By Aaron Joseph. Working into the wee hours of early New Year’s morning, the US Senate passed an ‘imperfect’ tax bill that will prevent the economy from going over the fiscal cliff. Next up, the bill must be voted upon in the House of Representatives.
Technically, all the Bush era tax cuts expired last night at midnight and taxes went up on all American’s, as well as the limitations on nearly all Federal entitlement programs. With the passage and implementation of this bill there will be no negative ramification of having missed the midnight deadline.
The “Fiscal Cliff” bill in essence is a budget bill for the United States government. Each year, congress is required to pass a budget bill. Recent political rancor, and what is recognized as rudderless leadership from the executive branch of government, has caused the budget argument to polarize the entire Congress.
To be fair, Vice-President Joe Biden was called to the Senate late last night to help broker, and finalize the deal. This, after the President held a mid-day Dec. 31st press-conference filled with bitter comments aimed at the senate.
Key pointers between the Republican and Democratic parties are Downsizing the 14 trillion dollar deficit, tax rates, and payment sizes and costs of the various Federal welfare programs and entitlements.
The “Fiscal Cliff” bill would allow tax rates to go up only upon families earning a joint income of more than $450,000, or for singles, $400,000. It would also prevent. The president was demanding that the taxes go up upon all American’s making more than $250,000 Joint, or $200,000 single.
As well, the Estate Inheritance tax would only effect properties worth more than $5,000,000. The Democrats (President wanted no cap). Also, Federal programs and welfare entitlements would be extended.
The bill heads to the US House of Representatives today to be voted upon.
Well, the details of this amazing deal are coming out. It would add 4 trillion in debt over the next ten years. That’s money that we will pay back through higher taxes on ourselves and our children.
Why isn’t the media telling everyone that Obama will not agree to any tax cuts without increases in spending? What is wrong with him? He had promised during his campaign that he would do “both tax increases and spending cuts”, but now all he is offering is “tax cuts and spending increases”.
And if the Republicans don’t go along, they will be blamed.
Do you really think we will be able to borrow forever? Does the credit card let you borrow forever? There will come a time when the US will declare bankruptcy, and the dollar won’t be worth anything anymore. We will become a third world country.
Ladies and gentlemen: You are watching the disintegration of the United States of America.
Before your very eyes.
Aided by the media.
The reality of this deal is they just “kicked the can down the road” for another time to figure out what to do.
And the Democrats show their true worth, when it comes to fixing real problems they can’t , but come up with a stupid law to regulate how we live and they are all over it….
Hey Yid:
The House has not voted on it yet, maybe tomorrow, and lets see if the Democrats in the House back out of the deal or try to change the deal they already made.
We already witnessed the disintegration of the United States in 1861. This is nothing. I have not seen or heard anyone before the last comment hint of seccession and disintegration. Our fellow countrymen have not received any call to duty from their states or the Confederate government. We certainly do not have men today like Robert E. Lee or George Washington to lead us into battle. So I do not think the nation is disintegrating.
A Lang,
When Germany was hyper-printing money in the 1920’s due to their unsustainable debt, which inevitably led to hyperinflation, hyper unemployment, the destruction of the German economy, and the rise of Nazism, there were those who warned of the disintegration of Germany if such unsustainable tax and spend policies wouldn’t stop.
But then there was one lawyer who said, “You can’t technically call it “the disintegration of Germany”,” and everyone else said, “Right! You can’t technically call it the disintegration of Germany”.
So all the people continued to support the policies that eventually brought about the destruction of Germany, because, you know, “You can’t technically call it disintegration.”
Wait! Was Germany technically “destroyed”? A good lawyer would argue that Germany wasn’t destroyed. It is still physically there.
The point, Mr. (or Mrs.) A Lang, is that most people understood what was meant. We are witnessing the slow destruction of the US economy, just like Greece.
And that will turn us into a third world country.
And if you can think of a better word, please do. The problem, I suspect, is that you don’t believe it will happen. You really think we can continue the unsustainable tax-and-borrow-and-spend policies, and that we will not look like Greece. Smell the coffee, dear.
We need to get our financial house in order, but I recall from macroeconomic theory was that as long as debt was owned to Americans, the only economic detriment was the crowding out effect. Unfortunately, must of our debt is now owed to foreign countries. That is more of a concern than the debt itself. Generally, growth of GNP should eat up the growth in debt. Hamilton was the first to teach us this.
Germany never had constitutional government. The Prussians united the “Huns” into a nation in 1870 through trickery and “blood and iron.” They were never capable of checks and balances, an independent judiciary or rule of law-although Prussia was the first country to have social security. The military was only accountable to the king (which meant accountable to no one, as in Japan) and they had nascent and weak multi-party system.
