Expert: Basics on why going over fiscal cliff takes America down a dangerous path

Dec 24, 2012 by Brendan Cosgrove

Barring a deficit-reduction deal in Washington, D.C., Americans should be quite concerned about going over the "fiscal cliff," says Charlotte Crane, a tax specialist and professor at Northwestern University School of Law.

Failure to work things out, she says, would likely result not only in an economic stall in 2013 but also in a continuing revolving door of legislative stalemates like the ones that have plagued Congress since the 2008 election.

In short, the refers to some $600 billion in tax increases and across-the-board spending cuts scheduled to take effect in January unless the and Republicans in Congress reach a more nuanced alternative deficit-reduction deal.

"The effects of going off the fiscal cliff might not be felt right away, as some players in the economy may have already adjusted their strategy assuming Congress won't act," says. Others, she says, may just automatically be assuming that Congress will work things out.

The mandatory spending cuts, called "" in federal budgetary parlance, total more than $100 billion per year and would include both defense and non-defense spending.

As bitter partisan fighting continues, have descended on Washington to lobby against going over the cliff. Without an agreement to narrow deficits over the long run, the United States could eventually lose investors' trust, triggering a .

No one would be immune from the effects of the mandatory tax increases and spending cuts, Crane says.

The fiscal cliff could hardly be more important or relevant for Northwestern students, faculty and staff—and for Americans in general. If the White House and Congress fail to find a compromise, taxes will go up significantly. An average family of four would see taxes rise on annual of $50,000 by nearly $2,000 and on earnings of $100,000 by $5,000.

"The combination of tax increases and spending cuts will reduce the amounts both consumers and the will have available to spend," she says.

The tax increases are built into current law, since a failure to reach a new agreement, means the "Bush tax cuts" would finally be allowed to die, she adds. "Although they have been extended several times since their first expiration date in 2010, these cuts were never made permanent."

Individual income, capital gains and estate tax rates would all be restored to pre-2001 levels. In addition, a 2 percent reduction in Social Security-funding payroll taxes that was enacted in 2010 as part of an economic stimulus package would go away.

"The Brookings/Urban Institute Tax Policy Center estimates that the income and payroll tax rates would increase for the 25 percent of households earning the least by an average of 3.7 percentage points, while the 1 percent with the highest incomes would experience a 7.2 percentage point increase in rates," Crane says.

The deadline for coming to an agreement about tax increases and spending cuts was set back in the summer of 2011 when Congress was having trouble agreeing on a federal budget, Crane says. The idea was for legislators to force themselves to make tough decisions on important tax and budgetary issues, but only after last month's general election.

"The Jan. 1, 2013 deadline that Congress set has particular significance, because it also is the cut-off date for several other important federal fiscal measures," Crane stressed. "Extended unemployment payments will end. Appropriations for the 'doc fix'—which provides for payment to medical providers under Medicare—will also end."

Ben Bernanke, the chairman of the Federal Reserve, coined the metaphor "fiscal cliff" to warn of the dangerous yet avoidable drop-off in the nation's fiscal path if the White House and Republicans do not work out an agreement with tax hikes and program cuts.

While White House and Congressional are beginning to engage in a genuine give-and-take in the negotiations, reaching a deal by Jan. 1 is far from a done deal.

"Failure to work things out means risking the loss of the confidence not only of the American public, but also the rest of the world," Crane says. "These spending reductions are clearly of an order of magnitude large enough to send the economy back into recession."

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RealityCheck
2.4 / 5 (33) Dec 24, 2012
These crazy, self-righteous lying hypocrites called Republican-Conservatives were largely responsible for the GFC, the national debt and the Fiscal cliff stand-off. They have been sabotaging all reasonable efforts to recover from the GFC, to remedy the economy imbalances/flaws, and to set in train reasonablemeasures to address the Fiscal cliff properly once for all. So why aren't these self-absorbed and self-interested, reality-denying lying Republican-Conservative "incestuous band of criminal brothers" comprising mercenary thieves and economic saboteurs not in jail or at least in court facing TREASON and FRAUD charges of the highest order? Until they are forced to be accountable for all their crimes as apparent over the last decade, they will be a CANCER on US Economy and Democratic process. Bring them to account through the courts if the populace is too gullible to act with reason rather than stupidity (at least just over half the US populace is not so gullible)!
Hari_Seldon
2.8 / 5 (16) Dec 24, 2012
The Republicans wouldn't even pass Speaker Boehner's plan B, which was nothing more than a barebones bill designed to make the president look responsible. It should now be apparent to most Republicans that their party does not have their economic interests in mind.
Caliban
2.8 / 5 (13) Dec 24, 2012
The Republicans wouldn't even pass Speaker Boehner's plan B, which was nothing more than a barebones bill designed to make the president look responsible. It should now be apparent to most Republicans that their party does not have their economic interests in mind.


