Latest Fiscal Cliff Deal....

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Submitted by Coronita on December 31, 2012 - 7:45am

Well if this is true it's actually pretty good (for me that is).....

http://finance.yahoo.com/news/two-sides-...


The Democrats made several key concessions yesterday in the Fiscal Cliff negotiations.

As a result, the two sides are absurdly close together. If we don't get a deal at this point, the entire country will be justified in being outraged.

Here's the Democrats' latest offer, as reported by Lori Montgomery and Paul Kane of the Washington Post:

* The Democrats agreed to raise the income threshold for tax increases to $450,000 a year (couples) from the prior $250,000. The Republicans are insisting on $550,000 threshold. This is a massive tax cut for almost the entire country relative to the rates that will otherwise take effect on January 1. (So agree on $500,000 already and call it a day.)

* However, to the Republicans' chagrin, the Democrats insist on raise capital gains and dividend taxes to 20% on households over $250,000 and reducing some of the allowable deductions. Importantly, this, too, is a massive tax cut relative to the scheduled changes, which would boost dividend taxes to 40% on incomes over $250,000.

* The Democrats conceded on the estate tax: They'll keep the threshold for taxable estates at $5 million, with a 35% rate over that level. This, again, is a massive tax cut over current law, in which the threshold will drop to $1 million with a much higher rate.

* The Democrats' offer would permanently protect middle-class households from the Alternative Minimum Tax. No details on how this would work.

* On the spending side, the Democrats' offer would delay the "sequester" (automatic spending cuts) until 2015. This would cost an estimated $200 billion. But it would avoid the cuts to the military budget that the Republicans are so desperate to avoid.

* The Democrats would also extend unemployment benefits for a year, extend farm subsidies for a year, and avoid a 27% cut in Medicare payments to doctors. The Republicans say they want offsets to these spending cuts.

When you boil all that down, the two sides are absurdly close.

The Republicans say they want spending cuts to offset the postponement of the sequester spending cuts, but the Republicans do not appear to have proposed anything in particular. Also, the postponement will only cost $200 billion over two years, which is not much on a government budget of $4 trillion a year. And the postponement of the cuts will avoid a shock to the weak economy, which will likely help on the tax revenue side.

On the tax side, the country will be getting a massive tax cut over the new taxes that will take effect on January 1. The current low income and investment tax rates for 98% of the country would be extended, and the income tax rates would be extended on even more households. The fact that the two sides are still haggling over whether the threshold for a modest income tax increase should be $450,000 or $550,000 is almost comical.

(At some point, taxes are going to have to rise modestly for everyone. If it's this hard to raise taxes even on the richest 1% of the country, imagine what the fight will be like when this increase will hit all Americans).

It's worth noting that this proposed deal would be good for the economy, especially relative to the Fiscal Cliff. The postponement of most of the tax hikes and spending increases would preserve the status quo, avoiding the austerity shock that will otherwise hit growth. The deal would likely boost the deficit over the next two years, but, again, neither side is arguing that the Fiscal Cliff would be preferable to a deal.

Submitted by flyer on January 4, 2013 - 2:41am.

SD Realtor wrote:
Well yes flyer and you are not unlike most people on this board. Unfortunately that level of preparation is representative of a very very very small fraction of the population. The other hundred or so million people who will be 60 or older in about 15 to 20 years are pretty screwed wouldn't you say?

I absolutely agree SD Realtor--it's an unfortunate situation--and I certainly don't have the answers.
Wish I did.

Whomever or whatever is to blame, we're here, and, IMHO, there is no turning back. I'm very grateful that I started out in life at a time when everyone I knew talked about living their dreams--and we did.

I tried to raise my kids with that same feeling. Thankfully, I have been able to see them achieve that level of success in life also.

Eventually, though, and I think it has already started, I believe life will become a matter of survival for most people--even the most well prepared. (i.e. look no further than the dismal stats on recent college grads who expected to walk into their dream jobs and dream homes as most in my generation did.)

