OFF THE CLIFF!

[dbacks fan]

It's just a market correction, down almost 10% in the last  month is nothing, TTAC  says so, so it must be true. 

[nathanm]

Not sure where you get your numbers but the SBA must be wrong.
Fully 99 percent of all independent enterprises in the country employ fewer than 500 people. These small enterprises account for 52 percent of all U.S. workers, according to the U.S. Small Business Administration (SBA). Some 19.6 million Americans work for companies employing fewer than 20 workers, 18.4 million work for firms employing between 20 and 99 workers, and 14.6 million work for firms with 100 to 499 workers. By contrast, 47.7 million Americans work for firms with 500 or more employees. http://economics.about.com/od/smallbigbusiness/a/us_business.htm http://web.sba.gov/faqs/faqIndexAll.cfm?areaid=24

The SBA numbers are derived like ADP's numbers, which overcount small businesses by including divisions of larger companies that handle payroll separately from the parent. Not that that has anything to do with the actual objections I raised to your post, which is that there is no evidence that higher marginal tax rates have any effect on overall economic growth.

[Gaspar]

Sorry Nate, but new economics just doesn't fly.

Any time you remove money from the economy, you have a negative effect on economic growth.  Period!  

If you remove fuel from a car, you decrease it's range.

If you remove food from your diet, you decrease the growth of your a$$.

If you remove wood from the fire you decrease the amount of warmth.

You can't get around the fact that when you remove capital from any market, you limit the ability for that market to expand.  The liberal argument is to say that the wealthy simply hord income, but the reality is that the wealthy buy things, and when they don't buy things they invest in financial instruments that also increase economic growth.  Allowing taxes for $250Kers to increase to Clinton levels only creates about $90 billion in new revenu a year according to the CBO, but the CBO has no mechanism for measuring the across the board revenue decreases as a result of slowed, stalled, or decreased economic growth.

[nathanm]

Sorry Nate, but new economics just doesn't fly.

Any time you remove money from the economy, you have a negative effect on economic growth.  Period!  

You offer much prognostication, but zero evidence. Moreover, you make the rather basic mistake of assuming that the government is a black hole into which money falls and never escapes. That is not the case. The money collected through taxes does not disappear, it just gets moved around. Generally speaking, back out to the private sector in short order, whether by hiring a construction company to build a road, paying a teacher, paying a shipyard to build an aircraft carrier, paying Social Security benefits, or buying food for poor people.

You have often argued in the past when discussing income inequality that wealth isn't a zero sum game. I'm not sure why you're now arguing that it is. You have also argued in favor of the theory that public borrowing crowds out private investment. Yet here you are arguing against the very existence of that effect. It's bizarre how your economic views seem to hinge on your ideological preferences.

[Teatownclown]

It's just a market correction, down almost 10% in the last  month is nothing, TTAC  says so, so it must be true. 

%10? Huh? Explain how you got there.

The Russell was up almost %20 ytd.

Take it to your broker....

[Gaspar]

You offer much prognostication, but zero evidence. Moreover, you make the rather basic mistake of assuming that the government is a black hole into which money falls and never escapes. That is not the case. The money collected through taxes does not disappear, it just gets moved around. Generally speaking, back out to the private sector in short order, whether by hiring a construction company to build a road, paying a teacher, paying a shipyard to build an aircraft carrier, paying Social Security benefits, or buying food for poor people.

Boy, that would be nice in a world where government debt, intrest, administration, waste, and government growth didn't exist. With over 1,300 agencies, many with overlapping responsibilities, a significant amount of that capital is spent before it arrives.  Over the past 20 years, federal spending grew 71 percent faster than inflation.  Entitlement spending more than doubled over the past 20 years, growing by 110 percent (after adjusting for inflation). Discretionary spending grew by 60 percent.  For every $6.80 the federal government collected in taxes in 2012, it spent $10. Consequently, $3.20 out of every $10 spent was borrowed.  Interest on the debt is the fifth largest federal spending category, even at today's low interest rates.

I know you think government is the model of efficiency, but there we simply have to disagree.  Here are a few examples of waste/opportunities for consolidation or efficiency that would have a far more pronounced effect on deficit reduction than just saying "bleed the rich."

From the Heritage Foundation's budget and spending report for 2012:
In 2011, the federal government wasted $115.3 billion of taxpayers' money in improper payments: money paid in the wrong amount, to the wrong person, or for the wrong reason. Most of these excess payments—$107 billion, or 93 percent—were in just 10 programs, including Medicare fee-for-service ($28.8 billion), Medicaid ($21.9 billion), the Earned Income Tax Credit ($15.2 billion), and Unemployment Insurance ($13.7 billion). Implementation of updated computer systems and fraud detection methods and stricter documentation requirements would reduce payment errors.

