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The Fiscal Cliff

Discussion in 'BBS Hangout: Debate & Discussion' started by CometsWin, Nov 17, 2012.

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What will happen with the fiscal cliff situation?

  1. Democrats get most of what they favor

    24 vote(s)
    23.5%
  2. Republicans get most of what they favor

    4 vote(s)
    3.9%
  3. Good deal for both sides, cuts and tax increases

    9 vote(s)
    8.8%
  4. No deal

    13 vote(s)
    12.7%
  5. Punt, short term deal that pushes the deadline back

    52 vote(s)
    51.0%
  1. rimrocker

    rimrocker Member

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    I think the actual Tea Party Caucus has 60-70 members. Hard to break down extreme vs not-extreme as just about all of them are pretty far along the extreme scale, either because of personal beliefs or because of the people that give them money or because of their districts or a combo.
     
  2. rimrocker

    rimrocker Member

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    158 Repubs have American Conservative Union rankings of 80% or greater. In glancing at the other rankings organizations, included some non-partisan ones, the numbers come out similar. So, there are likely about 150-170 wingnuts/near wingnuts in the House.

    But that does not really tell the whole story because increasingly, non-wingnuts are becoming afraid of losing to wingnuts in the primaries, making them drift toward wingnuttia. If you're looking at passing something with all Dems and some Repubs, your opportunities are quite small and if done, are essentially an end to those Republican's congressional careers.
     
  3. glynch

    glynch Member

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    Chained CPI is a reduction in what is going on now. You can argue whether it is the best way to do it, but if you are honest you can't argue that it is a reduction. Period.

    Show me the progressives who support this.

    As far as means testing, if Obama/Erskine Bowles types acknowlege the lower folks will get less with the chaied CPI and so will the higher folks, but don't worry we will do something outside the chained CPI change to help out the lower folks, that is taking away the universal aspect of the program.

    You are just spinning when you try to deny this.

    If your goal is to spin for Obama or support those who want to reduce social security payments you have the line down.
     
  4. Major

    Major Member

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    Of course it's a reduction. Which is necessary for SS to stay solvent in the long-term, even according to their own actuaries. No one has argued that it's not a reduction. The question is whether it's a reasonable reduction. If Chained CPI is the proper measure of inflation, then SS right now grows faster than inflation, which is stupid.

    Pelosi, the Center for Budget and Policy Priorities, and Center for American Progress, amongst others:

    http://www.salon.com/2012/12/19/the_progressive_case_for_the_chained_cpi/singleton/

    If you live in lala-land and think entitlements aren't getting cut at all, then you're no different than the leftist version of Tea Partiers that are destroying their party with their "no compromise" philosophy. That's a philosophy that always backfires and will result in a worse deal in the end (as you saw with the brilliant Wisconsin Democrats).

    But if you actually accept reality that the budget deficit must be fixed, and everything from taxes to defense and entitlements must be affected, this is one of the most logical and rational changes out there because *it makes sense*. Even Paul Krugman doesn't think it's a deal-killer.
     
  5. glynch

    glynch Member

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    There are many ways to fix social security and objective observers see no real reason to panic and do it hastily in the context of the bs so-called fiscal cliff "crisis". Normally you seem to want to be more deliberate, doncha?

    There are many ways to do this that are more progressive ( I know you are not perhaps concerned about this) including raising the cap so that millionaires and billionaires pay more social security taxes, raising the age say a year etc.

    Hopefully you are not playing the typical conservative "entitlement" talking point. Yes, we are damn well actually entitled not because we are silly or babies, but because it would be theft to take our FICA our whole lives and not pay it back. Besides just because Medicare is ****ed due to the expensive for profit system it pays for, does not mean social security is in a great crisis. See articles by Dean Baker if you want to get outside the FOX, ABC, Erskine Bowles/ Wall Street consensus.

    The fiscal cliff is a budget issue, social security is not. Even Reagan acknowleged that ss is not a budget issue. SS payroll taxes pay for this and it is solvent for many years. There is no need for Obama to please the social security haters by bringing in this outside issue just to please them. As usual he negotiates against himself and tries to please Wall Street that dislikes social security.

