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View Diary: Chained CPI is a Cut. You Either Care About People or You Don't. (365 comments)

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  •  yes, the president has to consider (9+ / 0-)

    the international implications of sending the US further into an economic crisis which is what cutting benefits does. That is why the world is watching, this policy has led to an economic depression in Spain and Greece, continued crises in Ireland and Portugal and the UK is heading back to recession. So if the US which represents a large portion of world economic demand cuts the incomes of the poor it means that that will increase the probability of economic crisis spreading more rapidly. Do you understand what I am saying?

    It is the demand of those on lower incomes that leads to production and employment (they obviously save less and spend more); cutting incomes of the poor will lead to increased problems of realisation of profits and hence decreases in production as there is no one to buy the goods and services that are produce. It produces an economic contraction; that is why austerity in the midst of a crisis is inane. If the US moves closer to another recession that affects everyone.

    The fiscal cliff is a manufactured problem ... cutting deficits and the debt now is essentially stupid; but even more stupid is shifting the burden onto the poor instead of letting tax cuts expire and using the increased revenue for job creation programmes and increasing benefits rather than cutting them.

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Wed Dec 19, 2012 at 10:11:25 AM PST

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    •  You do (0+ / 0-)

      realize that none of these spending cuts are going to happen in 2013,right?
      And that part of this deal,which even Krugman praised,is immediate stimulus spending that he did not think would be possible.
      Obama seems to be trying to avoid at all cost repeating the Euro austerity disaster. If we go off the cliff, that is going to be huge,instant austerity. So, Obama is trying to avoid that.

      So, he has a real world problem to solve...go over the cliff and face a world-wide recession in 2013,or make a deal that keep tax cuts on the bottom 98%, pushes off spending cuts til the economy is stronger,and get some unemployment compesation and infrastructure stimulus spending in 2013 to try to keep the recovery going.

      I am sure he wishes he could give everyone on Dkos everything they want, but that means going off the cliff.

      •  they cannot cut benefits from the most (7+ / 0-)

        dependent, that is elderly and disabled people. The bush tax cuts need to expire; there is no reason to cut the deficit ... the republicans cannot force anything through, they only control the house. There is no basis for negotiation at this point, it will only create harder losses for the poor who cannot cope with them at all at this point.

        The US going over the cliff will not cause a world-wide recession; the US needs to increase spending not cut it. The revenue received from the elimination of the tax cuts can be used for further gov't spending (there is no reason to cut the deficit). What will cause a recession is continued cutbacks to those on lower incomes. It is the poor, working class and middle classes whose spending ensures growth, not the wealthy and this derives from the relationship between consumption, production and incomes. Higher incomes for the working class and poor stimulate growth not higher wealth and income inequality which will bring about a depression ... have you noticed that the term recession has little meaning now that we have moved towards a world-wide economic crisis the likes of which has not been seen since the great depression? The term is not recession, it is economic crisis and people that actually know what they are talking about are far more worried about the impact of rising inequality in wealth and income. Elimination of the the tax cuts and the introduction of wealth taxes and financial transaction taxes could be used to lessen said inequality.

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Wed Dec 19, 2012 at 11:20:57 AM PST

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        •  You do (0+ / 0-)

          realize that going over the cliff will mean 300 billion will come out of the hands of the middle and lower class in the US in the form of tax increases?  That is going to spur economic activity?  And that the automatic spending cuts that will go into effect if we go over the cliff are going to be enormous?

          If we go over the cliff, taxes are going up on everyone,and spending is going to be slashed.
          That is the recipe for a recession in the US,and when the US coughs,the world gets a cold.

          •  What needs to happen but will not happen (1+ / 0-)
            Recommended by:
            priceman

            is that the money gotten back from the tax cuts being eliminated must be spent in direct gov't job creation and direct investment. If the money is used to decrease the deficit it will result in a recession as the money needs to be spent; tax cuts for the wealthy are not helpful to stimulate economic recovery. What is needed is putting money in the hands of the poor, working poor, working and so-called middle classes. I am not supporting paying back the deficit, I want to increase the deficit but refocus where it is being spent.

            "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

            by NY brit expat on Wed Dec 19, 2012 at 02:15:29 PM PST

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