Federally subsidized Amtrak lost $84.5 million on its food and beverage services in 2011, and $833.8 million over the past 10 years. It has never broken even on these services.

The Government Accountability Office (GAO) identified 34 areas in which federal agencies or initiatives have overlapping goals or duplicative services, which cost taxpayers billions of dollars each year. There are:

More than 80 economic development programs operating out of four different agencies: the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Small Business Administration;

More than 100 economic development programs spread across five agencies within the Department of Transportation;
Seven federal agencies, including the Departments of Education, Health and Human Services, and Housing and Urban Development, which have more than 20 programs addressing homelessness;

44 employment and training programs in the Departments of Education, Health and Human Services, and Labor; and

82 programs on teacher quality run through the Departments of Defense, Education, and Energy, as well as NASA and the National Science Foundation.

In 2008 and 2009 alone, the Department of Justice spent (DOJ)$121 million to host or participate in 1,832 conferences.

At one conference, petite Beef Wellington made the hors d'oeuvres menu, at a cost of $7.32 per serving.

An internal audit found DOJ did not keep costs to a minimum, despite federal guidelines. The most expensive conference reviewed in the audit was held in Istanbul, Turkey, and cost $1.18 million.

The General Services Administration (GSA), which is responsible for managing federal buildings and helping to cut costs, held a conference costing $822,751 in Las Vegas. At more than $2,500 per employee, it included $44-per-person breakfasts and commemorative coins for conference participants that cost $6,325.

In fiscal year 2010, the federal government spent nearly $1.7 billion to maintain 77,700 underused or unused buildings.

Eliminating both the New Starts and Small Starts transit grants programs would save taxpayers $5.6 billion over the next five years and $16.3 billion over 10 years. It would get the federal government out of the business of subsidizing high-cost, low-value local transit projects, such as $900 million for a 10-mile extension of the Bay Area rail system in San Jose and a $1.6 billion grant to construct a Honolulu rail line.

The Department of Agriculture's Office of the Chief Information Officer funded a $2 million intern program. Only one intern was hired full time as a result.

Fifteen federal agencies are involved in administering 30 food safety laws, resulting in fragmented food safety oversight.

The U.S. Navy bought 450,000 gallons of biofuels for $12 million, or almost $27 per gallon, to conduct exercises to showcase the fuel and bring it closer toward commercialization. It is the largest biofuel purchase ever made by the government.

The Internal Revenue Service stored 22,486 items of unused furniture in a warehouse at an annual cost of $862,000.

An Inspector General audit found that the Department of Energy cannot locate $500,000 worth of "green energy" manufacturing equipment that was bought with stimulus money.

The Bureau of Indian Affairs funded a fish hatchery that never saw a fish hatch for fourteen years, continuing funding even after the land had been converted to office space. Taxpayers spent $46.1 million in fiscal year 2012 to operate the national fish hatchery system.

The Department of Agriculture endorsed the "Meatless Monday" initiative and then a few weeks later announced plans to purchase $170 million worth of meat from drought-stricken livestock producers.

The Labor Department spent $495,000 in stimulus money on 100 television commercials to advertise the Obama Administration's Jobs Corps Initiative for green jobs.

The Department of Veterans Affairs spent $6.1 million, or $3,389 for each of the 1,800 employees that attended two training conferences last year in Orlando, Florida.

The agency Inspector General's office is investigating the conference organizers for possible ethics rules violations. The department also spent nearly $50,000 to make a video parodying General Patton that was shown at the conferences and $98,000 on promotional items. The items included pens, highlighters, hand sanitizers, and USB flash drives with VA's logo.

The State Department began a Diplomatic Culinary Partnership program in 2012. Over 80 American chefs have been inducted into the American Chefs Corps and will support the State Department by preparing food for visiting officials and traveling around the world to engage in "culinary diplomacy."

The Department of Veterans Affairs spent $221,540 on an 11-day conference at a resort—enough to pay annual disability compensation for six totally disabled combat veterans.

Department of Agriculture and Department of Energy officials approved a $76 million grant for a wood-to-ethanol plant in Soperton, Georgia, despite concerns among the project's researchers and other officials. The plant closed within a year of receiving the loan guarantee, without producing any ethanol.

The Rural Business Enterprise Grant Program gave $55,660 to a New York State dairy farm to package its butter in smaller, eight-ounce containers.
A grant totaling $25,000 was used to transcribe a Maldivian love ballad.

Taxpayers funded a National Institutes of Health study costing $55,382 in 2011, and $170,000 over three years, to study the hookah smoking habits of Jordanian university students.

The Department of Agriculture's Market Access Program spends $200 million a year to help U.S. agricultural trade associations and cooperatives advertise their products in foreign markets. In 2011, it funded a reality TV show in India that advertised U.S. cotton.

