Fiscal Cliff

GeorgeHowell

Thrugelmir wrote: »

The fiscal cliff is showing very clearly the social divide in the USA. A very different attitude to the UK.

It's probably somewhat more polarised than here, and the whole political spectrum is calibrated around a different centre point. But they have developed a similar dichotomy between those who believe that the state ultimately owes everyone an existence, and those who believe that individual responsibility and smaller government is the only way to proceed. A major party represents each group, and at major elections the voting is fairly even between the two. Sound familiar ?

wotsthat

Thrugelmir wrote: »

The fiscal cliff is showing very clearly the social divide in the USA. A very different attitude to the UK.

Not sure why it's getting such coverage in the UK or why it's being reported as an economics rather than social story then.

Don't we all know that a compromise is certain whatever the social implications?

Graham_Devon

wotsthat wrote: »

Not sure why it's getting such coverage in the UK or why it's being reported as an economics rather than social story then.

You actually serious?

I know you don't like the fiscal cliff talk, but to try and make out it's nothing is quite a feat.

Thrugelmir

GeorgeHowell wrote: »

It's probably somewhat more polarised than here, and the whole political spectrum is calibrated around a different centre point. But they have developed a similar dichotomy between those who believe that the state ultimately owes everyone an existence, and those who believe that individual responsibility and smaller government is the only way to proceed. A major party represents each group, and at major elections the voting is fairly even between the two. Sound familiar ?

Even more polarised. As elected representatives do so on their own agenda ticket. Such as no income tax rises. Therefore when crunch time occurs such as now. There's no room to manoeuvre. No following the line set by Party Whips.

wotsthat

Graham_Devon wrote: »

You actually serious?

I know you don't like the fiscal cliff talk, but to try and make out it's nothing is quite a feat.

Yes I'm serious. I know you've been losing sleep for months about the fiscal cliff but I think it's overblown given the inevitability of a compromise.

It's beyond me why anyone thinks these tax cuts will be implemented.

coastline

wotsthat wrote: »

I've found the whole fiscal cliff difficult to get excited about. I'm sure the media are delighted though - Washington must be a much better gig than Delhi or Baghdad at the moment.

By comparison with the clowns in US politics we're blessed.

There will be a compromise no doubt during the final seconds before the world plummets into the abyss. Both sides will claim victory and the world will keep turning until the next 'crisis'.

Earlier this month I found this quote...at the best cuts will reduce the budget deficit by 15% ??...as the proposals are spread over 10 years.
Its not a million miles away from the UK idea to reduce our budget deficit by 20% over 5 years..read on..

The proposal the Obama Administration has on the table today to address his gargantuan deficits is a $1600b tax hike on high-earning Americans and $400b in murky future spending cuts. But in the crazy way Washington has come to operate, these numbers are over the entire next decade. So for 2013 alone, Obama is asking the Congress to agree to $160b of tax hikes and no spending cuts to avert the fiscal cliff.
But $160b is nothing compared to the size of the problem! With average annual deficits of $1274b, a $160b tax hike on the top 2% of American earners will merely close one-eighth of the shortfall. The Republicans offered Obama an $800b tax hike over 10 years, or $80b per year. That is only a sixteenth of the Obama Administration's average deficit spending. The current fiscal-cliff talks are truly a total farce.

Thrugelmir

wotsthat wrote: »

It's beyond me why anyone thinks these tax cuts will be implemented.

We appear to be in a race to devalue currencies to boost growth and employment. If everybody in debt devalues what's the outcome?

wotsthat

Thrugelmir wrote: »

We appear to be in a race to devalue currencies to boost growth and employment. If everybody in debt devalues what's the outcome?

This is about pantomime politics - it's nothing to do with economics.

Mugs will continue to lend the US money and the US in return will continue to (try to) devalue. I can't imagine any other currency would survive such abuse. Whatever the outcome of the fiscal cliff negotiations this approach won't be changing anytime soon.

If other countries effectively want to give the US money so that American citizens can maintain their lifestyles it would seem remiss to decline such generous donations.

Generali

wotsthat wrote: »

This is about pantomime politics - it's nothing to do with economics.

Mugs will continue to lend the US money and the US in return will continue to (try to) devalue. I can't imagine any other currency would survive such abuse. Whatever the outcome of the fiscal cliff negotiations this approach won't be changing anytime soon.

If other countries effectively want to give the US money so that American citizens can maintain their lifestyles it would seem remiss to decline such generous donations.

I wondered why people are so keen to lend the US Government money at such low interest rates but then I considered what I'd be doing if I was a Greek or Spanish retiree and it makes perfect sense.

System

Walking over a cliff is usually irrevocable.
If this financial cliff proves a bad idea then all they need to do is reverse it. Or if they find they like living in a heap at the bottom, good luck to them.