The Fiscal Cliff.

[JoBa]

Is anyone actually buying into this hyped up nonsense?

There is no "cliff" at all. If they can not reach a compromising agreement, which they probably wont, they will just extend the so called "deadline" for another year.

It is all plain old smoke and mirrors, it's all bullshit.

-JoBa

[Jim]

In America we have a criminal class and we have Congress. But I repeat myself.
--Mark Twain

[JoBa]

Genghis Khan was a leader. Mother Teresa was a leader.

A leader has the unique ability to take a large group of people, many with opposing views, and convince them through whatever means, to work in unison toward one common goal.

No such person exists in Washington.

-JoBa

[Jim]

There's a lot of talk about the "cliff" that the U.S. will soon fall over, but most of us aren't economists and don't really understand what the actual facts are. This explanation is short, well illustrated, and clear. It might help you to understand the situation our country currently finds itself in.

This quick "lesson" is not easy to watch because of the severe message re: our country's damaged economic status, but it's imperative that we do understand.

Very Short Video. This is non-partisan, produced by an accountant, Hal Mason, retired after 27 years with IBM. He looks at the budget, its revenues and expenses, and very simply illustrates the problem.

Amazingly, we usually get all the media's talking heads blathering and shouting for hours and yet never get any clarity. This guy does it in a couple of minutes.

http://www.youtube-nocookie.com/embed/EW5IdwltaAc?rel=0

[Jenny Lynn]

Ranger Jim,

My background is accounting/auditing private, public and governmental. I thank you for posting this.

It's sad that most of our country's politicans today federal, state and local (cities/towns) hide the true state of affairs so they can stay in office or keep their jobs long enough to either save a stockpile of money before sticking it to others or getting vested in receiving retirement benefits while voting to cut other's benefits. Those who account for and monitor the finances who try to honestly make public the hard facts of our financial affairs are quickly silenced in one manner or another by those who do not want to lose the income, benefits coming into them, their friends, political contributors, or their special interest groups.

It's a vicious cycle since important services get cut leading to loss of jobs while many of the highly paid public and private individuals continue to take from the money pot by voting themselves significant pay raises and continuing to collect their benefits while trying to put a spin on the missed revenue forecasts they are responsibe for. State and local entities take from the federal government, federal government takes from the state and local governments. It would be nice for a presentation to be made available similar to the one here that honestly displays all the in's and outs of taxpayer monies at all levels of our government, not piecemeal and separated by the various entities to easily hide that which those who should be held accountable don't want you to see.

We haven't even address that huge amounts of our nation's money leaves our borders and goes to other countries with little to no tracking of where it is going and what it is paying for. All this coupled with the loss of a generation of savers (depression era) and the current pool of spenders and entitlement takers who do not pay into the money pot has lead us to this ledge we Americans now find our selves standing percariously on.

As stated in the video, what happened in Greece is so small in scale to what will happen here eventually in the US when the rubber meets the road and the continual deficits in our budgets can no longer be substained.

[rgrokelley]

Is anyone actually buying into this hyped up nonsense?

There is no "cliff" at all. If they can not reach a compromising agreement, which they probably wont, they will just extend the so called "deadline" for another year.

It is all plain old smoke and mirrors, it's all bullshit.

-JoBa

The "fiscal cliff" is not one item, such as not having a budget for the last four years, that can be extended. It is several items, many which will take effect and cannot be "extended" unless the president reauthorizes it. An example of this is the "Bush tax cuts". Though these are not tax cuts, what they are is the tax rate that every American pays. President Bush lowered them, similiar to what Reagan did. However the Congress wanted to make sure they weren't permanent, and put a time limit on them. Obama knew that if all the tax rates were raised it would screw up the economy, and hurt his chances to get re-elected. So he re-authorized them. Now that deadline is due again. Since Obama's motus operandi in life is to punish the rich, I don't see this getting re-authorized.

Another big one is Obamacare coming due. You are starting to see the effect of this with businesses cutting back on employees, or cutting back on hours they are allowed to work. This increases unemployment and decreases how much money folks can make. This is another area where there will be extending of a deadline, because there is no deadline. This is now the law and cannot go away unless it is repealed, which will not happen with the administration we have now.

These are just two items. There are dozens of other items that were all put off until after the election so that those in power could remain in power. So the cliff is not just some bullshit created scare folks. It is real. It will change our country in ways we are trying hard to figure out right now. To not take it seriously, or better yet, to not prepare, is a fool's game.

