Obama and the tax cut issue

[Kobi]

Originally Posted by HowSoonIsNow

Kobi,

I understand that the other countries, including mine (Canada), provide universal health care and equitable education and a host of other services that the USA -- all of which is possible through our higher tax rates.

However, the frustration I feel with your country is that these services/rights will NEVER come to fruition b/c citizens already complain about the relatively low taxes that you do pay. Also, the wealthy/and corporations are certainly not paying their fair share (as the article points out) and the burden, therefore, is felt largely by those making under 200 000.

Our tax rates DO afford us a lifestyle that most of us would not give up for a lower tax base. Largely, we understand that taxes are needed to afford to NEVEr care about a hospital bill/surgery, have equal funding for education, and our regulations helped us avoid a collapsed economy. However, the way that Canada and other countries operate is decried as (dirty!) socialism and, therefore, somehow antithetical to certain American *values*.

What was striking to me is how do people think an increase in services (including military spending) can be managed without increasing taxes? Something Reagan even did (who is lauded by The Teabaggers) too offset the federal deficit (he also raised them in the state of Calif. when he was gov. (largest tax hike that state had seen since then).

The USA will never have the standard of living as other industrial countries b/c people seem unwilling to admit that services must be paid by the people of that country and that includes proper taxation.

The USA has the lowest tax rate now since pre-1965 and spending has increased dramatically. Yet, tax hikes (on corporations and the wealthy esp!) is denounced by the GOP. (when they spent more in the last eight years before Obama)

*off for a massage...need it now after reading the article again!

How Soon,

I actually agree with you.

From my perspective, we Americans have a very strange relationship with our values and our economics and our political system. And we have wonkie ideas about accounting too.

[AtLast]

At this point, I am much more unsettled with how the US Congress is behaving than what upsets me about Obama (although, most likely I will support his re-election- just have to see who the GOP candidate ends up being). I'm registered as "decline to state," which in California, is "Independent."

Frankly, I was amazed that the GOP didn't want to even consider the initial debt-ceiling proposal that Obama said he was willing to support ($3 of cuts to every $1 of revenue via reform of tax loopholes). Although, I support social programs and the health care reform bill, we do need to pay down our debt. At this point, who and how we ended up with it, doesn't matter to me. Both major parties contributed to the mess the US is in.

There are some things that I bet I would be called conservative about- others, liberal or even progressive. Sometimes I feel like as I age, I am just more of a political moderate. Don't know. It pissed me off that Obama did not support the Simpson-Bowles comission findings last year. The fact is, some cuts in entitlement programs do have to be made- and can be without direct hits to beneficiaries. I support "means-testing" for example. There are many, many very, very wealthy retirees that do not need the level of benefits they now receive.

I was angry when Obama allowed the Bush tax credits to be extended and I don't want this to happen again. Yet, reform of the tax code (big time reform) is needed.

My main frustration right now is how much power a fringe group (the Tea Party) weilded during the debt-ceiling debate and Obama caving in on revenue. My guess is that he realized that the House TP members really are ignorant about what the extent a default would have caused. Yet, I think he should have invoked the 14th Amendment although we all know that he would have faced a legal fiasco and calls for impeachment via the GOP. BUT- the numbers to actually pull impeachment off are not there and I think his doing so would have gone a long way in establishing his leadership qualities during a crisis. Hell, he already is vulnerable in terms of re-election.

Honestly, I believe the GOP (the whole party) just wants our economy to tank more- even to the point of an actual depression so that a Republican is elected in 2012. This is what bothers me the most. This is just plain sick and evil because this is not just about Obama failing- it is about millions of us losing everything.

The only way I see as a way for real change in the US political system that can bring what is good and fair in democracy is public funding (only) of elections- federal, state, local- every election held in the US. Now, the chances of this happening anytime soon is pretty damn slim! The "Citizens United" Supreme Court decision cemented the class divisions that decide who will hold office in the US.