Even though I don't know any "Boomers" with as low a net worth as mentioned in the article below, it is a highly entertaining, and somewhat sadly true commentary on our current state of affairs, as well as a possible foreshadowing of what lies ahead. . .

http://www.nytimes.com/2012/09/13/boomin...

One generation hating another for who SOME of them are or aren't isn't going to make one bit of difference in the outcome of anyone's life, whether it's true or not.

That's why I think one of the most important things any of us can do, is to try to take care of ourselves and our own to the highest level possible for as long as we possibly can.

That's my 2 cents.

Submitted by CA renter on January 4, 2013 - 3:21am.

flyer wrote:

http://www.nytimes.com/2012/09/13/boomin...

One generation hating another for who SOME of them are or aren't isn't going to make one bit of difference in the outcome of anyone's life, whether it's true or not.

That's why I think one of the most important things any of us can do, is to try to take care of ourselves and our own to the highest level possible for as long as we possibly can.

That's my 2 cents.

Interesting article, and really liked some of the comments on it.

Submitted by The-Shoveler on January 4, 2013 - 6:39am.

Shoveler’s 2 cents
1) Get your bucket list over while you’re young enough to
a) Enjoy it,
b) Accomplish it.
You never know what will happen in the future.

2)Never fully retire, get some side biz going, you will get bored and your brain will turn to mush if you sit around watching TV etc… all day. Also a pension is great sure but it can be eaten away by inflation much faster than most think it can.

3)Stay as healthy as you possibly can, Health is the greatest wealth you have.
(No point being a multimillionaire if you’re not able to get out and enjoy it).

Submitted by flyer on January 4, 2013 - 6:42am.

CA renter wrote:
flyer wrote:

http://www.nytimes.com/2012/09/13/boomin...

One generation hating another for who SOME of them are or aren't isn't going to make one bit of difference in the outcome of anyone's life, whether it's true or not.

That's why I think one of the most important things any of us can do, is to try to take care of ourselves and our own to the highest level possible for as long as we possibly can.

That's my 2 cents.

Interesting article, and really liked some of the comments on it.

Yes, I noticed the comments were definitely emotionally charged from one extreme to the other. Lots of hatred--which is really fear--floating around out there.

IMO--in the final analysis--each of us either achieve our dreams in life or we don't--regardless of who or what is to "blame."

Submitted by flyer on January 4, 2013 - 6:55am.

The-Shoveler wrote:
Shoveler’s 2 cents
1) Get your bucket list over while you’re young enough to
a) Enjoy it,
b) Accomplish it.
You never know what will happen in the future.

2)Never fully retire, get some side biz going, you will get bored and your brain will turn to mush if you sit around watching TV etc… all day. Also a pension is great sure but it can be eaten away by inflation much faster than most think it can.

3)Stay as healthy as you possibly can, Health is the greatest wealth you have.
(No point being a multimillionaire if you’re not able to get out and enjoy it).

Agree with everything you've said. We've tried to live to the max throughout our lives--while planning for the future.

It's a great way to live, rather than waiting for possible health or other issues that might cramp your style as you get older. We never wanted to miss anything we had ever dreamed of doing--so we didn't!!

Submitted by CA renter on January 5, 2013 - 12:28am.

flyer wrote:
CA renter wrote:
flyer wrote:

http://www.nytimes.com/2012/09/13/boomin...

One generation hating another for who SOME of them are or aren't isn't going to make one bit of difference in the outcome of anyone's life, whether it's true or not.

That's why I think one of the most important things any of us can do, is to try to take care of ourselves and our own to the highest level possible for as long as we possibly can.

That's my 2 cents.

Interesting article, and really liked some of the comments on it.

Yes, I noticed the comments were definitely emotionally charged from one extreme to the other. Lots of hatred--which is really fear--floating around out there.

IMO--in the final analysis--each of us either achieve our dreams in life or we don't--regardless of who or what is to "blame."

Actually, the comments I'm referring to were quite rational and not emotionally-charged. They were saying that the "generation wars" are designed to distract us from what's really causing the problems for the younger generations (outsourcing, corporatism, increasing wealth/income divide, etc.). It's a bit like the "Democrat vs. Republican" battles...all designed to divide and conquer.

