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The Wolf The Republicans Just let In The Room
Market Ticker ^ | 8-1-2011 | Karl Denninger

Posted on 08/01/2011 10:19:19 AM PDT by verklaring

I hope you like higher taxes.

Much higher taxes.

Last night I couldn't figure out at first blush how Boehner/Reid managed to get their "numbers" to work. Well, when I looked at it again this morning, it snapped into focus, along with a backhanded comment and, yes, math.

Ok, ok, not really math. It was just a calendar.

See, the Bush Tax Cuts and the FICA holiday expire at or before the end of 2012. And guess who's going to be President then - either having just been re-elected or much worse, as a lame duck?

(Excerpt) Read more at market-ticker.org ...


TOPICS: Business/Economy; Government; News/Current Events; Politics/Elections
KEYWORDS: ceiling; debt; increases; taxes
Tax increases hidden in deal
1 posted on 08/01/2011 10:19:23 AM PDT by verklaring
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To: verklaring

They first expired Dec 2010, who was president then and who controlled both houses of congress?


2 posted on 08/01/2011 10:23:33 AM PDT by Raycpa
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To: verklaring
Rush Limbaugh was just talking about this, according to him this “debt commission” will make it virtually impossible to renew the Bush tax cuts or ever have any other tax cuts no matter who is president. Because the way it is worded, any action that the CBO deems increases the deficit would have to go before this debt commission to be balanced with spending cuts or other tax increases.
3 posted on 08/01/2011 10:24:04 AM PDT by apillar
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To: verklaring

I agree 100% on the tax problems in this bill. That said, if the economy still stinks this doesn’t help Obama one bit. The tax cuts do expire at the end of 2012, but a new congress and president can put them right back into place during the month of January when we win. If Obama gets reelection, yes, the taxes are going up, but everyone on both sides are on record that taxes going up in a recession are bad...and unless we see substantial growth in the next 15 months, the economy and jobs will still be poor...the looming tax hikes are going to further hold the economy down. In the ivy league towers this may seem like a great plan, but like everything else in liberalism, the reality is a suppressed economy. Business now has a new 60 pound weight on their shoulders because their fiscal year 2012 and 2013 budgets are now weighted down. The lack of spending cuts, deficit reduction, and any progress on debt control are going to further impact an already ailing economy.

Now don’t get me wrong, I would vote this bill down in a second because it is a piece of garbage, but I don’t think it is much of a help to Obama’s reelection nor going to help improve the economy to benefit their party. I am sorely sickened by the inclusion of this idiotic super committee and the ramifications may be very bad for our country. That said, I don’t think this does a damn thing to help the Democrats in 2012....assuming our side doesn’t screw it up.


4 posted on 08/01/2011 10:26:16 AM PDT by ilgipper (political rhetoric is no substitute for competence (Thomas Sowell))
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To: verklaring

Not happy with the GOP? Looks like Karl Denninger will have to vote for Obummer again in ‘12.


5 posted on 08/01/2011 10:27:02 AM PDT by Lazlo in PA (Now living in a newly minted Red State.)
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To: apillar

The point Rush is making is is part of Denninger’s point also. The bill is an inherent but hidden tax increase. It is what the Dem’s have wanted. It is a scam.


6 posted on 08/01/2011 10:27:49 AM PDT by verklaring (Pyrite is not gold))
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To: apillar
Agreed. Common experience establishes that “commissions,” or “committees” will always “reluctantly” raise taxes due to the great need for more “revenue.”. Until politicians are removed naked there will never be any stop to TAX & SPEND.
7 posted on 08/01/2011 10:28:09 AM PDT by AEMILIUS PAULUS (It is a shame that when these people give a riot)
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To: ilgipper
if the economy still stinks this doesn’t help Obama one bit

Here's what I expect to hear:

We were on the right path. The economy was getting better in the summer of 2012 -- "everybody agreed on that".
Then the Republican extremists threatened to push us into default.
Through adroit leadership, Obama was able to reach a compromise with some really unreasonable people.
Unfortunately, the compromise pushed the country off the right path, and moved us in a bad direction.
Which is why the economy of 2012 is so terrible.
So re-elect Baraqck Obama so he can undo the damage done by the Republicans.

