HorizonNinetails wrote:The system is bloated.
True enough. Has been for over a decade or longer. But when you are floating in a hot air balloon, you don't want to let all the hot air out.
They don't really make anything anymore.
I hope they do go over the fiscal cliff and have to deal with the austerity measures they've made for themselves.
THEY will be fine. It is us I am concerned about.
Our own personal debt here in Canada is getting the same way.
Eventually we're going to be choked out by this housing bubble.
Ah... I thought you lived in the USA. Anyway... so much for optimism.
And we are all dead in the long run anyway.
Kaitlin wrote:It would be a good thing in many ways. I'm not a fan of this level of austerity but if we went over the cliff one thing is certain, you would have deficit reduction.
Hmmm, well, maybe not as much as you might hope. Problem is that if you do stuff that really impacts the economy in a major way, and that causes the economy to slow by a lot, you get diminishing returns for every cut or tax increase. If you increase taxes across the board from, say 30 to 33 percent across the board and that causes your economy to slow by 10 percent... your tax revenues will actually go down and your deficit up. See Greece.
If you can increase taxes and cut spending in such a way that it won't effect the economy much, you will get the best deficit-decreasing results from them. Going off the fiscal cliff seems to be exactly what you should not want. Which is why it got that name.
It also takes the silly Norquist pledge off the table allowing Republicans to save face.
It would allow the Norquist pledge to remain in force. Not sure why one of the two major parties remaining committed to some influential rich guy's chokehold/blackmailing scheme, even if it goes against their better judgement is a good thing.
Also, I doubt that going over the cliff will stop them from having another game of chicken over the next required debt ceiling increase.
The tax cuts expire December 31st without a single vote. I personally think democrats are in a much better position to deal on lifting the debt ceiling by dangling the carrot of lowering tax rates from the highest level.
I think that is a somewhat perverse way of thinking. Pure partisan thinking, to be honest. Yes, the democrats may have the stronger position, gain a political 'win'. But what is that to the millions of people affected by the actual implemented policy? I get that you like the democrats to win. But it isn't a game-show.
I don't fully agree with the entire recession argument despite what some economists have said. It reminds me of all of the press surrounding WMDs. Unemployment rising to 9.1%+ would force action on the jobs front. The recovering economy over the last 18 months has led to little urgency in stimulating the economy
Sorry, Kaitlin. I do respect your intelligence, but ... this really has very little do to with WMDs. That was some agencies and (mostly) the US (and UK) Government saying a thing and the press copying it faithfully in the name of patriotism. This 'prediction' (it is a prediction, not a state of fact, as the WMD claim was) comes from various official agencies as well as from lots of economists (left and right) that have no common agenda and are largely independent of parties or the government. Economists can get stuff wrong, of course. And it is hard to predict the economy. But if this is what their models and calculations show them, it bears little comparison to the willful lies that were spread around and passed on in the build-up to the invasion of Iraq.
And personally, whilst I am hardly qualified to judge the details of the predictions made by the Federal Budget office, Bernanke, Krugman etc., what they say makes sense to me. Bernanke has pretty much said that it would be MUCH BETTER to implement the packages proposed by the bi-partisan committees like Domenici-Rivlin and Bowles-Simpson. The USA being unable to do so because it's politicians cannot bring themselves to compromise would be an epic fail for it's political system and for the USA itself.