1. #1

    Fiscal Cliff and explain the follow to me

    Most people here probably knows the fiscal cliff (increase in taxes and reducing government spending) but is a single thing that has been bugging me for a while.

    Why are both parties even negotiating (read below for further explanation of my question)?

    So democrats want to let the Bush tax cuts expire on people above 250.000 dollar
    Republicans want to extend cuts for everybody

    So why do they even have to cut spending (ignoring the argument if spending is to much or not) if thought their wouldn't be spending cuts if they extended tax cuts for everybody (hope I made myself clear).

    So I fail to see any connection between
    raising taxes on the rich (which technically isn't true) and spending cuts
    and not raising taxes and cutting spending

    The whole ''cut spending'' discussion wouldn't even exist if they extended tax cuts to everybody.

    So Democrats have to agree on reducing spending if they only want to keep the tax cuts for people making below 250.000 but if they agreed to tax cuts for everybody then would their still be spending cuts?


    PS Let me make the following thing clear, I'm not arguing to extend tax cuts for the rich just wondering why non of the media is even asking this quesiton
    .

  2. #2
    Because realistically we need to to both increase taxes and cut spending to get out of this hole.

    Quote Originally Posted by ati87 View Post
    The whole ''cut spending'' discussion wouldn't even exist if they extended tax cuts to everybody.
    This makes no sense whatsoever. You do realise that the deficit is (mostly) the result of tax receipts being smaller than spending, right? Cutting taxes for everyone just makes things worse.

  3. #3
    We are also going to hit the debt ceiling in a few days as well so there is no money to spend without tax increases. To me the wqy both parties are acting they are making it look like they are doing something, but want to see how the country will respond if we go over. This.country needs a tax increase to make up the debt but people dont like that word. I feel we are going over intentionally. They just dont want to look bad doing it.

  4. #4
    Quote Originally Posted by semaphore View Post
    Because realistically we need to to both increase taxes and cut spending to get out of this hole.


    This makes no sense whatsoever. You do realise that the deficit is (mostly) the result of tax receipts being smaller than spending, right? Cutting taxes for everyone just makes things worse.
    Yes I do know that the lower taxes which benefited mostly a small amount of people but that has nothing to do with my question

    Republicans want to cut taxes for everybody
    Democrats don't

    This has resulted in the following situation where just to make sure that the taxes for the people below 250.000 dollars stays low Democrats have to agree to spending cuts.

    Again the whole spending cuts wouldn't be on the table if taxes stayed low for everybody.

    So again why is it even on the table? because this is 1+1=3 because kind of doesn't add up if you look at their stances of both parties separate.

  5. #5
    Quote Originally Posted by ati87 View Post
    Yes I do know that the lower taxes which benefited mostly a small amount of people but that has nothing to do with my question
    It has everything to do with your question, you're just misunderstanding the situation.

    Again the whole spending cuts wouldn't be on the table if taxes stayed low for everybody.
    And again this makes no sense whatsoever. Why wouldn't spending need to be cut if taxes are low? Like seriously, what kind of logic is this?

    If taxes are low for everybody, MORE spending needs to be cut.

  6. #6
    Quote Originally Posted by semaphore View Post
    It has everything to do with your question, you're just misunderstanding the situation.


    And again this makes no sense whatsoever. Why wouldn't spending need to be cut if taxes are low? Like seriously, what kind of logic is this?

    If taxes are low for everybody, MORE spending needs to be cut.
    Let me rephrase my question then

    If everything stayed the same would their be even a discussion about spending cuts?

    We are talking about Republicans here, the only reason why they are demanding spending cuts is because the taxes for the rich are going up.

    The whole point about reducing taxes and spending at the same time isn't even a relevant.

  7. #7
    Quote Originally Posted by ati87 View Post
    If everything stayed the same would their be even a discussion about spending cuts?
    Yes. There is a $1.327 trillion deficit in 2012.

  8. #8
    Quote Originally Posted by semaphore View Post
    Yes. There is a $1.327 trillion deficit in 2012.
    Not in the context of the fiscal cliff deal.....

  9. #9
    Quote Originally Posted by ati87 View Post
    Not in the context of the fiscal cliff deal.....
    The reason we have that to begin with is because there is a large persistent deficit.

    I don't know what you think the Fiscal Cliff is, but simply put your ridiculous idea of "if there's tax cuts there won't be spending cuts" is ridiculous and untenable.

