This isn't about the bill. It's about a lot of things including Italy. It's about the dumb money panicking and leaving.

Here's where sometimes the financial markets make no sense. Due to the downgrade of the ratings of US Treasury, there was a widespread stock sell-off to move the money to...

US Treasury issues

Nowhere else to put it. And our debt is still as safe as anything else.

On the plus side, should be a good time to buy soon...

It's a GREAT time to buy right NOW.

I think the S&P downgrade was a surprise. I don't think its coincidental that there were rumors of a downgrade on Thu which is when the market really started to crash.

Tempted, tempted ... but thinking its got some more room to fall.

Especially with September and October right around the corner...

SI

Just put a lot into my retirement right now. Normally don't try and time stuff, but can't pass this up.

Man, teaching AP Government this year is going to be fun.

Any chance you are doing it in DC? They could use it.

I'm actually upping my contribution and shifting towards stocks.

Panic sellers want out...for a little while. Then they throw money towards bonds. But bonds are too boring so they'll be back to the stocks as soon as Warren Buffet shows up to ring the opening bell in a couple of weeks (or some such similar nonsensical show of market stability).

You know............I was wondering. What if a candidate came out right now and said........I'm going flat tax, and I'm cutting spending (not to crazy low levels), and we'll pay off the deficit in 10 years with the surplus. How would people react to paying more tax to balance stuff out? Are we ready for tough love?

I'm sure the downgrade played some part, but the bigger issue is that there's nothing on the horizon that will lead to growth. The EU may have to crack apart, the U.S. has no plan to lower unemployment and China is running out of gas. Because the global rich won't allow anything that hurts them to any degree we're going to stagnate for the next few years.

Big day in Wisconsin tomorrow with 6 Republicans facing recall elections. Dems need three seats to pick up the State Senate. I think they have a good chance of picking up at least two, as one Republican has a scandal and the another will probably fall victim of being in a Republican in a Democratic district.

Two Democrats are up for recall next week also, with one Democrat already successfully defending against the recall after some wife beating Tea Party clown won the Republican primary. One of the Ds might be in some danger, so I'd say that if the Dems want the Senate back, they should win four races tomorrow to be safe. And that's a very realistic proposition for them.

Listen I am not into S&M or nothing but I would be in favor of this plan. The problem with a politician saying this is it will be a lie. I would love for us to pay off the debt and get another 30 years of good times... enough time for me to amass a fortune.

:)

Noop

P.S. Barry makes me mad with his empty speeches.

I'd vote for that candidate in a heartbeat. Been asking for that option for some time now. Just toss out a flat tax with no deductions or credits. Everyone under that option pays their fair share rather than the 'fair share' that Obama's trying to shove down our throats.

If you tied it directly to the actual debt, and did not allow it into the general slush fund, I think you'd have a shot. Not a great shot, but a shot nonetheless.

Flat taxes are shown to be the most regressive form of taxation, far from being 'fair share'. But not surprising coming from someone calling for an end to the Bush tax cuts as something "Obama's trying to shove down our throats".

I'm all for a simplified progressive tax system, but a flat tax is a horrible idea and would destroy the economy unless you've got an insanely high floor to avoid destroying the buying power of the middle and lower classes.

You'd have to make the spending benefit everyone in a more equal way which will never happen.

No, that's not the case at all. Obama's only the latest one to refer to 'fair share' as an escalating tax bracket while leaving in a ton of deductions and credits for corporations and big income earners.

My case is a perfect example and I'll bring it up again. Under the current tax bracket, I'm in the very top tax bracket. My wife and I were supposed to be paying around 35% of our income to taxes. My actual tax rate for last year?????

11%

This stuff about 'fair share' and increasing taxes is an absolute joke. No one is increasing taxes on those people. Why? Because they're always tossing in bones behind the scenes to allow those people to continue to pay a paltry tax rate. A flat tax of even 20% with no deductions or credits would nearly double my current tax liability.

Just another perfect example of these 'leaders' refusing to enact real reform rather than the continued bull that is called 'reform'. Give me a break.

Does anybody have any good links to discussions of a flat tax? On the surface, it sounds like a good idea, but I figure this board will show plenty of differing insights.

