United States Credit Rating Downgraded

[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.