U.S. stocks fall after Speaker Boehner says spending is the issue preventing fiscal cliff deal

“U.S. stocks fell Thursday after House Speaker John Boehner declared spending to be the issue preventing a deal to avert spending cuts and tax hikes from starting in the new year,” Kate Gibson reports for MarketWatch. “Boehner called a news conference to detail his views on what is blocking negotiations to avoid the fiscal cliff, with the Ohio Republican blasting President Barack Obama and Democrats for looking to ‘punish small businesses’ with higher tax rates.”

“The Dow Jones Industrial Average fell 28.15 points, or 0.2%, to 13,217.30,” Gibson reports. “The S&P 500 index fell 4.14 points, or 0.3%, to 1,424.34, with consumer-related companies leading gains and energy leading sector losses. The Nasdaq Composite index fell 4.55 points, or 0.2%, to 3,018.36.”

Gibson reports, “U.S. stocks posted a flat performance Wednesday after Federal Reserve Chairman Ben Bernanke warned that the central bank doesn’t have the ability to shield the economy from the full impact of the fiscal cliff. Many economists fear that failure to avoid the cliff would trigger a recession.”

Read more in the full article here.

69 Comments

  1. The Federal Reserve “Bank” is neither federal nor a reserve. It is a cadre of international banks that allow the American taxpayer the honor of borrowing their own money at interest rates set by this den of usurers. It is the “National Bank” that both Jefferson and Andrew Jackson staked their careers fighting against…the ultimate Ponzi scheme.

        1. Well then, botvinnik, it’s time for me to join in. We had these nice exchanges several months ago and you chilled out for a while. But now you are back, polluting MDN with your tripe again. Don’t ruin my Christmas by making me spend hours disparaging your lack of wit and reason. Calm down, find your inner peace, and get some perspective on the U.S. government and associated organizations. You don’t have to live in your depressing, doom-and-gloom world of impending apocalypse and collapse. You choose to do so.

  2. hey Boehner quit pulling such a boner and manipulating the stock market with your imaginary cliff. the treasury could just print 1 trillion sovereign coins and call it a day – take a big whack at that interest… with the eurozone in financial disarray, now’s the time.

    1. Total spending on “welfare” broadly defined recently breached the ONE TRILLION dollar mark. (Social security and Medicare are not counted as welfare.) Defense spending is around $650 Billion.

      1. Your defense spending number appears not include the wars in Iraq and Afghanistan. But, never mind that, the number which dwarfs it all is that for unfunded Bush tax cuts which cost the U.S. budget $1.8 Trillion through the end of 2009.

        1. I’ve never understood the ‘unfunded’ term.
          Is it because taxes weren’t raised specifically for the war?
          If the theory is that raising taxes slows the economy and thus revenue altogether, how could that help ‘fund’ a war?

          1. An “unfunded” tax cut is one where there are no other sources of revenue, or budget cuts to balance the amount of tax revenue being lost. The notion that cutting taxes would increase tax revenues is a fairy tale, except in the case of truly oppressive taxation, which we did not have prior to W’s regime. An “unfunded” war is one in which taxes were not raised to pay for it. Both of these “unfundeds” require borrowing. The Bush tax cut is a chapter and verse application of the “Starve the Beast” strategy, where massive tax cuts bankrupt the government, then it can be argued that any social spending or breaks for the middle class cannot be afforded. It’s a truly cynical and heartlessly irresponsible plan to allow the super wealthy to become unspeakably wealthy overlords, at the expense of the rest of society.

            1. They did not have the power. Republicans have made unprecedented use of the filibuster. Moreover after Bush turned Keynesianism on its head leading to the Great Recession, the only tool Obama had to fight it was maintaining the high levels of liquidity for a couple of years, begun by W. Of course we would have rather seen that liquidity used to fund infrastructure instead of bank bailouts. But yes, in the last two years Mr Obama and the Democrats have attempted to raise tax rates on the very wealthy.

            2. And what percent of the debt will that pay for?
              Do you honestly think the return will be greater than if invested in the private sector?
              Or do you think they already have it budgeted for NEW spending?

              And, BTW, DID the Democrats try to raise taxes in 2009 or 2010? Why did they extend the Bush Tax rates for a year?