Not to mention that they couldn't even be bothered to authorize an extension of emergency unemployement benefits for their own constituents in the heartland, rust- and bible- belt, where millions of people are facing the REAL cliff.
CrooklynBoy
1.9 / 5 (26) Dec 25, 2012
Wow, some seriously brainwashed communists here.

Clue: Pelosi and Reid took congress in 06, in 08 it crashed. Congress controls the money, so communists were in charge of the money for 2 years before the crash, and it's Republicans fault.

LOL
VendicarD
3.2 / 5 (17) Dec 25, 2012
The Crook above, is typical of the Tea-Baggers that I have seen. Not only are they cheering over the defeat of any budget that raises taxes, I have seen hundreds of them actually demanding that the nation go over the cliff.

Bankrupting the nation was their initial goal. Pushing the Economy into a new depression is their new goal.

Republican Tea-Baggers are incapable of thinking rationally. They demand that there be no new taxes, and that any bill that includes increased taxes be overturned. However, when they are told that the fiscal cliff that they are demanding America go over, includes increase in taxes they just shrug their shoulders and ignore the reality.

Republicans are absolutely mindless.
kochevnik
3.5 / 5 (16) Dec 25, 2012
I think America broken up into five or more pieces would make it a better place for Americans, and eliminate the brewing civil-war issues at the same time. A nation divided against itself cannot stand, and anything Washington does seems to hurt one group while helping another. California is almost a country onto itself although an economic commonwealth is necessary to maintain imports of cheap Chinese crap from LA and Oakland

The federal government seems to be interested in making a nation of it's own, which I do not see represented in the states. Russia has the same problem in that the bureaucratic class exploded after Yeltsin and now is Russia's largest employer. The government has become a parasite that feeds off the 99% by fusion with the corporate 1%
ryggesogn2
2.4 / 5 (24) Dec 25, 2012
""The combination of tax increases and spending cuts will reduce the amounts both consumers and the federal government will have available to spend," she says."

The federal govt will have plenty of money to spend. The just print more, as they are now doing. The value of the money will be another question and of course the citizen will have significantly less wealth.
Wealth creation/destruction is the real issue, not money.
VendicarD
2.2 / 5 (10) Dec 25, 2012
America will not exist as a single nation at the end of this decade.

"I think America broken up into five or more pieces would make it a better place for Americans, and eliminate the brewing civil-war issues at the same time." - kochevnik

http://it.wikiped...land.png

VendicarD
3.4 / 5 (10) Dec 25, 2012
Well... that is what the TeaBaggers want.

"The value of the money will be another question and of course the citizen will have significantly less wealth. " - RyggTard

But unlike the Conservative TeaBaggers, and KookTard Libertarians, Nobel winning Economists have different ideas.

https://www.youtu...Oz3P5CXc

Conservative Tea Baggers are so stupid that they don't even know that the original Tea Party was a movement opposed to Corporate Largess and Corporate tax breaks.

http://www.youtub...amp;NR=1

VendicarD
3.3 / 5 (7) Dec 25, 2012
Here is a new Kotch Brother funded production from the Heritage Foundation, just broadcast on Faux News.

https://www.youtu...cxF26ev0
rwinners
3.3 / 5 (12) Dec 25, 2012
Time to pay the piper. Bush and company sheared taxes in an effort to hide the true costs of the wars in the middle east. Bastard!
VendicarD
3 / 5 (6) Dec 25, 2012
Odd isn't how Bush was touted by Faux News Republicans as the greatest president in history after Ronald Reagan.

Ahahahahahahah........

https://www.youtu...DYM20WRM
RealityCheck
2.3 / 5 (18) Dec 25, 2012
Hi CrooklunBoy.
Wow, some seriously brainwashed communists here.

Clue: Pelosi and Reid took congress in 06, in 08 it crashed. Congress controls the money, so communists were in charge of the money for 2 years before the crash, and it's Republicans fault.

LOL

Sometimes, it IS in the name: You call others "commies"; we may correctly call you CROOK------? Seriously, where were you in those two years? Democrats were (naively?) trying to build BIPARTISANSHIP and CONSENSUS, but the Repubs/Conserves ESPOUSEDLY determined to sabotage/block and say NO to any reasonable measure. That's what the democrats get for thinking that modern republican/conservative had any shred of decency, honesty, honour or interest in the greater good of the US populace/economy. Democrats learned a lesson: Republicans/Conservatives care only about PERSONAL power, money, crooked scams, reality-denial and defrauding voters of their votes under false pretenses: NOT to be trusted. Get a clue.
cantdrive85
3 / 5 (18) Dec 25, 2012
The idea that Repugnicans and Dumbocrats in Washington are different is laughable and naive. The condition of this country is directly due to the two party system. An exploding debt benefits only one segment of the population, much of it foreign based.