Personally, I prefer to live in a world where people have plenty of opportunities to achieve their dreams. Those opportunities have been shrinking dramatically over the past few decades, and you can't blame the younger generations for being upset about it. This is not the same world that you and I experienced when we were young adults.

Submitted by an on January 5, 2013 - 12:43am.

CA renter wrote:
Personally, I prefer to live in a world where people have plenty of opportunities to achieve their dreams. Those opportunities have been shrinking dramatically over the past few decades, and you can't blame the younger generations for being upset about it. This is not the same world that you and I experienced when we were young adults.

One thing we all can be sure of is, it's never the same experience between different generation. Never was, never will be. So, it's survival of the fittest. Adapt or die. I'm party of this younger generation you're speaking of and yet, I'm not upset, I have plenty of opportunities to achieve my dreams. I'm actually doing it right now. But I also see many in my generation who don't have the same work ethic and/or the ability to see the world for what it currently is and adapt to it. They think they can just get a liberal arts degree from a private school, racking up big debts, and somehow, they shouldn't be burden w/ the debt and be paid big bucks because they have a BA in underwater basket weaving. If you're a s/w engineer today specializing in mobile, there are plenty of opportunity. I'm being pinged by head hunter at least once a week (some weeks, it's once a day).

So, although the opportunity isn't universally available in all areas today like it was 20 years ago, there are many advantages of the current gen X/Y as well. We can go to work in jeans and t-shirts, we get big parties every Friday (Zinga), we get to be instant millionaires (if we work for a start up that succeeded like Facebook, Google, etc), we get to telecommute, we get food and gym for free (a lot of bay area companies), etc. None of this existed 20 years ago.

Submitted by CA renter on January 5, 2013 - 3:19am.

AN,

For a long time, it was accepted wisdom that each successive generation would be better off than the last. We're talking about many, many generations where this was true. Things have changed dramatically over the past few decades.

And while the mobile sector is hot right now, there is no guarantee that in some years' time, the desire or ability to do more with mobile devices will fade away, and you may well find yourself in that unenviable position of being in your 50s and trying to compete with the younger generation for jobs that you are not trained for and in which you have no experience. Even if you do have experience, good luck competing with someone who doesn't have a family or other obligations...one who is willing to work twice the number of hours for half the money as you were making in your prior job.

Not that long ago, people with Liberal Arts degrees were also being pinged by headhunters on a very regular basis. Many of them thought they were invincible, and that their opportunities would only grow with their experience, knowledge, and a strong business network. It's always best to look at the bigger picture, IMHO.

Submitted by flyer on January 5, 2013 - 3:31am.

AN wrote:
CA renter wrote:
Personally, I prefer to live in a world where people have plenty of opportunities to achieve their dreams. Those opportunities have been shrinking dramatically over the past few decades, and you can't blame the younger generations for being upset about it. This is not the same world that you and I experienced when we were young adults.

One thing we all can be sure of is, it's never the same experience between different generation. Never was, never will be. So, it's survival of the fittest. Adapt or die. I'm party of this younger generation you're speaking of and yet, I'm not upset, I have plenty of opportunities to achieve my dreams. I'm actually doing it right now. But I also see many in my generation who don't have the same work ethic and/or the ability to see the world for what it currently is and adapt to it. They think they can just get a liberal arts degree from a private school, racking up big debts, and somehow, they shouldn't be burden w/ the debt and be paid big bucks because they have a BA in underwater basket weaving. If you're a s/w engineer today specializing in mobile, there are plenty of opportunity. I'm being pinged by head hunter at least once a week (some weeks, it's once a day).

So, although the opportunity isn't universally available in all areas today like it was 20 years ago, there are many advantages of the current gen X/Y as well. We can go to work in jeans and t-shirts, we get big parties every Friday (Zinga), we get to be instant millionaires (if we work for a start up that succeeded like Facebook, Google, etc), we get to telecommute, we get food and gym for free (a lot of bay area companies), etc. None of this existed 20 years ago.