The Environmental Protection Agency awarded a $141,450 grant under the Clean Air Act to fund a Chinese study on swine manure and a $1.2 million grant to the United Nations for clean fuel promotion.

The Government Accountability Office (GAO) found that some people are double-dipping from unemployment and disability benefits programs. This lack of coordination among government agencies is costing taxpayers $850 million annually. GAO found one individual who drew $62,000 from unemployment insurance and disability insurance at the same time she was working and earning an additional $7,000 in income.

In 2011, the top 20 percent of farm subsidy recipients received almost 80 percent of all premium subsidies. Twenty-six farm businesses each collected over $1 million worth of subsidies.

Taxpayer losses from the failed solar cell manufacturing company Solyndra, which received a federal loan guarantee, totaled $528 million. Beacon Power and Abound Solar, two other failed alternative energy companies, cost taxpayers $46.5 million and $73.1 million, respectively.

A Congressional Research Service report revealed that among individuals earning $1 million or more, 2,840 received unemployment benefits in 2008 and 2,362 received the benefits in 2009.

The Conservation Reserve Program pays farmers $2.1 billion annually not to farm their land for a period of at least ten years.


So, to say that government redistribution represents efficiency is stretching the truth a bit.

[nathanm]

I never said the word efficiency or said anything about the topic. Nice distraction. Even if all that is true, which I doubt given the ideological slant of the source, it does nothing to refute my argument, which was that the money flows back into the economy almost as soon as it is collected. Nor does it speak to any of the criticisms of your logic on the subject that I brought up.

We're not talking about the shiny thing you are trying to distract the conversation with, we're talking about whether increased marginal tax rates lower economic growth.

[Townsend]

Why Passing the "Middle-Class" Tax Cuts Benefits the Wealthy, Too

http://www.offthechartsblog.org/why-passing-the-middle-class-tax-cuts-benefits-the-wealthy-too/

President Obama today clarified an important, and often misunderstood, point:  the so-called "middle-class Bush tax cuts" also benefit high-income people.  So, if the House were to approve the Senate-passed bill to extend the middle-class tax cuts (as the President favors), "that would prevent any tax hike whatsoever on the first $250,000 of everybody's income," he said at his press conference.

That's because the middle-class tax cuts do not just apply to people making less than $250,000 but to incomes — for everybody — up to $250,000 ($200,000 for singles).

In fact, as this chart based on Urban-Brookings Tax Policy Center data shows, extending the "middle-class" tax cuts would be worth about $12,000 next year to people making between $200,000 and $500,000.

[dbacks fan]

%10? Huh? Explain how you got there.

The Russell was up almost %20 ytd.

Take it to your broker....

Re: OFF THE CLIFF!

« Reply #3 on: November 10, 2012, 12:08:33 am »

Quote


--------------------------------------------------------------------------------

Shall we go off the cliff? I say forward!

Boehner and Cantor sort of remind me of Thelma and Louise at this point. "Over the cliff on January 1st" is definitely hard core all-in poker.
I might well play it that way myself, but don't see that being Obama's brand or style. 

I'll happily bet anybody even money until Monday that we don't "go over the cliff" on January 1st.

We need to go off the cliff to enable
the GOP/TEABAGGERS cause of lowering tax rates.
Win win....you don't get it Carl?

What? Why do you think we'd "plunge" into recession? I'm just trying to help GOPeer/Teabagger save face and have a reason to exist in 2014.
They let this cabal mature to this edge after all. They can fall back on "we lowered taxes." This will not make anything worse.


It's now Obama's fault!  http://www.businessinsider.com/the-obama-tax-hikes-that-will-hurt-2012-11
I've heard more whining this week than the past 4 years combined. if you make over $250,000 in California then counting all taxes your rate is closer to %67. Nobody saw this coming? War is hell and it made us poor.

Please don't force me to search your posts from 2008.

The market was due for a correction. And because of rate changes, there will be plenty of portfolio calibration. But don't fear chicken little as the Europeans appear to be getting their houses in order and if that were to become reality then we will see upward trends the next several years.

I'd be more in fear of "shadow" banks if I were you: http://www.spiegel.de/international/business/concern-over-lack-of-regulation-of-shadow-financial-institutions-a-866763.html

ah, good ole Okie Bill Moyers read my mind:

"...In fact, if you were choosing an image based on the coming fiscal
dust-up, it probably wouldn't be a cliff but an obstacle course - a series
of federal spending cuts and tax increases all scheduled to take effect as
2013 begins..."

http://billmoyers.com/content/why-washingtons-fiscal-cliff-is-a-myth/

Okay Al Sharpton, go back to your ways.

[TheArtist]

My guess is that "it" will happen.  (and I don't think it will cause a lot of problems for the economy)  Then they will begin negotiating adjustments to lessen this part and increase that part, which will keep them busy hollering bad things at each other for quite some time.