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States."
-Sen. Barry Goldwater

"The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers."
-Congressman Louis T. McFadden

"The Federal Reserve bank buys government bonds without one penny..."
-Congressman Wright Patman, Congressional Record, Sept 30, 1941
mountain_team_guy
1.8 / 5 (20) Dec 25, 2012
The Crook above, is typical of the Tea-Baggers that I have seen. Not only are they cheering over the defeat of any budget that raises taxes, I have seen hundreds of them actually demanding that the nation go over the cliff.

Bankrupting the nation was their initial goal. Pushing the Economy into a new depression is their new goal.

Republican Tea-Baggers are incapable of thinking rationally. They demand that there be no new taxes, and that any bill that includes increased taxes be overturned. However, when they are told that the fiscal cliff that they are demanding America go over, includes increase in taxes they just shrug their shoulders and ignore the reality.

Republicans are absolutely mindless.


Maybe Republicans are against raising the debt ceiling. When in the past have Democrats ever cut an entitlement? Maybe getting a fair cut of domestic and defense spending along with a tax hike isn't such a bad thing after all? How much debt is too much? Btw, Tbag to you too
mountain_team_guy
1.6 / 5 (21) Dec 25, 2012
Time to pay the piper. Bush and company sheared taxes in an effort to hide the true costs of the wars in the middle east. Bastard!


And Obama extended the cuts to...? And Obama added a billion in stimulus debt to do what? Hide the cost of the surge in Afghanistan? Call it like you want to see it.
mountain_team_guy
1.9 / 5 (17) Dec 25, 2012
Odd isn't how Bush was touted by Faux News Republicans as the greatest president in history after Ronald Reagan.

Ahahahahahahah........


Almost as funny as the Nobel Prize Obama received right after he took office. Ha.
mountain_team_guy
1.6 / 5 (19) Dec 25, 2012
Republicans/Conservatives care only about PERSONAL power, money, crooked scams, reality-denial and defrauding voters of their votes under false pretenses: NOT to be trusted. Get a clue.


Can you really call yourself RealityCheck with a straight face? You talk about consensus? Can you really convince yourself that a full third of Americans are simple evil monsters? You should have worked for the propaganda department back in WWII. You could have drew little red horns on pictures of Germans and Japanese, or Americans. It's no surprise congress cannot agree on anything with constituents so full of hate and spewing such disrespect. Liberals are so passionate, they believe the ends justifies anything. They call themselves intellectuals, but only use intellect to rationalize feelings.
kochevnik
2 / 5 (16) Dec 25, 2012
mountain_team_guy: Most here can now see through your libtard corporatist crap. You should go circle-jerk with your fellow freepers for entertainment.
mountain_team_guy
1.9 / 5 (18) Dec 26, 2012
mountain_team_guy: Most here can now see through your libtard corporatist crap. You should go circle-jerk with your fellow freepers for entertainment.


Whatever you say comrade. If you can't articulate an idea, just express yourself with more personal profanity. It suites you better than your longer posts.
Shinobiwan Kenobi
2 / 5 (16) Dec 26, 2012
Maybe Republicans are against raising the debt ceiling.


Funny, because these say otherwise:

http://clerk.hous...l279.xml

http://www.govtra...003/s202

http://www.govtra...004/h536

http://www.govtra...2006/s54

http://www.govtra...007/s354

...and the bomb-shell:

http://www.politi...mes-geo/

Please tell us all, again, how Republicans are against raising the debt ceiling <3 <3 =^-^=
VendicarD
3 / 5 (8) Dec 26, 2012
Exactly the same, with the exception that the policies of the Democrats favor the people while the policies of the Republicans favor Corporations and the super rich.

Which party has spent the last 40 years trying to gut social welfare programs?

"The idea that Repugnicans and Dumbocrats in Washington are different is laughable and naive." - Cantdrive

What policies do the Republicans have that require the wealthy or the corporations to sacrifice to balance the U.S. budget deficit?
VendicarD
2.8 / 5 (9) Dec 26, 2012
To keep your ignorant ass out of a 30 year long grand economic depression.

"And Obama added a billion in stimulus debt to do what?" - MountainTard

Idiot.
VendicarD
3.3 / 5 (7) Dec 26, 2012
If the economy were growing substantially, you would actually be correct.

"Maybe getting a fair cut of domestic and defense spending along with a tax hike isn't such a bad thing after all?" - MountainTard

But since it isn't, removing a half trillion in stimulus is expected to push the U.S back into a recesstion, and potentially a depression.

Either way, those cuts will be simply replaced with higher rates of spending for food and income supplements to keep people from starving in the streets.

Is that your brilliant plan?
VendicarD
2.8 / 5 (9) Dec 26, 2012
"The Federal Reserve bank buys government bonds without one penny..." - Congressman Wright Patman

Hahahahaha... So What?

That is how money is created.

Idiot.
Wolf358
4.4 / 5 (8) Dec 26, 2012
"The Federal Reserve bank buys government bonds without one penny..." - Congressman Wright Patman

Hahahahaha... So What?

