The US fiscal cliff - would it really be a bad thing?

[MrJonno]

Sort of normal for taxes to go up in bad times, don't know anywhere else where that doesnt happen

The problem is the -- again -- complete disregard of spending cuts. Not only were there no net cuts, we're AGAIN spending more. As Milton Friedman put it, spending is taxing. "Keep your eye on ....how much government is spending, because that’s the true tax … If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing. The thing you should keep your eye on is what government spends, and the real problem is to hold down government spending as a fraction of our income, and if you do that, you can stop worrying about the debt."

The UK and Greece have both had massive spending cuts and its wrecked our economies, it just doesnt work the biggest customer in any economy is the government. Spending cuts hits the private sector more than the public

[Coito ergo sum]

Sort of normal for taxes to go up in bad times, don't know anywhere else where that doesnt happen

The problem is the -- again -- complete disregard of spending cuts. Not only were there no net cuts, we're AGAIN spending more. As Milton Friedman put it, spending is taxing. "Keep your eye on ....how much government is spending, because that’s the true tax … If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing. The thing you should keep your eye on is what government spends, and the real problem is to hold down government spending as a fraction of our income, and if you do that, you can stop worrying about the debt."

The UK and Greece have both had massive spending cuts and its wrecked our economies, it just doesnt work the biggest customer in any economy is the government. Spending cuts hits the private sector more than the public

The economies were wrecked before the spending cuts. Greece, for example, could not sustain itself if it kept spending at the pace it was on. It may still not be able to. Eventually, there is no more money. That's what the private sector is for -- producing revenue. Governments, like machines, can't sustain themselves as perpetual motion machines. There must be additional energy (money) infused from the outside, or the machine will run down.

[MrJonno]

The economies were wrecked before the spending cuts. Greece, for example, could not sustain itself if it kept spending at the pace it was on. It may still not be able to. Eventually, there is no more money. That's what the private sector is for -- producing revenue. Governments, like machines, can't sustain themselves as perpetual motion machines. There must be additional energy (money) infused from the outside, or the machine will run down

The UK was in average for the world (ie low growth not in recession) it completely keeled over when the cuts came.

Greece just went from bad to worse after the cuts, people talk about capital fleeing skilled people tend to start fleeing when public services start going down hill. Greece needs to serious increase its tax collection rates, personally I would bring in foreigners (which Greece did) and pay them on commission (which they didnt)

[Coito ergo sum]

The economies were wrecked before the spending cuts. Greece, for example, could not sustain itself if it kept spending at the pace it was on. It may still not be able to. Eventually, there is no more money. That's what the private sector is for -- producing revenue. Governments, like machines, can't sustain themselves as perpetual motion machines. There must be additional energy (money) infused from the outside, or the machine will run down

The UK was in average for the world (ie low growth not in recession) it completely keeled over when the cuts came.

The cuts came in an effort to address the keeling over.

Greece just went from bad to worse after the cuts, people talk about capital fleeing skilled people tend to start fleeing when public services start going down hill. Greece needs to serious increase its tax collection rates, personally I would bring in foreigners (which Greece did) and pay them on commission (which they didnt)

The "cuts" in Greece were minimal. What people railed against as "austerity" looks to a normal human has moderate adjustments. I mean -- raising retirement age from 65 to 67? Big deal? A small cut in pensions? These are required measures, though. The Greek government doesn't have an unlimited printing press -- they can't just keep borrowing more money forever. They can run out. Eventually, the system can break down.

[MrJonno]

I know Greeks who have had their salaries cut in half (and they werent on a lot in the first place), imagine that happened to you with prices rising everywhere.

You think you would say ' fair enough as a nation we have over spent and we need to make cut backs', sod that people with skills just clear off or at best productivity goes down as whats the point

[Coito ergo sum]

I know Greeks who have had their salaries cut in half (and they werent on a lot in the first place), imagine that happened to you with prices rising everywhere.

You think you would say ' fair enough as a nation we have over spent and we need to make cut backs', sod that people with skills just clear off or at best productivity goes down as whats the point

Somehow, the system has to be fixed. You can't keep borrowing money. They have a huge welfare state, and when the economy tanks tax revenues dwindle at the same time as the amount needed for welfare and other government payments rises. The only choice is to borrow more money at higher rates, particularly as credit rating declines. Investors demand higher rates to compensate for the perceived risk associated with lending money to Greece. It's international overdraft facility was canceled. So, Greece had to go to the EU and the IMF for like 125 billion euros in funding. The public sector cuts in Greece were a condition of this safety net lending to Greece and it's designed to make the government fiscally responsible enough to engender lender confidence again.

In short, money doesn't grow on trees. It matters how much is spent and borrowed. Spending is a tax. No matter how you slice it.

It tends to piss people off in lender nations, like Germany, when bloated welfare states like Greece hold their hand out and don't want to clean up their own house.

Add to that that it's impossible for Greece to stimulate growth be devaluing its currency. Why? Because it uses the Euro, not the Greek drachma.

[JimC]

I suspect that, if looked at very carefully, government spending (here, at least) could be reduced considerably without a major impact on programs that support the disadvantaged or drive vital government actions. There seems always to be a lot of waste, duplication and inefficiency in the ways many governments spend money.

