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Moderators - posted this in Off-Topic because it is mostly not about highways and not about transit]
McClatchy Newspapers Washington Bureau: Transportation would suffer because of fiscal cliff and impact on economy (http://www.mcclatchydc.com/2012/12/06/176640/transportation-would-suffer-because.html)
QuoteIf Congress and the White House fail to deliver a deal on spending and taxes, funding for an array of federal transportation programs could suffer. But the bigger impact could result from an economic downturn that reduces travel and transportation demand.
QuoteA Fitch Ratings report last month warned that the fiscal cliff would drive the U.S. economy into a new recession and unemployment back to 10 percent. In 2009, domestic and international travel declined 5.3 percent from the year before, and Fitch forecasts that it could decline as much as 5 percent next year if the fiscal cliff triggers a broader downturn.
QuoteThe aviation system would face a huge slowdown with potential cutbacks in operations and personnel, but air travel also would decline in a slowing economy. Highway and transit spending depends on the federal gasoline tax, and that would decline if Americans cut back on driving. Lower demand for consumer goods would hurt trucking companies, freight railroads and port operators.
Heck, I'm not worried about that minor distraction (the so-called Fiscal Cliff™). OTOH, thoughts of the abyss that lies beyond it - and the total ignorance and recklessness of those in power in the face of it - scare the bejeevers out of me.
Mike
Quote from: mgk920 on December 07, 2012, 02:46:48 PM
Heck, I'm not worried about that minor distraction (the so-called Fiscal Cliff™). OTOH, thoughts of the abyss that lies beyond it - and the total ignorance and recklessness of those in power in the face of it - scare the bejeevers out of me.
Mike
That "minor distraction" will result in my wife and I paying an extra $400 per month in taxes which is money that would otherwise be going into the local economy. Politicians from both parties need to stop acting like children and get something worked out.
Quote from: realjd on December 08, 2012, 08:11:08 AM
Quote from: mgk920 on December 07, 2012, 02:46:48 PM
Heck, I'm not worried about that minor distraction (the so-called Fiscal Cliff™). OTOH, thoughts of the abyss that lies beyond it - and the total ignorance and recklessness of those in power in the face of it - scare the bejeevers out of me.
Mike
That "minor distraction" will result in my wife and I paying an extra $400 per month in taxes which is money that would otherwise be going into the local economy. Politicians from both parties need to stop acting like children and get something worked out.
As I said, a 'minor distraction' compared with what's coming if nothing is done to bring non-discretionary federal spending under control. Right now, for example, the *entire* current DoD budget accounts for about 40% of the current federal deficit. When that souffle comes crashing down, you'll be longing for the good old days of the $400/month in extra taxes of the Fiscal Cliff™.
And the sad thing is that those in power seem to be reveling in that coming abyss.
:banghead:
Mike
Of course they are. That way, when Congress passes legislation getting rid of the automatic cuts without reaching a deal on reducing the deficit (yes, they can do that), they'll take the credit for "averting disaster" despite having done nothing.
That said, there are some who suggest that going over the fiscal cliff (which would only make a small dent in the rate of growth of the deficit... think about that) would be a good thing as it would be a reality check to inform people that the US cannot afford to behave like a superpower any more (like how "rich" people find out they're poor only after their car gets re-possessed).
Quote from: mgk920 on December 08, 2012, 10:20:25 AM
As I said, a 'minor distraction' compared with what's coming if nothing is done to bring non-discretionary federal spending under control. Right now, for example, the *entire* current DoD budget accounts for about 40% of the current federal deficit. When that souffle comes crashing down, you'll be longing for the good old days of the $400/month in extra taxes of the Fiscal Cliff™.
And the sad thing is that those in power seem to be reveling in that coming abyss.
:banghead:
Mike
So please explain: what do you think is coming? All I know is that if sequestration happens, my taxes will go up significantly, reducing the amount of money I spend in the local economy. Hundreds of thousands - if not more - people will almost immediately lose their jobs due to reduced government spending. If you think our economy going back into a recession is a "minor distraction" than your long-term view must be particularly bleak.
Quote from: realjd on December 10, 2012, 10:21:06 AM
Quote from: mgk920 on December 08, 2012, 10:20:25 AM
As I said, a 'minor distraction' compared with what's coming if nothing is done to bring non-discretionary federal spending under control. Right now, for example, the *entire* current DoD budget accounts for about 40% of the current federal deficit. When that souffle comes crashing down, you'll be longing for the good old days of the $400/month in extra taxes of the Fiscal Cliff™.
