Greek Bond 'Haircut' of 50% Appears Set: Sources

[RandomGuy]

Pretty severe write-down, but probably about what is needed. As the article notes though, nothing is really set in stone yet, and the final haircut is, as one might expect, hotly debated/contested.

If you think our Congress is a bunch of do-nothing windbags, at least we don't have the clash of country interests within the EU. Yikes.

--------------------------------------------------------
A Greek bond writedown of 50 percent is practically assured, sources close to the situation told CNBC on Wednesday.


Negotiators remain divided, however, on the issue of what will happen to the remaining 50 percent of the current outstanding 205 billion euros ($284.9 billion) of debt load.

Indications are that the remainder will be divided into a cash sweetener, Greek Sovereign paper and paper from the European Financial Stability Facility (EFSF), the name of the currency zone's bailout fund. The exact mix remains to be determined and remains a key point of debate.

Indications are that the deal on a writedown-or "haircut" in current parlance-bears no resemblance to the original 21 percent PSI haircut, but will remain voluntary, though this word's meaning is becoming increasingly fuzzy, sources said.

Improved Chance of a Deal?

Prospects for a comprehensive deal to resolve the euro zone debt crisis at a summit on Wednesday had begun to look dim, with deep disagreement remaining on critical aspects of the potential agreement, including how to give the region's bailout fund greater firepower.


While there appears to be broad consensus on the need for around 110 billion euros ($150 billion) to be injected into the European banking system to help it withstand a potential Greek debt default and wider financial contagion, there is little clarity on either of the other two critical parts of the plan.

Aside from the Greek writedown, any agreement would hopefully involve scaling up the region's 440 billion euro EFSF.

European Union leaders will consider two methods for scaling up the EFSF, one by using it to offer guarantees to purchasers of new euro zone debt, and the other using part of its capacity to set up a special purpose investment vehicle that would attract money from sovereign wealth funds and other investors to buy debt.

They might also agree to combine both options.

No Concrete Numbers Expected

Whereas financial markets have been hoping for weeks that Wednesday's summit, scheduled to start at 1500 GMT with a gathering of all 27 EU leaders, followed at 1730 GMT by the meeting of the euro zone heads of state, will produce detailed figures on how to combat the debt crisis, there is now little likelihood of concrete numbers, sources say.

"The numbers are not yet finalized - you have to have all parameters in place and see what is needed and what the leverage factor would be.

It needs a lot of technical work to come up with a number," one EU official said, adding that discussions would continue on Wednesday to forge a pre-summit consensus.

"The leaders will agree on the options tomorrow, but whether it will be an agreement with all details remains to be seen.

I think it will be challenging - it will be very difficult to agree on everything." Instead, it looks likely that it won't be until Nov 7-8, when EU and euro zone finance ministers are next scheduled to meet, that the details of whatever euro zone leaders agree on during Wednesday's summit will be completely finalized.

- Reuters contributed to this report.

http://beta.finance.yahoo.com/news/greek-bond-haircut-50-appears-125447673.html

[CosmicCowboy]

It is still destined to explode. Even if they take care of Greece, Italy is next.

[coyotes_geek]

..........and Spain, and Portugal, and Ireland...............

[CosmicCowboy]

..........and Spain, and Portugal, and Ireland...............

yep

http://www.newscientist.com/data/galleries/dn16665-test-your-bloodstain-analysis-skills/1_drip_vertical.jpg

[coyotes_geek]

And one day, probably even us.............

[CosmicCowboy]

And one day, probably even us.............Yep, the developed countries have no choice but to inflate their way out of the mess and stick it to the creditor nations (China, Saudi Arabia, etc.)

[RandomGuy]

I see the bears are out in full force. :lol

I don't think it will get quite so out of control. Ugly, to be sure, but I think the economic system will muddle on.

[coyotes_geek]

Oh the system will defintely muddle on. There's just going to be a lot of banks, investors, taxpayers and beneficiaries of government spending taking pretty big haircuts along the way.

[Winehole23]

“If the Greek people don’t see the necessity of backing Papandreou we have a whole different ballgame,” Otto Fricke (http://topics.bloomberg.com/otto-fricke/), the budget spokesman in parliament for Merkel’s Free Democratic Party coalition partner, said by phone. “If he doesn’t get a majority, then there’s no second aid package, no voluntary haircut. We’d have a potentially explosive situation, one that leaves us today baffled as to what we could possibly do next.” http://www.bloomberg.com/news/2011-11-01/greek-referendum-decision-blindsided-european-partners-merkel-allies-say.html

[DarkReign]

Just read that, WH.

Very interesting. Since it is going to a popular vote, I dont think its too big of an assumption to say the Greeks are going to vote against the austerity measures en masse, this would trigger Greece's withdrawal from the EU and its partners.

Unless they stop the vote (dont see that happening), Greece will be isolated from the rest of Europe.

Will this trigger more withdrawals? Spain? Italy? Portugal?

Interesting times, interesting times.

[boutons_deux]

"Greece will be isolated from the rest of Europe"

Letting Greece in, with its corruption and lax tax collection among many other major issues, was a mistake, and many knew it back then.

[Winehole23]

If Greece withdraws from the EU it would give them a tool they don't have now: devaluing the currency (i.e., a new Drachma)

[Drachen]

If Greece withdraws from the EU it would give them a tool they don't have now: devaluing the currency (i.e., a new Drachma)

Won't work since the bonds are in Euros.

[MannyIsGod]

Won't work since the bonds are in Euros.

Pretty sure Greece isn't going to give a shit about that if they withdraw from the EU.

[MannyIsGod]

I should paraphrase the above remark to Drachen that I pretty much don't know shit about whats going here. :lol I read the articles and I knew of the deal and somewhat of the troubles and I get whats happening but I really have no insight or understanding of the ramifications.

WH, help a man out with some commentary here.

[MannyIsGod]

I found this especially funny:

1520:
The banks which agreed to write down some 100bn euros worth of Greek bonds say they will proceed as planned despite Mr Papandreou's announcement, AFP reports out of Washington.



:lol Well its not like they're going to get a BETTER deal out of this.

[Drachen]

Pretty sure Greece isn't going to give a shit about that if they withdraw from the EU.

I mean devaluing their currency does nothing if the bonds are valued in another currency


Let's say that 1 Euro = 1000 drachma
Lets say that their monthly interest payment is 10 Euro (10,000 drachma).

Now, they devalue their currency by a factor of 10 so 1 Euro = 10,000 drachma
Now their payment is still 10 Euro, but now 100,000 drachma.

Devaluing does nothing unless the debt is in your currency.

[MannyIsGod]

http://www.bbc.co.uk/news/business-15537557



But without the approval of the Greek people, without an end to crippling pervasive strikes, how on earth could this austerity be followed by economic recovery?
So although Mr Papandreou's decision to hold a referendum has shocked investors and eurozone leaders, to criticise him would be to argue both that democracy is a bad thing and (many would say naively) that a Greek revival could be possible in the teeth of opposition from Greek people.

[MannyIsGod]

I mean devaluing their currency does nothing if the bonds are valued in another currency


Let's say that 1 Euro = 1000 drachma
Lets say that their monthly interest payment is 10 Euro (10,000 drachma).

Now, they devalue their currency by a factor of 10 so 1 Euro = 10,000 drachma
Now their payment is still 10 Euro, but now 100,000 drachma.

Devaluing does nothing unless the debt is in your currency.

Lets say I owe you one Euro. Lets say you demand repayment and I say sure, I'll pay you back, but in Drachma. Then you're like oh hell no just give me .50 Euro. I then promptly tell you to GFY and offer you 400 Drachma instead. What are you going to do? Invade me?

[DarkReign]

I mean devaluing their currency does nothing if the bonds are valued in another currency


Let's say that 1 Euro = 1000 drachma
Lets say that their monthly interest payment is 10 Euro (10,000 drachma).

Now, they devalue their currency by a factor of 10 so 1 Euro = 10,000 drachma
Now their payment is still 10 Euro, but now 100,000 drachma.

Devaluing does nothing unless the debt is in your currency.

I have to take a similar position to MiG here and say out loud that I am not privy to the ramifications of this procedure, but...

If Greece withdraws from the EU, why would they give a shit about how much they owe? They are their own nation, they owe someone else money, who gives a shit? They could just throw the middle finger to the bank/EU and say "What money? What debt?"

So long as they have a stable economy (they dont), good tax collection (according to BD, they dont) and willing trade partners (Russia again? Someone else?), whomever holds the debt has no recourse to actually collect.

What am I missing?

[DarkReign]

Lets say I owe you one Euro. Lets say you demand repayment and I say sure, I'll pay you back, but in Drachma. Then you're like oh hell no just give me .50 Euro. I then promptly tell you to GFY and offer you 400 Drachma instead. What are you going to do? Invade me?

You put it much better than I did.

[Drachen]

Lets say I owe you one Euro. Lets say you demand repayment and I say sure, I'll pay you back, but in Drachma. Then you're like oh hell no just give me .50 Euro. I then promptly tell you to GFY and offer you 400 Drachma instead. What are you going to do? Invade me?

No, I won't loan you any more money and without natural resources, that is far more devastating than an invasion.

[MannyIsGod]

Who's going to loan them money anyway? They're about to default. Greece is already in a lot of pain so (and as I said above - I'm not very familiar with the situation) threatening them with economic pain isn't going to really do much, IMO. If the Greek people are willing to default then I'm not sure what course of action the EU has to scare them into doing what they want. It indeed may be harder for Greece along this path but that doesn't seem to matter to them.

[Drachen]

Who's going to loan them money anyway? They're about to default. Greece is already in a lot of pain so (and as I said above - I'm not very familiar with the situation) threatening them with economic pain isn't going to really do much, IMO. If the Greek people are willing to default then I'm not sure what course of action the EU has to scare them into doing what they want. It indeed may be harder for Greece along this path but that doesn't seem to matter to them.

The central banks of the stronger EU countries.

[DarkReign]

Who's going to loan them money anyway? They're about to default. Greece is already in a lot of pain so (and as I said above - I'm not very familiar with the situation) threatening them with economic pain isn't going to really do much, IMO. If the Greek people are willing to default then I'm not sure what course of action the EU has to scare them into doing what they want. It indeed may be harder for Greece along this path but that doesn't seem to matter to them.

Why do they need to be loaned money to begin with? As a nation, a sovereign nation, an entity that can print its own money and value it independently, why would you borrow money from a quasi-governmental Bank?

Greece has an opportunity to opt out of the system completely. Not just its debt, not just the EU or Europe in general, but the whooooole banking system of the world.

Will it work? Way above my head...like way above. I never understood national debt as a concept, how a nation can owe itself money because it borrowed against its potential future-growth from quasi-private entities (who got their wealth by...?).

It will never make sense to me.

[MannyIsGod]

The central banks of the stronger EU countries.

Not if the Greek's aren't willing to pay the price. And apparently, they're not. Plus, stronger is a relative word and right now it doesn't appear there is much strength at all in the EU.

[MannyIsGod]

Krugman basically says that the public will vote no in Greece, then Italy is the next domino, followed by France.

[Drachen]

Why do they need to be loaned money to begin with? As a nation, a sovereign nation, an entity that can print its own money and value it independently, why would you borrow money from a quasi-governmental Bank?

Greece has an opportunity to opt out of the system completely. Not just its debt, not just the EU or Europe in general, but the whooooole banking system of the world.

Will it work? Way above my head...like way above. I never understood national debt as a concept, how a nation can owe itself money because it borrowed against its potential future-growth from quasi-private entities (who got their wealth by...?).

It will never make sense to me.

I would think that this could work if the country didn't need to buy anything from abroad.

[Drachen]

Krugman basically says that the public will vote no in Greece, then Italy is the next domino, followed by France.

You don't think that Spain and Portugal would go before italy?

[MannyIsGod]

You don't think that Spain and Portugal would go before italy?

Krugman says Italy. I don't know enough to say. The comments I've made simply stem from me thinking that a country willing to default on anything.

Basically Greece is in Honey Badger mode right now.

[DarkReign]

I would think that this could work if the country didn't need to buy anything from abroad.

Thats not necessarily true. All a nation would need, in this case Greece, is a trade agreement with at least one nation.

If Greece opts out of the EU and its dept structure, starts their own currency from scratch, then signs a trade agreement with (for example) Russia, theyre good to go.

Because Russia would willingly convert Drachma into Rubles, which can then be used to buy foreign goods.

This requires extreme debt control on the part of Greece, however, because the moment they started borrowing from Russia, the threat of takeover to collect on debt becomes very real.

So long as the conversion was with actual money, they can still buy shit from outside their borders.

[Drachen]

Thats not necessarily true. All a nation would need, in this case Greece, is a trade agreement with at least one nation.

If Greece opts out of the EU and its dept structure, starts their own currency from scratch, then signs a trade agreement with (for example) Russia, theyre good to go.

Because Russia would willingly convert Drachma into Rubles, which can then be used to buy foreign goods.