8 posted on 08/01/2011 10:32:21 AM PDT by ClearCase_guy (The USSR spent itself into bankruptcy and collapsed -- and aren't we on the same path now?)
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To: apillar
any action that the CBO deems increases the deficit would have to go before this debt commission to be balanced with spending cuts or other tax increases.

The CBO also scored Obamacare, including all the assumptions that everyone knows are very unlikely to come about: such as 4% GDP growth and continued low interest rates on government bonds, and that scheme of using a ten year forecast with six years of new expense and ten years of new revenue from Obamacare.

Apparently, all the CBO does is run the numbers based on the assumptions provided by the party in power. So what the CBO turns out is dependent on what assumptions it is provided by the party in power.

So the budget impact of ending or continuing the Bush tax cuts would depend on the assumptions made about their effect on budget revenues.

I'd thought in the past that the CBO exercised some quality control on the sort of assumptions used in their scoring of bills, but that sure didn't seem to be the case as they scored Obamacare.

9 posted on 08/01/2011 10:35:08 AM PDT by Will88
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To: verklaring
"KILL THE BILL"
10 posted on 08/01/2011 10:46:26 AM PDT by Signalman
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To: verklaring

Creative accounting.


11 posted on 08/01/2011 10:48:36 AM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: verklaring

The author’s correct, if a little slow on the take.

Plus, there’s another wolf in the room. If this bill passes, Congress will have abdicated their legislative authority to an unelected 6-member extra-Constitutional body. We’ll not even know their names before this bill is brought to the floor. This 6 member so-named “Super Committee” will have more legislative power than both houses of Congress combined. The Omoslem’s extra-Constitutional czars pale in comparison. Disgraceful!!


12 posted on 08/01/2011 10:55:26 AM PDT by lonevoice (schizoprenic hostage taking hobbit terrorist)
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To: verklaring

Everyone seems to be forgetting why Obama gave his OK to extending the Bush tax cuts in 2010. The reason was that those cuts removed many low income taxpayers from the tax roles and gave a substantial tax cut to those with modest incomes. So failing to extend the Bush tax cuts would have a huge impact on those in the lower income brackets a majority of which are Obama supporters with a capital D.

Looking ahead Obama could see that negotiating a revised tax code to retain the Bush tax cuts for the lower income brackets and reimposing higher taxes for those filthy rich and mostly Republican taxpayers was not going to be a walk in the park - not with the House in control of the GOP and all those new crazy Tea Party types sitting in what where solid Dem seats only a few weeks earlier.

So Obama decided he would simply wait until his 2012 triumph and the return of the House to it’s rightful owner (the Dims) and then he could do whatever he wanted with the Bush tax cuts.

Is he going to see it any differently in 2012, win or (much more likely) lose?


13 posted on 08/01/2011 10:56:27 AM PDT by InterceptPoint (w)
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To: ClearCase_guy

I an sure you are almost exactly right. B I just don’t think it will work. If the economy stinks, their campaign will resonate as mush as his recent speeches and the ones during Obamacare.

I know we are all fearful of 1996, but Obama is no Clinton and this economy is god awful. Public opinon on issue after issue is with conservatives now. I don’t like this deal, at all, and I suspect they think this is their lifeline. I am sure it will fit their planned narrative, but I think our narrative will be superior.


14 posted on 08/01/2011 10:57:06 AM PDT by ilgipper (political rhetoric is no substitute for competence (Thomas Sowell))
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To: apillar

Because the way it is worded, any action that the CBO deems increases the deficit would have to go before this debt commission to be balanced with spending cuts or other tax increases.


Tax cuts + spending cuts? Unheard of.


