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U.S. President Barack Obama hosts a bipartisan meeting with Congressional leaders in the Roosevelt Room of White House to discuss the economy, November 16, 2012. Left of President Obama is Speaker of the House John Boehner.                             REU
This ain't over.
The Washington Post has an unpleasant reminder for any lawmaker feeling too self-congratulatory about this week's fiscal cliff curb deal: the economy still sucks and the deal doesn't do much to change that.
The agreement, which the Senate approved only hours after the government hit the limit on federal borrowing, fails to defuse the prospect of a catastrophic national default two months from now. The deal does not raise the debt ceiling, leaving the Treasury to use what it calls “extraordinary measures” as long as it can to pay the government’s bills.

Nor does the package do anything to address stubbornly high levels of unemployment, with 12 million Americans out of work. Instead, the deal could aggravate the problem. By allowing the payroll tax cut to expire, the deal takes money out of the hands of many Americans, sucking it out of the economy and slowing economic activity.

The extension of unemployment insurance helps to stave some of the blow to economic activity. A good deal, however, would address unemployment with actual economic stimulus and would offset the blow of the payroll tax cut expiring by replacing it with an equivalent tax break for people earning less than $113,000, the level where the payroll tax is capped.

To top it off, it leaves austerity hanging over the nation for the next two months, creating uncertainty for business and consumers. The fact that the next debt ceiling fight will coincide with the spending cuts, and the fact that the Republican House has demonstrated one more time how happy it is to take the nation to the brink, just compounds that uncertainty. Congress and the White House avoided going over a curb on Tuesday, but they set us up for a real cliff in 60 days.

Originally posted to Joan McCarter on Wed Jan 02, 2013 at 07:07 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  Unenthused Voters Secondary Effect Of Fiscal Cliff (5+ / 0-)

    The insanity of voting with deadlines looming will make it more difficult to keep the occasional voter involved so the electorate in 2014 looks like 2012 and not like 2010.

  •  there's lots of jobs stuff in the bill (19+ / 0-)

    green energy and R&D tax credits, railroad maintenance.  that is all jobs.

    and i don't think anyone in D.C. ever intended this deal to fix the economy; it was only ever about pushing back the sequesters, which would have slowed things more, and addressing the tax question.

    Please don't dominate the rap, Jack, if you got nothin' new to say - Grateful Dead

    by Cedwyn on Wed Jan 02, 2013 at 07:12:50 AM PST

  •  We've just fixed a flat tire with a bald spare (27+ / 0-)

    and the highway ahead is littered with spilled tacks.

    What was a performance of ugly congressional theatrics is about to get uglier and even more dramatic.

    An already broken system is headed for a catastrophic stress test.

    If cats could blog, they wouldn't

    by crystal eyes on Wed Jan 02, 2013 at 07:16:44 AM PST

  •  This sucks (23+ / 0-)

    and any amount of Redstate unhappiness doesn't change that.

    What we ended up with was a postponement only worse i.e. less leverage.

    •  Actually, we get to pocket the tax increases... (6+ / 0-)

      on the very wealthy and can demand more when the GOP demands cuts. Increased revenues are not off the table by any means and not sure why the talking heads keep repeating that nonsense.

      •  seriously...this "lost leverage" business (10+ / 0-)

        is just weird.  what leverage does the GOP really have going forward?

        obstructing on the debt ceiling?  even business groups are appalled by the brinksmanship.  if the GOP can't even get business behind them, they're screwed. they still haven't recovered from the last time they pulled that crap.

        obama finally achieved his goal of decoupling the tax breaks question from larger budget considerations.  now the new congress has to work through the budget/debt nonsense, only the budget now includes the increased tax revenue, which weakens the justification for spending cuts.

        now any "grand bargain" type nonsense can be a straight-up sacred cow cage match pitting the safety net against bloated MIC spending.  it rather calls the deficit scolds' bluff in an epic way.

        aaaaand, the new house coming in is down at least two teabaggers and has a smaller GOP caucus overall.  although it was pointed out yesterday that the teabaggers might have just concentrated their power, since they are now proportionally a larger part of the smaller GOP caucus.  let's hope not!

