Warren Buffett nailed it when he said "We're a very rich country and the reality is, this a minor problem that can be easily solved."
He then went on (as he often does) to tell interviewers that the US has to do something about the deficit and low tax rates for the rich.
But the deal falls short of already low expectations. It leaves in place significant short-term austerity while doing nothing to change the long-term increases in state debt. It doesn't reform taxes or entitlements and it doesn't deal with several key issues.
The main bits of the fiscal cliff were the expiring Bush tax cuts; expiring extended unemployment insurance benefits; expiring payroll tax cut; automatic spending cuts worth $110 billion per year, spread equally across defence and domestic programmes and the debt ceiling, the statutory limit on how much the Treasury must borrow. The current deal covers only the Bush tax cuts and enhanced unemployment-insurance benefits, which will continue for one more year.
The payroll-tax cut will expire as planned, reducing workers’ purchasing power by roughly $1,000 each. Together with the higher taxes on the richer (though not the very rich) that will impose a significant drag on the fragile recovery in 2013 (assuming that there will be one!)
Meanwhile, the Treasury can use various accounting manoeuvres for about two more months before it completely runs out of room to borrow without an increase in the debt ceiling. At that point, it will have to stop paying some bills—to Social Security (pension) beneficiaries, soldiers, Medicare doctors, and perhaps eventually bondholders, bringing on default.
Avoiding this will require intensive new negotiations likely to begin as soon as the tax deal is signed into law. Yet the last few months have shown the key players are incapable of making those sorts of deals.
Obama stated "If the Republicans think that I will finish the job of deficit reduction through spending cuts alone, then they’ve got another thing coming."
It seems to me that this system we have that we call 'democracy' is a large part of the problem. Party politics is just too adversarial, we aren't getting democracy, we're getting a little mini war between groupes who in reality are only a fag peper apart on policy. There may be ideological differences but our voting systems mean that the fanatical wings are sidelined in favour of broadly centre policies.
So if thats the case then why all the bickering and brow-beating rhetoric? Is it our fault? Is it us getting the governments we deserve?
In many ways its not the party in governenment who are the problem, its the opposition. Take here. The conservatives were royally f'ing useless in opposition as labour are now.
In the US the game has become even more adversarial, and this last election was the lowest and dirtiest ever seen!
We need these people to do less politics and more administration, and thats not easy., not saying it is. But if we can't have a group of people that can work together for the good of the constituents then we have the wrong people.
Jesus, no wonder the world is in such a mess, the people running it are idiots!
I watched again the select committee grilling of the Google, Amazon & Starbucks reps over theor corporate tax arrangements. The committee didn't have a tax accountant om the team. They had some people who talked a bit tasty, but they should have the top bastard available at any cost... that top expert should be working for the people, not the pharoes.
The starbucks and amazon had to swallow, unprepared... but the googlite wasn't asked a single searching question, was cool all the way through and tbh made the select committee look inadequate at best. Why, here's the experts?
Are we running the western world with people who can't get proper paying jobs inm the private sector because they aren't good enough? Who are these people?
You have absolutely no idea, just how totally inadequate and stupid some groups of politicians really are. I have spoken to an energy minister who didn't understand the simplest of the laws of physics. I have spoken to a finance spokesman who could not do simple fractions.
The CEO of Google UK summed it up nicely, when he later said that it is politicians who make the laws and therefore it is up to them to make the laws watertight. A first-year accountancy student could come up with tax laws that work.
As Khrushchev stated, a politician is a person who promises you a bridge tomorrow, when there isn't even a river!
If your local council is anything like ours, then it is run by bored housewives, retired useless civil servants and a motley collection of the idle, sick and disabled who can't get any other work anyway. A friend of ours who is actually capable and intelligent and had just sold his software company, ran for council and within a couple of years was made leader of the council. He was not some superman, but compared to the rest, he was!
The UK is probably the only Western country where the central government is actually doing something about the mess we are in. Given the piss-poor job they are doing, that gives you some idea of the quality of leadership in politics the World over!
All the rest are just kicking the can down the road, hoping that somehow, things will get better, all by themselves. Merkel agreed to lend Greece more money, the ECB wants to print more €uros to re-float the insolvent Spanish banks, the US is doing nothing about the government spending deficit and the US 'Super Committee' was not able to come up with a savings plan to cut less than 2% from public spending over ten years.
2% dear God! Imagine not being able to find 2% savings in a budget! 2% savings is something that any finance director in any major company could find during his lunch break. Delay capital expenditure, run trucks longer, look for cheaper financing, whatever.
The GOP (once the mouthpiece of the American working man and under Eisenhower a major vehicle for reform) is now completely frightened of upsetting the loonies in the Tea Party. So America is being torn between borrow-and-spend and cut-taxes-and-cut-spending. No Rep. candidate can afford to be a second Eisenhower, as the Tea Party will fill the selection committees with nut-jobs that will do anything to prevent that at all costs.