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Fiscal Cliff nonsense from the Right

NorthReport
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NorthReport
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America didn’t vote for a “grand bargain”

Listen up, Democrats: Obama didn't win by promising a compromise entitlement reform. He won despite it

 


NorthReport
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NorthReport
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NorthReport
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The coming debt battle

Citing a phony "crisis," the GOP wants to gut Medicare, Medicaid and Social Security. Democrats can't let them

In the tense run-up to Hurricane Sandy, I clicked on one of those headlines that appears on the right side of the screen: “Civilization May Not Survive This, Economist Says.”

Once there, I knew I’d been had.  It was about … the public debt. It cited one Lawrence Kotlikoff of Boston University, one of America’s most talented artificers, who “estimates the true fiscal gap is $211 trillion when unfunded entitlements like Social Security and Medicare are included.” Compared to that, what’s a thousand mile-wide hurricane?

That the looming debt and deficit crisis is fake is something that, by now, even the most dim member of Congress must know.  The combination of hysterical rhetoric, small armies of lobbyists and pundits, and the proliferation of billionaire-backed front groups with names like the “Committee for a Responsible Federal Budget” is not a novelty in Washington. It happens whenever Big Money wants something badly enough.

Big Money has been gunning for Social Security, Medicare and Medicaid for decades – since the beginning of Social Security in 1935. The motives are partly financial: As one scholar once put it to me, the payroll tax is the “Mississippi of cash flows.” Anything that diverts part of it into private funds and insurance premiums is a meal ticket for the elite of the predator state.

And the campaign is also partly political. The fact is, Social Security, Medicare and Medicaid are the main way ordinary Americans connect to their federal government, except in wars and disasters.  They have made a vast change in family life, unburdening the young of their parents and ensuring that every working person contributes whether they have parents, dependents, survivors or disabled of their own to look after. These programs do this work seamlessly, for next to nothing; their managers earn civil service salaries and the checks arrive on time. For the private competition, this is intolerable; the model is a threat to free markets and must be destroyed.

This attitude is reflected in the nonsense of media discourse, nicely illustrated in October’s vice-presidential debate, moderated by Martha Raddatz of ABC News:


NorthReport
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NorthReport
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Now we know what Romney was going to do on Day One - repeal ObamaCare, what has Obama done for his supporters on Day One!

http://theweek.com/article/index/236117/uncovered-mitt-romneys-president...

 


NorthReport
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Conservative Media Lie To Conservatives Because That's What Conservatives Want

http://www.motherjones.com/mojo/2012/11/conservative-media-mitt-romney-l...

On Election Night, I tweeted that Republicans shocked about Mitt Romney's loss Tuesday should be angry at a conservative media that misled them about the former Massachusetts' governor's chances. 

In the waning days of the race, much of this manifested in raising doubts about the polls and comical exaggerations about the possibility of a Romney landslide. Rush Limbaugh told his millions of listeners that "everything except the polls points to a Romney landslide," but the problem went beyond mavens like Limbaugh to afflict more well-regarded political analysts like Michael Barone and George Will. The Weekly Standard's Jay Cost wrote, "I am not willing to take polls at face value anymore. I am more interested in connecting the polls to history and the long-run structure of American politics, and when I do that I see a Romney victory." Analysts like Karl Rove—who through his stewardship of outside spending groups had a clear financial interest in giving upbeat assessments of Romney's chances—were given prominent perches to hoodwink the viewers of Fox News and the readers of the Wall Street Journal. And as Media Matters' Simon Maloy documents, Jennifer Rubin, the Washington Post's pro-Romney blogger, expressed a far less sanguine view of campaign events after the election than she did when she covered them in real time

The problem goes beyond the conservative media, however—even Republican-leaning pollsters like Rasmussen and Gravis Marketing proved poor predictors of the final outcome, while results from some Democratic-leaning firms like Public Policy Polling were actually closer to the final result than traditional powerhouses like Gallup.

All this has reopened the debate about "epistemic closure," the term libertarian writer Julian Sanchez used* to describe the closed universe from which conservatives receive their information, in which those who deviate from the official party line are deemed apostates who are to be excommunicated. Erik Kain, writing at Mother Jones, says this is in part a business model: "There's big money in controversy, and controversy is what the Glenn Becks of the world do best."


NorthReport
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NorthReport
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Let's not make a deal

 

http://www.nytimes.com/2012/11/09/opinion/krugman-lets-not-make-a-deal.h...

