It's Official - Debt Ceiling Deal is Bad

[bluehenbillk]

Dow about to finish like 260 points down - citing will do nothing to create jobs, just lose more. Also not generating any new revenue, you can't cut your way out of a bad economy, you have to invest, and to invest you need money, duh?

[Cap'n Cat]

Our country is fvcked. Moving to Canada.

[93henfan]

Dow about to finish like 260 points down - citing will do nothing to create jobs, just lose more. Also not generating any new revenue, you can't cut your way out of a bad economy, you have to invest, and to invest you need money, duh?

Are you saying we need to increase taxes?


DEATH TO YOU!!!

-the Tea Party

[∞∞∞]

Also not generating any new revenue, you can't cut your way out of a bad economy, you have to invest, and to invest you need money, duh?

So is Wall Street implying they don't want their large amounts of tax cuts?

[Bronco]

The new super committee has the ability to raise taxes...what could go wrong

[bluehenbillk]

Also not generating any new revenue, you can't cut your way out of a bad economy, you have to invest, and to invest you need money, duh?

So is Wall Street implying they don't want their large amounts of tax cuts?

Well it's political suicide usually to say it in Washington, but yea Wall Street's reaction says it plain & clear, "uh-oh".

[93henfan]

Oh c'mon. The Tea Party is sticking to its guns, unlike those weasely RINO's and DONKS!!!

So what if the ship is sinking. They'll drown with a clear conscience. Fuck compromise, baby!

[bulldog10jw]

Without doing anything - 14 trillion more added to the debt over the next 10 years

This deal - 12 trillion added to the debt over the next ten years.

Yeah, I'm sure Wall street is worried about revenue.

[houndawg]

It was a huge victory for the Honks. Cutting spending will cost jobs, perfect for the coming election.

[Col Hogan]

It was a huge victory for the Honks. Cutting spending will cost jobs, perfect for the coming election.

Damn straight....the only way out of this is to spend...spend...spend...

That's how I take care of money problems here at home...

[bulldog10jw]

It was a huge victory for the Honks. Cutting spending will cost jobs, perfect for the coming election.

Damn straight....the only way out of this is to spend...spend...spend...

That's how I take care of money problems here at home...

You forget. It's not spending, it's INVESTING.

[AZGrizFan]

Without doing anything - 14 trillion more added to the debt over the next 10 years

This deal - 12 trillion added to the debt over the next ten years.

Yeah, I'm sure Wall street is worried about revenue.

Jesus..no shit.

Only in Washington DC is reducing the level of spending INCREASES called a "cut".

[dbackjon]

Without doing anything - 14 trillion more added to the debt over the next 10 years

This deal - 12 trillion added to the debt over the next ten years.

Yeah, I'm sure Wall street is worried about revenue.

Jesus..no shit.

Only in Washington DC is reducing the level of spending INCREASES called a "cut".

That is probably the most pathetic part of it all.

[Ivytalk]

Without doing anything - 14 trillion more added to the debt over the next 10 years

This deal - 12 trillion added to the debt over the next ten years.

Yeah, I'm sure Wall street is worried about revenue.

Jesus..no ****.

Only in Washington DC is reducing the level of spending INCREASES called a "cut".

Lewis Carroll would be astounded!

[Ibanez]

Oh c'mon. The Tea Party is sticking to its guns, unlike those weasely RINO's and DONKS!!!

So what if the ship is sinking. They'll drown with a clear conscience. Fuck compromise, baby!

I have to give the Tea Party credit for sticking to thier guns, however even GWBush would comprimise. That's thier problem, they don't comprimise, which is how you get things done in DC.

[93henfan]

Oh c'mon. The Tea Party is sticking to its guns, unlike those weasely RINO's and DONKS!!!

So what if the ship is sinking. They'll drown with a clear conscience. Fuck compromise, baby!

I have to give the Tea Party credit for sticking to thier guns, however even GWBush would comprimise. That's thier problem, they don't comprimise, which is how you get things done in DC.

The way to get out of this is massive, painful cuts to entitlements and DoD instead of just discretionary spending, rollback of sweetheart tax breaks and loopholes, tax reform (some sort of flat or consumption tax along with a drastic lowering of the corporate tax rate to bring some of that money back onshore), and a balanced budget amendment.

We all know this, but few will agree to every single one of the items, hence the current boondoggle.

[BDKJMU]

Oh c'mon. The Tea Party is sticking to its guns, unlike those weasely RINO's and DONKS!!!

So what if the ship is sinking. They'll drown with a clear conscience. **** compromise, baby!

I have to give the Tea Party credit for sticking to thier guns, however even GWBush would comprimise. That's thier problem, they don't comprimise, which is how you kick the can down the road in DC.

FIFY

[Ibanez]

I have to give the Tea Party credit for sticking to thier guns, however even GWBush would comprimise. That's thier problem, they don't comprimise, which is how you get things done in DC.

The way to get out of this is massive, painful cuts to entitlements and DoD instead of just discretionary spending, rollback of sweetheart tax breaks and loopholes, tax reform (some sort of flat or consumption tax along with a drastic lowering of the corporate tax rate to bring some of that money back onshore), and a balanced budget amendment.

