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Thread: Reid rejects Boehner proposal for $2 trillion in spending cuts

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Quote Originally Posted by Deuce View Post
    You say that now but the incumbent victory rate will still be 85% or higher...
    in the house or the senate?

    I would say that in any scenario we are likely to see a less than 85% retention in the Senate for the simple reason that many Senators have already chosen to retire (turns out that "we can run on Obamacare!" wasn't as good a plan as many thought), and several others are facing very plausible defeat.


    in a scenario where Boehner comes out of the Ceiling Rise discussion with tax hikes.... however.....

    yeesh. well, imagine the effect of a Ross-Perot campaign in every state. The Conservative vote splits, and Republicans get slaughtered by Democrats who win on a plurality.
    Last edited by cpwill; 05-22-11 at 03:35 PM.

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Quote Originally Posted by MrVicchio View Post
    www.fairtax.org is an even better idea. The "Rich and Wealthy" would pay MORE then they do under any income tax scheme you can devise.
    This would collapse the American Economy in 1 year.

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Quote Originally Posted by hazlnut View Post
    This would collapse the American Economy in 1 year.
    Nice opinion but I have seen no proof of that

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Quote Originally Posted by hazlnut View Post
    This would collapse the American Economy in 1 year.
    No Hazlnut, it would spur growth like you cannot IMAGINE. The real reason you are told to be against this by your political masters? Because the Tax would be a visible tax, that means when Congress wants to raise taxes to push social spending, they cannot any longer play class warfare games and just "soak the Rich". It takes their power away.
    Climate, changes. It takes a particularly uneducated population to buy into the idea that it's their fault climate is changing and further political solutions can fix it.



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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    It would also significantly increase the deficit during it's year of transition. I agree as a long term solution it is preferable. But for right now? Let's get the Ryan plan through and try to avoid a debt crises - then we can look at switching over.

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Randel I think what you are missing is that the majority of the public is sick and tired of the democratic response to everything being more taxes and more spending. They want cuts first. We dont know if they will work; they have never been tried.

    Reports on personal savings and other spending issues show that a lot of people have made changes to their personal spending habits, they want government to do the same. That isnt unreasonable.

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Quote Originally Posted by OpportunityCost View Post
    Randel I think what you are missing is that the majority of the public is sick and tired of the democratic response to everything being more taxes and more spending. They want cuts first.
    Recent polling evidence argues against this. If anything, the American public is behind the curve when it comes to the long-term fiscal imbalances, as there is strong public opposition to reforming the drivers of the imbalances (Medicare, Medicaid, and Social Security).

    Poll shows Americans oppose entitlement cuts to deal with debt problem - The Washington Post

    Unfortunately, as was seen during the run-up in the housing bubble, where sacrifice avoidance was pursued (buying homes with greater leverage and abnormally low downpayments), sacrifice avoidance does not necessarily lead to risk avoidance. Indeed, the opposite played out then. If the major entitlement programs aren't reformed to make them fiscally sound, the risk of a medium- or long-term debt crisis will increase down the road.

    Finally, if the Washington Post poll is representative of American opinion and understanding of the nation's fiscal situation, and if such sentiment does not shift, one could well see the U.S. public elect new leaders who will pledge to avoid or retreat from difficult and painful choices, as happened in the recent Spanish regional elections where the vote became a referendum on Spain's austerity program.

    Zapatero

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Quote Originally Posted by OpportunityCost View Post
    Randel I think what you are missing is that the majority of the public is sick and tired of the democratic response to everything being more taxes and more spending. They want cuts first. We dont know if they will work; they have never been tried.

    Reports on personal savings and other spending issues show that a lot of people have made changes to their personal spending habits, they want government to do the same. That isnt unreasonable.
    and the republican response to everything has been to 'cut taxes'.....i'm not supporting a tax increase just for the sake of increasing them, but i believe it to be an important component of getting the budget squared away...i agree with spending cuts, they will have to be made, and they will hurt. for many years both sides have pushed the consequences of increased spending off to the future...the time has come to pay the piper...i personally don't want increased taxes, but i BELIEVE THEM TO BE NECESSARY .

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Quote Originally Posted by FilmFestGuy View Post
    A majority of Americans favor tax increases as part of the formula to fix the deficit.
    Americans back tax increases in debt fix: Reuters poll | Reuters

    Reagan's Budget Director also says increased taxes MUST be part of the solution.
    http://www.nytimes.com/2011/04/24/op...4stockman.html

    So why does Boehner get to hold all the cards? Because he runs 1 of 2 houses that represent the people?

    It's called negotiation. The moment he said, "Tax increases are not on the table", Boehner killed everything.

