said.
[QUOTE=ApatheticNoMore;112519]I want to ask the people that say this, have you ever held a real job? Because I've worked 4 professional jobs at this point and THERE ARE NO OLD PEOPLE THERE. The average age is often 30 something. There's not that many people over 50. And over 60, forget about it! QUOTE]
I worked as a nurse for my real job. It was physically demanding, and you had to be on your toes in order not to kill anyone, as well as work every other weekend and holidays as well as shiftwork. If you were lucky you found a weekday job, but they don't pay nearly as well.
I made it to 52 years old then took a much lower paying job, several of my friends lasted longer. But unless I worked nights on a ward where almost everyone slept I surely could not have done it when I was 68 years old.
My friend who worked in a factory had a lot of health issues from spending his life lifting, standing on cold floors and being in a factory that was very cold in the winter and very hot in the summer. A lot of his coworkers has respiratory issues from years of exposure.
But I don't feel it is right to take it away from younger people. The sacrifice should be across the board. Current retirees have lower COL's each year, nearly retired get a little less etc. And I haven't started to collect but if I knew I was going to take say 10% less to start with and less increases I have time to plan.
Who wants to take it away from younger people? Don't we all have friends and family we care about who are younger? How about if we quit talking about taking even more from the hard-working middle class and poor and concentrate on getting rid of loopholes that allow the "makers" to hide monies off shore, to benefit hugely from exporting jobs, and to bask in the reflected glow of their 15% tax rates. Do we really think the Mitt Romneys of the world are somehow worth more than competent nurses are and should be given all kinds of special perks along with their silver spoons and 20/20 blind trusts? "Shared sacrifice" seems to mean "the bottom tier fighting over scraps."
Again--to keep the social safety net strong, you have to take action and keep the heat on.
So, not to reanimate this thread (although I am) but....is there anything we can do as SLNers to feel more safe, in case there are disruptions, a big scare, whatever? Anything other than the things we usually do, like
reducing debt
becoming more self-sufficient
marshaling resources
etc?
I'm considering looking for a part-time job that I know might actually GROW if things become more insecure in my community. Just in case. The local locksmith-and-security guy is hiring.
Paranoid? Yes, I suppose a little.
ApatheticNoMore
11-19-12, 3:51pm
save more for retirement :) that's about what I think of, though I'm very not ok with those programs being cut *if* they try to propose that (remember SS technically not included in fiscal cliff though Medicare is) - because really as if everyone is in such a financial position and as if retirement savings are so secure.
At least from the news sources I get, this seems to be more about taxes than spending as the main crux of things. The Obama crowd is demanding tax increases for the wealthy and the Republican crown seems to want some sort of caps on deductions and closing some loopholes...so called raising revenue. As far as I can tell without making a study of it these get to the same basic place, though not identical. Are they just haggling over terminology and details or am I missing something.
At least from the news sources I get, this seems to be more about taxes than spending as the main crux of things. The Obama crowd is demanding tax increases for the wealthy and the Republican crown seems to want some sort of caps on deductions and closing some loopholes...so called raising revenue. As far as I can tell without making a study of it these get to the same basic place, though not identical. Are they just haggling over terminology and details or am I missing something.
While there's a lot of bravado about cutting spending and entitlements, the end result is all this spending ends up in some business's pockets. I can't imagine there isn't a furious amount of lobbying going on right now and watching who is trying to cut whose purse strings. On the tax thing I expect there will be a lot "shared pain, we have to do this", followed by last minute rescinding the "pain" for a select few (i.e., not the middle class).
ApatheticNoMore
11-29-12, 1:26pm
I think that's because that some spending cuts will happen is already agreed to so that is how it is being framed. It is very difficult to figure out what they actually plan to cut though, to figure out what they plan to do period! I suspect it's a bargain rather than go over the fiscal cliff but what are the details (you know even just in broad outline of it). Whatever they plan to pass shouldn't we the people kind of be clear on what it is? Isn't that beyond partisanship even, and just good government?
So as to probably guess of what will happen here is Nancy Pelosi:
http://www.npr.org/blogs/thetwo-way/2012/11/28/166088778/pelosi-the-fiscal-cliff-debate-is-a-clear-one-the-people-have-spoken
"Robert asked Pelosi if Democrats were willing to cut entitlements, which make up a large percentage of the budget.
She said that Democrats had already proposed more than $1 trillion in cuts."
So there will definitely be cuts if 1 trillion in cuts have been proposed. By the way she is of course being evasive here, she is asked if entitlements will be cut and she says there will be 1 trillion in cuts. That doesn't answer the question, entitlements in U.S. political discourse has a very specific meaning, mostly medicare and social security, the military is not an entitlement for instance.