        Please don't dominate the rap, Jack, if you got nothin' new to say - Grateful Dead

        by Cedwyn on Wed Jan 02, 2013 at 07:40:45 AM PST

        [ Parent ]

        •  agree (3+ / 0-)
          Recommended by:
          Boston to Salem, Cedwyn, FiredUpInCA

          the idea that threatening to raise taxes on the rich was some kind of overarching leverage to get everything we wanted is just more magical thinking.  

          And to believe that the Republicans will use the "leverage" of the debt ceiling to gut medicare/social security is equally puzzling.

          The same Republicans who have refused to name any cuts to those programs in the past?  The same Republicans who were criticizing the $716 B cuts to medicare?  The same Republicans who whipped up the "keep your hands off my medicare" frenzy?

          Republicans are going to say gut medicare/social security or we'll blow up the economy again?  I don't think that's a very strong political hand they've got there.

        •  Good Analysis (1+ / 0-)
          Recommended by:

          As one who like FlaDem fears what Obama will negotiate away more than I feared the lack of a deal on 1/1/13 I must say your spins have some merit and we can only hope that Obama does well with the positives you cite.

      •  How do you get more revenues now? (1+ / 0-)
        Recommended by:
        Eric Blair

        Honest question.  Why would the House GOP ever give on that?  Before the deal, we had a really big stick - rates were across the board going up.  Thus, taxes had to be dealt with.  If we went over the cliff, redoing the rates would have been passing tax cuts, not just doing status quo, so that also leaves wiggle room.  

        But now, rates are off the table.  What's the Republican motivation to close loopholes?  The Republican politicians have already floated trial balloons on this issue - oh, we're not raising taxes, we're just ending tax spending.  Yeah, that went over like a lead balloon.  The far right's position is still that any loophole closing should be revenue neutral - that is, that rates should be lowered further.

        So with rates off the table, how do you get to revenue?  Ignoring the debt ceiling (which the Republicans have already used to gut spending once), just look at sequestration.  It's a massive austerity package, with 50% going to the Pentagon, and 50% going to the rest of the government.  The President can repeat "balance" till he's blue in the face - how does he get the Republicans to put revenues into their wet dream - a gigantic spending cut?  Sure, the Republicans don't want to ever cut any military spending (just like many of the Democrats!), but what they get by doing nothing - sequestration - is surely better than closing loopholes that would raise taxes on their overlords.  

  •  You forgot one (12+ / 0-)

    The continuing resolution to fund the government for the upcoming year expires March 27.  So, even if the President refuses to negotiate over the debt ceiling, he has to negotiate over the spending levels in next year's continuing resolution.  Failure to do another continuing resolution setting next year's spending would not mean a default on the debt but would mean a government shut down.  

  •  By allowing the payroll tax to expire.... (21+ / 0-)

    we've stopped robbing Social Security of its lifeblood. If we're going to insist that the program remain robust, we've got to insist that people continue to kick in even during the lean years.

    •  Doesn't work when you have a president (8+ / 0-)

      Whose idea of balance is "three for the rich, one for the poor." Any positive that can be pointed to in the deal is "balanced" with a long or short term concession that, at best, makes the deal a wash in each particular context. if you look at it long term from the tax perspective it just piles on the growing income inequality, and adds to the debt that the scolds will use to extract more concessions from the poor.

      So, if the payroll tax increase is a positive for SS, and the goal is to allow the economy to grow, how is a "parallel lurch" helping? What did we get in return for the payroll tax holiday expiring, and exactly how does it help the economy?

      And how could anyone think this is "going forward?" Forward to what?

      This is why people look at Obama's record and say that he is obsessed with deal making for the sake of deal making. Long term, he is losing big. So why is he making the deals?

      Slap happy is a platform.

      by averageyoungman on Wed Jan 02, 2013 at 07:46:38 AM PST

      [ Parent ]

      •  The original payroll tax holiday was a bad idea... (13+ / 0-)

        and it was never intended to be permanent. Its the mechanism for funding Soc Sec. If you really want to see income inequality, starve the Soc Sec account to the point where it really will collapse, then the GOP will tell everyone "see, we have to means test this thing or it will implode." Then it becomes a welfare program, one that can and will be looted like all the others.

