US Election 2012...the aftermath

[Calax]

House approves 257-167.

 

And WoD I think that the rhetoric from the Democratic party has been that the Bush taxs cuts on the top 2% needed to be changed, but not on the lower brackets.

[Hurlshort]

Sadly the Republicans are too divided to even get much credit from these tax cuts. When you have a vocal group yelling 'let it burn!' it tends to make everyone look bad.

[Guard Dog]

All this deal does is put a band aid on a bullet wound. There are no real reductions in the rate of spending and only the smallest reductions on the reate of spending increases. Guys, this thing IS going to collapse at some point. Do you know of ANYTHING that cand spend more than it's revenue and survive in the long term?

 

Taxes are going up on everyone making more than $50k. I bet those folks didn't realize they were rich.

 

And on a different note I am meeting with my business partners tommorow to go over what the new Obamacare regulations will mean to us. We have three salaried employees and need to take on about 10 more for this Simon project. We don't provide those three with healthcare but we do pay and extra stipend to help cover the cost of private policies. With the potential new hires that might all change. If we can't adjust our cost structure we may have to contract temps instead of regular hiring. It is a damned shame this thing is so complicated. Fortunately I don't have to keep up with the business aspects of it. Not really my thing anyway.

[Morgoth]

Guys, this thing IS going to collapse at some point. Do you know of ANYTHING that cand spend more than it's revenue and survive in the long term?

 

Hear hear, a rare case where an American can stare straight into it's impending doom and not dismiss it as nonsense.

[Hurlshort]

I have a few people close to me running small businesses, and I've really had trouble finding any evidence that Obamacare will negatively affect them. I have been looking, my mother-in-law has enough troubles keeping her doors open without new costs. But most of the facts I can find on small businesses read like this article:

 

http://www.slate.com/articles/business/small_business/2012/07/nfib_is_wrong_on_obamacare_the_aca_should_actually_help_small_business.html

[Valsuelm]

Guys, this thing IS going to collapse at some point. Do you know of ANYTHING that cand spend more than it's revenue and survive in the long term?

 

Hear hear, a rare case where an American can stare straight into it's impending doom and not dismiss it as nonsense.

 

Indeed. Don't think for a moment Australia won't follow suit however. Per capita your nation is about where the U.S. was ten years ago debt wise. Almost every western nation is staring into the abyss as they've been taking candy from the central banking devils for generations. Just about every nation also seriously lacks any kind of quality leadership to avoid the abyss. Many people don't even understand the problem. More are LaDiDa so long as their personal life is going well enough. Ignorance is not bliss when the time comes to pay the devils their due or karma comes knocking. The only thing it really buys you is lack of understanding why. Barring some miracle never before seen in recorded history, bad bad things are coming.

[Morgoth]

Indeed. Don't think for a moment Australia won't follow suit however.

 

Wer lesen kann ist klar im Vorteil.

 

Otherwise I agree with your post completely.

Edited January 2, 2013 by Morgoth

[Calax]

All this deal does is put a band aid on a bullet wound. There are no real reductions in the rate of spending and only the smallest reductions on the reate of spending increases. Guys, this thing IS going to collapse at some point. Do you know of ANYTHING that cand spend more than it's revenue and survive in the long term?

 

Taxes are going up on everyone making more than $50k. I bet those folks didn't realize they were rich.

 

And on a different note I am meeting with my business partners tommorow to go over what the new Obamacare regulations will mean to us. We have three salaried employees and need to take on about 10 more for this Simon project. We don't provide those three with healthcare but we do pay and extra stipend to help cover the cost of private policies. With the potential new hires that might all change. If we can't adjust our cost structure we may have to contract temps instead of regular hiring. It is a damned shame this thing is so complicated. Fortunately I don't have to keep up with the business aspects of it. Not really my thing anyway.

 

Three things

 

A) The market declares you wrong, with all benchmarks and indexes on the rise with the news. (Although it's not infallible it's pretty good as a sort of crowd barometer)

 

B) I think it's 450K not 50K http://money.cnn.com/2012/12/31/news/economy/fiscal-cliff-rich/index.html

 

C) I'm actually happy for this for two reasons. It shows a changing tenor in the discussions in washington, with the "NO NEW TAXES ONLY CUTS AND LOOPHOLES!" nutjobs being ejected or forced aside by the parties. Republicans are also working to rebrand themselves into something more palatable to the average person, and ensure that they aren't seen as totally obstructive even in the face of crisis. The other reason is more analytical, by kicking things out for 3 months with the tax hike, it gives both sides time to examine, evaluate, and figure out exactly what effects are being seen after the measures put in play now. But it's not far out enough that they can just laugh and ignore it, as they're also getting glared at by their constituents because the same thing happened in August of last year.

[obyknven]

Indeed. Don't think for a moment Australia won't follow suit however.

 

Wer lesen kann ist klar im Vorteil.

