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Fiscal Cliff, Did the Tea Party Prevail?

The failure of the House Republican Leadership tonight to rally its troops to pass “Plan B” is being celebrated by Dems as a major defeat for the Republicans. They, the Dems, might want to hold back on popping the champagne corks. Neither side has much to celebrate but now, with the Republican proposal dead, the ball rolls back into the court of the Senate Democrats and the President. What are they going to do? Nothing? And, chalk this up as a victory for the Tea Party. Tea party types will happily accept higher taxes in exchange for drastic spending cuts.

This means we are likely to go over the so-called fiscal cliff come 1 January. Good by me. Time for America to wake the fuck up and stop deluding itself that it can spend wantonly while reducing the number of taxpayers who pay taxes. I am sick of the bullshit. Damn Obama for his disingenous lie that the “rich aren’t paying their fair share.” When the top 5% pay more than 60% of the taxes, one thing is clear–the rich are paying an unfair share. Fair is for everyone to pay something. Unfair is asking only one group to shoulder the burden.

I am sick of the Republican insistence on protecting a bloated defense establishment and approving entitlements without committing to the revenues to sustain them. The blast of new taxes that will hit everyone come 1 January will ensure the economy tanks. While Republicans may initially get the blame for that, Obama and the Dems will have to deal with the Republicans on coming up with legislation to try to revive us from a major recession. In that debate, which will probably take place over the summer, the Republicans could press for a reform of the tax code and probably will happily let Government spending decline because of de facto circumstances.

From a macro economic standpoint this is bad news. When you raise taxes and cut public spending in such a drastic manner the most likely outcome is economic recession, if not depression. We will find out within eight weeks whether or not John Maynard Keynes was right or wrong. What do you think?

  • http://profile.yahoo.com/ND2FCCGVV2IZTTAZQTXKJTCPNI Ruth
  • TeakWoodKite

    What do I think? I think it’s one blade short of fan.
    Let ‘em. When the game is gone no one can hunt.

    • KenoshaMarge

      It’s those kinds of “facts” that the left simply cannot grasp. Kill the Golden Goose and no more eggs. Milk the cow to death, no more milk. Tax the worker bees to death and no more honey.

      Whatever the metaphor, once the host is dead, the parasites die too.

      Once the parasites became the heroes and the productive became the enemy, these cretins became the enemy of all that this country stood for. Anyone could come here, work their asses off and make something of themselves to provide a better way of life for their kids.

      Now you best not work your ass off lest the government tax what’s left of it off. Sad that.

  • Deapster

    Whatever happens, Obama owns it. Party on.

  • KenoshaMarge

    Perhaps Boehner’s recent “purge” of conservatives from some committees had an adverse affect on his ability to get his caucus in order. Pissing off the troops seems a foolish way to get a consensus. Not to mention that there are quite a few who think that going over the fiscal cliff may be the best thing in the long run.
    I don’t pretend to know. I do believe that just another patch on this issue or a capitulation to obama and the obamacrats won’t serve the GOP or the country well.

  • Hokma

    If the United States were a company you could objectively say that the financial strategy by Democrats and Obama is to “milk the cow..”

    Raising taxes is the equivalent of looking as a company with stagnant sales growth and deciding to raise prices in order to grow revenue. Of course that means there will be less and less volume and eventually declining revenues even with increased prices.

    I think we have way too many Wall Street tied economists in charge of the country’s finances and what we need is the guy who started a company out of his garage or with just one store and successfully built from there.

    The inevitable result of whatever is agreed to will have zero positive impact on our economy and is likely to result in a second recession.

    As KenoshaMarge pointed out, Bob Woodward correctly said that in the very short term the GOP will get the blame but the result will have much longer negative consequences for Obama and the Democrats. A second recession will be devastating.

    • KenoshaMarge

      They aren’t trying to just “milk the cow” Hokma, they are milking it to death.

      • Hokma

        LOL. Where on Earth do you get these??

        • KenoshaMarge

          I vaguely remembered seeing a cartoon about obama milking a cow some time ago. So I just googled obama milking a cow images and there was the one I remembered and this one which was even better.