      •  Try some facts (4+ / 0-)

        The deal increases the tax rate on people earning over $400,000. That is six hundred billion in new revenues. In addition:

        We extended unemployment benefits for a year without having to give an offset, we extended research and development tax credits for things like wind energy another year, while extending stimulus tax credits for lower income families another five.  We also got the Medicare doc fix patched, so reimbursements don't get cut by 27%, the AMT patched, oh yeah, a freaking FARM BILL EXTENSION PASSED (which I have heard very few people mention, but is as huge a part of this deal as anything else).
        Hat tip to smash artist

        The Republicans in the house freaked out because their colleagues in the Senate gave the President much of what he wanted without getting any offsets in spending.

        Here's my take on it - the revolution will not be blogged, it has to be slogged. - Deoliver47

        by OIL GUY on Wed Jan 02, 2013 at 08:15:53 AM PST

        [ Parent ]

        •  None of that matters with the debt ceiling... (2+ / 0-)
          Recommended by:
          Timothy J, bronte17

          ...coming up. You cannot separate the two.

          •  Of course you can! (0+ / 0-)

            One actually has nothing to do with the other.

            I know that some folks seem to think the world will end because 2 million unemployed Americans will be getting UI checks in the mail and middle class folks don't have to face a large tax increase, and the price of milk won't double, but there are a number of good reasons to separate the two issues.

            Here's my take on it - the revolution will not be blogged, it has to be slogged. - Deoliver47

            by OIL GUY on Wed Jan 02, 2013 at 02:30:35 PM PST

            [ Parent ]

            •  No, you can't. Because the Repukes won't allow it. (0+ / 0-)

              They will extort spending cuts on social programs as the price for raising the debt limit. They have already said they are going to do that and I have no doubt that they will. As the story goes, it's in their nature.

              And here's another newsflash: No one around here is objecting to unemployed people getting their UI checks or middle class folks facing a tax increase. If you had been paying attention AT ALL you would have noticed that what people are objecting to is the price that will have to be paid for those things in two months because of the way Obama handled these negotiations.

    •  Bernie Sanders (4+ / 0-)
      Recommended by:
      Cedwyn, wishingwell, Just Bob, Sarenth

      "Show up. Pay attention. Tell the truth. And don't be attached to the results." -- Angeles Arrien

      by Sybil Liberty on Wed Jan 02, 2013 at 08:02:08 AM PST

      [ Parent ]

    •  Add to that (0+ / 0-)

      that social security and medicare taxes have been add to Capital Gains for a total of a 41% increase in capital gains taxes to 23.9% on families with incomes >450K. That helps too

  •  It won't be over until the current form (9+ / 0-)

    of the Republican party is destroyed.  Two things will need to happen:
    1.  Continue to force the party to split on votes, such as this one.
    2.  More Democrats turn out to vote than Republicans in close districts 2014.  It's possible to do this because the Republicans drew a lot of their districts to be Republican but close to split in order to have more Republican districts than they should have.

    But truly, it will never be over.  It's called governing.

    "But the problem with any ideology is that it gives the answer before you look at the evidence." - President Clinton

    by anonevent on Wed Jan 02, 2013 at 07:32:20 AM PST

  •  I don't know if you read MoDo today but her (1+ / 0-)
    Recommended by:

    interview with my Dem senator who voted no is something to think about.

    I don't think he was against taxing the rich, he's very rich but also comes from blue blood east coast nobles oblige. He wants to work on the deficits but I sure couldn't see him touching SS or medicare. And don't forget he's a very quiet new BFF with the big guy, girls same age etc. Maybe more tax hikes for the very rich and a stimulus is what's needed.

    How big is your personal carbon footprint?

    by ban nock on Wed Jan 02, 2013 at 07:34:19 AM PST

  •  Should add the word, "all," in-between... (13+ / 0-)

    ..."leaves" and "major," in this post's headline: "Fiscal cliff deal leaves ALL major economic problems unresolved." Despite the absurdly enthusiastic audience in this community, at the moment, if the passage of the bill in the House last night (given what's actually in it) gives folks here that much cause for celebration, it's just another indication of how pathetically low the bar has been lowered with regard to government's performance here in the U.S.!!! When one steps back, it's really quite sad.