15 posted on 08/01/2011 11:01:16 AM PDT by Personal Responsibility (Government grows when times are good. It grows when times are bad. When doesn't government grow?)
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To: Will88

So GIGO is still valid after all these years? Who’d a thunk it!


16 posted on 08/01/2011 11:02:57 AM PDT by Sursam Abordine
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To: ilgipper

It’s hard for me to believe that Obama would let the Bush tax cuts expire simply because the Bush tax cuts created a MORE progressive tax system than was in effect under the Clinton taxes. Yes, everyone got a tax break. BUT the biggest tax breaks (in terms of percentages) occurred for those at the bottom — that’s why we have about half the country paying nothing and a good portion of those even receive transfer payments under the “Earned Income Tax Credit,” i.e., they actually have a negative tax.

The Earned Income Tax Credit program was in effect before the Bush tax cut but I believe it was increased pretty heftily under the Bush tax cuts.

I think this is why Obama always just wanted to raise taxes on the so-called “rich” but caved when it came to letting the Bush tax cuts expire. He was unwilling to let the Bush tax cuts expire because it clearly would have been a tax increase on those he’d absolutely promised wouldn’t have their taxes increased. He doesn’t have the ability to veto a portion of a bill, so either all the tax cuts expire or he has to accept or reject the totality of a bill that would revise the taxes.


17 posted on 08/01/2011 11:05:53 AM PDT by SweetWilliamsMom
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To: verklaring

Obama won’t get a 2nd term. The fact that these tax increases are baked into an economy that is already faltering absolutely guarantees higher unemployment. The lousy GDP figures in the revised estimates for the 1st quarter show why UE rose despite the “good” (though fraudulent) numbers. Now, with guaranteed tax increases, businesses won’t be hiring as much, and many will begin to lay off workers again. There will be a sense of malaise not seen in this country since Carter was in office, with similar results. Obama is just a poser, with no clue as to how to steer an economy or be a leader, and both these negotiations and the future course of the economy will prove it beyond a doubt to everyone except a few Kool-Aid drinkers that worship him.

The ironic part is that this would likely have happened to anyone who was President this term. We’ve spent like there’s no tomorrow until...now there really isn’t a tomorrow to speak of. The entire world is crushingly overburdened by debt, and the only 2 ways out are default or hyperinflation (default after making EVERYONE with paper assets broke). For once in his charmed life, Obama has stepped into a steaming pile...so at least there will be a little joy in Mudville when this arrogant poser gets his butt kicked. All that’s needed is someone on the Republican side with more charisma than McCain or a tree stump (take your pick).


18 posted on 08/01/2011 11:10:09 AM PDT by Ancesthntr (Bibi to Odumbo: Its not going to happen.)
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To: verklaring

yes, IF they are allowed to expire. I’m sure that the tea-partiers are also well aware of this, and it would make a great campaign issue against 0bama and the democrats in the presidential election cycle - particularly since it is highly likely that the economy will still suck (if not into another recession).

They were able to poke a stick in the eyes of the ‘rats once, they certainly will be able to do it a second time to retain or make perminent the cuts. Sucker the ‘rats into thinking otherwise. All the while the rats are screaming about trying to find OTHER ways to increase taxes - methinks they realize this backdoor tax increase will be slammed in their face as well.


19 posted on 08/01/2011 11:11:29 AM PDT by Godzilla (3-7-77)
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To: apillar

We are screwed anyway.
Taxes will have to go higher. The bond holders will start demanding it, if they haven’t already.

The US is borrowing to pay its debts. Not sustainable. Taxes will go up, and spending will go down. We are in for a long winter.


20 posted on 08/01/2011 11:14:59 AM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: Sursam Abordine
So GIGO is still valid after all these years? Who’d a thunk it!

One of the constants in life. And I bet a heck of a lot of Americans think the CBO prevents the "Garbage In" part of the equation, but that doesn't seem to be the case.

Politicians in both parties use the CBO as a sort of "Good Accounting Seal of Approval". I'd like to hear their role clarified by someone who really knows what guidelines they work under.

