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Thread: Recession Possible if Impasse Persists, Budget Office Says

  1. #1
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    Recession Possible if Impasse Persists, Budget Office Says

    [URL="http://www.nytimes.com/2012/05/23/business/congressional-budget-office-warns-of-a-fiscal-cliff.html?_r=1&ref=congressionalbudgetoffice"]http://www.nytimes.com/2012/05/23/business/congressional-budget-office-warns-of-a-fiscal-cliff.html?_r=1&ref=congressionalbudgetoffice[/URL]


    [QUOTE]

    WASHINGTON — [B]The economy could relapse into a recession if President Obama and Congress remain at an impasse and allow several big tax increases and spending cuts to take effect at the start of 2013, the Congressional Budget Office reported on Tuesday. [/B]

    The nonpartisan budget office analyzed the impact of what has come to be called the year-end fiscal cliff. Largely by coincidence, several big tax cuts, including those from the Bush era, will expire as deep across-the-board spending cuts take effect. Many economists say the jolt of tax increases and spending cuts would shock the economy after four years of stimulus measures.

    In the first half of 2013, the economy would contract at an annual rate of 1.3 percent, the report concluded, instead of growing by a similar rate. Slow growth would resume in the second half, it said.

    “Such a contraction in output in the first half of 2013 would probably be judged to be a recession,” the report said.

    Avoiding that danger in the short run, by extending tax cuts and repealing automatic spending cuts, would hold its own economic perils for the long term by adding to annual deficits, the budget office said. It suggested a combination of higher deficits in the short term with adoption of tax and spending policies meant to gradually reduce annual deficits later in the decade.

    [B]The budget office estimated that the tax and spending changes ahead would slash the deficit from the 2012 fiscal year, which ends Sept. 30, through the 2013 fiscal year by $607 billion, or 4 percent of the gross domestic product — $560 billion after accounting for higher unemployment compensation costs and lower tax collections from individuals and businesses because of the slow economy[/B].

    Among the changes that will take effect if the White House and Congress do not act:

    ¶ The Bush-era tax rates will expire on Dec. 31. Republicans want to make them permanent, which would reduce tax receipts by more than $1 trillion over a decade, while Mr. Obama and Congressional Democrats insist that for the wealthiest taxpayers the rates should return to the higher levels of the Clinton era.

    ¶ Millions of middle-income taxpayers will have to pay the alternative minimum tax — which was intended only for the richest Americans — when they file their returns next year.

    ¶ A temporary two percentage point cut in Americans’ payroll taxes, effective in 2011 and 2012, will end on Dec. 31.

    ¶ Automatic cuts of $1.2 trillion will be made, half in domestic programs and half in the military, because the president and Congress did not agree to a 10-year deficit cutting package last year.

    ¶ Reimbursements to doctors who treat Medicare patients will be cut significantly, taxes will increase for wealthy taxpayers to help pay for health insurance for more Americans and temporary business tax cuts, part of stimulus measures, will expire.

    Adding to the fiscal hazards ahead, the nation’s debt limit must be raised early next year, according to the Treasury Department. A repeat of last year’s damaging deadlock is threatened because Republicans again are demanding domestic spending cuts equal to the amount of the increase in the debt ceiling. But Democrats say further deficit reduction must include higher tax rates for the wealthy.

    [/QUOTE]

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    With an editorial interpretation via the NY Times. Home of the communist writer Paul Krugman - a real flamer.
    Maybe there does need to be some tax increases. BUT FIRST LET'S SEE THE CUTS. Real cuts to the department of education ( a waste generator), welfare and food stamps, HUD, the "fast train" for Harry Reid in Nevada, union exemptions, and yes cuts to the military (not muscle and bone but the ample fat there). And there are numerous other areas in the budget which are ripe to cut. Student loans - let dad get a second mortgage.
    $3 in real cuts for every $1 oin tax increase. The increases should be across the board. The famous "shared sacrifice" the Hawaiian always talks about. Currently the lowest two income brackets pay zero tax on capital gains and dividends. Make it 10%. Higher brackets pay 15%. Make it 17.5 to 20%. That is not extreme so as to cause a "shudder" in things and will generate serious revenue.

