blame those who worked so hard to get this result not so much the tea[kool-aid] -puppets but those unseen hands who pull the strings of the puppets now exactly why those evil string pullers want a depression is something I donot understand but the rightwing is totally committed to causing a depression NOW
This is why you don't sniff glue.
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10:07 PM
Boondawg Member
Posts: 38235 From: Displaced Alaskan Registered: Jun 2003
to blame the tea party is illogical. We were downgraded because there was not enough cuts. S&P made this very clear. Obama said he would Veto any passed bills that did not raise taxes......is not "hostage taking"?
So, you have S&P say if 4 trillion was cut we would not be down graded, the tea party were the only ones calling for such a cut. Now that we get down graded for not doing what the tea party wanted in the first place, its their fault? this is madness. Its like buying a bunch of new appliances on a credit card and maxing it out. Then you find out you cant afford the monthy payment so you ask to raise your card limit so you can pay by subdizing with your already tapped out card. Then the when the company says NO, you throw a fit and blame them for your account going to collections. That is nuts!
What you should have done is taken back all the goodies you bought because its evident you could not afford it. This is no different. They over spent trillions on pet projects from health care to EPA regualtions. We cound NOT afford this crap, but rather then scratch the costly programs, their solution is to add a higher spending limit!
If you cant understand this basic principle, you seriously need to educate yourself on financial responsibility.
[This message has been edited by NickD3.4 (edited 08-11-2011).]
A lot of people don't realize that the problem is exacerbated by reduced revenues to the government, partially due the lack of consumer confidence, partially due to people saving rather than spending as they try to rebuild their nest-egg that was lost in the last market crash, and partially due to the tight consumer credit market that is caused in no small part by the government hogging the credit market. Other reasons for reduced government revenue include the payroll tax holiday and reduced manufacturing spending on equipment and materials, and reduced manufacturing output - due to low consumer demand.
If the economy was growing at the typical rate, revenues would be there to cover the spending, and the problem would continue being kicked down the road to future generations.
The growth of the economy, however, was built on straw - people spending money based on appreciation of their homes, not so much on their personal income - they were financing thier lifestyles on speculation rather than sound budgeting based on income. Housing bubble burst - here we are.
Better now than later, I say, my grandkids shouldn't have to pay for my parents and my generation's mess.
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11:40 PM
USFiero Member
Posts: 4873 From: Everywhere and Middle of Nowhere Registered: Mar 2002
Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade. Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.
I know it sounds great that taxes won't be raised but I really have not heard a legitmate plan that doesn't have at least some raised taxes in it. I'm amazed at how people say "we can't keep kicking the can down the road" but don't expect to have to pay more now. Just spending cuts? Good luck with that!
I know it sounds great that taxes won't be raised but I really have not heard a legitmate plan that doesn't have at least some raised taxes in it. I'm amazed at how people say "we can't keep kicking the can down the road" but don't expect to have to pay more now. Just spending cuts? Good luck with that!
Indeed. I don't think I've ever said we don't need to raise taxes, because we do, but if that's the mainstay of the liberla's plan, it won't work either. We need about $4 trillion in cuts alone, along with an increase in tax accross the board--not just for the wealthiest--accross the board.
That, is what the NRSROs were looking for and expecting and they didn't get it, even tho all of them had warned there would be at least a 1 in 3 chance of a downgrade if they didn't get it--plain and simple.
There are 9 of these Nationally Recognized Statistical Rating Organizations, with the top 3 being: S&P---Fitch---Moodys
Other less well known ones are EganJones and Kroll. Less known but well respected. I am REALLY surprised tho, that S&P lowered the rating, and the fact that they did just shows how bad things are. Why surprised? Because the top 3 NRSROs, unlike the others, are paid by the ISSUERS of the debt. For S&P to "bite the hand that feeds t", things had to be bad. I have little doubt, that when the administration was desperately trying to talk all 3 of these agencies into NOT downgrading, Geithner very much pointed out to them that they recieved their income in great part, from the Federal coffers, and I imagine, that he had that fact in mind last year, when he told fred barnes "Lose our AAA rating?--That wil never happen". When asked if he was sure there was no risk of that downgrade, he said "Absolutely not--zero chance--never". Famous last words, especially considering at the time, the Chinese's most prestigous bond clearing agency already HAD downgraded our rating of long term debt. A few months later, the most independant of our own NRSROs- Egan Jones also downgraded that same debt--but MSM just ignored that little fact.
It's interesting, that today, president Obama echoed S&P's reasons for the downgrade. A congress that was unwilling to come to terms with our debt and deficit issue--and he used virtually word for wod what the Chairman of S&P said the day they announced the downgrade. The only thing he omitted, (of course) was something S&P did not omit--that their disappointment also included the White House's unwillingness to compromise. That threatened veto pretty much sealed the deal on the issue.
The other ratings organizations, as well as the Daong in China, are paid for their data by the BUYERS of the debt, which to me, is a much more unbiased method, than being paid by the people who are borrowing the money. Can you imagine what conflict of interest it would be, if YOU were to be the one paying the mortgage loan officer to make a decision about your credit worthines? That's what we have when the big 3 NRSROs are recieving revenue from those who are issuing the debt. "Hey Moodys--Hey Fitch--we, the US Treasury-- pay you to rate our debt--what you gonna rate it at??"
