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Cliff Deal - Winners and Losers

Bruce Krasting's picture


Note: I wrote the following after watching the Prez on TV. His smiling demeanor and tough guy talk led me to believe that a "patch" on the cliff might happen. Four hours later, and that is not the case. The House will not vote on anything today.

There is a chance that the House could vote tomorrow. This would bring results along the lines I describe below. But if the House does not vote, then it means there will be a long fight. A fight that could go on until the debt limit shuts the government. 

These people are desperately trying to fail.










This is a decidedly un-Democratic outcome. The rich avoid taxes, lower incomes pays a disproportionate share. Who insisted that this unfair outcome was part of the deal? Answer: Harry Reid, Nancy Pelosi and Barack Obama. Don’t blame the Republicans when your next check has an extra bite out of it. “Go figure?”, on this outcome.




















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Tue, 01/01/2013 - 18:52 | 3113043 f16hoser
f16hoser's picture

Since Obama  is an illegitimate president, lets just Null-and-Void everything with his signature. Also, let's cut thru the chase, only 50% of Amerikans voted in the last election. Obama won just over half of those votes. So technically, only about 25% of Ameikans voted for this hamster.

Tue, 01/01/2013 - 17:52 | 3112898 TacticalZen
TacticalZen's picture

This train wreck will end badly but we don't have to behave as slaves.  I'm encouraged by some of the current generation (25-35) who no longer put money into a 401K but rather, buy PMs.  They don't believe the current system can survive and vote with their dollars & their feet.  To the extent that you can it makes sense to unplug from the current mindset and change your behavior:

• no dollar based investments or savings

• minimal funds in a  bank

• no debt

• only incremental assets are physical assets - financial assets have counterparty risk.

• change work to focus on enjoyment since career sacrifice is a lie (an old paradigm long ago lost).  Never work extended hours without immediate compensation.

• avoid propaganda, and those who don't know the difference

• prepare for changes as you are able and smell the flowers along the way.

• learn asymmetric warfare in case it is needed later.

• stock up on items you think may be in short supply as our just in time system cracks.

• study how others have survived and thrived through similar or worse challenges.  Make them your mentors.

• watch for signs of change and be prepared to act if needed.

• find alternative ways to earn money.  Don't rely on a single income stream.

Carpe Diem



Tue, 01/01/2013 - 16:21 | 3112686 kaiserhoff
kaiserhoff's picture

I said about three weeks ago on one of Bruce's threads that the tax hikes are real.  The spending "cuts" are all bogus.  Yup.

Tue, 01/01/2013 - 16:05 | 3112630 foxmuldar
foxmuldar's picture


I thought we were trying to cut the deficit not raise it. lol

Tue, 01/01/2013 - 15:58 | 3112616 Meremortal
Meremortal's picture

If this deal goes through as written I win huge.


You young people are screwed again.



Tue, 01/01/2013 - 14:58 | 3112472 foxmuldar
foxmuldar's picture

Did the House vote on this piece of crap yet? I hope they turn it down. Imagine another full year of unemployment benefits. WTF  are those lazy asses ever going to start looking for work?

Tue, 01/01/2013 - 14:18 | 3112384 QQQBall
QQQBall's picture

When I started out, a million $$$ was ALOT of money. You could pretty much figure a 10% yield on a $1,000,000 and you could retire comfortably. Back then, my medical insurance for a family of 4 was +/-$250 a quarter, $1,000 a year for 2 adults and 2 children. Now, for 3 of us, it is +/-$800/month (includes 24% bump in february); so one less person and 10x the premium cost. As Puplava has been pointing out on his pod casts, if you invest in ST US notes, you need $31MM or $41MM to get $75,000 annulally - and that is pre-tax. There was a troll early in the thread talking about his ability to live on $500/month... I still live way, way below my means and I still save, but "I think it is going to be different this time."  Reading a book Simulacra & Simulation; it is a few years old but is true today - the pols create talking points unrelated to the underlying problem and then address their illusions and claim victory. One area of opportunity has to be "medical vacations" to countries with cheap but good medical services and overseas retirement services. Basically exiting stage left from the land of milk & honey. The fiscal cliff is NOT the issue.

Tue, 01/01/2013 - 13:04 | 3112214 Joe A
Joe A's picture

American can more abroad to places where they pay less taxes to avoid paying them at home. Oh wait....

