Raising the debt limit, the brinkmanship and blame game.

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President Joe Biden and top lawmakers failed to break a deadlock on Tuesday in face-to-face talks over raising the $31.4 trillion U.S. debt limit but vowed to meet again with just three weeks before the country may be forced into an unprecedented default. After about an hour of talks in the Oval Office, Biden, a Democrat, and House of Representatives Speaker Kevin McCarthy, a Republican, showed no signs of softening their positions as a default looms as early as June 1. But talks among aides may continue as soon as Tuesday night on the federal budget. Biden called the meeting “productive” and reported that McCarthy said during the meeting that the U.S. would not default on its debt. “Everyone in the meeting understood the risks of default,” Biden said.

McCarthy underscored a lack of progress. "I didn't see any new movement," McCarthy told reporters after the meeting, complaining that Biden didn't agree to talks until time was running out. "That's not a way to govern," he said. The White House, he said "has no plan B." But he said the two sides agreed for their staff to get together this week, and for the principals to meet again on Friday to continue talking. The two sides exchanged blame after the meeting.
Few countries in the world have debt ceiling laws, and Washington's periodic lifting of the borrowing limit merely allows it to pay for spending Congress has already authorized. Biden would agree to a separate discussion on the budget but not tied to the debt ceiling, the White House said. The start of active talks could nonetheless soothe the nerves of investors who last week forced the federal government to pay its highest interest ever for a one-month debt issue. Prices for short-term Treasury bills fell on Tuesday as investors sold off debt that could come due around the time the U.S. debt limit could be hit.
Biden's foreign travel plans and House and Senate recesses mean there are just seven days when all three parties are scheduled to be in town before June 1. Treasury Secretary Janet Yellen on Monday said a failure to raise the debt limit would hurt the U.S. economy and weaken the dollar as the world's reserve currency. Treasury cash is dwindling as the extraordinary measures it is taking are exhausted. White House officials have discussed whether Biden has the authority to lift the debt limit on his own by invoking the U.S. Constitution's 14th amendment, but Biden told MSNBC last week that "I've not gotten there yet" on this argument. The 14th amendment says the validity of the public debt of the United States "shall not be questioned." Invoking it could trigger a legal challenge.
https://www.reuters.com/markets/us/bide ... 023-05-09/
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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Biden has already hinted that he's thinking about the 14th Amendment and Laurence Tribe's legal argument supporting how to implement it without exceeding Presidential powers: Biden can either obey Congress's law about the budget, or the Debt Limit law, but cannot obey both and should therefore choose to obey the more recently enacted law, the Budget. It's a clever argument Tribe makes that walks the razor's edge between Presidential power and exceeding it.

And Biden is fully aware of it and said so in yesterday's rare press conference. I expect it's his "Break Glass" contingency.
"Even if the bee could explain to the fly why pollen is better than shit, the fly could never understand."

Re: Raising the debt limit, the brinkmanship and blame game.

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I expect he'll go with the 14th and order Treasury to prepare the damn coin as a contingency. There's no need for Congress to raise the debt limit under the 14th because the debt limit was unconstitutional, but there was never anything prohibiting the from raising it. Preparing the coin signals to the courts that McCarthy can't win by appealing to the ref, so they might as well back Biden.

The budget negotiations start in the House regardless - we're headed for a shutdown no matter what.

Re: Raising the debt limit, the brinkmanship and blame game.

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Biden is hitting the road to try and get public support for his position in the negotiations. This is the same game Democrats played when Trump was in the White House, each party does it. This could have been solved years ago by giving the Treasury Secretary the power to raise the debt level, after all Congress has approved all the expenditures that increase the debt. Both political parties want to keep the game going, push their opponents back to the wall so they can look like victors in the next election.

Biden is a lawyer and he said he's not convinced that using the 14th Amendment is legal. The time to attempt to use the 14A was back in February when Biden and McCarthy last met. Biden doesn't want to make cuts and Republicans want cuts especially right wing House members. Any use of the 14A has to pass muster with SCOTUS and that could take time and it doesn't guarantee Biden will win. And the biggest economy in the world defaults which reduces our credit rating and makes borrowing money a lot costlier.

