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Author Topic: Fiscal cliff avoided
Itsame
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http://www.cnn.com/2013/01/01/politics/fiscal-cliff/?hpt=hp_t1

Well that's nice. I really didn't think this would happen (technically it wasn't in time, but whatever).

Edit: I read more closely and apparently it was Biden who helped to bring about the deal. Go him.

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Miro
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Sounds like it wasn't avoided so much as delayed. Two more months to whinge and then another "crisis".
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Stephan
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Do we know for sure Congress is going to approve it? I was under the impression the Senate was never the problem.
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Corwin
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Miro, from what I read the fiscal cliff legislation was passed, and what will be discussed in February is the debt ceiling increase.
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scholarette
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Corwin, that depends on what issue cOncerns you. If all you care about is taxes, all good. But the sequestering rule (where all government programs get a 10% budget deduction) is just delayed for two months. If you are a government contractor this means 2 more months of wondering if job going to be cut.
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BlackBlade
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We'll see if Boehner can get the House to vote for it. I'm giving him generous odds of 35% chance for success.

If the House modifies the bill in any way, it has to go back to the Senate, and that will be bad news bears. The radical wing of the Republican party is going to want to make changes, so they can look good for their constituencies.

Can't have it both ways.

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dandy_andi
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quote:
Originally posted by Corwin:
Miro, from what I read the fiscal cliff legislation was passed, and what will be discussed in February is the debt ceiling increase.

The senate has passed it. The house has not voted on it yet and is not due to convene until noon today.
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Blayne Bradley
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This is pretty bad because there's no way the GOP isn't going to aggressively hold the country hostage during the debt ceiling crisis and they will believe Obama will cave for a minor extension.

The House GOP frankly do not care about the country and will keep milking that cow until the US does default.

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Samprimary
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The Republican Party in One Tweet

quote:
Marco Rubio: Report that #GOP insisting on changes to social security as part of #fiscalcliff false.BTW those changes are supported by @barackobama
quote:
Today’s Republican Party thinks the key problem America faces is out-of-control entitlement spending. But cutting entitlement spending is unpopular and the GOP’s coalition relies heavily on seniors. And so they don’t want to propose entitlement cuts. If possible, they’d even like to attack President Obama for proposing entitlement cuts. But they also want to see entitlements cut and will refuse to solve the fiscal cliff or raise the debt ceiling unless there are entitlement cuts.

You can see why these negotiations aren’t going well.


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rivka
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Nothing has been avoided just yet. The bill has passed the Senate, but not the House. If the House doesn't pass it today or tomorrow, it's too late -- new Congress on Thursday.

IF the bill does pass, it will fix several of the fiscal cliff issues. The "fiscal cliff" has never been a single issue, but several distinct ones, all of which had deadlines of late December 2012 or early January 2013. The bill would more or less fix the tax issues. It would kick many of the other issues (like military spending) down the road for two months.

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Godric 2.0
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quote:
Originally posted by rivka:
Nothing has been avoided just yet. The bill has passed the Senate, but not the House. If the House doesn't pass it today or tomorrow, it's too late -- new Congress on Thursday.

IF the bill does pass, it will fix several of the fiscal cliff issues. The "fiscal cliff" has never been a single issue, but several distinct ones, all of which had deadlines of late December 2012 or early January 2013. The bill would more or less fix the tax issues. It would kick many of the other issues (like military spending) down the road for two months.

Here's one I hadn't heard about until just today: if a deal isn't reached it could result in the price of milk going to $7/gallon or higher.

Chicago Tribune:

quote:
The tax agreement, which could face a vote by the House of Representatives as early as Tuesday, contains a nine-month fix for expiring farm subsidy programs by extending a 2008 farm law. That gives lawmakers time to come up with a new five-year replacement.

Unless the measure is passed by the House, the farm law will expire and dairy subsidies will revert to 1949 levels, meaning retail milk prices could double to about $7 per gallon in coming weeks or months.

Seriously?!
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Blayne Bradley
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The free market has spoketh.
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Brian J. Hill
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quote:
The free market has spoketh.
If this is in reference to the farm bill, nothing could be further from the truth. There is no such thing as the "free market" in American agriculture, and there hasn't been for decades.

A simplified explanation: Dairy prices are set in part by the Federal government's willingness to buy back excess milk that farmers are unable to sell. Every 5 years, the formula for the price controls is fixed through a new "Farm bill." Since this year was a Presidential Election, and consequently the 112th Congress did almost nothing, the Farm bill wasn't renewed. Thus the formula for dairy prices reverts to a 1949 statute, making it around $7 per gallon. What the article fais to mention is that this doesn't happen overnight; the process will take months, even with the expiration of the current farm bill. One would hope that the 113th Congress will do something more than campaigning and posturing for the next election, since it's not this year.