    As far as lala land you moderate Republican types, who I am still glad like Obama rather than Romney, brought us Iraq and frankly the economic collapse and lot of the other problems with your small ball, what one favorite commentator called "crack pot" realism. Paul Krugman calls it the policies of " very serious" people who like to have positions on taxes, the deficit and social security in line mainly with Wall Street.

    Just noticed your replay of the Wisconsin Democrats. Your style of procedural politics and policy minutiae would still be negotiating with insiders for the first black admission to Old Miss.

    It ain't over in Wisconsin and the fight has just begun. All movementfor progress have temporary setbacks. Try not to get too upset over the fact that some folks will be riled up till things get back to a more comfortable moderate tone. Change is like that.
     
  6. rimrocker

    rimrocker Member

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    Conason...

    The more I think about the more convinced I am that Obama gives in so easily because if he negotiated like normal people, the crazies would drive Boehner out and nothing would ever get done. Looks like it might happen anyway...

    That could be interesting. Right now,it looks like typical Repub behavior... tear it down and hope something better comes along without having a true plan.
     
  7. glynch

    glynch Member

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    Major, let's see what Robert Reich has to say about the chained CPI deal you are pushing. I guess you might call him that famous lala land leftist, but nonetheless.

    ************
    Social Security should not be part of any such deal anyway. By law, it can’t contribute to the budget deficit. It’s only permitted to spend money from the Social Security trust fund.

    .

    Besides, the President’s proposed reduction in annual Social Security cost-of-living adjustments would save only $122 billion over ten years. Yet it would significantly harm the elderly.

    It defies logic and fairness to give more tax cuts to the wealthy while cutting benefits for the near-poor.

    The median income of Americans over 65 is less than $20,000 a year. Nearly 70 percent of them depend on Social Security for more than half of this. The average Social Security benefit is less than $15,000 a year.
    Even Social Security’s current cost-of-living adjustment understates the true impact of inflation on elderly recipients, who spend far more on health care than anyone else – including annual increases in Medicare premiums.

    Hands off Social Security. If the Republicans are willing to raise tax rates on high earners but demand more spending cuts in return, the President should offer larger cuts in defense spending and corporate welfare.

    http://robertreich.org/post/38349329185
     
  8. Major

    Major Member

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    They've been talking about this fix for a decade now - it's been pretty deliberate. If you have to give up something on entitlements - which has to happen - then why not throw this in there as the bone? SS was going to have to be fixed anyway, except now you can avoid cutting something else. Besides, the longer you wait to fix SS, the harsher the fix will be whenever you do have to do it.

    Of course there are - and I'm totally for raising the retirement age. But that's considered much less appealing to the left than the CPI fix (for whatever reason). You can raise the cap as well, but that doesn't have a lot of Dem support anyway - mostly because they want to raise taxes on the wealthy for other things instead.

    This is simply not true. Your benefits are correlated to your FICA inputs, but reducing or lowering benefits doesn't cause you to not get it paid back. Benefits have been raised multiple times, despite your inputs not going up; this would simply be the opposite of that.

    SS is not in a great crisis - but it will go bankrupt at some point. The idea is to do a minor fix to it before it becomes a crisis. As was noted in your subsequent post, the actual dollars saved from this are not huge - but it's enough to fix it because we're doing it now. The longer you wait, the bigger the problem will be and the harsher the cuts will have to be.

    He's nt trying to please SS haters. He's fixing something everyone agrees is going to be a problem - he talked about serious entitlement reform in a speech back in January 2009, before the budget was a problem. Clinton was going to do SS Reform in his long-term deficit fix before Lewsinsky blew it up too. Everyone agrees it needs to be done, but no one is ever willing to do it. Medicare wouldn't be the mess it is today and wouldn't need nearly as big reforms if Clinton had been successful with health care reform in 1994.

    I know its fun to blame Wall Street for anything and everything, but they really have no notable position on Social Security reform.

    Nevermind that the way civil rights laws were passed were exactly using my way. Same with the original launch of SS, Medicare, and any number of other progressive legislation. Tea Party obstructionism has never accomplished much of anything.