Yellen has stated that June 1st is the deadline.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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wings wrote: Wed May 10, 2023 7:36 am I expect he'll go with the 14th and order Treasury to prepare the damn coin as a contingency. There's no need for Congress to raise the debt limit under the 14th because the debt limit was unconstitutional, but there was never anything prohibiting the from raising it. Preparing the coin signals to the courts that McCarthy can't win by appealing to the ref, so they might as well back Biden.

The budget negotiations start in the House regardless - we're headed for a shutdown no matter what.
Shutdown, maybe, default, never. Even were the SCOTUS to determine that we SHOULD default, Biden could defy them and would survive the inevitable impeachment. It was Jackson who dared the SCOTUS to force him to do what they demanded. Like Stalin: "How many regiments does the Pope have?"
"Even if the bee could explain to the fly why pollen is better than shit, the fly could never understand."

Re: Raising the debt limit, the brinkmanship and blame game.

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I think Dark Brandon is going to eat them alive, spit out the bones, then grind those to make scones with. He has the Constitution, and he's got the platinum coin. Moreover, everyone can access the actual facts about the debt, deficit, and debt ceiling from the last administration. Facts are stuborn that way. Dark Brandon will play this for max political damage to the maga party.

CDFingers
Crazy cat peekin' through a lace bandana
like a one-eyed Cheshire, like a diamond-eyed Jack

Re: Raising the debt limit, the brinkmanship and blame game.

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Millions of Americans will probably get their Social Security checks even if Congress fails to reach a deal to raise the U.S. debt limit, economists and policy advocates say.
Still, there is a chance the checks many retirees rely on to pay the bills could be delayed or temporarily reduced should the government default on its obligations for the first time since the U.S. Treasury was established in 1789. If the checks are held up, the federal debt ceiling crisis could trigger household financial crises. “Any disruption to Social Security would be burdensome for beneficiaries’ ability to pay rent, utilities, out-of-pocket medical expenses and groceries,” said Dan Adcock, director of government relations at the nonprofit National Committee to Preserve Social Security and Medicare.
Social Security might seem insulated from borrowing limits, since the government collects a 12.4% payroll tax on earnings up to $160,200 to fund the program. Payroll tax and other program revenues covered nearly all of the more than $1 trillion Social Security paid in benefits in 2022, according to the Social Security Administration. The $2.8 trillion Social Security trust fund covered the gap. While that is how the government accounts for Social Security’s finances, it isn’t how it pays out benefits. The Treasury Department issues Social Security checks from its general fund, which resembles “a giant checking account,” said Steve Robinson, chief economist at the nonprofit Concord Coalition, which focuses on budget issues. Federal revenues from sources including payroll and income taxes and borrowed money flow into the fund. The Treasury Department uses the commingled cash to pay invoices for everything from Social Security to tax refunds to contractors’ bills. Treasury officials said bills are paid in the order in which they come due and it may not be possible to change the department’s systems to prioritize some obligations over others.
The impact of any delay in Social Security payments would depend in part on the calendar. Social Security recipients who were entitled to benefits before May 1997 are paid on the third of the month. Others are generally paid on the second, third or fourth Wednesday of each month, depending on their birth date. Once Congress resolves the current stalemate over fiscal priorities and votes to raise the debt limit, Social Security beneficiaries would be compensated for any shortfalls or delays in payments, said Mr. Adcock. A default could create other challenges for households, including turmoil in the financial markets that would likely punish retirement accounts
Congress could protect Social Security benefits from a default without raising the debt limit. “Politically, lawmakers really do not want over 60 million people mad at them,” said Alicia Munnell, director of Boston College’s Center for Retirement Research. With about 40% of beneficiaries relying on Social Security for half or more of their household income, millions might have to turn to payday loans or go without medicine or electricity if payments are delayed, she said.
https://archive.fo/SwOSo#selection-471.0-475.401
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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The Congressional Budget Office on Friday said that tax revenues and emergency measures after June 15 “will probably allow the government to continue financing operations through at least the end of July.” The updated guidance otherwise reiterated the CBO’s earlier uncertainty about the debt ceiling during the first few weeks of June. Even though mid-June tax revenues could ease pressure on the Treasury through July, there’s still the risk of default in the first few weeks of June, the key government forecaster said.

