United States Credit Rating Downgraded

[Strike For The South]

You reap what you sow.

http://money.cnn.com/2011/08/05/news/economy/downgrade_rumors/index.htm?iref=BN1&hpt=hp_t1

Remember when Obama offered 4.5 trillion in reduction and Bohener said no?

http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3DUS_Downgraded_AA%2B.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1243942957443&blobheadervalue3=UTF-8



The political brinksmanship of recent months highlights what we see asAmerica's governance and policymaking becoming less stable, less effective,and less predictable than what we previously believed.

[Xiahou]

Remember when Obama offered 4.5 trillion in reduction and Bohener said no?No, I don't.

[ICantSpellDawg]

Congratulations everyone! One more step towards global parity. Painful, but necessary.

[Centurion1]

http://www.huffingtonpost.com/2011/08/05/downgrade-us-standard-and-poors_n_919867.html


The move came after Congress haggled over budget cuts and the nation's borrowing limit – and failed to cut enough government spending to satisfy S&P.

No, you reap what you sow. Because the blame is bi-partisan in nature at best.

From the same article you posted,


However, one of S&P's explicit criticisms of the compromise was that it didn't address the biggest drivers of the nation's debt -- Social Security and Medicare

Whose babies are those?

[Centurion1]

double.

[a completely inoffensive name]

Whose babies are those? Obama's proposal gave about $680 billion in cuts for those.

[Papewaio]

Guys it's the bickering more then anything that is dropping the credit rating. Team USA has been playing as a group of star players not a star team, as such Team USA has had it's rating dropped to AA+ and with a negative outlook.

There are a lot of bitter pills to swallow and they have to work as a team or its just going to get worse.

[ICantSpellDawg]

Obama's proposal gave about $680 billion in cuts for those. But they didn't happen. We can all say what was given and what was offered, but they are still right where they were before. We don't know the the true machinations of politics. I was open to "revenue boosters" from tax reform, so were most registered republicans. Even those congressmen who signed the tax pledge eased off with a similar easing from norquist.

[ICantSpellDawg]

Guys it's the bickering more then anything that is dropping the credit rating. Team USA has been playing as a group of star players not a star team, as such Team USA has had it's rating dropped to AA+ and with a negative outlook.There are a lot of bitter pills to swallow and they have to work as a team or its just going to get worse. We don't deserve the credit. Retraction is more likely than growth and our debt is out of control. We should have had a downgrade years ago, but were able to keep it out of political pressures

[a completely inoffensive name]

But they didn't happen.
Which is why Strike is lamenting how Boehner walked out...I think.



We can all say what was given and what was offered, but they are still right where they were before. We don't know the the true machinations of politics. I was open to "revenue boosters" from tax reform, so were most registered republicans. Even those congressmen who signed the tax pledge eased off with a similar easing from norquist.
Well from what happened it looked like the Republican leadership wasn't open to those. Don't misinterpret me, I am not going to blame Republicans for all of our economic woes, but they were the wrench in the gears this time around and now our plan has been deemed inadequate.

[Major Robert Dump]

This actually makes me very, very happy.

[ICantSpellDawg]

This actually makes me very, very happy. Exactly, there is justice.

[Major Robert Dump]

The methods by which Congress spends our money is appalling. They are as bad, if not worse, than any welfare class we have in this country. They try to make it sound like Earmarking is the only way to get things done, when in fact, things were done just fine without earmarking up until the 1980s.

Americans have become complacent because they are spoiled rotten. The ruling class understands that by feeding the hole, they shut people up. By dumbing down the populace, they shut people up.

The free pass that public that chronic welfare recipients get in regards to their personal lifestyle is appalling. They should be treated just like children who cannot manage their allowance and get their homework done.

The free pass that corporate welfare recipients get in regards to mismanagement of income is appalling. Let them fail. The market will adjust, just like it did up until the 1980s when bailouts became the new fad.

Social Security was actually somewhat solvent until it became the PayDay Loan Advance for Congress.

The net worth of Congress has gone up hundreds of percent during this recession.

This is the second best thing that could happen, the first being a meteor hitting Washington while in sessions.

[Major Robert Dump]

DBL POST

[HoreTore]

Raising taxes - the only answer to all of this.

Funnily, it's also the only answer noone will ever contemplate. Enjoy.

[a completely inoffensive name]

I am weary of the benefits that a bad economy will bring. It usually during the bleakest of times (relatively for the population) that sociopaths and radicals get their opportunity to really throw the baby out with the bath water and muck up the good things that we had.

[ICantSpellDawg]

I am weary of the benefits that a bad economy will bring. It usually during the bleakest of times (relatively for the population) that sociopaths and radicals get their opportunity to really throw the baby out with the bath water and muck up the good things that we had.Right. Unless america can keep spending like a lunatic the Nazis will come to town.Major Robert dump, will you marry me? I have a hard time listening to americans complain about anything. The people we should be worried about live abroad and the best way to help them is by making investment in their economies look better and better, while keeping the pressure on their corrupt governments. Nothing does than like a downgrade. Their credit ratings go up in relation.This message was sent from my early 90s track phone

[Major Robert Dump]

Raising taxes - the only answer to all of this.

Funnily, it's also the only answer noone will ever contemplate. Enjoy.

If you raise taxes without also creating reform, no lessons are learned and this will happen again in 30 years. People need to suffer. You don't give a diabetic more sugar.

[a completely inoffensive name]

Not to provoke all the anti-tax people here but Standard and Poor's wishes for the Bush tax cuts of 2001 and 2003 to be eliminated for the highest earners so that the US debt growth will be easier kept in check.

"Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021.

[...]

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.

[...]

As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'."

[a completely inoffensive name]

Right. Unless america can keep spending like a lunatic the Nazis will come to town.Major Robert dump, will you marry me? I have a hard time listening to americans complain about anything. The people we should be worried about live abroad and the best way to help them is by making investment in their economies look better and better, while keeping the pressure on their corrupt governments. Nothing does than like a downgrade. Their credit ratings go up in relation.This message was sent from my early 90s track phone

Not saying the nazi's will come to town. Don't strawman me. I am saying that the far right and left will gain more support in making large shifts in american society. There is a possibility that the extreme right will gain more followers in dismantling all the "nanny state" measures, including a complete removal of social security, medicare and welfare entirely. As Bachman said during the Republican debate, "conservatives need their own great society bill that removes just as much or more than what the liberals created". Or something to that effect. Now I know there are strong problems with social security and medicare, but those are problems that should be tackled with reform not removal and doing so will be a big shock to a major section of the population.

[Major Robert Dump]

I don't know that I agree with you.

I would like to think that even the most infantile Americans would be able to see that is is the fringe left and fringe right that are highly responsible for this, as their agendas help mask the corruption in Washington...give the kids something to occupy themselves, so mom and dad can sneak out to the El Camino and do some meth.

[a completely inoffensive name]

I don't know that I agree with you.

I would like to think that even the most infantile Americans would be able to see that is is the fringe left and fringe right that are highly responsible for this, as their agendas help mask the corruption in Washington...give the kids something to occupy themselves, so mom and dad can sneak out to the El Camino and do some meth.

Idk, how is Bachmann doing in the polls/preliminary primary votes?

[Major Robert Dump]

Polls mean ****.

The credit downgrade just happened after being told for weeks on end that it would not and that there will be no double dip. Ask me that again in 4 weeks.

There are banks in this country who are charging people to save money at their institution. The behavior of the wealthy in these circumstances is disproving the old adage that the wealthy will invest with lower taxes, because right now they are piling so much into liquid savings accounts that the banks are having to come up with alternatives to make money because no one is investing and they cannot afford to pay out interest on piles of liquid cash.

Everything we know, the entire status quo, revolves around careless deficit spending, AAA credit and the world currency being the dollar.

Good night Irene, the dollar is next. I can't wait.

[a completely inoffensive name]

The credit downgrade just happened after being told for weeks on end that it would not and that there will be no double dip. Ask me that again in 4 weeks

I am pretty sure Moody's and S&P has been saying they will downgrade the US for over a week now.

[Ironside]

If you raise taxes without also creating reform, no lessons are learned and this will happen again in 30 years. People need to suffer. You don't give a diabetic more sugar.

It would happen anyway. 30 years is a generational shift and the children loves to do the same mistakes as their parents.

Lowest taxes for a very long time doesn't help either. Now that situation reminds a bit of California though.

[Centurion1]

I am pretty sure Moody's and S&P has been saying they will downgrade the US for over a week now.

I am pretty sure Moody's at least publicly announced that they would not be downgrading US credit.

[gaelic cowboy]

I'm pretty this is not a good thing, ye will learn absolutely nothing, being realistic yer just gonna blame each other like right now in this thread.

This is the fall of Singapore moment (http://en.wikipedia.org/wiki/Battle_of_Singapore) for America the day the weakness of the Empire was exposed.

[PanzerJaeger]

I am pretty sure Moody's and S&P has been saying they will downgrade the US for over a week now.

They've been saying it longer than that, to which the Obama administration has consistently responded 'Nuh uh!' (http://thehill.com/blogs/on-the-money/budget/156747-geithner-no-risk-that-us-loses-its-top-credit-rating) until very recently.



Treasury Secretary Tim Geithner said Tuesday there is "no risk" the U.S. will lose its top credit rating amid a new analysis that revised its outlook on American debt to "negative."

Geithner took to the airwaves of financial news networks to push back against a report Monday by Standard & Poor's that lowered its outlook on U.S. debt to "negative," reflecting political uncertainty over whether lawmakers will reach an agreement to address long-term debt.

There is no chance that the U.S. will lose its top credit rating, Geithner said, forcefully disputing the notion that S&P or other ratings services might downgrade U.S. bonds from their current AAA rating.

"No risk of that, no risk," Geithner said on the Fox Business Network.

This is bad news. The US has definitely lost its mojo. I'm not sure why people are celebrating. Nations rarely recover from the terminal rise in interest rates once debt fears kick in. S&P demonstrates that themselves in their press release on this.


The outlook on the long-term rating is negative. We could lower the
long-term rating to 'AA' within the next two years if we see that less
reduction in spending than agreed to, higher interest rates, or new
fiscal pressures during the period result in a higher general government
debt trajectory than we currently assume in our base case.

Then again, the direct effect this will have on interest rates is not certain, especially considering Moody's and Fitch's reaffirmation of America's triple A status. I hate to admit it, but I sort of agree with Barney Frank on this one - that the analysts at S&P are throwing their weight around after taking a lot of heat for completely missing the looming financial crisis (not that Frank should be lecturing people on that subject). The US has $58 trillion in household net worth and $14 trillion in debt. The downgrade seems more like political commentary than sound financial analysis.

In any event, the idea that people need to suffer in order to elect more competent politicians is a bit too masochistic for my tastes and doesn't really add up. As ACIN points out, economic instability rarely causes people to make better decisions at the ballot box. IMO, this will make the situation harder to fix as both side's extremes will be able to exert even more pressure on the moderates leading to even more entrenchment.