That is how money is created.

Idiot.


"Money", yes. But not the Value behind it. I think this is what they mean when they refer to the US Dollar as a "fiat currency". "Money" is _only_ worth what it will buy. Print more, and it takes more to buy the same amount of stuff, even if the stuff hasn't changed in value.
Lurker2358
2.3 / 5 (15) Dec 26, 2012
The Crook above, is typical of the Tea-Baggers that I have seen. Not only are they cheering over the defeat of any budget that raises taxes, I have seen hundreds of them actually demanding that the nation go over the cliff.

Bankrupting the nation was their initial goal. Pushing the Economy into a new depression is their new goal.


You're actually right.

At one point, Rush Limbaugh was actually quoted proclaiming that he "hoped the democrats failed" to solve problems, and I think Glenn Beck said something similar. These pricks were literally hoping for our country to go bankrupt, just so they could blame it on the democrats.

That speaks volumes to what Republicans and so-called "libertarians" are willing to do to get their way. Remember, many of these people have a large amount of wealth, or have connections to other people more wealthy than themselves. I believe they actually manipulate markets to try to make the other party look bad.
ryggesogn2
1.8 / 5 (15) Dec 26, 2012
ush Limbaugh was actually quoted proclaiming that he "hoped the democrats failed" to solve problems,


He hoped Obama failed to implement his Marxist policies because do not lead to more liberty and prosperity.
The problem solved by Obama's policies are to increase state power, not increase individual liberty and prosperity.

Lurker must want the country to fail if he supports socialist policies that are failing around the world.
RealityCheck
2.3 / 5 (19) Dec 26, 2012
The idea that Repugnicans and Dumbocrats in Washington are different is laughable and naive. The condition of this country is directly due to the two party system. An exploding debt benefits only one segment of the population, much of it foreign based.
It's Republican sabotaging and stealing that has brought all the 'free market' capitalism failures which 'socialist' govt stimulus has saved us from descending into severe global recession and rampant hyperinflation. Old theories/factors about causes of 'inflation' not all applicable now; because goods and services are not 'scarce'. As long as there enough goods and services 'on offer', then more money in the economy does not result in inflation, since the demand is satisfied and the economy is stimulated to tick over while the imbalances created by the 'free market' capitalist politician-scammers is corrected over time. If we can get rid of obstructing republican crooks and deniers and sabotaging crazies from policy making!
RealityCheck
2.3 / 5 (18) Dec 26, 2012
Republicans/Conservatives care only about PERSONAL power, money, crooked scams, reality-denial and defrauding voters of their votes under false pretenses: NOT to be trusted. Get a clue.


Can you really call yourself RealityCheck with a straight face? You talk about consensus? Can you really convince yourself that a full third of Americans are simple evil monsters? You should have worked for the propaganda department back in WWII. You could have drew little red horns on pictures of Germans and Japanese, or Americans. It's no surprise congress cannot agree on anything with constituents so full of hate and spewing such disrespect. Liberals are so passionate, they believe the ends justifies anything. They call themselves intellectuals, but only use intellect to rationalize feelings.
Mate, the current mob of repubs/conserves wrote the book on hate and obstruction and sabotage and plain crazy-reality fantasies. Who have been the obstructionists BY DESIGN? Get a clue.
RealityCheck
2.1 / 5 (19) Dec 26, 2012
Print more, and it takes more to buy the same amount of stuff, even if the stuff hasn't changed in value.
No. Old theories/factors causing 'inflation' not all applicable now, since the 'scarcity' is not an issue nowadays of mass production, transportation and global resources/markets making goods and services available (even 'glut'). So more money in crisis-of-confidence' scenarios will help economy tick over while imbalances corrected over time using reasonable measures to rebuild the 'free market' that capitalism/crooks used to almost destroy US and other democracies. Only intervention (in the market by govt, via extra money-issuing) has prevented a wholesale catastrophe; and the republican/conservative ideologues and crazies/crooks still want to take us there for their own mercenary/power agendas! Who needs this current crop of self-centered repub/conservative, alias rabble of foolish/criminal deniers of reality and othe greater common? We the sane people don't! Cheers!
cantdrive85
2.3 / 5 (16) Dec 26, 2012
Old theories/factors causing 'inflation' not all applicable now...


Right, it's different now. That's why the dollar has lost 98% of it's value since the enactment of the Federal Reserve Act. RUBE!
It's a myth that gold cost $1700 an once. And that nickel candy bar now costs two bucks. The government run "education" system is doing exactly as it is supposed to, making a populace of complete IDIOTS.
RealityCheck
2.5 / 5 (19) Dec 26, 2012
Hi, ryggesogn2.
Rush Limbaugh was actually quoted proclaiming that he "hoped the democrats failed" to solve problems,


He hoped Obama failed to implement his Marxist policies because do not lead to more liberty and prosperity.
The problem solved by Obama's policies are to increase state power, not increase individual liberty and prosperity.

