Erika Johnsen @ Hot Air:
On Wednesday, the Congressional Budget Office issued its latest report, predicting that — unless Congress acts to thwart January’s upcoming “Taxmageddon” — our economy will suffer even further setbacks and likely land squarely back into the realms of recession. …Wait, so they’re saying that… hiking taxes doesn’t necessarily lead to more revenue and actually hinders economic growth and job creation? What the what?
In its most dire warning yet about the fiscal cliff yet, the CBO said the economy would contract by 0.5 percent in calendar year 2013 if the Bush-era tax rates expire and automatic spending cuts are implemented.
Unemployment also would rise from 8.2 percent in 2012 to 9.1 percent next year, it estimates.
The contraction would be very severe in the first half of 2013. CBO sees the economy contracting by 2.9 percent in the first half– deeper than the 1.3 percent negative growth it had seen previously from the fiscal cliff.
The gloomy picture of rising debt and weak economic growth marks CBO’s final major report before the November election. The report is a sharp contrast with the 1.1 percent in growth the CBO projected in January for 2013 and 0.5 percent growth it projected in May.
So tell me something I don’t already know, why don’t you. Oh, and then there’s this lovely little nugget to really cap things off:
Congress’ nonpartisan budget analysts are projecting a $1.1 trillion federal deficit for 2012, the fourth straight year the government’s shortfall will exceed $1 trillion.
If we keep up with our current spending habits, we are well on our way to a Greek-style debt crisis — no if’s, and’s, or but’s about it.
Nearly all economists grasp the importance of timing. If nothing is done, the coming tax increases will hit hardest the very people whose spending most drives the economy: working and middle class consumers. These were the people most adversely affected by the recession to begin with.
An awareness of the importance of timing and of whose spending actually drives economic recovery is the reason Obama has called for a one-year extension of current rates for families earning less than $250,000 per year.
If you go over to the US Debt Clock, http://www.usdebtclock.org/# you find an exception to the ever-rising numbers:
Scan down on the left-hand side within a section called “Largest Budget Items,” to a box called “NET INTEREST ON THE DEBT.”
Watch those numbers for a few seconds.
They are going DOWN!
The banks might not be loaning much to would-be home buyers or those interested in opening a business, BUT their lower interest rates are affecting our government’s debt!
Obama made it LOOK like he’s trying to help YOU buy a home or open a business but the truth is he only helps his own profligate spending not look quite as bad as it really is.
@Greg:
BS Greg. Obama is just continuing the class warfare tactics designed purposely to foment divide amongst We, the People. And since you still insist on agreeing with the idiocy that the liberal/progressives are pushing, I guess it is working.
Hypocrisy at it’s finest. You advocate that government stay out of a woman’s womb, in the name of freedom and liberty, at the same time that you want government to reach into other people’s wallets and purses. Government intrusion here, but not there, that is your game. And who decides who gets intruded upon, and in what manner, Greg? Those you believe have a better idea than I do as to how I should run my life? The Democratic Party left the preservation of freedom and liberty behind a long time ago.
@Greg:
Holy-moley! Has Greg finally seen the light?! That is what we have been trying to get the Democrat posters here to realize.
Which is why we have to stop the out of control spending by Congress and expansion of entitlements. We don’t have the money to pay for it and simply taxing the rich won’t take up the slack. Even if you take away all military spending except for their pay, and we can not pay off the entitlement deficits.
Does that mean Greg, that Republicans can count on your vote to stop this financial lemming rush off the cliff? After all, the message from the Democrats and Obama is that the government needs to spend more money that we don’t have.
A good gauge to tell the trajectory of the recovery will be the next two months. Historically – an ill porportion of our crashes have come between Labor Day and Halloween.
The DOW is back pushing a 52 week high that we have not seen since 2007. When it begins its decline from the major high, it’ll start with a large drop.
The cogs to international trade are slowing down in all hemispheres. The markets are the last to know. But watch Soros, he’s a good metric to see where things are going. Judging by his latest moves, no bueno.
Soros just sold all of his equity positions in major financial stocks according to a 13-F report filed with the SEC for the quarter ending June 30, 2012. Then bought $130M in gold.
Warren Buffet is another good measure. And his Berkshire Hathaway noted in a recent quarterly filing that it had canceled credit-default swaps insuring its $8.25 billion muni-bond market wager. Warren Buffett’s exit from the municipal bond market is another bad sign of things to come.
@Greg:
I’ll bring the discussion back to the correct topic heading.
You said;
There is a fallacious mislead there, Greg, but I’ll get to that in a minute.
I have commented prior to this on the fact that it doesn’t matter what the tax rates are, including the extremely high rates in the Carter years. The top wage earners, during times where the economy is good, gain shares of the total yearly US income pie. Even at a 70% tax rate this happens. But guess what? The lower level wage earners, while maybe not gaining shares in the same pie, gain in actual dollars.
But that isn’t as important as what happens during economic downturns, or stagnant economies. At that time, the top level earners actually lose shares, and the lower income groups gain shares.
So, no matter what the economic condition, except possibly for the worst ones like the most recent, the lower income earners ALWAYS gain in dollar figures, while the upper income earners have to depend on the economy being good to great in order to gain income. This can be seen here;
http://taxfoundation.org:81/article/summary-latest-federal-individual-income-tax-data-0
So, about that fallacious mislead. You stated that the Romney “plan” redistributes income and wealth. Sorry, but that isn’t true. At least not entirely. If you are talking solely about shares of the total yearly income pie, then you would be correct, assuming that the economy turns around. But, since you aren’t, and since I have stated, and provided the link showing it, that the lower income earners ALWAYS gain income in dollar figures, no matter what the economy is doing, then what you have said is at best a misleading statement, and at worst, assuming you remembered what I’ve said before, a big fat lie.
