Free Republic

We apprehensively advance through this nail biting moment in history as a great Nation floats, uncertain, caught in a holding pattern, hoping its leadership will find wisdom enough to avert the so called Fiscal Cliff, even if most of us don’t fully comprehend what such a cliff entails, or even if such a thing exists. We’re too busy struggling, hanging on to whatever we have, hoping for stability, and hoping that tomorrow brings some relief to our stress.So let’s look for a little insight into what astute and gifted minds are really doing deep in the core of the...

We are cruising towards the fiscal cliff. The John Boehner leadership of the House is fighting Barack Obama and the Party of Treason. The issue is will some or all of the Bush tax cuts be extended and will there be cuts in spending or will the so-called “sequestration” kick in and force automatic and ill-advised spending cuts in key areas like defense. Is there an alternative to this mess? If there is, what is it? Here is the alternative. Do nothing. Will that be a good thing? Not really. It is simply better than the alternative. Why is it...

<p>Pete Peterson. Peterson founded, funded or supported most of the institutions in Washington devoted to publicizing the problem of the deficit, including ... documentary “I.O.U.S.A.”</p> <p>Bill Clinton. By the time Clinton left office, politicians were beginning to talk about perpetual surpluses, in exactly the same way that hucksters on Wall Street were talking about a perpetual bull market.</p>

Two weeks after raising its regular quarterly dividend, Brown-Forman (BFB n.a.) declared a special cash dividend of $4.00 a share on Tuesday as it looks to return money to shareholders ahead of the fiscal cliff deadline that could significantly raise dividend taxes. The maker of alcoholic beverages like Jack Daniel’s Tennessee Whiskey, Southern Comfort, Korbel and Woodford Reserve said the special dividend will be paid on Dec. 27 to shareholders of record on Dec. 12. A slew of companies, including Wal-Mart (WMT), have been moving up the date of their dividend to save shareholders a bundle of money on taxes...

The Republicans keep putting new tax revenue on the table (capping deductions), Warren Buffet suggests increasing tax rates on households earning $500k and above, but President Obama and Democrats replied “Nyet.” It is always a risky proposition to raise taxes when the economy is so fragile. Speaking of a fragile economy, the Chicago Fed National Activity Index printed at -0.56 for October and a previous reading of 0.00 in September. A print of -0.56 indicates economic contraction. Meanwhile, down in Texas, the Dallas Fed’s Manufacturing Outlook Level of General Business Activity was expected to print at +2.5, but printed at...

Veteran political analyst Pete Davis offers up a list of possible impediments to a deal on avoiding the fiscal cliff: 1. President Obama insists on a tax rate increase on those earning $250,000 or more, and House Republicans balk; 2. President Obama and Democrats refuse to accept revenue increases that won’t be scored by CBO, i.e. that depend upon tax reform and/or upon an assumed increase in economic growth; 3. President Obama insists on a Making Work Pay tax credit to replace the lost 2% payroll tax cut for working Americans that Republicans won’t accept; 4. House Republicans insist on...

Two weeks ago a slight majority of Americans voted for more stuff from the government. There may have been other drivers, but that is the main one. Below is a quote whose origin is disputed, but it is particularly apropos: A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a...

Brian Beutler of Talking Points Memo may have been the first person to use the term “austerity bomb” for the expired tax cuts and automatic spending cuts to take effect at the beginning of next year. Paul Krugman adopts the term in his blog entry "The Austerity Bomb" in the New York Times. Beutler wrote: “A giant austerity bomb is timed to go off at the beginning of next year, and the threat of significantly higher taxes and lower spending has Republicans running around the Capitol sounding more like John Maynard Keynes than John Boehner.” The term "fiscal cliff" makes...

Pundits, Politicians, etc are looking all over the map for a solution to the fiscal clift/sequestration problem. But the solution lies in what happened during Obama's first term. Under Bush/Congress the deficit increased 43% during his 8 year term (we had a real war, 9/11, and Katrina). Under Obama/Congress the deficit "doubled" during his 4 year term or "half" the time. Rather then us having to listen to threats to cut Social Security, Defense, or severe increase in Taxes shouldn't we go back to the problem that caused this Sequestration legislation to be passed in the first place? Should the...

According to The Hill, Senator Bob Corker (R-TN) is optimistic that there is a deal to get beyond the fiscal cliff. Really? The fiscal cliff is simply the foothills of a much larger mountain (of debt) range, much like the Andes of South America. So, what Senator Corker is talking about is getting past the foothills right in front of us. President Obama’s preferred habitat of tax are households with adjusted gross income of $250,000 and above. He defines this group as “the rich” and wants them to pay their “fair share.” Households with adjusted gross income of $250,000 or...

