Monday, December 10, 2012

The Fiscal Cliff

By Bill Maher

Now that the election dust has settled, and the big GOP donors have cut off Karl Rove's thumbs, and Donald Trump's syphilis has runs its course, everyone is talking about the "fiscal cliff." In fact, President Obama talked about it in his first appearance as a "two-termer." After which, let’s face it, he's going to be completely gray. He's going to look like Uncle Ben. Happens to every president. You age exponentially. Can you imagine what McCain would have looked like if he'd been president? He'd look like "Blue" from Old School.

What is the fiscal cliff? It's basically a built-in punishment if Congress and the President don't do their homework. Since they couldn't get a deal done last year, this is what they agreed to do in 2011 in order to raise the debt ceiling: come January 2013, automatic tax hikes and spending cuts would kick in that would be so large ($800 billion, according to the CBO) and abrupt that everyone pretty much agrees it'd send the economy back into recession. The Bush tax cuts expire. Obama's payroll tax cut expires. $55 billion cut from defense spending and $55 from nondefense discretionary spending. Basically, we'd be taking a good deal more out of paychecks and whacking government spending at the same time, which is going to do real damage. And if the Republicans could blame it on Obama they'd probably be for it. But chances are they'll get blamed, so they aren't.

So the President and John Boehner have to go golfing again. And these two do not have a relationship like Reagan and Tip O'Neill. Most of what they're fighting over is, of course, the tax cuts for the wealthy. Obama wants to extend the middle class tax cuts, but feels that we can't afford the Bush tax cuts for the wealthy and that those have to go back to Clinton-era rates. He also ran on this and won. Also, about two-thirds of Americans agree with him.

Republicans, of course, pretend that all that stands between us and darkest night are tax cuts for job creators, and that even though the Bush tax cuts are a huge contributor to the current deficits they say they despise, they're also perfectly crafted and must never be touched. Make sense? I didn't think so.
Interestingly enough, the CBO put out a report saying that tax hikes on the rich really don't hurt the economy the way Republicans contend: "Allowing income tax rates to rise for wealthy Americans, and maintaining rates for the less affluent, would not hurt U.S. economic growth much in 2013."
And this goes to the larger problem everyone is talking about post-election: Republicans live in their own world, where the key to job growth isn't anything but lowering tax rates for job creators. That's not their belief based on evidence. It's their religion based on faith. And the non-partisan number crunchers at the CBO are saying, "No, that's not really true." It shaves a fraction of a point off GDP growth, and in return you get about $1 trillion in revenue over the next ten years.

Hmm. Non-partisan number crunchers say one thing, Republican Party says another thing is true, and blows off the number crunchers. Where have we seen this before?

Now, the inability for our government to deal with this stuff is a real problem. It spooks the markets. It's already spooking the markets. They're going to need to do a deal. But in the past Republicans have basically held the economy hostage for tax cuts for the wealthy. When these deadlines neared, and ratings agencies started downgrading us, and the markets started tumbling, Obama gave in. Maybe that was smart, maybe it wasn't. Maybe it was all he could do. But now it's different. He holds the cards now. He won the election on this.

Some are arguing for Obama to hold his ground, even if it means we go over the cliff a little bit. Because this time everyone will know who to blame. It'll be like when the Republicans shut down the government thinking it would make Clinton look bad, but it ended up backfiring.

The threat of tanking the economy is the only card the Republicans have to play. Obama is proposing a middle-class tax cut for the 98 percent of Americans who make less than $250,000 a year, letting the Bush tax cuts expire for those earning more. If the Republicans block it, everyone's taxes will rise on Jan. 1.

So that's where we are. Let the golf outings begin.

20 comments:

wayner said...

What is so hard to figure out? Profligate spending and excess for decades is now demanding that the Piper be paid or face a Greece style economic future. If you think government debt is bad now imagine what it will be if interest rates climb to double digits.
- And btw maybe Mitt had a point about too many shiftless people playing the system for a free ride. How many young men are wasting away their lives in the basement of their parents' houses 'gaming' instead of educating themselves for gainful employment (and paying some taxes)? The video game industry is bigger than the movie industry and use up much more of the consumer's time than watching a movie. And yeah there is no shortage of young women getting knocked up on purpose for welfare benefits. We are indeed getting soft and grow up feeling entitled with no relativity for reference. Everyone should have watched that PBS special a while back about the Dustbowl of the dirty 30's (way before my time!) for a reality check. IMO the Republicans are living in a dream world if they think we can 'grow' our way out of huge debt; those days are long gone in this age of global competitiveness and cheap overseas wages.