Lurker must want the country to fail if he supports socialist policies that are failing around the world.

What planet do you live on? Our Australian (small "s" socialist) govt did it earlier and did it properly in a many-pronged way that stabilised, stimulated and increased trust/confidence, so we did not go into recession at all! And China seems to have thrived meantime. So your right-wing-crazies' propaganda is demonstrated worthless in the face of facts. Denying reality seems a popular 'thing' with you and your paymasters. Ugly mercenary agenda if ever there was. Get a scruple before it's too late for you, mate. Good luck!
RealityCheck
2 / 5 (16) Dec 26, 2012
Old theories/factors causing 'inflation' not all applicable now...


Right, it's different now. That's why the dollar has lost 98% of it's value since the enactment of the Federal Reserve Act. RUBE!


Not INTERNALLY. That is what counts. That will stimulate bringing BACK the US industry and exporting sector to proper levels, instead of what the BAIN/ROMNEY-ite 'free market' profiteers and TRAITORS did-----offshoring, industry, jobs and profits at the cost of their fellow Americans dignity and self-reliance, and forcing the govt to take up the slack and heal the hurt. So much for 'capitalism' that destroys the country that has fed it. Who's the 'rube' here? Not I. Seems that in this area, you are out of your depth, CD85. So I can't agree with you on this one, mate! Cheers; and stay safe during the holidays, CD85, everyone!
ryggesogn2
1.5 / 5 (14) Dec 26, 2012
Denying reality seems a popular 'thing'

Yes, especially among the socialists who believe in something for nothing.

"After years of prosperity, Australia moved left in 2007, with the election of a Labor government.

As one would expect, the previous, hard-won labor reforms began unraveling. Government spending, taxes, and regulations are all growing.

If the trend is not stopped, Australia's economic performance, as in the United States, will decline as it did during the previous period of big government.

Read Latest Breaking News from Newsmax.com http://www.newsma...GCrAZme5
Urgent: Should Obamacare Be Repealed? Vote Here Now!
"A set of incredibly weak economic reports from down under have left me with in inescapable conclusion that Australia has entered recession.
Read more at http://globalecon...zvb3f.99
eachus
5 / 5 (3) Dec 26, 2012
Sigh! All the comments here are ridiculous because they ignore reality. What reality? Well the House Republicans did not want "Plan B", because they preferred plan A--which they passed months ago.

The (Rules of the House and Senate, plus Constitutional requirements) spell out the way revenue (tax) bills proceed through Congress and are enacted into law. Any Revenue bill must originate in the House (Constitutional requirement). It then goes to the Senate where it can be amended. If the House and Senate pass different versions of the bill, a conference committee, with Members of both Houses is formed. If this committee agrees on a bill, it is submitted to both Houses with no amendments allowed. If it passes both Houses it goes to the President for signature. (I won't go in to the process after that.)

For years now the House has passed revenue bills, including budgets which (Democratic Majority Leader) Harry Reid has ignored in the Senate. Where is the problem?
RealityCheck
1.8 / 5 (15) Dec 27, 2012
Denying reality seems a popular 'thing'

Yes, especially among the socialists who believe in something for nothing.

"After years of prosperity, Australia moved left in 2007, with the election of a Labor government.

As one would expect, the previous, hard-won labor reforms began unraveling. Government spending, taxes, and regulations are all growing.

If the trend is not stopped, Australia's economic performance, as in the United States, will decline as it did during the previous period of big government.

Read Latest Breaking News from Newsmax.com http://www.newsma...GCrAZme5


You missed a little thing called the GLOBAL FINANCIAL CRISIS I mentioned, and which Labour govt INHERITED. Quick and targeted action by Labour saved Australia from becoming a banana republic in recession, with much more dire situation NOW. We pay our way. You seem determined to ignore reality AND history. Not good. Cheers!
VendicarD
3.9 / 5 (7) Dec 27, 2012
Value is subjective.

Double the population and you need double the amount of money to service the economy.

Double the value of the economy and you ned to double the amount of money to service the economy.

In real terms, the U.S. GDP has grown from 1 trillion to 13.6 trillion since 1930.

http://www.multpl...djusted/

In real terms then the number of dollars in the U.S. economy should have expanded by at least the same factor.

Which is roughly what is seen...

http://en.wikiped...pply.svg

There is a factor of 4 to 6 extra decline in the value of a 1930's dollar. And that has in part gone into raw wage inflation caused by workers demanding higher wages.

The velocity of money has also increased over this period.

"Print more, and it takes more to buy the same amount of stuff, even if the stuff hasn't changed in value." - Wolf
VendicarD
3.4 / 5 (5) Dec 27, 2012

THE EXPLODING U.S. MONEY SUPPLY MYTH….

http://pragcap.co...ply-myth
VendicarD
2.6 / 5 (5) Dec 27, 2012
Ah... Tard Boy... Newsmax isn't news. It is rabid, dreweling, right wing, nonsense.