          I spend more time than I should searching out and posting cartoons. I love them for what they can say with so few words.

          • http://noquarterusa.net Larry Johnson

            You do great work. Terrific stuff.

            • KenoshaMarge

              Thank you. I know there are several here who like cartoons as much as I do. And I like to share.

              • TeakWoodKite

                Thanks for that, KenoshaMarge.

    • Fred82

      I agree.

      Big business and Wall Street are hardly comprised of the kinds of people that made America what it is today.

  • no_longer_a_democrat

    I say, let it go over the cliff, most of that monies is borrowed or printed up anyway. I’m tired of kicking this problem down the road over and over again.

    close to 50% of working age americans pay no federal taxes, are the dims planning on taxes the “rich” at 100%?? Yea, that strategy will work, tell the productive enterpreneurial people in this country, hey work harder to create more wealth so that we dims can spread that wealth around!

    And frankly even if you taxes the rich at 100%, there isn’t enough money to pay for everything, eventually anyone who works and pays taxes will be considered “rich” by the dimocrats!

    • elizabethrc

      Depardieu had it right when he said that France was punishing him for being successful. He then put his Paris home on the market, bought all the foi gras he could and moved to Belgium.
      There will be consequences. There always are. Obama doesn’t get this. Oh well, that’s the way with the deluded and narcissistic.
      We seem to have our own Imelda Marcos in the White House in the guise of Obama. I think he is busily memorizing the phrase “let them eat cake”.

  • no_longer_a_democrat

    Excellent article.

    We are broke, why can’t the dummy dems get this!?!?

    We are spending way more than we take in, there are really only 3 ways for the govt to get revenues, 1)tax people 2)borrow the money, our debt keeps going up as a result 3)print money, which devalues the dollar, cost of living goes up, standard of living goes down.

    when someone is morbidly obese, saying oh, I’ll eat only 2 donuts a day instead or 5 isn’t going to cut it, the person has to go on a diet, its not fun, no goodies to eat and lots of exercise, it is not fun, but when things get that bad, there is no gradual way to correct things, it has to be done harshly to save the person.

    as Ann Rand said, people can avoid reality, but they cannot forever avoid the consequences of avoiding reality.

    we are broke and spending way more than we take in in revenues…., cannot tax your way our of this, there aren’t enough rich people to do that.

    pain is coming, no way around it, bloated govt, ignorant politicians, especially dimocrats have no clue that money doesn’t grow on trees, or if its printed, how horrible that is for our country.

  • HARP2

    Generally speaking, functioning societies make good-faith efforts to raise what they spend, subject to fluctuations in economic fortune:
    Government spending in Australia is 33.1 percent of GDP, and tax revenues are 27.1 percent. Likewise, government spending in Norway is 46.4 percent, and revenues are 41 percent – a shortfall but in the ballpark. Government spending in the United States is 42.2 percent, but revenues are 24 percent – the widest spending/taxing gulf in any major economy.

    So libs….You have 2 choices. Either reduce spending or have the 47% start paying taxes

    • KenoshaMarge

      They can’t do that Harp. How can they guarantee that the 47% vote for them if they are treated like everyone else. Gotta give to the gimme-es.

  • Fred82

    Larry,

    The Left lives in Lala land. Nuff said.

  • wanderer1836

    Well said and well written, Mr. Johnson.

  • Deapster

    DH used to work for OMB. It was a standing joke they would all hang out for a few weeks before the budget was due at all hours of the night. But were they working on the budget wheeling and dealing last minute negotiations? Hell no, they were sitting around drinking coffee doing this stunt only for for theater.

    Played well with the media to have hollow-eyed number crunchers out on the snowy lawn in front of the Old Executive Office Bldg at 4am cheering a deal had finally been reached.

    Yeah, right. Real men don’t pay games the national fiscal health. But politicians play any card they can and 4am “compromises” look good until someone actually looks at them.