"Rep. Nancy Pelosi, the Democratic minority leader in the House, says she's optimistic that Democrats and Republicans will reach a deal that would avoid triggering a wide array of tax increases and spending cuts scheduled to take effect in the new year and that experts say could send the economy into a recession.
"We were there last summer," she said in an interview with All Things Considered's Robert Siegel this afternoon. "The president agreed to a grand bargain that would reduce the deficit by $4 trillion."
This is actually the exact point of fact that people who worry about Social Security and Medicare are worried about: The Grand Bargain.
"Among the programs that could be targeted for substantial cuts in a grand bargain are the so-called entitlement programs: Medicare, Medicaid and Social Security."
http://uspolitics.about.com/od/thefederalbudget/a/What-Is-The-Grand-Bargain.htm
They only argue about taxes because they agree on cutting entitlements. Do most poeple know that? Social Security by the way (but not medicare) is very explicitly absolutely excluded from the fiscal cliff, it won't be cut if we go over the cliff because it's not even part of the current deficit. But it may be part of the Grand Bargain. How is this bargain a good idea again?
Last I heard (this morning) was that Soc. Sec., Medicare, the VA , and one other thing I forgot were not going to be touched. Don't know if that's true or not. I get a small disability payment from the VA and can use their hospitals free or for low cost and they said that there wouldn't be any cuts at all - and that Obamacare wouldn't effect disabled veterans access to medical care. Hope that's true but if not I'll survive without the extra moolah or if I have to pay more for medical. That won't be the case for other veterans who have more severe injuries and can't work and depend solely on their VA benefits. But SS is another matter. I won't get any - or not much because I have a government pension - but I can't imagine how many low income seniors can survive without it. There are alot of women 65 and older who were stay-at-home wifes and mothers who got divorced or widowed late in life and never had a high paying job who depend completely on SS benefits and medicare.
dado potato
11-29-12, 7:30pm
I imagine that there will be more baiting and blaming between Republican and Democratic leaders. I am not optimistic that a deal will be reached before January 1. So I expect that "Bush" tax cuts will go into the dustbin. Further, I expect no cuts to Social Security or Medicare will be agreed to before January 1.
Treasury Secretary Geithner has the authority to issue regulations on tax withholding for the IRS. If there isn't a grand compromise on the deficit, and tax rates go up as required by the existing legislation, Geithner can (and I think he will) leave withholding schedules unchanged "pending" an eventual resolution by Congress.
Then in February or March The federal debt ceiling will need to be raised, and I expect that again, Republicans in Congress will say, "not until we see the plan to cut entitlements". I expect the game of chicken on the debt ceiling to be repeated, up to the point where again the Secretary of the Treasury will do some unprecedented things to avoid default on US Treaury debt. Oh, it will be scary. The American public, whose attitudes are already fairly accurately known due to polling, will be urged to Tweet, and tell the Congress what their fears are.
Meanwhile the recession in the US that began in July of 2012 will be recognized. Employment growth will become feeble and then morph into some months of rising unemployment. The expected "economic hell" will present Republicans and Democrats with ample opportunities to play a blaming game.
And I bet I will be paying higher taxes (not being subject to withholding).
Well, it's actually pretty clear what we need to do, but of course everyone needs to 'play the game' and satisfy, or appear to satisfy their base.
Obama has opened with a bid, and now the republicans need to come back with a counter bid, and on and on until they reach an agreement, hopefully within the next few weeks. Isn't this how it works?
In my opinion, we need a mix of spending cuts and tax hikes. The Bush tax cuts need to expire, for everyone, and maybe 'half again' replaced for the middle class. In other words, no tax breaks for the uber wealthy and only some for the rest of us. If we are truly serious about fixing these problems, then everyone needs to know they are in this together. But that this isn't a time to totally crash the economy. We need to keep the safety nets in place..we just do, period. No way are we, the richest nation on earth, going to let our elderly go hungry or without medical care.
And of course we need spending cuts, but cuts alone won't do it, and I think everyone knows this. So a mixed approach is best.
I don't' mind paying a bit more in taxes as long as I know we are doing reasonable effort towards fixing our problems. I like my country, and I like what it stands for and how it is ordered, mostly. I also understand that stuff costs. Services cost, safety nets cost. Roads, and libraries, and police and fire protection, and food, air and water safety costs. And costs go up. Not just actual 'this costs more' realities, but the fact that our population has increased, so not only does it cost more, but there are more to provide for. People who keep saying 'oh, but we only spent this much in 1905' do not live in a reality based world. Or have the inability to think critically.
I like living in this country. And I know that in order to have the comfort and security and opportunities this country offers, I need to pay. It's the price of admission.
I think the fiscal cliff is a forgone conclusion as the "balanced approach" our President has said he favors will never happen. Several times in my memory we've had the promise of future cuts in exchange for tax increases now. Those cuts have never materialized before and I don't think this time is any different.