 

[Valsuelm]

Indeed. Don't think for a moment Australia won't follow suit however.

 

Wer lesen kann ist klar im Vorteil.

 

Entschuldigen Sie mich bitte. Und mein Deutsch is sehr rostig, so auf Englisch.

 

I misread Austria as Australia. Doesn't change too much what I wrote though, except that your debt is even worse than Australia's and you have the added fun of the EU to contend with.

[Calax]

Oby... why are there Austrians in there? That's an entire world away.

[alanschu]

Guys, this thing IS going to collapse at some point. Do you know of ANYTHING that cand spend more than it's revenue and survive in the long term?

 

Warren Buffet actually wrote an article in the NY Times and at one point mentions how it'd be ideal for the spending to be a shade greater than the revenue in perpetuity. It seems that when adjusted for inflation and economic growth, the debt load will be stable and not an issue.

 

I was a bit surprised to see him say this, though the notion isn't something completely new to me.

[Morgoth]

Taxing the super-rich higher won't really help much to balance the deficit, but at least it would be a nice token from the government to remind everyone in the US that they are one equal nation, not a nation of kings and serfs. Or at least that's what the founding fathers had in mind.

[Guard Dog]

Three things

 

A) The market declares you wrong, with all benchmarks and indexes on the rise with the news. (Although it's not infallible it's pretty good as a sort of crowd barometer)

 

B) I think it's 450K not 50K http://money.cnn.com...rich/index.html

 

C) I'm actually happy for this for two reasons. It shows a changing tenor in the discussions in washington, with the "NO NEW TAXES ONLY CUTS AND LOOPHOLES!" nutjobs being ejected or forced aside by the parties. Republicans are also working to rebrand themselves into something more palatable to the average person, and ensure that they aren't seen as totally obstructive even in the face of crisis. The other reason is more analytical, by kicking things out for 3 months with the tax hike, it gives both sides time to examine, evaluate, and figure out exactly what effects are being seen after the measures put in play now. But it's not far out enough that they can just laugh and ignore it, as they're also getting glared at by their constituents because the same thing happened in August of last year.

 

The stock market activity in the short term is not a good indicator of economic conditions in the long term. You know that.

 

Income tax rates are only going up for folks over $200k but the payroll tax got rolled back to the 1993 rate and that hits most everyone who earns a paycheck: http://www.bloomberg.com/news/2013-01-01/senate-passed-deal-means-higher-tax-on-77-of-households.html

 

I really had no trouble with increasing income tax rates across the board because the are the least onerous of all the tax options. But increases in capital gains taxes WILL hurt the economy because they discourage investment. If you tax something more you will have less of it. The heart of the issue is spending. There is a real argument to be made for allowing the mandatory spending cuts of sequestration happen because no one has the political will to tell the people who are taking money from the government "no". Don't you ever wonder why real assets like gold and silver are skyrocketing in price? If it was just an inflation hedge bonds would be doing well too but they are not.

[Guard Dog]

I can't believe I'm typing this but what Morgoth has been posting is right. It does not need to happen but it will because no one is trying to stop it.

 

My advice to everyone (not just Americans because a serious finacial crisis in the US will hurt everywhere) is this:

 

1) If you are in debt, get out. If you are not don't go in.

2) If you have investments choose to invest in things that have real value not associated with any currency. Commodities, real estate, etc. The very worst thing that will happen if there is no financial crisis is you will be well placed with safe if underperfoming investments. If the end does come your damages will be less than they might have been.

3) Do anything you can to improve your ability to be self sufficient. Store food if practical, water, plant a garden, buy a generator, anything you can do that may help if things get bad.

4) For Americans you should all arm yourselves in some way. I would no reccomend buying assault weapons or any crap like that but it does not harm to keep a small caliber pistol in you home if the need ever arises.

5) Hope and pray none of this is ever needed. I certainly hope not but the end of the track is ahead and the train seems to be picking up speed.

[Morgoth]

Fiscal Cliff diverted! Everybody celebrating! Congress did a great job again!

 

Yeah?

 

 

 

 

Next: Raising Debt ceiling theatre coming this February near your favorite channel.

 

"Crap I'm gonna miss prime time for Halo: Cortana's sorrows on Hulu!"

 

Edited January 2, 2013 by Morgoth

[Wrath of Dagon]

House approves 257-167.

 

And WoD I think that the rhetoric from the Democratic party has been that the Bush taxs cuts on the top 2% needed to be changed, but not on the lower brackets.

No, they were claiming Bush tax cuts overwhelmingly favored the rich. They only changed their tune a couple of years ago when the tax cuts were about to expire.

 

 

And on a different note I am meeting with my business partners tommorow to go over what the new Obamacare regulations will mean to us. We have three salaried employees and need to take on about 10 more for this Simon project. We don't provide those three with healthcare but we do pay and extra stipend to help cover the cost of private policies. With the potential new hires that might all change. If we can't adjust our cost structure we may have to contract temps instead of regular hiring. It is a damned shame this thing is so complicated. Fortunately I don't have to keep up with the business aspects of it. Not really my thing anyway.