I don't understand how the standard conservative economic program is supposed to work.

- Reduce taxes for the wealthy and corporations
- Raise taxes on the lower and working classes
- Cut unemployment benefits
- Cut the earned income tax credit
- Repeal health insurance subsidies
- Immediately pull hundreds of billions out of the economy through government cuts
- Fire tens of thousands of government workers
- Pay teachers and other government employees less
- Eliminate unions
- Reduce or eliminate the minimum wage
- Cut Social Security and Medicare

What's the theory behind these ideas that says things will get better?

The current system seems to benefit GE more than a flat tax would seem to.

You can still have a floor but I don't think it would necessarily need to be insanely high. It could be ~$10k per capita or something like that.

But I do think the practical act of implementing it would be a massive shock to the system. Since companies (presumably) couldn't deduct operating costs, you'd see an instant hike in prices of at least 10-20% (and likely more depending on the industry) since they couldn't deduct the cost.

I guess I like the idea of a flat tax so I don't buy that you can't make it work, principally, with just some very minor tweaks.

Which is why I'm for a simplified progressive system as opposed to the current system or the flat tax.

From David Frum:


A fuckin men

Same here MBBF...my effective rate of income taxation was 14%(which is only that high because I moved to a high tax state). I don't know if you were including other taxes as well in there but I'm certainly not paying 25% all told. I'm not in the top 5% but definitely top 20%.

I don't actually want to pay 25% of my income to the government but I'm struggling to see how a flat tax would do anything other than put it all out there and make it transparent.

Agreed that a simplified progressive system would be a good start.

Yeah, I think we've hit a point in civilization where up is down and left is right...both literally & figuratively. :)

I can't believe I'm agreeing with you on something. I don't agree on the flat tax at all. While I'd love a simpler tax system, I still feel a progressive system is fair because those who earn more receive more in return.

I still there are some deductions worth keeping. I do want one on student loan interest simply because I think we should be encouraging people to get an education. But outside of that, I don't think we need deductions for mortgage interest, new cars, even kids. I never understood why someone who has kids, who uses more resources than me, actually gets to pay less in taxes. We can likely do away with a lot of these extras that makes filling out a tax form so complex.

But the loopholes and bullshit needs to stop. This was one of the most infuriating things I have read in awhile. This is one area where our politicians agree and it is nothing more than corporate welfare.

Corporate Tax Holiday in Debt Ceiling Deal: Where's the Uproar? | Rolling Stone Politics | Taibblog | Matt Taibbi on Politics and the Economy

I also believe that capital gains should be taxed the same as regular income. Not only has it been used to dodge income taxes (we'll just pay our execs in corporate shares!) but there is no reason that one guy who works 40 hours a week should have to pay 30% while the guy who hits his mouse a few times pays 15% of what he makes.

You guys understand that the percentage of federal income tax associated with the "top bracket" only applies to the income in that bracket. So for the first x of your income you're paying at the lower rates, right?

By definition then, your actual rate of federal income taxes is going to be less than that of that of the highest tax bracket.

I understand you're trying to make a different point based on deductions and such, but you're being a little misleading.

While Washington has been more concerned about debt, I don't think they've been that concerned with inflation. I think they'd love some right now. They've been trying to pump money into the economy but banks don't want to do anything with it.

The problem lies with them going through a middle man (the banks) to get money into the economy. They should have just done it direct through real stimulus programs, not the bullshit "everyone throws the pet project they've had on their plate and whatever else big donors want" one we had a couple years ago.

If it's a flat tax, you're going to be paying a smaller percentage anyway.

Even in a simplified tax scale, you don't have anywhere near the amount of paperwork and accounting required right now. Give me a two page document where I enter my income and take it times a fixed percentage. Save me a lot of time and money and this is coming from a guy who has a master's degree in accounting.

I always thought that a flat tax meant that there were no longer the tiered system of taxes we have now? It sounds like the flat tax that people are talking about is that everyone gets taxed the same percentage? Which I guess does get rid of the tiered system.

If we're talking about increasing revenues, how about we fix this shit before we start hitting people with it?

Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes - Bloomberg

The tax code is due for an overhaul. Throughout the IRS's existence, there was a major overhaul every 10 to 15 years. The last time one occurred was 1986.

Yeah, it also gets rid of the tax deduction (or at least the concept I support does) by taxing all income rather than just profit. So, clearly that would increase prices but (imho) would now make the real costs of everything more transparent.

You could argue a downside is that it could be a disincentive for businesses to engage in activities that might not otherwise bother if not for the tax benefit of it....but I think those are outliers. And besides...I'd rather have a motivated person or corporation develop, create, expend resources to do something to make profit and add value than a conglomerate doing it only for the tax benefit.

Yep...close that loophole and the one that GE found and you've cut the deficit by 10%.

Ah cool, thank you. I just don't know enough about the inner workings of our taxes other than I have to pay them. I couldn't find a loophole to save my life.

Hopefully, innovative companies get some kind of reward or benefit. Don't know how, but, there's plenty of people smarter than me, that I'm sure could think of something.

Interesting poll.

CNN Poll: Time to clean house in Congress? – CNN Political Ticker - CNN.com Blogs

2012 will be a fascinating election on many levels. Could see historic turnover.

I agree. Anti-incumbent sentiment will be (and continue to be) the story of elections until one of the parties gets it right.

And by right...I mean what the vast majority of Americans really care about...jobs, rising food & gas costs, and housing...in that order.

Well, the local area bounced out some Dems back in the check-kiting and post office scandals of the early / mid-90s, then put them back in on the next election cycle and they are still there, so I have very little hope for the anti-incumbent fervor.

What it seems to fail to consider is how many are unhappy with the established GOP for compromising as much as they did.

I'm surprised by just how angry a lot of conservatives seem to be that a deal was struck at all, I guess I'm just among the more pragmatic wing of the party sometimes.

For example, I seem to be one of the few conservatives voices in this district who was lukewarm about Broun's "no" vote. From the reaction I got for commenting along those lines in a couple of places you'd have thought I suggested sacrificing fetuses on the town square, selling the stem cells to Satanists, and donating the proceeds to the Taliban.

Those folks ain't real happy with the GOP at the moment either, and if there's more of them than I expected then there's a pretty good chance that there's more of them than most people would expect either.

I've always considered myself a conservative leaning moderate. To back that up my family considers me a right wing whacko. My wife's family thinks i'm just a stone's throw from pinko commie.

To think that Jon hangs with people that consider him to be milquetoast moderate is both funny and frightening to me.

More the former than the latter.

Not all that different from my reaction really ;)

A Tea Party themed candidate could probably win a plurality in most of N.Georgia in a 3-way race with the R's and the D's right now ... if there was any such thing as an organized Tea Party in the first place. Seems to be by it's very nature a rather disorganized thing IMO.

It would help the Tea Party a bit if they didn't have utter morons like Bachmann leading the charge.

what a volatile day in the market. up 150... fed says no interest rate bump till 2013... then down 200... then a 600 point boost to end the day up 420

I have to imagine that computers are causing these huge swings. Just doesn't seem natural at all.

The Fed decision is a double edged sword. On one hand they are saying they won't raise rates, on the other they are almost admitting that the economy is in deep shit for awhile.

Spoken like an enemy of the movement.

Right now she's the pick of the litter for many (me included, although I'm technically not anything more than a tea sympathizer) although I think Perry could take that mantle from her if he enters.

But among the tea partiers I know/hear from the most, there's also a small (but vocal) Paul contingent, there's a Perry-better-run contingent, and a sizable anybody-but-Obama group, etc. Goes back to the lack of unity & explains why I'm intentionally using lower case t. and p. here. Even after this long in the news, there's a lot of people putting themselves/being put under the tea party banner but they don't necessarily have a lot in common with each other. Hell, give me a solid conservative majority in both houses and I'd rather have Obama in the WH as a complete whackadoo like Paul ... but the Paulites seem to feel similarly about Bachman Perry Overdrive.

The real distinction is that I'm smart enough to avoid labeling myself as a "tea partier" when I'm not ready to make that commitment whereas a lot of other voices lack the same discretion .... otherwise it'd be plenty easy to stick me under that banner. It wouldn't be a good fit but that doesn't seem to stop anyone from using that label too frequently (not on me specifically, just in general).