Without significant cuts in spending, no administration will be able to staunch the flow of public monies while limiting tax increases to "the rich". The Middle Class is where the real money's at and I believe we'll purposely hit the cliff in order to ensure that the government gets it.
I think the fiscal cliff is a forgone conclusion as the "balanced approach" our President has said he favors will never happen. Several times in my memory we've had the promise of future cuts in exchange for tax increases now. Those cuts have never materialized before and I don't think this time is any different.
Without significant cuts in spending, no administration will be able to staunch the flow of public monies while limiting tax increases to "the rich". The Middle Class is where the real money's at and I believe we'll purposely hit the cliff in order to ensure that the government gets it.
The "fiscal cliff" is a combination of tax increase and spending cuts. Given that at this point in time kicking the can down the road again is the less painful route in the short term, I don't expect more than a big game of chicken followed up with a few more short term band-aids.
I think that what no one is willing to admit is we went over the cliff several years ago - the bubble last decade masked it until the crash, since the crash the amount of debt and government spending required just to keep things going shows that we aren't going back. Any "fix" is going to look a lot more than what is going on in Greece, only there is no one big enough to prop us up.
The Storyteller
11-30-12, 12:11pm
At least from the news sources I get, this seems to be more about taxes than spending as the main crux of things. The Obama crowd is demanding tax increases for the wealthy and the Republican crown seems to want some sort of caps on deductions and closing some loopholes...so called raising revenue. As far as I can tell without making a study of it these get to the same basic place, though not identical. Are they just haggling over terminology and details or am I missing something.
Closing loopholes affects everyone, if you close enough to make a difference. One of the loopholes they want to close is the mortgage interest deduction. That would disproportionately affect the middle class.
I think raising the rates on rich folks, plus closing some of the loopholes would be most helpful. To be on the fair side, there also needs to be spending cuts, although I think that should be done through making things more efficient rather than cutting benefits.
I also don't think they are raising rates on the wealthy nearly enough, but there ya go.
The Storyteller
11-30-12, 12:13pm
The "fiscal cliff" is a combination of tax increase and spending cuts. Given that at this point in time kicking the can down the road again is the less painful route in the short term, I don't expect more than a big game of chicken followed up with a few more short term band-aids.
Not me. Obama holds the ace. He can just let the tax cuts expire, then push to have some (but not all) reinstated. He isn't likely to give up his ace.
The Storyteller
11-30-12, 12:15pm
In my opinion, we need a mix of spending cuts and tax hikes. The Bush tax cuts need to expire, for everyone, and maybe 'half again' replaced for the middle class.
That would kill the economy.
Not me. Obama holds the ace. He can just let the tax cuts expire, then push to have some (but not all) reinstated. He isn't likely to give up his ace.
But there's the spending cuts piece as well - while the defense spending cut (the only really positive piece of the fiscal cliff) will likely get rescinded almost immediately, the House can just sit on the rest.
That would kill the economy.
So will the spending cuts.
That would kill the economy.
I don't think it would. Truth is, we do need a combination of spending cuts and tax hikes, but I don't think eliminating the Bush tax cuts for the wealthy alone would do it. If we are serious about this, let's be serious about it. Eliminating the Bush tax cuts for the wealthy, and half of them for the middle class would, I think, not only help avoid the cliff, but also give the right perception and confidence we need to go forward. To be truthful, taxes would only go up a little on those of us who can afford it to go up a little. I do believe that seeing the super wealthy pay their fair share would help the middle class take their spoonful of medicine too.
I think most people know that we all need to pay to play, so to speak, and that the country does need our taxes to run in the way we want it to run..i.e. all the services and comforts and safety we enjoy now. I think where the anger comes in is when we see the Walmart heir (or Mitt Romney) paying 9 or 10%, or less, where the working stiff is paying 15% or 20%. And we see that they are actively working to eliminate capitol gains tax altogether! As well as estate tax! That's where the anger is.
Eliminate that unfairness and people's confidence will rise tremendously. And when the population's confidence rises, so does their spending, and that is how you drive an economy. The middle class working and building and buying, and growing. The Walmart heirs didn't get rich selling their plastic crap to each other or their wealthy friends. They need us, the vast middle class, to stuff our carts full of this junk. And they need to start paying their employees a decent wage along with health benefits so we the people can stop supporting their workers with food stamps and medicaid. But I digress....>8)
The Storyteller
11-30-12, 3:16pm
I don't think it would.
And economists disagree with you.
The Storyteller
11-30-12, 3:17pm
So will the spending cuts.
Depends on the cuts.
