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Video: Newt Says ‘Fiscal Cliff’ Is A Political Invention

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photo credit: gage skidmore

VAN SUSTEREN: All right, tell me, why are you telling House Republicans to, quote, “get a grip”?

GINGRICH: Well, I think this whole fiscal cliff language is designed to maximize a sense of fear that’s nonsense. The very same people, the Congress and the president, who invented the fiscal cliff — this is all an invention — could break it down into 12 foothills, or 15 foothills or 20 foothills. They could tackle one problem at [a] time.

I agree with what I understand Senator Jeff Sessions has said — and I think he’ll be on your show later — this ought to be out in the open. We’re rushing towards a secret deal made in secret meetings where nobody will know what’s going on, and then people will be told, Boy, if you don’t vote for this, we’ll go over the cliff.

Well, I think there are a lot worse things than going over a man-made cliff that I think is entirely artificial. And I think the reality is, the President of the United States has not come forward with any serious spending cuts. What the Democrats are proposing is to take the tax increase now, and then sometime next year, eventually, possibly, we might have some kind of entitlement reform. That’s a really bad deal for the American people.

Read full transcript HERE.

Steyn: Kindly Note the Impending Bankruptcy

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Previously on The Perils of Pauline:

Last year, our plucky heroine, the wholesome apple-cheeked American republic, was trapped in an express elevator hurtling out of control toward the debt ceiling. Would she crash into it? Or would she make some miraculous escape?

Yes! At the very last minute of her white-knuckle thrill ride to her rendezvous with destiny, she was rescued by Congress’s decision to set up . . . a Super Committee! Those who can, do. Those who can’t, form a committee. Those who really can’t, form a Super Committee — and then put John Kerry on it for good measure. The bipartisan Super Committee of Super Friends was supposed to find $1.2 trillion dollars of deficit reduction by last Thanksgiving, or plucky little America would wind up trussed like a turkey and carved up by “automatic sequestration.”

Sequestration sounds like castration, only more so: It would chop off everything in sight. It would be so savage in its dismemberment of poor helpless America that the Congressional Budget Office estimates that over the course of a decade the sequestration cuts would reduce the federal debt by $153 billion. Sorry, I meant to put on my Dr. Evil voice for that: ONE HUNDRED AND FIFTY THREE BILLION DOLLARS!!! Which is about what the United States government currently borrows every month. No sane person could willingly countenance brutally saving a month’s worth of debt over the course of a decade.

So now we have the latest cliffhanger: the Fiscal Cliff, below which lies a bottomless abyss of sequestration, tax-cut-extension expiries, Alternative Minimum Tax adjustments, new Obamacare taxes, the expiry of the deferment of the Medicare Sustainable Growth Rate, as well as the expiry of the deferment of the implementation of the adjustment of the correction of the extension of the reduction to the proposed increase of the Alternative Minimum Growth Sustainability Reduction Rate. They don’t call it a yawning chasm for nothing.

Read more from this story HERE.

Video: The Real Danger Is Not Going Over The ‘Fiscal Cliff’

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In an interview with CNBC earlier this week, economist Peter Schiff suggested that the time for austerity is now. The real danger, he says, is not going over the ‘fiscal cliff.’

In his view, continuing down the road we’re on will only make matters worse, and eventually Asia will stop loaning money to a dead-beat customer who can’t pay back its loans.

See interview below.

Conservative Activist Threatens to Steer Donors From RNC if GOP Raises Taxes

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photo credit: gage skidmore

Brent Bozell, a prominent conservative activist and fundraiser, is threatening to steer donors away from the Republican Party if GOP lawmakers sign a deal to raise taxes.

Bozell sent a letter to Republican National Committee (RNC) Chairman Reince Priebus on Wednesday pledging to make it his mission to counsel conservative donors to shun the party if its leaders in Congress agree to raise taxes.

Bozell, the chairman of ForAmerica Inc., has been active in conservative political circles for three decades and estimates he has raised hundreds of millions of dollars for “an alphabet soup of conservative causes.”

“Reince, it pains me to say this, but if the Republican Party breaks its word to the American people and goes along with President Obama with tax increases, it will have betrayed conservatives for the final time,” Bozell wrote.

“I will make it my mission to ensure that every conservative donor to the Republican Party that I have worked with for the last three decades — and there are many and they have given tens of millions to Republican causes — gives not one penny more to the Republican Party or any member of Congress that votes for tax increases,” he warned.

Read more from this story HERE.

McConnell ‘Burst Into Laughter’ as Geithner Outlined Obama’s Plan

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Mitch McConnell, the Senate Republican leader, says he “burst into laughter” Thursday when Treasury Secretary Tim Geithner outlined the administration proposal for averting the fiscal cliff. He wasn’t trying to embarrass Geithner, McConnell says, only responding candidly to his one-sided plan, explicit on tax increases, vague on spending cuts.

Geithner’s visit to his office left McConnell discouraged about reaching a “balanced” deal on tax hikes and spending reductions designed to prevent a shock to the economy in January. “Nothing good is happening” in the negotiations, McConnell says, because of Obama’s insistence on tax rate hikes for the wealthy but unwillingness to embrace serious spending cuts.

Geithner suggested $1.6 trillion in tax increases, McConnell says, but showed “minimal or no interest” in spending cuts. When congressional leaders went to the White House three days after the election, Obama talked of possible curbs on the explosive growth of food stamps and Social Security disability payments. But since Geithner didn’t mention them, those reductions appear to be off the table now, McConnell says.

Obama is pushing to raise the tax rates on couples earning more than $250,000 and individuals earning more than $200,000. But those wouldn’t produce revenues anywhere near $1.6 trillion over a decade.

Read more from this story HERE.