And the sad thing is that those in power seem to be reveling in that coming abyss.
:banghead:
Mike
So please explain: what do you think is coming? All I know is that if sequestration happens, my taxes will go up significantly, reducing the amount of money I spend in the local economy. Hundreds of thousands - if not more - people will almost immediately lose their jobs due to reduced government spending. If you think our economy going back into a recession is a "minor distraction" than your long-term view must be particularly bleak.
Think: when people stop buying US Treasuries, which they mostly now have, and the Federal Reserve has to resort to 'printing' money to cover the operating deficit, which they have been starting to do over the past couple of years, cryptically called 'Quantitative Easing™' (somewhere around 45% of all federal spending is now borrowed, perhaps as much as $1.5T/year now and growing), there will be a period of inflation the likes of which the USA has not seen since 'Continental' times. IMHO, it could well be at least as bad as what Mexico and Brazil endured during the 1980s and early 1990s.
Essentially, it is the question of "What will happen when the money runs out?".
Mike
I don't disagree with the basic premise that the federal budget should be in structural balance (i.e., deficits in the low point of the business cycle should be entirely offset by surpluses at the high point). But, without going too far in rejecting a purely Micawberish view of the economy (incoming = £20; outgoing = £20 0 s. 6 d.; result = misery), there is a role for timing in increasing taxes to offset the deficits. It does not make sense to let taxes go up at a time when an expansion of the tax base would be more than offset by shrinkage in revenue collections.
An underlying concern (one that is equal in chronological scope to the one Mike mentions) is that a society with great income inequality tends to have very long busts and very short booms, because large sectors of the economy have no surplus disposable income and this leaves policymakers little room to respond to cyclical events by manipulating the mix of savings and consumption in the economy. It is no coincidence that countries like Mexico and Brazil, which have very high income Gini coefficients, have had inflation crises. Most First World countries except us have low income Gini coefficients and we will eventually have to pay the price for being an outlier.
See the map here:
http://en.wikipedia.org/wiki/Gini_coefficient
I think the effects of doing the proverbial swan dive are overstated to a degree.
High gas prices are just like a tax, they take money out of the retail economy and put it in your tank. When gas spiked this summer, that extra $1 per gallon came straight out of the economy ... and yet we avoided slipping back into negative GDP growth.
The effect of the fiscal cliff will be $31 per week or $136 per month for the average person who makes $50,000 a year, according to Business Week. You'll get a lot of that back when you file your 2013 tax return if you have plenty of deductions, as I do. My credit card payment (which I use for gas only) was raised considerably higher than that when gas was $4 per gallon.
If you have a government job or rely on a government contract, you might be exposed. But hey, there will be plenty of fingers pointing in the aftermath, and according to some, you are part of the problem. Just saying.
There are some fiscal cliff calculators linked here: http://www.businessweek.com/articles/2012-12-03/what-will-the-fiscal-cliff-cost-you-theres-a-tool-for-that
Yeah, the "fiscal cliff" is just the lamestream media looking for news because they're bored. Plus when Congress passes a last minute bill getting rid of the fiscal cliff without doing anything else (which is inevitable; all past congressional doomsday devices have been diffused while not doing the action the doomsday device was intended to force), they get to take credit for preserving the status quo.
Quote from: deanej on December 11, 2012, 11:52:07 AM
Yeah, the "fiscal cliff" is just the lamestream media looking for news because they're bored. Plus when Congress passes a last minute bill getting rid of the fiscal cliff without doing anything else (which is inevitable; all past congressional doomsday devices have been diffused while not doing the action the doomsday device was intended to force), they get to take credit for preserving the status quo.
Lamestream media? You just outed yourself as a Tea Partier. We'll have to agree to disagree. You and I most likely have fundamental differences in how we view the role of government in society.
Quote from: realjd on December 11, 2012, 07:07:43 PM
Quote from: deanej on December 11, 2012, 11:52:07 AM
Yeah, the "fiscal cliff" is just the lamestream media looking for news because they're bored. Plus when Congress passes a last minute bill getting rid of the fiscal cliff without doing anything else (which is inevitable; all past congressional doomsday devices have been diffused while not doing the action the doomsday device was intended to force), they get to take credit for preserving the status quo.
Lamestream media? You just outed yourself as a Tea Partier. We'll have to agree to disagree. You and I most likely have fundamental differences in how we view the role of government in society.
Or being sarcastic. You just outed yourself as someone with no sense of humor.
Quote from: Steve on December 11, 2012, 08:52:58 PM
Or being sarcastic. You just outed yourself as someone with no sense of humor.