I think Rick Perry scares me the most because I think he successfully bridges the gap between southern and western conservatism.

When I talk about southern and western conservatism, I'm making gross generalizations of southern conservatism being more of the religious style conservatism. Western style conservatism would be the keep the dadgum government out of my backyard type.

It's not that at all. It's not that her political positions are stupid, it's she is stupid.

Paul has some wild ideas that I don't think are realistic. But I feel like if you sat down with him, he'd be far more educated on the world than Bachmann. He'd know much more about domestic and global situations than her. Once you get Bachmann out of her prepared talking points, she can't handle herself. I'm not arguing ideology at all, I'm just arguing the persons overall IQ.

And that pains me to say she is a fellow alum.

So there were six Wisconsin recall elections today. Democrats needed to win three of them to retake the state Senate. Three Republicans were called early. Then two Dems were called. Now it is down to one last race for control of the state senate. Sandy Pasch (D) has a 900 vote lead on Alberta Darling (R) with 30 precints left.

And I hear it's Waukesha that hasn't reported yet, which if you remember the Supreme Court fiasco...

Okay fair enough ... except


Which makes his various unconscionable positions even more appalling to me (assuming we stipulate the intelligence gap for the sake of conversation).

That crosses from not-knowing-any-better to being willfully dead-damned-wrong.

And apparently Kathy Nickolaus (the Katherine Harris of Waukesha) does not plan to report any votes for at least one hour.

Yeah its too bad he doesnt want to use the strong arm of the state to police social issues. (The same thing you get pissed about the Democrats doing on economic issues I might add)

Waukesha is finally in. Pasch is now down 3100 votes with Milwaukee still out.

12 Milwaukee precints left. Nate Silver projects that Pasch will come up about 1800 votes short.

Looking at the map of the district, I'm not surprised. Not a very big chunk of Milwaukee county surrounded by some very red territory.

It shouldn't be taking so long. Glad we are finally going to do something, even though its just words.

Sources: U.S. is moving toward calling for Syrian leader to step down - CNN.com

We blaming him for the downgrade too now?

I'm pretty sure I've already stipulated my authoritarian tendencies, have I not?

No, I think Geithner should be the fall guy.

Looks like the Republicans hold the Senate in Wisconsin. But I think we forget that RINO Dale Schultz will probably be the most powerful man in the Senate if the Dems hold their seats next week.

I've been drawn out of Schultz's district. Chopping my area off his district probably makes it more conservative. Perhaps the Republicans are eyeing a primary challenge for him.

Another rollercoaster ride on Wall Street today. Tons of buying and selling.

I think Bachmann is a fraud. Someone who claims to be for one thing and is really for another. She's been a big government, big spending Republican for years. Her own husband collect government handouts. The Tea Party needs a leader who actually backs up what they say.

I'm not talking ideology or anything. But there are politicians who stand for stuff that you know are intelligent. Know that they would shit down most peoples throats in an informal debate. I think Bachmann is a puppet.

I don't understand it. I keep hearing that the computers are causing a lot of this and the best approach right now is to sit back and watch the fun.

I will add to that. She seems to be latched on by the mainstream media as the "favorite" to win the Republican nomination though I have really heard nobody say this in person. (and I am talking about my friends and family that actually buy into the D/R game) Seems like they know who they want to challenge Obama. Why? Maybe so that he wins another term or if she wins that things will be business as usual in Washington. Or maybe so they can write fluff pieces about the first woman to run for president instead of talking about foreign policy, monetary policy, or economics because that would be too hard for the American public to digest. (and won't fit in a 150 character tweet)

(In my opinion the same reason Obama won the '08 bid and Clinton came in second over some people that actually stood for liberal ideology)

She would get slaughtered in the general. She's far more extreme than Palin and doesn't have the same charm.

I still think Perry is the darkhorse in the race.