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Wed Jan 02, 2013 at 07:38:24 AM PST

  •  dow up 250, s&p 27 (1+ / 0-)
    Recommended by:
    Timothy J

    guess wall street is upset there is a bill..........

    who is us...not.

    mittens=edsel. no matter how much money is spent to promote it, if the product sucks, no one will buy it.

    by wewantthetruth on Wed Jan 02, 2013 at 07:39:44 AM PST

  •  Perhaps you expected (8+ / 0-)

    a last-second deal that solves all major economic problems.

    With this congress.

    Early to rise and early to bed Makes a man healthy, wealthy, and dead. --Not Benjamin Franklin

    by Boundegar on Wed Jan 02, 2013 at 07:52:03 AM PST

  •  This is precisely why MOT was right (11+ / 0-)

    over this deal being a pyrrhic victory.

    •  Exactly. HUGE concessions on tax for the rich by (1+ / 0-)
      Recommended by:

      Making them permanent - their expiration on the 1%ers was the WH's major leverage point, and it was a huge one - and we only got two months?  

      Seems like a pretty poor deal, all in all - not mention the government funding mechanism expires around then, along with something else...oh yeah, the debt ceiling, that little thing.  

      This is gonna get ugly.

  •  Little good from dysfunctional Congress ... (0+ / 0-)

    The prospects for the 113th Congress can only be
    predicted to be possibly worse than the most un-
    productive, Republican obstructionist, 112th Congress.

    *Austerity is the opposite of Prosperity*

    by josmndsn on Wed Jan 02, 2013 at 08:13:24 AM PST

  •  And in the world of rainbows and ponies (1+ / 0-)
    Recommended by:
    Desert Scientist
    A good deal, however, would address unemployment with actual economic stimulus and would offset the blow of the payroll tax cut expiring by replacing it with an equivalent tax break for people earning less than $113,000, the level where the payroll tax is capped.
    such a deal might have been possible.

    However, we live in this one.  Speculating about things that had zero chance of passing is pointless negativism.

    "The future of man is not one billion of us fighting over limited resources on a soon-to-be dead planet. . .I won't go back into the cave for anyone."

    by Whimsical on Wed Jan 02, 2013 at 08:24:36 AM PST

  •  this is what happens when cans are kicked (1+ / 0-)
    Recommended by:

    down the road, and sadly, and unfortunately I fear it how the next couple at least, of years are going to look. The only time the House will act, will be once again, if there is some kind of a crisis, and then things will get uglyier and nastier. I would have loved to have been a fly on the wall at Grover Norquists' house last night after he heard taxes are going up. This of course will not sit well at all with the Tea Party minions. The good aspect of this is though, the GOP is in complete basketcase mode, and looks to be for some time to come. The bad news, is the Dems have to legislate with them somehow.

  •  Without rational partners (4+ / 0-)

    you cannot make rational decisions without one side simply ignoring the other side and forging ahead without them. In this case, the right wing is acting irrationally on so many issues that it befuddles  me how the POTUS can use them to put together a plan forward. This is a time for the ones in power to just start making things happen and damn the resistance. One of my biggest beefs with Obama is that he does not really think big at times like this, he is more of a tinkerer than a radical. Our economy is providing the predictable results one could expect in a global market place where finance and debt now create most if not all the profits in corporate America. We have a fake economy now in many ways. That is what we need to address folks. What really is the future of our economy and what in the world are all of us going to do to make a living? It's not in retail or food services...

    Do facts matter anymore?

    by Sinan on Wed Jan 02, 2013 at 08:31:48 AM PST

  •  Next Congress will be worse (4+ / 0-)
    Recommended by:
    guinea, nchristine, apimomfan2, Sarenth

    I seriously doubt at this point that John "Go Fuck Yourself" Boehner can hold on to the gavel.  If Cantor takes over then the House will be even more recalcitrant  (though the GOP majority is a bit slimmer) than the last Congress.

    These people have realized they can't win through free and fair elections, and can't even win through voter suppression. So all they've got left is blowing the place up.

