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Study: ‘Fiscal cliff’ may cost Kansas 40,000 jobs, $2.75 billion GDP

December 13, 2012

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— Kansas could lose more than 40,000 jobs next year, most of them in the private sector, if no deal is reached to avert mandatory tax hikes and spending cuts to defense and other federal operations under the “fiscal cliff,” according to an economic analysis.

Regional Economic Models Inc., a provider of economic models used by federal and state agencies across the country, estimates that 35,000 of the up to 40,400 jobs it anticipates the state potentially losing would be from private workers.

If the tax cuts pushed by President George W. Bush are eliminated there could be less consumer spending, harming Kansas retailers, REMI projects. There also could be a big hit to health care because of lower Medicare reimbursement rates and budget cuts, and there could be other large-scale job losses for Kansas in professional service such as architecture and engineering that support capital investments and heavy manufacturing.

Scott Nystrom, associate economist with REMI, said the good news for Kansas and other Upper Midwest states is that they have more diversified economies, including agriculture. That makes them less vulnerable to changes in federal and consumer spending and more able to weather the fiscal cliff.

Still, REMI projects a gross domestic product loss topping $2.75 billion for Kansas should the nation go over the cliff.

Jeremy Hill, director of the Center for Economic Development and Business Research at Wichita State University, said the tax cuts would have the biggest impact on Kansas, but defense also could take a hit. Hawker Beechcraft, now in bankruptcy proceedings, is among the most vulnerable Kansas aerospace companies to possible cuts, Hill said.

The company declined comment on the potential impact of defense spending cuts on its business plan.

However, Hill noted that the nation’s light aerial attack fleet, which is more efficient and cost effective to maintain, is likely to benefit from defense cutbacks, and Hawker Beechcraft has a portion of that defense segment work.

At Spirit AeroSystems in Wichita the majority of the work is in commercial aviation, not defense. But Spirit still works on three significant defense programs, including building parts for Boeing on the Air Force refueling tanker as well as the Navy’s P-8A Poseidon Subhunter and the Marines CH-53K Heavylift Helicopter.

“While these are very high on the priority list, looming mechanical cuts to both defense and the FAA are of great concern, as they are to every aerospace company doing business in the defense and commercial aviation sectors,” said Spirit spokesman Ken Evans in an email.

The REMI numbers, posted this week on an interactive database on its website, allows states to look at the fiscal impact on their own state economies based on their differing industries, populations and other factors. The company’s regional economic model uses government data such as Bureau of Labor statistics, Bureau of Economic Analysis, and Census information.

The possibility of a fiscal cliff already has had a major impact on defense due to uncertainty, impacting jobs, investment and innovation, Evans said.

The Federal Funds Information for States, a joint service of the National Governors Association and the National Conference of State Legislatures, has estimated the potential impact of an across-the-board defense sequester in Kansas at $210.1 million, including $182.4 million in procurement contracts.

“If the sequestration part does act like a tipping point for a company’s viability, then the impact could be much worse for Kansas than what was modeled in the REMI estimate,” Hill said.

Spokeswoman Sherriene Jones-Sontag said Kansas Gov. Sam Brownback believes lawmakers in Washington will come to an agreement. She declined to specifically comment on the “hypotheticals” of REMI’s fiscal cliff economic analysis.

Kansas used REMI modeling last spring to evaluate the economic effects of last session’s tax policy, she said. State officials anticipate companies will add 22,900 new jobs in Kansas on top of normal growth next year — for which they credit the Legislature’s state income tax cuts and the exemption of the owners of 191,000 partnerships, sole proprietorships and other businesses from paying income taxes. Those projections, however, do not factor in a “fiscal cliff” scenario.

Comments

msezdsit 2 years ago

I wonder how many people, regardless of political persuasion, realize that the cuts that are proposed by either side will result in the loss of jobs. When in a economic downturn, it is a bad time to try to repay our debt. We can certainly work in that direction and certainly make some strides towards relieving our debt but jobs will be lost.

chootspa 2 years ago

Indeed. Ideally we'd be increasing our spending right now, not cutting it. You cut spending when the economy recovers.

gccs14r 2 years ago

To be fair, we should have cut spending during the 90s, and Greenspan should not have turned on the money spigot. Sure, we had a great run, but we just needed an OK run and could have paid down debt and reduced the money supply and started the 21st century in much better financial shape. It sure would be nice to be a creditor nation again.

chootspa 2 years ago

Greenspan was asleep at the wheel intentionally, and it did not play out so well for any of us.