This requires extreme debt control on the part of Greece, however, because the moment they started borrowing from Russia, the threat of takeover to collect on debt becomes very real.

So long as the conversion was with actual money, they can still buy shit from outside their borders.

The only problem here is what does russia do with the drachma? No one wants to touch the currency due to the currency devaluation risk. Basically, Russia would be losing money on their stores of drachma.

Edit: Oh and if they did end up doing this, Russia would have to price the risk into the currency exchange making everything prohibitively expensive. Now we are back where we started with the country needing to produce everything (including economic demand) in country.

[CosmicCowboy]

No big deal. Following conventional progressive logic Greece should be able to spend it's way out of it's problems.

[boutons_deux]

And let's not forget that is was Goldman Sacks that showed Greece govt how to hide its debts off books, aka fraud.

[Th'Pusher]

No big deal. Following conventional progressive logic Greece should be able to spend it's way out of it's problems.

Following conventional conservative logic, the austerity measures they've taken thus far should not have plunged them into further economic depression. Austerity creates jobs because it builds confidence, right?

[Winehole23]

I mean devaluing their currency does nothing if the bonds are valued in another currency


Let's say that 1 Euro = 1000 drachma
Lets say that their monthly interest payment is 10 Euro (10,000 drachma).

Now, they devalue their currency by a factor of 10 so 1 Euro = 10,000 drachma
Now their payment is still 10 Euro, but now 100,000 drachma.

Devaluing does nothing unless the debt is in your currency.Devaluation does something to the balance of trade/investment, but you make a good point. Still, Greece could go the route of Argentina, default, and tell its creditors to get bent.

[CosmicCowboy]

Following conventional conservative logic, the austerity measures they've taken thus far should not have plunged them into further economic depression. Austerity creates jobs because it builds confidence, right?

broke is broke.

[Drachen]

broke is broke.

well since they are taking the austerity measures, and are broke, why aren't businesses flocking in????

Buy Low, Sell High, right?

[CosmicCowboy]

well since they are taking the austerity measures, and are broke, why aren't businesses flocking in????

Buy Low, Sell High, right?

Are you actually advocating continuing the borrowing/spending until there is no other choice but default or massive currency inflation?

[Drachen]

No you were being glib, and tried to make a political statement, I responded with the same.

The answer, just like with the sub-prime mortgage issue, was that they were (for one reason or another) rated incorrectly.

[boutons_deux]

"why aren't businesses flocking in????"

flat-taxer rich-boy Steve Forbes had a conference for rich people looking to buy up Greek islands, properties, factories, whatever. aka "disaster capitalism"

http://articles.businessinsider.com/2011-06-15/wall_street/29967106_1_greek-economy-greece-greek-diaspora

[RandomGuy]

Krugman basically says that the public will vote no in Greece, then Italy is the next domino, followed by France.

If the vote can be framed as a referendum of remaining in the Eurozone, as it pretty much must be, then the analysis I have read says that it has a chance of passing.

I think that once the real consequences of continuing to throw an enormous hissy fit are made clear, most rational people will have to suck it up and vote yes.

[RandomGuy]

I mean devaluing their currency does nothing if the bonds are valued in another currency


Let's say that 1 Euro = 1000 drachma
Lets say that their monthly interest payment is 10 Euro (10,000 drachma).

Now, they devalue their currency by a factor of 10 so 1 Euro = 10,000 drachma
Now their payment is still 10 Euro, but now 100,000 drachma.

Devaluing does nothing unless the debt is in your currency.

Correct.

[RandomGuy]

Why do they need to be loaned money to begin with? As a nation, a sovereign nation, an entity that can print its own money and value it independently, why would you borrow money from a quasi-governmental Bank?

Greece has an opportunity to opt out of the system completely. Not just its debt, not just the EU or Europe in general, but the whooooole banking system of the world.

Will it work? Way above my head...like way above. I never understood national debt as a concept, how a nation can owe itself money because it borrowed against its potential future-growth from quasi-private entities (who got their wealth by...?).

It will never make sense to me.

The problem with this is that you end up like Argentina, i.e. persona non grata when it comes to borrowing money again.

The Argentines are still paying a risk premium on their debt even now.

[coyotes_geek]

Following conventional conservative logic, the austerity measures they've taken thus far should not have plunged them into further economic depression. Austerity creates jobs because it builds confidence, right?

Who's claiming austerity has anything to do with creating jobs? Austerity is all about saving banks.

[coyotes_geek]

The only problem here is what does russia do with the drachma? No one wants to touch the currency due to the currency devaluation risk. Basically, Russia would be losing money on their stores of drachma.

I think it was Pepsi who back in the 80s started selling soda in the Soviet Union. They didn't trust the ruble so they took all their Russian profits and bought vodka. Then they'd import the vodka to the U.S. and sell it for dollars.

[boutons_deux]

"Who's claiming austerity has anything to do with creating jobs?"

austerity comes from cutting taxes, and cutting taxes is how the Repugs want to create jobs. Trickle down worked, so cutting taxes to create jobs will work, too.

[MannyIsGod]

Who's claiming austerity has anything to do with creating jobs? Austerity is all about saving banks.


:lol

Well no one unless you count the GOP and Tea Party.

[coyotes_geek]

"Who's claiming austerity has anything to do with creating jobs?"

austerity comes from cutting taxes, and cutting taxes is how the Repugs want to create jobs. Trickle down worked, so cutting taxes to create jobs will work, too.

Yes, the greek people are rioting in the streets because those evil austerity measures will cut their taxes.

[coyotes_geek]

:lol

Well no one unless you count the GOP and Tea Party.

link?

I know the GOP / TP crowd are saying tax cuts will stimulate the economy, but that's not austerity.

[Drachen]

"Who's claiming austerity has anything to do with creating jobs?"

austerity comes from cutting taxes, and cutting taxes is how the Repugs want to create jobs. Trickle down worked, so cutting taxes to create jobs will work, too.

No austerity comes from cutting deficits. In Greece's case austerity came from cutting benefits and raising taxes.

[MannyIsGod]

Really, CG?

http://majorityleader.gov/YouCut/


Now, as our new majority continues to work to cut spending and grow our economy,

[CosmicCowboy]

In some ways I can see Greece's point. Under the EU plan it's going to take them two generations to pay down the huge load of debt they are carrying forward and their life/economy is gonna suck anyway. It just might be worth the risk to say fuck it...we are defaulting and start fresh.

[MannyIsGod]

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/02/AR2011010202155.html



http://media3.washingtonpost.com/wp-srv/hp/img/ad_label_leftjust.gif

"The American people want a smaller, more accountable government. And starting Wednesday, the House of Representatives will be the American people's outpost in Washington, D.C.," Boehner said. "We are going to fight for their priorities: cutting spending, repealing the job-killing health care law and helping get our economy moving again."


Now, if you ask me to provide a link proving that water is indeed wet, I will ignore it.


http://www.washingtonpost.com/wp-dyn/content/article/2011/01/02/AR2011010202155.html

[MannyIsGod]

Titled, Cut Spending to Grow the Economy.
http://thehill.com/blogs/congress-blog/economy-a-budget/171559-cut-spending-to-grow-the-economy

[coyotes_geek]

Really, CG?

http://majorityleader.gov/YouCut/

Not saying there aren't a bunch of republicans out there who want to cut taxes (which I do not support btw). But I haven't seen anyone trying to pass that off as an actual austerity plan. If anyone is, then they're fools.

[vy65]

You're talking past each other. Austerity measures include cuts in government spending which is a conservative position. But they also include tax increases - albeit VAT increases - which I'm sure is not a part of the conservative agenda. The short term goal of the Greek cuts is to stop default - as CG said - and promote growth in the long term.

http://aleksandreia.wordpress.com/2011/06/23/just-what-are-those-greek-austerity-measures/

http://www.nytimes.com/2010/05/07/world/europe/07greece.html

[Th'Pusher]

Who's claiming austerity has anything to do with creating jobs? Austerity is all about saving banks.

http://www.nytimes.com/2011/03/25/opinion/25krugman.html?_r=1


On one side, we’re constantly told that if we don’t slash spending immediately we’ll end up just like Greece, unable to borrow except at exorbitant interest rates. On the other, we’re told not to worry about the impact of spending cuts on jobs because fiscal austerity will actually create jobs by raising confidence.

[coyotes_geek]

You're talking past each other. Austerity measures include cuts in government spending which is a conservative position. But they also include tax increases - albeit VAT increases - which I'm sure is not a part of the conservative agenda. The short term goal of the Greek cuts is to stop default - as CG said - and promote growth in the long term.

http://aleksandreia.wordpress.com/2011/06/23/just-what-are-those-greek-austerity-measures/

http://www.nytimes.com/2010/05/07/world/europe/07greece.html

Thanks. This is what I was trying to convey. Republicans are selling tax cuts as good economic practice. That's a different and much broader situation than austerity where you have a government in specific negotiations with creditors to avoid a sovereign debt default. Since the U.S. isn't facing imminent default like Greece is (yet...), there is no American austerity package for republicans to want tax cuts to be a part of.

[vy65]

Also increases in real estate taxes - whatever that means:


In June, the Greek parliament voted 155-138 for a €28bn (£24bn) five-year programme of cuts, tax rises and asset sales. Riots followed. George Papandreou's majority has now shrunk to three. Without a referendum he may not be able to push through the reforms Brussels wants. The programme includes:

• Balancing Greece's budget by 2014. In 2010 Greek state spending was 12% higher than revenues.

• Putting 30,000 civil servants on 12 months' notice with a 60% pay cut and extending to 2014 a move to replace only one in 10 of those leaving or retiring from the public sector.

• Pensions of more than €1,200 a month cut by 20% and payments for those who retired before 55 cut by up to 40%. A 10% pension cut had already been agreed in previous austerity plans.

• Extend a higher real estate tax to 2014 and reduce the tax-free threshold from €12,000 to €5,000 a year.

• An increase in VAT from 19% to 23% and taxes on everything from cars, tobacco and alcohol to a windfall tax on large companies' profits.

• Privatisation of the state lottery, Athens and Hellenikon airports, four Airbus A340 aircraft and 2004 Olympic venues, hotels, beaches, marinas and casinos. Also the main gas distributor, petrol refiner, the main railway operator and the motorways.

http://www.guardian.co.uk/business/2011/nov/01/greece-austerity-measures

[vy65]

Thanks. This is what I was trying to convey. Republicans are selling tax cuts as good economic practice. That's a different and much broader situation than austerity where you have a government in specific negotiations with creditors to avoid a sovereign debt default. Since the U.S. isn't facing imminent default like Greece is (yet...), there is no American austerity package for republicans to want tax cuts to be a part of.

I'd also mention the IMF's presence and the fact that European bank's agreed to a 50% cut in their loans shows this is driven more by avoiding default than some spurring economic growth.

[coyotes_geek]

I'd also mention the IMF's presence and the fact that European bank's agreed to a 50% cut in their loans shows this is driven more by avoiding default than some spurring economic growth.

Exactly. Austerity is all about what's best for the banks, nothing more.

[MannyIsGod]

Austerity is the practice of lowering deficits and spending. Tax increases can be a part of that but they are not a defining characteristic of austerity. And yes, the actions in Greece were meant to avoid detail but the original comment that started this conversation was based in sarcasm.

Al of that aside, terms is no doubt the gop wants to practice their version of austerity and is selling it as a pathway to economic growth.

[vy65]

There's no point in belaboring this further - but what started this all this:


"Who's claiming austerity has anything to do with creating jobs?"

austerity comes from cutting taxes, and cutting taxes is how the Repugs want to create jobs. Trickle down worked, so cutting taxes to create jobs will work, too.

Which is incorrect in claiming austerity = tax cuts.

All I'm saying is that I think the GOP would have a tough time swallowing a package similar to the Greek one.

[Drachen]

There's no point in belaboring this further - but what started this all this:



Which is incorrect in claiming austerity = tax cuts.

All I'm saying is that I think the GOP would have a tough time swallowing a package similar to the Greek one.

You are right, they didn't even want to discuss it when the $4T package was being talked about in august.

[CosmicCowboy]

You are right, they didn't even want to discuss it when the $4T package was being talked about in august.

Oh please

The $4T was never a serious offer and we all know it. It was just positioning and posturing to kick the re-election campaign off.

[Drachen]

Oh please

The $4T was never a serious offer and we all know it. It was just positioning and posturing to kick the re-election campaign off.

Boehner was on board until his party said no.

[Drachen]

Oh, and which $4T plan were you talking about??? The Obama/Boehner bipartisan or the Gang of Six Bipartisan?

[CosmicCowboy]

Boehner was on board until his party said no.

Boehner was on board with talking until Obama made tax increases non-negotiable.

[boutons_deux]

the austerity being pushed as solution (VRWC wants to drown govt in a bathtub) to the fabricated deficit crisis RESULTS in large part from the the dubya/Repug tax cuts. That's the relation between austerity and tax cuts.