[dreadgeek]

Originally Posted by AtLastHome

Honestly, I believe the GOP (the whole party) just wants our economy to tank more- even to the point of an actual depression so that a Republican is elected in 2012. This is what bothers me the most. This is just plain sick and evil because this is not just about Obama failing- it is about millions of us losing everything.

I am a big believer in taking people at their word. If someone says, for instance, that they believe that we should lock up criminals and not worry overly much about legal niceties such as trial by jury (as a poster here suggested back in June) that what they *mean* is what they said. Well, the Republican party is on record as saying they want Obama to fail. Keep in mind that one of the chief ideologues of the GOP, Rush Limbaugh, flat out said that his goal was to make certain that Obama's presidency failed. Let's presume he meant that. Let us also presume that all of those GOP elected officials who parroted Limbaugh meant it. Now, view their behavior through the lens of their words. They are trying to make certain that he cannot govern! If that means tanking the economy, so be it.

What better way to win the next election than to make certain that the economy is in the tank?

Quite honestly, this reminds me a lot--a LOT--of end-stage Weimar Germany. At the end-game, the right-wing in Germany (the Nazis, the Conservatives and the Junkers) simply made the Reichstag non-functional. The idea was to make the nation unstable so that the German people would vote for anyone who would bring about stability. Doesn't that sound familiar?

Cheers
Aj

[Glenn]

Yep AJ; Then hardcore nationalism and then complete industrialization for the purpose of war...I don't think it will be as bad as Germany, but the focus will be more on waging war.

[Toughy]

http://www.randirhodes.com/pages/rrn...rticle=8909602

and

http://www.randirhodes.com/pages/rrn...rticle=8914378

Very interesting pieces about how Obama fucked over the Republicans with the Debt Ceiling Bill that he negotiated and signed.....it seems the Tea Party crazy fucks lost big time in this deal.....

[atomiczombie]

Originally Posted by Toughy

http://www.randirhodes.com/pages/rrn...rticle=8909602

and

http://www.randirhodes.com/pages/rrn...rticle=8914378

Very interesting pieces about how Obama fucked over the Republicans with the Debt Ceiling Bill that he negotiated and signed.....it seems the Tea Party crazy fucks lost big time in this deal.....

I think everyone lost big time in this deal. It's a shit sandwich if you ask me. This bill is going to slow the economic recovery and result in even higher unemployment.

[Toughy]

Did you read the articles?

I don't really think it will truly affect the economy all that much....good or bad.

Congress now MUST deal with jobs. We need another much bigger stimulus to continue re-building the infrastructure of this country. I'm thinking Tennessee Valley Authority or Hoover Dam or all the Army Corps of Engineer projects kind of things. It will create tens of thousands jobs and the economy will take off again.

We also need to create new revenue besides the Bush tax cuts which sunset out at the end of 2012. Close the checkbook on corporate welfare, raise taxes on those making more than a million bucks a year. Leave the frigging middle and working class alone.

[dreadgeek]

Originally Posted by popcorninthesofa

Yep AJ; Then hardcore nationalism and then complete industrialization for the purpose of war...I don't think it will be as bad as Germany, but the focus will be more on waging war.

Hmmmm...see, my reading of Germany is that the focus was on waging war. This might just be an artifact of the material I've read focusing on how the entire German economy and culture was pointed toward war but it seems to me that from January 1933 onward the entire nation was gearing up for war in Europe. I think what will be different is that Germany under National Socialism was far less theocratic than what I think is barreling towards us. My concern is that we are just this side of a theocratic takeover. Now, this theocracy won't look like Saudi Arabia but rather more a mash-up of Iran after the Islamic revolution and John Calvin's Geneva with a little of late-19th century Utah (Under Brigham Young) thrown in for good measure.

Cheers
Aj

[girl_dee]

As sad as this may sound I am so happy to be going to work Canada right now, I am so tired of worrying about what the government will or will not do with our future, I understand I am still affected but being away from all of it sure is a nice break.