We could get into a philosophical debate over the efficacy of government subsidies in agriculture, but one thing is certain: The "free market" hath NOT "spoketh" and is unlikely to ever speak again when it comes to agriculture.

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Mucus
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For fellow Canadians:
$7/gallon ... if I'm converting right, that is about $1.84/L. That's maybe 20% higher than Canadian prices when buying exactly 1 L. Much more expensive when buying in bulk (e.g. $4.23 for 4L) here though.

But when they say "*could* double", I'm assuming there's probably some sensationalism going on there, so that's probably the worst/smallest case.

Interesting business opportunity if it happens though.

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JanitorBlade
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quote:
Originally posted by Mucus:
Interesting business opportunity if it happens though.

That's what I was thinking. The price might shoot up initially, but then people will create a business model that delivers cheaper milk, and the price will be driven down.

We already pay for the more expensive milk via our tax dollars.

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BlackBlade
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Surprisingly, the House is voting on this tonight.

And it appears Eric Cantor is trying to kill this version of it, in favor of making changes, which I think is going to be very costly for House Republicans when they become the face of the fiscal cliff.

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rivka
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quote:
Originally posted by BlackBlade:
Surprisingly, the House is voting on this tonight.

Why surprising? Time is running out.

"Surprising" was when Congress took off most of last week. [Razz]

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Samprimary
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Why do they have to "become" the face of the fiscal cliff? Like with how conservatives hold the debt ceiling hostage, they're it.
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rivka
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And the vote is done. But while some things have been fixed permanently, and others for a full year, the "sequester" has only been delayed two months.

quote:
While the vote averted immediate pain like tax hikes for almost all U.S. households, it did nothing to resolve other political showdowns on the budget that loom in coming months. Spending cuts of $109 billion in military and domestic programs were only delayed for two months.
http://news.yahoo.com/house-republicans-weigh-last-ditch-challenge-fiscal-deal-005743252--business.html
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Jon Boy
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quote:
Originally posted by Blayne Bradley:
The free market has spoketh.

*cringe*

Try "hath spoken".

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Brian J. Hill
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Thank you, Jon Boy. I was going to address that particular grammatical deficiency in my rebuttal to Blayne's argument, but didn't want to sound snarkier than necessary.
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Samprimary
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am free markets is spoking
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Samprimary
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it looks like this bill becomes a notable exception to the hastert rule, aka part seven of "if it's not exactly what republicans want we're not letting anything happen ever"

172 dem votes aye, 85 rep votes aye and 151 rep votes nay, good golly

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BlackBlade
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Yeah, I was surprised they got way more than the necessary number of House Republican votes to make this happen.

I suspect in two months, this is going to become a spending showdown now that taxes are resolved, and it's up to the Obama administration to get down to brass tacks about cutting spending.

Like maybe we shouldn't give billions of dollars to countries that hate us, and perhaps State Dept officials children shouldn't be able to get tuition paid for in one country, decide they'd rather have their family in another country while on assignment, and get tuition paid for there too brass tacks.

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TomDavidson
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quote:
Like maybe we shouldn't give billions of dollars to countries that hate us, and perhaps State Dept officials children shouldn't be able to get tuition paid for in one country, decide they'd rather have their family in another country while on assignment, and get tuition paid for there too brass tacks.
I can't imagine that this would actually add up to much meaningful savings.
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BlackBlade
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It's only two tacks Tom. I think if a neutral sweep of all government waste were done we could eliminate a good chunk of the budget shortfall. We could then address a serious restructuring of our armed forces.
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Hobbes
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quote:
Originally posted by TomDavidson:
quote:
Like maybe we shouldn't give billions of dollars to countries that hate us, and perhaps State Dept officials children shouldn't be able to get tuition paid for in one country, decide they'd rather have their family in another country while on assignment, and get tuition paid for there too brass tacks.
I can't imagine that this would actually add up to much meaningful savings.
The second I can't imagine is much, but foreign aid was 52.7 billion in 2010 (or 1.5% of total budget). When you look at the countries that get our aid, it's a very interesting list. Some are clear countries who would suffer massive mortality with any loss of aid. Some are... really not.

Hobbes [Smile]

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TomDavidson
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While that's true, Hobbes, a lot of that foreign "aid" is actually quid-pro-quo payments for other things (like, say, deciding to criminalize something we want criminalized). Whether the State Department should really be negotiating that sort of payment is another question, but it's not like we're just handing out money for no reason.
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Hobbes
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quote:
Whether the State Department should really be negotiating that sort of payment is another question, but it's not like we're just handing out money for no reason.
Yes, but I guess that other question is the one I'm interested in. I mean no matter what some right-wingers think, the government doesn't just spend money for no reason on anything. Sometimes it's really bad reasons and sometimes the reason is good but the execution is terrible, but there's always a point. Which means to reduce spending we will always have to decide their reason isn't good enough (or could be fulfilled in a better way) and I think that's a pretty relevant question to ask for foreign aid.