Personally, I wouldn't change the time I was born, and the life I and my family have been able to live for anything before or after. My hope would be that everyone had the opportunity to feel that way about life.

Like the players in the tech revolution today, many of us in my age group were able to cash in on real estate and other investments--franchises, etc.--in a comparable way. That,along with our chosen careers with the airlines, enabled us to become millionaires by the time we were in our early 30's.

I can understand, as CAR mentioned, how many younger people would feel frustrated by the lack of some of these opportunities today. On the other hand, as AN mentioned, fantastic opportunities are still there for those who are educationally prepared, and looking in the right places.

Submitted by flyer on January 5, 2013 - 3:45am.

CA renter wrote:
AN,

For a long time, it was accepted wisdom that each successive generation would be better off than the last. We're talking about many, many generations where this was true. Things have changed dramatically over the past few decades.

And while the mobile sector is hot right now, there is no guarantee that in some years' time, the desire or ability to do more with mobile devices will fade away, and you may well find yourself in that unenviable position of being in your 50s and trying to compete with the younger generation for jobs that you are not trained for and in which you have no experience. Even if you do have experience, good luck competing with someone who doesn't have a family or other obligations...one who is willing to work twice the number of hours for half the money as you were making in your prior job.

Not that long ago, people with Liberal Arts degrees were also being pinged by headhunters on a very regular basis. Many of them thought they were invincible, and that their opportunities would only grow with their experience, knowledge, and a strong business network. It's always best to look at the bigger picture, IMHO.

CAR, those are some very good observations. I can't tell you how many people I have known in various fields over the years who were "excused" from their careers in their 40's and 50's.

Other than the fact that I always wanted to be an airline pilot, I also originally chose that career because it is protected by very strong unions. I've, personally, never known one airline pilot over the years who was "let go" because their skills were outdated, or because of their age. Many retired young, but none could be forced out.

In other fields, where jobs are not protected by unions, the answer might be to make your fortune while you're young, so you don't have to worry about being replaced when you're older.

Submitted by Coronita on January 5, 2013 - 8:28am.

flyer wrote:

In other fields, where jobs are not protected by unions, the answer might be to make your fortune while you're young, so you don't have to worry about being replaced when you're older.

ding ding ding... Counting on a today's salary to fund future needs is financial suicide. It continues to amaze me that folks will argue over a pathetic 2-3-4-5% raise at work, it it entails working an additional 30% more. (It's one thing if there's a sense of personal enjoyment or accomplishment.But purely on a comp perspective...not the best ROI)
It's never about how much salary you make. It's always about what you do with it...

Which is why I find it so ironic by folks who keep arguing the "sweat money" is soooo much more noble and "earned" than "investment equity"..Sure, go work on a rig lifting boxes up and down for $100-200/hr starting when your twenties or lifting an engine block day in and day out at a stealership...
Let me know how that works for you if you haven't done anything meaningful with your money when you're in your 40ies-50ies when your back goes out.

...Furthermore, let me know how it works out if in your attempt to convert "sweat money" to passive investment but then are are taxed ridiculously 40,50,60% on investment income (as some people think investment income should but thankfully aren't in office (yet)) such that you have to continue to work in your 60ies and 70ies lifting boxes.

I will agree with one fundamental thing though...Majority of younger generations are gonna have a tougher time building wealth because (a) reduced "sweat money" available (b) more importantly, importantly reduced ability to convert "sweat equity" to investment income in a meaningful way as we generally have increasingly unfriendly government encroachment (and frankly individuals who champion it ) via taxes.

Take care of your own. Because no one else will and they're screwed if you don't. And it's probably more important ever so now than before. And now with the latest fiscal cliff deal, apparently government has green lighted this with the estate taxes exemption...

Submitted by scaredyclassic on January 5, 2013 - 8:52am.

but if you do have to lift, get a lower back like this guy.

oh man, this photo gets me excited...

http://www.ironmind-store.com/Backs-Are-...