[Major Robert Dump]

I am pretty sure Moody's and S&P has been saying they will downgrade the US for over a week now.

The were giving warnings, and Washington was denying it.

[Fragony]

The were giving warnings, and Washington was denying it.

pssssssst China. And they aren't very pleased atm

[ICantSpellDawg]

Sometimes, when things are broken major changes need to be made. Neither the republicans nor the democrats have any idea how the new economy works. The united states has lost the benefit that it once had. It used to be the only game in town with a disjointed europe constantly inflicting catastrophic wars on one another. Now, china does what we used to do economically, only better. Our place in the world is lost for the moment. We need to encourage parity, whether we'd like it or not. We need to invest in global markets intelligently. We need to slash social security spending by raising the retirement age to 75. We need to slash our military spending, eliminating all of these waste programs, f22, f35. We need to reform the tax code and end the drug war. We need to downsize law enforcement around the country and encourage weapons ownership. We need to eliminate traditional educational institutions and digitize the learning process, firing half of the teaching force. We need to cut out massive swathes of the laws that make everyone a criminal waiting to be nicked and give massive cuts to the wages of government employees. We need to invest in infrastructure and education with the saved surplus. We need laws that require that employees be given a share of the companies stock. We need a new deal of sorts, revolutionary politics

[Banquo's Ghost]

Then again, the direct effect this will have on interest rates is not certain, especially considering Moody's and Fitch's reaffirmation of America's triple A status. I hate to admit it, but I sort of agree with Barney Frank on this one - that the analysts at S&P are throwing their weight around after taking a lot of heat for completely missing the looming financial crisis (not that Frank should be lecturing people on that subject). The US has $58 trillion in household net worth and $14 trillion in debt. The downgrade seems more like political commentary than sound financial analysis.

I agree with this analysis. S&P are playing a political game - it is sad that a bunch of discredited agencies still have influence over markets. But then the fundamental weakness of current speculative markets is that they are run by sheep to whom the herd instinct is second nature. Rarely do these overpaid clowns actually do the research on fundamentals that would allow a more sanguine view. Witness yesterday's volatility - the markets resembled nothing as much as a herd of spooked wildebeest running back and forth from menacing shadows in the long grass.

Sadly, this entirely self-manufactured crisis is gaining a momentum all of its own. In normal cycle downswing recessions, the best approach is lower interest rates and lower taxes to stimulate growth. In our current situation caused by immense debt, interest rates have already been long at historical lows. In many countries, taxation is very low. Yet growth is stagnant as consumers have no faith in leaders and their trite solutions and so are paying off debt rather than spending.

In this situation, growth is not going to happen fast enough (possibly at all) to pay off debt. Thus the only recourse is to pay off debt by tax rises and cuts in public spending. Both of these are a must - lower taxation is not encouraging people to spend, nor entrepreneurs to invest, therefore (in my opinion) we're not losing anything by getting money in to pay the debt off more rapidly.

[Hosakawa Tito]

Guys it's the bickering more then anything that is dropping the credit rating. Team USA has been playing as a group of star players not a star team, as such Team USA has had it's rating dropped to AA+ and with a negative outlook.

There are a lot of bitter pills to swallow and they have to work as a team or its just going to get worse.

Negative. It's the debt level itself.
Debt as of July 31 totaled $14.342 trillion. That was made up of $9.756 trillion held by the public and $4.587 trillion the U.S. government owes itself (intergovernmental borrowing, largely from the Social Security and Medicare trust funds to the general fund). GDP—the value of all of the goods and services produced in the United States—in 2010 was $14.5265 trillion (http://bea.gov/newsreleases/national/gdp/2011/pdf/gdp2q11_adv.pdf). With the Treasury’s additional borrowings of $238 billion so far in August, the total of all debt outstanding has now increased to $14.5807 (https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=11080200.pdf). That’s $54.2 billion more than average 2010 U.S. GDP, the last year for which we have final estimates on GDP from the U.S. Department of Commerce.


Raising taxes - the only answer to all of this.

Funnily, it's also the only answer noone will ever contemplate. Enjoy.

Yes raising taxes in a recession will guarantee the total collapse of the economy and bring on the conditions for a marxist/socialist utopia that some people are dreaming of, again.

[tibilicus]

Someone said in the thread you reap what you sow, this is very true.

How anyone can be surprised about this is beyond me, lets go over a few basic facts. For the last decade or so public spending has shot up at the same time tax cuts have been implemented, let me just ask, what planet is Washington on? Are they really still adhering to that theory that if we tax people less they'll spend more and as a result, consumerism will rise? This works to an extent but when a significant majority of the population is currently or has been for the last decade unemployed or forced into jobs which don't pay enough to encourage the population to reinvest in the economy then things are obviously going to stall and debt is going to increase.

Couple this with ineffective and short sighted public spending programs and it becomes quite clear why the USA is in a very ill way financially indeed. Reform welfare and yes, raise taxes. News flash, tax cuts is beneficial in a sense but they need to be reasonable. Tax cuts for the super rich is also pointless. Don't tax them to the hilt but realistically most of this group either keep their money off shore or don't reinvest it in the economy. This dogma pedaled by the Republicans in particular is simply bogus and it's mind boggling that the population doesn't see the motives for keeping these super rich untaxed as personal and cronyism and instead see it as some how beneficial that the richest contribute so little to the economy as a % of their wealth.