[Jenny Lynn]

Is anyone actually buying into this hyped up nonsense?

There is no "cliff" at all. If they can not reach a compromising agreement, which they probably wont, they will just extend the so called "deadline" for another year.

It is all plain old smoke and mirrors, it's all bullshit.

-JoBa

JoBa, Please accepy my apologies I forgot to address you as the creator of this thread and felt I may have hyjacked on this thread a bit, our nation's fiscal health is something I may be a bit passionate about.
Thank you for starting this thread which has different individuals discussing this important topic from different perspectives.

Rgrokelley,
Thank you for your post helped me realized that I had not addressed JoBa in my response which I believe was disrespectful of me.

Jenny

[Flesh Thorn]

Another video that explains how our monetary system is a debt engine: http://www.youtube.com/watch?v=VNFi-Exh ... 2XWvm_2MSQ

[Jim]

Another video that explains how our monetary system is a debt engine: http://www.youtube.com/watch?v=VNFi-Exh ... 2XWvm_2MSQ

Excellent basic overview. Good catch.

[Flesh Thorn]

Another thing to consider, there is no way that small towns and local municipalities can afford the mandatory services they provide if not for the money that comes from the federal government. Water, sewer, public works, fire and police do not come cheap. Even if the big government manages to stay afloat, what about all of the small towns going belly up ?

[Jenny Lynn]

Another thing to consider, there is no way that small towns and local municipalities can afford the mandatory services they provide if not for the money that comes from the federal government. Water, sewer, public works, fire and police do not come cheap. Even if the big government manages to stay afloat, what about all of the small towns going belly up ?

Ranger Flesh Thorn,
I agree important matters to keep in mind, the local and state budgets are significantly funded by federal dollars there is no guarantee those levels coming in will continue at the levels they have.

This may be a bit off topic but I think everyone with deposits in any US financial institutions should stay on top of the FDIC insurance limits which were temporarily increased in 2008 after the significant failures of financial institutions.

In summary,
Deposits at FDIC-insured institutions and NCUA (credit unions) are now insured up to at least $250,000 per depositor through December 31, 2012. On January 1, 2013, if things stand as they are now, the standard insurance amount will return to $100,000 per depositor for all account categories except for IRAs and other certain retirement accounts which will remain at $250,000 per depositor.

Currently I've been reading there is a bill in legislation to extend the increased FDIC and NCUA deposit insurance limts. It’ll be interesting to see if anything changes between now and the end of 2012, or if the coverage limits will be allowed to fall back to $100k which was originally set back in 1980 when $100,000 would buy much more then it does now.

From the outside, virtually nothing will change if the legislation passes you’ll just have longer have to worry about the safety of your savings account, CDs, etc. come 2013 if your combined balance at a single bank is somewhere between $100k-$250k.

I've also heard there's been talk about passing legislation to make the FDIC and NCUA deposit insurance limits permanent.

for those interested, link to FDIC website page on this deposit insurance limits http://www.fdic.gov/deposit/deposits/un ... ation.html (noted this page was last updated 11/9/12
- I edited link since I had originaly posted wrong FDIC page)

Jenny

[JoBa]

Is anyone actually buying into this hyped up nonsense?

There is no "cliff" at all. If they can not reach a compromising agreement, which they probably wont, they will just extend the so called "deadline" for another year.

It is all plain old smoke and mirrors, it's all bullshit.

-JoBa

JoBa, Please accepy my apologies I forgot to address you as the creator of this thread and felt I may have hyjacked on this thread a bit, our nation's fiscal health is something I may be a bit passionate about.
Thank you for starting this thread which has different individuals discussing this important topic from different perspectives.

Rgrokelley,
Thank you for your post helped me realized that I had not addressed JoBa in my response which I believe was disrespectful of me.

Jenny

Jenny, there is no need to apologize at all. In aviation we have what is known as 'hanger flying", a conversation can start on one topic and meander onto many completely unrelated topics, the point is, it keeps the groups interest, but most importantly, all involved enjoy and willingly participate in the conversation.

Your contribution has clearly remained on topic, so why apologize?

Forums such as this are little more than a group of like minded people enjoying each other's company. If this conversation flips over to sport fishing, as long as we are enjoying ourselves, who cares?

Forums that demand lock step with the topic conversations usually end up with a bunch of glazed over eyes, and little participation.

The real reason we are all here is for the camaraderie and the fun.

-JoBa