What was all that about “disaster averted?”
United States of America Long-Term Rating Lowered To ‘AA+’ On Political Risks And Rising Debt Burden; Outlook Negative
We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.
We have also removed both the short- and long-term ratings from CreditWatch negative.
The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.
More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
And just to make things even more fun, Treasury says it found a mathematical error in S&P’s downgrade work.
S&P officials notified the Treasury Department early Friday afternoon it was planning to downgrade the U.S. government’s debt from the AAA rating it has held for decades, a government official said, and it presented its report to the White House. S&P has previously warned such a downgrade might come if Washington didn’t move to comprehensively tackle its long-term fiscal woes.
After two hours of analysis, Treasury officials discovered that S&P officials had miscalculated future deficit projections by close to $2 trillion. It immediately notified the company of the mistakes.
S&P officials later called administration officials to say they agreed with the administration’s critique, though they did not say whether it would affect their rating. White House officials remained waiting Friday evening to see what the company would do.
Turbo Tax Tim’s Treasury calls out one of the credit ratings agencies that led us into the financial collapse and is now downgrading our national credit — and turns out to be right: S&P made a $2 trillion mistake. So, yeah, it’s hard to have much confidence in any of these people.
More: Just a small point of compare and contrast here — while President Obama has presided over the unprecedented downgrading of US credit, a certain governor of a large southern state has presided over the elevation of his state’s credit rating.
That’s right. Rick Perry has led Texas to the point where its credit rating is equal to that of the United States.
Ask yourself: Which would you rather have as president?
Update: As commenter Wigglesworth notes, we might get downgraded again in two years if the US doesn’t kick the spending addiction.
There’s already a downgrade reaction website, by Let Freedom Ring.
More: Also read the Tatler’s coverage of GOP contenders reacting to the downgrade, and a call for Treasury Secretary Tim Geithner to resign.
Congratulations Mr. Obama. You have officially passed Jimmy Carter as the worst president ever.
I actually assumed that, with criminal investigations underway, the rating agencies would have given the Obama Administration another year before the downgrade. Their political operation seems prepared with the “blame Republicans” strategy, but they haven’t, you know, figured out what to actually do to save the US economy.
Which brings us to my question. What I’d like to see is, given that we have a serious chance of becoming another Argentina, some ideas about what an ordinary person can do to protect his assets and his family from a collapse: hyperinflation, confiscatory fiscal policies, long-term economic disaster. Kudos if someone can avert this in time, but we need to have a serious conversation about What To Do.
In Argentina, the right move was to convert your financial assets to US dollars and move as much of your physical assets off-shore as possible. Live in the burbs, away from the crime and corruption of the cities and away from the violence in the rural areas. Inflation hit unevenly– prices for durable goods like jewelry, cars, and other luxuries didn’t rise as fast as food/energy/rent because people were selling their luxuries to afford this month’s necessities– so people who had enough hard currency could buy up the luxuries at fire sale prices.
But there’s no “flight to quality” possible. Where would we go? China’s already got its inflation problem. The Euro is even worse off than we are. Nearly the entire world is tied to the US’s economy– dependent on our products, our markets or both. Even precious metals are going to be a crapshoot– and don’t forget that outlawing the ownership of bullion has been done before. So where do we park our assets?
I don’t have an answer, I’m looking for the PJMedia Hive Mind to come up with ideas. Because if this turns into a death spiral, it’ll be too late to prepare.
Let me stress, we’re not this bad quite YET. There are other ratings agencies, and if you don’t think that “Gunwalker” Holder has men sitting down at S&P and Moody’s right now armed with threats and promises, then you’re dead wrong. S&P might very well walk back the credit rating change. Even a sustained downgrade could be survived if it doesn’t spiral out of control (though the libs are already talking about triggering inflation on purpose– which I think will ensure a death spiral).
I just read the report. Another important point to add Bryan is that S&P said there is a possibility of another downgrade in the next 2 years.
“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.”