Fact, the EU area worked together to clamp down on off shore tax havens and make sure the rich payed up, revenues increased as a result. Sweden taxes their rich quite effectively, are you telling me there are no stock brokers or rich people their because they all ran to the hills when the taxes came? It's garbage, my friend who aspires to work in the financial sector knows a stock broker in Stockholm, funnily enough he's still rich, it's not like taxing him ruined his wealth and he doesn't have any desire to buy $400 bottles of whiskey anymore. Taxes need to be addressed in a sensible manner and reformed in a sensible way, but they cannot stay at their current levels, the US treasury is missing a valuable area of income unnecessarily.

On a wider note of debt, this crisis has been brewing for decades. I can only comment more on a European, particularly a British perspective as I'm not in the loop with the complexities of American public spending but since the post-war period demand on the welfare state has risen and risen far above income of the state, For example people presume Thatcher cut public spending massively. She didn't. She still spent more than the state earned just not enough to appease those who think the government should provide everything. Yes its going to be painful for those which rely on the state the most but it cannot continue. This crisis is manufactured by public demand and inadequate state income. The next decade or two is going to be tough as one generation is punished for the gluttony and state spending madness of another generation but it is something which has to be done.

[Major Robert Dump]

The public has been held hostage by American credit reporting agencies for decades, and now our government is being held to the same standard as the rest of us.

Is there any way we can pawn Rhode Island?

[Lemur]

guarantee the total collapse of the economy and bring on the conditions for a marxist/socialist utopia that some people are dreaming of, again.
Hosa, you know I love you, but I think anyone invoking communist utopias and/or Stalin should be awarded a Niwdog, which is a lot like a Godwin.

[Ice]

The best part was when the US found a 2 trillion dollar error in the analysis, but S & P brushed it by calling it "immaterial". I don't know what's worse, them considering it immaterial, or them releasing such an important analysis before adequately proofing it.


I agree with this analysis. S&P are playing a political game - it is sad that a bunch of discredited agencies still have influence over markets. But then the fundamental weakness of current speculative markets is that they are run by sheep to whom the herd instinct is second nature. Rarely do these overpaid clowns actually do the research on fundamentals that would allow a more sanguine view. Witness yesterday's volatility - the markets resembled nothing as much as a herd of spooked wildebeest running back and forth from menacing shadows in the long grass.

These are the same idiots who who were rating mortgage back securities with an excellent rating before the financial crisis, and then used some bull**** excuse as why it wasn't their fault, but their "model's".

[Skullheadhq]

Raising taxes - the only answer to all of this.

Funnily, it's also the only answer noone will ever contemplate. Enjoy.

So they can spend more? Right HoreTore?

Also, more taxes = less people buy less stuff = less profits = even worse American economy = less taxes = higher taxes?

[classical_hero]

I would think that the rich can afford to pay more in tax. Well actually there are so many loopholes in the tax code the the rich are not paying much tax at all. Many corporations are paying nothing or are getting a benefit from the government to make their stuff, so there is room for the tax revenue to grow, if their is anyone in Washington ready to stop giving corporations concessions. GE paid no tax all considering the concession they received from the government and things like that won't stop since too many politicians receive donations from such corporations to keep it that way. America is :daisy: since corporations have it by the balls.

[Fisherking]

I would think that the rich can afford to pay more in tax. Well actually there are so many loopholes in the tax code the the rich are not paying much tax at all. Many corporations are paying nothing or are getting a benefit from the government to make their stuff, so there is room for the tax revenue to grow, if their is anyone in Washington ready to stop giving corporations concessions. GE paid no tax all considering the concession they received from the government and things like that won't stop since too many politicians receive donations from such corporations to keep it that way. America is :daisy: since corporations have it by the balls.


While the current tax model may be broken, harping about businesses not paying tax is not much of a winner.

You can tax businesses until no one buys their products or services but taxes on them are only a tax on those who buy their goods and services. It is just a tax on the consumer.

Insist on higher business taxes and everything goes up. Remember that Farms are also businesses the same as insurance companies.

As long as we pay taxes on our income we can do without business taxes. Those people earning the profits will still have to pay a tax on it if it is taken as income.

If you expect Congress to get corporations out of government, that is not going to happen. Do you think they will go against their own best interests just for the good of the country?

[classical_hero]

That is what is wrong with America, people thinking that taxing means you will make things be too expensive. It is about corporations paying their fair share, rather than not paying anything at all. Simply there are so many holes in the tax laws that you could make billions and pay less tax than a janitor. Corporations like GE make billions of profit each year and yet they do not give any money back to the American people.

[Skullheadhq]

S&P gave the US an AA- rating because it sees the US political system as unable to make decisions and thinks the US can't live on with the endless debtmaking anymore.

[Fisherking]

That is what is wrong with America, people thinking that taxing means you will make things be too expensive. It is about corporations paying their fair share, rather than not paying anything at all. Simply there are so many holes in the tax laws that you could make billions and pay less tax than a janitor. Corporations like GE make billions of profit each year and yet they do not give any money back to the American people.

Just tell me this.

If customers pay the taxes that a corporation owes, when dose the corporation pay its fair share?

You can set the tax so high that no one buys the product but you can’t do much else.

[Ironside]

So they can spend more? Right HoreTore?

Also, more taxes = less people buy less stuff = less profits = even worse American economy = less taxes = higher taxes?

Uh, no? The negative spending effect is less than the increased income in almost every case.

Otherwise you wouldn't be in this mess in the first place, since every tax cut since the Clinton era has been based on that it should stimulate the economy to a higher state income. It has utterly failed in general.

[Hosakawa Tito]

Hosa, you know I love you, but I think anyone invoking communist utopias and/or Stalin should be awarded a Niwdog, which is a lot like a Godwin.