"Read Latest Breaking News from Newsmax.com" - RealityCheck

You do realize don't you, that the NewsMax article you link to was written by the Moonies? I.E. the Washington Times...

Newsmax.com and the New Phony Journalism

http://www.populi...ism.html

NewsMax Lies

http://notalone-s...ies.html

Lies and the NewsMax Liars Who Tell Them

http://conwebwatc...sh2.html

Rachel Maddow Highlights Dick Morris/Newsmax "Scam"

http://mediamatte...s/191779
kochevnik
2.5 / 5 (13) Dec 27, 2012
At one point, Rush Limbaugh was actually quoted proclaiming that he "hoped the democrats failed" to solve problems, and I think Glenn Beck said something similar.
Ironic these pundits are both former/current drug junkies
VendicarD
3.4 / 5 (5) Dec 27, 2012
The Federal Reserve act was made law in 1913.

At that time the U.S. GDP was 39 billion.
Currently the U.S. GDP is 16.5 trillion.

So in 1913 the U.S. GDP was 99.8 percent smaller than today.

"That's why the dollar has lost 98% of it's value since the enactment of the Federal Reserve Act." - Cantdrive

The economy has grown by a factor of 500 since then. So unless you intend to starve your economy with a lack of dollars, then you have to inflate the money supply, or create denominations equal to tenths and 100ths of pennies.

cantdrive85
1.7 / 5 (12) Dec 27, 2012
"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
Alan Greenspan
Gold and Economic Freedom
Capitalism: The Unknown Ideal
1967

"The expansionists are quite right in asserting that credit expansion succeeds in bringing about booming business. They are mistaken only in ignoring the fact that such an artificial prosperity cannot last and must inextricably lead to a slump, a general depression."

Ludwig von Mises
cantdrive85
1.8 / 5 (12) Dec 27, 2012
"Like every other tax, inflation acts to determine the individual and business policies we are all forced to follow. It discourages all prudence and thrift. It encourages squandering, gambling, reckless waste of all kind. It often makes it more profitable to speculate than to produce. It tears apart the whole fabric of stable economic relationships. Its inexcusable injustices drive men toward desperate remedies. It plants the seeds of fascism and communism. It leads men to demand totalitarian controls. It ends invariably in bitter disillusion and collapse."
Henry Hazlitt
Economics in One Lesson
Foundation for Economic Education
1946

"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists."
Ernest Hemingway
Notes on the Next War: A Serious Topical Letter
Esquire
September 1935
RealityCheck
2.1 / 5 (14) Dec 28, 2012
Hi Vendicar, everyone. Just a typo correction.

It was actually ryggesogn2, and NOT me, RealityCheck, who said the following (in response to me), and which you, Vendicar, then inadvertently attributed to me.

"Read Latest Breaking News from Newsmax.com" -


You do realize don't you, that the NewsMax article you link to was written by the Moonies? I.E. the Washington Times...


Again, it was ryggesogn2 and NOT me who said what you inadvertently 'labeled' in your post as being from me.

I trust everyone is now clear on that. Cheers!
RealityCheck
1.9 / 5 (13) Dec 28, 2012
Hi CD85. It is crooked/political manipulation that is the problem, not the tools (money/economy). If we shrink the money supply/economy back to prewar eras, then recession and shortages due to lack of investment in supply side will make even that money worthless due to hyperinflation with increasing population alone. Reason why old economies 'worked' at all was because the POORER classes worked for a PITTANCE and without health/job safety nets and basic/decent human dignity. The old order you want to return to was all about few 'overlords' using the poorer/helpless populace as their DISPOSABLE ECONOMIC UNITS while they kept a lid on them /economy to suit agendas of power over poor populace who had no choice but to work, suffer and die from childhood just to stay alive for as long as they were 'lucky' in the workplace/life/health. Mate, maybe you should leave this area alone, as social/economic systems/history is not as cut and dried as plasma physics! Play to your strengths CD! Cheers!
dabbler
1.4 / 5 (9) Dec 28, 2012
The Crook above, is typical of the Tea-Baggers that I have seen. Not only are they cheering over the defeat of any budget that raises taxes, I have seen hundreds of them actually demanding that the nation go over the cliff.

Bankrupting the nation was their initial goal. Pushing the Economy into a new depression is their new goal.

Republican Tea-Baggers are incapable of thinking rationally. They demand that there be no new taxes, and that any bill that includes increased taxes be overturned. However, when they are told that the fiscal cliff that they are demanding America go over, includes increase in taxes they just shrug their shoulders and ignore the reality.

Republicans are absolutely mindless.