My answer is, not far at all. Mr. Obama should hang tough, declaring himself willing, if necessary, to hold his ground even at the cost of letting his opponents inflict damage on a still-shaky economy. And this is definitely no time to negotiate a “grand bargain” on the budget that snatches defeat from the jaws of victory.

In saying this, I don’t mean to minimize the very real economic dangers posed by the so-called fiscal cliff that is looming at the end of this year if the two parties can’t reach a deal. Both the Bush-era tax cuts and the Obama administration’s payroll tax cut are set to expire, even as automatic spending cuts in defense and elsewhere kick in thanks to the deal struck after the 2011 confrontation over the debt ceiling. And the looming combination of tax increases and spending cuts looks easily large enough to push America back into recession.

Nobody wants to see that happen. Yet it may happen all the same, and Mr. Obama has to be willing to let it happen if necessary.

Why? Because Republicans are trying, for the third time since he took office, to use economic blackmail to achieve a goal they lack the votes to achieve through the normal legislative process. In particular, they want to extend the Bush tax cuts for the wealthy, even though the nation can’t afford to make those tax cuts permanent and the public believes that taxes on the rich should go up — and they’re threatening to block any deal on anything else unless they get their way. So they are, in effect, threatening to tank the economy unless their demands are met.

Mr. Obama essentially surrendered in the face of similar tactics at the end of 2010, extending low taxes on the rich for two more years. He made significant concessions again in 2011, when Republicans threatened to create financial chaos by refusing to raise the debt ceiling. And the current potential crisis is the legacy of those past concessions.

Well, this has to stop — unless we want hostage-taking, the threat of making the nation ungovernable, to become a standard part of our political process.

So what should he do? Just say no, and go over the cliff if necessary.

It’s worth pointing out that the fiscal cliff isn’t really a cliff. It’s not like the debt-ceiling confrontation, where terrible things might well have happened right away if the deadline had been missed. This time, nothing very bad will happen to the economy if agreement isn’t reached until a few weeks or even a few months into 2013. So there’s time to bargain.

More important, however, is the point that a stalemate would hurt Republican backers, corporate donors in particular, every bit as much as it hurt the rest of the country. As the risk of severe economic damage grew, Republicans would face intense pressure to cut a deal after all.

Meanwhile, the president is in a far stronger position than in previous confrontations. I don’t place much stock in talk of “mandates,” but Mr. Obama did win re-election with a populist campaign, so he can plausibly claim that Republicans are defying the will of the American people. And he just won his big election and is, therefore, far better placed than before to weather any political blowback from economic troubles — especially when it would be so obvious that these troubles were being deliberately inflicted by the G.O.P. in a last-ditch attempt to defend the privileges of the 1 percent.

Most of all, standing up to hostage-taking is the right thing to do for the health of America’s political system.

So stand your ground, Mr. President, and don’t give in to threats. No deal is better than a bad deal.

 

 


NDPP
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Flaherty Says He Won't Stand By' if Shock Pushes Canada into Recession

http://www.winnipegfreepress.com/canada/flaherty-says-us-fiscal-cliff-li...

"...Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney both pledged Wednesday to take action to support the economy if a shock from the US or Europe, threatened to once again plunge the country into recession. 'We are a pragmatic, sensible government. If our economy goes into recession because of an external shock from the United States or the Eurozone, or both, we will take steps to support the economy...

What we have done before we will do again..."

LOL! What a sick joke! Neocon Jim and Goldman Sachs killer squd Carney  are going to drain you dry, rob you blind and the crooked media will have you begging for them to 'water the wine' and do it to you one more time...especially if the ndp cheerleading squad is rah rah rahing for it too. Can't say they didn't warn you, eh?


Bec.De.Corbin
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What % of taxes do you Canadians pay up there?


kropotkin1951
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Bec.De.Corbin wrote:

What % of taxes do you Canadians pay up there?

Hard question to answer because the provinces all have their own income and corporate tax rates on top of the federal ones. As well we also have various versions of the HST and GST depending on  the province as well as the property taxes that municipalities rely on to run our cities.  BC also has its own gas tax on top of the federal taxes paid.

The short answer is there is no "Canadian" tax rate.


6079_Smith_W
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NorthReport
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Will Wall Street be punished?

The bankers are whining big-time. Their favorite son lost, and their chief enemy won. Here's what needs to happen

 


Bacchus
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Bec.De.Corbin wrote:

What % of taxes do you Canadians pay up there?

 

The figure I have seen in studies published in the newspaper is that Americans keep 70% of their income after taxes and Canadians 69%


Bacchus
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Bec.De.Corbin wrote:

What % of taxes do you Canadians pay up there?