He ran the Texas campaign for Al Gore for president. I can't see the JiMGa's latching onto this guy. Seems like another religious nut who just figured out the effect massive government spending has on the economy but I won't be voting for him or Bachmann anyways so I guess they can nominate any fool they want. Maybe him and Obama can debate such "important" issues like prayer in school and gay marriage and whether to have only 3 wars or more while the fucking country spends its way into the shitter.

I think Bachmann is the "slaughter" candidate right now. Being paraded as the front-runner, carrying the spotlight and givings the opponents someone to rip on; while someone else emerges in the end.

The sad part of this is that unions and supporters poured $30 million into this race. I would of rather spent that money in saving jobs or supporting those who got the axed.

I don't think most Republicans care about the past or what issues someone stood for. They just want to hear the ideology they like come out of the candidates mouth and that's it. In fact, that's probably the same for most politicians and parties.

Don't know a ton about Perry but he plays hard to the Christians and has some charisma. He's also an outside which I think is a huge advantage in a year when no one wants to go near anyone who has been tainted by Washington.

No, you're right on that one. His talking points will probably be something along the lines of "Secession!", "More war!", "Jesus saves" or some variation. :)

Reminds me a lot of Rudy in '08.

Huh? Perry is definitely a contender for my vote at this point. I'm not wasting my time on in-depth research until he's officially in however.


Social issues trump everything for me, economics included. Difference in me & some (okay, a lot) of social issue voters is that

a) I'm on the opposite side of the abortion fence, it's not a litmus issue for me however

And

b) I'm not willing to settle to for only getting the social stuff right, only a candidate who gets social & fiscal (and foreign policy) right will get my enthusiastic support.

Well you may want to do some research on this guy then before throwing your support behind him. I didn't really consider you an Al Gore type guy.

I agree with you on the social issues. I would much rather the candidates debate fairy tale time in the classroom and whether gays can die in our endless wars than something that actually really might help us determine who would have the balls to be a true leader.

I don't often do this, but it seems like the appropriate response.

For what shall it profit a man, if he shall gain the whole world, and lose his own soul? Mark 8:36

That's confusing. Seems like your Bible quote for be a good platform to run against 99% of the politicians in both parties. (Including Perry) They all sell themselves out for power.

This. A honest politician is about as easy to find as an unicorn.

Yup, anyone that thinks that a particular candidate 'gets it right', is delusional in my opinion. There's only two entities that politicians work for, the companies and rich people that buy them out, and themselves. We are the stupid ones that keep letting them keep their jobs. There is ZERO accountability for politicians in this country unless they posted a picture of their dick on craigslist. Tank the economy? Free pass.

What would happen if they held an election and no one showed up to vote?

If I largely get what I want out of a pol - basically someone making a solid effort to move topics X,Y, and Z in the direction I desire - then does it ultimately matter whether he's doing that for all the right reasons?

I mean, that'd be lovely & all, but at the end of the day I'll take results over motivation.

I'm sure there's candidates that line up with a good portion of my laundry list (which isn't long by the way), but, I don't fool myself for one second that I think they are serious about them or they have the citizens best interests at heart.

The only time you see results in DC is when someone has terminal cancer or they aren't going for re-election. Other than that, they are nothing but walking, talking, Power Point presentations.

My favorite Perry moment is him going on about secession during the health care debate and how Texas didn't need the U.S. Then a week later he is furious that he isn't getting flu vaccines fast enough from the federal government. Can't even keep the schtick going for a week.

See, I just don't get the inconsistency there really.

I mean, there's a lot of stuff that I wish was one way but am not so caught up on the idea (or fantasy) of that I'll completely deny the reality of how they are in the meantime.

The government can now borrow money over 5, 7, or 10 year periods for negative real interest rates. Thank God we're focused on cutting spending rather than putting people back to work.

Mizzou actually has a point about effective tax rates, the cure for that is not a flat tax (horribly regressive and a net negative to consumer spending and economic growth). Getting rid of deductions across the board and tying that to a cut across the lowest brackets is the best way to eliminate that 11%. Even letting a small cut in the top bracket it would still be a net loss for the rich, they need the loopholes more than you do.

Flat tax would be on income, so corporations would still be allowed to deduct operating costs. That is actually a good thing, you want many corporations to spend all that money on expenses to get the relatively small returns (only a tiny fraction of the billions they generate per year is profit, a good deal goes to salaries, materials, and so on).

