The Fiscal cliff! Who will blink first, Obama or GOP?

January will be upon us soon, and with it the US “fiscal cliff”, automatic spending cuts and tax increases unless the borrowing limit is raised from it’s present astronomical level.

Republican speaker of the House of Representatives Boehner and others have said they will not make a deal with Obama that includes tax hikes for the rich. Obama has doubled down and insisted on a second shot at a Grand Compromise.

Americans are waiting with bated breath to see if there will be another political roller derby match or some sort of compromise will be worked out. World citizens, nervous about a weak recovery and jittery stock markets, are also waiting anxiously.

Will there be a deal? Will the hardliners in the GOP compromise, or just remember the Alamo?

And what should they do?

A desperate power play both sides are equally guilty of. Doesn’t matter who gives in, if they end up taxing the rich or not. Go ahead and tax those that make more than 200k a year, then what? The real question of what will ultimately drive American economic growth still looms in the balance. Neither side has a real answer for that.

250K I believe. But you are spot on about the long term question.

However, how will long term growth be helped by kicking the recovery in the nuts?

Obama can’t back down, or he loses all integrity. He would be changing his tune, breaking an election promise. Yes that’s true for GOP house reps as well but then they have to realize that Obama is their president, and they need to show at least a semblance of bipartisanship once in a blue moon. The GOP could back down - I think - with some sort of twist, like making it part of the package to reapply the tax cuts after 3 years. That would help get the recovery happening, while not being seen as actually backing down completely, and giving a nod to voters who indicated that they are not on love with the Tea Party anymore.

The GOP could also insist on trimming a bit of fat off programs they oppose, giving them some empirical gains. Their base would be angry but they’d gain a few moderate supporters as well. And it’s not like voters would kick out a repub and elect a dem, knowing that one year after the next mid-terms the issue would come up again, heading into another presidential election. I think it’s more doable for the GOP now than Obama, and probably the right thing to do in terms of the recovery.

Obama has the leverage here. He has the GOP over a barrel. Win vs. win for Obama; lose vs. lose for the Republicans… if Obama sticks to his guns.

It seems economics and politics these days is all about brinkmanship and that’s it.

I’m sick of it. Trying to stay calm every day while every threat is looming everywhere in the US, Europe, Asia and the Middle East.

Don’t be a pawn. Don’t be a lemming.

What f’n cliff?

Good question. If the president and the Congress cannot compromise, then automatic tax hikes and spending cuts will kick in. If they come up with a compromise, then tax hikes and spending cuts will be enacted.

I say let tax rates rise across the board and let the spending cuts hit. We need to start raising revenue and reducing spending at some point. Why not now? By the way, EVERYBODY’s tax rates would rise, and why not? We should all have responsibility. Actually, the tax rates would be exactly the same as during the Clinton years, and those were prosperous years. I don’t believe there really is a “fiscal cliff”.

Good question. If the president and the Congress cannot compromise, then automatic tax hikes and spending cuts will kick in. If they come up with a compromise, then tax hikes and spending cuts will be enacted.

I say let tax rates rise across the board and let the spending cuts hit. We need to start raising revenue and reducing spending at some point. Why not now? [/quote]

Because the economy is very fragile, with slow growth and high unemployment: tax rises and /or spending cuts right now could push it back into a recession- just like what has happened in Europe. Two years from now would be better.

And far and away the worst part of this is allowing payroll tax cuts to expire.

We are all discussing this as if there is a never-ending supply of people willing to loan money to the US. Eventually, people are going to look at the mountain of American debt and say “no thanks” the next time the US Treasury tries to sell more bonds.

That’s the REAL fiscal cliff.

I agree - just let it happen. The “fiscal cliff” is a media creation. It’s what was agreed upon during all that debt ceiling crap. They talked about deficit reduction during the election campaign, well that’s what this is! Let’s take our lumps now before we get knocked out cold later.

You cats have got to be kidding me. That this is even up for debate.

Obama can’t back down lest he lose his integrity, change his tune, and break an election promise?
The Obama administration has already extended the Bush era tax cuts once, during their first term!
They have also: expanded domestic spying, extended the patriot act, authorized 5 times more drone strikes than George Bush, kept Guantanamo Bay open, reneged on their pledge to try Khalid Sheikh Mohammed in civilian court, abandoned the ‘public option’ to pass weak sauce health care reform that—let’s face it—only the insurance companies themselves are pleased with, and finally, gave the banks responsible for the 2008 financial crisis a slap on the wrist while calling it ‘financial reform’.

…and much of this when the Democrats had the White House, the Senate, AND congress.

Barack Obama will almost certainly back down—probably the first time that Fox News calls him a socialist.

Back when President Obama was Candidate Obama, his speeches damn near brought tears to my eyes. …So look. I hope I’m wrong. I WANT to be wrong on this. I just don’t see Obama through rose colored glasses anymore.

BTW – In case you need more proof, here is Joe Biden discussing how the dems plan to lower taxes on corporations… AFTER they won re-election. youtube.com/watch?v=jd3-1NsRsrs

Whatever the U.S. does to lard up its wealth creation process in the name of “fairness” I hope it does so in moderation because I’m already busier than a one-legged man in an ass kicking contest and can’t handle much more business migrating here to Asia because of the ever higher cost of doing business in the U.S.

[quote=“Got To Be Kidding”]We are all discussing this as if there is a never-ending supply of people willing to loan money to the US. Eventually, people are going to look at the mountain of American debt and say “no thanks” the next time the US Treasury tries to sell more bonds.

That’s the REAL fiscal cliff.[/quote]

Yes, and the first sign that people are wary about lending money is a rise in the interest rates they demand, which on US Treasury bonds are…?

Answering my own question:

washingtonpost.com/blogs/won … siness_pop