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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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  •  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-)
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      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

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