[atomiczombie]

This from Bloomberg News website:

The U.S. had its AAA credit rating downgraded for the first time by Standard & Poor’s on concern spending cuts agreed on by lawmakers to raise the nation’s borrowing limit won’t be enough to reduce record deficits.
S&P dropped the ranking one level to AA+, after warning on July 14 that it would reduce the rating in the absence of a “credible” plan to lower deficits even if the nation’s $14.3 trillion debt limit was lifted. The U.S. was awarded the top credit ranking by New York-based S&P in 1941. It kept the outlook at “negative.”
‘The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said in a statement today.
Demand for Treasuries has surged even with the specter of a downgrade as investors saw few alternatives to the traditional refuge during times of risk as concern increased global growth is slowing and Europe’s sovereign debt crisis is spreading. The action could still hurt the U.S. economy over time by increasing the cost of mortgages, auto loans and other types of lending tied to the interest rates paid on Treasuries. JPMorgan Chase & Co. estimated that a downgrade would raise the nation’s borrowing costs by $100 billion a year.
Moody’s, Fitch
“It’s a reflection of the fact that we haven’t done enough to get our fiscal house in the order,” Anthony Valeri, market strategist in San Diego at LPL Financial, which oversees $340 billion, said in an interview before the downgrade. “Sovereign credit quality is going to remain under pressure for years to come.”
Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings on Aug. 2, the day President Barack Obama signed a bill that ended the debt-ceiling impasse that pushed the Treasury to the edge of default. Moody’s and Fitch also said that downgrades were possible if lawmakers fail to enact debt reduction measures and the economy weakens.
The measure raised the nation’s debt ceiling until 2013 and threatens automatic spending cuts to enforce $2.4 trillion in spending reductions over the next 10 years.
S&P put the U.S. government on notice on April 18 that it risks losing its AAA rating unless lawmakers agree on a plan by 2013 to reduce budget deficits and the national debt. S&P indicated last month that anything less than $4 trillion in cuts would jeopardize the rating.
‘Grand Bargain’
“A grand bargain of that nature would signal the seriousness of policy makers to address the fiscal situation in the U.S.,” John Chambers, chairman of S&P’s sovereign rating committee, said in a video interview distributed by the ratings firm on July 28.
Obama has said a rating cut may hurt the broader economy by increasing consumer borrowing costs tied to Treasury rates. An increase in Treasury yields of 50 basis points would reduce U.S. economic growth by about 0.4 percentage points, JPMorgan said in a report, citing Federal Reserve research and data.
“The hope is that we could keep Treasuries pure, limited to interest rate risk,” Mohamed El-Erian, chief executive and co-chief investment officer at Pacific Investment Management Co., said in a Bloomberg Television interview before the announcement. “The minute you start downgrading away from AAA, you take small steps toward credit risk and that is something any country would like to avoid.”
Relative Yields
Treasury yields average about 0.70 percentage point less than the rest of the world’s sovereign debt markets, Bank of America Merrill Lynch indexes show. The difference has expanded from 0.15 percentage point in January.
Investors from China to the U.K. are lending money to the U.S. government for a decade at the lowest rates of the year. For many of them, there are few alternatives outside the U.S., no matter what its credit rating.
“Yields are low in the face of a downgrade because there is nowhere else for people to go if they don’t buy Treasuries because they want to be in safe dollar assets,” Carl Lantz, head of interest-rate strategy at Credit Suisse Group AG, one of 20 primary dealers that trade directly with the Federal Reserve, said before the announcement.
Ten-year Treasury yields fell to as low as 2.33 percent in New York, the least since October.
Bond Dealers
The committee of bond dealers and investors that advises the U.S. Treasury said the dollar’s status as the world’s reserve currency “appears to be slipping” in quarterly feedback presented to the government on Aug. 3. The U.S. currency’s portion of global currency reserves dropped to 60.7 percent in the period ended March 31, from a peak of 72.7 percent in 2001, International Monetary Fund data show.
“The idea of a reserve currency is that it is built on strength, not typically that it is ‘best among poor choices’,” page 35 of the presentation made by one member of the Treasury Borrowing Advisory Committee, which includes representatives from firms ranging from Goldman Sachs Group Inc. to Pimco. “The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate.”
Members of the TBAC, as the committee is known, which met Aug. 2 in Washington, also discussed the implications of a downgrade of the U.S. sovereign credit rating. “None of the members thought that a downgrade was imminent,” according to minutes of the meeting released by the Treasury.
A U.S. credit-rating cut would likely raise the nation’s borrowing costs by increasing Treasury yields by 60 basis points to 70 basis points over the “medium term,” JPMorgan’s Terry Belton said on a July 26 conference call hosted by the Securities Industry and Financial Markets Association. The U.S. spent $414 billion on interest expense in fiscal 2010, or 2.7 percent of gross domestic product, according to Treasury Department data.
“That impact on Treasury rates is significant,” Belton, global head of fixed-income strategy at JPMorgan, said during the call. “That $100 billion a year is money being used for higher interest rates and that’s money being taken away from other goods and services.”
To contact the reporter on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