 

The figure I have seen in studies published in the newspaper is that Americans keep 70% of their income after taxes and Canadians 69%


Slumberjack
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I think many Canadians whine about income tax levels and sales tax, but they don't tend to view taxation in general as a particular type of socialist tyranny enforced by UN troops recruited from the Muslim communities of Kenya.  In Canada income tax was first conceived as a temporary measure to pay our way through the First World War.  In actuality, this form of taxation was born to support tyranny, and has remained loyal to this endeavour ever since.


NorthReport
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Canada's revenue agency rates are quite misleading as many people in the upper income brackets get all sorts of tax loophole deductions such as dividend revenue, capital gains, etc.

It is all a massive con job on the less priviledged in our society. 


NorthReport
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So it is going to be another rich against the poor battle. We all know how this will turn out.

Get ready for an economic game of chicken

Democrats want to raise taxes for the rich, while Republicans would extend breaks another year. Which party blinks?

 


Fidel
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It's all scripted. Obamacrats are so totally owned by the financial oligarchy that it isn't even funny anymore. The one percent will continue attacking labour unions and become even richer as a result. And if anyone talks the truth, they will be labelled as inciting class war. The USA is headed for neofeudalism if they arebn't already there.

China and even state-capitalist Russia are probably more democratic.


jas
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NorthReport wrote:
That the looming debt and deficit crisis is fake is something that, by now, even the most dim member of Congress must know.  

The debt isn't fake, but it certainly wasn't caused by medicare.

Brown University: Costs of Iraq and Afghanistan Wars  

"How has the U.S. paid for the wars so far? The United States paid for past wars by raising taxes and or selling war bonds.  The current wars were paid for almost entirely by borrowing. This borrowing has raised the U.S. budget deficit, increased the national debt, and had other macroeconomic effects, such as raising interest rates. The U.S. must also pay interest on the borrowed money. The interest paid on Pentagon spending alone, so far (from 2001 through FY 2011) is about $185.4 billion in constant dollars."


NorthReport
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Can a federal insurance program go bankrupt? Of course it can’t. Bankruptcy is a legal process for private citizens seeking relief from unpayable debts. How can the obligations of Social Security or Medicare ever be unpayable? These are public programs, not private companies. All the federal government has to do is to write the checks, pursuant to law. As for the size of the checks, it will be whatever Congress prescribes at any given time. Bankruptcy as a concept does not apply. So what are they talking about?  Lies and nonsense, nothing more.

Less easy to penetrate is the thick swamp of dogma thrown up by the economists who have provided a background chorus for the doomsayers.  Kotlikoff’s $211 trillion is a nice example of this: the net present value of a discounted stream of projected federal deficits over (one suspects) an infinite future time horizon.  Or maybe only 75 years or so.  But who’s counting? It’s a big, big number, and the man spreading it about is a credentialed professor.  Must mean something, surely?

No, it does not.  For one thing, any such number needs to be placed in context – what fraction of total GDP, over the same horizon, are we talking about? That GDP number will be 10 to 20 times larger, so Kotlikoff’s forecast doesn’t tell you anything you didn’t already know, by looking at present deficits in relation to present GDP.

Even that comparison misses the real point, which is that all balance sheets are double-entry propositions. Assuming it’s a real number, and not made up, that $211 trillion liability must correspond, to the penny, to an asset. And that’s the gain in expected future net financial wealth of the private sector, also discounted. Every one of those dollars, after all, corresponds to a bond, which will be owned by a person, a company or a bank. Big crisis? Not at all. At best, it’s a curiosity calculation, of no practical importance.

Even worse, because more immediately read and followed by policymakers, are the Congressional Budget Office’s baseline economic projections.  These combine mutually impossible events, leading to the prediction that the debt/GDP ratio will rise toward 300 percent of GDP by mid-century, while real growth and inflation chug along at 3 and 2 percent, respectively.  But if this were possible, why should anyone care?  In fact it’s not possible; the CBO’s deficits are driven mainly by assumptions about healthcare costs and interest rates that cannot happen. Healthcare cannot rise indefinitely as a share of GDP (and may have already stopped rising). And if interest rates returned to what CBO thinks of as normal the underlying economy would collapse. Luckily for us, the Federal Reserve won’t do that. CBO should revise its assumptions;  if it did, the scare forecasts would go away.

Do we have budget problems? Yes: We spend too much on military hardware and wars; the talent, materials and technologies that go into that are wasted and cannot be used, say, to protect New York from storm surge. Our rich build too many mansions, thanks to their CEO incomes and their low tax rates;  letting the Bush tax cuts expire will usefully dent that purchasing power.