    Barack Obama for President

    by looty on Wed Jan 02, 2013 at 08:32:59 AM PST

  •  Um...what? (1+ / 0-)
    Recommended by:
    Desert Scientist

    "A good deal, however, would address unemployment with actual economic stimulus..."

    Yes, and a good unicorn farts rainbows...what part of this "Republicans control the House" thing are we not understanding here?

    Abortions for some, miniature American flags for others.

    by Aqualad08 on Wed Jan 02, 2013 at 08:41:02 AM PST

  •  Back in the 30's (1+ / 0-)
    Recommended by:

    the slogan was "Prosperity is Right Around the Corner." Of course the corner was World War 2 and the that was a good ways off. With the Debt Ceiling and Cuts freight training at us, our new slogan is "Austerity is Right Around the Corner."

    Ceterum censeo Carthaginem delendam esse. Cato

    by moon in the house of moe on Wed Jan 02, 2013 at 08:44:29 AM PST

  •  SS age eligibility is going up folks in 2 months (3+ / 0-)
    Recommended by:
    slinkerwink, shaharazade, apimomfan2

    SS increase in age eligibility to 67-70
    SS chained CPI
    ACA subsidies cuts to lower middle class

    And you can bank on it that the military would get only token cuts. Too many Dems in military districts.

    We'll also have Speaker Cantor leading the terrorists.

    What a disaster.

    •  Doubtful (1+ / 0-)
      Recommended by:

      You really think Harry Reid is going to go along with all that, and the President sign it?

      The House GOP extremists can prevent stuff from passing -- but they do not have the clout to roll back or force changes in SS/Medicare.

      •  Yes. (3+ / 0-)
        Recommended by:
        shaharazade, apimomfan2, bryduck

        The President will sign it. It's the Grand Bargain he's always wanted. Of course he'll sign it. Sure, it'll cripple the Democratic Party for years to come, but he's not running for anything anymore (and he's honestly never been too concerned or interested in party building/maintanence)--and he's proven he can strong-arm the party into doing his bidding when he really wants to.

        The Grand Bargain must be stopped at all costs to protect the 99%.

        by cybrestrike on Wed Jan 02, 2013 at 09:02:03 AM PST

        [ Parent ]

    •  This is the battle we need to fight (2+ / 0-)
      Recommended by:
      nchristine, apimomfan2

      No changes can be made to Social Security, Medicare, Medicaid or any other program without a large scale agreement by Democrats.  Obama can make any deal he wants but the House will need Dem votes to pass and the Senate will need for Dems to put it on the table.
      I believe the next 2 months will be full out war on social programs.  Republicans want blood, it has nothing to do with fiscal responsibility and everything to do with their morbid obsession with human suffering, thus no amount of reasoning or compromise will placate them.
      It is entirely up to the Democrats in Congress to make sure that Americans will continue to have at least the level of benefits that we have today.  They need to hear it often and loudly that the republicans don't represent the needs of America.

  •  At What Point? (3+ / 0-)
    Recommended by:
    MPociask, apimomfan2, Sarenth

    What's it going to take for most people to recognize that President Obama isn't on the side of the working class, poor and elderly?

    If I was a communist, rich men would fear me...And the opposite applies. The history of all hitherto existing society is the history of class struggles.

    by stewarjt on Wed Jan 02, 2013 at 08:49:25 AM PST

    •  I'm guessing somewhere around the time... (0+ / 0-) start realizing it was either him or the austerity faeries of Mitt Romney.

      Statements like yours are reactionary and childish. Go back to your progressive dreamland while the rest of us deal with reality...

      Abortions for some, miniature American flags for others.

      by Aqualad08 on Wed Jan 02, 2013 at 08:59:56 AM PST

      [ Parent ]

      •  Be ready to deal with the reality of Chained CPI (3+ / 0-)
        Recommended by:
        stewarjt, nchristine, apimomfan2

        ...and whatever other cuts are coming down the line when the Debt Ceiling fight begins in earnest.

        How are you lot going to sell that as a victory?