Actually, getting rid of government subsidies (in the form of tax deductions) would, in classical economics, be more likely to decrease prices. In some supply situations and points on the demand curve the decrease in subsidy would have a substantial enough effect on volume to drive up prices (fewer customers leads to a supply cut to the point where remaining customers need to pay more per unit).

This is not the case today, demand is pretty saturated particularly in this environment, and the colleges themselves need a certain level of supply or they will need to bail. So in the short run at least the removal of the subsidy will result in a price somewhere in the middle, with colleges cutting costs to get volume and students forking over a bit more of their own money to get in (but overall price decreases).

I would take it further and suggest that inflationary pressure is exacerbated by the government tax subsidies creating an education bubble which may make you fret and fume about losing your several hundred dollar deduction but the price pressure may have cost you thousands of dollars more in loans. If you plopped down some graphs about the total price of colleges I'd venture it would look more like a bubble than inflation.

Tax holidays are just one of the loopholes, but it is a big one. One of my favorites for explaining why our tax system over the last decade encouraged outsourcing.

As for trading, I was clearly wrong last Wednesday when I went in at 1240. By Friday my hedge was triggered and I decided to go heavy short with my speculative budget (I'm loaded heavy long overall of course by a large degree so I am hoping for a turnaround).

I don't think this is computer driven, it is no Black 2pm (wiki it). I know some may be triggerred by a variety of conditions but the overall trend right now is being set by humans. If I was to point out computer intervention I would look at Tuesday around 3PM. I would venture that is not just a reaction to interest rate announcements, the prices had been falling far enough that most computer traders I could think of would probably kick in and start a run up. Even if humans are that eager to make the turn I don't think they are quite that fast! :)

So putting people back to work means providing more federal/state government employees? Or would it mean providing federal funds for th18% of union-only construction workers? Would you also add putting more funds into miltary and defense related jobs? But I guess that also means we can't have more employment in extractive industries since those are taboo. Personally, I'm hoping for the next technology boom.

We could get around and build some stuff that will last us 100 years. There are a lot of infrastructure improvements that can be done.

I saw Meredith Whitney on CNBC this morning and thought she was spot on. Enough with the unemployment extensions, the rebates, one-time tax credits. People need jobs. Put the money toward getting people jobs, not putting a few hundred bucks in their pocket next week.

Well, the American Society for Structural Engineers estimates that we need $2.2T over the next 5 years for urgently needed infrastructure projects and repairs. Things that governments take care of, like utilities, roads, dams, etc. Since loans won't get any cheaper, now would be the time to take the money out for these projects, rather than later. They are going to have to be done at some point, and the number is only going to grow as more items are pushed off until later.

I think one idea would be to close the gap between income tax and capital gains tax. Maybe that means keeping the current Bush tax rates but raising the capital gains by 5% or something. Seems silly that we have such a difference in rates bassed on how you earn it.

Another option would be to lower the payroll tax rate but get rid of the caps on income. Would help the middle class a lot and help fund Social Security.

They should have done this in the Stimulus Bill. Unfortunately that turned into everyone's pet projects and some tax cuts that did nothing.

There was still quite a bit that made it into the Recovery Act that was infrastructure related. There are several road projects in Texas that have started, and on the drive from Texas to Idaho back in June, there were a bunch as well that had the Recovery Act signs.

But probably the more urgent infrastructure needs are the water lines that in many places are at more than twice their rated life spans.

You may want to do some research yourself. Perry supported Gore in his 1988 presidential bid. People forget now, but back then Gore was seen as a conservative Democrat and his candidacy was aimed at preventing another northern liberal from getting nominated. In fact, Super Tuesday was created just for this purpose, but it backfired because Jesse Jackson won several southern states, preventing Gore from getting the momentum he needed.

Either way, Perry has gone as far right since then as Gore has gone left, so I'm not sure why you think Jon or other conservatives would care who he supported or worked for 23 years ago.

Gore really isn't that far to the left. The science stuff overshadows the fact he is a moderate. He was more conservative than Bush if you look back on their campaigns.