As I said before, the bill is a shit sandwich. I can't believe our government created such a clusterfuck.

[*Anya*]

Originally Posted by dreadgeek

I am a big believer in taking people at their word. If someone says, for instance, that they believe that we should lock up criminals and not worry overly much about legal niceties such as trial by jury (as a poster here suggested back in June) that what they *mean* is what they said. Well, the Republican party is on record as saying they want Obama to fail. Keep in mind that one of the chief ideologues of the GOP, Rush Limbaugh, flat out said that his goal was to make certain that Obama's presidency failed. Let's presume he meant that. Let us also presume that all of those GOP elected officials who parroted Limbaugh meant it. Now, view their behavior through the lens of their words. They are trying to make certain that he cannot govern! If that means tanking the economy, so be it.

What better way to win the next election than to make certain that the economy is in the tank?

Quite honestly, this reminds me a lot--a LOT--of end-stage Weimar Germany. At the end-game, the right-wing in Germany (the Nazis, the Conservatives and the Junkers) simply made the Reichstag non-functional. The idea was to make the nation unstable so that the German people would vote for anyone who would bring about stability. Doesn't that sound familiar?
Cheers
Aj

I have been thinking this is the underlying issue myself. The GOP, I believe, would allow us to tank, just to get more Republicans elected. They believe, with evangelical zeal, that they are the ones to save our country.

This whole mess is a true clusterfuck (good word atomic). Does anyone remember and granted, my memory is not what it was- when Clinton left office, we were in the black? The elected GOP quickly put us back in the red.

I am disappointed in Obama- I did have high hopes for his administration but maybe they were unrealistic. I just know I am disgusted with all of them-hell, they could not even agree to tax big business and their Gulfstream jets!

Bottom-line, my fear is that the GOP will win in 2012 and then we will be well and truly fucked.

[Kobi]

Originally Posted by Anya/Georgia

I have been thinking this is the underlying issue myself. The GOP, I believe, would allow us to tank, just to get more Republicans elected. They believe, with evangelical zeal, that they are the ones to save our country.

This whole mess is a true clusterfuck (good word atomic). Does anyone remember and granted, my memory is not what it was- when Clinton left office, we were in the black? The elected GOP quickly put us back in the red.

I am disappointed in Obama- I did have high hopes for his administration but maybe they were unrealistic. I just know I am disgusted with all of them-hell, they could not even agree to tax big business and their Gulfstream jets!

Bottom-line, my fear is that the GOP will win in 2012 and then we will be well and truly fucked.

An evangelical clusterfuck. This doesnt conjure up fantasies of a good time.

The Clinton surplus is debated as a myth. I dont pretend to understand voodoo economics or how best to reframe or manipulate data for a specific purpose. This article helps to do that: http://www.craigsteiner.us/articles/16

All I know is basic math. If you have a deficit, there are only three ways to reduce it - increase revenue, cut spending, or a combo of both.

We can continue to quantify and qualify, and expound on any number of theories and crapshoots. But no matter how hard we try, we cannot escape simple math.

We also, in my opinion, cannot escape that in allowing ourselves to go global, we lost (or forfeited) a great deal of control over our own economy and economic wellbeing. This defies common sense.