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    Maybe the President should realize nobody (literally) supports him on his proposed budgets...

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    It is almost impossible to have discussion on this forum.

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    [QUOTE=Buster;4478694]It is almost impossible to have discussion on this forum.[/QUOTE]

    Look in the mirror, Brother Buster. There is discussion in this thread, but when it conflicts with your point of view you act like everyone else is ignorant and you are the enlightened one.

    How dare anyone bring up the question of bias. In my opinion this is nothing but a preemptive strike to blame a recession on the Republicans should it come before election day.

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    Going Over U.S. ‘Fiscal Cliff’ May Mean Recession: CBO

    [URL="http://www.bloomberg.com/news/2012-05-22/going-over-u-s-fiscal-cliff-may-mean-recession-cbo.html"]http://www.bloomberg.com/news/2012-05-22/going-over-u-s-fiscal-cliff-may-mean-recession-cbo.html[/URL]


    The Bloomberg interpretation


    [QUOTE]

    The U.S. economy will probably tip back into recession next year if Congress doesn’t address an impending “fiscal cliff,” the Congressional Budget Office said.

    The nonpartisan agency said in a report today that the economy would contract at an annual rate of 1.3 percent in the first half of 2013 if lawmakers allow the George W. Bush-era tax cuts to expire as scheduled and don’t head off $1.2 trillion in government spending cuts set to begin taking effect in January.

    The economy would resume growing in the second half of next year, CBO said, at an annual rate of 2.3 percent.

    “Such a contraction in output in the first half of 2013 would probably be judged to be a recession” according to past recessions as identified by the National Bureau of Economic Research, CBO said.

    “Policy makers face difficult tradeoffs in deciding how quickly to implement policies to reduce budget deficits,” the report said. “Particularly important given the current state of the economy, immediate spending cuts or tax increases would represent an added drag on the weak economic expansion.”

    Lawmakers in both parties have said they don’t plan to allow all of the tax increases or spending cuts to take effect as scheduled, though there is no agreement on how to address them. House Republicans are calling for cuts in food stamps and other programs for the poor to prevent cuts in Pentagon spending. Democrats reject that proposal.

    November Election

    Both sides are waiting until after the November election for serious negotiations. Even then, lawmakers probably will wait until next year to resolve the tax and spending issues, House Budget Committee Chairman Paul Ryan of Wisconsin and the panel’s top Democrat, Chris Van Hollen of Maryland, agreed last week at a budget conference in Washington.

    “It is clear that we need to act and we must do so in a balanced way -- that is why Democrats support the extension of tax cuts only for the middle class,” Van Hollen said in a statement today. He called on Republicans to “put the needs of all American families before millionaires and big oil companies.”

    Senator Orrin Hatch of Utah, the top Republican on the tax- writing Finance Committee, said Obama “seems content to pursue misguided micro-policies that target the so-called rich in the name of so-called fairness.”

    ‘Self-Anointed Arbiters’

    In a Senate floor speech, Hatch said voters “don’t want politicians spreading the wealth around. They don’t want self- anointed arbiters of how much income is fair.”

    The CBO said the economy would grow by around 4.4 percent and add 2 million jobs next year if lawmakers rescind all of the automatic spending cuts and extend the tax cuts.

    That would add more than $500 billion to the U.S. budget deficit between 2012 and 2013, the agency said. Without some plan to address the debt, that would increase the risk of a crisis, CBO said.

    “Growing debt also would increase the likelihood of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget and the government would lose its ability to borrow at affordable rates,” the agency said.

    The challenge for lawmakers is to reduce the long-term fiscal imbalance without hurting the economy through sudden changes, said Donald Marron, a former acting director of CBO.