“If the debt limit remains unchanged, there is significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations,” said the CBO report. The new report came as the White House and congressional leaders postponed a scheduled Friday meeting to continue negotiations, citing little progress so far over any deal to cut spending and pair that with a debt limit hike.
https://www.cnbc.com/2023/05/12/us-can- ... r=sharebar
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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The Biden administration and congressional Republicans are making progress in their negotiations over federal spending and raising the debt limit, Treasury Secretary Janet Yellen said, adding that she believes the talks could result in an agreement. “I’m hopeful. I think the negotiations are very active. I’m told they have found some areas of agreement,” Ms. Yellen said in an interview Saturday at the end of a gathering of finance ministers from the Group of Seven advanced democracies in Japan. Republicans and Democrats are racing to find a compromise for raising the nation’s roughly $31.4 trillion debt limit. Republicans say lifting the debt ceiling should be paired with cuts to federal spending, while Democrats say raising the cap shouldn’t be contingent on broader budget negotiations.
After resisting discussing spending cuts alongside the debt limit, Democrats have warmed to the possibility of placing limits on federal spending in the talks with Republicans, according to people familiar with the matter. Some Democrats believe potential spending caps could be flexible enough to be acceptable to the party, while opening the door to an agreement with Republicans. But the duration of any potential spending caps is a point of contention, according to the people familiar with the talks. Democrats have discussed setting spending levels for the next two fiscal years, a period when all spending legislation would have to pass through a GOP-controlled House anyway. Republicans are pushing to lock in spending caps for a longer period, passing legislation last month that limited spending over 10 years. Other areas of potential compromise between Republicans and Democrats in the talks are repurposing roughly $70 billion that was previously designated for responding to the Covid-19 pandemic, which would generate savings on paper. Crafting legislation to speed up project permitting is another area where Republican
Mr. Biden has said his administration is also studying experimental ways to keep paying the government’s bills if Congress doesn’t raise the debt limit in time. Ms. Yellen, though, has repeatedly said any of those alternatives still pose risks. “I’m often asked questions—if the debt ceiling is not raised, what would you do?” Ms. Yellen said Thursday. “And I don’t want to go there and discuss alternatives.” She said “there is no good alternative that will save us from catastrophe.”
https://www.wsj.com/articles/republican ... s-d9d4fbd9
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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Is it the Biden default? Or the Republican Default on America? Even as negotiators push forward with halting talks to resolve the federal debt-ceiling standoff, members of both parties are positioning themselves to try to dodge the blame for the economic fallout if things go south. Democrats lambaste Republicans for taking the debt ceiling hostage to appease “extreme MAGA” conservatives bent on shrinking government spending. Republicans hit Democrats for waiting too long to open talks and not taking G.O.P. demands seriously. But deep down — and in some cases not so deep — officials in both parties know they are all going to pay if they don’t get a deal, the government defaults and Americans lose money and jobs and confidence about their financial well-being and future.