        The Grand Bargain must be stopped at all costs to protect the 99%.

        by cybrestrike on Wed Jan 02, 2013 at 09:04:54 AM PST

        [ Parent ]

        •  Right, right...NEXT TIME... (0+ / 0-)

          ....that's when he'll REALLY sell us out...unlike this time when all he did was get Republicans to vote in favor of raising taxes on the wealthy and extending unemployment benefits without touching the social safety net...

          Yes, yes...NEXT TIME...

          Abortions for some, miniature American flags for others.

          by Aqualad08 on Thu Jan 03, 2013 at 12:11:28 AM PST

          [ Parent ]

      •  Wow! All Of That Invective For A Simple Question? (1+ / 0-)
        Recommended by:

        Believe me I can respond with the best of them, but I'm not...yet.

        I'll just say that if I wanted Republican policies, I would have voted for a Republican.

        Van Jones
        Single Payer
        Elizabeth Warren
        Susan Rice

        I know.  I know.  The Republicans made him do it all.

        If I was a communist, rich men would fear me...And the opposite applies. The history of all hitherto existing society is the history of class struggles.

        by stewarjt on Wed Jan 02, 2013 at 09:10:38 AM PST

        [ Parent ]

      •  We're getting austerities (1+ / 0-)
        Recommended by:

        through one set of policies or another.  Neoliberal or conservative, it doesn't seem to matter.  The poor and middle class are getting the shaft by the party that is supposed to give a damn.

        The reality is, is that this situation is not tenable for the long term.  You cannot build a lasting house on a crumbling foundation no matter how thick the walls or well-engineered the rest of it is.

        "You have to let it all go, Neo. Fear, doubt, and disbelief. Free your mind." -Morpheus, The Matrix

        by Sarenth on Wed Jan 02, 2013 at 04:10:44 PM PST

        [ Parent ]

  •  One other small piece of help (0+ / 0-)

    According to what I read this morning, one of the small tax items that is included is a one-year extension on the provision saying if your house gets foreclosed or you do a short sale or a modification, the forgiven debt is NOT taxable income. (That's common sense but the tax code generally would treat it as "income.")

    This is a huge help to people who are trying negotiate a modification or short sale, or got foreclosed on.

    Like the other pieces, it won't move the economy forward, but it will prevent more hurt on the people who are already hurting badly.

  •  Much Farther To Go! (5+ / 0-)

    Quoting J.J. Goldberg at forward (dot) com: 

    [...] Eisenhower inherited a top marginal income tax rate of 92% from his predecessor Harry Truman when he entered the White House in 1953. He quickly lowered it to 91%, where it stayed until Lyndon Johnson lowered it again to 77% in 1964 and then 70% in 1965. 

    [...] Eisenhower managed to reduce the federal deficit by 75% — down to a quarter of the size he inherited — while building the Interstate Highway System and launching America’s space program. GDP growth averaged 3% per year. Unemployment averaged just under 5.5%. 

    Reagan, entering office in 1981, inherited Johnson’s 70% top marginal income tax rate and immediately lowered it to 50%, then to 38.5% and finally to 28%. His theory was that high taxes stifle economic growth, while lowering taxes unleashes growth and creates jobs. [...] It didn’t work. Growth averaged 3.4% per year during Reagan’s presidency, hardly better than Eisenhower’s, while unemployment averaged a shocking 7.43%, far worse than Eisenhower’s and hardly better than the much-maligned Obama record. [...] 

    The debate we’re having today is between a robust Reaganism and a faint, timid echo of Eisenhower Republicanism. In fact, when you get down to it, the Democrats can’t even bring themselves to take Eisenhower’s side with any conviction. We’re all touting variations on a flimflam theory that’s been tried and proven a colossal failure.

    •  Right. Good, Informative Comment (1+ / 0-)
      Recommended by:
      Eric Blair

      The economic facts are that President Carter's term had higher average annual RGDP growth, and a lower average unemployment rate than did President Reagan.  The only main macroeconomic measure that was better under President Reagan than President Carter is inflation.  

      Moreover, President Reagan nearly tripled the national debt from under $1 Trillion to almost $3 Trillion.