Richard Heckler 2 years ago

Leaving the tax cuts for the 99% is a good thing. Let's do that for a change.

The 1%-2% have been receiving cuts for 33 years and where are the jobs? The Communist Chinese government is certainly happy with millions upon millions upon millions of USA jobs that somehow arrived there.

The 1%-2% have been making bundles of money sending jobs away. Mitt Romney and friends were doing it during the most recent election period . That tool is known as the leveraged buyout.

--- "Mitt Romney Made Millions from the Rescue of Detroit" as 25,000 GM jobs went to China.

--- " Investigative reports reveal how Republican presidential nominee Mitt Romney made some $15 million on the auto bailout and that three of Romney’s top donors made more than $4 billion for their hedge funds from the bailout.

--- As part of a massive government bailout, U.S. taxpayers paid $12 billion to save auto parts maker Delphi Corporation. Out of that taxpayer money, three billionaires and their partners took in a profit of over $4 billion. One big winner, with a profit of over 4,000 percent, were the billionaires’ silent partners, Ann and Mitt Romney. The Romneys made at least $15 million, and as much as $115 million.

Leaving the tax cuts for the 99% is a good thing. Let's do that for a change. The 99% spend more money in America than do the !%-2%. The 99% is the economic engine that drives the USA economy thus creates the jobs in the USA.

TongiJayhawk 2 years ago

Ok lets leave the tax cuts for the 99%. Then let raise the rate on the 1%, to whatever number you want, lets say 100%. This increase is NOT going touch the amount of debt we are spending yearly (let alone the 16 trillion we already have)! People need to look at the big picture! I wish they would quit arguing over the stupid increase on the rich. Do it already!! Then get busy on fixing the real mess, because that isn't going to touch it! It's either we all pay more or cut government spending. Probably both is going to be needed, but nobody want to take that medicine.

Richard Heckler 2 years ago

Republicans blew $47 million dollars and created no new jobs or industry. Meet supply side economics.

Worker's taxes siphoned off by their bosses Thursday, April 26, 2012 | Posted by Jim Hightower

Where is the $47 million tax dollars that belong to Kansas taxpayers?

My congratulations to workers in 16 states – from Maine to Georgia, New Jersey to Colorado! Many of you will be thrilled to know that the income taxes deducted from your paychecks each month are going to a very worthy cause: your corporate boss.

Good Jobs First, a non-profit, non-partisan research center, has analyzed state programs meant to create jobs, but instead have created some $700 million a year in corporate welfare. This scam starts with the normal practice of corporations withholding from each employee's monthly check the state income taxes their workers owe.

But rather than remitting this money to pay for state services, these 16 states simply allow the corporations to keep the tax payments for themselves! Adding to the funkiness of taxation-by-corporation, the bosses don't even have to tell workers that the company is siphoning off their state taxes for its own fun and profit.

These heists are rationalized in the name of "job creation," but that's a hoax, too. They're really just bribes the states pay to get corporations to move existing jobs from one state to another, or they're hostage payments to corporations that demand the public's money – or else they'll move their jobs out of state.

Last year, Kansas used workers' withholding taxes to bribe AMC Entertainment with a $47 million payment to move its headquarters from downtown Kansas City, Missouri, to a KC suburb on the Kansas side, just 10 miles away. What a ripoff!

rtwngr 2 years ago

Blah, blah, blah, blah, Republicans are to blame. Blah, blah, blah, blah, rich people stole it from you. Blah, blah, blah, blah, corporate greed. Blah, blah, blah, blah, blah, blah, blah, blah, blah, blah.

just_another_bozo_on_this_bus 2 years ago

Jim Hightower does well in telling it like it is in just a few short paragraphs. (Not that the willfully ignorant can bother themselves to read it before kneejerking a vacuous response.)

jhawkinsf 2 years ago

How many people are employed in the defense industry? If we cut defense 10%, how many jobs will be lost. If it's a 20% cut, how many jobs.

Cutting defense sounds good, but that will have consequences that will need to be thought out first.

chootspa 2 years ago

Please provide evidence of the negative effect higher taxation on the wealthy has. Feel free to use examples from the 1950s.

chootspa 2 years ago

Please find 47% who pay no income tax, no payroll tax, no sales tax, no property tax, and are not retirees who paid taxes on the income they're now using for pensions. It would be helpful if you could list the income brackets to which they belong as well. Thank you.

fancy80 2 years ago

Some of the opposition does come radio hosts, no doubt. But I don't think anyone can deny that low tax rates is one of the core beliefs of the Republican party, and has been for a very long time. For the record, I never listen to Hannity, Limbaugh or Beck. I am not, and probably never will be in the 1%. At this point in time though, I think we have to raise rates, but in return for that, I believe there have to be spending cuts as well.