If that's all you can find wrong with my statement then the important stuff must be making sense to my favorite Lemur buddy. Next year the tax freeze extension is due to expire and the Obamacare tax increases kick in. It will be the largest tax increase in the history of this country. Taking money out of the hands of job creators for the government to play industry cronyism will crush what is left of the economy and bring on another recession/depression.

[gaelic cowboy]

If that's all you can find wrong with my statement then the important stuff must be making sense to my favorite Lemur buddy. Next year the tax freeze extension is due to expire and the Obamacare tax increases kick in. It will be the largest tax increase in the history of this country. Taking money out of the hands of job creators for the government to play industry cronyism will crush what is left of the economy and bring on another recession/depression.

There doing such a fine job now as it is investing all the surplus, I have to say I am dubious about how anymore tax cuts will turn this around.

[Centurion1]

There doing such a fine job now as it is investing all the surplus, I have to say I am dubious about how anymore tax cuts will turn this around.

The issue runs far deeper than the deficit. The government also has to reinvigorate the economy and tax increases do precisely the opposite of that. Also while they always say it is for the middle class tax increases and cuts always hurt the middle class more than any other.


Otherwise you wouldn't be in this mess in the first place, since every tax cut since the Clinton era has been based on that it should stimulate the economy to a higher state income. It has utterly failed in general.

Uh,

A. There has been one major tax cut since the clinton era so your depositing a steaming pile of dung with that statement to start off with.

B. It did raise revenues over time and increase the size and power of the economy

[Idaho]

Maybe China's right. Maybe you just don't have the money to pay for military supremacy any more. It's the way all super-powers go. Take a glance through history. Unfortunately history also shows that dwindling super-powers tend to hold on to that to the bitter end, only making things worse.

I've maintained for 15 years that the start of the Second Gulf War (Kuwait 1990) was the high water mark of US power and influence, and that it's a downhill slide from that moment.

[Ironside]

Uh,

A. There has been one major tax cut since the clinton era so your depositing a steaming pile of dung with that statement to start off with.

B. It did raise revenues over time and increase the size and power of the economy

A. You did miss the Bush/Obama tax cuts as part of the stimulus packages did you? Not counting that Bush made more than one cut. Federal Tax Receipts as a Percentage of GDP 1945–2015 (http://en.wikipedia.org/wiki/File:U.S._Federal_Tax_Receipts_as_a_Percentage_of_GDP_1945%E2%80%932015.jpg) Notice that it's also a prognosis. So the planned tax rises back to normal levels are in the graph (I didn't know those. If they're kept, it's a good start). But 2009 and 2010 had the lowest taxes since 1950.

B.
https://i4.photobucket.com/albums/y104/panzerjaeger/u-s-federal-government-revenue-current-inflation-gdp.jpg

OMG, the correlation between the tax rates and federal revenue are huge!!!!!

Shocking. The tax hikes by Bush combined with the economical recovery between 2004-2008 did really good for the revenues (still spend maniac during that time, so only deccelerating debt growth). Those aren't talked about much though.

Oh and for those tax cuts for the rich and they paying themselves back, I've already been into those here (https://forums.totalwar.org/vb/showthread.php?136755-US-gubmint-shutdown-default-subprime-sequel&p=2053352098&viewfull=1#post2053352098).

So reality stinks, but if you don't fact check that you might still wonder where that smell comes from...

[Major Robert Dump]

THIS WOULD BE FIXED IF EVERY AMERICAN WOULD GET ANOTHER $300 DOLLAR CHECK FROM TEH BUSH

[ICantSpellDawg]

I thoroughly blame jersey shore, alcohol and our absurd interest in sports for the fall of western civilization.

[Strike For The South]

:rollingeyes: the fall of western civ?

[Louis VI the Fat]

:rollingeyes: the fall of western civ?Rolling eyes? Have you ever even seen Jersey Shore?

[Adrian II]

:rollingeyes: the fall of western civ?

I don't think so, the world is giving S&P's the finger. US bond yields are at an all time low this morning.

Of course the reason for this might be a coming meltdown in shares, followed by large scale rioting in all major cities, political chaos and military coups, followed by all-out war and devastation of the world as we know it.

But US bonds are safe.

AII

[Strike For The South]

I don't think so, the world is giving S&P's the finger. US bond yields are at an all time low this morning.

Of course the reason for this might be a coming meltdown in shares, followed by large scale rioting in all major cities, political chaos and military coups, followed by all-out war and devastation of the world as we know it.

But US bonds are safe.

AII

As the dust starts to settle with this it becomes clear S&P was looking for a reason to downgrade after they got the majority of the blame for the junk bonds, coupled with the 2 trillion dollar error I feel like the administration is not toattly on clay fleet when they say this is a purley political move

[Lemur]

Economist/opinion machine Paul Krugman lays some very effective smack down (http://www.nytimes.com/2011/08/08/opinion/credibility-chutzpah-and-debt.html?_r=1) on S&P today. Possible responses from investors and economics wonks: oh snap, oh no he di'n't, it's on now, you go girlfriend, and this **** just got real.

Let’s start with S.& P.’s lack of credibility. If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah — traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he’s an orphan.

America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.

Nor did the bad judgment stop there. Notoriously, S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong.

So these people are now pronouncing on the creditworthiness of the United States of America?

[Strike For The South]

It's good to see people taking your advice

[Tellos Athenaios]

Lemur, why leave out the most relevant bit of his piece?



The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.

So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues.

The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.

[a completely inoffensive name]

The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.


Hit the nail on the head.