              Also, how did the Bush Tax cuts ‘bankrupt’ the government?
              How much more would have been raised without them?

              And one more thing……what affect did the Fannie Mae/FreddiMac debacle have on the economy via banking?

            3. The Bush tax cuts cost the nation more than defense spending (including the wars). Taxes are lower than anyone living can remember and it’s an outrage. And when Bush enriched the already-wealthy, it’s a fact they did not go out and build factories with the money. What goods they bought were largely foreign (Italian yachts and French châteaux), but most of it went into the international financial system, searching for tax havens and other selfish stuff. We cannot afford for those with the most money to be paying the lowest percentage rate in taxes. I say this as someone who is in the 1% myself, and because I am under-taxed I have increased charitable giving.

            4. Sorry, but your answers are way too simplistic.

              You are talking about raising taxes for the sake of raising taxes AND for social justice.

              Both points are bullshit.

              If taxes were raised to actually lower the debt while at the same time streamlining non-essential and duplicate services (including military) most Conservatives would be for it….save for the fact that the politicians would go back on their word, as they have in the past.

              THAT is why the right is against higher taxes, for the same reason a wino bum isn’t going to spend that dollar he wants for ‘a warm meal’, he is just going back to the well.

              But if you want my real opinion of what we (the right) should do, as I have stated, get out of the way and let the left spend its way into oblivion.

              Maybe some in the middle will finally learn…..Others never will.

            5. Are you an idiot, TowerTone? You claim to understand economics. If so, then you should easily be able to answer your own question given the state of the economy in 2008-2009. There were virtually no levers left to turn in a collapsing economy with interest rates already near zero and banks unwilling to loan money to qualified small companies after spending the last eight years practically shoveling money at anyone with a pulse. And then there was the obstructionism of the Grover Norquist acolytes who signed a pledge when tax rates were higher than they are currently and chose to interpret allowing a temporary tax cut to expire as “raising taxes.” Damn you are a tool.

            6. Come on, Mel, I was setting a trap. If raising taxes on the wealthy back then would stifle the economy, what is the difference now?

              Don’t give me economic stats, they don’t matter to the wealthy….remember?

              How much was lost by the Bush tax cuts and the war (minus default military spending) vs the housing bubble + Obamacare+stimulus?

              Also, I laugh at Grover being an ‘obstructionist’.
              The Democrats can’t even pass a budget but Grover ruined everything.

              Now let’s talk about being a tool by believing THESE myths:

              A tax hike on the wealthy makes them pay ‘their fair share’.
              It will help balance the budget
              the Bush Tax Rates caused these problems
              Obamacare will pay for itself

              These are utter BS that supposed ‘thinking men’ like yourself accept and propagate.

              It doesn’t MATTER if a lower tax rates stimulate the economy or not! IT IS OUR MONEY!!!!!!!
              And if the government wants to spend more of OUR MONEY then it better be to reduce the debt, NOT INCUR MORE!

              Like I have said, show a budget with actual, meaningful restraints and how higher rates will go directly to lowering the deficit/debt and you will see people of all classes understanding.

              But when you raise rates under the ruse of ‘medical reform’ whose cost is exorbitant compared to simply insuring the uninsured, then it is nothing more than a power grab and the right will not accept it.

        2. If you include the two middle eastern wars and things like veterans’ administration and Homeland Security , defense spending is in excess of $1T per year. The DoD budget has doubled since 2000.

    2. In Houston, churches are going up let and right. Not just simple ones either, but big elegant ones, some with businesses within the church. Need to tax them after a certain point. Why should they be tax free?

      1. here’s why dipshit:
        (note which one is Numero Uno)
        Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

        1. Why are then news media organisations taxed? And how does tax abridge the freedom of speech?

          I could never understand the reasoning behind protecting churches (and I’m not talking about the people who organise themselves into groups, but about the hierarchy, which employs others) from paying taxes. No wonder we have people like Reverand Al Sharpton, or Reverand Jesse Jackson. Nothing like a clerical calling to shield oneself from taxation…

            1. They may be paying taxes themselves (much like employees of all other employers pay taxes in US), but somehow, I’m getting a feeling that a very reverend minister can easily funnel money (and acquire goods) through his employer (his church, or ministry), saving himself tax. I have seen way too many priests driving around in Mercedeses to not begin asking myself a few questions.