Tue, 01/01/2013 - 12:33 | 3112144 justsayin2u
justsayin2u's picture

At least we didn't have to cut spending when the goobermint is already a lean tough prosperity making machine.  Now, with a little more income, the govvies will be able to get back to work, giving us what we need and want.  Stuff like solyndra, goobermint motors, GMAC i mean Ally, studies on trouser trout - you know - the big stuff.  Oh yeah, and killing more americans without a trial.  That stuff too.

Tue, 01/01/2013 - 12:26 | 3112124 SmoothCoolSmoke
SmoothCoolSmoke's picture


Tue, 01/01/2013 - 17:38 | 3112864 kraschenbern
kraschenbern's picture

You've been reading some of the IMF Working Papers haven't you?

Tue, 01/01/2013 - 12:16 | 3112090 pfairley
pfairley's picture

I liked everything but the stink about the normal social security tax as a huge tax increase. David Stockman was just on Bloomberg stressing that insolvency is the big issue and that it is not a big deal that we go into recession now or later with never ending 1 trillion deficits. He likes both the middle class to pay higher tax AND having spending cuts....I am sick of everybody but budget experts like Dave Stockman and Peter Or'zag and I wish Congress would subcontract the decisions to guys like them...same as giving your tax return to your accountant

Tue, 01/01/2013 - 15:23 | 3112525 JR
JR's picture

It’s the people who created the mess, the Orszags and Rubins and Bernankes who have stolen the people’s wealth, who are in there now directing how it should be fixed. And their solution is that the victims must pay.

As the U.S. travels through its economic crisis, it is the victims who are asked to pay in inflation-damaged social security, in extended retirement age, in severe loss of savings, in unemployment, in small business failures and all the rest. In the meantime, the bailouts and the multibillion dollar bonuses and the emergency spending go to the creators of the crisis (the victors) and their politically-connected groups.

As the Roosevelt Institute has charged: “Washington bipartisan elites have been working to weaken Social Security since the mid-Clinton Administration. Clinton, prodded by his Treasury Secretary Robert Rubin, was on the verge of cutting a deal with Newt Gingrich to partially privatize America’s most successful retirement program.

“What is it with Democrats like Bowles, Rubin, and Rubin’s protégé Peter Orszag, director of the Office of Management and Budget and another of the deficit hawks who would weaken Social Security in order to cut the deficit? ...  Don’t they appreciate that two-thirds of elderly Americans depend on Social Security for at least half their income...”

And then, on December 9, 2010, Citi  announced that Peter Orszag had joined as a Vice Chairman in its Global Banking business.

As James Fallows wrote regarding Orszag’s move in The Atlantic Monthly: “Exactly how much it will pay is not clear, but informed guesses are several million dollars per year. Citibank, of course, was one of the institutions most notably dependent on federal help to survive in these past two years.”


“When we notice similar patterns in other countries -- for instance, how many offspring and in-laws of senior Chinese Communist officials have become very, very rich -- we are quick to draw conclusions about structural injustices. Americans may not ‘notice’ Orszag-like migrations, in the sense of devoting big news coverage to them. But these stories pile up in the background to create a broad American sense that politics is rigged, and opportunity too. Why do we wince a little bit when we now hear ‘Change you can believe in?’ This is an illustration.”

Tue, 01/01/2013 - 10:34 | 3111856 brettd
brettd's picture

We've saved Medicare and Social Security for Buffet, Winfrey & Gates!

Victory is ours!

Tue, 01/01/2013 - 11:42 | 3111997 Middle_Finger_Market
Middle_Finger_Market's picture

Pitchforks and torches; bullish. 

Tue, 01/01/2013 - 11:51 | 3112020 3.7.77
3.7.77's picture

And good rope.

Tue, 01/01/2013 - 12:03 | 3112067 Middle_Finger_Market
Middle_Finger_Market's picture

...opportune moment for a noose toter.  

Tue, 01/01/2013 - 08:37 | 3111781 Hannibal
Hannibal's picture

US COnstitution: "All legislation must originate in the House of Representatives and send to the Senate for..,,"

Tue, 01/01/2013 - 11:43 | 3111998 masterinchancery
masterinchancery's picture

Only revenue bills, like.....Obamacare.

Tue, 01/01/2013 - 06:06 | 3111732 bigkahuna
bigkahuna's picture

Obama giveth, and Obama taketh away.

Tue, 01/01/2013 - 10:19 | 3111841 falak pema
falak pema's picture

Obama chickened out, but he knows that the show must go on. The real cliff is where it is, its not in the Paper CB world, its in private banking, and no amount of can kicking can resolve that.