Yeah, well that’s what I mean by a death spiral. A downgrade means that interest rates will go up, which means payments on interest (already a huge fraction of our budget) will go up, which makes it less likely we will meet our current obligations, which causes more downgrades. Without cuts (real cuts, not “reductions in planned increases”; that happen now, not “over ten years”; that hit entitlements, not increase them by monkeying with discretionary spending tricks) we’ll fall into the same trap the Argentinians and many others have. You see that argument between far-left econopologist Ezra Klein and Rick Santelli? Watch it again– Ezra is always reading from Obama’s talking points, and his call for a round of serious inflation is downright scary. He’s almost ensuring a meltdown.
Honestly, at this point I’m not worrying about politics. I know how I’m going to vote in 2012 and probably so are you. The only people left who don’t realize the President is driving our economy off a cliff are the ones who don’t want an economy in the first place. I’ll show up, vote for the most deficit-hawkish, pro-growth, Tea Party candidate I can find in the primaries and the general. Probably, so will you.
What I’m worrying about is me and my family and how to protect them if worse comes to worse. The odds of a meltdown are still low, but they’re now very, very real and we won’t have time to prepare by the time we know for sure. I’m wondering what I personally can do to protect my family in particular: our finances, our assets, our personal safety, our livelihoods. What specific investments can we make, what high-risk investments should we get out of, how to cover our financial @#$. This has never happened to the US before. Ever. We have no institutional experience about what, personally, to do. And I think that is the conversation worth having.
The most important thing is to diversify. No matter how good one investment looks never put all your money in it. You can seek out the advice of a financial planner that doesn’t get paid a sales commission for putting your money in certain investments.
In the interview this morning, S&P stated and restated the time frame of six (6) months to two (2) years as points of downgrading more or……..
War
or
Small business stimulation, serious waste and fraud purges, reform of entitlement programs, enforcement of smart regulations, massive capital flight to energy innovations, reform of education strategy and actually fixing healthcare.
Only increased wealth and ending bad business practices will fix this mess.
or war and the subsequent peace dividends in a less confrontational world. Large oil deposits in the Aegean, Levant and MENA could easily stimulate the Western economy…..
Look at the view regarding NASA. Some cry themselves to sleep. Boeing Rutan, the DOD and Musk all are testing new space delivery systems. That’s a first for America. Much of where we go now is psychological and a smart play with existing assets.
Not sure leadership is up to the task. So perhaps that’s a critical missing link. Independents will vote for the one who looks like he can accomplish the second option above.
Well, sir, I just got back from a trip to Singapore, and had more Singapore dollars left over than expected. Considering the situation with the US dollar, I decided to hold onto them. Singapore is a remarkably well managed economy and society – you could do worse than the SGD as a secure store of value.
This has really been a long time coming.
And as for Perry– listen, the reason he’s governor of a successful state is not because of anything he’s done; it’s because the state of Texas doesn’t allow him (or the legislature, or anyone else) to do much at all. That’s the beauty of Texas– the bastards only have 181 days every 2 years to screw things up (and boy, do they really, really try.) I try to imagine what kind of shape the nation would be in if Reid and Boehner only had 6 months every 2 years to do anything, and Obama (or Bush) was basically impotent during the “off-season.”
That’s the strength of Texas; no man, but a system that curbs the basest desires of man.
Same is true here in Arkansas, our legislature only meets for three months every other year. I don’t think there is a need for the US congress needs to be full time. We have enough laws already and all they do is screw things up by constantly changing laws and thereby creating instability and uncertainty. If you take a loom at all the useless bills passed but never signed by a president each year you would see how much time they waste and just how much mischief they cause.
#2 wells
….some ideas about what an ordinary person can do to protect his assets and his family from a collapse: hyperinflation, confiscatory fiscal policies, long-term economic disaster. Kudos if someone can avert this in time, but we need to have a serious conversation about What To Do.
