Free Markets, Free People


“Fiscal cliff deal”: 41:1 tax increase to spending cuts. Great job! [update]

In case you’re looking for an “fiscal cliff” bottom line, here it is in one sentence.

According to the Congressional Budget Office, the last-minute fiscal cliff deal reached by congressional leaders and President Barack Obama cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts.

If there’s any good news in this “compromise” bill, it is that the Democrats will get their tax on the rich, and it will make absolutely no difference in the debt.

As we’ve been saying for years, it’s not a revenue problem, it is a spending problem.

In  fact going over the fiscal cliff is not been avoided, the chasm has just been deepened. Or said another way, the can has been firmly kicked down the road.

The word of the day?

“Disgust”.

UPDATE: In case you were wondering what this means in nice round numbers in terms of debt:

The fiscal cliff deal approved by Congress will increase deficits over the next decade by close to $4 trillion, according to the Congressional Budget Office.

Like I said, in full sarcasm mode, “great job!”

~McQ

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25 Responses to “Fiscal cliff deal”: 41:1 tax increase to spending cuts. Great job! [update]

  • And we’ve scheduled the next Fiscal Cliff Kabuki theater presentation for, what, March?  April?

    • February.
      Mark Steyn is right.  There is no political force supporting seriousness in America…not one anybody is in fear of.

  • That $4 trillion is the optimistic scenario.

  • Contrary to conservative talking points, the debt is a spending and revenue problem.

    • Don’t piss on my back and tell me it’s raining.  The DEBT is a spending problem, just like it always is, anywhere you have debt and income.   Stop excessive spending, it’s pretty simple.
      When you make a personal income of $50,000 a year, it’s a BAD idea to buy a Lear Jet, a pilot, and an airport solely for recreational purposes on the weekend.  It’s a WORSE idea for you to turn around and claim WE should help you pay for it.
       

    • No shit, Sherlock!?
      Did you miss the part where THERE ISN’T enough money in the whole FLUCKING world to meet our obligations at this rate….????

      • How do you make a contribution to reduce the debt?
        There are two ways for you to make a contribution to reduce the debt:

        You can make a contribution online either by credit card, checking or savings account at Pay.gov
        You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it’s a Gift to reduce the Debt Held by the Public. Mail your check to:

        Attn Dept G
        Bureau of the Public Debt
        P. O. Box 2188
        Parkersburg, WV 26106-2188

    • Really? What econ school did you go too? Debt is normally a result of spending more than you have. That’s not a “revenue” problem.

    • What happens when you give someone that maxes out their credit cards a new credit card?  They max it out too.

      No fiscal responsiblity is no fiscal responsiblity. 

    • Tell that to Moody’s … I feel a US bond rating downgrade just days away

      • Just like they convinced the faithful that the downgrade from the debt ceiling controversy 2 years ago was due to inaction in raising the debt ceiling unconditionally by Republicans, they’ll invent some more nonsense to blame it on Republicans.  ‘Not enough spending,’ ‘not enough taxes on the rich’, etc.  When they’ve got the megaphone with swing voters, whose going to contradict them?

    • Zoloft prescription run out again?

  • I though the whole idea of things was that we needed more taxes to close the defict? That’s what the Dems told us, so why did they increase overall spending ahead of their “revenue” gains? Why is adding $4 Trillion ok now? I tried asking libs this weekend about it and all I got was “Bush added to the deficit!” and blather about wars on the credit cards etc. Let it burn. Blue America needs to suffer, and they need to suffer badly.

  • Uh, there is other good news. Some of the Bush tax cuts, most of them in fact, are no longer part of the negotiations but are the law of the land. Spending and taxes have been decoupled.

    The CBO “deficit increase” was due to the tax cuts, it simply means they are counting the Bush tax cuts as the “law of the land”. This means the $4T “deficit increase” doesn’t take into account the lower GDP that results from increased taxes, the CBO uses static analysis.

    • Also, I don’t feel that returning to the original payroll tax is “raising taxes.”
      That was a stupid idea in the first place.
      If anywhere needs to be cut its the corporate tax rate because that makes people invest more.

      • Well, it is raising them back to what they were. However, the payroll tax is for something the American people want, even if it is unconstitutional and unsustainable.

  • Begin the jettisoning process…

  • The only good news is that “taxes” have now been done.
    Any further attempts to raise taxes, I think will be viewed a bit more suspiciously by the LIV public. “Didn’t we already fix that?”
    And no more angst over the Bush Tax Cuts having to be renewed. One less pro-Dem deadline.
     

    • Gore and Sen Boxer’s hubby and some Clinton friend supermarket magnet are all making a bundle on the deal to sell Cureent TV to al Jazeera, but what makes them hypocrites for hurrying the deal along so it would be completed by 12/31 so they would not be subject to the brand new democratic taxes.

      Irony is Al Gore walking away with $100 million in dirty oil money.
      Well, it would be ironic if it weren’t so predictable.

  • The fiscal deal struck last night makes one thing clear: President Obama must have really hated the recommendations of the bipartisan Bowles-Simpson commission that he appointed. The commission said that we needed to reform entitlement programs to rein in spending and that increased tax revenue should come in the form of base broadening and lower marginal tax rates. The deal appears to offer no entitlement reforms, no tax reform, and higher marginal tax rates. After all the public discussion over the past couple years of what a good fiscal reform would look like, it is hard to imagine a deal that would be less responsive to the ideas of bipartisan policy wonks.

    You can tell that we are now in post-partisan times … when there is only one party, nothing is partisan