As I've noted before, there is no "cliff" and January 1st is not a drop dead date. There are a few things that appear certain (but you never know with policy): 1) The top marginal tax rate will increase from 35% to 39.6%. 2) The payroll tax cut is probably going away. This was the 2% payroll tax reduction that workers received in 2010 and 2011. 3) The Alternative Minimum Tax (AMT) relief will probably be extended (it is every year). 4) Given that the top marginal tax rate will increase - and that certain politicians can't vote for any...

President Obama, claiming his election "majority" was a vindication of his fiscal policy, held firm Friday to his intention to include tax hikes for America's top earners in any negotiations with Congress to pull the nation back from the so-called "fiscal cliff." The president, in his first remarks from Washington since winning a second term, urged officials to "get to work" on the issue as he invited congressional leaders to the White House next week. He said he's open to "compromise," but did not appear to budge on what has been a central disagreement over the last two years --...

Just days after Tuesday’s presidential election, President Barack Obama invited Capitol Hill leaders to the White House for debt and spending meetings next week in order to discuss the country’s looming ‘fiscal cliff.’ On the election, he said that “the American people voted for action, not politics as usual.” “You elected us to focus on your job, not ours and in that spirit, I’ve invited leaders of both parties to the White House next week so we can start to build consensus around the challenges that we can only solve together.”

Republicans know they’re going to have to budge on revenues in the looming debt and spending debate. The question is when to blink. The problem: Revenue increases, which could solve the fiscal cliff riddle this fall, are also their best bargaining chip for an even bigger fight to overhaul the Tax Code expected next year. GOP lawmakers — especially those on the tax-writing Ways and Means Committee — say tax increases should happen only as part of a fundamental Tax Code rewrite that also lowers marginal tax rates, a policy dream that won’t be realized until next year at the...

It has been two days since the US election where President Obama was re-elected and both the House and Senate remained in the same hands. In other words, nothing changed. The reaction? Dow Jones Industrial Average The reaction was decidedly negative since the election signals more of the same policies under which the economy if foundering. Ten Year Treasury Yields Ten year Treasury yields have dropped indicating a rush to safety. Gold Prices Gold prices have risen a heck of lot faster than the stock market, particularly today. Silver Prices Often used as a defense against vampires and werewolves, silver...

What are you predictions for the stock market tomorrow? What about the next month/year?

President Obama’s admission to talk show host Jay Leno that “my math expertise tops out at the 7th grade level” isn’t a handicap as Obama campaign adviser David Axelrod sees it. “Some are going to jump to the conclusion that a person like Mitt Romney with his financial experience in multimillion dollar business investments would be a better person to manage the government in a time of fiscal crisis,” Axelrod said. “But we don’t agree.” “We think the vast majority of voters will identify with the president’s aversion to math,” Axelrod pointed out. “Most people find math to be hard...

An oldie from way back in September 2012. Seems so long ago. I think the point of the song / video is that some kind of tax hikes are needed along with spending cuts to avoid the fiscal cliff. They call tax hikes broadening the base and eliminating loopholes. Both Romney and Obama want to tax the rich. It's just that Romney wants to cut spending. Watch for Obama calling out Romney on extreme spending cuts in the next debate. And think about the Boomers who will be taxed so they can pay for their own entitlements in the next...

The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a bid to boost growth and reduce unemployment. Yikes! Here is Bernanke’s statement. And here is the New York Fed’s statement on MBS purchases. The reaction? More air pumped into gold, silver, stocks. Seniors hurt by lower bank deposit rates. Gold Silver Dow Jones Industrials – Monetary easing bubbles stock markets 10 Year Treasury Yield Yield Curve – rising yield curve is not what The Fed expected Fannie #0yr Current Coupon Spread over 10 Yr Treasury...

(CNSNews.com) - Although the Congressional Budget Office estimates that the federal government will spend $3.563 trillion in fiscal year 2012 and the White House Office of Management estimates it will be $3.795 trillion, actual withdrawals from the U.S. Treasury have already exceeded $10 trillion. In fact, as of the close of business Wednesday, withdrawals from the Treasury equaled $10,201,615,000,000 for fiscal 2012, which began on Oct. 1, 2011 and will end on Sept. 30. According to the Daily Treasury Statement--the official daily accounting sheet for the federal government—withdrawals from the Treasury exceeded $10 trillion this year on Aug. 30, when...