    The only way to do this is to go in with everything on the table.
    You mean like when Obamacare was "negotiated" i.e. crammed down our throats 100% along party lines with 100% democrat voting yes and 100% of republicans voting no? So this "negotiation" thing only works if you want republicans to give in to some democratic bill, but the same doesn't go for a republican led bill, right?

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    Re: Reid rejects Boehner proposal for $2 trillion in spending cuts

    Quote Originally Posted by randel View Post
    and the republican response to everything has been to 'cut taxes'.....i'm not supporting a tax increase just for the sake of increasing them, but i believe it to be an important component of getting the budget squared away...i agree with spending cuts, they will have to be made, and they will hurt. for many years both sides have pushed the consequences of increased spending off to the future...the time has come to pay the piper...i personally don't want increased taxes, but i BELIEVE THEM TO BE NECESSARY .
    IMO, credible fiscal consolidation will require some tax hikes. First, revenue changes will be necessary to develop a sufficiently broad base of political support to enact, implement, and sustain such a program. Second, real problems exist in the Tax Code that should be addressed. One such problem is the high percentage of Americans who pay no income taxes, as cited by former Comptroller General David Walker. Third, efficiency gains could be achieved by broadening the tax base and simplifying the Tax Code (eliminating deductions/closing loopholes in exchange for somewhat lower rates).

    IMO, the widely-popular home mortgage deduction should be examined, as part of a larger review, especially as such a deduction likely contributed (in part) to the run-up of the housing bubble, as taxpayers subsidized additional leverage. Whether the deduction would be eliminated, reduced in size/capped and then tied to changes in nominal GDP (not housing prices, as a cap tied to housing prices would be procyclical and enhance the risks were a new bubble to develop well down the road), etc., would depend on the review. Moreover, a transition whereby existing homeowners are held harmless could be politically necessary. Another deduction that should be reviewed relates to the deductibility of interest on state and local government bonds. States/localities would object to a loss of that deduction. However, the reality is that this program also creates incentives for states/localities to increase their debt. Balanced budget requirements aside, state and local government debt has steadily increased. Of course, such a move might need to be tied to a more transparent program of transfers to state/local governments. Fourth, changes related to the 2001 and 2003 tax relief programs will very likely have to be considered in the larger context of overall tax reform given the amount of revenue involved.

    Having said all that, while I believe some revenue increases will be needed to contribute to fiscal consolidation, those increases cannot account for a majority of the fiscal consolidation effort. Spending reductions/mandatory spending reforms should account for 2/3 or more of the fiscal consolidation (note: interest savings from debt reduction are not a spending cut, but are attributable to the overall balance of spending reductions/tax hikes involved in fiscal consolidation). Any greater involvement of tax hikes would likely create a growing risk of increasingly sluggish economic growth. Reduced economic growth could exacerbate the nation's long-term fiscal picture, leading to a more negative outlook, increased risk premia that raise the cost of servicing the nation's debt, etc. If nominal GDP growth were to fall toward and then below the nation's cost of financing its debt, that would present an especially perilous situation.

    A similar situation prevails with respect to public investments (expenditures that yield long-term benefits). If investments are treated as little different than other discretionary spending, the country could also risk putting itself on a slower economic growth trajectory. For example, an undereducated workforce would lead to lower productivity and slower growth than would otherwise be the case, as other countries capture a slice of economic activity that would be foregone. Slower economic growth means lower profitability and reduced tax revenue.

    Finally, revenue increases cannot become an excuse for policy makers to try to avoid restructuring the nation's mandatory spending programs. Already, problems inherent in those programs are becoming more urgent as the enormous Baby Boom cohort continues to retire. Social Security can readily be fixed with benefit changes, increased age of eligibility (pegged to life expectancy changes), and some payroll tax hike (rate and/or ceiling increase). Medicare and Medicaid present a much more complex problem. IMO, addressing those two programs will require the kind of reform that dramatically reshapes U.S. health care, namely addresses the industry's excessive cost growth problem. Such a solution almost certainly will require major changes with respect to technology procurement/deployment and supply side remedies that significantly increase the supply of medical practioners in the U.S. Premiums and benefit formulas for Medicare and Medicaid will need to be adjusted. The latter approach, absent a remedy for the excessive cost growth problem, would lead only to increased rationing, whether it is through reduced purchasing power of vouchers vis-a-vis the price of medical services or budget-driven mechanisms.

    Unfortunately, at present, the American public appears ill-informed about the main drivers of the imbalances and unprepared to support the required changes. That will make it difficult for the nation's policy makers to enact robust reforms, as well as to sustain the effort, absent the emergence of a transformational political leader of an FDR, JFK, or Reagan stature who can lead big change.
    Last edited by donsutherland1; 05-23-11 at 11:12 AM.

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