Anonymous said...

Let's go over the cliff and let democrats immediately propose new legislation raising taxes ONLY on those making over $ 250,000. Republicans will have to support it, or risk the wrath of 98 % of the population.

Toovey said...

Hey Bill why don't the dems just but their own bill on the floor and let the repulicans vote on it

Doug Leschak said...

To the dear Mr. Huckabee. I understand it is in your fundamentalist, warped mind that it is God's retribution to kill kindergarten children. After all, that is how he has always worked. Kill the children first and, if they don't fall into line, kill the adults. You can take that to hell with you. Along with the rest of your BS.

By the way Mr. Maher, I agree with you on most things, except your stand on PITA and gun control. PITA had a good idea in the beginning but have degraded into extremist fanatics who have no logical reasoning behind their current actions. And, my individual choices for what I prefer to eat or drink or smoke are my own business and not subject to legislation. (Please notify Mr. Blumberg). I do not care what you think about the way I live, only about the way you want to control the way I live.

Jordan99 said...
This comment has been removed by the author.
Jordan99 said...

Yeah, right Bill. This guy right here owns you and all of your buddies like Michael Moore.

http://www.youtube.com/watch?v=VmAm7h4rhbc

Phil PA said...

Jordan99,

Quit trolling and spend your time doing something meaningful, like calling for armed security guards in schools, death penalty for possession of narcotics, and Jesus for "Prez" 2016..

While you were copying and pasting that link, a few mexicans jumped the border and stole our jobs. Did I say Mexicans, I meant Saudis.

Anonymous said...

OK, solution to the debt crisis: pay cuts for congresss.
It is my opinion that higher tax rates lead to seeking deductions, like, well, payroll expenses.
Also, kick the limit off FICA, to help fix SS.

Shaun McFedUp said...

Boehner isn't going to budge, at any cost, even if it plunges the world into a recession. It's not about what's good for America, it's about what's good for the political party. It sucks because the SMALL business owners and the middle and lower class folks out there are the ones getting hurt the most by Congress PLAYING THEIR, "MY PARTY IS BETTER THAN YOUR PARTY" EGO GAME, all the while the richest of the rich continue to buy up our properties that are foreclosed on,continue to hold down our salaries and blame that on the economy, and continue to get rich and thrive off political indecision, that believe me, they FULLY SUPPORT!

UpState NY said...

All Obama said during his reelection campaign was that Millionaires and Billionaires should pay their fair share! So why are the Democrats pushing a bill that would raise taxes on those making 250K/yr? Are people so out of touch that they don’t realize a couple making 250K (combined) with a couple of kids, a dog, a cat, a mortgage, and saving for college is far cry from the jet setting Millionaires and Billionaires Obama referred to during his campaign? If Democrats are serious about raising taxes on Millionaires and Billionaires they should raise taxes on those making $1,000,000 per year or more! This is the old “bait & switch,” but shame on me for voting for Obama!

Anonymous said...

IMPEACH BOEHNER

Chuck Martin said...

I live in Canada. Usually half of my earnings are gone after source deductions, and I'm good with it. Payin' my share. It is not a political issue although politics are involved. The issue at hand is human desire. Desire for more money, more power, more, more, more,,,. With no empathy or respect for the next person. This is the issue. But where to start? Lets start at the annual earnings. $100k-150k tax goes up to 30%. 200k = 35%. 250k = 40%. 300k = 45%. 500k = 50%. 750k = 60%. 1million = 70%. 10million = 80%. And corporations lose their subsidies, and pay 90% tax. Extrapolate globally. Then we take the revenue, apply it to the environment, health, education, R&D, Arts & Humanities, and we have a nice place to live. Fiscal Cliff? A ruse, smoke and mirrors to obfuscate the real issues that warrant serious attention. How much was spent on that ridiculous election? Hey Bill, when you comin' to Canada?

J said...

"Jesus loves all of you! let him into your life"
I think we're a little too old for fairy tales..

J said...
This comment has been removed by the author.
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