Hobbes [Smile]

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kmbboots
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quote:
Originally posted by BlackBlade:
It's only two tacks Tom. I think if a neutral sweep of all government waste were done we could eliminate a good chunk of the budget shortfall. We could then address a serious restructuring of our armed forces.

I would like to see numbers on that. Also, bear in mind, that even "waste" is money that goes into someones' pocket. Depending on the pocket, that could be good or bad.
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Blayne Bradley
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So whose gonna cave with the debt ceiling, any bets?
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BlackBlade
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quote:
Originally posted by Blayne Bradley:
So whose gonna cave with the debt ceiling, any bets?

Democrats have nowhere to go but to cut. I hope they plant their feet and make cuts to the military equal to the cuts the Republicans want made everywhere else. But I doubt it's going to be that way.
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Xavier
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The problem: is what the heck do you cut? From which buckets does this "waste" exist?

Here is the breakdown I see when I google the federal budget:
code:
20%		Defense   
20% Social Security
21% MedCare, MedCaid, CHIIP
13% Safety nets (earned income and child tax credits, welfare, supplemental security, etc)
06% Interest on debt
07% Government pensions and veterans benefits
03% Transportation and Infastructure
02% Education
02% Science and Medical Research
01% Non-security International
04% All other spending

Cutting social security is off limits. Medicare and Medicaid too are uncuttable. Cutting safety net programs is undesirable for most people, because those programs are part of what helps prop up our economy (like unemployment insurance). Infrastructure spending actually pays for itself in economic stimulation, so if anything we should raise that budget. We can't just stop paying government pensions.

Defense is one of the places we can cut, but of course the Republicans would not stand for that.

That doesn't leave a whole lot to work with. Do we really want to cut education spending? Stop funding research? Both of those seem dumb to me.

I would love to see some actual proposals for cuts that would actually make a real dent. Not vague statements and calls to cut programs that are in reality only like 0.01% of the budget.

In this thread I do see foreign aid. But most of that spending seems like a good thing to me, in Africa and other developing areas. What percentage do you think could be cut? To which countries?

The most glaring one on that list to me is Russia, but I'd probably call that a "please don't go back to communism" bribe [Wink] . Edit: And its only 0.013% of the federal budget.

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Blayne Bradley
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The GOP seems perfectly willing to cut Medicare, Medicaid, safety net programs and SS to me.
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Xavier
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Edit 2: In fact, I probably should just withdraw from the conversation. I've intentionally avoided reading recent articles on the fiscal cliff because they end up pissing me off and raising my blood pressure. So I don't know why I am trying to join this debate in any form.

Edit 3: The quote below was from my unedited post. Don't want anyone to think he's crazy or anything [Smile] .

[ January 02, 2013, 04:20 PM: Message edited by: Xavier ]

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Brian J. Hill
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quote:
Are they? Then why were Ryan and Romney accusing Obama of trying to cut Medicare?
Democrat answer: Ryan and Romney were simply playing politics by using despicable scare-the-seniors-tactics, which are totally inappropriate to use, unless we are the ones doing it, in which case it's OK to point out "contrasting positions."

Republican answer: Romney and Ryan were simply pointing out how the Obama administration is paying for the Obamacare on the backs of seniors, by cutting $716 Billion(!) from the Medicare program, and while we have to reduce our debt, we are better off doing it through structural changes to "entitlement programs" (never mind that Obama's cuts were structural changes; they were the wrong kind of structural changes.)

Declare your party allegiance, and then take your pick.

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kmbboots
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Lift the cap.
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Blayne Bradley
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Except Brian I'm pretty sure only one of those two positions is a lie so they are not equivalent.
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Mucus
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quote:
Originally posted by Xavier:
... The most glaring one on that list to me is Russia, but I'd probably call that a "please don't go back to communism" bribe [Wink] . Edit: And its only 0.013% of the federal budget.

Let's examine Russia specifically too, it's not like the US is just writing a cheque to Putin.

quote:
In July, he signed a law requiring many groups funded from abroad to register as "foreign agents" and has also pushed through laws increasing fines for protesters and for defamation.

The State Department said USAID would promote democracy and civil society in Russia even after its office closed, but it was not clear whether it could continue to fund Russian groups.

Annual aid to Russian groups from USAID is about $50 million, and more than half of its 2012 budget in Russia is spent on human rights and democracy work.

http://www.reuters.com/article/2012/09/19/us-usa-russia-aid-idUSBRE88I0EE20120919

Russia (or rather, the Russian government) would probably be perfectly happy if that aid stopped.

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Gilnar
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I've lurked here for some time, and finally decided to come out of the shadows.

