$275 billion worth of economic drag is already in the pipeline for 2013 without even Obamaquester
President Obama has been so busy proactively blaming Republicans for the allegedly dire consequences of the March 1 sequester that he has failed to notice something far more damaging to the American economy. The tax increases already enacted on Jan. 1 by Congress and the president, coupled with the “tax” of higher fuel prices, altogether mean that about $275 billion worth of economic drag is already in the pipeline for 2013.These tax increases are far more economically and politically burdensome than the spending cuts mandated by the sequester. They get little attention now, but politicians won’t be able to ignore them by the summer.
As a quick refresher, the direct tax increases, amounting to $175 billion per year, were enacted by the Congress on Jan. 1 as a means to avert the “fiscal cliff” that would have mandated even larger tax increases. The legislation rescinded the $110 billion payroll tax reduction that was part of the 2010 stimulus package. Virtually all households pay the payroll tax to finance the Social Security, Medicare, and Medicaid programs. Then the president’s tax increases on “the rich” boosted income tax rates for households earning over $450,000 per year, thereby garnering another $65 billion per year in revenue. On top of this, if fuel prices prices stay at this sharply higher level, there will be another $100 billion in lost disposable income for households. The total, $275 billion, or nearly 2 percent of GDP, dwarfs the $44 billion in actual spending cuts mandated by the sequester….
The payroll tax hike wiped out a year’s worth of wage gains
$50B lost disposable income secondary to higher gas prices
Gasoline reaches a fresh high for the year, but its climb isn’t overThe average price for a gallon of regular gasoline climbed to $3.782 on Tuesday, edging above the previous year-to-date high of $3.781 seen on Feb. 22, according to AAA.
Prices are up from Monday’s $3.777. They’ve gained almost 44 cents a gallon from a month ago, AAA’s Daily Fuel Gauge Report shows.
3 Month Average Retail Price Chart:
gasbuddy.com
Bloomberg: The Impact on U.S. Consumers of Every 1¢ Increase in Gas Prices: $1 billion
Reid: Spending cuts will happen - $85 billion
WASHINGTON (MarketWatch) — Senators on Tuesday sounded increasingly pessimistic about avoiding the automatic budget cuts set to kick in on Friday, predicting they’ll go forward absent an elusive deal on taxes.
“Until there’s some agreement on revenue I think we
should go ahead with the sequester,” Senate Majority Leader Harry Reid, a
Nevada Democrat, told reporters on Capitol Hill. Sen. Roy Blunt, a
Missouri Republican, told reporters: “The spending cuts are going to
happen.”
With $85 billion in across-the-board cuts to defense and
domestic spending set to start in less than three full days, the parties
spent Tuesday pointing fingers at each other instead of negotiating.
President Barack Obama, speaking at Newport News Shipbuilding in
Virginia, used his bully pulpit to urge a deal.
Republicans, Democrats brace for impact of March 1 cutsBy the Numbers: Automatic spending cuts
Austerity USA begins March 1st: 600,000 food stamp recipients will be cut from the program, Millions on unemployment will see their checks cut by 11%, 700,000 jobs are expected to be lost, and 70,000 children kicked out of head start
600,000 food stamp recipients will be cut from program
Massive educational cuts
Millions on unemployment will see their checks cut by 11%
12 billion in Medicare cuts
Federal funds to state governments will be cut
700,000 jobs are expected to be lost
While 70,000 children kicked out of head start
Massive educational cuts
Millions on unemployment will see their checks cut by 11%
12 billion in Medicare cuts
Federal funds to state governments will be cut
700,000 jobs are expected to be lost
While 70,000 children kicked out of head start