“I would hate to be the politician trying to explain to people when the economy is in the toilet that it’s not my fault, it’s their fault,” said Senator Lindsey Graham, Republican of South Carolina. “Yeah, that ain’t going to work. They will flush us all.” Polls have suggested Mr. Graham’s view is correct. A Washington Post-ABC News Poll released earlier this month shows that the public is divided about who will bear the blame, with a significant chunk of independents saying the two sides should share it equally.
The two parties can continue to trade shots. But until they trade negotiating positions they can come to terms on, the threat of default hangs over Washington and the nation. And if that happens, those involved may find that the public won’t distinguish between who did or said what when, but will hold them all accountable.
https://www.nytimes.com/2023/05/19/us/p ... onomy.html

Prolonged debt-ceiling squabbling could push the U.S. economy into recession, while a government default on its obligations might touch off a severe financial crisis. U.S. lawmakers are negotiating over raising the federal government’s borrowing limit and may have just days to act before the standoff reverberates through the economy. in a worst-case scenario, a failure to pay holders of U.S. government debt, a linchpin of the global financial system, could trigger severe recession and send stock prices plummeting and borrowing costs soaring. Many economists don’t expect a default for the first time in U.S. history. But they outline three potential ways the standoff could affect the economy and financial system, ranging from not great to extremely scary. The economy is already slowing due to rising interest rates, with many forecasters expecting a recession this year. While lawmakers haggle, uncertainty could cause consumers, investors and businesses to retrench, increasing the chances of a recession, said Joel Prakken, chief U.S. economist at S&P Global Market Intelligence. Workers aren’t likely to lose their jobs, but the unpredictability of the economic outlook could cause them to put off purchases.
If negotiations extend beyond Thursday June 1, economists expect a more severe reaction from financial markets, as the possibility for default looks more real.
“The shock would tend to accelerate quite rapidly” on June 1, said Gregory Daco, chief economist at Ernst & Young. If consumers’ retirement and investment accounts suddenly shrink, they could sharply curtail their spending, the lifeblood of the U.S. economy. Businesses could pause hiring and investment plans. There is a possible window between June 1 and any missed payments. Yellen wrote that the actual date Treasury exhausts its cash could be days or weeks later than estimated. The Bipartisan Policy Center projects Treasury to spend $622.5 billion in June while taking in $495 billion in tax revenue. The exact timing of those inflows and outflows impact cash reserves.
If no deal is reached and the government can’t pay all its bills for days or weeks, repercussions would be enormous. “There would be chaos in the global financial system because Treasurys are so important,” said Wendy Edelberg, an economist at the Brookings Institution. “What happens when that thing that everybody is benchmarking themselves to proves to be one of the riskiest things out there?” Ernst & Young’s Daco said a default would trigger a recession more severe than the 2007-09 downturn.
https://archive.fo/VbPmZ

Raising the debt limit is one of the highest levels of political drama, blame the other party and push negotiations to the brink. It happens every time the debt limit is raised, both parties relish the drama and paint the other party as devils. Biden and McCarthy could have started negotiating in February, but Biden didn't want to make cuts and McCarthy was and still is beholden to party extremists.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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Senior Biden officials have told progressive activists and lawmakers in recent days that they do not see the 14th Amendment — which says the “validity of the public debt” cannot be questioned — as a viable means of circumventing debt ceiling negotiations. They have argued that doing so would be risky and destabilizing, according to three people familiar with the discussions. The White House has studied the issue for months, with some aides concluding that Biden would likely have the authority to declare the debt limit unconstitutional as a last-ditch way to sidestep default. But Biden advisers have told progressives that they see it as a poor option overall, fearing such a move would trigger a pitched legal battle, undermine global faith in U.S. creditworthiness and damage the economy. Officials have warned that even the appearance of more seriously considering the 14th Amendment could blow up talks that are already quite delicate.
Biden himself has said that he sees a bipartisan deal as the only option to the current standoff, casting doubt on the 14th Amendment as workable in public remarks. But the private resistance being registered by his aides has frustrated progressives who worry the president is too readily giving up his leverage. It also threatens to fracture months of party unity behind Biden’s debt ceiling strategy, exposing the White House to increasingly vocal criticism just as it enters the final stage of its high-stakes standoff with the GOP.
Top White House aides have largely dismissed the rising angst among progressives and other allies who feel left out of debt talks. Instead, the administration has effectively gone all in on a debt ceiling-and-budget agreement with Republicans that officials hoped to finalize as early as Sunday, the people familiar with the discussions said. That would allow Biden to clinch the deal shortly after returning from the G-7 Summit in Japan, and give congressional leaders in both parties several days to lock down the votes needed to push through a debt ceiling increase.
https://www.politico.com/news/2023/05/1 ... g-00097930
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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I believe if it comes down to a force default, which the nutty fascist MTG branch of the Trump GOP WANTS, and are working for, Biden will have no choice but to invoke the 14th. Trump himself, being the 6x bankruptcy king, is pushing for default because being the ignorant irresponsible putz he is, he doesn't understand the difference between him (or a business) declaring bankruptcy, and the strongest nation on earth, with the biggest GDP, defaulting.