But Social Security, Medicare and Medicaid impose no such future burdens. They are transfers in current time. They meet today’s commitments to seniors, survivors, dependents, the disabled and the ill – commitments they have earned through work – providing them with income and services at the expense of others also currently alive.  This any community can always do, to the full extent of its will and resources. The future has nothing to do with it.  Except that, from a moral point of view, it’s useful for the young to learn that we are a community, in which working people take care of those who can’t.

And that is what the Objectivists in Congress cannot stand. Our sense of community is an obstacle to their power.  And what they are determined to destroy, we must defend.  There is much more to be said, about disaster relief, food assistance, housing and other threatened programs.  But to begin, Congress should leave Social Security, Medicare and Medicaid alone.

http://www.salon.com/2012/11/08/the_coming_debt_battle/


NorthReport
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What’s driving inequality?

Technology and education, says Timothy Noah.

But unemployment and the rules governing wages may matter more.


jas
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Salon.com wrote:
Do we have budget problems? Yes: We spend too much on military hardware and wars; the talent, materials and technologies that go into that are wasted and cannot be used, say, to protect New York from storm surge. 

Bit of an understatement.

If you go by the Brown University study's estimates, and this is just for Iraq and Afghanistan, a rough averaging over the ten years produces these figures:

$4,000,000,000,000.00 ($4 trillion) spent over 10 years

$400,000,000,000.00 ($400 billion) spent per year

$33,333,333,333.00 ($33 billion) spent per month

$1,111,111,111.00 ($1 billion) spent per day

 

If you go with the conservative estimate, which is the simple total of military budget allocations for Iraq and Afghanistan, you come up with these figures:

$1,380,000,000,000.00 ($1.38 trillion) over the decade

$138,000,000,000.00 ($138 billion) in a year

$11,500,000,000.00 ($11.5 billion) in a month

$383,333,333.00 ($383 million) per day

 


NorthReport
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What if we tried some novel ideas - such as imposing just a simple 10% inheritance tax, remove all tax loopholes, tax all income at fixed graduated levels so that there really is some balance and fairness in the tax system, have full employment and decent wages, benefits, and good and portable pensions for all as a goal, and stop any kind of government funding of anything other than the public school system?  And let's go back and make employers pay for training for their employees, etc.


NorthReport
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Come on Obama, let's start taxing Wall Street, the people who created the fiscal cliff to begin with.


NorthReport
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Well worth a read - as according to the author Obama needs to do nothing before next year

 

 

http://nymag.com/news/politics/elections-2012/obama-romney-economic-plan...


Ryan1812
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NDPP wrote:

Flaherty Says He Won't Stand By' if Shock Pushes Canada into Recession

http://www.winnipegfreepress.com/canada/flaherty-says-us-fiscal-cliff-li...

"...Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney both pledged Wednesday to take action to support the economy if a shock from the US or Europe, threatened to once again plunge the country into recession. 'We are a pragmatic, sensible government. If our economy goes into recession because of an external shock from the United States or the Eurozone, or both, we will take steps to support the economy...

What we have done before we will do again..."

LOL! What a sick joke! Neocon Jim and Goldman Sachs killer squd Carney  are going to drain you dry, rob you blind and the crooked media will have you begging for them to 'water the wine' and do it to you one more time...especially if the ndp cheerleading squad is rah rah rahing for it too. Can't say they didn't warn you, eh?

Ok, so call me new, but it seems to me that Flaherty and Carney committing to stabilizing the economy should it get a shock from the States or Europe is a good thing. Is it not? The first people to be hurt in such a crisis, should prices rise as one would expect they would, will be consumers. One must also consider those on a low income who have already been given the shaft by multiple provincial governments and the federal government. So, stability is a good thing, no?


NDPP
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Sure, but let us see who gets paid and with whose money at whose expense...

 

Obama Spells Out Austerity Agenda for Second Term

http://www.wsws.org/articles/2012/nov2012/elec-n10.shtml

"...Whatever the ultimate form of the deal worked out by Obama and the Republicans, both parties are agreed on implementing trillions of dollars in cuts to social spending on Medicare, Medicaid, Social Services, and reworking the tax code to increase the tax burden on a majority of the population while lowering it on the very rich.."


NDPP
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Obamacare Creates Perverse Incentives for Employers to Cut Hours

http://www.againstcronycapitalism.org/2012/11/welcome-to-part-time-natio...

"...If you are a full time non-salaried employee in a company with 49 or more full time employees, your employer may be inclined to cut your working time in an effort to avoid the cost of Obamacare penalties..."


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