Fiscal Cliff: Avoid? Drive Right Over?

http://www.europac.net/commentaries/extend_and_pretend

Discuss.

Or alternatively, post favorite links regarding the same topic: what should (or should not) be done about the upcoming fiscal cliff.

I doubt it will matter, it’s like gravity, it will happen sooner or later.

[quote]MaximusB wrote:
I doubt it will matter, it’s like gravity, it will happen sooner or later.
[/quote]
What about the thesis that sooner would be better than later, based on the idea that putting it off will make it worse?

[quote]undoredo wrote:

[quote]MaximusB wrote:
I doubt it will matter, it’s like gravity, it will happen sooner or later.
[/quote]
What about the thesis that sooner would be better than later, based on the idea that putting it off will make it worse?
[/quote]

This depends on what your financial situation is.
If you’re a debtor you want as much inflation as possible to wipe out your debt. A default and deflationary correction would mean you also would have to default.

If you have savings in dollars or you own debt securities, then of course the sooner a default happens the less your savings are devalued by inflation.

Of course the federal government is the biggest debtor of all and default means politicians don’t get reelected, so the chance of congress with the backing of the FED allowing a legitimate default is near zero. They will eventually be forced to default when interest rates and inflation spike. This won’t happen until the bond bubble finds a pin and our foreign creditor withdraw from the market. The timing of this is difficult to predict, but it’s very unlikely to be delayed another 4 years.

The best position to be in is to have a significant dollar hedge in precious metals and commodities, focusing on dividend paying energy, foreign consumer based stocks.

[quote]TooHuman wrote:

[quote]undoredo wrote:

[quote]MaximusB wrote:
I doubt it will matter, it’s like gravity, it will happen sooner or later.
[/quote]
What about the thesis that sooner would be better than later, based on the idea that putting it off will make it worse?
[/quote]
This depends on what your financial situation is.

[/quote]
What about the thesis that going off the fiscal cliff (sharp rise in taxes and sharp cut in spending, triggering an immediate recession) sooner rather than later would be better for the common good, and result in less human suffering in the long run?

Legislative and Executive pay & benefits (other than health) should be suspended until a plan is put into place to balance the budget within 3 years and reduce the debt to 50%-75% of GDP, at a minimum, within the next 10 years.

There is no reason we can’t right this ship, but we will have to take responsibility for it. I’m in my mid 20s and have said multiple times that I will gladly pay into Medicare, social security, etc…for those over the age of 40-50 and accept no benefit when it’s my turn. As in, the programs are ended and no one under the age of 45 gets anything. That’s the reality of the situation and I accept that while my actions have zero to do with the current debt it’s still my responsibility to do my part because I am America.

Also, this could be a key to our turn around at least in the short to mid term.

This could be the domestic boost we need until fossil fuels are replaced. Perhaps a proactive Congress could use this boost, if it occurs, to pay off the debt. Maybe add a tax to foreign oil sales to be used specifically for the debt.

Edit:

At the very least it should drive the price of oil down and create boon in the auto industry.

“What cliff?! I don’t see a cliff.”

I say drive right over the cliff. Less spending and more revenue, exactly what both sides want (well one side wants more taxes and the other wants more revenue) it is a win-win.

[quote]BrianHanson wrote:
I say drive right over the cliff. Less spending and more revenue, exactly what both sides want (well one side wants more taxes and the other wants more revenue) it is a win-win.[/quote]

Exactly. Schiff makes a very good point.

The only ones that should really have a problem with the “fiscal cliff” are the Keynesians, the government, and those on the dole.

[quote]undoredo wrote:

[quote]TooHuman wrote:

[quote]undoredo wrote:

[quote]MaximusB wrote:
I doubt it will matter, it’s like gravity, it will happen sooner or later.
[/quote]
What about the thesis that sooner would be better than later, based on the idea that putting it off will make it worse?
[/quote]
This depends on what your financial situation is.

[/quote]
What about the thesis that going off the fiscal cliff (sharp rise in taxes and sharp cut in spending, triggering an immediate recession) sooner rather than later would be better for the common good, and result in less human suffering in the long run?
[/quote]

You’re confused. I already demonstrated that depending on your financial situation debtor or saver, inflation hedge or not, what is “good” changes. Therefore there is nothing “common” between savers and debtors with an inflation hedge in this situation. If you’re prepared, you can do well in either scenario. The chance that congress will act to allow a recession for the moral good of savers, who acted responsibly(under-consumption) in detriment to the debtors and bankers that make up their reelection constituencies is near zero.

This is a manufactured scam!

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=9238

I think we should jump, IMO we should raise taxes on the top 2% and reduce the deductions from the top down. Both The Dems and the Reps want to keep the bush cuts , so the Reps fail on 2% they win on 98% :slight_smile:

[quote]undoredo wrote:

[quote]MaximusB wrote:
I doubt it will matter, it’s like gravity, it will happen sooner or later.
[/quote]
What about the thesis that sooner would be better than later, based on the idea that putting it off will make it worse?
[/quote]

Depends on the person you ask.

