Courtesy of Mish.
I have seen Fiscal Cliff analysis written from two perspectives
1. Republicans Caved In
2. Democrats Caved In
Theory number 1 (Mine and others) says Congress punted the ball and Republicans waived the white flag. Given that virtually nothing has been done about the deficit, I fail to see how there can possibly be any debate on this. Yet there is.
Theory number 2 (primarily liberals) still blames Bush for the “Bush Era” tax cuts, while moaning about spending cuts that did not happen, and bitching that not enough tax hikes occurred on the wealthy. Curiously, the “Bush Era” tax cuts are now the “Obama Era” tax cuts and even the AMT problem was allegedly fixed.
A subset of the proponents of perspective number 2, people are bitching the “temporary 2-percent reduction in Social Security taxes” just expired. Payroll taxes will jump from 4.2% to 6.2% of income for everyone.
In the glass half missing theory, this will cause a 1% hit to GDP so it should not have been done. This set of folks wanted “temporary” to become permanent, while simultaneously bitching about the “Bush Era” tax cuts.
Lost in the entire debate is how the country can possibly afford any of this.
What About Healthcare Premiums?
Let’s assume for the moment that the expiring payroll tax cut will amount to a hit on GDP of about 1 percent. Reader Greg writes …
Hello Mish
One thing I have not heard a lot of chatter on is the size of the increase in healthcare premiums most small to medium-sized companies are experiencing. I have involvement with 3 companies and all three have seen quotes from current providers with an average increase over 30%.
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