21 posted on 08/01/2011 11:25:04 AM PDT by Will88
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To: redgolum

Correct, the concept the republicans are peddling, that you can increase spending forever without paying for it is as crazy as their fellow travelers in the democrats party and their free lunch crowd.


22 posted on 08/01/2011 11:27:15 AM PDT by org.whodat (What does the Republican party stand for////??? absolutely nothing.)
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To: Ancesthntr

“All that’s needed is someone on the Republican side with more charisma than McCain or a tree stump (take your pick).”

I would vote for a steaming pile of dog crap over Chairman Maobama.


23 posted on 08/01/2011 11:32:31 AM PDT by dsc (Any attempt to move a government to the left is a crime against humanity.)
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To: verklaring

The taxes were going to increase anyway. And the FICA decrease was a piddly 2%. Most people didn’t even notice the difference when it expires.


24 posted on 08/01/2011 11:35:57 AM PDT by Blood of Tyrants (Islam is the religion of Satan and Mohammed was his minion.)
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To: SweetWilliamsMom

I agree 100%. See my Post #13.


25 posted on 08/01/2011 12:11:07 PM PDT by InterceptPoint (w)
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To: Godzilla
yes, IF they are allowed to expire. I’m sure that the tea-partiers are also well aware of this, and it would make a great campaign issue against 0bama and the democrats in the presidential election cycle - particularly since it is highly likely that the economy will still suck (if not into another recession).

Isn't it interesting that last week, Tea Partiers were being villified as hard hearted, uncompromising, skunks at the garden party. But just yesterday, I heard pundits talking about how the Tea Partiers were big winners in that the national conversation is now about cutting government spending, and polls show that's where most folks are, as well.

We need to keep that conversation going, and instead of screaming about how horrid this deal is, start working to get some more conservatives in office to replace those who don't seem to be worried about the spending problem.

As my dear late Mama always used to say, "You can catch more flies with honey, than with vinegar."

26 posted on 08/01/2011 12:39:43 PM PDT by SuziQ
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To: SuziQ
But just yesterday, I heard pundits talking about how the Tea Partiers were big winners in that the national conversation is now about cutting government spending, and polls show that's where most folks are, as well.

That is why the Tea Party reps are there - the people wanted this. And if we can step back and breath a minute, note - 0bama stomped his feet and wanted 1.5 trillion in new taxes- he got none. 0bama stomped his feet and wanted a big single solution - he still got a two step solution that'll hang around his neck like an albatross. He stomped his feet and demanded no BBA - but a vote on a BBA is now to happen - in the midst of the election run. Not bad for a bunch of freshmen hobbits who only control one side of congress versus a democrat senate and WH.

Tackle the bush tax cuts afresh at the appropriate time, let the dems think they've got us, then pull the football away.

27 posted on 08/01/2011 12:44:41 PM PDT by Godzilla (3-7-77)
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To: lonevoice

Yes I have major problems with the Super Committee. I think we are just going from the Gang of Six to the Gang of twelve. Government by Committee. What about the other 423 Congress Critters that might want to present a piece of legislation on matter of our debt? They will be ignored.


28 posted on 08/01/2011 1:17:34 PM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: verklaring

bttt


29 posted on 08/01/2011 1:18:51 PM PDT by Pagey (B. Hussein Obama has no experience running anything, except his pedestrian mouth.)
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To: verklaring
There's no way that the middle class isn't going to get a tax increase in some form. The government isn't going to stop spending more money than it's taking in.

If the government taxes corporations at a higher rate, either by raising corporate taxes or by inventive new ways of sucking money out of them, it's just going to be passed on to the middle class in the form of price increases.

At some point the democrats are going to get there way and impose "revenue increases" on everyone who currently pays taxes in order to buy the votes of the 47% of Americans that don't pay taxes.

30 posted on 08/01/2011 1:32:05 PM PDT by mbynack (Retired USAF SMSgt)
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