It ain’t perfect, but is is a reasonable start. The author of this blog is an Argentinean who has been through exactly what you said, the collapse of Argentina. I offer it for the consideration of all.
http://ferfal.blogspot.com/2008/01/most-important-need-in-first-few-days.html
and I would offer another blog that may be of use:
http://www.survival-preps.com/
This is Bill Quick’s survival blog. Bill Quick as in DAILY PUNDIT and the guy who invented the word Blogosphere. Survivalism is not about being a snake-eater or getting ready to recreate Fort Zinderneuf. Most of it is about what to do if things start going south. What do you do if there is not power, no heat, no water? What if food supplies are less than certain because the grocery stores are not being re-stocked because the money to pay the supplier is worthless? You don’t have to have a stockpile of weapons bigger than Ft. Hood, but being unarmed is probably not a rational approach.
One idea is to check with your local TEA Party and see if they have a monthly Survival Breakfast like ours does. Once a month, people gather and bring ideas about specified topics [water supply and purification, heating, sanitation, etc.] and we talk about it and share ideas over breakfast. If your TEA Party does not have such, you might want to see if you and they can start one. Having a core group, a community, that has thought of these things ahead of time may save a bunch of lives.
By the way, you might want to investigate solar heating and cooking and water purification as a cheap DIY approach to a number of those problems.
Mind you, if you are in an urban area, y’all are scrod.
It is far better to be prepared, and not need it; than need it, and not be prepared.
Subotai Bahadur
“You don’t have to have a stockpile of weapons bigger than Ft. Hood…”
OTOH…it couldn’t hurt.
“And just to make things even more fun, Treasury says it found a mathematical error in S&P’s downgrade work.”
Is that the same Treasury headed up by a guy who can’t even fill out his own tax returns correctly?
So long as billions of domestic dollars are pumped out of our economy’s by the biggest private sector stakeholders going abroad in foreign investments and billions more continue to be made in operating profit from abroad, it would seem that the economy may well be in a long term slump. A slump that demands little in the way of lowering unemployment numbers.
Nobody who counts is focusing on import reform. Nobody is seriously focusing on domestic energy reform. Nobody is focusing on reforming the past uunsustainable consumer credit component of the national economy. Nobody wants to seriously talk about domestsic economic investment. Are these not major factors of domestic economic growth in todays global environment?
Nobodys coming together to govern on the most critical economic points. The congress is completely disconnected and dysfuntional. Likewise, its no secret that between now and 2013 there will be NO governing on behalf of the nation…only ‘political’ posturing for an election.
The possible S&P two trillion dollars error aside, it would seem the underlying basis of the S&P downgrade is viable.
I don’t mind all this ‘focusing on domestic’ this that and the other as long as it doesn’t involve continuing more of the same grossly unConstitutional Fed rules/regs/agencies/etc. Y’wanna increase domestic investment etc? Don’t focus on anything except following the Constitution. Eliminate the vast swathes of Fed bureaucrazies that are blatantly unConstitutional and throw not sand but boulders into the gears of business, stifling the economy, hurting the poor who are denied the employment opportunities that should be theirs. Do that, and watch business boom, wealth spread, freedom reign. The debt controversy will be a thing of the past.
But we won’t do that. We the People are a wicked and lazy sovereign, having traded our birthright for a mess of pottage. And what a mess.
A constitutional amendment of the commerce clause ‘restating’ it’s narrow intent would fix most of the nations problems and allow for a structured transition over a couple of decades without to much pain. Pain, but not sacrificing large segments of the population as we’re now heading for at some point in time when, either the government machine ‘self destructs’ or the ‘people’ destroy it.
What’s all the hoo-haw? This is exactly what the Kenyan intended to do when he and his pimps stole the Presidency. His mission was to destroy the middle class in the US and do whatever else he could to destroy our country. If left to him, there will be reeducation camps all over the country, confiscation of even more private property, great shifts of white wealth to those who really deserve it, death panels for members of groups that don’t support him, universal union membership and, eventually, a sort of sainthood for his idols, e.g., Ayers, Alinsky, Stalin, etc.
Obama has no interest in comparisons to any other president, his only job was to destroy our country and that is the only measure of performance he cares about.