We all know this, but few will agree to every single one of the items, hence the current boondoggle.

If we ran the governent like a business, we wouldn't need an amendment. Of course we need tax reform, cuts to entitlements, defense, etc.. However, i've been saying it since i've been on AGS and CS, we dont have any statesmen or women in Congress, willing to make the necessary decisions. It's a career killer.

[Ibanez]

I have to give the Tea Party credit for sticking to thier guns, however even GWBush would comprimise. That's thier problem, they don't comprimise, which is how you kick the can down the road in DC.

FIFY

This...

[Grizalltheway]

I have to give the Tea Party credit for sticking to thier guns, however even GWBush would comprimise. That's thier problem, they don't comprimise, which is how you get things done in DC.

The way to get out of this is massive, painful cuts to entitlements and DoD instead of just discretionary spending, rollback of sweetheart tax breaks and loopholes, tax reform (some sort of flat or consumption tax along with a drastic lowering of the corporate tax rate to bring some of that money back onshore), and a balanced budget amendment.

We all know this, but few will agree to every single one of the items, hence the current boondoggle.

I find it hard to believe the cash stashed in offshore accounts would magically find its way back here, even if the corporate tax rate were drastically lowered. I don't necessarily think it would be a bad thing to lower it, but why would they decide to pay x percent on it, when it would remain tax-free in the Cayman Islands?

[BDKJMU]

The way to get out of this is massive, painful cuts to entitlements and DoD instead of just discretionary spending, rollback of sweetheart tax breaks and loopholes, tax reform (some sort of flat or consumption tax along with a drastic lowering of the corporate tax rate to bring some of that money back onshore), and a balanced budget amendment.

We all know this, but few will agree to every single one of the items, hence the current boondoggle.

I find it hard to believe the cash stashed in offshore accounts would magically find its way back here, even if the corporate tax rate were drastically lowered. I don't necessarily think it would be a bad thing to lower it, but why would they decide to pay x percent on it, when it would remain tax-free in the Cayman Islands?

Its not the Cayman's anymore, its places like Switzerland and Ireland that have 16% and 12.5% corporate tax rates compared to the US, which has the highest in the world, not even including state & local. Posted excerpts from this 4 page long 60 Min Piece (certainly no conservative news source) on another thread last yr:

"......When President Obama threatened to clamp down on tax dodging, many companies decided to leave the Caribbean. But instead of coming back home, they went to safer havens like Switzerland.

Several of these companies came to a small, quaint medieval town in Switzerland call Zug.

Hans Marti, who heads Zug's economic development office, showed off the nearby snow-covered mountains. But Zug's main selling point isn't a view of the Alps: he told Stahl the taxes are somewhere between 15 and 16 percent.

"And in the United States it's 35 percent," Stahl pointed out.

"I know. It's half price," Marti said.

Marti told Stahl that Zug most probably has the lowest tax rates in Switzerland.

"So you're kind of a tax haven within a tax haven?" she remarked.

"Maybe, yes," he acknowledged.

The population of the town of Zug is 26,000; the number of companies in the area is 30,000 and growing at an average rate of 800 a year. But many are no more than mailboxes......

......Economist Martin Sullivan says it's standard operating procedure for companies like Cisco. "U.S. multinationals are shifting their research facilities, shifting their manufacturing facilities, and shifting some regional headquarters into Switzerland and into Ireland. And those are massive numbers of jobs," he told Stahl.

Sullivan says Ireland taxes corporations at just a third of the U.S. rate, so no wonder the outskirts of Dublin look like Silicon Valley. Many well-known companies are all but obliged to go abroad.

"Well, if you have a 35 percent rate in the United States and, for example, a 12.5 percent rate in Ireland, there's a incentive to move your factory to Ireland," he explained.

"Six hundred American companies are in Ireland and they employ 100,000 people," Stahl pointed out. "Those are jobs that aren't here. And they moved to Ireland because of taxes."

"The U.S. Treasury in effect is subsidizing investment in Ireland," Sullivan said.

"Why isn't everybody in Ireland if it's that great?" Stahl asked.

"Almost everybody is in Ireland," Sullivan said. "All the pharmaceutical companies, all the high tech companies. You're stupid if you're not in Ireland," he replied.......

........If they bring the money home, it's taxed the full 35 percent. If they leave it overseas, the IRS can't touch it. In other words, the tax law all but forces companies to keep their money out of the country, indefinitely.

"We leave the money over there. I create jobs overseas; I acquire companies overseas; I build plants overseas; and I badly want to bring that money back," John Chambers told Stahl.

Chambers told Stahl Cisco has almost $40 billion overseas that could be brought back to the U.S.

The total amount of money U.S. companies have trapped overseas is $1.2 trillion. Chambers is advocating for a one-time tax break to allow them to bring that money home at a rate of, say five percent. That would, he says, stimulate the economy and create jobs.

"What is your downside for money that isn't going to come back anyhow? I'd say your downside is zero," he told Stahl.

