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DesideriScuri -> RE: IF No Deal Made on Fiscal Cliff? 10 Things That May Hurt Us Jan.1. (12/29/2012 6:14:18 AM)
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quote:
ORIGINAL: tj444
I suppose I really shouldnt say anything.. its really not my place.. so I really hesitate to post.. especially since I will likely get some flack (or maybe a lot of flack.. lol)
I keep scratching my head when Americans go on about their politicial system, you are always fighting fires & you go in circles, you keep shooting yourselves in the foot.. your system needs a major overhaul and to start over.. your system is just not working..
Wtf is a fiscal cliff???
Last year we went through a debt ceiling standoff and finally decided to get serious about our debt issues. A compromise bill was written to go into effect Jan. 1st 2013 that contained large cuts in spending to social service programs dear to Democrats, and to Defense spending, dear to Republicans. It was assumed that the cuts to dear programs (these cuts are referred to as "sequestration") would spur Congress to compromise on some sort of debt reduction plan.
The Bush tax cuts were extended across the board through 12/31/2012 as part of that bill, along with a 2% rate cut from the employee's share of the employment tax (which funds our Social Security Insurance) that was put in at Obama's behest.
So, the "fiscal cliff" is an increase in Federal income tax rates (return to the Clinton-era rates and brackets; which will hit almost everyone that files), and increase in the employment tax (which will hit every worker), and mandatory spending cuts to programs that are unsavory to one or both parties.
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I dont seem to recall this being a problem where I am from.. Comparing Canada to the US (or the US to Canada if you prefer that.. [:D] )
"Governments must lead by example when managing their own debt and spending. Low debt is the result of low spending. Federal government spending as a share of the overall economy is 15 per cent in Canada (2) and 24 per cent in the U.S. (3). The numbers are not merely the result of prodigious U.S. military spending, though that is certainly a factor. Non-military federal government spending is 14 per cent of Canada's economy (4), and 18 per cent of America's (5).
Just as cause equals effect, spending equals debt. Net government debt as a share of the Canadian economy is 36 per cent. In the U.S., it is 83 per cent. America's gross government debt is now bigger than the entire U.S. economy. According to the U.S. Treasury Department website, Mainland China holds $1.1 trillion of it. To quote Mark Steyn: "If the People's Republic carries on buying American debt at the rate it has in recent times, then within a few years U.S. interest payments on that debt will be covering the entire cost of the Chinese armed forces." "
http://www.huffingtonpost.ca/pierre-poilievre/canadians-and-fiscal-cliff_b_2377518.html
You Americans have a big problem.. regardless of what happens in the next few days.. your problems are still not going to go away.. how far down the road can you keep pushing them, time and time again?? and just how ugly is that gonna eventually get?? [8|]
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It has been pushed down the road for far too long. That being said, they'll kick that can as far down the road as they can. I've said it before that they keep kicking that can down the road, but it's getting heavier. Eventually, they are going to kick it down the road and they'll break their foot.
On a pure dollar basis, we are bringing in vast amounts of money, 4th most in US history if the 2012 projections play out, and the budget projections only show increasing revenues for years to come. By the end of Obama's second revenues are expected to be at all-time highs. Spending already is at or near all-time highs, and are expected to continue growing. When you read about talks to cut $4T in spending, that's $4T over 10 years, not annual spending. And, most of those cuts are "limits in spending increases," not actual cuts. So, if the budget for widgets was supposed to grow from $1T to $3T over 10 years, they might go in and say they'll limit it to only $2.5T - and, voila! - a half-trillion dollar spending cut is born. They can claim that widget spending is being cut, but it's still going to go up, and it's not really being cut. Plus, you'll see things like Clinton's Medicare overhaul that included a reduction in reimbursement rates for Medicare service providers that never actually goes into effect, though it's counted to pass the bill. To ward those reimbursement rate cuts, Congress passes a "Doc Fix" bill, every time the current one is about to expire.
Fiscal cliff primer. It isn't perfect, but you get the gist.
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