[nathanm]

My guess is that "it" will happen.  (and I don't think it will cause a lot of problems for the economy)  Then they will begin negotiating adjustments to lessen this part and increase that part, which will keep them busy hollering bad things at each other for quite some time.

This seems most likely. Boehner has made some noises about a compromise that includes at least some rate increases, but I don't see how he delivers any of his increasingly intransigent caucus. They seem to think they can force Obama into a bad deal. I can't rule that out given Obama seemingly buying into the apocalyptic rhetoric. I think that once the sequester takes place and the Bush cuts expire in their entirety, which seems likely since the Republicans seem (understandably) not to be taking Obama up on the offer to do the extension for the under-$250,000 set now, Boehner will be in a better position to make a deal and deliver 30 of his caucus since they won't actually have to vote for any tax increases.

Maybe they'll surprise and do the under-$250s before going home for Christmas.

[Gaspar]

This seems most likely. Boehner has made some noises about a compromise that includes at least some rate increases, but I don't see how he delivers any of his increasingly intransigent caucus. They seem to think they can force Obama into a bad deal. I can't rule that out given Obama seemingly buying into the apocalyptic rhetoric. I think that once the sequester takes place and the Bush cuts expire in their entirety, which seems likely since the Republicans seem (understandably) not to be taking Obama up on the offer to do the extension for the under-$250,000 set now, Boehner will be in a better position to make a deal and deliver 30 of his caucus since they won't actually have to vote for any tax increases.

Maybe they'll surprise and do the under-$250s before going home for Christmas.

He just did a press conference with dirty Harry.  They have both agreed on compromise.  Not too many details, but it made the market happy.

[Teatownclown]

Okay Al Sharpton, go back to your ways.

I get it now....db stands for dick bump.


SURGE! http://www.businessinsider.com/markets-rally-after-fiscal-cliff-meeting-2012-11

[carltonplace]

Republicans can actually fight for tax decreases if the Bush Tax cuts expire since everyone's taxes will rise. I'm sure this will be as divisive as preventing the expiration will be.

[Townsend]

House Republicans launch their own PR offensive on fiscal cliff

http://politicalticker.blogs.cnn.com/2012/11/27/house-republicans-launch-their-own-pr-offensive-on-fiscal-cliff/?cid=sf_twitter

Washington (CNN) - As President Obama kicks off a series of events and meetings this week to pressure Congressional Republicans to reach a deal to avert the fiscal cliff, top House GOP leaders are planning their own public campaign to frame Democrats as the ones who are unwilling to budge.

House Speaker John Boehner's office announced Tuesday that leaders and rank and file Republicans will roll out a series of events in Washington and in their districts across the country with small business owners to frame Democrats demands to oppose upper income tax cuts as a threat to new jobs.

Although GOP aides stress the outreach was in the works before details of the President's campaign-style efforts were outlined, they aren't hiding the fact that they don't appreciate the White House effort to try to box them in on taxes.

The top Senate Republican slammed the President's decision to travel to Pennsylvania for a public event on the fiscal cliff on Friday.

"Rather than sitting down with lawmakers of both parties and working out an agreement he is back on the campaign trail presumably with the same old talking points that we are all quite familiar with," Senate GOP Leader Mitch McConnell said on the Senate floor.

The post-election tone of compromise that leaders from both parties stressed as they predicted a compromise was close at hand appeared to fade as McConnell questioned whether the President was capable of working across the aisle.

"We already know the president is a very good campaigner. We congratulate him on his re-election. What we don't know is whether he has the leadership qualities necessary to lead his party to a bipartisan agreement on big issues like we currently face."

Boehner's spokesman suggested the President's focus was misplaced.

"The target of the president's rallies should be the congressional Democrats who want to raise tax rates on small businesses rather than cut spending," said Michael Steel in a written statement

House leaders from both parties are meeting separately on Wednesday with several CEOs involved in the "Fix the Debt" coalition that is pushing for a deal to avoid the year end fiscal cliff. House Republican Whip Kevin McCarthy announced that GOP leaders will meet with small business owners next week in his office.

While President Obama continues to argue that allowing the tax breaks for the wealthiest Americans to expire should be part of a deal, GOP leadership aides are preparing talking points and events with local businesses to hammer home their argument that tax rate increases will cost more jobs.

Republicans on Capitol Hill also complained that the major focus on the negotiations was on how willing GOP members were willing to give in on taxes while Democrats continued to dig in on opposing any major structural changes to entitlement programs. They maintain their offer to give some on revenue should be met with some flexibility on changes to Medicare and Social Security.

This was one message GOP leaders planned to deliver to the CEOs attending Wednesday's meeting on Capitol Hill.

One senior GOP aide summarized the appeal from GOP members to business leaders, "when you guys are pushing a balanced approach don't forget about spending. Let's not keep this whole entire conversation centered on tax rates."