      If I was a communist, rich men would fear me...And the opposite applies. The history of all hitherto existing society is the history of class struggles.

      by stewarjt on Wed Jan 02, 2013 at 09:13:44 AM PST

      [ Parent ]

      •  And the reason that inflation was lower (0+ / 0-)

        under Reagan was that Paul Volker, appointed by Carter, raised interest rates dramatically, squeezing the inflation out of the economy.

        I'm truly sorry Man's dominion Has broken Nature's social union--Robert Burns

        by Eric Blair on Wed Jan 02, 2013 at 11:08:55 AM PST

        [ Parent ]

    •  You are being very misleading.. (0+ / 0-)
      It didn’t work.  Growth averaged 3.4% per year during Reagan’s presidency
      Did you intentionally only want to list the "average"?

      By Reagan's 4th year in his first term, GDP was smoking hot - it hit over 9% one quarter and averaged 7.75%.  The economy was on fire.  It did indeed "work".  Or something did and it was coincidental.

      Whatever the reason, you cannot imply, as you try by averaging, that growth was lackluster under Reagan.  It took a few years, but the economy was booming.  There is a reason Reagan won 49 States and 550 electoral vote landslide in '84.

      •  Talk about misleading (0+ / 0-)

        Yes the GDP did increase dramatically for a very small number of quarters leading up to the 1984 election, but dropped back after the first two quarters of 1984 and averaged 3.7% for the second term.  In that era, it was a common practice to stimulate the economy going into an election so that economy would look strong and Reagan did that.  Real wages, btw, did not increase under Reagan. All the increased GDP went to the top.

        I'm truly sorry Man's dominion Has broken Nature's social union--Robert Burns

        by Eric Blair on Wed Jan 02, 2013 at 11:21:24 AM PST

        [ Parent ]

        •  real wages of the unemployed sure went up (1+ / 0-)
          Recommended by:

          Unemployment dropped precipitously as the GDP went up.

          And it dropped because people were actually getting jobs.  The labor participation rate went up.

          The current lowering of unemployment is from people leaving the national workforce.

          Going from zero income to a steady paycheck sure seemed to count for something back then.  The 20+ million out of work right now might gladly take that, regardless of the "real wage".

          •  You have been reading too much right wing (0+ / 0-)

            propaganda.  When Reagan came into office the economy was improving gradually and the unemployment rate was just over 7%.  His policies then bumped it up to about 11%.  From that point it gradually decreased to about 5% when he left office.  Given the fact that the Volker interest rate increases had imposed a substantial drag on the economy (albeit with the benefit of killing inflation) a more realistic view is that the Reagan policies caused a substantial temporary increase in unemployment that was superimposed on a trend of gradually reducing unemployment.  This was particularly unimpressive given that he borrowed more money than all the previous Presidents combined and changed the US from the world's largest creditor nation to the world's biggest debtor nation.  One would think that all that borrowing would have resulted in more jobs, at least transiently.  Instead most of it enriched the rich and military contractors.  Under Bill Clinton, by contrast, the unemployment rate started at about 7% and steadily decreased to 4%.

            I'm truly sorry Man's dominion Has broken Nature's social union--Robert Burns

            by Eric Blair on Thu Jan 03, 2013 at 11:12:00 AM PST

            [ Parent ]

  •  What bullshit (2+ / 0-)
    Recommended by:
    shaharazade, Sarenth

    News flash.  We have raising debt ceiling for decades.  It's not something you just solve unless u are a crazy right winger who wants zero debt.  Now exactly how well would that work out ... Decades of recession most likely.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Wed Jan 02, 2013 at 08:58:47 AM PST

  •  How To Cut Spending: End Corporate Welfare!!! (6+ / 0-)

    As Rex Nutting of Marketwatch noted in his 12/18/2012 article "Why isn’t Obama demanding corporate welfare cuts?", "$2.6 trillion could be saved [...] It’s possible to achieve all the budget savings we need for the next 10 years simply by cutting the fat out of discretionary spending programs and tax expenditures [i.e., cutting the corporate welfare] without raising tax rates on the wealthy or cutting the safety net at all."    

    Oil and gas companies, which are raking in record profits, certainly don't need $4 billion a year in subsidies, and even the oil company CEOs admit they don't need it!    

    Why are cuts to Social Security and Medicare even being discussed while literally billions in corporate welfare are constantly spilling out of the Treasury?