Then throw in 2 botched, unfunded wars approaching $3T, unfunded Medicare Part D, subsidized/unfunded Medicare advantage, and you get the deficit as dubya left office

[ElNono]

Anybody that lived in a country with fairly high IMF debt would know IMF packages are fucking criminal... It's not just "cut spending" and "raise taxes", but also "privatize everything to foreign interests", neo-capitalism, etc. The same foreign companies that will start sucking away the country's wealth when they don't agree with the government anymore.

The IMF and their fucked up policies are fairly well documented to be partially the cause of emerging markets like Brazil taking a royal shit in the 90's, until Lula came around, gave them the middle finger and finally resurrected their economy. Argentina went through a similar period, and ended up solving it the same way: They paid off all the debt they had with them and sent them packing.

[Drachen]

Boehner was on board with talking until Obama made tax increases non-negotiable.

When they BOTH announced it, it included a 3 to 1 ratio of spending cuts to revenue increases. When he supported it, he knew that taxes increases were included.... Until he didn't support it for knowing that tax increases were included (after his party said no).


.... and the gang of six?

[boutons_deux]

"privatize everything to foreign interests"

aka "shock capitalism" http://www.naomiklein.org/shock-doctrine

happening right now in Greece

[Borat Sagyidev]

Yep, the developed countries have no choice but to inflate their way out of the mess and stick it to the creditor nations (China, Saudi Arabia, etc.)

Yeah, and those countries don't have a clue!

LONG LIVE Colonialism....:king

[boutons_deux]

Government in Greece Teeters After Move on Referendum

The Greek government was plunged into chaos on Tuesday, as lawmakers rebelled against Prime Minister George Papandreou’s surprise call for a popular referendum on a new debt deal with Greece’s foreign lenders.

The revolt by lawmakers and a no-confidence vote planned for Friday raised the prospect of a government collapse that would not only render the referendum plan moot but probably would scuttle — or at least delay — the debt deal that European leaders agreed on after marathon negotiations in Brussels last week. That, in turn, could put Greece on a fast track to default and raises the prospect of the country’s exit from the monetary union of countries sharing the euro currency.

The political instability in Greece has long dismayed European officials, who fear that it could touch off a financial market panic that could cause a damaging run on other shaky European economies like that of Italy, which is mired in its own political crisis. Indeed, European markets plunged on Tuesday on the news from Greece, in most cases in excess of four percent.

http://www.truth-out.org/government-greece-teeters-after-move-referendum/1320170567

[Winehole23]

left-right alliance faces off against Brussels and the IMF. if Greek debt is written off, who's next?



Tsipras’ victory presents the troika—a consortium consisting of the European Central Bank, the European Commission, and the International Monetary Fund—with a series of unappetizing options (http://www.vox.com/cards/eurozone-crisis/syrizas-strategy). If the troika gives in and writes down Greek debt, then other, larger countries—such as Spain—will have an incentive to negotiate a similar deal, triggering a major financial headache in Brussels and Frankfurt. If the troika refuses, then Greece is likely to default on its debt obligations this year and be forced to exit the eurozone—a fate that neither Tsipras nor the European leadership say they want.


Either way, the events in Greece signal that Europe’s long, failed experiment with austerity is cracking. In addition to Syriza, anti-austerity parties have grown popular in Spain, where opinion polls show Pablo Iglesias’ Podemos with 20 percent support. And Euroskeptic parties gained heavily in last years’s European parliament elections, particularly Marine Le Pen’s National Front Party, which has campaigned against fiscal austerity in France.

http://www.theatlantic.com/international/archive/2015/01/europes-austerity-moment-may-be-over/384813/

[boutons_deux]

Ending Greece’s Nightmare

Why were the original projections so wildly overoptimistic? As I said, because supposedly hardheaded officials were in reality engaged in fantasy economics. Both the European Commission and the European Central Bank decided to believe in the confidence fairy — that is, to claim that the direct job-destroying effects of spending cuts would be more than made up for by a surge in private-sector optimism. The I.M.F. was more cautious, but it nonetheless grossly underestimated the damage austerity would do.

And here’s the thing: If the troika had been truly realistic, it would have acknowledged that it was demanding the impossible. Two years after the Greek program began, the I.M.F. looked for historical examples where Greek-type programs, attempts to pay down debt through austerity without major debt relief or inflation, had been successful. It didn’t find any.

http://www.nytimes.com/2015/01/26/opinion/paul-krugman-ending-greeces-nightmare.html?rref=collection%2Fcolumn%2Fpaul-krugman

[Winehole23]

Al of that aside, terms is no doubt the gop wants to practice their version of austerity and is selling it as a pathway to economic growth.Preaching water, drinking wine. Austerity wasn't our pathway to economic growth, gold-plated socialism for TBTF banks and financial firms was.

[boutons_deux]

"austerity ... as a pathway to economic growth."

for which strategy, Repugs have NO evidence, but, Repugs NEVER have evidence, facts, ONLY blind ideology.

[CosmicCowboy]

The elephant in the room is that we all understand that there is a point where continuing to increase the deficit has a tipping point where there is nothing left but bad outcomes.

We can argue where the money gets spent from liberal/conservative perspectives but what do you do when there isn't any more money and dollars are as worthless as drachmas?

[boutons_deux]

The elephant in the room is that we all understand that there is a point where continuing to increase the deficit has a tipping point where there is nothing left but bad outcomes.

We can argue where the money gets spent from liberal/conservative perspectives but what do you do when there isn't any more money and dollars are as worthless as drachmas?

that's all bullshit.

check Barry's budget for 2015, it will drive y'all rednecks crazy.

[CosmicCowboy]

Seriously boo. Are you really that stupid? Get off your Whacko Internet feeds and join the real world.

2015 budget :lol

[CosmicCowboy]

And yeah, whitehouse.gov is a propaganda source only believed by idiots like you.

[boutons_deux]

Obama Budget to Seek to Stabilize Deficit and Address Income Inequality

President Obama (http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per) will propose a 10-year budget on Monday that stabilizes the federal deficit but does not seek balance, instead focusing on policies to address income inequality as he adds nearly $6 trillion to the debt.

The budget — $4 trillion in fiscal 2016 — would hit corporations that park profits overseas, raise taxes on the richest of the rich and increase the incomes of the middle class through new spending and tax credits. Mr. Obama will challenge the Republican Congress to answer his emphasis on wage stagnation, according to congressional aides briefed on the details.

The central question Mr. Obama's budget (http://topics.nytimes.com/top/reference/timestopics/subjects/f/federal_budget_us/index.html?inline=nyt-classifier) will pose to Congress is this: Should Washington worry about what may be the defining economic issue of the era — the rising gap between the rich and everyone else — or should policy makers primarily seek to address a mountain of debt that the White House hopes to control but only marginally reduce as a share of the economy?

Mr. Obama’s spending-and-taxes plan foresees a $474 billion deficit, which would be 2.5 percent of the gross domestic product, a level most economists see as manageable, according to budget documents obtained by The New York Times. The deficit number would creep up each year, to $687 billion by 2025. But measured against the economy, the deficit would remain stable.

The debt, while growing every year, would creep down from 75 percent of the gross domestic product this year and next to 73.3 percent in 2025. Those levels are higher than at any time in the nation’s history except for World War II and its immediate aftermath.

http://www.nytimes.com/2015/02/02/us/obama-budget-to-seek-to-stabilize-deficit-and-address-income-inequality.html?partner=rss&emc=rss

Dems' tax and spend is a hell of a lot better than Repugs borrow-and-spend (increases the deficit under Repug Prez since 1980)

[xrayzebra]

"Greece will be isolated from the rest of Europe"

Letting Greece in, with its corruption and lax tax collection among many other major issues, was a mistake, and many knew it back then.

boutons you should be happy now that the commies have the power. And we know how good they are at running governments.
Remember the USSR.

[Winehole23]

The elephant in the room is that we all understand that there is a point where continuing to increase the deficit has a tipping point where there is nothing left but bad outcomes.is the deficit out of hand now? compared to when?

[Winehole23]

and compared to whom? we're the fucking USA.

[CosmicCowboy]

and compared to whom? we're the fucking USA.

Why the fuck even have a budget? Lets just give everyone everything they want. What does it matter? We're the fucking USA!

[boutons_deux]

Why the fuck even have a budget? Lets just give everyone everything they want. What does it matter? We're the fucking USA!

ah, the old "balanced budget" canard, saying the sovereign USA budget MUST balance like a household or company (the vast majority of both are IN DEBT constantly)

[FuzzyLumpkins]

Why the fuck even have a budget? Lets just give everyone everything they want. What does it matter? We're the fucking USA!

This is stupid and a strawman to boot. This is a common stupidity you hear on Fox and AM radio. I imagine you understand that corporate and home accounting operate on completely different basis. Why is it so hard to fathom that a similar difference exists as pertains to nation states? Particularly this one.

[CosmicCowboy]

This is stupid and a strawman to boot. This is a common stupidity you hear on Fox and AM radio. I imagine you understand that corporate and home accounting operate on completely different basis. Why is it so hard to fathom that a similar difference exists as pertains to nation states? Particularly this one.

Arrogant little prick.

Of course I understand the difference.

[angrydude]

This is stupid and a strawman to boot. This is a common stupidity you hear on Fox and AM radio. I imagine you understand that corporate and home accounting operate on completely different basis. Why is it so hard to fathom that a similar difference exists as pertains to nation states? Particularly this one.

Because there isn't one when it comes to the fundamentals. Nations are just bigger, have armies, and can spread the pain out to many more people over a much longer period of time.

YEA POVERTY!

[CosmicCowboy]

So you arrogant little prick do you understand the relationship between GDP and deficits? Do you understand that when deficits grow faster then GDP forever it's not a good thing. Fucking little prick.

[FuzzyLumpkins]

:cry Fucking little prick. :cry I'm going to double down and repeat myself. If your debt grows faster than your gross forever it's not a good thing. :cry

EN usually takes you to task over your simpleminded fiscal accounting but you are nothing if not pigheaded.

Once you start looking at national debt as not being held by institutions with authority like in your personal life, and instead look at it as a sovereign debt traded on the open market on a take it or leave it basis you will start to get it. If anything, your scare tactics undermine the confidence that creates the market. It's against US interests to do so. Of course it is a make believe human construct but so is most of law and finance inclusidne what you deal with in your personal life.

You lack nuance. Your not bad like TSA and WC but ffs I hope you have someone do your accounting for you.

[FuzzyLumpkins]

Because there isn't one when it comes to the fundamentals. Nations are just bigger, have armies, and can spread the pain out to many more people over a much longer period of time.

YEA POVERTY!

Who does the US borrow money from and what is the nature of the agreement? :lol fundamentals in an arbitrary construct being applied to a different construct.

[ElNono]

The major (huge) difference between the US and other states is that the US only owes in USD. IIRC, only the US, UK and Japan have what it's called 'sovereign currency'. That is, they only owe obligations in it's own currency and don't need to 'backup' their currency emission against another currency (which is important to have flexibility in spending, and don't fall into the hyperinflation trap mentioned below).

The household accounting trivialization is terrible because nations, whether they have a sovereign currency or not, emit their own money (except rare exception, where the country already decides to use another country's currency, ie: Ecuador).

The worst case for a nation with emission out of control is inflation. It doesn't mean they'll go bankrupt, it means devaluation of the currency, erosion of salaries, etc, all the bad stuff that inflation, at a high enough level, does. This is particularly harmful for nations that have obligations in a different currency, as the inflation makes converting currency to pay more expensive, normally causing more emission, which turns into a vicious cycle that normally ends up with hyperinflation, bank runs, etc.

[ElNono]

But, to answer the question of why have a budget, etc? Well, because you don't want to spend too much if your inflation level is already high, as it does all the bad stuff I mentioned on my previous post.

I think the US does need to be fiscally conservative during the "good times". That is, when deflation isn't on the radar and growth looks sustained. I don't think we're there right now, but we've been there before and we haven't really cutted down on spending, and that's really a problem.

[boutons_deux]

the balanced budget VRWC bullshit is propaganda hiding the VRWC truth:

increase tax expenditures for 1% and BigCorp and "pay for" the "spent" taxes by destroying the social welfare spending.

iow, balance the budget on the backs of the 99% or even better on the backs of Bishop Gecko's 47% who are lazy, frauds, have easy, simple lives that the 1% pays for, are criminals, moochers, takers.

same old VRWC, predatory, greedy, sociopathic bullshit.

[ElNono]

I think having a balanced budget is a noble goal... the problem is nobody ever agrees on where to make the cuts or how to increase the revenues.

[boutons_deux]

I think having a balanced budget is a noble goal... the problem is nobody ever agrees on where to make the cuts or how to increase the revenues.

it's useless goal used by the VRWC to enrich the wealhty and screw the poor.

[ElNono]

it's useless goal used by the VRWC to enrich the wealhty and screw the poor.

how so?