As an Irishman, all I can say is welcome to the club! Perhaps YOUR ratings downgrade will prompt you to ease back on your smug urination all over the merits of the Euro eh? People in glass houses shouldn’t throw stones and all that, etc etc.
I suppose your own liberal, tone deaf, spendaholic Government isn’t so far behind our useless European bastard elite afterall….
With all due respect….f-you you pontificating a-holes. Get your house in order and impeach that imbecile out of office.
Tony, you silver tongued Irish devil you. I wish I could disagree with you. Unfortunately, I can’t.
What I can say, is that Obama is probably done. No amount of spin is going to save him this time. This is so historic and so historically bad, no one is going to forget it at the polls.
As for Rick Perry. Rick, if you’re listening, you’re really the only one we can see who might have a shot at saving this country. GET IN THE RACE. You may not be perfect, but we need you.
Captains Darling, I love my fellow Irishmen, but you know with the tragic copter loss, the President, his Party, his Partisans, his Press and his Punditry will smear us for discussing this while ‘Taps’ still sounds over the graves of brave men!
And all my Irish cousins will still vote Dem because Da did and GranDa did…
Normally, I’m the most jingoist American on the planet. But who am I with a good, old Irish suggestion?
Might as well get all of the dumb stuff taken care of before 55+ million weirdos reelect Obama..
Gawd!!
In a world where ratings agencies were not bought and paid for McShills of their paymasters, the real ratings on the US debt will be JUNK or DEFAULT.
The United States spends 40% MORE than it earns and Congress CANNOT cut spending. Ask the bondholders in the PIIGS and France how’s that working out for them?
The time will come (and it will be far sooner than most people predict, 12-18 months at most) when the US is faced with the SAME financial calamity that GREECE and IRELAND face today.
At 5% interest, debt service costs more than defence…
By 2020 the United States will no longer be regarded as a first world country.
The United States of Mexetina – Change your getting. Juan Peron – Yes we can!.
Finally, a grade that Obama cannot cover up. Yes, el presidente, I’m blaming you for setting the stage that led to the downgrade. You’ll try to blame someone else and you’ll amp up the rhetoric to try and preserve the spending spree for another term. You won’t take responsibility for this either. Who on earth is going to give you a billion for your re-election campaign? Obama = Epic fail
The Progressives have already started to use Alinsky’s rule #12: Pick the target, freeze it, personalize it, and polarize it. The current target is the S&P. Enjoy the show!
What are you griping about? At least he’s keeping the “change” part of his promise of HopeAndChange.
Yes he has.
Now he can redistribute the wealth and make all the illegals,who are draining us of jobs and welfare,citizens who will vote for St.Obama.Then he can force socialist medical care on us,have his dietitian wife dictate what we eat,ban guns and outlaw freedom of speech.
We will be well prepared to be slave workers paying for our owners,the illegals,criminals and welfare slugs,so we can devolve to a third world muslim nation.
I would tread very lightly with respect to claiming that S&P make a mathematical error.
I have not looked into this in detail yet, but based on Obama’s policy of hyper-politicizing every governmental department, and ordering them to continuously lie and push his extreme liberal-Marxist agenda, S&P probably did not make a mathematical error. They might have agreed to say that they did, in response to some heavy and serious threats and blackmail from Obama’s people.
Saying that S&P made a mathematical error gives Obama the only face saving gimmick they could invent on such short notice. Now the media will gear up for additional demonization of S&P in the near future. I bet Obama’s people threatened the HELL out of Moody’s and Fitch today, as well.
Oh there is no question about it. I wouldn’t be surprised if S&P is hit with an expensive IRS corporate audit as well as their executives personally. Of course the official line will be they were randomly selected.
Don’t know what the rest of the MSM is saying yet but Fox had a statement stating “first downgrade in U.S. history.” That’s gonna make the WH even more livid and go into full on propaganda mode. Heh!
!0bamanomics
Racists!
This is all because of BUSH!
Raaaaaaaacists!
“*tap-tap*, is this teleprompter on?”
Giddyup! Arugula and cake for everyone!