If you have less than 50 employees Obamacare shouldn't affect you, unless you want to take a tax credit for providing employee insurance.

 

 

Income tax rates are only going up for folks over $200k but the payroll tax got rolled back to the 1993 rate and that hits most everyone who earns a paycheck: http://www.bloomberg...households.html

To 2009 rate you mean. All that's happened is the idiotic payroll tax holiday expired this year and wasn't renewed. To me that's actually the best part of the deal, I was afraid once that giveaway happened you couldn't get rid of it.

 

Also the "rates" only go up for $400k and up, but deductions will be reduced for $200K and up.

[alanschu]

The heart of the issue is spending. There is a real argument to be made for allowing the mandatory spending cuts of sequestration happen because no one has the political will to tell the people who are taking money from the government "no". Don't you ever wonder why real assets like gold and silver are skyrocketing in price? If it was just an inflation hedge bonds would be doing well too but they are not.

 

Government spending and taxation are intrinsically linked. Where do you think the money that the government spends goes? Do you think the hundreds of billions of dollars that it spends on each year just evaporates out of the economy? The problem with government spending isn't just that it's spending, it's that it can mask inefficiencies in an industry and keep putting money into something that may not be truly economically viable. Cutting all the spending while keeping the taxation exactly where it is is going to cause ridiculously unemployment in the short term. The private sector will just move in, and may or may not provide the services more efficiently (there's situations where this isn't the case. Having 3 competing medical clinics all have to fork out the millions of dollars for the high tech equipment in order to compete for customers is grossly inefficient when the total volume of work can be easily satisfied by 2 or even 1. The only winner in this case is the company that was able to sell 3 of these pieces of equipment instead of just 1 or 2, but this just reflects how complex the market can be in trying to ascertain this stuff.

 

 

I really had no trouble with increasing income tax rates across the board because the are the least onerous of all the tax options. But increases in capital gains taxes WILL hurt the economy because they discourage investment. If you tax something more you will have less of it.

 

This still depends on what that alternative is. That Buffet article linked had a very interesting observation. If your investment goes from earning 5% to 4.5% ROI after tax (which is what your ROI would be with a 10% increase in capital tax), are you going to stop investing in capital gains and sit on the money instead (earning what, 0.25%?). All the taxation does is mean that people see less direct profit from capital gains, which means when they are sold there is less purchasing power. It also means that a person will have less equity with which to borrow against. Now, what this WILL do, is make the investment a bit riskier. As a result, you'll get less people borrowing with the sole purpose to invest it elsewhere. But, if I am not mistaken, you yourself encourage people to not go into debt. There's much less risk if losing the investment means you have lost some capital and equity. If losing the investment means you're still on the hook for the loan you took out with the hopes of creating wealth with it,

 

So you can argue that less capital growth/profits on investments is still bad for the economy (since there's less money to spend), but the fear of capital investment being reduced only becomes an issue if you support the notion of taking out loans in hopes of investing in capital. Is this something you are in favour of though? I get the impression that you do not think this is a good thing to do.

Edited January 3, 2013 by alanschu

[Nepenthe]

Now who brought logic and economics into an ideological fight? tsk tsk

[Raithe]

And from what I've heard with Congress starting up.. a bunch of the moderates on both parties lost their seats. So gee, it should be even more extreme partisan politics in the struggle to get anything done...

[Calax]

And from what I've heard with Congress starting up.. a bunch of the moderates on both parties lost their seats. So gee, it should be even more extreme partisan politics in the struggle to get anything done...

Maybe, maybe not... Chris Christi certainly took them to school.

[Wrath of Dagon]

More polarized than ever : http://pjmedia.com/tatler/2013/01/07/why-no-one-wants-to-compromise/

[Gorth]

More polarized than ever : http://pjmedia.com/t...-to-compromise/

 

Interesting article...

 

"In essence, it appears that millions of voters on both sides exist in their own echo chambers where the information loop is closed and outside influences — new ideas, a different way of looking at the world — are not only suspect but actively discouraged."

 

Sort of sums it up nicely (and applies to most people, not just in the US).

[Calax]

More polarized than ever : http://pjmedia.com/t...-to-compromise/

 

Interesting article...

 

"In essence, it appears that millions of voters on both sides exist in their own echo chambers where the information loop is closed and outside influences — new ideas, a different way of looking at the world — are not only suspect but actively discouraged."

 

Sort of sums it up nicely (and applies to most people, not just in the US).

MASS MEDIA! *shakes fist*

[Tsuga C]

Enjoy your diminished future, kids! I strongly suspect that the Baby Boomers will set the standard for financial well-being as compared with Gen X, Gen Y, and the following generation in the USA. After that, things may begin to rebound.