[boutons_deux]

how so?

because the VRWC and their enablers the Repugs don't give a fuck about the deficit or the accumulated debt, or St Ronnie and dubya wouldn't have INCREASED the debt by 2+ times EACH.

For the VRWC, it's pretext for destroying the social safety net while enriching the rich. They want to balance the budget by not touching current corporate welfare, by increasing tax expenditures, and by cutting public assistance to the poor, in fact, to all of the 99% (no infrastructure, no maintenance, no education assistance, etc, etc)


http://www.usgovernmentspending.com/include/usgs_chart4p04.png

http://www.usgovernmentspending.com/debt_deficit_brief.php

note how in the 1980s and 2000s, under deficit/debt-hating Repugs, the deficits were huge and debt increased, 2x, 3x, and nary a peep from the Repugs, until they could blame it all Obama.

[ElNono]

That doesn't explain why balancing the budget is an "useless goal"... that was your claim. Why is balancing the budget a "useless goal"? In economic terms, balancing the budget will eventually become a necessity more than a luxury, how is that "useless"?

[boutons_deux]

That doesn't explain why balancing the budget is an "useless goal"... that was your claim. Why is balancing the budget a "useless goal"? In economic terms, balancing the budget will eventually become a necessity more than a luxury, how is that "useless"?

"balanced budget" propaganda is USEFUL to the 1% who want their tax cuts paid for by cutting public assistance.

It's USELESS to everybody else. Look how the annual deficit has varied over the decades, and who got hurt by it? deficit spending is useful when unstable capitalism has one of economic troughs.

btw, a lot, even most, of the USA debt is owed to Americans, to the Fed, iow, to Americans and America itself. That's why the 1% as creditors HATE and WHINE against inflation because it lets their debtors off the hook some.

The RIGID insistence by the VRWC that the annual budget MUST be balanced EVERY YEAR is pure, USELESS bullshit propaganda hiding their real agenda.

btw, Paul Ryan's sociopathic budgets that were passed 3 or 4 times by the House INCREASED the national debt by a $Ts over next 10 years, but it was hard to get an solid estimate since their were some many undefined jokers, fudges, holes in his bullshit budget.

[ElNono]

Inflation actually cuts pretty evenly... but, if you consider the fact that the poor has less money to put away in a different currency (ie: gold) to fight off inflation, they're actually the most hurt by it. You complain a good bit about stagnant salaries, that's an inherent problem of inflation. Now, in order for the economy to function, you do want a small-ish amount of inflation. It makes people take higher risks that just sitting on the money.

We're currently still fighting off deflation (32 straight weeks with inflation under 2%, the Fed's baseline target), so there's no need to rush to balance the budget. But, eventually, things will bounce back and there will be inflationary pressure. Paying that kind of shitload of interest alone on the debt is going to require some sort of budget balancing, be it through cuts or increase in revenues.

[boutons_deux]

"stagnant salaries, that's an inherent problem of inflation."

bullshit. real household income has been stagnant since VRWC shill/union buster St Ronnie got into office in '81. Single male's real income is even worse, back to the 70s.

35+ years of stagnant salaries are DIRECT result of the War on Employees: busting unions that were the middle-class' "salary leader", and excess labor supply due to BigCorp's achieving/buying its political strategy of globalization which exports/kills US jobs and put US workers in direct competition with foreign sweat shops.

[CosmicCowboy]

http://images.angelpub.com/2009/50/3446/us-debt-chart-1.png

Despite what Boutons spittles, this isn't a Republican or Democrat issue. it is a politician and education issue.

see the trend? And this is with crazy low interest rates for the last few years...just wait till they normalize....

and the baby boom social security and medicare entitlement bulge is just starting. You guys are going to be paying my wife and I $3000+ a month in todays dollars and giving us unlimited free health care.

I am not a "balance the budget at any cost" whacko but I can also see the handwriting on the wall that we are on a path that should damn well alarm you younger guys...I've got mine already but for you young guys you should realize that you will ultimately be the victims of the out of control spending.

[Winehole23]

actually, you've misunderstood your own graph, CC. it does not reflect out of control spending.

[CosmicCowboy]

actually, you've misunderstood your own graph, CC. it does not reflect out of control spending.

It is debt vs. GDP Winehole. There is no misunderstanding that. 2014 GDP is out and our debt exceeeds our current annual GDP and is continuing to rise. They can play Washington games with the annual numbers and ignore future obligations but the trend is irrefutable.

[CosmicCowboy]

By their own projections and admissions Social Security and Medicare will decimate their "trust funds" within 20 years and will not be be to fund 100% of their promised benefits without substantial changes in revenues and promised benefits.

Touching social security and medicare is also the proverbial "third rail" in US politics. Touch it, you die. Good luck getting THAT changed.

[ElNono]

It is debt vs. GDP Winehole. There is no misunderstanding that. 2014 GDP is out and our debt exceeeds our current annual GDP and is continuing to rise. They can play Washington games with the annual numbers and ignore future obligations but the trend is irrefutable.

We've been there before though (and worse, actually):

http://upload.wikimedia.org/wikipedia/commons/b/b8/US_Federal_Debt_as_Percent_of_GDP_by_President.jpg

The US dollar has actually been appreciating lately. We're still staving off deflation. Rates won't come back up until we have a solid period with at least 2% or so inflation.

[CosmicCowboy]

We've been there before though (and worse, actually):

http://upload.wikimedia.org/wikipedia/commons/b/b8/US_Federal_Debt_as_Percent_of_GDP_by_President.jpg

The US dollar has actually been appreciating lately. We're still staving off deflation. Rates won't come back up until we have a solid period with at least 2% or so inflation.

Totally different scenario. Debt levels then were military related due to WWII, Korea, and Vietnam. Our military commitment now is just a skirmish compared to those times. Also, US economy was booming post war and through the 70's.

Again, I'm not screaming chicken little the sky is falling today. I'm saying you younger guys are fucked on the long term fundamentals that you can't appreciably change.

[ElNono]

Totally different scenario. Debt levels then were military related due to WWII, Korea, and Vietnam. Our military commitment now is just a skirmish compared to those times. Also, US economy was booming post war and through the 70's.

Again, I'm not screaming chicken little the sky is falling today. I'm saying you younger guys are fucked on the long term fundamentals that you can't appreciably change.

We were actually on a pretty fucked up recession with deflation before the war too, thanks to the '30s crisis. Economically speaking, the war was merely an excuse for the government to issue record-level debt and inundate the economy with funny money, until the economy got back on track and the GDP growth shot through the roof.

The thing is, IMO, it's relatively impossible to look 20 years down the line with any certainty in the current climate. If the economy stays this stagnant for the next 20 years, we're going to have bigger things to worry about.

[boutons_deux]

By their own projections and admissions Social Security and Medicare will decimate their "trust funds" within 20 years and will not be be to fund 100% of their promised benefits without substantial changes in revenues and promised benefits.

Touching social security and medicare is also the proverbial "third rail" in US politics. Touch it, you die. Good luck getting THAT changed.

Any problems with SS and Medicare are easily fixed, since govt policies created the problems, but Repugs will block any fixes, unless they can privatize, if not kill, SS and Medicare. You Repug voters are responsible for the Repug laws, policies that YOUR Repug politicians enact or block.

[CosmicCowboy]

Any problems with SS and Medicare are easily fixed, since govt policies created the problems, but Repugs will block any fixes, unless they can privatize, if not kill, SS and Medicare. You Repug voters are responsible for the Repug laws, policies that YOUR Repug politicians enact or block.

spittle, spittle, spittle

fixing involves cutting benefits or raising SS/Medicare payroll withholding.

Name me a Democrat that will vote for that.

[FuzzyLumpkins]

Totally different scenario. Debt levels then were military related due to WWII, Korea, and Vietnam. Our military commitment now is just a skirmish compared to those times. Also, US economy was booming post war and through the 70's.

Again, I'm not screaming chicken little the sky is falling today. I'm saying you younger guys are fucked on the long term fundamentals that you can't appreciably change.

:lol EN is trying to talk specifics and you get more vague trying to cling to your ideology. Nothing if not pigheaded.

:lol long term fundamentals. more like long term talking out of the ass.

[CosmicCowboy]

:lol EN is trying to talk specifics and you get more vague trying to cling to your ideology. Nothing if not pigheaded.

:lol long term fundamentals. more like long term talking out of the ass.

bla bla bla ankle biter bitch

[FuzzyLumpkins]

bla bla bla ankle biter bitch

I am talking specifics. I called you out on your 'long term fundumentals' and this is the weak shit you come with? There is no leg to bite because you have nothing to stand on, loser.

[CosmicCowboy]

I am talking specifics. I called you out on your 'long term fundumentals' and this is the weak shit you come with? There is no leg to bite because you have nothing to stand on, loser.

Idiot. You didn't post anything but overly simplistic, ill informed gobbledygoop.

"Called me out"

:lmao

The fact that we can no longer keep our debt from rising faster than GDP when we aren't at war tends to alarm intelligent people. I can see how you would miss that.

[CosmicCowboy]

from the CBO to help educate idiot Fuzzy


Choices for the Future
The unsustainable nature of the federal government’s current tax and spending policies presents lawmakers and the public with difficult choices. Unless substantial changes are made to the major health care programs and Social Security, those programs will absorb a much larger share of the economy’s total output in the future than they have in the past. Even with spending for all other federal activities on track, by the end of this decade, to represent the smallest share of GDP in more than 70 years, total federal noninterest spending would be larger relative to the size of the economy than it has been, on average, over the past 40 years. The structure of the federal tax code means that revenues would also represent a larger percentage of GDP in the future than they have, on average, in the past few decades—but not large enough to keep federal debt held by the public from growing faster than the economy starting in the next several years. Moreover, because federal debt is already unusually high relative to GDP, further increases in debt could be especially harmful. To put the federal budget on a sustainable path for the long term, lawmakers would have to make significant changes to tax and spending policies—letting revenues rise more than they would under current law, reducing spending for large benefit programs below the projected levels, or adopting some combination of those approaches.

The size of such changes would depend on the amount of federal debt that lawmakers considered appropriate. For example, bringing debt back down to 39 percent of GDP in 2038—as it was at the end of 2008—would require a combination of increases in revenues and cuts in noninterest spending (relative to current law) totaling 2 percent of GDP for the next 25 years. (In 2014, 2 percent of GDP would equal about $350 billion.) If those changes came entirely from revenues, they would represent an increase of 11 percent relative to the amount of revenues projected for the 2014–2038 period; if the changes came entirely from spending, they would represent a cut of 10½ percent in noninterest spending from the amount projected for that period.

In deciding how quickly to carry out policy changes to make the size of the federal debt more sustainable, lawmakers face other trade-offs. On the one hand, waiting to cut federal spending or raise taxes would lead to a greater accumulation of debt and would increase the size of the policy adjustments needed to put the budget on a sustainable course. On the other hand, implementing spending cuts or tax increases quickly would weaken the economy’s current expansion and would give people little time to plan for and adjust to the policy changes. The negative short-term effects that deficit reduction has on output and employment would be especially large now, because output is so far below its potential level that the Federal Reserve is keeping short-term interest rates near zero and could not lower those rates further to offset the impact of changes in spending and tax policies.

[ElNono]

CC has a valid point, in that the way we're setting things up, it's either going to be boom or bust. While I wouldn't particularly agree the bust option is a real possibility at this point in time, any person that hedges would try to cover/show some concern about it regardless.

[ElNono]

The negative short-term effects that deficit reduction has on output and employment would be especially large now, because output is so far below its potential level that the Federal Reserve is keeping short-term interest rates near zero and could not lower those rates further to offset the impact of changes in spending and tax policies.

This is what it boils down to. Right now, it would be unwise to do it. But, as soon as China blinks, the economy gets moving a bit again, inflation creeps up a bit and the GDP starts to grow, you gotta start trimming.

[CosmicCowboy]

CC has a valid point, in that the way we're setting things up, it's either going to be boom or bust. While I wouldn't particularly agree the bust option is a real possibility at this point in time, any person that hedges would try to cover/show some concern about it regardless.

I tend to go with the eventual bust theory because idiots like Fuzzy vote. Politicians are either running for election or running for re-election. Dealing with real issues is painful and no politician from either end of the political spectrum is going to campaign on or support higher taxes and cutting benefits.

[CosmicCowboy]

And don't give me the "taxing the rich" fallacy. You could take it all and it wouldn't reverse the trend. The real tax money is in the middle class.

[ElNono]

I tend to go with the eventual bust theory because idiots like Fuzzy vote. Politicians are either running for election or running for re-election. Dealing with real issues is painful and no politician from either end of the political spectrum is going to campaign on or support higher taxes and cutting benefits.

If they have to act (and that's a big if), it's gonna be reactionary, as usual. Obviously, if GDP grows steadily again, then it becomes less of an issue, which is what this waiting game is all about. I was reading China apparently already hit their ceiling of external consumption and now are fomenting internal consumption to continue growth. That's going to be interesting to follow.

