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Posted by Tina
The progressive democrats keep yammering about the swell job they are doing with the economy. Their recent tax increase victory in the cliff deal has them busting out the confetti and balloons but according to Moody’s chief economist, Mark Zandi, Pantheon Macroeconomic Advisors chief economist Ian Shepherdson, and Gallup chief economist Dennis Jacobe agree it really just puts us another toe over the cliff. Investors Business Daily reports their view:
Moody’s Analytics chief economist Mark Zandi says the higher taxes on the wealthy and the increase in payroll taxes will shave close to 1 point off GDP growth this year and result in 600,000 fewer new jobs.
Pantheon Macroeconomic Advisors chief economist Ian Shepherdson figures the deal will cut GDP by 1.5 points. And Gallup’s chief economist Dennis Jacobe says the deal has created a “higher probability of recession — just the opposite of what fixing the fiscal cliff was intended to do.”
They went on to say that the creation of more tax brackets will complicate tax reform and referred to the historic record on raising taxes:
Tax hikes rarely produce as much revenues as expected, particularly when they’re targeted at the rich, who can more easily avoid the new taxes.
President George H.W. Bush’s tax hikes in 1990 generated $135 billion less than expected. (CBO?) And revenues as a share of GDP came in lower than predicted after Clinton’s tax hikes went into effect.
In a separate article Moody’s warned that the fiscal cliff deal will not help America avoid another downgrade:
The credit rater said the deal hammered out by Congress and the White House on taxes is merely a first step, and the U.S.’s credit rating could be affected “negatively” if Washington fails to take further steps to rein in the deficit. In fact, it said it was “necessary” for policymakers to adopt further measures to bring down the deficit to keep the U.S. rating intact.
Moody’s called the compromise a “further step” in clarifying the nation’s debt trajectory, but said it was far from sufficient.
Sounds like these credit guru’s want a more balanced approach to the problem than Obama and Reid demanded and got in this deal. So far the progressive democrat syndicate and their godfather have only delivered higher taxes; more spending and regulation; and a lukewarm economy with high unemployment, and stagnant wages.
This is a certainty in today’s world: We can count on progressive democrats to be obstinate, arrogant, and anything but fair about anything.
Gotta get this posted…I have a date to watch “Mars Attacks”…I need a good laugh and it never fails to amuse. Night all.
“Mars Attacks”. Heh. Imagine various political figures in some of the roles. I vote for Senator Reid as the Martian leader.
Oh yeah that’s half the fun. Political figures, lefty entertainment figures…it’s a riot!
Tina: “Moody’s Analytics chief economist Mark Zandi says the higher taxes on the wealthy and the increase in payroll taxes will shave close to 1 point off GDP growth this year and result in 600,000 fewer new jobs.”
That’s interesting, because yesterday you said that the payroll tax cut Obama implemeted in 2011 was a “stupid idea” which had little to no positive effect on the economy. According to Zandi, the payroll tax cut was important enough that its expiration will be a factor in significantly hurting the economy.
Do you now agree with Zandi that we needed the payroll tax cut, or do you stand by your previous opposition to it?
I believe with so many others we have already gone over the cliff. It’s just a matter of time before we hit the bottom if actual corrective measures aren’t taken.
Remember the “Bush Recession” was declared to have ended in June 2009 when unemployment was 9.5% and the GDP was 3.2%. At 18 months long it was declared the longest in US history since WWII.
The “Obama Recession” has lasted 54 months long, with a 2.7 GDP for Q3 2012!! But I’ve heard or read nothing declaring it the longest in our history.
Another down grade is the least of our problems. Paying for it will be hitting the bottom.
December jobs report: 155K jobs added, jobless rate stays at 7.8%:
“The underlying measures didn’t improve at all. The employment-population ratio actually declined by a tenth of a point to 58.6%, near the 2012 low of 58.5% and far below the consistent pre-recession levels — or even the levels seen at the recovery point in June 2009. The civilian labor force participation rate also remained stuck at 63.6%, near the 31-year lows achieved in 2012 of 63.5%. The obvious conclusion is that the workforce isn’t expanding at all relative to population growth.
The alternate measure of under/unemployment, U-6, stayed steady at 14.4% however. That would indicate that the situation isn’t getting worse, either. Instead, we’re still stuck in stagnation at the bottom of the cycle.
Among the major worker groups, the unemployment rates for adult women (7.3 percent) and blacks (14.0 percent) edged up in December, while the rates for adult men (7.2 percent), teenagers (23.5 percent), whites (6.9 percent), and Hispanics (9.6 percent) showed little or no change. The jobless rate for Asians was 6.6 percent (not seasonally adjusted), little changed from a year earlier.”
http://hotair.com/archives/2013/01/04/december-jobs-report-155k-jobs-added-jobless-rate-stays-at-7-8/
Report: Recession Over In June 2009:
“The National Bureau of Economic Research, a panel of academic economists based in Cambridge, Mass., said the recession lasted 18 months. It started in December 2007 and ended in June 2009. Previously the longest postwar downturns were those in 1973-1975 and in 1981-1982. Both of those lasted 16 months.”
http://www.npr.org/templates/story/story.php?storyId=129990734
GDP Revised Upward to 2.7% Growth for Q3 2012:
“Q3 2012 real GDP shows 2.7% annualized growth, revised from 2.0% in the advance report.”
http://www.economicpopulist.org/content/gdp-revised-upward-27-growth-q3-2012
I’m with Peggy, we’ve already gone over the cliff. We owe more money than we can possibly pay back in 50 years. It was totally irresponsible of Congress and they continue to be irresponsible. I think the latest number is .42 cents of every dollar spent is on credit.