The term was popularized by Sarah Palin and I only ever hear it used by Tea Party members. In this case, I took it as a cue that deanej was a Tea Party member, or at lease politically aligned with them. I was using it to explain why we disagree on the budget discussion; we simply approach the problem from different philosophical viewpoints. I didn't mean it as an insult. What does that have to do with my sense of humor?
Quote from: realjd on December 11, 2012, 07:07:43 PM
Quote from: deanej on December 11, 2012, 11:52:07 AM
Yeah, the "fiscal cliff" is just the lamestream media looking for news because they're bored. Plus when Congress passes a last minute bill getting rid of the fiscal cliff without doing anything else (which is inevitable; all past congressional doomsday devices have been diffused while not doing the action the doomsday device was intended to force), they get to take credit for preserving the status quo.
Lamestream media? You just outed yourself as a Tea Partier. We'll have to agree to disagree. You and I most likely have fundamental differences in how we view the role of government in society.
Careful there. Tim Brown (aka bandit) uses many of the same terms for the media, and he's usually far to the left of them.
^^^
Like I said, I've only ever heard that term from Tea Party folks and I didn't mean it disparagingly.
There's the Tea Party, and then there are the omelet-without-breaking-eggs folk. I sometimes think the latter are more well-represented on this forum than members of the formal political parties or any of their subgroups.
Quote from: realjd on December 11, 2012, 07:07:43 PM
Quote from: deanej on December 11, 2012, 11:52:07 AM
Yeah, the "fiscal cliff" is just the lamestream media looking for news because they're bored. Plus when Congress passes a last minute bill getting rid of the fiscal cliff without doing anything else (which is inevitable; all past congressional doomsday devices have been diffused while not doing the action the doomsday device was intended to force), they get to take credit for preserving the status quo.
Lamestream media? You just outed yourself as a Tea Partier. We'll have to agree to disagree. You and I most likely have fundamental differences in how we view the role of government in society.
Quote from: realjd on December 11, 2012, 09:32:14 PM
Quote from: Steve on December 11, 2012, 08:52:58 PM
Or being sarcastic. You just outed yourself as someone with no sense of humor.
The term was popularized by Sarah Palin and I only ever hear it used by Tea Party members. In this case, I took it as a cue that deanej was a Tea Party member, or at lease politically aligned with them. I was using it to explain why we disagree on the budget discussion; we simply approach the problem from different philosophical viewpoints. I didn't mean it as an insult. What does that have to do with my sense of humor?
I always see it in online political communities centered around new media, such as a blog or podcast. I always assumed it was an expression of the war between new media and old media. I don't really pay attention to old media, so I pretty much know what's going on with it from watching the Colbert Report. For the record, I'm a paradoxical mix of left and right views, mostly on the left; while I think the US should get rid of debt (I'm practically allergic to debt in fact and fear it like the plague in my personal life), my methods for doing it would probably horrify most conservatives.
Here's a nice podcast on the subject of the fiscal cliff explaining what I posted in more detail: http://www.dancarlin.com/disp.php/csarchive/Show-242---Commeth-the-Repo-Man-II/Fiscal%20cliff-deficit-debt
Quote from: deanej on December 12, 2012, 05:17:27 PM
podcast
now there's a failed hybrid of the new and the old media... I much prefer to read my content, as I do so about 5-10x faster than listening to it.
They're great for when I have chores to do or some menial task to do on the computer.
Quote from: deanej on December 13, 2012, 11:31:17 AM
They're great for when I have chores to do or some menial task to do on the computer.
I cannot divide my attention like that. if I'm at home puttering around, and there is a TV or radio in the background, I will catch maybe 10% of what is going on.
If there is a menial task to be done on the computer, the first question to ask is whether it can be automated somehow so that no eyeball time needs to be spent on it. I taught myself NT batch programming for this reason and have now reached a point where my daily surf of state DOT websites (in search of new construction plans) is now handled by batch files which use wget and string extraction.
A difficulty with podcasts (especially for deaf people) is that many don't have subtitles or accompanying transcripts.
Most of what I was thinking of is stuff like mindlessly typing my thesis revisions, which are mostly editorial things; there have been a couple of time where I've had to pause so I can think about how to re-arrange paragraphs though.
Quote from: deanej on December 12, 2012, 05:17:27 PM
I always see it in online political communities centered around new media, such as a blog or podcast. I always assumed it was an expression of the war between new media and old media. I don't really pay attention to old media, so I pretty much know what's going on with it from watching the Colbert Report. For the record, I'm a paradoxical mix of left and right views, mostly on the left; while I think the US should get rid of debt (I'm practically allergic to debt in fact and fear it like the plague in my personal life), my methods for doing it would probably horrify most conservatives.