Don’t count Mr. Obama out just yet. He’s got $1 billion in his “war chest” and massive voter fraud on the way as never seem in our USofA.
First off,fund raising:
FRom DNC = $40 million
FRom fund raising = $47 million
Funding from “Priorities” related groups (George Soros) = $100 million+
From online pledges and fund raising = $800 million. This process raised $750 million for Mr. Obama in 2008.
Now for social service political organizations operating extra electorally, but being capable of effectively change an elections results:
MoveOn.org
AFL-CIO
CREDOaction
Democracy For America
PCCC
AFT
Campaign For Americas Future
Change Nation
Nation
Politico
SEIU
NEA
AFSCME (federal employees union)
Food and Commecial Workers Union
La Raza
These groups (partial list) are already busy signing up anything that walks, has two arms and legs…legal or illegal.
If this doesn’t convince an American to vote, here’s the icing on the cake, an end run…if you will:
Mr. Tom Golisano (a businessperson) and “Chucky” Chuck Schumer along with the folks from National Popular Vote Movement are introducing (if they haven’t already) to Congress a replacement to current State-by-State Electoral System with the “direct Election of the President by guaranteeing an Electioral College Majority to the Popular Vote winner” This will turn our US Constitution on its head.
The only way to have Mr. Obama accept a one term Presidency is for a massive voter turn out as never before seem in USofA’s history. Because massive fraud is definitely on its way. It’s designed to choke every voter precint, ballot box and Voter tabulating procedure. Thusly, guaranteeing Mr. Obama the disputed vote. (Florida, anyone?)Have every State Lagislature enact Voter ID Legislation…it’s the only way to stop this fraud. Even the New Black Panthers are registering dead brothers…crips and bloods.VOTE! God Save America!
Add to that a DOJ that won’t investigate voter fraud…
Actually, I don’t need any of the above to know he’s going to get a second term. 2 interactions come to mind that say he’s got it in the bag unless independents and a couple of groups (seniors, perhaps) vote solidly red.
Exhibit A) A very intelligent and hard thinking young woman, talking prior to 2008 election “I just couldn’t vote for McCain because of his stance on abortion”
I presume she thought Obama would be a lame duck, but she routinely ignored his associations, etc (Rev. Wright, Ayres, etc). A lot of voters are single issue, and this was hers. It’ll happen again.
Exhibit B) Seeing twitter feeds or blog posts by otherwise rational people still saying ‘can I just vote for Obama now? There’s no way I’m voting for a conservative’ The leftists and progressives still own the dominating blocks in the most populous states, typically in the larger cities, which dominate the electoral process.
I think we’re screwed. The best we can hope for is taking the Senate and holding the House. Hell, it’s to the point I’d even vote Bill a third term (and I grew up in Arkansas!). I’d rather a pragmatic “I want to be popular” power hungry president, than a blind, deaf, slavishly Keynesian ideologue any day.
Well of course they downgraded the USA after all this so called Debt REDUCTION was all smoke and mirrors. Here’s what they did first they INCREASED America’s borrowing by $2.5 TRILLION to $16 TRILLION then they agreed to limit the INCREASE in spending over the next 10 years to ONLY $7 TRILLION instead of the $10 TRILLION it was going to be thus making the debt ONLY $23 TRILLION not $26 TRILLION. Then they sold the $3 TRILLION difference as a CUT. Whoopee!!!! now we can all relax as the American taxpayer will now owe $23 TRILLION when they couldn’t even afford a debt of $14 TRILLION. This is the ECONOMICS OF THE MADHOUSE. So if thats a CUT then they can CUT my wages like that every year only give me a 6% INCREASE instead of a 8% INCREASE then tell the Accountants they have CUT the wage bill and see if they believe you. LOL.