              And my question is still not answered: WHY does a church NOT pay tax (and a news outlet, much like every other entity, has to)? Where does the First Amendment (“Numero Uno”, as botvinnik to the American constitution so eloquently put it) even say anything about taxation?? And once again, how does tax “abridge” the freedom of speech (or the press), or the right to peaceably assemble or petition the Government for redress of grievances? And if it does, why do those who are the primary purveyors of that free speech (media outlets) taxed like everyone else, if the “Numero Uno” is the primary reason (and somewhere there in the explanation of this “Numero Uno” concept, a term ‘dipshit’ was used…)???

            2. It’s simple, Predrag.
              A newspaper is set up to make a profit because it is a business
              Churches (not the chicken shack) are not.

              If a newspaper losses money, it’s tax rate will go down.
              If a church loses money, they will gain a more colorful pastor….

              Obviously there should be limits to what a church can do with its money without it being taxed.

              Other than that, your correlation is faulty.

            3. Your argument makes a lot more sense than botvinnik‘s. He claimed that the churches don’t pay taxes somehow because of the First Amendment to the constitution (and then went quoting it). So far, he has been unable to explain how the two relate (taxes and 1st amendment).

            4. Then let me expound-
              If a small, rural church consisting of mostly farm laborers and other low wage earners were required to pay taxes that it could ill afford, the property would eventually be attached and auctioned as other properties.

              This would restrict the ability of the congregant from worshipping as they desire and thus it is protected FROM taxation to ensure no restrictions on worship from the state.

              I hope this helps.

            5. I am still patiently waiting for a good explanation why the churches are specifically exempted from taxation (with relation to the first amendment).

              While TowerTone had provided a valid explanation regarding the difference between, say a news outlet (a practitioner of free speech by the very definition of its business) and a church (or, for that matter, any not-for-profit, charity organisation), and did so in very civilised and eloquent manner (unlike other participants in this debate), the argument is STILL not there with respect to the first amendment. As far as free speech is concerned, taxing has exactly the same effect on church as it does on a news outlet, with respect to limiting their free speech. So, no, first amendment to the US constitution is NOT a valid argument about shielding churches from free speech (and not other types). Otherwise, rural churches, with very little revenue, would easily be able to deduct enough expenditures from their tax base to fall below the taxation threshold. Richer ones would, of course, be able to pay their share.

              I would say, the only apparent reasoning behind protecting the church (or charities) from taxation would be due to the charitable nature of their primary mission. This follows the same principles that allow contributors to such charitable institutions to deduct such contributions from their taxable personal income. The connection to the first amendment, or any other amendment (or article) of the constitution is weak at best.

        2. I don’t like it, but am willing to accept their escaping taxation on the sanctuary itself. However, there’s a mega-Baptist church near our house and they are huge real estate speculators, buying property all over. They’ve eaten much of the neighborhood and grabbed land all over the county, holding it at no tax cost and later selling for a profit. Why is this not taxed?

            1. Indeed. That’s a problem. And you now appear to be understanding Predrag’s original comment. Tax exemption for religion? Fine. Tax exemption for religious business conglomerates? Not fine.

      1. That statement is neither racist nor elitist. Use a dictionary.

        The tax exemption for religious purposes is fine – churches, synagogues, mosques, etc. But I am not in favor of tax exemptions beyond the pulpit. Churches have become businesses investing in real estate, etc. It has gotten out of control.

        1. Again, Mel, you bite the bait set for another.
          I know it is neither, but used it as a kneejerk response just as the left does for almost EVERY social argument against the right they can’t counter.

          Although, considering that Blacks and Hispanics are more religious based on percent, you could say that taxing churches unfairly goes against minorities. Also, since MOST churches offerings go to help poor and needy, you could argue that taking money to pay taxes removes that ability, thereby constituting elitism.
          (BTW, I’m sure auramac intended taxing only the white, conservative churches in the South)

          Wow, it is SOOOO easy to extrapolate BS into any argument.
          No wonder the Left does it so often!
          (and I’d make a bitchin’ über-lib….)