Even the HINT of default is negatively affecting markets already, and that default would be catastrophic. But that's what the fascists want BECAUSE .... they want a fascist revolution to overthrow our democracy, and would LOVE a civil war.... just like Franco destroyed Spanish Democracy in the 30's with Putin's, er, Hitler's help, and Spain suffered for 40 years under that torturing bastard. He still had political prisoners slowly garroted to death as late as 1974! That's what the MTG ReThugs are WORKING FOR!
"Even if the bee could explain to the fly why pollen is better than shit, the fly could never understand."

Re: Raising the debt limit, the brinkmanship and blame game.

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Trump is pushing for default so he can beat Biden and Democrats with it during a general election. Trump would never do it, but he pushes his loser followers to vote for it. I assume before this is over that financial backers will have a heart to heart with members of the Freedom Caucus and impress upon them that support ends if they don't raise the debt ceiling. No one wants a default, but both parties can't raise the ceiling and not cut some spending.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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highdesert wrote: Sun May 21, 2023 12:21 pm Trump is pushing for default so he can beat Biden and Democrats with it during a general election. Trump would never do it, but he pushes his loser followers to vote for it. I assume before this is over that financial backers will have a heart to heart with members of the Freedom Caucus and impress upon them that support ends if they don't raise the debt ceiling. No one wants a default, but both parties can't raise the ceiling and not cut some spending.
Correction: The Fascist Caucus and Trump want it so they can have their Franco-type revolution.
"Even if the bee could explain to the fly why pollen is better than shit, the fly could never understand."

Re: Raising the debt limit, the brinkmanship and blame game.

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Democrats want "clean" legislation, a debt ceiling increase without conditions. They reason that negotiations on spending and the budget can be undertaken after the debt ceiling is resolved. That's not a solution Republicans like much. Republicans are holding out for spending cuts and other provisions.
https://www.cbsnews.com/news/debt-ceili ... democrats/

A clean bill is fantasyland, Democrats don't have the votes in the House and Senate to pass it by themselves.

Sixty percent of Americans say Congress should only raise the nation’s debt ceiling if it cuts spending at the same time, according to a new CNN Poll conducted by SSRS, as the government’s June 1 “hard deadline” to avoid economic catastrophe looms large over Washington. Few see President Joe Biden or the Republicans in Congress as acting responsibly in negotiations over the debt limit, with most in both parties more concerned that their side will give up too much than that the United States will default on its debt.

Still, a broad majority of Americans favor raising the debt ceiling (84%), with just 15% saying Congress should not do so under any circumstances. Besides the 60% who support raising the ceiling alongside spending cuts, 24% say it should happen no matter what.

These findings come amid widespread doubts about the nation’s political leaders more broadly. Few Americans say that Biden (31%) or the Republican leaders in the House of Representatives (29%) have the right priorities. Among independents, 60% say that neither Biden nor GOP leaders are paying enough attention to the country’s most pressing problems.
https://www.cnn.com/2023/05/23/politics ... index.html
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Raising the debt limit, the brinkmanship and blame game.

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Matt Gaetz Openly Confirms Republicans See US Economy as 'Our Hostage'

Through their actions in recent months, House Republicans have made clear that they view the debt ceiling standoff as a hostage situation that they can exploit to advance their political agenda—which includes draconian cuts to social programs and massive handouts to the fossil fuel industry.