    The GOP got every single thing they wanted in that fight, and the Dems got nothing. Republicans even won back control of the Senate - the one thing Dems gained for a grand total of a few months - with the November election. I don't consider total failure of achieving even one of your stated goals - either political or policy - to be a temporary setback. They simply failed, completely.
     
  9. Major

    Major Member

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    On a side note, Obama understands negotiating far better than anyone on the left gives him credit for. His 2010 agreement to extend all the Bush tax cuts for 2 years was brilliant: he extracted numerous concessions (extention of a variety of Obama policies, DADT repeal, START, etc), while giving up nothing of significance. All that happened was that he gets to use the same carrot to extract even more concessions this time around. If the Bush tax cuts were not on the table again now, Obama would have far less leverage.

    Similarly, in the debt ceiling fiasco of 2011, he extracted the sequester, which completely favors Democrats. It again gives him plenty of leverage to create a deal favorable to him. At this point, it looks like whatever deal that gets struck (probably in January) will be far more Dem-friendly than anything they could have gotten in 2010 or 2011.
     
  10. rocketsjudoka

    rocketsjudoka Member

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    I am curious Glynch, but would you agree to raising the retirement age on social security?
     
  11. NewRoxFan

    NewRoxFan Member

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    A perfect example of the clear differences in the debate on solving the financial crisis from Sunday's Fox News political discussion program. Note how one senator not only addresses the problem with the political climate, but attempts to steer the discussion back to an actual proposal that reflects compromise and a workable approach to debt reduction. The other senator simply spouts partisan speaking points, including criticizing the President but avoiding any comments about his own party's unsuccessful approaches or any other real solution. And since this is Fox News, the tries to kindle partisan division (at least he makes a weak effort to get the GOP senator to answer his questions, however slanted to one side they may be):

     
  12. Northside Storm

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    The CPI debate is a wonkish one with foundations in micro-economics.

    In the interest of keeping this brief, the debate is essentially between the Laspeyres index (the current method of calculating CPI), the Paasche index and a compromise between the two (the Fisher index).

    Essentially, the Laspeyres index overstates the change in CPI because it understates substitution bias (i.e as relative prices rise, people are inclined to relatively substitute away from that product), while the Paasche index understates it because because it overstates substitution bias. The Fisher index is somewhere in between, but since it's a geometric average, you can be assured that CPI will be "lower" with the Fisher index than with the Lasperyes method. I believe the American government is considering a switch to the Fisher index (the famous chained CPI touted that accounts somewhat more for substitution bias), though someone can correct me if it is the more extreme Paasche index, or some other way of dynamically measuring changes in consumer "buckets" from year-to-year. Yes, this does mean COLA (cost-of-living adjustments) will go down if this measure passes.

    http://en.wikipedia.org/wiki/Price_index#Paasche_and_Laspeyres_price_indices
    http://www.investopedia.com/terms/s/substitution-effect.asp

    In effect "chained-CPI" (which can be done through the usage of a Fisher or Paasche Index) merely reflects a more dynamic world than a static basket, because it would better reflect the fact that as relative prices go up, consumers shift away from the relatively more expensive products---the static basket that does not account for this thus overstates CPI increases and corresponding COLA. A good example of this is gasoline. If gasoline becomes more expensive, than some consumers will choose to use their car less or not at all, and switch to less costlier alternatives (bicycles? mass transit? tamed elephants?). The CPI increases of a static bucket with gasoline reflects, at least from a price standpoint, less of a burden on these individuals than those assumed to continued buying gasoline at the same quantities. Their COLA cheques are therefore larger than they should be, and theoretically should be slashed back.

    Is this the right way to go about fixing a deficit issue? Depends on who you believe should bear the burden. A switch does make sense in technocrat-land. You're in essence capturing a missing variable that has been un-accounted for some 60 years or so. It is, however, most unfortunate that this kind of a change will lead to lower standards of living, and some dashed hopes that might never have occurred had these changes been made earlier.
     
    #192 Northside Storm, Dec 25, 2012
    Last edited: Dec 25, 2012
  13. Northside Storm

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    It should be noted in any debate about pensions that the "inter-generational bargain" has been straining for quite some time.

    http://www.nd.edu/~dbetson/research/documents/DepthofPoverty.pdf

    Is this is a call, perhaps, to extend similar levels of protection towards poor children as we do the poor elderly? Or the reality that when someone wins, someone else must lose? I sympathize more with the former, but can understand people who see it from the latter point of view.
     
