Must Read!!! Grab Your Wallets ——- Obama Lied! Gives Repubs A Choice! Fiscal Cliff Or New Fiscal Cliff!!!

New Proposal From Obama!  Additional 10% tax of GDP!

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Barry Zero recently dispatched Timmy “we don’t have a plan” Geithner, to negotiate for Zero in an effort to avoid the fiscal cliff.

The rhetoric is well known by now.  Obama is pushing to raise the tax rates on couples earning more than $250,000 and individuals earning more than $200,000.  He wants to bring their rates back up to 39.5%.  The latest estimate is that would generate $82 billion per year.  Yours truly and a few others have been saying for a very long time that this doesn’t amount to anything realistic towards fixing our deficit spending.  Repubs have finally caught up and starting noting the same thing.  Barry Zero made this one of his central campaign talking points.  For reasons lost to posterity, no one of prominence made it a point to laugh at Barry Zero for making such a meaningless gesture a central theme and primary campaign issue …….. not the LSM, not Romney, not Fox, no one but, just a few voices in the wilderness.

It is so meaningless that now one of the more prominent advocates of the tax hike, Warren Buffett, says it’s nothing more than a morale booster for the middle class.  This is probably worthy of a post itself, I’ll just say, knowing that my potential employers will have less disposable income doesn’t really fire me up.  I’m not sure what increased middle-class morale is supposed to do, but this doesn’t really put an extra skip in my gait.

I think now is a good time to review what the “fiscal cliff” really is.  I’ll quote from wiki…… But, I’ll enlarge and embolden a few of them.

  • Expiration of the Bush tax cuts extended by President Obama in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010;
  • Across-the-board spending cuts (“sequestration”) to most discretionary programs as directed by the Budget Control Act of 2011;
  • Reversion of the Alternative Minimum Tax thresholds to their 2000 tax year levels;
  • Expiration of the 2% Social Security payroll tax cut, most recently extended by MCTRJCA;
  • Expiration of federal unemployment benefits, as extended by MCTRJCA and

First of all, we need to end the 2% SS payroll cut anyway.  For those who don’t know, all this does is reduce the amount of Social Security you will be able to draw when you retire.  The government isn’t giving you a tax cut, you are contributing less to your retirement.  This speeds the impending insolvency of Social Security.  The 2% payroll tax cut is estimated to be about $120 billion/yr. 

Secondly, I don’t know how other states are dealing with the unemployment extension, but in the state of Kansas, this is already expired and isn’t available.  Again, this is probably a bad idea, anyway.  It is estimated that this would cost $30 billion in additional federal spending, but it was $44 billion for 2012.

Thirdly, does anyone really believe the Obamacare taxes won’t be imposed?  We’re going to get them anyway.  To avoid the “fiscal cliff” this may delay their implementation, but it won’t avoid them.  The estimated tax costs to the HCER is $14 billion and the PPAC is $20 billion annually after being offset by Barry’s raping of Medicare.  This totals $34 billion annually.  (Note:  this isn’t the total cost of Obamacare, just some taxes delayed.)

So, this “fiscal cliff” includes things that will happen anyway and things that should happen anyway.  The 3 provisions emboldened total about $200 billion of the fiscal cliff.  $30-$44 billion in spending cuts and $154 billion in tax increases that will happen anyway.

All total, the “fiscal cliff” is suppose to reduce federal spending by $103 billion and increase tax revenues by $399 billion and somehow total $560 billion.  Let’s see what we are really trying to avoid, because as noted, the other ones we shouldn’t try to avoid or won’t be able to avoid anyway.  This leaves about $60-$70 billion in spending cuts and $245 billion in tax increases.  Subtract the $70 billion in cuts from the tax increases and we get $175 billion in tax increases over budget cuts.

Why did I include this lengthy morass of numbers?

imageBecause of Timmy and Barry Zero.  Timmy showed up to “negotiate” with the Repubs.  Timmy’s efforts resulted in forcing Mitch McConnell to LOL.  Seriously!  Boehner reacted only slightly differently by telling Timmy “this is not a game!” 

imageThat’s where the Speaker is wrong.  Barry, Timmy, and the rest of the Marxist Dems are playing a game, and they’re going to win if the Repubs don’t recognize what’s happening.  The Repubs will lose, but most importantly, the American people will suffer severely for this political gambit.

