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View Diary: Chill out "fiscal cliff" doomsayers it's really a fiscal hill and "austerity bomb" could be worse (17 comments)

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  •  Social Security as nothing to do with it. (2+ / 0-)
    Recommended by:
    HoundDog, Odysseus

    And, I wouldn't mind seeing some carefully designed cuts to the defense budget, designed to protect American jobs for the time being.

    “Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.” -- Ronald Reagan, 1984 debate with Walter Mondale

    by RJDixon74135 on Sun Nov 18, 2012 at 12:27:28 PM PST

    •  Defense cuts are the way to reduce spending as it (1+ / 0-)
      Recommended by:
      mookins

      has almost doubled since the Clinton era.  I know Social Security has nothing to do with it an the Social Security Trust Fund is solvent through the mid 2030s but that's one of the things in Simpson-Bowles that President Obama is reported to have included in the proposed "grand-bargain" lat go around.

      The means is the ends in the process of becoming. - Mahatma Gandhi

      by HoundDog on Sun Nov 18, 2012 at 12:32:22 PM PST

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      •  For you to believe that SS is broke by 2037 (1+ / 0-)
        Recommended by:
        mookins

        you have to think there will be a 25 year recession.

        I never thought you were into such massively unrealistic predictions. SO the Jets will win the Superbowl this year?

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Sun Nov 18, 2012 at 01:59:08 PM PST

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    •  To avoid the immediate negative impact of (3+ / 0-)
      Recommended by:
      RJDixon74135, wu ming, Roger Fox

      reductions of defense spending back to previous levels I support President Obama's infrastructure banks and a temporary stimulus of infrastructure spending including upgrading our electrical grid, and accelerating infrastructure spending from the highway fund.

      We have to offset the austerity bomb affect in the short-term and defense spending does have some Keynesian like benefits, although the economic multiplier effects are not as great as domestic spending on real productive assets like infrastructure, or just even spending in the US instead of overseas.

      The means is the ends in the process of becoming. - Mahatma Gandhi

      by HoundDog on Sun Nov 18, 2012 at 12:42:50 PM PST

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    •  Oh, I may have misunderstood you point RJ (1+ / 0-)
      Recommended by:
      RJDixon74135

      the expiration of the payroll tax withholding reduction will  impact consumer demand, especially if it hits simultaneously with greater payroll tax deductions.

      I favor a greater reduction of middle-class tax reduction beyond the Bush-tax cuts to offset this.  

      The means is the ends in the process of becoming. - Mahatma Gandhi

      by HoundDog on Sun Nov 18, 2012 at 12:54:47 PM PST

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      •  That sounds like a good idea, HoundDog (2+ / 0-)
        Recommended by:
        nchristine, HoundDog

        I know it's not easy, but people with mid-range and higher incomes need to resume contributions to Social Security as soon as possible. If not, they may find themselves at retirement time with no program left. I'm old enough that I'm already drawing and I can't stress enough how important this program most likely will be to them.

        “Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.” -- Ronald Reagan, 1984 debate with Walter Mondale

        by RJDixon74135 on Sun Nov 18, 2012 at 01:05:19 PM PST

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      •  Multiplier for Payroll tax reduction (1+ / 0-)
        Recommended by:
        HoundDog

        is nothing to Woof home about. 1.1 to 1.3. at best.

        Among tax cuts, multipliers ranged from 1.29 for a payroll tax holiday down to 0.27 for accelerated depreciation. Making the Bush tax cuts permanent had the second-lowest multiplier, 0.29. Refundable lump-sum tax rebates, the policy used in the Economic Stimulus Act of 2008, had the second-largest multiplier for a tax cut, 1.26.
        http://en.wikipedia.org/...
        CBO says .60

        See table 6
        http://www.fas.org/...

        Infrastructure spending is 1.8, even 2.5 in certain situations.

        http://www.washingtonpost.com/...

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Sun Nov 18, 2012 at 01:47:43 PM PST

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      •  The problem is money being hoarded by (1+ / 0-)
        Recommended by:
        Roger Fox

        Congress, Wall Street and industry. Since taxes are only collected on money that moves, increasing or reducing the rates may not make it move. Not collecting FICA from wage earners will keep more money circulating, especially if we can keep Wall Street from capturing more. Increasing elderly pensions will pump more money into the economy. But, the big problem is turnover--the vellocity of the dollar.

        http://research.stlouisfed.org/...

        We organize governments to provide benefits and prevent abuse.

        by hannah on Sun Nov 18, 2012 at 01:58:43 PM PST

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        •  important point: velocity (0+ / 0-)

          not just the volume of money.

          And those FICA holidays have a sucky multiplier, .6 to 1.29, see my comment upthread.

          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Sun Nov 18, 2012 at 02:04:20 PM PST

          [ Parent ]

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