Some would say sooner, so their children would not suffer at the hands of our present day foolishness. Others would say, they want it later, so they would not be around to see it themselves.

[quote]pittbulll wrote:
I think we should jump, IMO we should raise taxes on the top 2% and reduce the deductions from the top down. Both The Dems and the Reps want to keep the bush cuts , so the Reps fail on 2% they win on 98% :)[/quote]

Unless you tax EVERYONE, or you cut ALOT, you are not going to make a dent in it.

You can tax all those evil White devils, and you will might get a Trillion if you took ALL their assets, which offsets maybe one year of spending.

[quote]Zeppelin795 wrote:
This is a manufactured scam!

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=9238[/quote]

Very good!

There is an abundance of government waste and federal departments that should not even be in existence. For example, how did we ever get along without the Department of Education which was only created 35 years ago or so. Did it help? We had higher grades in the 60’s and early 70’s than we do now. So get rid of that department and there are others as well.

The dead last thing we should be doing is raising taxes on anyone–Especially the job creators as that will land us in another recession which will be even deeper than the first. If Obama actually had a clue as to how important small business is (65% of all new jobs come from small business) he wouldn’t even suggest such a nutty idea. But then again he’s never had a job in the private sector so he actually doesn’t understand it. It’s quite a bit different than say community organizing. Obama is the most clueless and naive commander and chief in my lifetime.

But I digress…

No tax hike, cut waste, fraud and the size of the government and you get where you want to go. And it will be permanent.

I hope the House republicans hold the line on this tax hiking nonsense.

Cut the size of government. Let nothing be off the table in regards to that. Not the fucking military, not the fucking department of education, not social security, not any little pet thing someone loves while despising another. Raising taxes is a bad idea, but it’s going to happen whether I like it or not. I just hope it can come at a time when the government starts to reduce it’s size at all levels as well.

It should all be on the table in regards to spending, but each side has certain untouchable loves. We can’t touch entitlements says the left. We can’t touch defense says the right. We can’t touch big ag or big labor or big banks or big this if I like it. Cut that, not this we can’t cut that any!

Personally I’d like to drive right over the fucker. Let some automatic cuts happen. I don’t give a shit how “painful” it is. Long overdue. We can either keep searching for more and more small bandaids in the hopes of slowing the bleeding or we can perform painful surgery and attempt to fix the problem. Of course it’s going to hurt like hell. We love our huge military and our huge entitlements and our huge farm bills and our stimulus checks and our Medicare Part D and our Patriot Act and everything else we “need” from the government. Left and right have grown accustomed to giving us our big government just in different doses. And it’s been fun to take that red and blue medicine.

Of course we won’t do anything painful we will continue to kick the can down the road (because of course THIS isn’t the time to deal with it) as we always do. And if the economy starts to pick up and turn around and revenues are coming in we will have more new problems that require the government to fix them and more wars to fight and more stuff that keeps us from getting to it then.

Understanding the fiscal cliff.

http://therealnews.com/t2/component/hwdvideoshare/?task=viewvideo&video_id=75144

We can have democracy in this country," Louis Brandeis accurately said, “or we can have great wealth concentrated in the hands of a few, but we can’t have both.”

[quote]H factor wrote:
Cut the size of government. Let nothing be off the table in regards to that. Not the fucking military, not the fucking department of education, not social security, not any little pet thing someone loves while despising another. Raising taxes is a bad idea, but it’s going to happen whether I like it or not. I just hope it can come at a time when the government starts to reduce it’s size at all levels as well.

It should all be on the table in regards to spending, but each side has certain untouchable loves. We can’t touch entitlements says the left. We can’t touch defense says the right. We can’t touch big ag or big labor or big banks or big this if I like it. Cut that, not this we can’t cut that any!

Personally I’d like to drive right over the fucker. Let some automatic cuts happen. I don’t give a shit how “painful” it is. Long overdue. We can either keep searching for more and more small bandaids in the hopes of slowing the bleeding or we can perform painful surgery and attempt to fix the problem. Of course it’s going to hurt like hell. We love our huge military and our huge entitlements and our huge farm bills and our stimulus checks and our Medicare Part D and our Patriot Act and everything else we “need” from the government. Left and right have grown accustomed to giving us our big government just in different doses. And it’s been fun to take that red and blue medicine.

Of course we won’t do anything painful we will continue to kick the can down the road (because of course THIS isn’t the time to deal with it) as we always do. And if the economy starts to pick up and turn around and revenues are coming in we will have more new problems that require the government to fix them and more wars to fight and more stuff that keeps us from getting to it then. [/quote]

All government programs are not created equal. How much money does the U.S. spend in comparison to other industrialized countries with regards to it’s governmental components of health care? The U.S. spends more than the other top 13 military spenders combined. So it can make perfect sense to cut 1 program and not another.