So, what was it that made McConnell LOL and Boehner to react the way they did?  The administration literally doubled down on their tax increase proposal.  This is their plan.  Geithner and Obama are now proposing $1.6 trillion in tax increases over 10 years or $160 billion in tax increases annually, in order to avoid $175 billion in tax increases over budget cuts. 

McConnell says, Geithner showed “minimal or no interest” in spending cuts.

Back to the charts.

Two days ago, I graphed Barry Zero’s plan to deal with the budget.

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That was before we knew that Zero’s plan actually includes doubling the amount of tax increases he campaigned on.  I’ll graph his new plan.

Current federal spending stands at $3.8 trillion per year.

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Now, some of you may state that this isn’t a fair comparison.  That I should be comparing it to our deficit.  Fair enough.  I’ll even make the assumption that removing $160 billion of disposable income from the free economy won’t have a negative impact on our revenues, which it will.  The $80 billion probably wouldn’t have had that much affect.  $160 billion most definitely will.  Our current debt is $16 trillion.  It is estimated that our deficit spending in 2012 was $1.1 trillion, but the final numbers will be more than that.  So, Zero plans to raise an additional $160 billion a year with no cuts to the budget.  Let’s see what happens assuming spending won’t go up.  (It most definitely will.) and that the tax increases won’t harm the economy, thus losing tax revenue.  (They most definitely will.)

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They like to put things in terms of 10 years.  Okay, here we go!

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That’s his plan!  That’s it!  Zero and Treasury Tool Timmy proposes additional taxes of over 10% of our GDP.

This isn’t a choice.

It is a fiscal cliff or a new fiscal cliff.  Anyone pretending that we can remove 1% of our capital from the GDP and not have a negative impact on our economy is a delusional nutjob.  This will have an immediate negative impact on our economy and because it does nearly nothing to reduce the debt burden, it will hock our economy moving forward.

My Advice To The Repubs.

Give it to them.  Break off negotiations right now and say you’re willing to go along with this madness.  Abstain in the voting or vote present.  Make it a point to say you’re against this idiocy, explain why, but underscore the administrations lack of a serious approach to our problems.  The longer these negotiations are drawn out the more tax proposals the administration will bring.  If we accept the tax proposals, we will be plunged into a further, deeper recession.  If we take the fiscal cliff, we will be plunged into a further, deeper recession.  Only, the Repubs will be blamed for it.  Call their bluff and let them own it.  We will get a double moral boost from these people who hate Americans.  Expose their hatred for Americans and let them have it.

My thanks to Dirk for pointing out my math errors.

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18 Responses to Must Read!!! Grab Your Wallets ——- Obama Lied! Gives Repubs A Choice! Fiscal Cliff Or New Fiscal Cliff!!!

  1. philjourdan says:

    I am glad I am not the only voice in the wilderness saying the SS tax cut was just a bad idea. But like all snake oil salesmen, Obama sold it as some type of saving. Basically, the principal is as old as civilized man is. It is called eating your seed corn.

    • James Sexton says:

      Yeh, I probably should have written more about it, but, it’s one of the dumbest things which has been inflicted on the people in response to the recession. The loss in SS revenue is something we won’t get back. In an effort to fix one crisis we made an impending crisis worse and sooner on the horizon.

      • philjourdan says:

        One point of disagreement. The SS tax cut was not an effort to fix anything. It was a way to make those paying no taxes think they were getting a tax cut.

      • James Sexton says:

        Lol, well, OK, it was sold to the people as a solution to something. I tell you, I skipped for joy with that extra $50 on my bi-weekly pay check knowing it was going to cost me much more in just a few years. For the working poor it was more like $25 a paycheck. And it will cost them more than they can imagine.

        • Jason Calley says:

          It was not much money, but I skipped for joy. The reason why, is that no matter how much we have taken from our paychecks, they will demand more and still spend more than they get. This is a proven fact — at least insofar as past experience can ever be proof of future events. I don’t want to “give” them one more penny — not one! I understand what you mean when you talk about costing “much more in just a few years.” I just do not think that paying more now would have prevented that extra cost in the future. They would just have spent that extra money now on some other forsaken boon-doggle and we would STILL be in the hole just as deep. For decades, we have been paying in a surplus to Social Security. Did they do anything responsible with that surplus? No, they just spent it and put in IOUs that have to be paid by the same people who already paid in the surplus. Be glad for every cent you keep from their grasp! James, I would be willing to bet that YOU are a rational, responsible and fiscally prudent individual. I would trust YOU to run a Social Security fund — but those clowns in Washington? No matter how much of our money is extracted from us they will spend it.