One day it will all have to come out in the wash. 

While Eurozone crows "year of Draghi and how he stopped sovereign meltdown in Euro zone", it does not resolve the fact that the Euro central bank is now a huge HF with expanded BS second to none and with only backstop the German Buba; who has its nuts caught in the shitta, if ever the Deutsch and Landersbank crowd get burned in the asset meltdown. 

Ringa ringa roses, and print print print. Year of the doldrum is with us to stay. 

Tue, 01/01/2013 - 00:35 | 3111546 vft2212
vft2212's picture

Tax wealth not income

Tue, 01/01/2013 - 11:47 | 3112005 Middle_Finger_Market
Middle_Finger_Market's picture

If wealth is defined as quantities of money held in GS and JPM then that would be a great idea. There would no money left in the banks by sunrise. 

Tue, 01/01/2013 - 11:44 | 3112000 masterinchancery
masterinchancery's picture

Go back to Cuba, you idiot.

Tue, 01/01/2013 - 09:56 | 3111824 sessinpo
sessinpo's picture

And who is to say what is wealth? Someone down the street may have $500,000 in wealth which may seem a lot to some. That same $500,000 may not seem a lot to others. 


Am I getting the message to you in the fallacy of your thinking?


You might be only making 20k a year but you have a old car. Well, guess what? There is some junky that is unemployed with no car!  YOU HAVE TO MUCH WEALTH!


Are you getting the message? If you are a typical liberal, probably not.

Tue, 01/01/2013 - 03:30 | 3111689 Bastiat009
Bastiat009's picture

hey vft, how about letting people, including you and me, save, invest, spend their money they way they like. Capitalism without capital is not possible. How giving my money to build drones to destroy foreign countries can make the US better?

Tue, 01/01/2013 - 01:14 | 3111586 MikeMcGspot
MikeMcGspot's picture

Riderect governance from the collective to the individual. Replicate the knowledge of governance from the collective to people.

Tue, 01/01/2013 - 00:35 | 3111545 vft2212
vft2212's picture

Tax wealth not income

Tue, 01/01/2013 - 01:00 | 3111575 rehypothecator
rehypothecator's picture

Tax consumption, not wealth nor income.  

Tue, 01/01/2013 - 01:26 | 3111601 Vidar
Vidar's picture

End all taxation and shut down the state!

Tue, 01/01/2013 - 10:09 | 3111833 sessinpo
sessinpo's picture

Oh, I know would get huge down arrows posting a contradicting view.


I will only say this is ridiculous. On the FEDERAL level, taxation and power needs to be reduced a huge amount.


But clearly this post is emotional and WITHOUT thought of reality. Don't get caught up in the emotion and really think about it.


Tue, 01/01/2013 - 00:07 | 3111521 torak
torak's picture

Most of the readers and those commenting voted for either a democrat or a republican for their congressional representive and for President (if you voted at all). 

Garbage in --> Garbage out.  Until you ditch the status-quo, two-party, PAC-ladened, beauty pagent that pretends to be a fair and non-corrupt democratic process, then you are as much to blame as the dumb-sticks that you put into office (over, and over, and over again). 

So, stop bitching.  Try taking steps to change the system.  Anything else is just a waste of hot air.

Tue, 01/01/2013 - 15:18 | 3112509 foxmuldar
foxmuldar's picture

Sounds good but how can you expect to beat someone who is now Santa Clause to the masses. Do you really think that asshole standing in line for their free phones is going to vote for a libertarian? Until the system collapses and we end up like Greece, I don't see any other party winning the White House as long as you have 50 Million collecting food stamps by 2016. 

Mon, 12/31/2012 - 23:18 | 3111433 MikeMcGspot
MikeMcGspot's picture

The assumptions of this article do not fit my view.

I am self employed, owner of my own and making new companies as I will for years to come.

I can live happily off of $1000/mo with half going to insurance.

There has never been a point in time where I have seen so much opportunity.

As my tax bill rises I will cut the hours of work of my employees whilst still tossing silver ounces back to good performers and making sure my people are OK.

Meanwhile back at the ranch, my companies are outperforming many others most of my people are Gen X and Y, I'm a boomer.


I could never imagine some guy named Tyler flimflamming me for a skin alkaline burn.

Being weary of Wolds empires I say.

Fight club!

See you in the ring Tyler.

Happy new year!