Submitted by flyer on January 5, 2013 - 4:44pm.

flu wrote:
flyer wrote:

In other fields, where jobs are not protected by unions, the answer might be to make your fortune while you're young, so you don't have to worry about being replaced when you're older.

ding ding ding... Counting on a today's salary to fund future needs is financial suicide. It continues to amaze me that folks will argue over a pathetic 2-3-4-5% raise at work, it it entails working an additional 30% more. (It's one thing if there's a sense of personal enjoyment or accomplishment.But purely on a comp perspective...not the best ROI)
It's never about how much salary you make. It's always about what you do with it...

Which is why I find it so ironic by folks who keep arguing the "sweat money" is soooo much more noble and "earned" than "investment equity"..Sure, go work on a rig lifting boxes up and down for $100-200/hr starting when your twenties or lifting an engine block day in and day out at a stealership...
Let me know how that works for you if you haven't done anything meaningful with your money when you're in your 40ies-50ies when your back goes out.

...Furthermore, let me know how it works out if in your attempt to convert "sweat money" to passive investment but then are are taxed ridiculously 40,50,60% on investment income (as some people think investment income should but thankfully aren't in office (yet)) such that you have to continue to work in your 60ies and 70ies lifting boxes.

I will agree with one fundamental thing though...Majority of younger generations are gonna have a tougher time building wealth because (a) reduced "sweat money" available (b) more importantly, importantly reduced ability to convert "sweat equity" to investment income in a meaningful way as we generally have increasingly unfriendly government encroachment (and frankly individuals who champion it ) via taxes.

Take care of your own. Because no one else will and they're screwed if you don't. And it's probably more important ever so now than before. And now with the latest fiscal cliff deal, apparently government has green lighted this with the estate taxes exemption...

It appears we agree, flu. I'm not really sure why more people don't think this way. It's always been important, but, IMO, will become essential going forward.

Even though young people never think any life changing events--job loss-health problems, etc.--will ever come their way, and that it will be smooth-sailing from here to a cushy retirement, might be in for a rude awakening--especially in the world of today, where life is changing faster than ever--as CAR mentioned.

I've seen countless people in their 40's and 50's go down the tubes in one way or another--invincible today--gone tomorrow. That's why I was so determined, as I know you are, to insulate myself and my family from that fate.

Submitted by bearishgurl on January 5, 2013 - 5:28pm.

CA renter wrote:
flyer wrote:

http://www.nytimes.com/2012/09/13/boomin...

One generation hating another for who SOME of them are or aren't isn't going to make one bit of difference in the outcome of anyone's life, whether it's true or not.

That's why I think one of the most important things any of us can do, is to try to take care of ourselves and our own to the highest level possible for as long as we possibly can.

That's my 2 cents.

Interesting article, and really liked some of the comments on it.

I skimmed the first few pages of comments, as well, CAR. There were several "boomers" on there reminding readers that living and working conditions weren't so great when we were young and starting out on our own.

The crux of the problem, as I see it, is that the vast majority of the millenials (Gen Y) have expectations for every facet of their lives that are thru the roof!

I don't think Gen Y is lazy. They're just far more "picky" then we were ... about their work "environment," living "environment" and other items they buy. Compared to what boomers had, they have infinite choices.

I'm attributing this phenomenon partly to the wealth of consumer info on everything available to all 24/7 on the internet.

Submitted by bearishgurl on January 5, 2013 - 5:32pm.

The-Shoveler wrote:
Shoveler’s 2 cents
1) Get your bucket list over while you’re young enough to
a) Enjoy it,
b) Accomplish it.
You never know what will happen in the future.

2)Never fully retire, get some side biz going, you will get bored and your brain will turn to mush if you sit around watching TV etc… all day. Also a pension is great sure but it can be eaten away by inflation much faster than most think it can.

3)Stay as healthy as you possibly can, Health is the greatest wealth you have.
(No point being a multimillionaire if you’re not able to get out and enjoy it).

ALL great advice, Shoveler ... esp the health-maintenance part :)

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