During the fiscal years for which Rick Perry exercised budgetary authority as Governor of Texas (FY02 through FY10)
• Debt outstanding increased 184.2%, or 20.5% per year
• Per capita debt outstanding increased 140.4%, or 15.6% per year
• Total liabilities increased 60.6%, or 6.7% per year
• Total liabilities per capita increased 35.8%, or 4.0% per year
http://conservatives4palin.com/wp-content/uploads/2011/08/gubernatorial-debt-1-300×182.png
http://conservatives4palin.com/wp-content/uploads/2011/08/gubernatorial-debt-300×182.png
http://blogontheprairie.blogspot.com/2011/08/governor-palin-leading-fight-on-debt.html
Excuse me, but would this be the moment to say “Glenn Beck was right”?
Before you try to make this downgrade entirely Obama’s fault, you should read what S&P actually wrote in their report:
“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.”
http://tinyurl.com/4yc9tty
S&P clearly believes that BOTH spending cuts AND tax increases will be needed. And what’s bothering them is the gridlock that prevent the Dems from reforming soaring spending AND the GOP’s resistance to letting the Bush tax cuts lapse even in part.
Thank you for the citation.
Until the Norquistian GOP stops defending the irresponsible Bush43 tax cuts, it will not matter how much spending is cut, or who is elected in 2012.
The Clinton surpluses were solely due to an accounting trick that added the planned FICA surpluses into general revenue.
The reason the irresponsible Bush43 tax cuts were designed to expire was as a contingency just in case the then-projected surpluses disappeared. Which they did as defense and NCLB and Medicare drug spending soared under Bush43.
The Obama/Pelosi economic plans are now failing because the Dems did not have the spine to let ALL the irresponsible Bush43 tax cuts expire as planned in December 2010.
More Norquistian GOP is NOT the solution. Until the GOP gives up Starve the Beast, and the Dems give up on Obamacare and over-regulation of oil&gas drilling, the USA is doomed.
Do you seriously think that an increase in taxation would solve the debt? What planet are you living on?
The key problem is that the Democrats are refusing to deal with:
1) tax-reform, to close loopholes (this isn’t the same as increasing taxation), About 47% of the population pay no taxes and even receive govt money. No economy can handle such a low ratio of producers to non-producers of wealth.
2)entitlement reform, where social security and medicare have become
ways-of-life for people living entirely off the govt and contributing nothing to the economy. These programs were meant as safety nets not regular modes of income and lifestyle. They have, instead, removed more and more people from the wealth-producing sector of the economy;
3)The problem of investment wealth. The Democrats are focused on consumption and assume that all an economy needs is lots of money given to the population, for consumer purchases…They think this will lead to a robust economy. No, this is disastrous because it ignores the most basic step in an economy: Investment.
An economy must leave a large surplus of wealth in the private business sector, which uses this as investment. Even banking it enables the banks to make small business loans. But investment goes, as well, into building new factories, hiring more workers, updating equipment. This is the infrastructure of a robust economy. The Democrats tax all of this from small businesses – and this is killing the economy.
4) Regulation reform. The intrusion of the govt into business is smothering small businesses which are swamped with regulations.
If you are naive enough to think that all that is needed is ‘more money from those who make 200,000′..well, I’ve got a bridge in Florida to sell you.
If we took 100% of the wealth from the ‘wealthiest’ in this country it would barely make a dent in our debt.
Of course raising taxes will provide more revenue, initially, to pay off debt, if the Democrats have the discipline to use the revenue for that. I doubt that they will. They will probably use the revenue to increase spending even further, to pursue their Keynesian economics trying to spend their way to prosperity. What you are failing to consider is the effect of higher taxes on the economy, especially during a recession. Lost jobs and further economic slow down is what would occur. The only beneficiaries would be unions and bigger government, because they are the ones that would continually be rewarded for supporting the Democrats.
K2K…don’t give a nano second of time to this kind of TeaParty GOP economic expert hogwash…..["3)The problem of investment wealth. The Democrats are focused on consumption and assume that all an economy needs is lots of money given to the population, for consumer purchases…They think this will lead to a robust economy. No, this is disastrous because it ignores the most basic step in an economy: Investment."]
Rational folks can easily ‘observe’ and learn that without –first– a consumer market, the segment of the economy that makes and innovates goods and provides services and jobs would NOT have any such thing as INVESTMENT CAPITAL.