Cant_have_it_both_ways 1 year, 11 months ago

You ever wonder why you are in the bottom 10% Liberal?

just_another_bozo_on_this_bus 2 years ago

There is no "fiscal cliff."

The predicted drastic effects of the sequester would only happen if Congress and Obama fail to do anything in the several months following the so-called "cliff" at the beginning of next year.

just_another_bozo_on_this_bus 2 years ago

The manufacture of the non-event, "fiscal cliff," has absolutely no similarity to the very real events that humans by the billions are creating-- global warming. Your attempt to link the two is an indication of the feebleness of your cognitive processes.

just_another_bozo_on_this_bus 2 years ago

Looks like falseflag is flapping in the breezes of the disappeared-- yet again.

Richard Heckler 2 years ago

The Fiscal Cliff does not exist it is just more GOP useless terminology that the news media has latched on to....

Social Security,Medicare & Medicaid Are NOT Entitlements - Risky Loans ARE!

Social Security Insurance is paid for and is not an entitlement. Medicare is paid for and not an entitlement. Medicaid is necessary and not an entitlement. The word entitlement is used rather loosely in the beltway and Topeka.

What is en entitlement is reckless financing that has created havoc in millions upon millions of USA households. Yes reckless financing of home loans and the financing of large buyouts using a variety of avenues all of which has created much grief for Americans in our own USA.

How can republicans, bankers and regulators either be stupid or simply not give a damn?

YOU decide.

How did blue and white collar workers lose these millions upon millions of jobs?

It’s not the Unions! It's the really big big reckless financing over the past 33 years.

--- 1. Mergers = industry and jobs lost to other countries

--- 2. Hostile Takeovers = industry and jobs lost to other countries

--- 3. Leveraged Buyouts = industry and jobs lost to other countries

--- 4. Free Trade Agreements = industry and jobs lost to other countries

--- 5. Reagan/Bush Savings and Loan home loan scandal which killed the economy and cost the USA millions of jobs. = industry and jobs lost to other countries

--- 6. Bush/Cheney Home Loan scandal killed the economy and cost the USA millions of jobs = industry and jobs lost to other countries

--- 7. Bush tax cuts

All of above ultimately translate into millions upon millions upon millions of blue and white collar USA job losses in some cases to dictatorships. Big time layoffs are the end result. These jobs go abroad with tax codes that prevent taxation on profits made abroad from USA big name corporations.

John Hamm 2 years ago

Keyword? "MAY." Tell your president to start behaving as a President not a spoiled child who's not getting his way.

gccs14r 2 years ago

People who say taxing the 1% won't do anything seem to not realize what the 99:1 split signifies. The 1% have 99% of the money. The 99% have 1% of the money. Of course raising taxes on the 1% will improve the balance sheet, and will do a lot more good than raising the taxes on the rest of us will. People who say, "But the 1% already pay most of the taxes", fail to realize that since they 1% has 99% of the money, they should pay 99% of the taxes. They're certainly getting more benefit from government services than the rest of us are, so they should pay for it.

TongiJayhawk 2 years ago

I'm not saying don't tax them, just don't expect it to come close to solving our problem! And your numbers are way off.

One frequently used definition of rich is the top 1% of federal tax filers -- those with adjusted gross incomes of at least $343,927.

They earned nearly 17% of all AGI in the country and paid more than a third (37%) of all federal income taxes collected by the government.

Table 1: Distribution of net worth and financial wealth in the United States, 1983-2010

Total Net Worth

Top 1 percent Next 19 percent Bottom 80 percent 1983 33.8% 47.5% 18.7% 1989 37.4% 46.2% 16.5% 1992 37.2% 46.6% 16.2% 1995 38.5% 45.4% 16.1% 1998 38.1% 45.3% 16.6% 2001 33.4% 51.0% 15.6% 2004 34.3% 50.3% 15.3% 2007 34.6% 50.5% 15.0% 2010 35.4% 53.5% 11.1%

just_another_bozo_on_this_bus 2 years ago

No, taxing the wealthy more by itself won't solve the budget deficits, but the deficits won't go away if they aren't taxed more, either.