Morgan Stanley Forecasters Fear Major Recession in 2013

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The global economy is likely to be stuck in the “twilight zone” of sluggish growth in 2013, Morgan Stanley has warned, but if policymakers fail to act, it could get a lot worse.

The bank’s economics team forecasts a full-blown recession next year, under a pessimistic scenario, with global gross domestic product (GDP) likely to plunge 2 percent.

“More than ever, the economic outlook hinges upon the actions taken or not taken by governments and central banks,” Morgan Stanley said in a report.

Under the bank’s more gloomy scenario, the U.S. would go over the “fiscal cliff” leading to a contraction in U.S. GDP for the first three quarters of 2013. In Europe, the bank’s pessimistic scenario assumes a failure of the European Central Bank (ECB) in cutting rates and a delay of its bond-buying program.

But the bank says investors should also be nimble, in case policy action is “convincing and decisive,” leading to a big uptick in growth.

Read more from this story HERE.

After Fiscal Cliff Comes Fiscal Avalanche, Rejection of U.S. Debt

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While Washington is preoccupied with the so-called fiscal cliff, little attention has been given to the fiscal avalanche that will occur if we continue down an unsustainable, long-term path, causing markets to turn sour on U.S. debt and leading to a spike in interest rates.

Such a eurolike crisis would make the fiscal cliff look like a dip in the road. Unlike driving off a cliff, which you can see coming and make last-minute adjustments to avert, we cannot predict with any reasonable certainty when the avalanche will break. If it does, there will be little anyone can do to prevent its devastating effects.

No one knows just how long the United States can continue to accrue massive debts before lenders lose confidence. Delaying significant fiscal restraint for yet another year will send the wrong signal to financial markets and may serve as a tipping point that could lead to disastrous consequences for our economy.

If U.S. creditors decide that our debt is no longer the safest form of investment available, demand for Treasurys will drop, interest rates will rise and the cost of servicing our debt will begin to explode. Paying interest on our national debt will quickly crowd out spending on almost all other federal priorities. At that point, any deficit reduction undertaken by Washington — including the sorts of spending cuts or tax increases being discussed today — will be too little, too late.

The Congressional Budget Office projects that under the most likely policy scenario, in 30 years, net interest payments on the debt could total $3.8 trillion in today’s dollars. That is more than total government spending for 2011.

Read more from this article HERE.

Major League Baseball Front-loading Contracts to Avoid Obama Tax Hikes?

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Team executives and agents wandered into the Agave Sunset lounge at the resort where the general managers’ meetings were held in Indian Wells, Calif. Four of the six flat-screen televisions were showing election coverage, with the other two turned to sports.

President Barack Obama’s victory over Mitt Romney was of as much interest to baseball’s money men as the game scores, given the millions of dollars routinely guaranteed in player contracts these days.

As free agents negotiate deals this offseason, tax policy is an area that comes up along with the usual issues. Some players are wrangling for as much money as they can get before the end of the year to avoid a take hike in 2013.

“Front-loading would make sense if at all possible as tax rates will definitely go up on January 1st on all high-income taxpayers,” agent Greg Genske said in an email. “The only question is HOW MUCH will the rates increase????”

This much is known for now: Starting Jan. 1, there is an additional 0.9 percent Medicare tax on wages above $200,000 for individuals and $250,000 for married couples filing jointly under the federal Affordable Care Act, a rise to 2.35 percent.

Read more from this story HERE.

Michael Moore: ‘Drive the rich right off their fiscal cliff’

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Liberal film director Michael Moore has big plans for President Barack Obama’s second term, he just needs Obama to hear him out.

In an open letter to the president, Moore congratulates Obama on the recent victory and lays out his vision for the president’s second term — a left-wing wish list, shunning compromise and taking it to the rich.

“This was truly another historic election and I would like to take a few minutes of your time to respectfully ask that your second term not resemble your first term,” Moore writes, noting that he does not want to see Wall Street “darlings” running the economy and wants Obama to “fight” to resolve the issues still on the table.

“Your fellow citizens have spoken and we have rejected the crazed ideology of this Republican Party and we insist that you forcefully proceed in bringing about profound change that will improve the lives of the 99 percent,” Moore writes. “We’re done hoping. We want real change. And if we can’t get it in the second term of a great and good man like you, then really — what’s the use? Why are we even bothering? Yes, we’re that discouraged and disenchanted.”

According to Moore, so far he likes what he has seen — “At your first post-election press conference last Wednesday you were on fire….MORE OF THAT!! PLEASE!!” — but he does not want to see compromise, and instead wants swift moves to the left, including driving the “RICH RIGHT OFF THEIR FISCAL CLIFF.”

Read more from this story HERE.

Ranchers, Farmers Brace for ‘Death Tax’ Impact (+video)

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photo credit: royal_broilRancher Kevin Kester works dawn to dusk, drives a 12-year-old pick-up truck and earns less than a typical bureaucrat in Washington D.C., yet the federal government considers him rich enough to pay the estate tax — also known as the “death tax.”

And with that tax set to soar at the beginning of 2013 without some kind of intervention from Congress, farmers and ranchers like Kester are waiting anxiously.

“There is no way financially my kids can pay what the IRS is going to demand from them nine months after death and keep this ranch intact for their generation and future generations,” said Kester, of the Bear Valley Ranch in Central California.

Two decades ago, Kester paid the IRS $2 million when he inherited a 22,000-acre cattle ranch from his grandfather. Come January, the tax burden on his children will be more than $13 million.

For supporters of a high estate tax, which is imposed on somebody’s estate after death, Kester is the kind of person they rarely mention. He doesn’t own a mansion. He’s not the CEO of a multi-national. But because of his line of work, he owns a lot of property that would be subject to a lot of tax.

Read more from this story HERE.