          I do agree with taxing churches for profit made on any sales unless that amount can be traced to a charity…..as long as it not the pastor’s girlfriend for ‘services rendered…’

  3. spending is theentire problem, you might mislead by the media that Bush caused all this, I say bull… When Bush was president, unemployment was around 5% for a quite a while, it wasn’t until housing died, thanks to democrats pushing crappy loans that all failed at the same time, imagine that. Now we have Obama, spending more money then we can print, and people stand around and wonder why there is a problem.. Duh….

    1. So true, to pay for the over 3.7 trillion in spending our government will do this year you would have tax everyone at 100% making a 100,000 and above to cover all spending this admin is doing. People need to wake up and get un-brain washed.

    2. Spending is not the problem. Reducing the nation’s income (taxes) is the problem. It’s the same as a person taking out new credit cards and loans then quitting a full time and taking a part time job.

      Bush becomes president when the US is taking in more money (surplus) then it pays out.

      Bush starts 2 wars and a Medicare prescription program without paying for these items and cuts the nation’s income (taxes) twice. Bush lowered the US income and increased spending and what do you get, record deficits 6 of 8 years and of course a tremendous increase in the nation’s debt to which republicans remained silent.

      Enter Obama, hey black guy hold this leaking paper bag (1.4 trillion dollar deficit, unpaid wars, unpaid Medicare drugs, US autos going bankrupt, bank bailout, unemployment raising 8 straight months) for me, won’t you. Hey Obama, stop spending my money and destroying the country you Muslim, commie, fascist and communist dictator.

      Why don’t list the law (that only a president can sign) that as you say allowed the banks to give loans to dead people which in turned caused all this problem.

      1. Wrong on a couple of points:

        1. The surplus that Bush ‘inherited’ was a deficit surplus (Fed Gov’t), not the US debt. The debt was still there. It helped that Clinton was a peacetime president and the Internet boom did wonders for the economy. And thanks to BIPARTISAN (a word that Obama doesn’t seem to understand) policy, the economy flourished… Until Clinton decided to expand the reach of Fannie Mae… But that’s another story.

        2. The prescription drug benefit came in WAY under budget- it reduced the seniors monthly contribution from $37 to $22. The Dems, including Obama, like to hammer this plan based on Federal budget figures, which do NOT take into account the private sector contribution. It was a big budgetary savings.

        3. Adjusting marginal tax rates does virtually nothing for gov’t income. Clinton raised marginal rates across the board, the coffers hardly belched. He then lowered corporate tax rates, which led to an almost immediate influx of ‘revenue’. It’s almost impossible to tell whether or not lowering marginal tax rates had any affect on revenue during the Bush years, because there were too many confounding factors (2 wars, housing collapse, etc). But the unemployment rates stayed low, businessss profited, and inflation was kept in check. Can’t really argue that it hurt the economy. Besides, if the Dems were so concerned, why didn’t they do something about it when they had super majorities in the House and Senate in 2008?

        Don’t get me started on the Obama spending spree…

        1. 1. A deficit (revolving and increasing debt if one is unable to pay a sufficient amount) is one thing and debt (the total amount you owe) is another thing. In order to tackle the deficit you need to be able to pay the interest and principle (debt) amount in order to pay down your total debt over a set period of time. If your debt exceeds your income you will never pay down your debt.

          This means you need to make or earn more money (taxes in the case of the US) than your total expenses. President Clinton accomplished this by raising taxes and reforming welfare. This netted the US a surplus instead of a deficit (revolving debt), which is used to pay down the total US debt. Clinton’s economy created over 20 million jobs, an unemployment rate of under 5% and gas prices averaging about $1.50 a gallon throughout his administration.

          Bipartisanship you say; like when the republican congress raised the debt ceiling 7 times under Bush as they did under Reagan but when it came to raising it for Obama because of the mess Bush left the country, the republicans held the country hostage and consequently lost the US’s AAA rating. Speaking of Reagan, he is the president that took the US into trillion dollar deficits with massive tax cuts.

          Then you have the republicans in the senate that filibustered bills and appointees from Obama’s first day in office. You no longer have to filibuster as in the old days of continuously talking, now congressmen can just evoke the less than 60 vote rule.

          2. It will cost the US about $800 billion dollars to subsidize the Bush prescription drug plan over the next 10 years.

          3. You caught yourself tangled in your own web of deceit. Today we have republican congressmen many who claim or at least call themselves Christians, who in turn were elected by other Christians holding this country hostage because they’re defending the wealthy from small tax hikes while asking the poor to do with less so the rich may have more.