[CosmicCowboy]

If they have to act (and that's a big if), it's gonna be reactionary, as usual. Obviously, if GDP grows steadily again, then it becomes less of an issue, which is what this waiting game is all about. I was reading China apparently already hit their ceiling of external consumption and now are fomenting internal consumption to continue growth. That's going to be interesting to follow.

I agree that if they ever act it will be in reaction to the catastrophic consequences of their previous actions to hide the mess. My guess is that they will eventually try to print their way out of it, making it even worse in the long run.

[CosmicCowboy]

Again, I am just pointing it out. I don't claim to have the answers but I can at least see the problems. I am comfortably set financially pretty much whatever happens and the next generation of my family is rapidly getting there, fortunately so hopefully I have prepared no matter what happens short of anarchy. I get criticized and disparaged by the idiots like Fuzzy for being "old" like being young makes them smarter. I'm not saying I'm smarter but I have had the chance to watch politicians and politics since LBJ and seen the both parties lie to me. I've seen federal wage and price controls, I've see 18% mortgages. It really CAN happen. I've seen the financial devastation in Texas of the 80's when oil crashed the last time...and hell...I'm not even 60 yet...

[FuzzyLumpkins]

Again, I am just pointing it out. I don't claim to have the answers but I can at least see the problems. I am comfortably set financially pretty much whatever happens and the next generation of my family is rapidly getting there, fortunately so hopefully I have prepared no matter what happens short of anarchy. I get criticized and disparaged by the idiots like Fuzzy for being "old" like being young makes them smarter. I'm not saying I'm smarter but I have had the chance to watch politicians and politics since LBJ and seen the both parties lie to me. I've seen federal wage and price controls, I've see 18% mortgages. It really CAN happen. I've seen the financial devastation in Texas of the 80's when oil crashed the last time...and hell...I'm not even 60 yet...

I call you old because your demographic has many common behaviors that you yourself exhibit. I don't think you're dumb. Pigheaded means obstinate not dumb.

You coming on here to tell us about every single entitlement that you can get your hands, tell us about how you have been politically active since JFK, and want to tell us how worried we should now be about the national debt? Is the irony lost on you? It seems so blatant to me as to be contrived.

[boutons_deux]

"tax increases quickly would weaken the economy"

bull fucking shit.

income taxes were much higher throughout the 50s, and the economy exploded, all boats floated.

America is wealthy enough to cover its 99%, but the 1% has hoarded $Ts due to paid-for, rigged tax policies.

Medicare is expensive because health care is for-profit (and yes, Americans are sicker, fatter, and brain-washed that BigPharama, BigMedicine is the solution, rather the diet + exercise)

Federal debt is burdened with Repug bogus, botched wars costing $3T+, plus Repug tax cuts.

[CosmicCowboy]

I call you old because your demographic has many common behaviors that you yourself exhibit. I don't think you're dumb. Pigheaded means obstinate not dumb.

You coming on here to tell us about every single entitlement that you can get your hands, tell us about how you have been politically active since JFK, and want to tell us how worried we should now be about the national debt? Is the irony lost on you? It seems so blatant to me as to be contrived.

i see no irony. I do see a jealous ankle biting bitch, though. I have literally paid over a million dollars in taxes so far. If your President wants to give tax credits for electric cars and residential solar systems to influence consumers behavior then I will be influenced and take advantage of the tax credit. Doing otherwise and intentionally paying more taxes than are owed would be stupid.

[pgardn]

i see no irony. I do see a jealous ankle biting bitch, though. I have literally paid over a million dollars in taxes so far. If your President wants to give tax credits for electric cars and residential solar systems to influence consumers behavior then I will be influenced and take advantage of the tax credit. Doing otherwise and intentionally paying more taxes than are owed would be stupid.

It seriously makes that much of a difference to you? Unless it's like, a hobby?

[CosmicCowboy]

It seriously makes that much of a difference to you? Unless it's like, a hobby?

I don't understand? They are financial/investment decisions...for the rooftop solar, I invested $10,000 after rebates and tax credits to reduce my utility bill by $100 a month for 20-30 years. For the electric vehicles, I bought them for $14,000 in December and took a $13,000 tax credit for them in April. Both investments were perfectly legal and the tax credits were offered by the Federal government to entice people like me to take advantage of them. It bothers Fuzzy because he is just a jealous ankle biting bitch.

The only real irony I saw in the US tax credits was that the solar panels and most of the equipment for the rooftop solar came from Canada and the electric vehicles came from Korea. They made Obamas' "green" buddies happy, though.

[boutons_deux]

\solar panels and most of the equipment for the rooftop solar came from Canada and the electric vehicles came from Korea. They made Obamas' "green" buddies happy, though.

the "Canadian" solar panels were made in China, if your panels are "Canadian Solar" brand.

US has imposed anti-dumping tariffs on Chinese panels, so maybe some US mfg will spring up.

btw, your "business buddies" paid govt to push for, achieve "globalization" which destroyed $Ts in US (solar panel) mfg and US jobs.

Do you know which Congress whores (it wasn't Obama) who added the "golf cart" tax break to some bill? Obviously, golf carts have been electric forever, so the tax break wasn't a "consume less oil" angle.

[CosmicCowboy]

uhhhh Boooo...it's my house. I know where the panels came from.

:lol @ my "business buddies"

and yeah Boo...the electric vehicle tax credit was Obama's all the way and he is still doing it. :lol @ you trying to deflect "credit" to congress...

http://www.greencarreports.com/news/1096601_white-house-budget-asks-for-10k-electric-car-credit-natural-gas-cars-added

[Th'Pusher]

uhhhh Boooo...it's my house. I know where the panels came from.


So did the pannels come from China or Canada?

[CosmicCowboy]

Last I checked Ontario was in Canada.

[boutons_deux]

Last I checked Ontario was in Canada.

My solar installer said "Canadian Solar" company's panels are Chinese

[Th'Pusher]

Looks like the bulk of the panels are manufactured in China, but they do have a manufacturing facility in Ontario. .

http://en.wikipedia.org/wiki/Canadian_Solar

[FuzzyLumpkins]

i see no irony. I do see a jealous ankle biting bitch, though. I have literally paid over a million dollars in taxes so far. If your President wants to give tax credits for electric cars and residential solar systems to influence consumers behavior then I will be influenced and take advantage of the tax credit. Doing otherwise and intentionally paying more taxes than are owed would be stupid.

I'm not jealous of your lack of personal accountability. I get that you will follow the money no matter if you think there is a long term cost for everyone else; you don't need to explain it again. Not voting for nor pursuing government handouts is stupid, I get that you think that. You'll likely be dead in 20 years at this point so why stop now?

The Economist estimates that the average boommer has seen $1.3m in outlays on as opposed to what was contributed over their lifetime. We can bump that number up for you because you go out of your way to be a freeloader. You haven't retired yet like your brethren but soon your outlays will go much much higher as you start loading up on SS and medicare.

[CosmicCowboy]

I'm not jealous of your lack of personal accountability. I get that you will follow the money no matter if you think there is a long term cost for everyone else; you don't need to explain it again. Not voting for nor pursuing government handouts is stupid, I get that you think that. You'll likely be dead in 20 years at this point so why stop now?

The Economist estimates that the average boommer has seen $1.3m in outlays on as opposed to what was contributed over their lifetime. We can bump that number up for you because you go out of your way to be a freeloader. You haven't retired yet like your brethren but soon your outlays will go much much higher as you start loading up on SS and medicare.

You will get no argument from me. The whole entitlement system is dumb but we have to take care of the poor, the stupid, and the old because we are a compassionate society LOL.. I'm sure my parents have probably gotten out at least 3X what they put in...hell my dads been collecting SS and Medicare for 30 years...

You crack me up. You are one angry little bitch over baby boomers. And you can't do a fucking thing about it :lmao

Bite me!

I have paid over a million dollars in taxes and you call me a freeloader. That's rich. How much have you paid, loser?

[FuzzyLumpkins]

You will get no argument from me. The whole entitlement system is dumb but we have to take care of the poor, the stupid, and the old because we are a compassionate society LOL.. I'm sure my parents have probably gotten out at least 3X what they put in...hell my dads been collecting SS and Medicare for 30 years...

You crack me up. You are one angry little bitch over baby boomers. And you can't do a fucking thing about it :lmao

Bite me!

I have paid over a million dollars in taxes and you call me a freeloader. That's rich. How much have you paid, loser?

I just explained to you how on average your ilk takes $1.3m out and seeing how you seek government dole that number is up for you. I'm thinking you still owe $300k in back taxes. In slightly different shoes, you would be the first one in line for your Lonestar card but you want to tell us about how dangerous running up deficits is.

And you are not blind. My sentiment is not exactly novel and your generation is dying off. Good luck in the coming years.

[CosmicCowboy]

I just explained to you how on average your ilk takes $1.3m out and seeing how you seek government dole that number is up for you. I'm thinking you still owe $300k in back taxes. In slightly different shoes, you would be the first one in line for your Lonestar card but you want to tell us about how dangerous running up deficits is.

And you are not blind. My sentiment is not exactly novel and your generation is dying off. Good luck in the coming years.

So do you hate your parents too? Dirty stinking baby boomers...:lol

[FuzzyLumpkins]

So do you hate your parents too? Dirty stinking baby boomers...:lol

My parents taught me an ethic to take hand outs only as a last resort. You do not operate as they did.

I don't hate boomers as a matter of course. I go on a case by case basis. Maybe it's just Texas but there are a hole lot of freeloaders such as yourself that think that because you pay some tax you are entitled to anything you can get your hands on. All the while you denigrate darkytown and the dole and bitch about fiscal debt. That is the stereotype and I know that doesn't fit you exactly but when it chimes you resonate the frequency.

You are cliche frankly.

[CosmicCowboy]

My parents taught me an ethic to take hand outs only as a last resort. You do not operate as they did.

I don't hate boomers as a matter of course. I go on a case by case basis. Maybe it's just Texas but there are a hole lot of freeloaders such as yourself that think that because you pay some tax you are entitled to anything you can get your hands on. All the while you denigrate darkytown and the dole and bitch about fiscal debt. That is the stereotype and I know that doesn't fit you exactly but when it chimes you resonate the frequency.

You are cliche frankly.

freeloaders.

LOL

Tax deductions and credits are given by the government in an attempt to influence behavior that is supposed to be in the best interest if the country. In the case of the two tax credits I utilized they were promoting green energy as opposed to using fossil fuel. I'm quite puzzled why this gets your panties in such a wad.

Actually, you are the cliche of the bitter underemployed college graduate who wasted his parents money on a shit degree. Baby Boutons indeed.

[FuzzyLumpkins]

freeloaders.

LOL

Tax deductions and credits are given by the government in an attempt to influence behavior that is supposed to be in the best interest if the country. In the case of the two tax credits I utilized they were promoting green energy as opposed to using fossil fuel. I'm quite puzzled why this gets your panties in such a wad.

Actually, you are the cliche of the bitter underemployed college graduate who wasted his parents money on a shit degree. Baby Boutons indeed.

:lol So you just double down on your rationalizations and then make up story's about me.

Yes freeloader. You seek out government handouts that you are eligible for. If you qualified for food stamps you would buy steak with it and tell us it was stupid to do otherwise.

[CosmicCowboy]

:lol at you getting your panties in such a wad about legal and legitimate credits and deductions in the federal tax code.

Are you against Federal incentives promoting green energy?

[FuzzyLumpkins]

:lol at you getting your panties in such a wad about credits and deductions in the federal tax code.

More like smh.

And I am not ignorant of accounting and in the end what you are doing ends up the same in the bottom line. If fact if you do it right it can be even better. You are also ignoring your other welfare like the cash for clunkers. What other dole have you taken advantage of?

[CosmicCowboy]

:lmao

Yeah you are apparently very ignorant in accounting. That gobbledygoop you just spittled out doesn't even make sense Baby Boo.

I missed cash for clunkers because I didn't own any clunkers. I wasn't the one with the worthless degree :lol

[boutons_deux]

Repugs LOVE big govt SPENDING with tax expenditures

GOP Hypocrites Busted For Trying to Add $310 Billion to the Deficit Via Tax Breaks

The next time a Republican even comes near climbing aboard the deficit cross, you have permission to laugh in their face. The party of paying for things has proposed $310 billion in permanent, unpaid for tax provisions today.The party of austerity for children, veterans, the elderly, and the sick claimed they were only cutting people off in order to be “Responsible with the Deficit”.

This is the same deficit that they told us didn’t matter when they were in charge, but after they fled responsibility in the wake of the 2008 crash as a Democratic President took office to clean up their mess, suddenly the deficit was all Republicans could think about. So sorry about your starving baby, but the DEFICIT.The DEFICIT is the number one priority, they somberly and relentlessly intoned any time they got near a microphone.And yet today, Republicans proposed tax provisions without offsets that Ranking Member Sander Levin (D-MI) points out would add “a combined $310 billion to the deficit,” which “represents more than half of the entire federal deficit this year.”