I can’t believe Ali Velche’ on CNN said spending is not a problem that is tied to the national debt?
Geeeez, I’m a natural blond and even I can figure out spending IS the problem. The ONLY reason we need higher taxes is to pay for all of the spending Congress, Obama and his executive minions are having a drunken party with.
I really hope the republicans hold a hard-line in weeding out all of the pork in the Sandy relief bill. Billions added on for unrelated pet/pork projects should NOT be in it and identified as “PIGGY-BACK” add-ons.
Chris: “That’s interesting, because yesterday you said that the payroll tax cut Obama implemeted in 2011 was a “stupid idea” which had little to no positive effect on the economy.”
The point Chris is that the payroll tax cut appeased people but didn’t create, and could never create, 6-8% growth…which is what it will take just to get us back to full employment never mind paying down the debt! If you weren’t so busy playing smart a** all the time you might realize that.
Peggy: “The alternate measure of under/unemployment, U-6, stayed steady at 14.4% however. That would indicate that the situation isn’t getting worse, either. Instead, we’re still stuck in stagnation at the bottom of the cycle.”
Stagnation for now but so far nothing significant is being done to create a vibrant economy and a lot has been done to keep it dragging along at the bottom. Can you imagine the headlines if this were Bush or Romney’s record!!!!!!!
There was another report today that small business is not doing well. They are attempting to stay afloat (not the best sign). Businesses with 50 employees are cutting back to 49 to avoid certain regulatory burdens. Same with businesses cutting employees to get under ten or less. That means they won’t be hiring any time soon and we all know it is small business where most of the jobs are.
Tina,
I humbly submit that there are just as many right wing conservative republicans that are “…obstinate, arrogant, and anything but fair about anything” as there are progressive democrats. So far as I’m concerned there are 435 members of the house, 100 members of the senate, 1 president and 1 vice president. I will judge our representatives on their individual actions and not on the actions of the party to which they belong. Here’s a quote that helps me stay sane in the face of a two party system;
“I never submitted the whole system of my opinions to the creed of any party of men whatever, in religion, in philosophy, in politics, or in anything else, where I was capable of thinking for myself. Such an addiction is the last degradation of a free and moral agent. If I could not go to heaven but with a party, I would not go there at all.” –Thomas Jefferson to Francis Hopkinson, 1789.
“The point Chris is that the payroll tax cut appeased people but didn’t create, and could never create, 6-8% growth…”
No, that’s not “the point” of Zandi’s analysis or of my question. Zandi is saying that the end of the payroll tax cut will hurt the economy. I asked you a very simple question: whether or not you support the payroll tax cut. You refuse to answer.
I can understand why this is hard for you. If you say you oppose a tax cut, you commit Republican heresy. But if you say you support the payroll tax cut, then you are agreeing with something Obama did, which is the worst possible offense in your party these days.
If you cared as much about intellectual honesty as you did about towing the party line, this wouldn’t matter, and you would be able to give me a straight answer.
Michael I appreciate your insightful contribution to our discussions and I hope you will do so often.
Generally speaking I would gladly wear Jefferson’s quote as my own personal credo when observing the political scene. However, I have been watching politics closely over many years and I have noticed that the party founded by Jefferson and Madison has become a party more attuned to Marx and the mob; a party that thinks the Constitution is in the way of their personal ambitions and ideology.
Jefferson and Madison were gentlemen and statesmen, fierce defenders of the Constitution and states rights. They respected the process they had created and would not recognize what has been going on in Congress today under the leadership of Obama, Reid and, during Obama’s first term, Pelosi.
The Democrat Party is controlled and populated by people that have little regard for the Constitution and align behind a man who seeks to fundamentally transform this nation and its government. Not all who belong to the party are as extreme, unbending, and unscrupulous but enough are to garner absolute control.
Republicans in Congress may be obstinate and arrogant and they may not always be fair in their negotiations but I don’t see that they are unwilling to work according to the process given the opportunity. I don’t see that their ideas and ideals conflict with the founding principles of the nation and I believe they would be willing to work to produce legislation in a bipartisan fashion if the opposition were so disposed.
Republicans put together 25 separate bipartisan pieces of legislation designed to promote job growth and Reid blocked every single one of them. Reid refused to submit a budget over four years in breach of the law. The President invited Paul Ryan to a news conference ostensibly to announce a bipartisan starting point where both parties could work toward reforms. Instead he purposely and blatantly used the occasion to publicly humiliate Ryan setting him up as a target for his goombah’s in the media to destroy. Obama has abused his powers and authority in many ways through executive orders. Nancy Pelosi pushed Obamacare through the House. It was created in secret meetings and in collusion with certain healthcare industry people. Republican representatives were completely locked out of the process. It was passed only through the use of bribery and threats within the super majority democrat party. This is not a political party; this is a syndicate! These are tactics that mob bosses use and they demean the Constitution, our governments process, and the American people.
I’m sorry sir, but I humbly submit there are times when a group of people who are supposed to be servants and representatives of the people deserve not only criticism but exposure. If ever their was such a bunch it is this group of lowlife anti-American scum!
America deserves, and needs at this most perilous time, patriotic citizens who are willing to call out and name those who would usurp the guiding ideals and principles that made this nation great. It is important that we reaffirm that power resides in the people who have the fundamental right to live free from excessive government intrusion.