You want to fix Medicare? Then fix the healthcare system so that we don't spend twice as much per capita as other wealthy countries do. (Expanding to Medicare for all could do precisely that.)

Do that, and cut the War budget by half or more, and, voila, the deficit problem vanishes. And let's do it soon so we can begin addressing the real crisis for upcoming generations-- global warming and climate change.

BTW, what's the source for your statistics at the end. They appear to be in considerable conflict with statistics I've seen elsewhere.

gccs14r 2 years ago

I've read that the wealthy in this country have $21 trillion squirreled away in overseas tax havens. Seems to me that a chunk of that would go a long way toward retiring our debt.

voevoda 2 years ago

Thank you, rockchalk1977, for making such a compelling argument for raising the taxes on the richest Americans to a higher rate than Congressional Democrats have proposed. Instead of merely restoring the Clinton-era rates, let's restore the Eisenhower-era rates, and balance the budget that way.

kippcolorado 2 years ago

Are you Kansas people just deliberately ignorant, or is it that you didn't learn math well enough to understand that the Republicans you voted for are screwing you?

kippcolorado 2 years ago

You people better learn that you can't sit on your asses in Lawrence and change your state for the better. That goes double for whoever the Kansas Democratic Party Chair is. The state of Kansas is an embarrassment, and KU is looking especially bad, speaking as a Lawrence native and KU alum. I won't even spend any money in the state now, much less contribute to anything KU. You do realize that your state is owned by the John Birch Society, don't you? When I was growing up in Lawrence these people were despised, now they're glorified in the Journal-World and by Rush Limbaugh. Be extremely ashamed.When is the Koch Brothers statue coming to campus?

patkindle 2 years ago

it is all for the greater good and all apart of the grand plan besides no one cares about kansas, to few people to vote

Richard Heckler 2 years ago

Face it folks the GOP... not the Cliff is the largest threat to the USA.

What If There Is No Fiscal Crisis? —By David Corn| Thu Dec. 13, 2012 1:05 PM PST

If there is no fiscal crisis, can there be a fiscal cliff?

There is no fiscal crisis.

Bruce Bartlett, who was an economics official in the administrations of Presidents Ronald Reagan and George H.W. Bush, is a contributor to the New York Times' Economix blog, and in an important post a few days ago he delved into the Government Accountability Office's new estimates of the federal government’s long-term budget outlook. The bottom line: "The idea that we are facing a crisis is complete nonsense." Bartlett, by the way, considers himself a conservative, a reality-based conservative.

[S]pending is not out of control. Entitlement programs like Social Security and Medicare are rising gently as the baby-boom generation retires. All other spending, including that for the military and domestic discretionary programs, falls—with the notable exception of interest on the debt

In other words, the inability to raise revenue to diminish deficits—and tackle rising interest payments—is the major problem.

To be sure, some restraint is needed in federal entitlement programs…Spending for Social Security, in particular, is very stable. Relatively modest changes, such as raising the taxable earnings base slightly, would be sufficient to put the program on a sound footing virtually forever.

Bartlett chides Republicans for droning on and on that domestic discretionary spending is responsible for bloated government. But, he points out, "such programs have already been cut sharply by the Budget Control Act of 2011." He adds, "That leaves interest on the debt as the principal driver of long-term spending and deficits."

And if the Rs continue to resist raising revenues, he maintains, there will be higher spending for interest on the debt. (The interest line in that chart could even be much greater, if interest rates go up.)

Bartlett advocates letting all the George W. Bush tax cuts expire and all the automatic spending cuts kick in. He acknowledges that this might cause a short-term hit to the economy, but he argues that taming the deficits will lead to medium- and long-term growth. Whether that's the right policy solution or not—it does entail a difficult trade-off—it's at least based on data that reflects the real world.

His post, though, does make one thing clear: President Barack Obama (or anyone else) need not rush into a big deal at this moment. There is no imminent fiscal crisis regarding entitlements. The Republicans are merely hyping the matter to bolster their attempts to extract a ransom for either (a) extending the Bush tax cuts for the bottom 98 percent, or (b) acceding to a hike in the debt ceiling, which will soon reach its latest limit, or both.

The sky is not falling. It is not on fire. And the cliff may not be that frightening.

JayhawkFan1985 2 years ago

The real fiscal cliff as far as the State of Kansas goes is described really well at: http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html?ref=us#KS

There is a giveaway to global corporations that is coming at the expense of Kansas kids in schools, Kansas commuters on highways that need to be improved, Kansas lakes and rivers that are polluted, etc...