  14. glynch

    glynch Member

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    Rather than respond point by point. I think the main difference we often have is that you see for instance the civil rights advance or, social security problem or the budget problem primarily through the prism of the last acts, the haggling of the wording of the legislation or the perhaps even cunning compromise or two at the end. With civil rights it was the struggling, marching, propagandizing and even dying that led up to the final legistative compromise and wording.

    Hey everyone should focus on what interests them most. What absolutely enfuriates progressives about Obama, but understandably not you, is that by not contesting the big picture and focusing only on what is achievable now, the compromise and the minutiae he keeps losing from a progressive stand point.
    Hey raise taxes on those making $400k not $250k-- so Obama, so disappoiningt. He wins twice and that is the best he can do. Just keep many of the tax cuts for the 1%. Interesting that the last I heard about $380k per yr is top 1%.

    Obama accepts or at least fails to contest the conservative talking points: OMG a fiscal crisis, "entitlement" reform is oh so important now. So far I don't find him at least buying that ss is "bankrupt" like you which shows how you have perhaps without knowing it pretty much bought the whole ss hater line. Wall Street and the money guys who would make money off of privatizing ss and managing the funds have no general viewpoint etc.

    Meanwhile when the right wins they come out with bold rhetoric and big plans. See Reagan or Dubya. Of course they do have the legislative word hagglers and do a compromise or two to their radical proposals at the end of their process. In addition since they argued a clear agenda, folks remember and in future years they can talk about how their agenda was only partly implemented. They still win and years later the small ball Obama types get a bit of it back with a "realistic" compromise or two. Of course years later nobody knows what agenda or dreams Obama tried to get, but had to do one of his little "realistic" compromises on. No vision thing to build on.

    I think it is clear that Obama has no real agenda that he feels strongly about, but he does feel strongly that he should get a deal virtually any deal if it is a slight improvement. Is the facilliatator role useful? Sure just disappointing in a world and the USA with great problems needing leadeship and Obama was the hope and change president who runs more or less as a populist when he has to win .
     
    #194 glynch, Dec 25, 2012
    Last edited: Dec 25, 2012
  15. glynch

    glynch Member

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    No not really. I think the best thing is to raise the cap on the amount taxed
    Of course if folks routiny live to a hundred. Lice expectancy is not increasing much for the lower half iirc the cut off
     
  16. Rocketman1981

    Rocketman1981 Member

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    Its very simple. No Christmas break, no vacation, no holidays, no new years.

    Just lock them in a room everyday from 7 am till 10 pm till they come up with a solution.

    When you can go home for Christmas and American citizens are paying your bills then you aren't forced to deal with the inability to come to an agreement.
     
  17. bigtexxx

    bigtexxx Member

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    lol I guess Obama got shamed into cutting his vacation short. Good to see him at least show up for work and not take the lazy way out again
     
  18. Major

    Major Member

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    Why is it disappointing? Obama's $400k proposal netted more revenues than the $250k line because it also limited deductions. You seem more interested in winning the war of words as opposed to actually passing an agenda that does what you claim you want it to.


    Entitlement reform has been important to Obama long before there was ever a fiscal crisis. I never said SS is bankrupt - I said it will go bankrupt if nothing is done, and that's absolutely true. You can either do something really minor - and logical - now, or you can tear it apart down the road. If Medicare was fixed 10 or 20 years ago, it wouldn't be in the mess it's in now.

    No one is currently pushing for privatization of SS. That's not remotely on the table. The discussions being had are about raising retirement age, raising revenues, CPI, etc.

    Yeah, it's not like Obama ran on or passed big agenda items like health care reform or financial regulation reform. Each of those was bigger than anything Reagan or Bush ever did. You just don't like it because they weren't perfect - never mind that SS, Medicare, and any number of things you love weren't close to what they are now when originally passed either. Grass is always greener in your world, it seems.
     
  19. QdoubleA

    QdoubleA Member

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    LoL look at bigtex try so hard!
    [​IMG]
     
  20. glynch

    glynch Member

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