Going over fiscal cliff on purpose?

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http://news.yahoo.com/analysis-obama-co ... nance.html

Tax giveaways for the rich and austerity for the poor is doing wonders for the economy of Europe. I think maybe Obama should just become a conservative and let the Republicans do whatever they want. Sign every Republican piece of tax cutting social safety net gutting legislation they want and make it the law of the land. Veto all stimulus bills. Undo all labor laws. Get rid of the minimum wage. Bring back child labor and mandatory unpaid overtime. And outlaw collective bargaining with the threat of jail time for any worker that tries to start a union. Accomplish the ultimate wet dream of every conservative. We could accomplish what Milton Freedman's proto-fascist "Chicago Boys" did in Chile, only without a military junta to shoot the disenfranchised rioters dead. What the American people need now is brutal punishment. Then maybe the American people will finally wake up and elect politicians who will pursue real progressive reform.

I am not persuaded that the Republicans will go to the mat for the top two percentiles.

While there is a lot of money in those two percentiles, all the money in the world isn't going to save you from the wrath of voters who will experience the intransigence of the Republicans on behalf other people.

The political calculus appears to me to favour the President. He doesn't have to face the voters in two years time and he is unlikely to lose the Senate at the mid-terms. On the other hand, if the Republicans are to make gains, they are going to have to demonstrate that they have a plan, and that it is a plan that is going to make things better for the people who really count in their base: workers and small business people in the states where they cannot afford to lose House seats.

Let's remember that Republicans lost the popular vote in the House of Representatives election this year. It does not take a major swing for their marginal seats to disappear. There is a base that will vote Republican until the moon goes blue from cold--but it is not enough of a base to prevent such a swing.

visagrunt, to be quite blunt Obama probably doesn't care if the country goes off the fiscal cliff.

There are multiple parts to the so-called "fiscal cliff"

1. The expiring reduction of the Social Security (SS) employee (but not employer) payroll tax (2 percent of SS wages) and extended unemployement insurance benefits, expires 12/31/2012. Take-home employee pay will be reduced starting 1/1/2013. Unemployment Insurance benefit reduction has a seperate but related timetable.

2. Expiring Federal Income Tax (FIT) provisions (often refered to as the "Bush Tax Cuts"), expires 12/31/2012. Take-home employee pay will be reduced as soon as new withholding tables are effective post-12/31/2012 (the tables have not been released yet).

3. Expiring FIT provisions ("Extenders package") of a grab-bag of personal and corporate provisions, credits, deductions, and rules (look it up if you're interested), effective 12/31/2011. Will start to impact tax returns filed starting Jan 2013 for tax year 2012 (That is not a typo).

4. Mandatory budget cuts ("Sequestration") required by the Budget Control Act (BCA) of 2011. Timetable is a little confusing on this one, but starts to phase in fairly early in 2012.

5. Mandatory reductions in Medicare reimbursement rates, required by the Balanced Budget Act of 1997 (as amended several times since), also has a confusing timetable.

We also have...

6. The continuing resolution to operate the US government expires March 31, 2012, which means the US Government will be unable to operate non-essential functions (go to 1995 for court rulings on what stays open).

7. The US Government is almost up against it's borrowing authority, and congress will be asked to increase the borrowing authority (Debt Limit), the exact timing will depend on the above items.

Depending on where you sit on the US political spectrum, some pieces of these items may interest you in one way or another. One key point that should be noted is that parts of the "cliff" kick in at different times.

This is how a government files for Chapter 11.

There is no way to make it work, the Board of Directors is hopeless.

Debt need to be paid, price for services raised, and expenses cut.

That was obvious when they came up with a plan that would kick in after the election, and then go into action within six weeks.

It was the best Congress could come up with to avoid the blame.

As for the Government, it is meaningless, because the debt ceiling is the real fight. No new taxes will be paid before spending limits are reached, which will further reduce Government when no agreement is made.

Government workers will be sent home without pay, States will not get Grants, so they will layoff many, and gridlock will rule for two years.

Point being, next election, both can claim to have fought, cuts will add up, and two years of higher tax. We will be mostly out of Afganistan, and somewhere around a balanced budget.

No one goes on record as being soft on defense, it still gets cut.

Banks and Wall Street are going to get Re-Regulated, have higher Capital Reserves, and I hope a transaction Tax. That we do not tax where most money changes hands is shocking.

It is, Throwing in the Towel. the fight was called because both parties were off punching in different corners.

Business is still good, the recession is with the people, for five years now, and is likely to last beyond Obama's term. All the 99 weekers, no new ones, no jobs, are being thrown over the side. The same for recent grads, as no one sees how and where new employment could happen.

Managed decline is the plan, we are sinking, but flooding some compartments will level the ship.

Will someone please invent a new bubble! We need something new that will lead to a recovery, that employs lots of useless people at good wages.

The Mexicans are self deporting, more will leave as the available money declines.

This is go long, a Hail Mary of Government, as we wait to see where the ball comes down in 2014.