On Tuesday, just days before the June 1 "X-date," Rep. Matt Gaetz (R-Fla.) came right out and admitted it, telling reporters that "my conservative colleagues for the most part support Limit, Save, Grow, and they don't feel like we should negotiate with our hostage."

The Limit, Save, Grow Act is legislation that Republicans passed in a party-line vote last month, staking out their position that the debt ceiling shouldn't be raised unless rich tax cheats are protected and an axe is taken to spending on federal nutrition assistance, Medicaid, affordable housing, childcare, and other key programs.

The House GOP, officially led by Speaker Kevin McCarthy (R-Calif.) but heavily influenced by the far-right Freedom Caucus, has held to that position, threatening to force a debt default and unleash global economic chaos unless their demands are met.

Gaetz, a member of the House Freedom Caucus, suggested Tuesday that the deal McCarthy struck with his far-right flank to secure the speakership—specifically the rule allowing just one lawmaker to call a vote to unseat the speaker—has kept the Republican leader committed to debt ceiling brinkmanship.

"I believe the one-person motion to vacate has given us the best version of Speaker McCarthy and I think he's doing a good job," Gaetz said Tuesday.
Long article: https://www.commondreams.org/news/matt- ... ng-hostage

The truth comes out.
Facts do not cease to exist because they are ignored.-Huxley
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." ~ Louis Brandeis,

Re: Raising the debt limit, the brinkmanship and blame game.

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As the Repugs want to cut taxes for their wealthy donors, I suggest we return to the tax brackets percentages of 1950 adjusted incomes for inflation. 1950 was the start of the biggest economic boom we have seen since 1900. The Roaring Twenties did not compare to the 1950s.

https://www.tax-brackets.org/federaltaxtable/1950
Facts do not cease to exist because they are ignored.-Huxley
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." ~ Louis Brandeis,

Re: Raising the debt limit, the brinkmanship and blame game.

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TrueTexan wrote: Wed May 24, 2023 10:28 am As the Repugs want to cut taxes for their wealthy donors, I suggest we return to the tax brackets percentages of 1950 adjusted incomes for inflation. 1950 was the start of the biggest economic boom we have seen since 1900. The Roaring Twenties did not compare to the 1950s.

https://www.tax-brackets.org/federaltaxtable/1950
This is a messaging test for the Dems, to see if they can successfully tie one-quarter of the Debt to spending signed by Repubs during 45's disastrous tenure. The documents exist. It will just take good messaging. Best of luck, Dems. You don't have a good track record there.

I agree that a return to those tax rates would be a good thing. It would force the Companies to share with the workers or give it up to Uncle Sam. Sharing with the workers gave us the Middle Class from the 50's and 60's. Naturally the Repubs wanted to crap on that picnic table.

CDFingers
Crazy cat peekin' through a lace bandana
like a one-eyed Cheshire, like a diamond-eyed Jack

Re: Raising the debt limit, the brinkmanship and blame game.

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CDFingers wrote: Wed May 24, 2023 12:17 pm
TrueTexan wrote: Wed May 24, 2023 10:28 am As the Repugs want to cut taxes for their wealthy donors, I suggest we return to the tax brackets percentages of 1950 adjusted incomes for inflation. 1950 was the start of the biggest economic boom we have seen since 1900. The Roaring Twenties did not compare to the 1950s.

https://www.tax-brackets.org/federaltaxtable/1950
This is a messaging test for the Dems, to see if they can successfully tie one-quarter of the Debt to spending signed by Repubs during 45's disastrous tenure. The documents exist. It will just take good messaging. Best of luck, Dems. You don't have a good track record there.

I agree that a return to those tax rates would be a good thing. It would force the Companies to share with the workers or give it up to Uncle Sam. Sharing with the workers gave us the Middle Class from the 50's and 60's. Naturally the Repubs wanted to crap on that picnic table.

CDFingers
Agree.
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"Resistance is futile. You will be assimilated!" Loquacious of many. Texas Chapter Chief Cat Herder.

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