Tue, 01/01/2013 - 15:25 | 3112528 foxmuldar
foxmuldar's picture

Are you growing pot in your cellar? Where does the silver come you throw at your employees? I'll bet your working under the table and still collecting an unenployment check. What do you heat your home with? No heating bills? That alone would suck at least half of that $500 you claim to live off of every month. You need to stop inhaling the fumes from that Propane stove your using for heat. That shit will kill you when your sleeping if it hasn't already. 

Tue, 01/01/2013 - 03:56 | 3111702 Alpha Monkey
Alpha Monkey's picture

I downed you because it sounds like bullshit.  Where to start...


If you expect me to believe you live happily on $500/mo then you must love of ramen noodles.  Do you live in your parents basement still?



So the opportunity you speak of is for your employees to find another job to make up for their missing hours?  Yeah, tons of opportunity there...

Even if any of what you say is true, it's quite clear you suffer from the same shortsighted affliction hindering most of the ruling class in america.

Tue, 01/01/2013 - 11:50 | 3112014 Middle_Finger_Market
Middle_Finger_Market's picture

Self sustaining farmer?

Tue, 01/01/2013 - 03:35 | 3111691 Sabibaby
Sabibaby's picture

What do your companies do? Are you a realtor?

Tue, 01/01/2013 - 03:45 | 3111699 DeadFred
DeadFred's picture

His name suggests he runs a line of entertainment professionals. He won't make it far if he only uses a 22 to protect his turf. Great that he rewards his best "performers" with silver coins though. :)

Tue, 01/01/2013 - 01:03 | 3111577 MikeMcGspot
MikeMcGspot's picture

For all who downed me none presented an argument to refute my premises or presentation points.

The movie "Fight Club" would have ended quickly with me as Tyler tried to burn my skin and I popped .22 cap in his noggin.

Life is not a movie.

Man or Woman up if you have the guts.

Or just cap me if you can.


Tue, 01/01/2013 - 14:51 | 3112456 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture



Admit it -- you have not actually watched this film all of the way through have you?

Tue, 01/01/2013 - 10:16 | 3111840 sessinpo
sessinpo's picture

MikeMcGspot:  "For all who downed me none presented an argument to refute my premises or presentation points."


Thats because you presented NOTHING of substance.

For example, you give vague descriptions of your life, WITHOUT proof.  Descriptions that the majority think you are falsifying.


So when you get called upon it, you get defensive about it, instead of providing proof.  THAT IS THE TRAIT OF A SCAMMER.


Cap you? I would rather point out the obvious and let you refute that with some facts. That way others, hopefully with some intelligence, will skip your post and future posts.


Tue, 01/01/2013 - 03:38 | 3111694 Walt D.
Walt D.'s picture


... because you are right! The "Obama Rich" are not millionaires - they are mostly self-employed small business who either work for themselves or employ a few people. The reason that Obama hates these people is that they are "bourgeoise" or "kulaks". They are not big enough to hit up for campaign contributions. (Incidentally, this is also why the Rebublicans are selling thesee people down the river - to small to make any difference in voting, not enough campaign contributions). 

Mon, 12/31/2012 - 22:58 | 3111396 Moe Howard
Moe Howard's picture

Pay your taxes bitchez and quit complaining. You voted for this nit wits and love the programs.

Bruce, pay up. Quit crying about the AMT

Mon, 12/31/2012 - 22:34 | 3111343 Tango in the Blight
Tango in the Blight's picture

Be glad you don't live in Europe. Here in the Netherlands the minimum tax bracket is 37% (raised from 33% last year), the medium tax bracket is 42% and the top tax bracket is 52%.

Mon, 12/31/2012 - 22:53 | 3111391 malek
malek's picture


What percentage do you pay for Social Security (aka retirement/pensions), health insurance (does that cover the whole family or only an individual?), and what's the VAT?

Mon, 12/31/2012 - 23:16 | 3111426 Tango in the Blight
Tango in the Blight's picture

AOW (social security) 17.9% of gross wages

Health insurance, minimum €92.25 per person (price of the lowest offering at Zekur for basic coverage, higher at other insurers)

BTW (VAT) 21% (raised from 19% last year).

Welcome to socialist paradise! /sarc


Tue, 01/01/2013 - 08:08 | 3111769 Sziget
Sziget's picture

legal pot: priceless

Tue, 01/01/2013 - 14:54 | 3112465 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

we have that!  well sort of legal anyways.  govt is So confusing.