  • Deapster

    Larry Johnson 2016

  • akaPatience

    I’ve been looking forward to going over the cliff for quite a while now. It’s probably the only way spending will be cut. And while my Obot husband has been telling me for 3 years that the economy’s on the brink of “taking off”, it would seem the Fed chairman isn’t as confident — why else the endless pumping and continued very very low interest rates? At worst we may be headed for a recession in any case. At best, we’ll probably limp along as we have, barely escaping the technical definition of a recession. I have little faith, in spite of equity market cheerleaders. They’re happy, between the pumping and company hoarding of cash, but it can’t last forever and some of the gains seem almost bubble-like and illusory. Time will tell.

    “Time for America to wake the fuck up and stop deluding itself that it can spend wantonly while reducing the number of taxpayers who pay taxes”. Ain’t it the truth – you said a mouthful Larry.

  • HELENK2
    • buzzlatte3

      It’s now a game of pinning the failure tail on the donkey. Yes, Mitch McConnell punked Reid. What’s happening now is just the next chess move. Frustrating to watch.

      • KenoshaMarge

        I think Bob Woodward nailed it on this one. If the economy tanks and the Dems and their media lapdogs blame it all on the GOP the public will blame the Republicans for a while. But in the long run, it’s the man in the White House who takes the hit.
        All the obots will blame anyone but their obamamessiah but there are still enough people in this country who don’t have their heads up their ass who will stop blaming Bush and the Republicans and start pointing the finger at the POS Campaigner in Chief.
        And if a few more “reporters” took their balls out of storage and confronted said POS at press conferences, like Jake Tapper did, and the POS reacts as arrogantly as he did then… People will see the man as what he is. Only dedicated obots like arrogant, narcissistic assholes.

        • elizabethrc

          I notice that more and more people in the media are challenging Obama. His plans to having his swearing in in private, without the media, bombed when the media jumped all over him.
          Let’s hope it’s a trend.
          I make a concerted effort to never watch MSNBC or any of the alphabet networks. Tapper has always been the one exception. Maybe his switch to CNN means the new head of the network is going to do some much needed repair work. They need to dump Soledad, Lemon and Martin and get some fresh air in the place.

  • win43

    You’re cherry-picking your taxes, Larry.

    Your “top 5% pay more than 60% of the taxes” line leaves a very important word out: INCOME. The top 5% of earners pay more than 60% of the INCOME tax. But there are many other federal taxes — payroll tax alone makes up just as big a share of total federal tax receipts as income tax. So it makes more sense to look at the share of the TOTAL tax burden, doesn’t it?

    Here are those numbers — and from a conservative think tank, so no crying bias: http://www.manhattan-institute.org/html/ir_22.htm

    Look at Figure 1, and Figure 4 (which the author cleverly separates to make the point harder to see). In 2009, the top 5% paid 40% of total federal tax. (Fig. 4) That’s a lot, right?

    But they made 37% of the national income. (Fig. 1) Which is awfully close to 40%, isn’t it? Seems pretty fair to me — at least not nearly as unfair as you’re crying about it being.

    And the top 1% figures? 22.9% of national income, and 22% of total federal taxes paid.

    So cry me a river. Rich people pay most of the taxes in this country? Of course they do. But that’s because they make most of the money, too.

    If you want to talk tax burden, talk real numbers — total taxes, not just income taxes. Hiding from the real numbers is a coward’s game.

    • Deapster

      Class warfare is not working.

      • win43

        Class warfare is not OCCURRING.

        If it were, wouldn’t the rich, or at the very least the super-rich, be paying federal taxes way out of proportion to their share of the national income?

        But they’re not. Because class warfare is a myth.

        This is really the best comeback you people have? LOL

        • http://noquarterusa.net Larry Johnson

          You are intellectually dishonest, just like Obama. Portraying people who make $250,000 as rich and lumping them in the same category as the Warren Buffets, Bill Gates and Mitt Romney is pure horseshit. As I have written repeatedly, the super rich can easily circumvent higher taxes on regular income by purchasing tax free municipal bonds. And, if you think eliminating that tax loophole is the answer, then you better be prepared to deal with the aftermath–the drying up of capital for that sector.

          Moreover, even full confiscation of the income of the so-called “wealthy” will not solve the US debt. But getting ideologues like you to be honest is like trying to convince a dog to stop licking its balls.