    “The optimal policy is to commit yourself to deficit reduction in the future while not doing very much of it next year,” Marron said. “It’s hard to distinguish that sincere policy from the ‘just kick the can down the road, I don’t really mean it’ policy.”

    To contact the reporter on this story: Brian Faler in Washington at [email]bfaler@bloomberg.net[/email]

    To contact the editor responsible for this story: Jodi Schneider at [email]jschneider50@bloomberg.net[/email]

    [/QUOTE]

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    [QUOTE=Ernie;4478696]Look in the mirror, Brother Buster. There is discussion in this thread, but when it conflicts with your point of view you act like everyone else is ignorant and you are the enlightened one.

    How dare anyone bring up the question of bias. In my opinion this is nothing but a preemptive strike to blame a recession on the Republicans should it come before election day.[/QUOTE]

    The article (and the report) said that the end of the Bush Tax cuts coupled with the automatic spending cuts will be disastrous to the US economy. Both of these things happen by January 2013.

    Which post commented on either of those things?

    I must’ve missed it

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    [QUOTE=Buster;4478700]The article (and the report) said that the end of the Bush Tax cuts coupled with the automatic spending cuts will be disastrous to the US economy. Both of these things happen by January 2013.

    Which post commented on either of those things?

    I must’ve missed it[/QUOTE]


    I believe in budget cuts. Massive ones. It's time to end the gravy train for parasitic Americans. And illegal parasites also.
    Perhaps some tax increases as outlines in post #2 here.
    The president is a total moron for his position on reduction of the payroll contribution for Socila Security. Withholding income to a program which is on the ropes. He is truly STUPID.

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    [QUOTE=palmetto defender;4478748]I believe in budget cuts. Massive ones. It's time to end the gravy train for parasitic Americans. And illegal parasites also.
    Perhaps some tax increases as outlines in post #2 here.
    The president is a total moron for his position on reduction of the payroll contribution for Socila Security. Withholding income to a program which is on the ropes. He is truly STUPID.[/QUOTE]


    Ok, if you get elected King you can institute your short sighted policies. Short of a dictatorship you can bet that the democrats in congress will protect much of what you wish to cut.

    The CBO basically said the things the left side of the electorate wants (the end of the Bush tax cuts) coupled with what the right side of the electorate wants (massive domestic spending cuts) will throw us back into a recession. Think about that.






    PS. Social Security is solvent until 2033.

    Tell me another organization or company that can claim the same?

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    Taxmageddon is coming at the end of this year. The CBO is correct there. If 2013 brings the cancellation of the Bush tax cut particularly on cap gains there will be a sell off like no other in the markets. That along with all of the new obamacare taxes scheduled to kick in will be a death blow to the economy. The punishing tax hikes will with out a doubt ring in a new recession. This will not be dealt with until the election is over however. That's just the way these things go.

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    [QUOTE=Buster;4478775]PS. Social Security is solvent until 2033.

    Tell me another organization or company that can claim the same?[/QUOTE]

    Wow. Just wow. SMH.

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    [QUOTE=Jets Things;4478854]Wow. Just wow. SMH.[/QUOTE]

    Saint Mary's Hospital?

    [URL="http://online.wsj.com/article/SB10001424052702303592404577362052094040414.html"]http://online.wsj.com/article/SB10001424052702303592404577362052094040414.html[/URL]

    [QUOTE]

    ...Social Security, which pays retirement and disability benefits to 56 million Americans, will exhaust its reserves by 2033, three years sooner than previously estimated, a new government report said Monday...

    [/QUOTE]
    Last edited by Buster; 05-28-2012 at 01:12 AM.

  13. #13
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    [QUOTE=palmetto defender;4478748]I believe in budget cuts. Massive ones. It's time to end the gravy train for parasitic Americans. And illegal parasites also.
    Perhaps some tax increases as outlines in post #2 here.
    The president is a total moron for his position on reduction of the payroll contribution for Socila Security. Withholding income to a program which is on the ropes. He is truly STUPID.[/QUOTE]



    The Social Security fund will still receive the monies that it would have from the payroll tax......It will just be returned from the Government general coffers.....

