Catholic Online Forum

The Fiscal Cliff...

Is it real or just a scare tactic?

Apparenly those wise legislators of yore thought is would be a good idea to set a time limit on the Bush era tax cuts. Why not just let it happen?

_________________
David L (CA)
"Outside of a dog, a book is man's best friend. Inside of a dog it's too dark to read.” - Groucho Marx

What about the wise Founders of yore?

I still await an annual budget -been waiting a few years now... Why won't the leftists just let it happen?

_________________
Daniel

"Do you think that I have come to establish peace on the earth? No, I tell you, but rather division." -- Luke 12:51

A politician only gets credit for a permanent tax cut once. He gets credit every year for renewing a temporary cut.

_________________
- Joe Kelley

Death is only a shadow across the path to Heaven.

The Fiscal Cliff reminds me of the Bible story of the demons being driven out and going into the swine, and the swine tumbling over the cliff into the sea. Under the current administration's financial strategy it's bound to happen regardless of what pushes it over. When and if it does a financial collapse will occur that makes any other recession and dollar inflation seem like a non-event. Recovery will be long and painful. Stocks and 401k portfolios will plummet, you will need wheel barrows full of dollars to buy food, and precious metals will skyrocket in value. It's a horrible scenario but mostly a self-inflicted chastisement. Spin-off events will perpetuate causing much suffering. Sound unlikely? We had better pray that it is.

_________________
Pax et Bonum


Schultzz

Remember the housing bubble. Today we have a government spending bubble. The possibility of the bubble bursting is very real UNLESS the government cuts spending.

The 'balanced' approach that Obama proposes is nothing more than additional continued spending that entails an IOU for future cuts in additional spending with an immediate increase in tax revenue. In essence, Obama seeks to indebt further present taxpayers and as well indebt further our posterity. The balance he seeks is by continuing to spend; increase spending, and balance this debt by spreading the debt into the future.

This is by definition indentured servitude -slavery -tyranny...

Washington DC, the modern Sodom, is living the high life right now as are our government overlords and government workers. EVENTUALLY, there will be a reckoning.

_________________
Daniel

"Do you think that I have come to establish peace on the earth? No, I tell you, but rather division." -- Luke 12:51

Not sure I'd use your exact words but I agree; Obama's definition of balanced is a nation of government elites and tax-paying subordinates.

_________________
BobA

David,



I suppose that depends on how you feel about a mild recession in early 2013.

The term "fiscal cliff" is attributed to Ben Bernanke. Most economists feel "fiscal hill" or "fiscal slope" would be more accurate. The important thing is that even if it is allowed to happen, the impact won't be felt as a single, sudden knock-out punch. The effect will be gradual and cumulative. Even so, with unemployment levels where they are, this is something you'd really rather not happen.

_________________
James Daly

"It is the Lord." (Jn 21:7)

James, when we look at all the economic markers, not just those favorable to the administration, we find that the recession has not ended. We have been in a moderate recession for four years now and the wrong action or no action by our government today could actually result in a moderate economic depression. Everyone talks about the "fiscal cliff" as something that can be fixed today, not so, there are many new taxes that kick in tomorrow due to Obamacare and other draconian measures regardless of the Bush tax cuts issue.

_________________
BobA

Bob A,



That is very difficult to say. We don't know how the USA defines "recession". The rest of the world defines it as "two consecutive quarters in which the rate of growth in GDP is negative". We know that the US does not accept that definition. We don't know what definition the US uses since it is a secret.



True. But they are not yet due and payable. Depending on the House vote, the whole event might never have happened. It would seem that jumping off the fiscal cliff has been something of a bunjee jump.

_________________
James Daly

"It is the Lord." (Jn 21:7)

James, the definition of recession is truly a secret; the government has one that is more generous than the economists; I trust the economists.

There are many taxes that will kick-in this month including several within Obamacare regardless of the any Fiscal Cliff compromise; I wish it was not so but...
Many of us who are conservatives remember what happened the last time we let the Democrats jam something down our throats, Obamacare, so we are less likely to roll over this time. If we go over the "cliff" so be it, it will happen later if not now simply because the economy will not tolerate the current philosophy. it will collapse.

_________________
BobA

Theoretical economic discussion becomes truly academic and ancillary when the reality elephant in the room can no longer be ignored, The debt limit has been reached, that is what we discuss. The government spends far more than it takes in -this is true whether some argue there is a depression or an economic boom.

The government is bankrupting itself and the leftists wish to continue pursuing this path by borrowing more and increasing taxes.

Regardless those who claim the economy is improving -government debt is growing and THAT is the measure.

The economic policies of Obama as measured by government debt have been a resounding epic failure.

_________________
Daniel

"Do you think that I have come to establish peace on the earth? No, I tell you, but rather division." -- Luke 12:51

Bob A,

According to the US Departmant of Commerce, Bureau of Economic Analysis, GDP growth for the third quarter of 2012 was 3.1% (estimate) and for the second was 1.3%. On the basis of the internationally accepted (except in the US) definition I gave above, the US is not in recession.

http://www.bea.gov/newsreleases/glance.htm

(I'm assuming the figures provided are accurate - more or less.)




...which is not to say the US doesn't have problems; it most certainly has some very serious ones.

The following table from the OECD shows government debt as a percentage of GDP

http://www.oecd-ilibrary.org/economics/ ... t-table-en

You'll notice that the projected figures for the US for 2013 and 2014 are nothing short of horrifying.

_________________
James Daly

"It is the Lord." (Jn 21:7)

The terms change regularly.

In the 1800's, it was a "panic". They didn't use that word in the 1930's because it would cause...panic. So they called it a depression. We didn't use that word after the 1970's because it would cause...panic. So we call it a recesesion. We don't use that word after the 1990's (starting with GHW Bush) anymore because it causes...panic. So we call it a "long recovery".

Roosevelt had it right. The only thing we have to fear is fear itself. Consumer confidence is key, and consumer confidence is fickle and fragile. So I can understand the constantly shifting lexicon.

_________________
Jeff Stevens

Jeff,

We know that in the US a recession is determined by a calculation involving not only GDP growth, but also other factors such as unemployment levels, growth in employment, number of bankruptcies, business spending, the inflation rate... We just don't know how much weight is given to each or what calculations are involved.

_________________
James Daly

"It is the Lord." (Jn 21:7)

<shrug> I'm not sure "recession" is a useful word. It is a term that is useful to news outlets and laymen I suppose, but to anyone who wants to examine what is truly going on, the factors you mention are much more relevant, and a generalized description is not particularly.

_________________
Jeff Stevens

http://www.abc.net.au/news/2013-01-02/u ... al/4450338

Bungee jump was right.

_________________
James Daly

"It is the Lord." (Jn 21:7)

I wouldn't say it's "just" a scare tactic. But it is something of political theater. Congress put the shackles on themselves, they had the power to avoid the sequestration and tax increases. Not only that, they have the power to make any action they take henceforth retroactive to January 1st, thus avoiding any significant economic impact. It's like Houdini throwing himself in the ocean with a straightjacket on...while he's palming the keys. Sure, he'll get wet, but he's not going to drown.

What's often overlooked is that the Republicans are sort of over a barrel here. The 113th Congress (seating Thursday 1/3/2013) has more Democrats in it in both houses of Congress, so they'll get a worse deal starting Thursday than they will before then. So the Democrats have more power in the negotiations. In a sense, "Don't like it? We can wait until 1/3 and we'll have to convince less Republicans to vote for this."

_________________
Jeff Stevens