I dont know who, if anyone, has the answer that will put us back on the path to prosperity or even just an even keel. Just seems to me, we need to abandon economic gymnastics, reclaim basic math and accounting principles, and get our collective heads out of this dysfunctional relationship we have with the accumulation of wealth and power and the corruption of character and values it breeds.

I dont know that the Democrats or the Republicans have the ability or desire to tackle this head on. They are both complicit in and working hard to tame this creature they jointly created.

I do know that, I, dont want to be caught up in a bunch of marketing stategies and campaign bullshit that is just nonsensical and illogical in both nature and content but sounds plausible given the right presentation.

As Americans, I do believe we have the ability to accomplish and overcome many things. But, we cant do either until we are willing to abandon the fantasy world we live in and get firmly reentrenched back in reality.

For me, come election time, I am going back to the basics in deciding who to vote for. I will be looking for those whose actions speak louder than their words, who are strong in basic fundamentals even when those are not popular, who doesnt promise me a bunch of bull we both know is not feasible or plausible, and who doesnt make me feel like I am choosing the least offensive of 2 evils.

[AtLast]

http://www.bloomberg.com/news/2011-0...n-concern.html
Yes, at this time, only S & P actually downgraded the US credit rating, but, both of the other 2 rating firms (Moody's & Fitch) are not optimistic about the US keeping the AAA ratings they are sticking with right now.

They could also downgrade us at any time. Most likely they could do this when the "super-commission" that will be appointed to offer up the budget cuts necessary via the recent debt-ceiling bill. We are not out of the woods at all with this and these downgrades can and will trickle down to both the middle and working classes. In fact, this could very well smack down even further any gains that just "common folk" might be making if they have been fortunate enough to find work after being laid off due to the recession.

I don't like scare tactics (especially when so many are so stressed economically right now), but this is not something we as a country should take lightly or wait for the direct effects it could have on us.

It seems to me that we ought to be sending messages to all 4 of the Congressional leaders (Reid, McConnell, Boehner & Pelosi) that will be appointing members to this panel stating that appointments need to be made up of people that are willing to compromise! Both sides have already been talking about appointing stead-fast reps of their party that hold to the same damn things that caused the debt-limit mess- and brought on the S & P downgrade. We need more of this conflict???

[Toughy]

I want the most hardcore idealogues from both sides on the super commission. When they fail to do anything because they will not compromise, all those triggers will kick in. Then the Republicans are fucked because they will have to either increase revenue or cut their precious defense budget and corporate welfare. If the triggers kick in SSI, Medicare, Medicaid, Veterans and Senior benefits are OFF the table for cuts.

All those big corporations and big pharma are shitting their pants right now as they will be the ones who are going to face the big ass cut spending knife, not the middle/working class and poor people.

I'm telling y'all, Obama royally fucked the Republicans with the debt ceiling legislation.

The real way to stop this forever is two-fold. Pass a federal Constitutional Amendment declaring Corporations are not people and money is not speech (the only way to get around the Robert's SCOTUS). The other thing would be passing legislation that requires only public financing of all political campaigns. Bye bye special interest groups and all those big money lobbyists. K Street will have a whole bunch of empty office buildings.

[citybutch]

The downgrade was brought by the fact that Republicans are not willing to raise taxes and the Democrats are not willing to cut spending.... and not the debt limit "mess". In order to make for a healthier financial outlook either one of those two things or both need to happen. Just like when I am working with my clients who are spending more than they are making (which is what is happening in the country right now) we work on increasing revenue and/or decreasing expenses. It's that simple. This is a problem that has been brewing with the rating companies long before the debt limit stalemate came along... THAT "mess" was created, in my very humble opinion, by politics... although frankly it needed to come to the forefront at some point. The debt limit was raised 8 (?) times under GW Bush... and 4 times thus far (well, 5 now... kinda) under Obama... There just comes a time where one has to stop increasing the amount one can borrow... and start to work on the systemic problems of overspending when revenues are reduced... Something had/has to change....

Originally Posted by AtLastHome

hold to the same damn things that caused the debt-limit mess- and brought on the S & P downgrade. We need more of this conflict???