JayhawkFan1985 2 years ago

I love the disconnect from reality that libertarians have....

Richard Heckler 2 years ago

What Fiscal Cliff? Ben Bernanke came up with "Fiscal Cliff' nonsense.

--- Fiscal Cliff... fact or radical GOP hoax from Ben Bernanke

Much information .... YOU decide http://www.motherjones.com/search/apachesolr_search/Fiscal%20Cliff

--- Killing Social Security Insurance Is Not An Option. http://www.dollarsandsense.org/archives/2010/0111orr.html

--- Killing Medicare Insurance is simply not an option. http://www.thenation.com/article/159769/paul-ryans-plan-destroy-medicare

Pal 2 years ago

YOU decide.

November Election Called Blue-State ‘Suicide Pact’

Voters in blue states who went solidly for President Obama’s re-election are ironically those who will suffer the most from the tax-the-rich policy promoted by Obama.

“With their enthusiastic backing of President Obama and the Democratic Party on Election Day, the bluest parts of America may have embraced a program utterly at odds with their economic self-interest,” observes Joel Kotkin, executive editor of NewGeography.com.

“The almost uniform support of blue states’ congressional representatives for the administration’s campaign for tax ‘fairness’ represents a kind of bizarre economic suicide pact.”

Raising taxes on the so-called rich — defined as households making over $250,000 a year — will have the strongest impact on blue states that depend largely on the earnings of high-income professionals including doctors and lawyers, entrepreneurs, and technical workers, he points out. The states and metropolitan areas that have the highest concentration of these people are overwhelmingly in the bluest states.

But the higher taxes will have far less effect on the truly wealthy Obama purports to target, who derive most of their income from capital gains and have access to offshore tax dodges.

The 10 states with the largest percentage of “rich” households under the Obama policy include New York, California, New Jersey, Connecticut, Maryland, Massachusetts, plus Washington, D.C. All of them are true-blue bastions, yet they would benefit the most from an extension of all the Bush-era tax cuts.

Moves to curb mortgage-interest deductions for affluent households would also fall most heavily on blue states, where home prices are highest and residents carry the largest mortgages on average, according to Kotkin, who also is a presidential fellow in urban futures at Chapman University and author of the book “The Next Hundred Million: America in 2050.”

Singling out “rich” taxpayers could also reduce their discretionary spending, which drives employment for lower-income workers.

Kotkin’s NewGeography article — which originally appeared in Forbes magazine — also notes that being “rich” means different things in different places. A couple with two children and a $150,000 annual income in a city in red state Texas is far “richer” in terms of housing and personal consumption than a couple earning $300,000 in blue New York City or Los Angeles.

Kotkin adds: “Perhaps the greatest irony in all this is that the Republicans, largely detested in the deep-blue bastions, are the ones most likely to fall on their swords to maintain lower rates for the mass affluent class in the bluest states and metros.”

Richard Heckler 1 year, 12 months ago

GOP walks away from the alleged Fiscal Cliff talks after discovering the GOP votes were not there to support the extreme right wing aka Koch/Cantor/Brownback/Wal-Mart/Fundamentalist Christian thinkers.

Democrat Party must break with Obama on Social Security/Medicare Cuts!

So the word for what is being proposed is “cut”—as in: President Obama and congressional Republicans are proposing to cut Social Security.

“This is a cut affecting every single beneficiary—widows, orphans, people with disabilities and many others. It is a cut which hurts the most those who are most vulnerable: the oldest of the old, those disabled at the youngest ages, and the poorest of the poor.

Perhaps fittingly, this will be done during the holiday season, when the American people are distracted,” says Nancy Altman, the founding co-director of the advocacy group Social Security Works. “They will cut Social Security not openly but by stealth—through a cruel cut known colloquially as the chained CPI.”

This is what Democrats—and most Republicans—said during the recently finished campaign that they would never do.

If Obama cuts the deal, he will, in the words of CREDO political director Becky Bond, be engaging in a “massive betrayal” of his own campaign commitments, and of the voters who reelected him barely a month ago.

The question is whether the president’s backers will back the betrayal.

The only responsible response is to say “No!”

The American Association of Retired People has does just that, rejecting the “chained-CPI” scheme as a “dramatic benefit cut would push thousands more into poverty and result in increased economic hardship for those trying desperately to keep up with rising prices.”