S&P has lots of irons in the fire revenue wise, besides rating debt. They can afford to lose the revenue from Treasury--Moodys and Fitch cannot do so as easily. Now, do you understand, why both Moodys and Fitch, while basically saying EXACTLY what S&P did, and assigning a NEGATIVE outlook to our longterm debt, declined to carry thru with their own threat to downgrade? $$ talks and BS walks.
Indeed. I don't think I've ever said we don't need to raise taxes, because we do, but if that's the mainstay of the liberla's plan, it won't work either. We need about $4 trillion in cuts alone, along with an increase in tax accross the board--not just for the wealthiest--accross the board.
That, is what the NRSROs were looking for and expecting and they didn't get it, even tho all of them had warned there would be at least a 1 in 3 chance of a downgrade if they didn't get it--plain and simple.
There are 9 of these Nationally Recognized Statistical Rating Organizations, with the top 3 being: S&P---Fitch---Moodys
Other less well known ones are EganJones and Kroll. Less known but well respected. I am REALLY surprised tho, that S&P lowered the rating, and the fact that they did just shows how bad things are. Why surprised? Because the top 3 NRSROs, unlike the others, are paid by the ISSUERS of the debt. For S&P to "bite the hand that feeds t", things had to be bad. I have little doubt, that when the administration was desperately trying to talk all 3 of these agencies into NOT downgrading, Geithner very much pointed out to them that they recieved their income in great part, from the Federal coffers, and I imagine, that he had that fact in mind last year, when he told fred barnes "Lose our AAA rating?--That wil never happen". When asked if he was sure there was no risk of that downgrade, he said "Absolutely not--zero chance--never". Famous last words, especially considering at the time, the Chinese's most prestigous bond clearing agency already HAD downgraded our rating of long term debt. A few months later, the most independant of our own NRSROs- Egan Jones also downgraded that same debt--but MSM just ignored that little fact.
It's interesting, that today, president Obama echoed S&P's reasons for the downgrade. A congress that was unwilling to come to terms with our debt and deficit issue--and he used virtually word for wod what the Chairman of S&P said the day they announced the downgrade. The only thing he omitted, (of course) was something S&P did not omit--that their disappointment also included the White House's unwillingness to compromise. That threatened veto pretty much sealed the deal on the issue.
The other ratings organizations, as well as the Daong in China, are paid for their data by the BUYERS of the debt, which to me, is a much more unbiased method, than being paid by the people who are borrowing the money. Can you imagine what conflict of interest it would be, if YOU were to be the one paying the mortgage loan officer to make a decision about your credit worthines? That's what we have when the big 3 NRSROs are recieving revenue from those who are issuing the debt. "Hey Moodys--Hey Fitch--we, the US Treasury-- pay you to rate our debt--what you gonna rate it at??"
S&P has lots of irons in the fire revenue wise, besides rating debt. They can afford to lose the revenue from Treasury--Moodys and Fitch cannot do so as easily. Now, do you understand, why both Moodys and Fitch, while basically saying EXACTLY what S&P did, and assigning a NEGATIVE outlook to our longterm debt, declined to carry thru with their own threat to downgrade? $$ talks and BS walks.
God i hate this country sometimes.
Oh I know you have stated your views on what should be done before and while I don't agree with all the particulars of it I at least respect the fact that you see that a combination of things have to be done, you don't just regurgitate the talking points from one or the other political side.
As much as I don't think S&P have a very good track record in terms of their ratings (see mortgage crisis), I can't disagree with the U.S. downgrade and their stated reasons.
I do however take issue with your statement of the White House not being willing to compromise, IMO the current amisistration frequently looks weakened by the fact that they often seem to compromise away from their positions. It's often the Tea Party that seem to have the most stringent ideals and who try to hold fast no matter the outcome but hey that's what they campaigned on so they are sticking to their guns (so to speak ).
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07:43 PM
82-T/A [At Work] Member
Posts: 22761 From: Florida USA Registered: Aug 2002
Oh I know you have stated your views on what should be done before and while I don't agree with all the particulars of it I at least respect the fact that you see that a combination of things have to be done, you don't just regurgitate the talking points from one or the other political side.
As much as I don't think S&P have a very good track record in terms of their ratings (see mortgage crisis), I can't disagree with the U.S. downgrade and their stated reasons.
I do however take issue with your statement of the White House not being willing to compromise, IMO the current amisistration frequently looks weakened by the fact that they often seem to compromise away from their positions. It's often the Tea Party that seem to have the most stringent ideals and who try to hold fast no matter the outcome but hey that's what they campaigned on so they are sticking to their guns (so to speak ).
With all the talk of raising taxes, there have actually been a few pro-Democrat economists that, while they DO agree that taxes should eventually be raised, that RIGHT NOW is not the right time. They have been saying that it should be very slow, and not for at least another year or two before they raise taxes because it would cause a recoiling of business spending. And if you think about it, they've got a really great point.
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07:54 PM
Toddster Member
Posts: 20871 From: Roswell, Georgia Registered: May 2001
Originally posted by 82-T/A [At Work]: With all the talk of raising taxes, there have actually been a few pro-Democrat economists that, while they DO agree that taxes should eventually be raised, that RIGHT NOW is not the right time. They have been saying that it should be very slow, and not for at least another year or two before they raise taxes because it would cause a recoiling of business spending. And if you think about it, they've got a really great point.
Yeah, I can understand that reasoning, I guess what I more or less don't understand is the idea by some that a one sided approach can work. The positions of "No tax increases" or "Don't touch SS, Medicare..etc." seem foolish to me, a balanced approach looks like the only way to go IMO.
[This message has been edited by newf (edited 08-12-2011).]
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