          • win43

            So, what’s your point? You’re all over the place. First we’re talking about relative tax burdens, then you’re complaining about semantics and which well-off people we should call “rich,” then you’re making an irrelevant argument that tax hikes alone won’t balance the budget… what exactly are you trying to say? (Other than that I’m an a stupid asshole — sorry Larry, your vulgar teenager act doesn’t impress me much)

            Anyway, look, whether you use the word “rich” or not, the point I’m making is that you’re using bullshit numbers to paint a picture of the tax burden borne by the top 5% of earners. When you do that, you’re either showing that you’re uninformed (bad) or deliberately misleading people (really bad).

            As for whatever you’re trying to say about the plight of people making more than $250k… if you know people making more than that and they can’t afford a 4% increase in their marginal tax rate on income above $250k — what they were paying under Clinton, and less than what they were paying under Ronald fucking Reagan — then you know some people who are truly awful at managing their money.

            • Hokma

              I’m not going to get into the bullshit Clinton myths that the media propagates.

              More importantly is the Rumpelstiltskin economic theory by left wingers. Unfortunately we’ve run out of straw.

              • Audacity of Hype

                Because they are simple animals with small brains?

            • http://noquarterusa.net Larry Johnson

              You don’t know what the fuck you are writing about.

              • win43

                Insightful!

                Really shows why so many important people listen to you, you know?

                Now, why don’t you go back to lying to what readers you do have about taxes. I guess that’s all you’ve got left anyway.

                • buzzlatte3

                  Ah, you lost the argument…so you resort to insults. ROTFL!!

                  • win44

                    Um, I’m still waiting for any response at all re Larry’s lie about the percentage of federal taxes paid by the top 5% of earners.

                    Except instead of doing that, Larry the chickenshit has disabled the win43 ID (pretty easy workaround there, Larry).

                    You are SUCH a coward, Larry. You’ll run your mouth, but you get all pissed off and start banning anybody who points out your lies. You, who are so fond of calling Obama and others intellectual lightweights, can’t even conduct a rational argument — instead, you ban people and censor your site.

                    Pretty pathetic.

                    • Audacity of Hype

                      I don’t understand why you continue to post here. You claim it’s a backwater yet you’re always here.

                    • win44

                      why do cats play with yarn?

                    • buzzlatte3

                      Why do cats continually cough up hair balls like Win43?

                    • TeakWoodKite

                      Because they do not have an ability to seperate fact from fiction.

            • TeakWoodKite

              I think Larry is quite clear on what his point is, as I read it. Stop licking BO’s balls.

    • Fred82

      Class warfare is just a silly tactic used by the Lefties to take attention off of their own failures and justify their desire to get their grubby little paws on more of other people’s money.

      • KenoshaMarge

        Exactly. And only the lefties, in their repulsive “hero-worshipping are stupid enough to fall for it.

        • buzzlatte3

          Fabulous! Love that the cartoonists at least will take Obama on and expose his real agenda.

    • TeakWoodKite

      “payroll tax alone makes up just as big a share of total federal tax receipts as income tax. ”

      Sad to see how stupid you are.

      According to the OMB for 2011, Income tax is 47% to payroll taxes of 36% of the federal budget of $3.6 trillion.
      Payroll taxes as a whole are regressive: they collect a higher percentage of total earnings from lower-income workers than higher-income ones.

      You are seriously challenged. Thanks for playing.
      http://www.cbpp.org/cms/index.cfm?fa=view&id=3822

  • HELENK2
  • HELENK2

    http://www.thegatewaypundit.com/2012/12/harry-reid-on-fiscal-cliff-we-are-not-going-to-do-anything/

    why is this not a surprise??? other than lay the bills on the desk and forget about them just what has this load done ???

  • HELENK2

    Report: US House may return as soon as Dec. 27 with a new ‘fiscal cliff’ plan, senior party aide tells @Reuters

    • Deapster

      Reaching a deal at 4am is good theater too, just like coming back during holiday vacations.