    If it is just a temporary tax break (2 years) it should not have a neglible effect on the SS trust fund.....If it becomes more permanent, it would be a bad precedent and could cause future problems for SS....
    Last edited by jetsmetsrangers; 05-28-2012 at 06:19 AM.

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    The government.

    We trust them with nuclear f*cking weapons.

    Make up your minds. Do you trust them or not?

    Stop being bi-polar woman. Freaking weirdos.

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    [QUOTE=Buster;4478775]Ok, if you get elected King you can institute your short sighted policies. Short of a dictatorship you can bet that the democrats in congress will protect much of what you wish to cut.

    The CBO basically said the things the left side of the electorate wants (the end of the Bush tax cuts) coupled with what the right side of the electorate wants (massive domestic spending cuts) will throw us back into a recession. Think about that.



    The left as a general rule is made up of : losers who do not pay taxes and the ultra rich who do not care and won't miss a million or two. Buffett, BTW, is the biggest phony in the country. When he dies NONE of his money goes to the U.S. HE doesn'y trust the gov.





    PS. Social Security is solvent until 2033.

    Til 2033? Not much of a relief for those who are 45 is it? With the Hawaiian's policies the SS fund will become insolvent WELL before 2033.

    Tell me another organization or company that can claim the same?[/QUOTE]

    Let's see. Exxon/Mobil, Chevron, IBM, Procter and Gamble, Coca Cola, Johnson and Johnson. There are,ofourse,many others - too numerous to itemize here. The difference? They are run by intelligent men and women. Noy by an a group of idiots like our president and his amateur hour.

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    [QUOTE=PlumberKhan;4478945]The government.

    We trust them with nuclear f*cking weapons.

    Make up your minds. Do you trust them or not?

    Stop being bi-polar woman. Freaking weirdos.[/QUOTE]


    The military is technically part of the government, but it is a subset. It is staffed by professionals who are well trained and who have been in positions of responsibilty for some time. Neither Obama or his key staff is trained in anything at all. Except fundraising.

  17. #17
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    [QUOTE=palmetto defender;4478969]The military is technically part of the government, but it is a subset. It is staffed by professionals who are well trained and who have been in positions of responsibilty for some time. Neither Obama or his key staff is trained in anything at all. Except fundraising.[/QUOTE]

    The military is technically part of the govt?

  18. #18
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    [QUOTE=cr726;4479037]The military is technically part of the govt?[/QUOTE]



    They operate with people who have a career in being an expert at something with a purpose. Obama, Hillary Clinton and Eric "My People" Holder have no ability whatever. Their training is minimal or non existant for their current position.
    The more the politicians get involved with the military the less effective they become.

  19. #19
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    [QUOTE=palmetto defender;4479047]They operate with people who have a career in being an expert at something with a purpose. Obama, Hillary Clinton and Eric "My People" Holder have no ability whatever. Their training is minimal or non existant for their current position.
    The more the politicians get involved with the military the less effective they become.[/QUOTE]

    Eric Holder worked for the Deparment of Justice as a prosecutor for 20 years, that's not a career in being an expert at something with a purpose? You can disagree with his politics, but you can't ignore his credentials.

  20. #20
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    [QUOTE=cr726;4479143]Eric Holder worked for the Deparment of Justice as a prosecutor for 20 years, that's not a career in being an expert at something with a purpose? You can disagree with his politics, but you can't ignore his credentials.[/QUOTE]

    It's Republican logic.


    Trust the government with nuclear weapons? YES!!! (and if you say no, you hate the troops, freedom, apple pie and baseball)

    Trust the same government with your doctors appointments?































    [SIZE="7"]OMG!!! HELL NO!!! CHAOS!!! DESTRUCTION!!! SOCIALISM!! MAO!! HITLER!!! ARRRRGHGG!!![/SIZE]

    :rolleyes:


    Rejects....

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