    White House petition here:

  •  This deal is not in any way, shape or form .... (1+ / 0-)
    Recommended by:

    a good one, but given the composition of the House especially, it may be the best anyone can get.  Anyone who saw the movie "Lincoln" (with whatever distortions Spielberg put in) has to realize how things get done in Washington!  You should never know how either sausages or laws (or budgets) are made.

    What we need to do is dis-elect the Tea Partiers.  We still have a republic, not a dictatorship and Obama is not a dictator.  I don't agree with him on many things, but just think how this would have played out under President Romney!  

  •  I'm ready to fight to avoid this real cliff. This (1+ / 0-)
    Recommended by:

    battle was far from over and I plan on helping this community put the pressure on congress.  We may not have the House but we have some great Democrats coming into power this year and it's our job to get them to fight.  Don't give up, we are done yet.

    Funny Stuff at

    by poopdogcomedy on Wed Jan 02, 2013 at 09:01:28 AM PST

  •  And Joan, I have a new diary about Mark Begich (1+ / 0-)
    Recommended by:

    who has proposed a very bold plan to strengthen Social Security.  I've written quite a bit about it but I want to help make it a reality and I could use your help and the community's help.  Can we get it republished to the Social Security Defenders group?  A Recommend would also be nice but only if you like it:

    Funny Stuff at

    by poopdogcomedy on Wed Jan 02, 2013 at 09:15:54 AM PST

  •  I wish he would just say (0+ / 0-)

    "We will not begin to negotiate until the debt ceiling is raised."

    last time they held this hostage, our credit rating was downgraded.


  •  The "cliff" in 60 days is no more a "cliff" than (2+ / 0-)
    Recommended by:
    shaharazade, apimomfan2

    the faux one we just "averted."  Let the deadline pass for all I care.  DC demonstrated their complete lack of seriousness this week with this awful deal.

  •  If GOP is imploding, why do we fear them???? (1+ / 0-)
    Recommended by:

    Since the GOP is now in full circular-firing-squad mode, why should we fear them as the next deadlines, for debt-ceiling etc, approach? Shouldn't we have a little more confidence?

  •  Reality is (0+ / 0-)

    now shaped by the bought and owned pols lies and dirty dealings.. Fear rules the day and keeps Goldman Sachs ruling the world.  Both sides here are operating under the same reality that says this anti-democratic virulent version of capitalism run amok is inevitable and the way forward. Too big too fail and a global rule of the unrestrained  'free market' which holds all people hostage to this neocon neoliberal wet dream of power and useless wealth is nothing that anyone should support let alone sacrifice for. The market is up the casino is running full tilt and the Dems saved the day.  

    Shock after shock disaster after disaster all manufactured to create a nightmare world that's not only unsustainable but viscous, cruel and has destroyed any economic equity and made our government a mockery of representational democracy . Who cares which side wins in this bogus haggling over our already picked clean bones. Humanity and the planet lose. This is just insane it's nothing but cart before the horse politics. FDR had a good point about fear.

    This is not what democracy looks like. This is not the Axelrod/Clinton 'inevitable world as we find it'. It's the same old world that throughout history the power mad looters and pillagers decide to impose on humanity. It certainly is strange that people are declaring victory and rooting for our side all so that the boot heel of the oligarchy remains firmly on their neck. Reality even political reality is not static and teh evil can't be vanquished by replacing it with by a kinder gentler version of the same evil. Evil is as evil does and it's systemic at this point and not any reality I intend to feed. What good are the Democrat's when they also define this evil as reality.        

  •  Give away! (0+ / 0-)

    The progressives have given away any strong bargaining power they had. Now that taxes is off the table, it only leaves cuts. What to cut and how much. The Republicans will not go easily down the road of tax deduction reform. they will call that raising taxes. The time is now to bring the people in. All of us must let our representatives know what we want our tax dollars to fund and how much and how they will be paid. For we can not let the wealthiest of us make the decisions for us all. Because they will only protect themselves. We owe it to our children to solve this problem now. For I am sure that we would want to bear the pain rather then our children and others who will follow us. Now is the time to standup and be counted.

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