I was struck by the comments above to the effect that the House needed to not modify the bill in any way or it would be bad. That somehow the Republicans would be screwing things up by doing so.

But as the details of the "deal" emerge, it's clear there are many stupid or unwise provisions in the bill that do nothing to protect the "middle class" or even the 98%. This is a huge problem with the way the federal government has operated the past 5 years (or thereabout).

The legislative process is basically dead, and the elected officials no longer debate and amend the bills that come before them. Deals are cut offline, lobbyists write the bills, and the elected officials are presented with a completed package upon which they must vote up or down. Usually at the last possible second.

The bill that "saved" all of us is over 150 pages long, and the complete bill was available to the Senate for less than five minutes before they had to vote on it. The House had the benefit of a day or so to review it. Given that there could be no changes made, do any of you find this a process that leads to the best results? Or even good results?

Looking at what they packed in this bill, there are $76 billion in corporate tax credits that were slated to expire and were renewed. So somehow a bill about whether or not to increase taxes on everyone in the country, or just a few more well-to-do people in the country, turned into what we call in the legislative business a "Christmas tree" where things that had been stalled in the process and/or were never going to pass get tacked onto something that absolutely has to pass as quickly as possible.

I believe from my reading of this board that very few of the regular participants are interested in helping the Goldman Sachs's or GE's of the world pay less taxes, but that is exactly what is in the bill. Title II and Title III of this fiscal cliff bill is almost a word for word cut and paste job of something called the Family and Business Tax Cut Certainty Act of 2012, which had passed a Senate committee in August and had been bottled up ever since and was going nowhere.

So as part of making sure the "middle class" does not see a massive tax increase, Congress and the White House give us a bill that ensures the richest of the rich will continue to receive favorable tax treatment for years to come. Hollywood, the wind energy lobby, and even Captain Morgan rum all get to continue having their tax credits continue.

While some of what was in the earlier bill made sense, and was reasonably part of this fiscal cliff bill, much of it was pure lobbyist-generated favoritism. Frankly, an orderly, public, and comprehensive debate on tax policy and in particular social and economic engineering through the tax code is needed and has been needed for decades. But it's never going to happen because of the current climate in Washington.

Bottom line is that in order to stop the federal government (in particular but state government is not too far behind) from becoming something that mostly exists to propagate itself and secondarily exists to give perks to people with good lobbyists, we somehow have to get back to having a Legislative branch that actually you know, legislates.

That means passing an annual budget, so it is known ahead of time how much of a deficit they project, where the money is being spent, etc. That way, if there are unwise or unfair benefits being given to the favored few, there is a way to identify it, and a way to stop it in the budget adoption process.

It also means having actual debates and perhaps messy fights in which amendments are proposed, and elected officials who are engaged and trying to do what is right and best (as opposed to expedient) have to participate. Out of the chaos there will emerge a solution.

I've been an elected official, and I can tell you that public debate and argument about the best way to proceed almost always ends in better policy being made.

The federal government does almost nothing in public anymore. It's all crisis management and backroom deals that must be approved or the world will end. It's federal agencies using unofficial email channels to conduct public business, so they can't be traced through FOIA requests. It's lobbyists pulling strings and writing things that the elected officials never even see, much less read, comprehend, and understand.

So while I do not think I would have supported the Republicans, or anyone else, deciding to take this bill and this vote and hold it up to force complicated and lengthy discussions and debates on things not in the bill, I do wish someone had read the bill (critically) and maybe excised some of the provisions that have nothing to do with protecting the "middle class".

[ January 03, 2013, 02:50 PM: Message edited by: Gilnar ]

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scholarette
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The thing that annoys me is that this crisis is manufactured. There is no actual crisis or event it is in resppnse to. Congress created it by their refusal to do their jobs properly.
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rivka
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quote:
Originally posted by scholarette:
The thing that annoys me is that this crisis is manufactured. There is no actual crisis or event it is in response to. Congress created it by their refusal to do their jobs properly.

AMEN!
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Blayne Bradley
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A huge part of the problem is the need to outspend your opponents, even in "safe" elections in order to win. This means taking in massive contributions and selling your soul to business interests such that you are no longer really representing your constituents.

We saw this conflict take center stage when SOPA came to the floor; the internet and its own lobbyists were just barely able to kill it. But we saw like Franken, whom I normally thought should've known better, voting for and supporting SOPA with people like Chris Dodd speaking in abrupt frankness that those who voted against SOPA may likely suffer the consequences.

We need public financing, public equal time media, and ungerrymandered competitive districts (with exceptions, like the gerrymandering that is done to increase black representation over multiple districts instead of making one large ghetto).

Essentially the job of law makers should be to study and acquaint themselves with ANY issue, they should ALL be well read and learned in any and all possible issues and their job should reflect this, spending their time studying the issues they are deciding on instead of campaigning and indebting themselves to private interest.

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