I’m sure that you will provide a quote showing that statement to be true. My guess is that, at least Ryan, is like most conservatives who believe that a man’s work is his own, whether that be running a multi-million or billion dollar company, or sweeping the floors in that same company, and as such, are entitled to their earnings without the jealousy and envy of liberal/progressive moonbats clamoring for the government to take it away from them.
As I said above, I do not know the particulars of this economic downturn period, but in all previous ones that I’ve seen, the upper income earners tend to lose shares of, and dollar amounts of, the total yearly income pie.
In this we agree, Greg, although probably not for the same reasoning. As the tables at the linked site show, the middle income earners, during times of economic downturns, tend to have a mixed bag of results, from losing money and shares, to actually gaining money and shares. Much of that, I’m sure, depends upon how bad, and how deep, the economic downturn actually is.
The class-warfare rhetoric is overplayed, Greg, but you and Obama still seem to believe that it will turn heads. In reality, people are beginning to see that the government cannot create jobs. Obama had 3.5 years already and his job creation tally is negative. In my opinion, people are starting to wonder if what conservatives say is true, that job creation is caused by all those “rich” people that you and Obama are demonizing. Obama has held the capital those people have hostage for over three years with his threats of increasing their taxes. It’s no wonder that capital hasn’t been flowing into businesses during his term.
Remove that threat, extend the Bush tax cuts, for everyone, and see what happens. My guess is that the economy will start growing by much better than the roughly 1% average it has been, which, by the way, is far, far under inflation growth.
Greg, you wrote: “….all good things are a result of the creativity and efforts of the wealthy.”
Actually it should read: “….all good things are a result of the creativity and efforts of the risk-takers.”
Wealth comes AFTER risk.
Without risk even the hardest working individual is merely a wage slave.
And, even with risk, that creative person has NO GUARANTEE that his efforts (expensive as they may be) will reap any rewards.
@Nan G:
And risk includes not only the opportunity to succeed, but also to fail. Otherwise, risk isn’t involved. But that is what Obama and the rest of the liberal/progressives preach. Equality of result. Which means everyone “succeeds”. And no risk is taken.
Anyone who doesn’t know we’re in a depression is ignorant of economics and should be disregarded.
@johngalt, #6:
I don’t suppose you would be counting the 500,000+ public sector job losses since Obama took office to come up with your negative total. Because that would be a bit misleading.
It might also be worth remembering that the rate of job creation had just reached it’s most negative point as Obama took office. The first 18 months of his administration were marked by a steady improvement in the situation, but it took that long just to get back into positive territory–for the rate of job creation to finally exceed the rate of job losses.
This chart is instructive for anyone who actually wants to think clearly about the competing claims. Note that the accompanying article seems even-handed in it’s evaluation of the performance of both administrations.
I don’t know how anyone can really claim that the private sector jobs situation has steadily deteriorated since Obama took office. There’s no doubt that it has markedly improved.
@Greg:
Misleading? Possibly.
The economy has gained back, or nearly gained back, all private sector jobs lost since the start of Obama’s term. However, given that total population has increased by nearly 7 million people since then, there are millions of working age people out of work right now that could otherwise be employed. It could easily be argued that the private sector jobs gained have done so despite the policies and economic threats of Obama.
As for public sector jobs, on the surface, it would look like Obama is shrinking government. Of course, when you get into the particulars, public sector job loss has been entirely due to the state and local governments shrinking payrolls, despite the federal government gaining jobs since Obama took office.
And remember, we conservatives, although being for smaller, less intrusive government, focus on the federal government first. Why? Because the federal government was never meant to be the behemoth that it has become(and honest conservatives blame both Democrat and GOP presidents and Congresses for this).
And when Obamacare hits it’s full stride, federal government job totals will balloon even more than it has, creating a further drain on the economy.
So, in one sense you are correct. Private job creation, during Obama’s term, has been a net positive, in terms of actual jobs. However, the actual jobs situation, which one must consider the unemployment rate as well, has been steadily deteriorating since Obama took office. In order for the unemployment rate to be equal to what it was when he took office, the economy needed to add roughly 2.3 million jobs during that period, above and beyond the employment tally it was at. Overall, Obama’s job creation record is abysmal in all areas except federal public sector jobs, which he increased by over 6%.
Not exactly the record I’d be touting.
johngalt
hi, I was just reading on a daily news paper,
the CANADIAN PRIME MINISTER IS IN THE NORTH ARTIC, AND SAID HE WILL OPEN THE DOOR
FOR MORE PIPELINE PROJECTS HE SEES THE BOOMING RISE ON NORDICT GAZ AND OIL
development,
this paper also mentioned , THE US GEOLOGICAL SURVY estimated the ARTIC CONTAIN 13 %
OF THE WORLD UNDISCOVERED OIL RESERVES AND ALSO ONE THIRD OF THE GLOBE NATURALS
GAS RESERVES,
ONE assessment from CHATHAM HOUSE PREDICTED THAT THE ARTIC COULD GENERATE 100 BILLIONSIN OIL , GAS AND MINING INVESTMENTS IN THE NEXT FEW YEARS,
HE WILL INTRODUCE THE PROJECT ; ONE PROJECT ONE REVIEW RULE TO EXPEDITE ,
AND SPEED UP DEVELOPMENTS, HE ALSO SAID;
THE NORTH’S TIMES HAS COME MY FRIEND AND YOU HAVEN’T SEEN NOTHING YET
BYE