Beginning to see you as absolutely mindless after commentary like this.... Fiscal cliff is a Leftist Agenda propaganda and bludgeoning tool to scare the hell out of the American public while trying to pile more blame on the Right.
dabbler
1 / 5 (8) Dec 28, 2012
Also beginning to amass significant written evidence and quotations of obvious non US or not actual American citizens frequently running off at the mouth about issues that are neither their actual business or concern as well.... Also got to love the usual misfire quoting of obviously fictitious or leftly demented news sources like MSNBC, HuffingtonPost, NPR etc. that pop up frequently in lots of places. The article we are arguing about is also quite a flop piece of confabulation in general. Nothing much more useless than liberalist only slant point statements on "How it ought to be," etc etc Oh yeah Rachel Maddow is a loud mouthed over-opinionated socio-commie blow bag as well!
ryggesogn2
1 / 5 (9) Dec 28, 2012
it was ryggesogn2 and NOT me who said what you inadvertently 'labeled' in your post as being from me.

No, it was not I.

cantdrive85
1 / 5 (10) Dec 29, 2012
Reality?
"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
-Henry Ford
Clearly you don't understand it as well as Mr. Ford.

"The few who understand the system, will either be so interested from it's profits or so dependent on it's favors, that there will be no opposition from that class."
-Rothschild Brothers of London, 1863
Then again, maybe you do...

"Give me control of a nation's money and I care not who makes it's laws"
-Mayer Amschel Bauer Rothschild

I agree that it is crooked politicians, but who owns them?
VendicarD
4.3 / 5 (6) Dec 29, 2012
You do realize that Greenspan is the origin of the current U.S. fiscal crisis?

"The abandonment of the gold standard made" - Alan Greenspan

Here is Greenspan admitting that his Randite Ideology produced the failure.

http://www.youtub...iXsbPQY4

Greenspan's testimony guts the fundamental principles of his own Libertarian/Randite ideology.

cantdrive85
1 / 5 (11) Dec 29, 2012
"The Federal Reserve bank buys government bonds without one penny..." - Congressman Wright Patman

Hahahahaha... So What?

That is how money is created.

Idiot.

"The regional Federal Reserve banks are not government agencies. ...but are independent, privately owned and locally controlled corporations."
-Lewis vs. United States, 680 F. 2d 1239 9th Circuit 1982

"...the increase in the assets of the Federal Reserve banks from 143 million dollars in 1913 to 45 billion dollars in 1949 went directly to the private stockholders of the [federal reserve] banks."
-Eustace Mullins

So not only are you a socialist commie, but you support fascism as well. "Educated" indeed.
VendicarD
4.2 / 5 (5) Dec 29, 2012
They are.

"The regional Federal Reserve banks are not government agencies. ...but are independent, privately owned and locally controlled corporations."

And by law, they return all excess profits to the treasury.

You seem to believe that these banks should be controlled by big government.

cantdrive85
1 / 5 (12) Dec 29, 2012
At no point in his tenure as the head of the Fed did he every revert to his "Libertarian/Randite" (as you call it) philosophy. To the contrary, he couldn't distance himself far enough from this ideology, a fact Dr. Ron Paul repeatedly pointed out.
VendicarD
4.2 / 5 (5) Dec 29, 2012
"...the increase in the assets of the Federal Reserve banks from 143 million dollars in 1913 to 45 billion dollars in 1949 went directly to the private stockholders of the [federal reserve] banks." -Eustace Mullins

Oooowwwww Skairieeeeeeeeeeee

Know your sources or be consumed by them...

"Eustace Clarence Mullins, Jr. (March 9, 1923 – February 2, 2010) was a populist American political writer, biographer, and antisemite. His most famous work is The Secrets of The Federal Reserve. Along with Nesta Webster, he is generally regarded as one of the most influential authors in the genre of conspiracism."

http://en.wikiped..._Mullins

Consider youself consumed.
VendicarD
4.2 / 5 (5) Dec 29, 2012
Bullshit!

"At no point in his tenure as the head of the Fed did he every revert to his "Libertarian/Randite" (as you call it) philosophy." - Can'tDrive

He clearly states that the failure of his ideology was in the implicit assumption that people and especially organizations would never act against their own self interest.

"I made a mistake in presuming that the self-interest of organisations, specifically banks, is such that they were best capable of protecting shareholders and equity in the firms . - Greenspan

That is the core belief of Libertarian/Randite ideology, that individuals and corporations never act against their own self interest unless they are coerced to do so.

The corollary to that ideological statement is that regulation is either unnecessary since it causes actions to be taken that otherwise would have been taken or causes actions to be taken that are against the interest of individuals or corporations.