[Coito ergo sum]

I suspect that, if looked at very carefully, government spending (here, at least) could be reduced considerably without a major impact on programs that support the disadvantaged or drive vital government actions. There seems always to be a lot of waste, duplication and inefficiency in the ways many governments spend money.

I guarantee you are correct. But, we'll be skiing in hell long before the government is able to do anything like that.

[MrJonno]

While morally the poor and vulnerable are an issue with cuts but nationally a bigger problem is the government is the private sectors biggest client. No government contracts no business in a lot of cases

[Seth]

I suspect that, if looked at very carefully, government spending (here, at least) could be reduced considerably without a major impact on programs that support the disadvantaged or drive vital government actions. There seems always to be a lot of waste, duplication and inefficiency in the ways many governments spend money.

I guarantee it, and you don't have to look all that carefully. Here in the US, it's called "pork" and there are whole organizations dedicated to ferreting out fraud and waste perpetrated by Congresscritters to pad their wallets, feather their nests and garner votes from their districts.

Here's an idea: "No Congressperson may submit a Bill for consideration that applies only to that Congressperson's district or state or which applies to less than three fourths of the States."

[Tyrannical]

The economies were wrecked before the spending cuts. Greece, for example, could not sustain itself if it kept spending at the pace it was on. It may still not be able to. Eventually, there is no more money. That's what the private sector is for -- producing revenue. Governments, like machines, can't sustain themselves as perpetual motion machines. There must be additional energy (money) infused from the outside, or the machine will run down

The UK was in average for the world (ie low growth not in recession) it completely keeled over when the cuts came.

Greece just went from bad to worse after the cuts, people talk about capital fleeing skilled people tend to start fleeing when public services start going down hill. Greece needs to serious increase its tax collection rates, personally I would bring in foreigners (which Greece did) and pay them on commission (which they didnt)

Foreigners were a big part of the problem. Low skilled foreign workers displace low skilled Greeks, and those that do have jobs the added competition pushes wages lower. Greeks are starting to realize this, and Golden Dawn is actively working to remove unwanted and unneeded foreigners.

[MrJonno]

Greece has a lot bigger problems than people flocking to live there

[Gerald McGrew]

So is this the new conservative version of history? That the European economies were already "killed" before austerity, rather than the austerity measures serving as a death blow for weak economies? (Like the guy who sees someone with a cold and shoots him in the head, but then tries to argue, "Hey, he had a cold so he was already dying".)

Well I guess at the very least that's still a tacit concession that austerity economics doesn't work during tough times. After all, if austerity is the prescription for an ailing economy, Europe should be booming by now. Instead...well, we can see for ourselves.

Just like with so many other issues (global warming, evolution, sex education to name just a few), conservatives keep insisting that austerity and supply-side economics work, despite the data unequivocally showing otherwise.

[Seth]

So is this the new conservative version of history? That the European economies were already "killed" before austerity, rather than the austerity measures serving as a death blow for weak economies? (Like the guy who sees someone with a cold and shoots him in the head, but then tries to argue, "Hey, he had a cold so he was already dying".)

Well I guess at the very least that's still a tacit concession that austerity economics doesn't work during tough times. After all, if austerity is the prescription for an ailing economy, Europe should be booming by now. Instead...well, we can see for ourselves.

Just like with so many other issues (global warming, evolution, sex education to name just a few), conservatives keep insisting that austerity and supply-side economics work, despite the data unequivocally showing otherwise.

If Europe, or Greece, or anybody else was actually being austere we would see improvement...eventually. Getting detoxed off the heroin of tax and spend liberal politics takes a long time and it's painful and ugly. But eventually the patient recovers and moves forward.

Not one flipping country in Europe, and certainly not the United States, has even begun to be austere enough to have any effect whatsoever on the inevitable decline and fall of both that will occur because no politician anywhere is capable of not spending the public's money.

The hardest thing for a politician to say to anyone is "I'm sorry, but government can't help you with that, you're on your own." Because when they say what they NEED to say, the public, being well indoctrinated in the welfare state, get all pissed off that the gravy train is at an end and elect someone, anyone, who will promise them bread and circuses, even though that promise is fiscally and actually impossible to keep, was never meant to be kept, and never will be kept.

And every time one of those promises of largess from the treasury is broken, the lumpen dependent-class proletariat will simply eject the liar and install another, more convincing liar, in the vain and idiotic hope that the new liar will be able to turn lead into gold with the wave of the Federal Reserve wand. And then the cycle repeats again and again till it all collapses, as it's doing in Greece right now, and as it will do in the rest of Europe as the dominoes start to fall.

Marxism has so drained the native intelligence of the dependent class that they do not understand their peril and reject any notion that things won't go on as they always have. That bias will destroy civilization eventually.

What's needed is someone who will do what is necessary to stop the slide to national bankruptcy, which is to simply shut down 90 percent of the federal government overnight and send all the government employees packing to look for jobs in the "private sector."

Or, as someone recently suggested, impose an across-the-board cut of ONE PERCENT to the budget of every single federal program, agency and employee, use the proceeds to pay down the deficit, freeze all budgets at the new -1% level and hold that line for six years, by which time there will be no deficit.

Don't tell me that everyone in the federal government or who is supported by the federal government cannot endure a one-percent cut in their hog slop.

[MrJonno]

The US is in a better state than Europe because it spent money during the recession instead of cutting back (we don't have any restrictions on where you were born to become Prime Minister here, if Obama wants another job in 2016 he would be welcome here)