[Lemur]

Hit the nail on the head.
But remember, Tea Party activists hate government spending and reject Keynesian economics. Except when they don't. (http://www.economist.com/blogs/democracyinamerica/2011/08/stimulus-thinking?fsrc=rss)

[a completely inoffensive name]

But remember, Tea Party activists hate government spending and reject Keynesian economics. Except when they don't. (http://www.economist.com/blogs/democracyinamerica/2011/08/stimulus-thinking?fsrc=rss)

Humans are hypocrites, which isn't surprising.

[Papewaio]

This issue has been a long time coming. The Tea Party may be on the wrong side of the solution, they may not. But I don't think it's a good idea to single out a faction when this situation was created by a bipartisan effort.

Neither side of the two major parties when in power did enough to stop this happening, and in a bipartisan effort they've effectively course corrected right into the iceberg field many years before this.

A fruitpicker isn't anywhere near as responsible for the fruit on your table as the people who planted and looked after the orchard. Can't really blame the current administration or Congress as much as those who put in place the situation years before... you can however blame a lot of the politicians as they are career criminals er representatives who were part of the ones who created the mess... I'd like to see a detailed analysis of cause and effect with their voting records attached...

BTW if solutions are going to be found, then the best ones to find it are those who will give up on their old ways and find new solutions, not those who keep to the same system despite it sinking the ship. So Tea Party of any others who are changing ideas to match the current environment good on them.

[Adrian II]

you can however blame a lot of the politicians as they are career criminals er representatives who were part of the ones who created the mess...

This is a common reaction these days. Citizens without a clue blame their politicians, call them liars and thieves and think they can just walk away from the argument. As if it's not their country, their democracy, thier very onw doing that caused the problems.

Its an understandable reaction, I think. Psychologists have a thing called attribution theory. If a person does well he is likely to attribute that to his own talents. If he doesn't, then he is likely to blame his parents, his boss, taxes, society in general and of course politicians for his failures.

It's the easy way out: act like an irresponsible child.

AII

[a completely inoffensive name]

It's the easy way out: act like an irresponsible child.

AII

When you think about, what exactly is the difference between an adult and a child? Sometimes I think that the only difference is that the adult has too much responsibility to tend to first before he starts whinging and pointing fingers.

[Adrian II]

When you think about, what exactly is the difference between an adult and a child? Sometimes I think that the only difference is that the adult has too much responsibility to tend to first before he starts whinging and pointing fingers.

In a way, yes. The difference is that the former shirks responsibility and the latter often feels that he has taken on too little responsibility. But this is the real rot in our democracies: the idea that politicians are to blame for any problems and that without them we'd all be swell. You see this attitude both on the right and on the left. Government is regarded as a service industry that should deliver the precise kind of society we want.

AII

[Centurion1]

In a way, yes. The difference is that the former shirks responsibility and the latter often feels that he has taken on too little responsibility. But this is the real rot in our democracies: the idea that politicians are to blame for any problems and that without them we'd all be swell. You see this attitude both on the right and on the left. Government is regarded as a service industry that should deliver the precise kind of society we want.

AII

Or the disaster that results in government taking too much responsibility. Like anything else nirvana is found in a happy medium.

[a completely inoffensive name]

Like anything else nirvana is found in a happy medium.

If only the public recognized that the main differences between most liberals and conservatives is only where they think that happy medium is. Only the extremists question/deny whether/if there can be one.

[Centurion1]

If only the public recognized that the main differences between most liberals and conservatives is only where they think that happy medium is. Only the extremists question/deny whether/if there can be one.

If only I was the supreme dictator of the United States. Let me tell you, :daisy: would get done. Or we would all die in a nuclear holocaust because I toed the line too much and told vladimir putin he needed to come get his mom out of the oval office.

Eh, the problem is no large enough group is ever close enough in similarities to agree. Look at you and I in some things like education we largely agree, economics we bicker, gay marriage we agree, foreign policy is a mixed bag as well. Democracy can never find that happy medium but it is sure better to be a pissed off democracy than living in some nutcases personal nirvana (e.g. N. Korea)

[Adrian II]

it is sure better to be a pissed off democracy than living in some nutcases personal nirvana (e.g. N. Korea)

Spoken like a man. :2thumbsup:

AII

[a completely inoffensive name]

it is sure better to be a pissed off democracy than living in some nutcases personal nirvana (e.g. N. Korea)

Except when we see what is happening in London right now....when the CHAVS come out at night. Oh god.

(read that first sentence like it is in a promo for a horror movie for the comedic effect)

[Centurion1]

Except when we see what is happening in London right now....when the CHAVS come out at night. Oh god.

(read that first sentence like it is in a promo for a horror movie for the comedic effect)

I can't help but laugh whenever I hear the word chav.

I first think of chaps which makes me think of cowboys which leads to ruminating about Texas which leads to SFTS which leads to Louis which makes me consider homosexuality which all finally culminates in assless chaps.

That is what I think of Britain's uneducated ignorant gangbangers.



Edit: In all seriousness I would rather a bit of looting on occasion to being physically inferior to people of nearly the same ethnic group fifty miles to the south of me.

[Vladimir]

I can't help but laugh whenever I hear the word chav.

I first think of chaps which makes me think of cowboys which leads to ruminating about Texas which leads to SFTS which leads to Louis which makes me consider homosexuality which all finally culminates in assless chaps.

That is what I think of Britain's uneducated ignorant gangbangers.

Edit: In all seriousness I would rather a bit of looting on occasion to being physically inferior to people of nearly the same ethnic group fifty miles to the south of me.

Which leads to British youths in assless chaps running around London with flaming fags ...torches...burning stuff. Yea.