I had thought that maybe the President might see the "raising revenue" Republican talk as a possible compromise. At least as of his talks today he has been firm on not accepting anything without tax hikes for the wealthy. My take is that he is trying to re-establish himself as a strong leader after being accused of caving to the Republicans on other issues (plus I think Romney really torked him off in the first debate). If the bus goes off the cliff he can blame he can blame the Republicans. Sort of a win-win politically.
I've always thought that one or the other would give and most of the Bush tax cuts would survive by the end of the year, but now I'm not sure. I think it's going to get ugly.
At this point, I expect all tax rates to rise across the board, there simply aren't enough "millionaires and billionaires" to make a difference, and individual tax liabilities to increase even more by eliminating many of the middle class deductions such as mortgage interest. I would also expect spending to increase proportionally, to the point that this time next year there will be talk of nationalizing personal retirement accounts with the promise of a governmental annuity during your retirement years.
Or maybe I'm off by a year or two.
Depends on the cuts.
Well, it depends if the cuts are used to reduce deficit spending. If so, the immediate effect is just $x billion less dollars in the economy.
I think it's going to get ugly.
Me too. This board more than most places should understand some of the fallout of living beyond your means. You're not going reign in spending and cut down the debt incurred on the rest and maintain the same lifestyle you have. And I think that applies to national economies as well as household economies.
This board more than most places should understand some of the fallout of living beyond your means. You're not going reign in spending and cut down the debt incurred on the rest and maintain the same lifestyle you have. And I think that applies to national economies as well as household economies.
I'm hardly an economist, and I don't think that the economists even know for sure. But Klugman and Stiglitz, who are pretty famous guys and Nobel prize winners, say that austerity measures in a poor economy can also compound the problems. There is probably a cost cutting measure that is the right balance without cutting too deep. Hopefully our government genius folk, which may exclude some members of Congress, can get a good take on things. Sometimes what seems like common good logic for running a household may not hold for national economies.
“Austerity is an experiment that has been tried before with the same results,” Stiglitz said today in a speech in Copenhagen. Cutting budgets in low-growth cycles leads to higher unemployment and hampers recovery, he said.
http://www.bloomberg.com/news/2011-05-13/nobel-winner-stiglitz-warns-job-killing-austerity-measures-hurt-economies.html
Sometimes what seems like common good logic for running a household may not hold for national economies.
Oh, I don't know. It seems to me that living beyond your means is never a good thing, regardless of scale.
I care deeply about Social Security and Medicare being available for my young relatives and everyone else, so I keep the heat on my representatives, and I wish everyone else would do the same. Get rid of the $106,000 cap, raise the FICA percentage if necessary, and bring back the "lock box" Al Gore was so roundly lampooned over. What's with all the boomer bashing here lately? I don't get it. Parent issues, maybe. Whatever, I've never done anything to earn your scorn.
And--call me a crazy optimist--I believe we'll come through the storm OK. It's hard to tell the serious threats from Chicken Little noise, but we've got the means to meet any challenge, IMO.
Plus 1. Had a conversation with some baby boomer friends just this afternoon touching on every point you make. They don't "have it easy." We were all plotting how to (slowly and painfully) storm the ramparts on behalf of those behind us.
Closing loopholes affects everyone, if you close enough to make a difference. One of the loopholes they want to close is the mortgage interest deduction. That would disproportionately affect the middle class.
"Loopholes" in general are forms of subsidy. The mortgage interest deduction directly subsidizes home builders, realtors and everyone's favorite, mortgage bankers. Those three groups have a lot of members with a lot of money and have purchased very powerful lobbying positions with their cash. They have a vested interest in keeping the 'American dream' of homeownership for everyone alive even though all kinds of data seems to support an optimum level of homeownership somewhere around 28% to 30%.
Other big loopholes are there for food production (big ag), big oil, utilities, healthcare, manufacturing, etc. In the long term eliminating them is probably in our best interest, but doing so would mean that relatively small tax increases are the least of the problem for the middle class because any increase in costs of doing business will be passed directly right through to consumers. Closing loopholes may end corporate welfare, but costs and revenue are parallel lines in corproate America; if one moves, the other follows. Consumers will either continue to support industry indirectly through subsidy via tax dollars (in addition to directly with their purchases) or they will fully support it by paying higher prices. Just like our government, the one option that is not attractive to the consumer class is cutting back. Whatever "it" is, we still want a lot of it, we want it now and we want it cheap. I don't see that changing.
Consumers will either continue to support industry indirectly through subsidy via tax dollars (in addition to directly with their purchases) or they will fully support it by paying higher prices.
Here's a vote for higher prices over subsidies. I can choose whether or not to buy a product - I have no choice when it's subsidized.
Here's a vote for higher prices over subsidies. I can choose whether or not to buy a product - I have no choice when it's subsidized.
I vote the same way, for exactly the same reason.
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