The US has a long history of stable constitutional government that goes back to 1066 and a strong two-party system that goes back to Charles II. Perhaps you might want to compare to 1789 France, but the financial problems of Louis XVI were the immediate cause of their “disintegration.” Their real problem was that, unlike Britain and the US, they could not effectively integrate their economic class, the most powerful part of a nation, into their ruling class. (BTW-You can understand a lot about the economic system of privilege in France and Europe from the t’shuvas and particularly Choshen Mishpat 156, and even more so, vice-versa. I even saw in Montesque’s work–the celebrated Frenchman of the Federalist Papers–criticism of Turkey because dukes and local authorities did not have privilege to prevent outsiders from doing business in their own provinces. He considered this as oriental style central tyranny. Sure enough, the Maharashdam, printed in Constantinople in the 1500s, said that in his country, everyone can do business where ever they want.)
America and England always had a strong middle-class and freedom from economic restrictions based on privileges. that allowed allowed a privileged party to do business. It will take more fundamental and certainly constitutional problems to disintegrate this nation, as was the case with succession and slavery.
To A Lang:
Unfortunately, this economic growth that the Obama administration have been counting on have yet to be realized. Not only that, but economic theorists acknowledge that higher taxes in fact SLOW economic growth (even just taxation on the rich people although to a lesser extent). That applies to higher capital gain rates as well.
The problem that the Democrats fail to address is that the growth of Medicare and Medicaid is on pace to make up approx. 15% of our GDP within the next 40 years. These are automatic increases that do not need to be voted on! To put things into perspective, our current taxes bring in about 15% of the GDP. The Democrats are unable to place any real reforms on these programs because these are their babies. If you leave these guys in power long term they will drive us right off the cliff (not this one, but this spending will catch up with them). America’s hope for taking of this problem can only be done by the Republicans because their voters don’t vote for them to maintain these programs.
Really what is happening is the inherent weakness of Democracy. When the people realize they can vote money for themselves, then they do. This leads to a slow demise of wealth and prosperity due to higher taxation (may I call it confiscatory). Point in fact – France it now trying to pass a 75% tax rate for high earners.
A Lang really thinks that America today is no different than four years ago, and that we won’t become a dictatorship anytime soon.
A Lang, I suggest you speak to anyone old enough to remember Germany in the 1920’s. I have spoken to some of them. Germany at the time was the most enlightened progressive country……
It can happen here too. And the catalyst will be the collapse of the economy due to the unsustainable debt brought about by unsustainable govt spending.
Actually, it may happen even earlier, if they decide to disarm the citizenry, just as the Nazis banned guns when they came to power. Except that in America, the citizens may revolt and we may have another revolution.
Interesting tidbit: A 95 year old German woman whom I knew said the following in late 2007 about the young unknown Barack Obama, candidate for presidential nominee. She said, “this man reminds me of Hitler. The way he whips up crowds with his rhetoric and populism is exactly the way I remember Hitler whipping up the crowds and that is how Hitler was able to get Germany to elect him and follow him to commit genocide.”
If you think this can’t happen, your head is buried in the sand.
we dont have to worry about loosing on the battlefield with our enemies , we have to worry about destruction from within our own borders,namely those who are leading us down the path of financial collapse.
You will see in a future installment of my paper that just began posting a footnote about money in politics. People with a higher stakes spend more to win their causes by influencing public opinion and legislators. This spending, including donating to campaigns, has been interpreted to be protected by the First Amendment (Buckley v. Valeo). Finding the correct balance between money and its sometimes corrosive effect on the political system, is the quintessential issue of the day.
As for Medicare and and a national debt that might reach double GNP, they indeed are indeed important issues but nothing that cannot be solved or at least mitigated within the constitutional framework. This nation has great resilience for all kinds of problems.
I would say that J. Edgar Hoover was as powerful as anyone can get in the US. Obama is not even close to FDR as a populist. The nation is not in danger. We have seen the rise and fall of both fascism and communism embraced by world powers, countries than can make cars and airplanes. Our enemies today are bear clawed-stone tool people in the Middle East. The US once again dominates the world market with our intellectual capital.We are stronger than we were when I was a child and witnessed the demise of our manufacturing infrastructure, double digit inflation and high interest rates. As for the comment about the Democrats staying in control too long, that is why we have two parties. You have a party in power and an opposition. However, it seems that many people would like to have only one party.
Interesting to note that after the Democratic Party dissolved in 1861 and the Whigs dissolved in 1856, we had four parties in 1861 and the destruction of the federal republic. Like Britain we will alway fall back into a two party election oriented system because Congressional districts are winner take all as are almost all state laws determining the electors of the president. So if the Democrat oppose this or that today, they will support it tomorrow when it is opposed by the Republicans. That is how our system works. Party’s are not issue oriented. Their only concern is to get their candidate elected and will alway take opposing stances. This helps keep them accountable.
Study some history. Germany had good science and was the nation of Kant, but their political philosophers were left in the dust by men like Locke, Mill, and others in England and America. They were lightweights in the science of government. This of course can be attributed to their history of authoritarian control starting including such enlightened despots such as Frederick.