In this case, AARP speaks not just for seniors but for the vast majority of voters. Sixty percent of voters say it is unacceptable to change the way Social Security benefits are calculated so that benefits increase with inflation at a slower rate than they do now, according to a new Washington Post/ABC News poll.

Needless to say, those numbers put congressional Democrats and progressive interest groups in a bind. They can look the other way as President Obama cuts a deal that cuts Social Security, or they can do what the American people expect them to do: raise their voices in loud objection—so loud that the president has no choice except to keep his campaign promises.

For congressional Democrats, the stakes are much higher than they are for Obama. The president is done with elections. But the Democratic Party must compete in elections to come, and the fight that is now playing out will define whether they do so as defenders of Social Security or as a party that is always on the watch for ways to compromise with House Budget Committee chairman Paul Ryan and other Republicans who salivate at the prospect of weakening and eventually privatizing Social Security.

The Nation

Richard Heckler 1 year, 12 months ago

Have opponents actually lied to the public about Social Security?

Yes. Former President George W. Bush repeatedly claimed that those who put their money in private accounts would be “guaranteed a better return than they would receive from the current Social Security system.

But every sale of stock on the stock market includes the disclaimer: “the return on this investment is not guaranteed and may be negative” for good reason. During the 20th century, there were several periods lasting more than ten years when the return on stocks was negative.

After the Dow Jones stock index went down by over 75% between 1929 and 1933, the Dow did not return to its 1929 level until 1953. In claiming that the rate of return on a stock investment is guaranteed to be greater than the return on any other asset, Bush was lying.

If an investment-firm broker made this claim to his clients, he would be arrested and charged with stock fraud. Michael Milken went to jail for several years for making just this type of promise about financial investments.

Dollars and Sense

Richard Heckler 1 year, 12 months ago

Opponents have taken two tracks to attack Social Security.

The first is to claim the system as it is will fail, and the second is to claim that privatization is a better way to provide for retirement security. The first claim was the favorite from 1935 to about 2001.Then the privatization claim became the vogue. Now the first is back on the table.

With corporations routinely defaulting on their pension promises, more and more workers must rely on their individual wealth to make up the difference. The stock market collapse at the turn of the millennium wiped out much of the financial wealth of middle class Americans, and the collapse of the housing bubble has wiped out much of their remaining wealth.

Richard Heckler 1 year, 12 months ago

--- How would the rest of the U.S. economy be affected if the private accounts replaced the current system?

Put simply, moving to a system of private accounts would not only put retirement income at risk—it would likely put the entire economy at risk.

The current Social Security system generates powerful, economy-stimulating multiplier effects. This was part of its original intent. In the early 1930s, the vast majority of the elderly were poor. While they were working, they could not afford to both save for retirement and put food on the table, and most had no employer pension.

When Social Security began, elders spent every penny of that income. In turn, each dollar they spent was spent again by the people and businesses from whom they had bought things. In much the same way, every dollar that goes out in pensions today creates about 2.5 times as much total income. If the move to private accounts reduces elders’ spending levels, as almost all analysts predict, that reduction in spending will have an even larger impact on slowing economic growth.

The current Social Security system also reduces the income disparity between the rich and the poor. Private accounts would increase inequality—and increased inequality hinders economic growth.

The rapid increase in income inequality that occurred in the 1920s was one of the causes of the Great Depression. And the rapid increase in inequality under the Reagan and two Bush administrations was one of the causes of the current “Great Recession.”

Dollars and Sense

Richard Heckler 1 year, 12 months ago

What impact would the conversion to private accounts have on the national debt?

The government would have to borrow an additional $4 trillion over the next 20 years to make up the money that would be drained out of the system by private accounts.

Former President Bush and Congress racked up an average $793 billion deficit each year Bush was in office.

Social Security privatization would raise the size of the government’s deficit by another $300 billion per year for the next 20 years. This does not seem to bother Republicans, as long as they are in power.

In fact, by the time the second Bush left office, the national debt had grown to $12.1 trillion. Over half of that amount had been created by Bush’s tax cuts for the very wealthy.

Another 30% of the national debt had been created by the tax cuts for the wealthy under Presidents Reagan and George H.W. Bush.

Fully 81% of the national debt was created by just these three Republican Presidents.

Dollars and Sense

Richard Heckler 1 year, 11 months ago

How scary can the cliff possibly be? Not all that scary as the sensationalizing makes it I would bet. So I say congress go home go home. Let the new congress work it out. That's the smart approach.

Meanwhile let's take a look at the cliff... http://www.thenation.com/blog/171932/guide-going-cliff

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