UPDATE 1-Obama: Massive Blow to Economy if Tax Cuts Lapse

Reuters ^ | Wed Nov 30, 2011 | Reuters

[Son House]

President Barack Obama warned on Wednesday that the U.S. economy would suffer a massive blow if Congress fails to extend expiring payroll tax cuts, saying "we're not fully out of the recession yet."

Obama sought to turn up the heat on congressional Republicans at a campaign-style rally at a high school in Scranton, Pennsylvania, a battleground state in the 2012 presidential election in which he is seeking a second term.

Obama and his fellow Democrats want to finance the payroll tax break extension by raising taxes on wealthier Americans, an approach Republicans vehemently oppose. He said the issue could come up for a vote in Congress as early as Friday.

He said if Congress doesn't act to extend the payroll tax cuts, middle-class Americans will see their taxes go up "at the worst possible time."

"It would be tough for you," he said. "It would also be a massive blow to the economy because we're not fully out of the recession yet."

[Son House]

"It would be tough for you," he said. "It would also be a massive blow to the economy because we're not fully out of the recession yet."

Have we started a new recession and I haven't been aware?

U.S. recession ended June 2009, NBER finds
http://www.marketwatch.com/story/us-recession-ended-june-2009-nber-says-2010-09-20

The U.S. recession that began in December 2007 ended in June 2009, making the 18-month slump the longest since the Great Depression, according to the National Bureau of Economic Research.

Yet the NBER also cautioned that its findings bear no relation to the current state of the economy and do not represent a forecast about the future. If another downturn occurs anytime soon, the NBER said, it would constitute a separate recession.

[Jim Robinson]

Yes, the recession ended. The Obama depression officially started January 20, 2009 and the ending will officially begin January 20, 2013.

[Son House]

Why aren’t the Republicans countering the payroll tax cut with a income tax cut instead? That would apply for everyone and would lower payroll deductions too, along with negate the Democrat intended consequence of a “progressive” tax structure only having a payroll tax cut would impose as being paid for by millionaires. Isn't that a wealth tax?

[unixfox]

Obama: Massive Blow to Economy if Tax Cuts Lapse

Worse than what you have already done to it? You treasonous P.O.S.!

[Son House]

Either he isn’t aware of the state of the economy or ‘recession’ is being used for effect.

[GeronL]

Obama trying to position himself as a tax cutter and a friend of Israel?

hilarious.

[dynachrome]

I do not believe there would be a “clean” bill that just extended the tax cuts. There would be Lord knows what added to it.

[TheWriterTX]

Dear Son:

That's because all the economic indicators seems to suggest stability, or at least nominal growth.

I'm almost positive it didn't take into account the Fed interference to the tune of nearly $4B a day.

NBER ran counterfactuals on the 2 rounds of QE, which they labeled as "extreme," and determined that they had no positive impact on the economy. Had we not spent the money, we would have been in the same place (except $2 trillion less in debt).

[XenaLee]

And of course, the part Obama does NOT say is....if the DemocRats can’t get their tax increases on the “wealthy” (ie anyone that makes over $200k/year) passed...the Bush tax cuts WILL be allowed to expire. Talk about yer blackmail...(or mulattomail).

[monkeyshine]

GOP can just pass an extension and force the WH to veto that which he says will send us into recession if it doesn’t pass. Simpler that way. The campaign ads will write themselves!

[Son House]

He doesn’t even recognize his normal, steady erosion, he thinks we are still in a recession over 2 years after the recession ended.

[ballplayer]

I guess they have totally given up on Social Security since that is the So called tax cut Obama is talking about,either that or Social security does not need the money because contrary to news reports it is Fiscally sound,so which is it? I thought Social Security Money was separate from General revenue,why does Obama not tell Seniors he is taking money from social Security? Will future retirees benefits be reduced because their Contributions went down for two three or four years? Dont forget this so called tax cut or increase in your income, will now be subject to income taxes next year,yeah your taxes are going up because of the OBAMA tax CUT! Thats because your tax rate is the same,it is not being reduced,OBAMA IS a CON MAN

[justlurking]

Why aren’t the Republicans countering the payroll tax cut with a income tax cut instead?

Because about half of the wage earners in the US are only paying Social Security taxes. They aren't paying any income taxes. The only people that would benefit from lowered income taxes would be those already paying them.

By lowering payroll taxes, the burden is being further shifted onto the people that pay income taxes. Those payroll taxes will have to be made up from the general fund (i.e. from income taxes), both now and in the future.

Economically, your proposal makes sense. Politically, it would be a disaster.

[SunkenCiv]

Thanks Son House.

would suffer a massive blow if Congress fails to extend expiring payroll tax cuts... [Zero] and his fellow [Demagogic Partisans] want to finance the payroll tax break extension by raising taxes on wealthier Americans...

...which proves, once again, that they're really just about raising taxes while simultaneously creating ever-rising massive budget deficits to line their own pockets and those of their cronies.