  10. #10
    A law was passed that said by a given date we had to reduce spending by a specific amount, failing to do so would automatically trigger a series of across the board cuts (heavy duty austerity measures). The "fiscal cliff" was the date by which this had to be done. It wasn't really done however, but a good chunk of it was and new legislation passed to push back the rest of it a few months.
    It is by caffeine alone I set my mind in motion. It is by the beans of Java that thoughts acquire speed, the hands acquire shakes, the shakes become a warning.

    -Kujako-

  11. #11
    Quote Originally Posted by ati87 View Post
    Let me rephrase my question then

    If everything stayed the same would their be even a discussion about spending cuts?

    We are talking about Republicans here, the only reason why they are demanding spending cuts is because the taxes for the rich are going up.

    The whole point about reducing taxes and spending at the same time isn't even a relevant.
    Republicans want spending cuts because its their way of reducing the deficit without impacting the rich. Keep taxes the same, cut spending on programs that benefit middle and lower class people.

    Also the fiscal cliff came about because both parties disagreed on what to cut, if revenue should be included, and how to raise revenues.

    Republicans want to cut Medicare, Medicaid and SS (and a lot of smaller things like PBS, NPR)
    Democrats dont want to cut those things.

    Republicans want to keep taxes the same or lower them(especially for high income)
    Democrats want more revenue to make up for the revenue lost due to the Bush Tax cuts

    They couldnt come to an agreement so they made a way to force themselves to do their jobs. Then they still didnt do their jobs and just kicked the can down the street. So now we have smaller fiscal cliffs every few months that just get delayed another few months.

  12. #12
    Mmm seems you got some things mixed up.

    Lets say our governments total tax income for a year is $40,000(yes its way way higher i know). By extending tax cuts it would stay at 40,000. If these tax cuts end the government will make more. Lets say 45,000 a year.
    Now lets look at spending. Lets say the government spending is 80,000 a year. If the gov is making 40,000 but spending 80,000 a year that means we are currently spending much more than we have. So to make up the difference the government keeps borrowing money which in turn raises our debt.
    Some want to increase taxes that the government will make more a year than it spends which means we can cut into that debt a bit. But that alone won't work since it would have to be a really large tax increase in order to reach the amount needed to negate our over the top spending. A more balanced idea is to cut the amount the government spends a year while raising the taxes a bit so that we won't be increasing our debt more and more.
    The FISCAL CLIFF is basically just the government constantly giving itself a deadline to get these things done before an automatic system kicks in which cuts spending massively and raises taxes a bunch.

  13. #13
    Under budget sequestration any extension of debt limits without any regard for deficits would trigger mandatory across the board cuts to everything.

    It's never actually yielded a balanced budget, unless you play accounting tricks the way the Clinton Administration did (by removing Social Security Trust Fund liabilities from the equation).

    But when no agreement or bill to account for deficits can be reached, congress has no choice by the enact budget sequestration by law. It hits both sides spending goals...

    (yes I know... BILL CLINTON BALANCED THE BUDGET OMG. Sure as long as you played accounting gimmicks; the never actually was a balanced budget and hasn't been since 1969. The closest Clinton came to your mythical balanced budget was in 2000, but he had to "borrow" to achieve it.)
    The most successful tyranny is not the one that uses force to assure uniformity but the one that removes the awareness of other possibilities.

  14. #14
    Quote Originally Posted by ati87 View Post
    Yes I do know that the lower taxes which benefited mostly a small amount of people but that has nothing to do with my question

    Republicans want to cut taxes for everybody
    Democrats don't

    This has resulted in the following situation where just to make sure that the taxes for the people below 250.000 dollars stays low Democrats have to agree to spending cuts.

    Again the whole spending cuts wouldn't be on the table if taxes stayed low for everybody.

    So again why is it even on the table? because this is 1+1=3 because kind of doesn't add up if you look at their stances of both parties separate.
    I don't think you understand the huge gap between what the rich pay in taxes vs what the middle class pays.

    Put it this way, when Romney said 47% of the country didn't pay taxes, he was right in concept but wrong in his math. The bottom 50% of the country pays 3% of its total tax receipts.

    So if you cut the bottom's tax bill in half, you've only decreased your total receipts by about 1.5%.

    If you cut the top's tax bill by 20%, however, you're decreasing your total receipts by, well, almost 20%.

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