Republicans are trying to do exactly what got us into this mess, with unpaid for tax credits and give aways, after years of taking from the poor and the vulnerable in order to pay for their last go at Daddy’s credit card.

http://www.politicususa.com/2014/04/29/republicans-move-add-310-billion-deficit-federal-deficit-year.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+politicususa%2FfJAl+%28Politi cus+USA+%29

All y'all redneck Repug voters have to be, REALLY are totally STUPID to believe the Repugs hate budgetary deficits and national debt

[CosmicCowboy]

Repugs LOVE big govt SPENDING with tax expenditures

GOP Hypocrites Busted For Trying to Add $310 Billion to the Deficit Via Tax Breaks

The next time a Republican even comes near climbing aboard the deficit cross, you have permission to laugh in their face. The party of paying for things has proposed $310 billion in permanent, unpaid for tax provisions today.The party of austerity for children, veterans, the elderly, and the sick claimed they were only cutting people off in order to be “Responsible with the Deficit”.

This is the same deficit that they told us didn’t matter when they were in charge, but after they fled responsibility in the wake of the 2008 crash as a Democratic President took office to clean up their mess, suddenly the deficit was all Republicans could think about. So sorry about your starving baby, but the DEFICIT.The DEFICIT is the number one priority, they somberly and relentlessly intoned any time they got near a microphone.And yet today, Republicans proposed tax provisions without offsets that Ranking Member Sander Levin (D-MI) points out would add “a combined $310 billion to the deficit,” which “represents more than half of the entire federal deficit this year.”

Republicans are trying to do exactly what got us into this mess, with unpaid for tax credits and give aways, after years of taking from the poor and the vulnerable in order to pay for their last go at Daddy’s credit card.

http://www.politicususa.com/2014/04/29/republicans-move-add-310-billion-deficit-federal-deficit-year.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+politicususa%2FfJAl+%28Politi cus+USA+%29

All y'all redneck Repug voters have to be, REALLY are totally STUPID to believe the Repugs hate budgetary deficits and national debt




:lmao

YOU have to be really stupid to think it's only Republicans piling on the pork. Doesn't matter the party affiliation....Neither will ever have the balls to deal with it until it becomes a crisis and bites them in the ass.

[RandomGuy]

I tend to go with the eventual bust theory because idiots like Fuzzy vote. Politicians are either running for election or running for re-election. Dealing with real issues is painful and no politician from either end of the political spectrum is going to campaign on or support higher taxes and cutting benefits.

+1

[RandomGuy]

And don't give me the "taxing the rich" fallacy. You could take it all and it wouldn't reverse the trend. The real tax money is in the middle class.

It isn't a fallacy. The wealthiest, and highest incomes have seen their real, inflation-adjusted, incomes rise by almost 20 percent over the last couple of decade or so.

The middle class has broken even, and by some real measures, has gotten worse off.


While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall.
http://www.vanityfair.com/news/2011/05/top-one-percent-201105

Just a sample quote, but I would be more than happy to flesh that out with solid data.

We really do need to raise taxes on the wealthy, and it is not an inconsiderable portion of income we are talking about.

My claim, though, and my burden of proof. I will call "bullshit" on myself and try to flesh that out this weekend.

[RandomGuy]

http://inequality.org/wp-content/uploads/2014/09/GIMP-Top-1p-Share-of-Total-PTI.png?f5dbb1

http://inequality.org/income-inequality/

Little bit easier to find than I thought. There is a start.

[RandomGuy]

http://inequality.org/wp-content/uploads/2014/09/GIMP-Average-After-Tax-Income.png?f5dbb1

And another...

http://inequality.org/wp-content/uploads/2014/09/GIMP-Change-in-Take-Home-Pay.png?f5dbb1


Between 1979 and 2012, the top 5 percent of American families saw their real incomes increase 74.9 percent, according to Census data. Over the same period, the lowest-income fifth saw a decrease in real income of 12.1 percent. This sharply contrasts with the 1947-79 period, when all income groups saw similar income gains, with the lowest income group actually seeing the largest gains. -

See more at: http://inequality.org/income-inequality/#sthash.iCIIrL3i.dpuf

[RandomGuy]

Over the long term, if that richest segment has their incomes rise, while everyone else's stagnates, it will be the case that wealth will continue to be concentrated. Between the inheritance tax repeals and the capital gains tax rates, we are creating a new aristocracy. Talk about a sense of entitlement....

https://cdn.static-economist.com/sites/default/files/images/print-edition/20150124_LDP001_0.jpg
http://www.economist.com/news/leaders/21640331-importance-intellectual-capital-grows-privilege-has-become-increasingly

[SnakeBoy]

It isn't a fallacy. The wealthiest, and highest incomes have seen their real, inflation-adjusted, incomes rise by almost 20 percent over the last couple of decade or so.

The middle class has broken even, and by some real measures, has gotten worse off.


And why is that?

[boutons_deux]

Estate tax and the founding fathers

You can't take it with you

http://www.economist.com/blogs/lexington/2010/10/estate_tax_and_founding_fathers

[RandomGuy]

And why is that?

Tax policies favoring capital, and punishing labor, fostered by the Republican party. Reference :'Job creators"

http://assets.diylol.com/hfs/366/d63/1b8/resized/mr-potter-meme-generator-bitch-please-i-m-a-job-creator-810e5a.jpg?1355461020.jpg

"death tax"

Et cetera. The wealthy have gamed the system, inside and out, to ensure that the source of most of their income, i.e. capital, is taxed less than the source of everybody else's income, i.e. labor.

[SnakeBoy]

Tax policies favoring capital, and punishing labor, fostered by the Republican party. Reference :'Job creators"

http://assets.diylol.com/hfs/366/d63/1b8/resized/mr-potter-meme-generator-bitch-please-i-m-a-job-creator-810e5a.jpg?1355461020.jpg

"death tax"

Et cetera. The wealthy have gamed the system, inside and out, to ensure that the source of most of their income, i.e. capital, is taxed less than the source of everybody else's income, i.e. labor.

C'mon RG, you know that's a ridiculous answer. Throw in a little profanity and it's something I would expect from boutons. I would think you could do better given your exceptional intellect.

[RandomGuy]

C'mon RG, you know that's a ridiculous answer. Throw in a little profanity and it's something I would expect from boutons. I would think you could do better given your exceptional intellect.

Already provided the graphs to back it up. You want me to add in a few of the tax policies that actively favor capital, such as the capital gains tax history?

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161

1994 stood at about 30%
2014 stood at 15%

Sorry you aren't pissed about the way you have been manipulated into thinking this is fair, or in your interest. You should be, because it is neither, and the people pushing for it, bloody well know it.

[RandomGuy]

The Estate Tax Explained: Who It Hits And Doesn't

A philosophical question arose on the floor of the House of Representatives on Thursday: Should dead people have to pay taxes? Sounds funny, but the estate tax or, as Republicans call it, the "death tax," is one of the big debates between the two parties. And, as is usually the case, the truth is more complicated than either party makes it.

According to Ben Harris, a researcher with the Tax Policy Center whose job is to pore over IRS statistics and tax tables, "very, very, very few people" pay estate taxes.

"It hits about 2 out of every 1,000 estates, and these estates are the wealthiest of the wealthy," he says. "These are very high-income individuals who are affected by the estate tax."

The Tax Policy Center is a think tank that is a joint project of the Urban Institute and the Brookings Institution. It's been tracking the inheritance tax since President George W. Bush and his Republican Congress tried to kill it by putting the tax on a long slide into the ground. Over the past decade, the tax rate got progressively lower, while the amount of money a person had to be worth to pay it got higher. The idea was that by 2010 — poof! —there would be no more estate tax at all.
http://www.npr.org/templates/story/story.php?storyId=121074648

This is another dishonest bunch of bullshit that the GOP signed on to, at the expense of everybody else, setting up a set of rich kids and their entitlements.

All so that Kardashian's can have shoe closets that are larger than some single family households:
http://www.ixdaily.com/images/user/shoe-closet-1600x1483-fromthebottomofmysole-khloe-kardashian-self-confessed-shoe-fanatic-urumix.com.jpg

[CosmicCowboy]

Seems like a lot on unhealthy jealousy going on here. Personally I could give a fuck how many shoes the kartrashians have.

[CosmicCowboy]

Personally I don't see what is wrong with working hard and saving a little to pass on to your kids. I certainly think they have a more righteous claim to the remainder of my lifetime savings than the government does. I only got those savings by paying all the taxes that were due already.

[RandomGuy]

Personally I don't see what is wrong with working hard and saving a little to pass on to your kids. I certainly think they have a more righteous claim to the remainder of my lifetime savings than the government does. I only got those savings by paying all the taxes that were due already.




According to Ben Harris, a researcher with the Tax Policy Center whose job is to pore over IRS statistics and tax tables, "very, very, very few people" pay estate taxes.

"It hits about 2 out of every 1,000 estates, and these estates are the wealthiest of the wealthy," he says. "These are very high-income individuals who are affected by the estate tax."

[RandomGuy]

Seems like a lot on unhealthy jealousy going on here. Personally I could give a fuck how many shoes the kartrashians have.

(shrugs)

I don't really care if someone has more money than I do. I really, really don't.

What I do care about is that many of them leech off the rest of us, though favorable tax policies, therefore benefiting the most from the system, while providing nothing of value to the economy, other than a lucky last name.

You can't tell me that "hard work" is the only way that the super-rich are worth so much more than all the other human beings on the planet combined, sorry, not buying that.

[CosmicCowboy]

It was my impression that you were advocating more inheritance taxes. Is this true or false?

We know Boutons would want 100% since he so despises successful people. Where do you stand?

[CosmicCowboy]

At what dollar amount do you think the government should confiscate family wealth?

[SnakeBoy]

Already provided the graphs to back it up. You want me to add in a few of the tax policies that actively favor capital, such as the capital gains tax history?

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161

1994 stood at about 30%
2014 stood at 15%

Sorry you aren't pissed about the way you have been manipulated into thinking this is fair, or in your interest. You should be, because it is neither, and the people pushing for it, bloody well know it.

I'm benefiting from it, why aren't you?

[vy65]

1994 stood at about 30%
2014 stood at 15%

Incorrect.

[ElNono]

There's more factors than just taxes... you gotta have enough disposable income and understanding to go play in the market lottery... or if you have enough money or influence, your can make the market work for you.

It's all a giant casino that really stopped serving it's main purpose a long time ago (providing solid, long-term investments for companies). Now it's all about the quick buck, riding the wave, quick turnaround.

Companies are happy to play too, focusing in the short-term and stock price over the long-term.

If you have enough money to hedge your bets and the time and understanding to play the game, you can probably beat some suckers and get their money. Banks get fatter either way, taking their commission.

That's why all this recent 'economic growth' really isn't. It's the same money changing hands with very few, if any, actual investment and economic growth. Heck, actual GDP growth has been pretty tame.

[CosmicCowboy]

I dunno. Where I live (San Antonio) The economy looks pretty damn strong. I know oil prices ARE gonna hurt it, they just haven't visibly manifested yet.

[ElNono]

Texas is it's own little monster. 1 out of every 6 Texans earn below the poverty line right now (which is 6th worst rank in the nation), and it's been like that for decades.

I suppose if you were doing ok, you might be doing better. But it isn't an economy designed to lift people out of poverty when there's steady growth.

[ElNono]

BTW, going back to Greece... agreement reached, as expected...

[CosmicCowboy]

Texas is it's own little monster. 1 out of every 6 Texans earn below the poverty line right now (which is 6th worst rank in the nation), and it's been like that for decades.

I suppose if you were doing ok, you might be doing better. But it isn't an economy designed to lift people out of poverty when there's steady growth.

Pretty much 1 out of every 6 in Texas just hopped the river looking for a better life than where they were at. Sure tends to skew the statistics. The fact that the Texas economy can even absorb most of them is pretty impressive.

[ElNono]

Pretty much 1 out of every 6 in Texas just hopped the river looking for a better life than where they were at. Sure tends to skew the statistics. The fact that the Texas economy can even absorb most of them is pretty impressive.

It's actually twice as many, IIRC... I think the Hispanic population in Texas is close to 30%...

I didn't mean to criticize, just pointing out that Texas simply has an enviable position that's hard to replicate for a lot of states: massive oil resources, with the accompanying jobs, and cheap labor readily available. But when you look at the people earning at or below the minimum salary or below poverty levels, they've been always amongst the worst ranked states in those areas (most south states, except Florida, actually), and it's not just a new thing, you can track it all the way from the 80's and it's always been like that. Add no income tax (which is a big redistributor), poor investment in education, etc.

So it's by design. We can argue whether that's a good or bad thing, but ultimately, it's academic, and only really applies to Texas, due to the circumstances described above.

[CosmicCowboy]

It's actually twice as many, IIRC... I think the Hispanic population in Texas is close to 30%...

