Posted on 12/28/2012 9:52:51 AM PST by whitedog57
President Obama has summoned Congressional leaders to the White House to discuss avoiding the “fiscal cliff.”
The fiscal cliff contains three elements: 1) automatic spending cuts (good), 2) expiration of Bush-era tax cuts (bad) and 3) Obamacare tax implementation (ugly).
First, automatic spending cuts in fiscal 2013 would cause federal spending would fall an estimated $65 billion. For perspective, the Federal government’s budget deficit ending in September 2012 was $1.09 trillion. This means that the dreaded automatic spending cuts will amount to a paltry 6% of the 2012 budget deficit.
Second, taxes will be going up in 2013 by an average of $3,446 for U.S. households, according to the Tax Policy Center. But eventually Obama and Congress will settle on gouging households earning $250,000. Here is a detailed list of the taxes going place. This includes both expiring Bush-era tax cuts and Obamacare taxation (mostly on those earning $250,000 and above).
On the other hand, wages and salaries of Americans (as a percentage of GDP) have fallen rather dramatically since 1970.
And The Fed has doused the economy with enough accelerant to ignite a firestorm (if banks start lending on housing).
With dead money multiplier and velocity, it is difficult for the government (and The Fed) to generate a finance-driven recovery.
And the “debt virus” that plagues the US, Japan and Europe shows no sign of abating.
We shall have to wait and see what toxic stew Obama and Congress cook up for us (including reductions in the mortgage interest deduction). They may generate a patch, but the spending cuts are trivial given the enormous spending levels by the Federal government.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
What seems to have caused you to excerpt your own blog?
If the paltry 65 billion in cuts, how much of that comes out of Defense, and how much comes out of social security, medicare, obama care? Answer: 50% comes out of defense, and ZERO cuts to Social security, medicare, and Obamacare. So it is more like bad, bad, and ugly.
If you watch nothing else today....please watch this short illustration lesson. This is a non-partisan video produced by an accountant, Hal Mason, who retired after 27 years with IBM. He looks at the budget, its revenues and expenses, and very simply illustrates the financial problems of the U.S.
Amazingly, we get all the media talking heads blathering and shouting for hours and never give us clarity. This guy does it in a few minutes. The message seems to be very clear. Where Greece is today, we will be tomorrow, unless our representatives in Washington start to take some very decisive steps.
http://www.youtube-nocookie.com/embed/EW5IdwltaAc?rel=0
Good video. Too bad the country is too stupid to understand it, much less do anything about it.
We had our chance. It’s gone.
Agreed. We are headed towards Greece.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.