        • James Sexton says:

          Well, right, SS is a horrible mess. I understand and agree with what you’re saying. But, this “tax break” isn’t what they’re painting it to be and they are promising people something they know they can’t deliver. This “tax break” is going to be something real bad.

          Thanks for the kind words. I would trust you to do the same responsible things with the money, as well. I sometimes think cleptocrats and politicians are of a different species of animal.

  2. DirkH says:

    The real 10%-of-GDP tax is the hidden tax of inflation;as Ben Bernanke generates about 10% of GDP out of thin air. And as long as the deficit is about 1 tn a year, he will have to continue to do so (no other takers for long term bonds left).

    Looks like a Chinese bind to me (pun intended – because this race to the bottom for the dollar does not make the US more competitive as China races to the bottom with nearly the same speed).

    As long as this continues, more cheap stuff and unemployment for Americans.

  3. Bruce says:

    Powerline thinks he is doing a Michael Corleone.

    The Republicans should resist everything. No cooperation, no negotiations, nothing. Zero. Scorched earth. No discussions no taking phone calls nothing. Obama and Reid are not remotely serious. If they want to play games let them shed the political blood price. At least if the GOP shows a spine they will keep their tea partiers from jumping ship to the Libertarian ticket.

  4. David says:

    James, we are in full agreement here, and you agreed with my earlier comment recomending the same. Obama, and all the dems, along with the main stream media are in full campaign mode, warning that republicans are scrooge, and will tax the middle class to death, rather then raise the taxes on their wealthy white fat cat friends. End of story, another simple message they endlessley drone to the thoughtless. (Republicans greedy white rich guys, democrats protect the poor and hard working lower middle class)

    This was a done deal when the republicrats (an E.M. Smith term) accepted and signed onto the democratic fiscal cliff idea. This was a very dumb move. Now you are right, they have to make Obama own it. I would however play it a little different. Do not fold yet.

    Make a serious counter plan, present it to the public in bullet points, and predict disaster if we either go off the cliff, or accept Obama’s proposal. Then, at the last minute fold, with the public statement that , “We foolishly thought we had a real partnership with the democrats when we signed the fiscal cliff deal. Now we have to cave to a disaterous proposal, that is a fiscal cliff in itself. We gave in hope to minimise what we know will be destructive to all of America, and to do are best to help the middle class, Who Obama was ready to throw off the cliff that HE proposed. So now America, we are going off of a different Cliff, the Obama cliff. And show them your charts presented here in this article.

    They must do all of the above under loud and continues protest that they were blackmailed into this, and they must repeat every day, at every news conference, that under Obama’s policy, we will still have a massive recession, and forewarn America (particularly Black and hispanic America) every day, in front of every microphone, that employment still will not improve, and neither will the extremely optimistic deficit reductions indicated.

    At the photo op for the signing of the agreement, they must, even there, not smile, not shake hands, but engage in frank open talk of the blackmail of the Democrats, and the sad promise of future pain and democratic inspired failure. (Indeed, this is the place to make the largest demonstration.) Do not play your cards to soon. let them crow a bit. But when the lights are on, be dramatic, and make OBama own his policy.

    They must, then and after, articulate (through united bold predictions) that deficit reduction and jobs growth will still not happen for three primary and possibly three reasons. Out ocf control spending, Obamacare, Energy policy, and fourth, a foreign policy destabilizing the world, possibly necessitating future US military expenses. They must predict massive destruction of the middle class. They must, over and over, tell the minority community that Obama policy is responsible for their misery.

    They must spend millions (billions) as outreach in all the swing states, pointing out to minorities in urban environments everywhere (swing states mainly) that jobs are better then welfare, that pride is better then victimhood, and that in dire circumstances, then of course food and adequate housing for all, is, yes, a necessary safety net, that they will never reject, but it can be done WITH PRIDE at 1/4 the cost of today’s programs, and can be ministered by the very people receiving the food and housing, until such time as the economy recovers from years of government abuse and overregulation.