Greenspan - the prime disciple of Ayn Rand - CONT
VendicarD
4.2 / 5 (5) Dec 29, 2012
Cont.

thereby destroyed fundamental tenants of his own sick Randite/Libertarian political ideology.

http://www.youtub...-o7oEiyY

kochevnik
2.2 / 5 (10) Dec 29, 2012
And by law, they return all excess profits to the treasury.
After they decide what is their "excess profit" LOL

BTW the "money supply" is no such thing. It is bankster "debt supply." Banksters only make profits from debt. It is their product. That's why the gold standard had to be eliminated. Gold has intrinsic value, unlike debt notes people call "money"

I doubt Greenspan seriously believes his Randite blathering. Rather zionists employ ideology to manipulate the goyum. They themselves know ideologies are tools for the job at hand. No one tool fits all agendas.
VendicarD
5 / 5 (4) Dec 29, 2012
No macro-economiclly significant amount of money can be siphoned off of the profit simply because the profits can be calculated based upon the banks outstanding loans, which is pubic information.

"After they decide what is their "excess profit" LOL" - Kochevnik

So if you wan't to Audit the FED, then go right ahead. You might even find that some of the bank presidents are skimmers. If so then hold them accountable for crimes if any were committed.

However you aren't going to find trillions of dollars missing. Accounting standards simply make it impossible.

cantdrive85
1 / 5 (10) Dec 29, 2012
US Constitution
Article 1 Section 8

The Congress shall have Power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

Not big govt, but the limited one described by the CONSTIFUCKINGTUTION you fascist socialist commie scumbag.
kochevnik
1.6 / 5 (7) Dec 29, 2012
However you aren't going to find trillions of dollars missing. Accounting standards simply make it impossible.
Interesting you mention that. Bernanke seems to think auditing the FED will destroy the world economy: http://www.youtub...BugvVqpw
ryggesogn2
1 / 5 (10) Dec 29, 2012
What? Canada is successful because of less socialism and more free enterprise?
"(the speech) contrasted the success of free enterprise in Canada, with the failure of the welfare state in America and Europe. I assumed my mother and I would be its only YouTube viewers, as usual. "
"Canada has been practicing what the U.S. always preached: free markets, low taxes and minimal state interference. And it is working. "
http://www.huffin...p_ref=tw
kochevnik
2.6 / 5 (10) Dec 29, 2012
What? Canada is successful because of less socialism and more free enterprise?
Than Norway, you mean? Or China?

You call Obama a socialist yet he is more conservative than Nixon. You standard is right-wing despotic dictators. Oh wait you say Hitler is a socialist. No surprise there. I bet Kony is more your man.
Lurker2358
1.5 / 5 (8) Dec 29, 2012
He clearly states that the failure of his ideology was in the implicit assumption that people and especially organizations would never act against their own self interest.


He said that? OMG. How could anyone be that absolutely stupid? He seriously believed people never act against their own self interest? What about gift giving, suicide, laziness, etc?

No wonder he destroyed the U.S. economy. Greenspan is an idiot.

I remember my idiotic college economics professor proclaiming that "Greenspan is God" BS.
RealityCheck
1.9 / 5 (13) Dec 29, 2012
Reality?
"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
-Henry Ford
Clearly you don't understand it as well as Mr. Ford.

"The few who understand the system, will either be so interested from it's profits or so dependent on it's favors, that there will be no opposition from that class."
-Rothschild Brothers of London, 1863
Then again, maybe you do...

"Give me control of a nation's money and I care not who makes it's laws"
-Mayer Amschel Bauer Rothschild

I agree that it is crooked politicians, but who owns them?
As the comments since your post make clear from all 'sides', it is the crooks that are the main worry, not the tools. When greed and political/criminal chicanery is given free rein by 'unfettered capitalism' suicide-policies, then obviously greedy/crooked people/orgs act against their own best interests/profiteer as the case may be. GFC anyone!
RealityCheck
1.9 / 5 (13) Dec 29, 2012
Also beginning to amass significant written evidence and quotations of obvious non US or not actual American citizens frequently running off at the mouth about issues that are neither their actual business or concern as well.... Also got to love the usual misfire quoting of obviously fictitious or leftly demented news sources like MSNBC, HuffingtonPost, NPR etc. that pop up frequently in lots of places. The article we are arguing about is also quite a flop piece of confabulation in general. Nothing much more useless than liberalist only slant point statements on "How it ought to be," etc etc...
INTERNET is a great leveler. You don't get to dictate who observes/comments on world affairs. And when will it get through your shill agenda? Extremism in ANY system (communism or capitalism or religionism) contains the seeds of its own inevitable destruction. History proves this again and again. Time to go the middle way. With reason. NOT power crazy liars (Republican) slogans/hatreds.
Jeddy_Mctedder
1 / 5 (9) Dec 30, 2012
"The Federal Reserve bank buys government bonds without one penny..." - Congressman Wright Patman

Hahahahaha... So What?

Wrong.

That is how money is created.
Idiot.

Money can be created in any number of ways by any number of enties under any number of political scial and economic systems. Moneyness is nothing more than a quality of utility of an object for exchanging things over time.

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