          1. Take a look at the total debt over the past century or so- it has steadily increased over that time frame, higher rates at different times. A great book to read- One Nation Under Debt. Your simplistic view of debt management underscores your lack of understanding I believe. The economy under both the Clinton Administration and Reagan was great, mostly because of booming business, but via different methods of govt ‘incentives’. But the common thread between the two was that each leader was willing to work with the other side, as opposed to our current leader (how many republicans voted for the PPACA? How many republicans were involved with deveolping the PPACA? How many republicans were PHYSICALLY locked out of negotiations regarding the PPACA? Right.

            Debt ceiling? Can be raised when you have the money to do so. In case you haven’t noticed our debt exceeds our GDP- where are you gonna get the money? And please tell me what role Bush had in crashing the economy, and compare and contrast that role (whatever it may be) to that is the actions of the democratic leaders of the finance committee and, eventually, the democratic leaders of Congress.

            And please provide proof of your $800 billion figure. Considering the total bill was only budgeted for $70 or so Billion… And don’t forget about the private sector ‘contributions’. BTW- Obama pretty much dismantled the bill already.

            Right- my own web of deceit. Clever. So what would a ‘fair’ or equitable marginal tax rate look like for the ‘rich’, since you’re an apparent expert?

          2. BTW- you might want to review why we lost our AAA rating, and how these ratings are figured. The report from S&P clearly stated that the US has a spending problem, not a revenue problem.

  4. Obama’s idea of a “balanced approach” is maybe 25 cents of budget cuts for each additional dollar raised in taxes. He and his kind are addicted to spending … excuse me, “investment”. They’re already talking about taking the few billion in profit from the AIG bailout and using it for (wait for it) stimulus! That’s not counting yet another $50 billion in “targeted” stimulus under consideration.

  5. My plan is working, will spend the stoopid US into oblivion, then when my brown sheeple can no longer get paid off with free stuff and riot, I declare Marshal Law and no more stinkin democrazy.

    By that time my allies in Middle East have taken over and consolidated into Islam nuclear super power block.

    Then we can blackmail and turn the world into Islam Paadise for the appearance of Brown Doodoo Messiah and butfuck u all!

    FORWARD SUCKERS!

    1. I want to reach out and say thank you for being my bitch. Statistically speaking, there is very little chance that any of you home school halfwits are wealthier than I. Yet you ardently plea my cause, and if you are successful in your amusingly impotent rants, you will add a few meaningless shekels to my already overflowing coffers. In return I promise to give a rat’s butt about you, your family or any of the miserable peons you call your friends. Suckers indeed. Hat’s off to each of you.

  6. What the hell does this have to with Apple?

    I don’t understand this statement – John Boehner declared spending to be the issue preventing a deal to avert spending cuts

  7. I remember the stock prices nose dived forlike three days straight, right after Obama’s return to office. Guess the market knew the new Obama would be like the old Obama and be an ASS about the fiscal cliff and government spending cuts!

  8. The repubnicants are the problem here. They just need to accept the fact that the American people will blame them no matter what happens. So get with the program and raise the damn taxes on the rich mofos already. Those mofos will undoubtedly find other ways to shelter their money. This is the silly Boehners way of getting back at the Dems for getting slapped down for the election loss. If we go over this so called cliff, we will remember repugnicants.

  9. I think we need both tax hikes and deep budget cuts.

    I’m well off and will happily pay more if we have a real plan in place that includes less spending.

    let’s get off our high horses and do what’s right for our children because they will be the benefactors of the decisions we make today.

  10. The Republicans are in a lose/lose position, thanks to idiot Boehner. If we go over the fiscal cliff it will be because the Republicans were being obstructionists in the eyes of the public. If the Republicans do get their way, and the cliff is avoided, they will be in the unenviable position of having garnered favored treatment for the wealthiest 2% of Americans. Come 2016, they will be massacred either way.

  11. It should be rare to see so many people posting with so little understanding of the economy. The problem is simple: People are getting lazy and expecting more from the little work they do. The US economy is based on cheap energy and the intelligent use of that resource. When the people of the world need to make credible contracts with the US, they need a trusted intermediary to know how much they will get back when dealing with the US. The Fed is that intermediary.

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