[Furunculus]

downgrade was because of the economy stupid:

http://ftalphaville.ft.com/blog/2011/08/09/648126/edwards-says-this-has-nothing-to-do-with-that-downgrade/

[drone]

I first think of chaps which makes me think of cowboys which leads to ruminating about Texas which leads to SFTS which leads to Louis which makes me consider homosexuality which all finally culminates in assless chaps.
All chaps are assless. It all depends on if the "cowboy" is wearing pants underneath.
[/pendant]

[Lemur]

The Tea Party may be on the wrong side of the solution, they may not. But I don't think it's a good idea to single out a faction when this situation was created by a bipartisan effort.
Didn't you know the economy and the debt are all Obama's fault? Seriously, dude, where have you been hiding.

In mature, reasoned lawmaker news, a fifth Republican congressman has now called for the president's impeachment (http://www.politico.com/news/stories/0811/60949.html). Almost there. And once we've impeached him, AMERICA WILL BE SAVED FROM THE MUSLIN SHARIA AND EVERYTHING WILL BE GREAT.

[Tellos Athenaios]

downgrade was because of the economy stupid:

http://ftalphaville.ft.com/blog/2011/08/09/648126/edwards-says-this-has-nothing-to-do-with-that-downgrade/

And promises a rerun of the aftermath of Japan 1992 for the US & UK. You should've posted this one in the London riots thread, too:


And as London burns, the point I have always made is that the US and UK are not like Japan in one very special way. Although Japan suffered a decade of pain it is a very homogenous, equal society. The UK and US are not. Some readers may not know that rioting and looting has broken out around London. While I hear the UK politicians denounce the looters as common criminals (which of course they are), I can’t help but think that Louis XVI in 1789 and Tsar Nicolas II in 1917 might have said the same thing.

[Banquo's Ghost]

And once we've impeached him, AMERICA WILL BE SAVED FROM THE MUSLIN SHARIA AND EVERYTHING WILL BE GREAT.

Damn right. The American Caliphate must use proper high quality cloth for its burkas. :wink:

[Vladimir]

Damn right. The American Caliphate must use proper high quality cloth for its burkas. :wink:

Which will be made in China. Huzzah!

[classical_hero]

Didn't you know the economy and the debt are all Obama's fault? Seriously, dude, where have you been hiding.

In mature, reasoned lawmaker news, a fifth Republican congressman has now called for the president's impeachment (http://www.politico.com/news/stories/0811/60949.html). That is just insane.

[Adrian II]

Burgess spoke, the paper said, in response to an attendee’s suggestion that the GOP-controlled House use impeachment to stop Obama from “pushing his agenda.”

Words fail when you are up against such foolishness. Obama was elected, right? So he might as well impeach the majority of Americans :rolleyes:

AII

[drone]

The House can blather all they want but to remove the Prez 1) you have to have a serious crime to charge him with, and 2) the Senate(D) gets to try him. Chances are Burgess knows this (although this might be a stretch with some of these idjits) and this is all just pandering to the angered constituency.

[Vladimir]

Echos of 43.

[Banquo's Ghost]

The House can blather all they want but to remove the Prez 1) you have to have a serious crime to charge him with, and 2) the Senate(D) gets to try him. Chances are Burgess knows this (although this might be a stretch with some of these idjits) and this is all just pandering to the angered constituency.

I think it's more serious than this. Calling for a president to be impeached should be an absolute last resort in the face of proven and serious wrongdoing. The Congressman is (as Adrian noted) agitating to over-turn the elected will of the people. The act of impeachment is, by definition, anti-democratic.

It was beyond the pale that President Clinton was subject to impeachment proceedings. To call for impeachment at this time on on such flimsy pretext is to my mind, an act of sedition. I always considered that the office of president was given a degree of respect in the US whatever the political differences. Now it seems a tawdry prize that both sides diminish without care.

Adrian is also right that in all our pathetic and cowardly leaders across the West, it is we the people that have failed. We have bought the snake oil by the barrel, and cannot complain when we are led by snake oil salesmen.

[Vladimir]

I think it's more serious than this. Calling for a president to be impeached should be an absolute last resort in the face of proven and serious wrongdoing. The Congressman is (as Adrian noted) agitating to over-turn the elected will of the people. The act of impeachment is, by definition, anti-democratic.

It was beyond the pale that President Clinton was subject to impeachment proceedings. To call for impeachment at this time on on such flimsy pretext is to my mind, an act of sedition. I always considered that the office of president was given a degree of respect in the US whatever the political differences. Now it seems a tawdry prize that both sides diminish without care.

Adrian is also right that in all our pathetic and cowardly leaders across the West, it is we the people that have failed. We have bought the snake oil by the barrel, and cannot complain when we are led by snake oil salesmen.

I believe perjury is an impeachable offense.

Isn't an impeachment meant to establish wrongdoing? If not, what legal body would need to prove wrongdoing? "High crimes and misdemeanors" can also be interpreted not as serious offenses but offenses committed by high officials.

Obama may not have committed any of those offenses but I'm surprised you're defending Clinton.

You should know that political discourse has been more civilized than under the previous administration.

Edit: Yes. Impeachment is meant as an accusation of wrongdoing. Severity and proof are irrelevant.

http://en.wikipedia.org/wiki/Impeachment

[Lemur]

I believe perjury is an impeachable offense.
What is or isn't an impeachable offense has never been defined,* so jaywalking or public drunkenness may also be impeachable offenses. Subjective.