I didn't mean to criticize, just pointing out that Texas simply has an enviable position that's hard to replicate for a lot of states: massive oil resources, with the accompanying jobs, and cheap labor readily available. But when you look at the people earning at or below the minimum salary or below poverty levels, they've been always amongst the worst ranked states in those areas (most south states, except Florida, actually), and it's not just a new thing, you can track it all the way from the 80's and it's always been like that.

So it's by design. We can argue whether that's a good or bad thing, but ultimately, it's academic, and only really applies to Texas, due to the circumstances described above.

i'm not anti hispanic. I had the blessing to grow up in San Antonio which truly has been multicultural for hundreds of years. It just is what it is. The statistics don't tell the true story.

[ElNono]

On the flipside, it's just such a massive state. Everything is cheaper there, including property (perhaps not property taxes). Generally nice weather helps too, tbh...

[CosmicCowboy]

BTW, the local americanized hispanics are the biggest abusers of the immigrant hispanics. It's not the gringos holding them down. You have the "local" making all the money and his 5 illegal tree trimmers making shit for money and and 'owing" the local for their job. Is what it is. You could audit my payroll or any other legit business owner in SA and skill for skill the hispanics make exactly what their gringo coworkers make.

[ElNono]

BTW, the local americanized hispanics are the biggest abusers of the immigrant hispanics. It's not the gringos holding them down. You have the "local" making all the money and his 5 illegal tree trimmers making shit for money and and 'owing" the local for their job. Is what it is. You could audit my payroll or any other legit business owner in SA and skill for skill the hispanics make exactly what their gringo coworkers make.

I don't doubt it. A lot of those guys come from a culture of exploitation too, that's all they know until they eventually figure it out.

[RandomGuy]

Incorrect.

Feel free to present some alternative evidence.

Facts or GTFO.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161

maximum rates column.

what does it say for 1994?

then look up the rate for 2014.

Knock yourself out, you evil shit.

[RandomGuy]

It was my impression that you were advocating more inheritance taxes. Is this true or false?

We know Boutons would want 100% since he so despises successful people. Where do you stand?

I would be happy to have the inheritance taxes stay at historical levels, given how narrow the demographic is that is subject to it. 100% tax is not something I would ever be for, though.

[RandomGuy]

BTW, the local americanized hispanics are the biggest abusers of the immigrant hispanics. It's not the gringos holding them down. You have the "local" making all the money and his 5 illegal tree trimmers making shit for money and and 'owing" the local for their job. Is what it is. You could audit my payroll or any other legit business owner in SA and skill for skill the hispanics make exactly what their gringo coworkers make.

That I would believe. I have seen similar, and it is a bit maddening.

[CosmicCowboy]

I would be happy to have the inheritance taxes stay at historical levels, given how narrow the demographic is that is subject to it. 100% tax is not something I would ever be for, though.

By historical level I am assuming you were referring to the 1970's where the government confiscated 70% of estates over 5 million, correct?

That level of taxation just caused the creation of charitable foundations for the super wealthy and ridiculous life insurance policies for everyone else.

It also killed the small family farms. By it's very nature farming is asset intensive as one needs land and the expensive implements to work the land. A 70% death tax on those assets pretty much destroyed family farming.

[Winehole23]

It also killed the small family farms. By it's very nature farming is asset intensive as one needs land and the expensive implements to work the land. A 70% death tax on those assets pretty much destroyed family farming.have you got any support for that bold claim, or are you rolling commando, per usual?

[boutons_deux]

One of the big changes pushing top layer of mgmt to kill labor in improve profits is that compensation was moved from salary to stocks. So mgmt decisions prioritizing stock price enriched mgmt, fuck everybody else.

Another factor pushing CEOs to screw employees to enrich themselves (not build the company):

http://www.americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-tax-subsidies-for-ceo-pay/

[CosmicCowboy]

have you got any support for that bold claim, or are you rolling commando, per usual?

I have no desire to be adversarial, however, lets use a little logic and simple math here.

Lets say we have a relatively small 500 acre family farm in Iowa. We aren't talking about richers here. Hopefully most years if they get the rains right and after paying for fuel, fertilizer, etc. they make a modest profit the family can can live on.That farmland is valued at $20,000 an acre. At a minimum they are going to need a half million dollars of equipment just to have the basics to work the land. Just that modest farm land and equipment puts us at a 10.5 million valuation. You are advocating that the government seize 70% of the value of the estate over 5 million. That means that when one generation wants to pass the family farm down to the next generation a tax bill of 3.85 million dollars will be due and payable. Is that in fact what you are advocating?

[boutons_deux]

"one generation wants to pass the family farm down to the next generation "

It's called "income" and it's taxable, AFTER $5M TAX-FREE. I'm really, really sympathetic to these abused, impoverished next generation. I'd would have loved to have $5M tax free from my parents.

[boutons_deux]

When the financial sector, investors are interested in education, it ain't to improve education, it's to MAKE MONEY.

Murdock getting into education? :lol

The principal running a network of NYC charters make $450K, vs a NYC public school principal making about $100K.

[CosmicCowboy]

"one generation wants to pass the family farm down to the next generation "

It's called "income" and it's taxable, AFTER $5M TAX-FREE. I'm really, really sympathetic to these abused, impoverished next generation. I'd would have loved to have $5M tax free from my parents.

We can tell you are jealous Boutons.

[CosmicCowboy]

The farm was purchased with savings left over after paying tax on income the first time. Now you want to tax the savings again.

[boutons_deux]

The farm was purchased with savings left over after paying tax on income the first time. Now you want to tax the savings again.


ah, the old double taxation red herring. The children's $5M is THEIR revenue, their parents paid tax on their revenue. Everybody should pay tax on their revenue, right?

I suppose you are a hard-core Constitutional "orginalist"? Then you must know the FFs were dead set against primogeniture

http://www.economist.com/blogs/lexington/2010/10/estate_tax_and_founding_fathers

[CosmicCowboy]

Glad to see Boo admit he is just ate up with jealousy.

[vy65]

Feel free to present some alternative evidence.

Facts or GTFO.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161

maximum rates column.

what does it say for 1994?

then look up the rate for 2014.

Knock yourself out, you evil shit.

The tax rate on most net capital gain is no higher than 15% for most taxpayers. Some or all net capital gain may be taxed at 0% if you are in the 10% or 15% ordinary income tax brackets. However, a 20% rate on net capital gain applies in tax years 2013 and later to the extent that a taxpayer’s taxable income exceeds the thresholds set for the new 39.6% ordinary tax rate ($406,750 for single; $457,600 for married filing jointly or qualifying widow(er); $432,200 for head of household, and $228,800 for married filing separately). For more information, refer to Publication 505, Tax Withholding and Estimated Tax.

There are a few other exceptions where capital gains may be taxed at rates greater than 15%:

The taxable part of a gain from selling section 1202 qualified small business stock is taxed at a maximum 28% rate.
Net capital gains from selling collectibles (like coins or art) are taxed at a maximum 28% rate.
The portion of any unrecaptured section 1250 gain from selling section 1250 real property is taxed at a maximum 25% rate.

http://www.irs.gov/taxtopics/tc409.html

You'd think an accountant would know what the capital gains tax rate is.

[RandomGuy]

By historical level I am assuming you were referring to the 1970's where the government confiscated 70% of estates over 5 million, correct?

That level of taxation just caused the creation of charitable foundations for the super wealthy and ridiculous life insurance policies for everyone else.

It also killed the small family farms. By it's very nature farming is asset intensive as one needs land and the expensive implements to work the land. A 70% death tax on those assets pretty much destroyed family farming.

Provide some proof that the inheritance tax in the 1970's "killed family farms". What killed family farms was, to my understanding, large scale industrial agriculture that drove down the cost of production to the point where smaller farms can't compete.

If your beef with a tax is based on a flawed assumption, then one should set that aside in considering the impact. What can be asserted without evidence, can be dismissed without evidence.

[boutons_deux]

What killed family farms is the century+ urbanization, esp the farm kids moving to the city for better quality of life, jobs, money, lifestyle and the industrialization of farming by BigAg/BigChem/BigFood, NOT tax policy.

[RandomGuy]

The tax rate on most net capital gain is no higher than 15% for most taxpayers. Some or all net capital gain may be taxed at 0% if you are in the 10% or 15% ordinary income tax brackets. However, a 20% rate on net capital gain applies in tax years 2013 and later to the extent that a taxpayer’s taxable income exceeds the thresholds set for the new 39.6% ordinary tax rate ($406,750 for single; $457,600 for married filing jointly or qualifying widow(er); $432,200 for head of household, and $228,800 for married filing separately). For more information, refer to Publication 505, Tax Withholding and Estimated Tax.

There are a few other exceptions where capital gains may be taxed at rates greater than 15%:

The taxable part of a gain from selling section 1202 qualified small business stock is taxed at a maximum 28% rate.
Net capital gains from selling collectibles (like coins or art) are taxed at a maximum 28% rate.
The portion of any unrecaptured section 1250 gain from selling section 1250 real property is taxed at a maximum 25% rate.

http://www.irs.gov/taxtopics/tc409.html

You'd think an accountant would know what the capital gains tax rate is.

https://twistedsifter.files.wordpress.com/2012/01/watch-out-we-got-a-badass-over-here-meme-neil-degrasse-tyson.png

An accountant would know enough not to define "the" capital gains tax, or to simply speak about rates most generally applicable to most capital gains.

An accountant would also know that if a tax exemption applied to a non-material number of taxpayers or overall tax collected, it would any meaningful consideration of the economic impact of said exemption.

I guess if we want to talk about things we are experts on, maybe you could tell me what would a despicable human being say "the" capital gains tax rate is?
http://www.spurstalk.com/forums/showthread.php?t=224425&page=19&p=6955041&viewfull=1#post6955041

You could also follow up by telling me what how a bloviating douchebag would reform "welfare", when he couldn't even define it, since we are talking about tax policy and how we should tax or spend.
http://www.spurstalk.com/forums/showthread.php?t=224425&page=22&p=6956024&viewfull=1#post6956024

Do tell.

[vy65]

Sweet, so the 2014 cap gains tax rate isn't 20% for all taxpayers.

[RandomGuy]

I have no desire to be adversarial, however, lets use a little logic and simple math here.

Lets say we have a relatively small 500 acre family farm in Iowa. We aren't talking about richers here. Hopefully most years if they get the rains right and after paying for fuel, fertilizer, etc. they make a modest profit the family can can live on.That farmland is valued at $20,000 an acre. At a minimum they are going to need a half million dollars of equipment just to have the basics to work the land. Just that modest farm land and equipment puts us at a 10.5 million valuation. You are advocating that the government seize 70% of the value of the estate over 5 million. That means that when one generation wants to pass the family farm down to the next generation a tax bill of 3.85 million dollars will be due and payable. Is that in fact what you are advocating?

Valuation is not the same as basis, nor is it the same as net worth (i.e. equity after subtracting debt). If memory serves there were also very specific exemptions (as there always are)

Incorporation, trusts, and all sorts of other things are available to shield family run enterprises from this tax.

Not really a valid argument against it in my mind.

FYI:
http://www.extension.iastate.edu/agdm/wholefarm/html/images/c2-70fig1.gif
http://www.extension.iastate.edu/agdm/wholefarm/html/c2-70.html

[CosmicCowboy]

The whole point of going to the lower rate in '86 was to have a fair across the board rate and eliminate all the shelters and dodges. So you are advocating going back to the higher rate and reinstating all the accounting tricks to avoid them?

[Th'Pusher]

The whole point of going to the lower rate in '86 was to have a fair across the board rate and eliminate all the shelters and dodges. So you are advocating going back to the higher rate and reinstating all the accounting tricks to avoid them?

So you would be ok, going back to the 1986 cap gains tax rates? I'm pretty sure that's similar to what BHO proposed in his most recent budget.

[CosmicCowboy]

no

[Th'Pusher]

no

Why? They were good enough for Reagan but not BHO? What is your reasoning behind taxing capital at a different rate than labor?

[CosmicCowboy]

Lol @ "good enough for Reagan" is taking one item out of context with the whole. Nice little talking point though.

[Th'Pusher]

Lol @ "good enough for Reagan" is taking one item out of context with the whole. Nice little talking point though.
Fine. Answer the question explaining your reasoning as to why taxing capital and labor differently is good policy.

[CosmicCowboy]

Fine. Answer the question explaining your reasoning as to why taxing capital and labor differently is good policy.

Much is made of the stagnation of middle class incomes but the best tax treatment available to combat this is to allow them to maximize their savings investments, purchase homes as part of a retirement strategy, etc. excessive taxation of their investments after already taxing their income is a disincentive to savings and investment.

[Th'Pusher]

Much is made of the stagnation of middle class incomes but the best tax treatment available to combat this is to allow them to maximize their savings investments, purchase homes as part of a retirement strategy, etc. excessive taxation of their investments after already taxing their income is a disincentive to savings and investment.
So based on that theory there should be some correlation with the saving rate and changes in the capital gains tax rates

http://www.tradingeconomics.com/charts/united-states-personal-savings.png?s=unitedstapersav&d1=19800101&d2=20151231

There's the saving rate. I'm not going to take the time to overlay the cap gains tax, but I think it's pretty clear there's no correlation if you take a look at the links RG and VY posted upstream.