    Millions of fliers over and over pointing out the futility of the Government to live up to its promise…, pointing out the value of self sufficiency, the pride of taking care of ones own neighborhood…Conservative Black and Hispanic celebrities on the face of every flyer, delivered over and over. They must point out real success stories of peers within their community succeeding in a culture of hard work, and self sufficiency and they must plainly illustrate the colossal and historic failures of the shiny socialism thing. They must do the same thing on Collages across the nation.

    This must be repeated over and over through grass roots communication. The value of hard and honest work, and self sufficiency, as true american values must be shown over and over. Black and Hispanic conservatives must point out the success of Asian minorities in the US from around the world. They must tell them why these cultures succeeded in the US, despite racial prejudice, and it must be communicated that it has nothing to do with intelligence, but everything to do with coming from a “I am hungry: culture, vs an Obama inspired “I am owed” culture.

    Bold pictures of Obama with whips and chains in his hands saying, “You live to serve this ship, row well, and live” must be distributed in inner cities everywhere, showing the destruction of the middle class, and ever increasing dependency on a master incapable of providing what he promised, a Savior and protector, turned into a Tyrant.

    Well, these are my thoughts, but I am not hearing them expressed. On talk radio I see and hear a defeatism in the voice of coservatives, saying, well we might as well go off the cliff full speed, the sooner to start back up. However, “pain is a prod to memory” therfore, if the real cause of the pain is misunderstood, the lesson will not be learned.

    • James Sexton says:

      David, you’re describing a Republican party that doesn’t exist. I don’t believe they have a serious counter offer. If they do, they’re keeping it a secret. They let themselves get backed into this corner, and they’re like deer in the headlights. This is what is most frustrating for conservatives such as ourselves. They’ve had over a year to prepare for this. Did they believe the Dems would come to the table in an honest manner?

      You’re right, there’s a lot of defeatism. They have to make it that Obama owns the economy. If they don’t, as you’ve observed, the lesson will be lost. I don’t know why they wouldn’t play it like you described, but, they won’t.

      Personally, I like McConnell and Boehner, but I don’t think they understand the depths of depravity they’re up against. Dems will place party over country every time. McConnell and Boehner aren’t showing the leadership necessary to direct a cohesive counter to the Dems. Someone needs to step up and take some of the actions you described. But, most importantly, they can’t go over the cliff with the Dems or they will be blamed.

  5. David says:

    Oh, and also, as Obama care kicks in, and millions are forced onto the Obamacare plan, and millions have reduced hours, and almost nobody starts up new business, while many existing business falter, and Obamacare becomes a underfunded buracratic nightmare where the implementation alone will be a disaster requireing far more in costs, laws, and additional rules then anticipated, your pesemistic charts, which I know you noted to be conservative, will look like wishful thinking.

    Government revenue will, within four years, likely drop below current revenue, and costs will be far more then projected, quality of medical care will go down, and Doctor shortages will increase dramatically. Oh, and the US credit rating will be reduced, and the dollar will no longer be THE international currency of exchange.

    Obama and the Democrats will blame ALL of the above on the Greedy fat cat republicans throwing the middle class under the bus if we go off the fiscal cliff. In the end, the republicans must cave in here and realise that the game they are in, is a war game, a war of perception, the battle is likely lost, but if the blame for the coming pain is misplaced, the war is lost along with the nation and any chance of real recovery.

  6. David says:

    I am concerned you are correct. I also do not think many Tea Party members have properly thought of this. In the end we aill learn that the government can not keep its promises, but it is very painfull, like watching a loved child struggle through their teen years with drugs, lack of thought and purpose, and zero self responsability.

    • DirkH says:

      David says:
      December 1, 2012 at 5:52 am
      “I am concerned you are correct. I also do not think many Tea Party members have properly thought of this.”

      Unlikely. You said
      “realise that the game they are in, is a war game, a war of perception,”

      These are nearly the exact words of Andrew Breitbart. If anyone knows it it’s the Tea partiers.

  7. Jason Calley says:

    “Barry Zero recently dispatched Timmy “we don’t have a plan” Geithner, to negotiate for Zero in an effort to avoid the fiscal cliff.”

    The big circle is not a zero. It is not even an “O”. It is the barrel of a gun, and it is pointed at YOU.

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