I'm surprised you're defending Clinton.
And I'm shocked you're defending that impeachment. Not only was it an attempt to overturn the results of a lawful election, it was ineffective, and turned the majority against the Republican Congress (http://www.nytimes.com/1998/12/19/us/impeachment-the-poll-republicans-image-eroding-fast-poll-shows.html). So not only was it misguided, it was provably stupid.

-edit-

*The Constitution gives the rather vague "treason, bribery, or other high crimes and misdemeanors." Defining perjury in a civil lawsuit (http://en.wikipedia.org/wiki/Clinton_v._Jones) as a "high crime and misdemeanor" is, and always has been, a stretch.

[drone]

The only good thing that happened with the Clinton impeachment was the effect it had on Uncle Teddy. He probably lost 5 years off his life having to hold his tongue. :yes:

The Dems had a better case for impeachment with 43, they just lacked the balls (and were too complicit) to go through with it.

[Vladimir]

What is or isn't an impeachable offense has never been defined,* so jaywalking or public drunkenness may also be impeachable offenses. Subjective.


And I'm shocked you're defending that impeachment. Not only was it an attempt to overturn the results of a lawful election, it was ineffective, and turned the majority against the Republican Congress. So not only was it misguided, it was provably stupid.

-edit-

*The Constitution gives the rather vague "treason, bribery, or other high crimes and misdemeanors." Defining perjury in a civil lawsuit (http://en.wikipedia.org/wiki/Civil_procedure#Differences_between_civil_and_criminal_procedure) as a "high crime and misdemeanor" is, and always has been, a stretch.

Oh, stop jumping to conclusions again. You can say that about any impeachment. You can also say that about the Florida supreme court but that would throw this thread way off on a tangent. When have you known politicians not to stretch things? In Clinton's case the violation was clear; in Obama's case it's just political rhetoric.

As inundated as we are with politics around here I've barely heard of this meaning that it's not taken seriously. Why is anyone here taking it seriously?

[Vladimir]

:gah:

[Banquo's Ghost]

Lemur answered your previous questions for me.


Why is anyone here taking it seriously?

It's part of the infantilism gaining ground in our democracies. Stupid, pointless and ultimately damaging little chips at the institutions that make up a working democracy, all in aid of cheap populism. If any elected representative even considers that it is permissible to undermine the will of the electorate just because they have a difference of opinion, democracy suffers. The US uniquely relies on the mutual respect between the arms of government, as well as the respect of the people.

In this, it is both the greatest liberal democracy and the most vulnerable.

[Vladimir]

Lemur answered your previous questions for me.



It's part of the infantilism gaining ground in our democracies. Stupid, pointless and ultimately damaging little chips at the institutions that make up a working democracy, all in aid of cheap populism. If any elected representative even considers that it is permissible to undermine the will of the electorate just because they have a difference of opinion, democracy suffers. The US uniquely relies on the mutual respect between the arms of government, as well as the respect of the people.

In this, it is both the greatest liberal democracy and the most vulnerable.

It's only populism if people take it seriously and act on it. If someone says Obama is a circumcised Muslim from Mars and no one pays attention to it, the system works. We've always had fools and demagogues in politics and we always will.

This is why I blame the people for idiots like Chavez, not the man himself.

[drone]

And in totally unrelated news, S&P is being investigated by the Justice Department (http://www.washingtonpost.com/business/report-justice-department-investigating-standard-and-poors-mortgage-securities-ratings/2011/08/17/gIQAjOdTMJ_story.html) for it's role in the mortgage debacle.

WASHINGTON — The Justice Department is investigating whether the Standard & Poor’s credit ratings agency improperly rated dozens of mortgage securities in the years leading up to the financial crisis, The New York Times reported Wednesday.

The investigation began before Standard & Poor’s cut the United States’ AAA credit rating this month, but it’s likely to add to the political firestorm created by the downgrade, the newspaper said. Some government officials have since questioned the agency’s secretive process, its credibility and the competence of its analysts, claiming to have found an error in its debt calculations.

The Times cites two people interviewed by the government and another briefed on such interviews as its sources. According to people with knowledge of the interviews, the Justice Department has been asking about instances in which the company’s analysts wanted to award lower ratings on mortgage bonds but may have been overruled by other S&P business managers.

If the government finds enough evidence to support a case, it could undercut S&P’s longstanding claim that its analysts act independently from business concerns. The newspaper said it was unclear whether the Justice Department investigation involves the other two major ratings agencies, Moody’s and Fitch, or only S&P.

[Lemur]

And in totally unrelated news, S&P is being investigated by the Justice Department (http://www.washingtonpost.com/business/report-justice-department-investigating-standard-and-poors-mortgage-securities-ratings/2011/08/17/gIQAjOdTMJ_story.html) for it's role in the mortgage debacle.
About ******** time. Now if we can only get the investment banking industry to tick off the administration, we could get them investigated as well.

I read a great bit some months ago about a reporter who was covering the whole mortgage thing, drinking with a dude from the SEC, who after knocking back a few said, "You wanna write an article about this? Here's what you say: Everybody was scamming and breaking the law, and nobody goes to jail. There, That's your *********** article right there."

[Seamus Fermanagh]

The whole mortgage thing is/was sick making.

Really bright people working very hard to find and exploit gaps in law/regulation that they knew were unethical, however legal. Saddening.

[a completely inoffensive name]

It's almost as if we need to have strict regulations because we can't rely on the morality of bankers to do the right thing.

[Papewaio]

morality of bankers to do the right thing.

Yeah that's as likely as a vegan vampire.

[a completely inoffensive name]

Yeah that's as likely as a vegan vampire.

Precisely.