[CosmicCowboy]

So you would deny the middle class any tax incentive to save and improve their situation? Remove capital gains rates from the sale of homes? Have a one time "income" the year you sell your house and get whacked at 30-40% going straight to the government?

[Th'Pusher]

No much argument to be made that Ant significant income from capital gains and dividends is going to the middle class

http://upload.wikimedia.org/wikipedia/commons/5/59/Percent_of_Income_from_Capital_Gains_and_Dividends _%282006%29.gif

[Th'Pusher]

So you would deny the middle class any tax incentive to save and improve their situation? Remove capital gains rates from the sale of homes? Have a one time "income" the year you sell your house and get whacked at 30-40% going straight to the government?
I don't have a problem with not taxing the Profits from the sale of a primary home as capital gains, but as I demonstrated above, the middle class isn't the group making money on capital gains and dividends. Sorry.

[CosmicCowboy]

So to spite the "rich" pusher says "fuck the middle class" that is trying to responsibly have some savings and investments. Jealously rears its ugly head again.

[CosmicCowboy]

I don't have a problem with not taxing the Profits from the sale of a primary home as capital gains, but as I demonstrated above, the middle class isn't the group making money on capital gains and dividends. Sorry.

Oh, ok. Now you want to have the magic wand that decides what are "good" investments to be tax favored and what are "bad " investments to be appropriated by the government.

[Th'Pusher]

So to spite the "rich" pusher says "fuck the middle class" that is trying to responsibly have some savings and investments. Jealously rears its ugly head again.
Not at all. I don't mind Obama's progressive tax on cap gains. We tax earned income under a progressive system, why not cap gains?

[Th'Pusher]

Oh, ok. Now you want to have the magic wand that decides what are "good" investments to be tax favored and what are "bad " investments to be appropriated by the government.
That's the way it is now.

I just don't like the flat cap gains tax. Obama has introduced some progressive tax structure and is proposing more. Make a cogent argument against that.

[CosmicCowboy]

So basically you are advocating the classic jealous income warfare being advocated by Obama as a polarizing political issue in the classically cynical "there are more poor voters than wealthy voters" so let's make wealthy people the boogeyman. Got it.

[CosmicCowboy]

I admit that as I drive down I10 in my six year old pickup and see all the cool E500's panamericas, jaguars etc. that I am sharing the road with I get a little of that "damn, that would be nice" but I don't resent them so much that I want the government to confiscate their income.

[Th'Pusher]

So basically you are advocating the classic jealous income warfare being advocated by Obama as a polarizing political issue in the classically cynical "there are more poor voters than wealthy voters" so let's make wealthy people the boogeyman. Got it.

It has nothing to do with jealously. I simply think making capital gains a progressive tax, just like earned income, is good policy.

Since you were unable to refute it with any cogent argument I'll assume you are incapable of doing so.

[CosmicCowboy]

Progressive.

Classic liberal weighted phrase for taking someone else's money.

[Th'Pusher]

Progressive.

Classic liberal weighted phrase for taking someone else's money.

Then make an argument for a flat tax. I'd assume you'd support a flat tax for earned income too? It appears to me you can't string together an argument. There's plenty out there you can plagiarize if you like.

[vy65]

He did.

Problem with your chart is that it doesn't differentiate between economic strata. But more to the point, the claim that just because lower cap gains taxes might not, on their own, cause drastic increases in personal savings does not provide a reason why, as a matter of policy, we should keep the rate high.

[vy65]

And ironically, the progressive system we have now (based on income) does nothing for those whose actual take home is based solely on capital gains. Essentially, you have the Romneys of the world paying 15% rather than 20%

[vy65]

And bullshit, I bet CC could buy him a s550 if he really wanted to.

[boutons_deux]

And ironically, the progressive system we have now (based on income) does nothing for those whose actual take home is based solely on capital gains. Essentially, you have the Romneys of the world paying 15% rather than 20%

on what they declare, not on the many $Bs they have hidden in tax havens.

[Th'Pusher]

No much argument to be made that Ant significant income from capital gains and dividends is going to the middle class

http://upload.wikimedia.org/wikipedia/commons/5/59/Percent_of_Income_from_Capital_Gains_and_Dividends _%282006%29.gif


He did.

Problem with your chart is that it doesn't differentiate between economic strata. But more to the point, the claim that just because lower cap gains taxes might not, on their own, cause drastic increases in personal savings does not provide a reason why, as a matter of policy, we should keep the rate high.

See the chart I pasted up steam wrt your claim I had not differentiated between economic strata. The crux of CC's argument was that a lowered cap gains rates encouraged savings and investment for the middle class. I refuted that, but then suggested a policy of a progressive cap gains rate which would still theoretically incentivize saving and investment.

And a progressive tax is good policy IMO as it would increase government revenues and in the long run narrow the inequality gap, which I believe is being driven by recent reductions in capital gains tax rates.

[Th'Pusher]

And ironically, the progressive system we have now (based on income) does nothing for those whose actual take home is based solely on capital gains. Essentially, you have the Romneys of the world paying 15% rather than 20%
That's why I am arguing for progressive capital gains tax rates similar to what we have with earned income.

[ElNono]

And ironically, the progressive system we have now (based on income) does nothing for those whose actual take home is based solely on capital gains. Essentially, you have the Romneys of the world paying 15% rather than 20%

Actually, that was exactly what he was pointing out, if I understood correctly.

From a strictly economic standpoint, the end result seems to be an incentive towards "rentier capitalism".

[RandomGuy]

Progressive.

Classic liberal weighted phrase for taking someone else's money.

Progressive tax rates are based on the economic concept of marginal income. Very old school concept, hell even the people that wrote the bible understood it.

[RandomGuy]

The whole point of going to the lower rate in '86 was to have a fair across the board rate and eliminate all the shelters and dodges. So you are advocating going back to the higher rate and reinstating all the accounting tricks to avoid them?

That doesn't really answer my question.

I don't see how the inheritance tax "killed small family farms". If so, I would like to know about it, to improve the amount of valid information I have to consider the topic.

I would guess you can't or won't show that, so I will dismiss the assertion then.

I was though, merely pointing out that the law allowed for the specific exceptions to spare the mythical family farm from the tax. I am for a simple tax code, all other things equal.

In this case, estate taxes are a very progressive kind of tax on people who can easily afford to pay back into the system that created the wealth to begin with.

[RandomGuy]

It has nothing to do with jealously. I simply think making capital gains a progressive tax, just like earned income, is good policy.

Since you were unable to refute it with any cogent argument I'll assume you are incapable of doing so.

The "jealousy" claim merely makes it easier to wrongly dismiss arguments on an emotional basis. My case for progressive income taxes, or estate taxes for that matter, isn't really made on some random emotional basis, but a reasoned consideration of harm and benefits, as well as a consideration of the ethics.

Claims of jealousy when it comes to countering arguments for progressive taxes tend to fall into the "appeal to emotion" logical fallacy, i.e. the arguments for it are invalid because of some emotional reason.
https://yourlogicalfallacyis.com/appeal-to-emotion

[TeyshaBlue]

I struggle with the concept of double taxation. I paid taxes on that income once. Put this additional levy on the front end....tax capital gains as income and raise the tax on the higher income set then leave me the hell alone with my earnings and what I set aside for my heirs.

[baseline bum]

I struggle with the concept of double taxation. I paid taxes on that income once. Put this additional levy on the front end....tax capital gains as income and raise the tax on the higher income set then leave me the hell alone with my earnings and what I set aside for my heirs.

I agree with that, not a fan of the estate tax either.

[FlAVaK]

https://www.youtube.com/watch?v=Afl9WFGJE0M&feature=youtu.be

[CosmicCowboy]

That doesn't really answer my question.

I don't see how the inheritance tax "killed small family farms". If so, I would like to know about it, to improve the amount of valid information I have to consider the topic.

I would guess you can't or won't show that, so I will dismiss the assertion then.

I was though, merely pointing out that the law allowed for the specific exceptions to spare the mythical family farm from the tax. I am for a simple tax code, all other things equal.

In this case, estate taxes are a very progressive kind of tax on people who can easily afford to pay back into the system that created the wealth to begin with.

I confess to using the family farm cliche and hyperbole but I did give you real numbers in the original post to demonstrate how the "old" estate tax rates created a tax due on death that virtually guaranteed a sale of the property in order to pay the tax. When you advocate going back to the old rates the common counter is that "we can not include farmland, or houses, or whatever your favorite asset to get preferential tax treatment. That itself is the trap we get into where monied special interests can basically bribe their way to special exemptions and we end up with just a different fucked up preferential Swiss cheese tax code.

[Winehole23]

Wikileaks roils IMF brokered negotiations with Greece:


Even if the transcript of the conversation is consistent with the publicly stated views of the IMF it is likely to stoke the kind of suspicion in Greece and Germany that has long created political hurdles to progress in the Greek debt crisis.



Greece, and many international observers sympathetic to its predicament, will see the IMF officials’ remarks as more evidence that the Fund and the European Union have little regard for Greece’s sovereignty.
The massive spending cuts and tax increases Greece has already implemented in recent years in order to repay its debts have contributed to a massive uptick in poverty and the highest unemployment rate (http://www.statista.com/statistics/268830/unemployment-rate-in-eu-countries/) in the European Union.



Meanwhile, the IMF’s potential threat of withdrawal could exacerbate German suspicion of the bailout process. The German public has long been wary of additional lending to Greece, which it believes has failed to reform its profligate government finances or adequately liberalize its economy.



It is also unclear what implications another potential Greek financial standoff will have on the European refugee crisis (http://www.huffingtonpost.com/entry/greece-refugee-crisis-economy_us_56b12f1de4b04f9b57d7b7d4), of which Greece has been on the front line (http://www.huffingtonpost.com/entry/migrants-refugees-trapped-in-greece_us_56d84dfce4b0ffe6f8e84444). Greece is the first entry point (http://www.huffingtonpost.com/entry/greece-refugee-numbers-borders-closed_us_56d5e0bee4b03260bf783f3e) for the thousands of refugees flowing into Europe from Turkey and other countries. Tens of thousands of refugees with hopes of reaching more prosperous European nations have been stranded in Greece as neighboring European nations close their borders.



The European Union reached a deal (http://www.nytimes.com/2016/03/19/world/europe/european-union-turkey-refugees-migrants.html?_r=0) with the Turkish government on March 18 to return asylum seekers trying to reach the continent by sea in exchange for additional aid to Turkey. They also agreed to an increase in the number of Turkey-based refugees Europe would resettle through a formal absorption process. The plan goes into effect on Monday.

http://www.huffingtonpost.com/entry/imf-greece-leak_us_57001521e4b0a06d5805ddf6

[Winehole23]

Sidebar: Greece is an open air prison for war refugees. point of transshipment between Turkey and Europe proper.

which Turkey is using as leverage -- to join the EU.

[Winehole23]

Lagarde implied that the leak had been the result of eavesdropping and suggested the onus was on the Greek government to prevent such an incident in the future.http://www.huffingtonpost.com/entry/imf-greece-leak-letter-response_us_570186afe4b0daf53aeff293

[Winehole23]

EU extends and pretends to protect banks, Greece becomes a permanent debt peon:


Technically speaking, the central pillar of the new debt agreement is a decade-long postponement of payments totalling €96.6 billion that were due to begin in 2023. The Greek state has thus been offered easy repayments until 2033 in exchange for continuing harsh austerity ad infinitum; impossible annual debt repayments from 2033 to 2060; and a debt-to-national income ratio above 230% by 2060 if the next global recession puts the plan’s over-ambitious growth targets out of reach, as it surely will.

Any objective assessment of the Eurogroup’s recent deal on Greek public debt would conclude that it condemns Greece to permanent debt bondage. And an impartial observer of the Merkel-Macron Meseberg Summit would conclude that the eurozone remains as macroeconomically unsustainable as it was five years ago. And yet Europe’s establishment, oblivious to the Nationalist International preparing to devour the EU, is serving it appetizers.https://www.livemint.com/Opinion/2DjIse0nDA6j818tVtfTUN/Europes-remarkable-ability-to-remain-in-denial.html

[boutons_deux]

I agree with that, not a fan of the estate tax either.

the estate tax in UNEARNED INCOME for the beneficiaries. Why should it be tax free?

"death tax" is bullshit phrasing, fooling the fools

[boutons_deux]

"Nationalist International"

... Pootin's Long Game.

Break up international agreements, cooperations, treaties in favor of weaker (autocratic) govts amenable to Pootin's influence, power, support.

see: Poland, Hungary, Turkey, and Trash's plans for USA

[boutons_deux]

EU enslaving Greek to decades of punitive austerity and debt?

That's nothing but Capital's plan for everybody, everywhere.