Here's a nice podcast on the subject of the fiscal cliff explaining what I posted in more detail: http://www.dancarlin.com/disp.php/csarchive/Show-242---Commeth-the-Repo-Man-II/Fiscal%20cliff-deficit-debt
I'm admittedly not a follower of many "new media" sources. My usual news sources are cnn.com, drugereport, the local paper, The Daily Show, the local news, and news.bbc.co.uk. Like agentsteel, I much prefer written news sources and am way too ADD to listen to a podcast. While I've only heard "lamestream media" used as a slur against traditional media sources that aren't Fox News, I can see how new media groups would also embrace it.
Personally, I'm not anti-debt. Debt is a tool and isn't inherently good or bad IMO. In many cases, taking on debt can be more financially beneficial than not. Taking out a mortgage for a house is usually (but not always) good financial sense, as are student loans. Car loans are fine provided you don't overextend on monthly payments. Interest free deals on big-ticket items like appliances are usually OK also in my book, provided you have the discipline to pay them off before the interest free period ends and the back-calculated interest comes due.
Bad debt is maxing out a credit card on useless possessions. But even then, I've found credit cards to be useful tools as an emergency buffer on my finances. Car needs a new transmission? That's going on a credit card, and I'm paying it off quickly over the next few months. Need a new TV? I'll save up.
As far as government debt, I'm OK with it conceptually. Like a car needing a transmission, there are times where the government unexpectedly needs to spend money it doesn't immediately have. And during downturns, I'm OK with the government using debt to carry us through. The problem IMO is that we never seem willing to stop borrowing when things get more prosperous again. We have the borrowing part down but not the paying back part.
Quote from: realjd on December 13, 2012, 02:36:15 PMPersonally, I'm not anti-debt. Debt is a tool and isn't inherently good or bad IMO. In many cases, taking on debt can be more financially beneficial than not. Taking out a mortgage for a house is usually (but not always) good financial sense, as are student loans. Car loans are fine provided you don't overextend on monthly payments. Interest free deals on big-ticket items like appliances are usually OK also in my book, provided you have the discipline to pay them off before the interest free period ends and the back-calculated interest comes due.
One standard rule for distinguishing between good and bad debt is self-liquidation. If the transaction for which the debt is incurred self-liquidates in time (i.e., produces a return that is more than sufficient to pay off the principal and interest), then it is good debt. If it does not, then it is bad debt unless it can be justified on other grounds.
From that standpoint mortgage debt for a house is justified if the expected increase in value of the house is greater than the money borrowed (principal) plus the interest charges. (This ignores any liquidity premia that may apply, however.) A similar analysis applies to student-loan debt. For consumer debt (including car loans and hire-purchase agreements for household appliances such as refrigerators), however, the calculation is different since the goods purchased with the borrowed money are intrinsically wasting assets: they will never again be as valuable as they were when they were purchased new. Deciding whether it is worthwhile to take on debt to purchase these goods involves different considerations, such as the extent to which payment for the good can substitute for other, larger payment streams (e.g., having your own washer and dryer instead of having to go to the laundromat every so often), or intangible returns which require some form of calibrated measurement before they can be integrated into a profit/loss computation. (An example: let's say you are happy to drive a clunker for which you can pay cash, but you have a much better chance of being promoted at your job, with a consequent increase in salary, if you take out a loan and buy a new car. Is it worthwhile to do that? In order to make such a judgment you need to form an estimate both of the salary differential and your likelihood of promotion both with and without the new car.)
Debt planning can be tricky once it gets away from the simple self-liquidation rule.
QuoteThe problem IMO is that we never seem willing to stop borrowing when things get more prosperous again. We have the borrowing part down but not the paying back part.
That is actually one of the traditional criticisms of Keynesian economics: policymakers who apply it faithfully set themselves up to be victims of their own success. If you raise the economy out of slumps and tamp down the booms, you degrade your ability to tell where you are in the business cycle and therefore to choose appropriate interventions, at least until the cumulative effect of policy mistakes (such as abolishing regulation of investment banking and allowing a housing boom to get out of hand) becomes apparent. This may or may not occur at a fiscally convenient time. In our case the 2008 recession hit just after a "jobless recovery" when fiscal policy was already expansionary, albeit in a poorly designed way that was over-reliant on tax cuts and on debt financing for two wars.