  • HELENK2

    White House: President will work with Congress ‘to ensure that taxes don’t go up on 98% of Americans’ – statement via @NBCNews

    and I am 21 years old and look like Linda Darnell

    • elizabethrc

      Frankly, if push comes to shove, I’ll pay a little more in taxes because compared to the inevitable much migher prices for food (8 dollars a gallon for milk has been suggested on Drudge), for people at my income level, it won’t be as hard to bear as the increasing difficulty in putting food on the table. This is not going to end well.

  • Popsmoke

    I wonder if the British would take DC back, if we threw California in as incentive?

    • HELENK2

      they can not afford California

      • Popsmoke

        Yeah! Neither can we!

        • HELENK2
        • win43

          We can’t afford to LOSE California. For every dollar of federal spending that goes to California, California pays out $1.28.

          http://www.ritholtz.com/blog/2011/04/united-states-federal-tax-dollars/

          • Deapster

            What California exports intangibly to the rest of the nation will bankrupt it more than the actual money it exports from its alleged fiscal excesses. Not to worry, the “rich” are fleeing the state while state expense soar so this current revenue imbalance will soon end.

            Of course this is a good time for the Calif Teachers Assn (union) to ponder why they are turning down federal dollars just so the state can keep funneling its own revenues out to other states, who did accept education reform the CTA had consistently turned down here.

          • Hokma

            All that will happen is those companies producing those taxes will just move to other states. No loss.

            • win44

              Right, the movie industry leaves LA for Texas, Silicon Valley relocates to Boise… any day now, right?

              Also, hasn’t California’s tax and fiscal situation been this way for years now? When is your promised exodus going to, um, start?

              • Hokma

                It already has been happening – particularly to Texas.

                Give California to the Brits and EVERY business will move out of CA ASAP.

                • buzzlatte3

                  Yes, this has already been known . 52% tax rate in CA between feds and state and guess what? Texas is to Belgium as what CA is to France.

              • TeakWoodKite

                Dipshit, Merry Christmas. Have you no brains to see the obvious? Billions of dollars has split from LA to other parts of the world.

                LOS ANGELES — Perhaps the legendary beaches here are losing their pull. California, once the very symbol of sun-drenched American growth, had a population increase of only 10 percent in the last decade, the slowest rise in the state’s history. And for the first time since California became a state in 1850, it will not gain a Congressional seat.

                http://www.nytimes.com/2011/03/09/us/09california.html?_r=0

          • TeakWoodKite

            “they” can’t afford.. then Win43 says… “we” can’t afford. He is they.
            Would it surprise you to know that it is not the .28 cents on the dollar that is bad for the state….no nothing about 25% of the states dollars never come back…
            The problem is you seem to think it’s ok.

    • HELENK2
      • Popsmoke

        Hummm? That could be a deal breaker… But maybe we can work a deportation deal out?

        • Deapster

          Melting him would work.

          • Jimbo

            Wouldn’t that cause massive flooding?

            • Deapster

              Well then we could use it as beta test for the global warming rise in sea levels expected to innundate our fair state sometime in the nebulous future. Unless of course we all don hair shirts and flagellate ourselves for being such bad, bad anthro-morphs.

      • HARP2

        Throw ?

        Hell we can`t even lift him.

    • Deapster

      Since we are bi in everything else, we might as be a bi-coastal state as well. Only problem is DC doesn’t want our debt and we don’t want their schools. And that’s saying something considering what ours are like.

  • HARP2

    Stock Futures Tumble on “Plan B” Failure

    Standard & Poor’s 500 futures were down some 1.4% in Asian trading as the confidence bordering on complacency that some solution to avert massive tax increases and spending reductions would be reached by year-end was shaken by the lack of progress between the White House and the GOP-led House.

    Some how this old song seems relevant.

    http://www.youtube.com/watch?v=nXspsfoPX50

  • buzzlatte3

    I’m tired of both parties playing tug-o-war with my wallet. If reform of the tax code means heading toward a flat tax, so be it. I never can decide who tells the bigger lies. Obama or the GOP cabal. Right now the arrow points to Obama.

    • Deapster

      The joke is blaming is Obama’s worst feature. So if he drives us off the cliff and blames the Republicans, he is reminding everyone why they had to hold their nose to vote for him in the first place.