But the Obama administration opposed this idea. When it was tried in 2005, the Treasury did rake in billions of dollars, though very few jobs were created.

"What if tomorrow Congress passed a quickie law and the tax rate was 20 percent? Would that solve everything?" Stahl asked.

"I think it is the most important ingredient that we have to think about being competitive," Chambers replied.

"You lower the rate from 35 percent to 20 percent. You lose something like $2 trillion in taxes. We have a horrible deficit crisis, debt crisis. That's almost too much money to lose. What's your answer to that?" Stahl asked.

"My answer's very simple: every other developed country in the world has already done this. I'm not asking to give me a favor, or a hand out," Chambers replied.

"You know what: it sounds it," Stahl remarked.

Chambers replied, "All we're asking is: Give us a level playing field. Get us close."
http://www.cbsnews.com/stories/2011/03/ ... ontentBody" onclick="window.open(this.href);return false;

[danefan]

The question isn't whether the money would come back to the US, but instead what would companies do with that cash once they brought it back.

Companies love to claim they would create jobs with it, but in reality the vast majority will pay dividends and themselves. Thats what shareholders want

The 2004 repatriation holiday is a concrete example of that. Corporations were given a one year "holiday" on repatriated earnings. There is zero evidence that any additional jobs were created.

There is going to be a major push o a territorial tax system, which is what almost every other developed country has. that type of system would only tax earnings generated in the US. In our current system, US companies' worldwide incom is subject to tax at some point.

[∞∞∞]

Danefan is right on. I don't think any of us really like that the debt ceiling was increased, but we all know that's not really the reason the whole economy is stagnant. The simple reason is that consumers don't have money to spend. Wages have haven't been growing (I think I read that they're actually decreasing), prices are increasing, companies are making larger profits, but none of the money is going back to the working class. If non-upper management wages don't go up, the economy is going to stay the same. People need to spend money for non-essential things (so not just the bare minimum to survive) for the economy to keep growing and people are hesitant right now to spend. It's basic economics really. We can blame the government as much as we want (and deservedly so), but businesses have a bigger role in this thing and it seems like no one is talking about it (at least not in the mass media).

[ODUsmitty]

Danefan is right on. I don't think any of us really like that the debt ceiling was increased, but we all know that's not really the reason the whole economy is stagnant. The simple reason is that consumers don't have money to spend. Wages have haven't been growing (I think I read that they're actually decreasing), prices are increasing, companies are making larger profits, but none of the money is going back to the working class. If non-upper management wages don't go up, the economy is going to stay the same. People need to spend money for non-essential things (so not just the bare minimum to survive) for the economy to keep growing and people are hesitant right now to spend. It's basic economics really. We can blame the government as much as we want (and deservedly so), but businesses have a bigger role in this thing and it seems like no one is talking about it (at least not in the mass media).

Wow, just wow, Smudge.

The world was functioning pretty well until about 4 years ago. So what has changed or come to fruition??

1. The simple reason is that consumers don't have money to spend - Agreed. With many out of work or underemployed, there is less disposable income to spend on discretionary items. and any job moves that require housing changes result in loss of principal due to depressed housing prices. Thanks to Jimmy carter and Bill Clinton for the idiotic idea that everyone deserves to own a home, no matter how bad their credit (community reinvestment act).
2. None of the money is going back to the working class. The entire United States is not unionized, thank goodness. Business is created to make a profit, not to create jobs - jobs are a beneficial side effect. However, much money is going to the NONWORKING class with generational social support programs (medicaid, welfare, food stamps), transitional benefits (neverending unemployment payments, mortage payment relief, etc), and illegal immigrant border freedom. We are not collecting tax revenues from Americans who should be working (but are compensated too well to consider taking such jobs) in favor of illegals who pay nothing into the system other than sales taxes.
3. prices are increasing. Really. Do you think the drilling ban has any effect on prices. How about idiotic emissions legislation for power companies? ANd the net effect of monetizing our debt through QE1 and QE2 makes the US dollar less valuable for foreign goods. Wait until the inflation comes....
4. people are hesitant right now to spend. Yes, the smart ones are saving like mad to prepare for the coming economic armegeddon.....
5. businesses have a bigger role in this thing . Banks acted recklessly because the govt saif FMx2 had their back....see the housing collapse. GE pays no federal taxes, and Immelt is in Obama;s inner circle. Green energy is a farce when America has plenty of coal reserves, but govt emission regulations are oppressive. Shall I continue??

Wake up, Trip. This is a planned and coordinated attack to change our capitalistic society to a socialist centralized economy, and the government infrastructure is infiltrated with progressive liberals that have never created an honest dollar in their lives. It is unsustainable and will be removed either by failure or force, whichever comes first.

[TheDancinMonarch]

Only in Washington DC is reducing the level of spending INCREASES called a "cut".

Almost a direct quote from Bill Clinton in 1993 or 1994. Then of course when the Repubs tried to slow the rate of increase in 1995, Bill called them cuts too. Just a little history.

As far as this deal is concerned, the only winners are the political class in DC. The rest of, not so much.