American’s haven’t been in the innovation race since the 70′s but through government motivated and supported innovation through health care, defense and space-NASA sectors. Actually, health care, agriculture, manufacturing and on down the line has followed golobal consortiums of innovation. If one wants to really be honest, even our initial space-NASA innovations came about as a result of ‘imported German talent. America’s rightful claims were in industrial and manufacturing ‘process’ up through the times of having reached our highest economic pinnacle. Now we’re a follower in that area also. What innovators we do have are comprised of a very high ratio of ‘imported’ foreign talent.
The TeaParty-GOP arguments of ‘taxes and regulation’ are no more than ‘political’ red herrings. America’s decades of climbing to its highest exonomic pinnacle was also times of high taxes and increasing regulations.
The root causations of unsustainable arbitrary and circular inflation effects that took the U.S. out of the global economic race is what needs to be seriously addressed…in other words the ‘peoples’ greed and corruption that corrupted the private sector economy and the government!
The big three social program problems are easily fixable!
According to an interview with S&P this saturday morning, there are five (5) “columns” of criteria applied equally to any nation involved in their ratings reviews. I guess folks will cherry pick whatever column of criteria best sits the ‘political’ causes to place blame in their blame game….and ignore the others.
Yes, but that doesn’t mean a downgrade is a result of weakness in all 5 categories especially when we are talking about a downgrade from AAA to AA+.
I never made any such inference! The governments spending and debt liabilities is only one of them and they (S&P) seem to talk around the fringe that it may not have been the greatest weighted variable in their decision. At least, thats how I understood the comments of their interview today.
We were downgraded not for a lack of ability to make good on our debts but because the GOP shows contempt for our duty to pay our debts.
What do you think Ryan’s budget was about? Notice that Obama and the Democrats haven’t provided a budget since he flew into town.
What you do think Cut, Cap and Balance was about? Do you recall Obama threatening to veto it? And how the spineless sycophant Reid therefore didn’t even dare bring it to the Senate for a vote but instead tabled it?
What do you think Boehner’s plan was about? Are you aware that Obama threatened to veto it as well? And Reid collapsed before Obama in the same way?
Do you have any evidence that the Democrats feel any duty or even desire to deal with the debt? Well?
That’s because it doesn’t make sense to pay off debts with more borrowed money. And you call yourself “scholar”?
Josh…you’re exactly correct! The Tea Party Cut/Cap/Balance has NOTHING to do with fixing the nations economy which is the ‘foundation’ of what any countrys economic and fiscal value is measured. If it becomes broken then folks such as the S&P turn to a nations government and their capacities and abillity to address the core problems and fix them…politics aside! Democrats nor the TeaParty-GOP have shown the professional capacity to address the nations ‘core problems’ and are governance and politically dysfuntional.
The decades of sucking the government teats for champagne and dancing to the fiddler by all the people of ALL politcal parties is over and now the Tea Party-GOP folks don’t want to pay for the champagne and the fiddler.
The social programs and costs are a complete side show and political diversion tactic away from the core issues; being used ‘ideologically’ by both sides. The congress has mismanaged the programs for decades further lending to their incapacity to govern discredit. The social programs were solidly in place all during America’s rise to its highest pinnacle of economic greatness.
The economy and government are broken because the ‘people’ have kept electing their favorite “special interest’ advocates to govern the nation and now their special interest consequences have shown up and turned the lights out at the peoples party. Now all the hypocrits rise up and play the blame game against each other dividing the nations people and durther delving the nation deeper into national dysfunction.
The ratings agencies should have joijed together and given a downgrade of A- but only the S&P is a politically ‘independent’ ratings entity.
Did you notice, josh scholar, that when the GOP-TP came up with specific plans to deal with the infrastructure of the economy – ie., the causes of the debt, by such plans as Ryan’s Budget and the GOP Cut, Cap and Balance – the Democrat reaction?
Ads showing Ryan pushing grandma in a wheelchair off a cliff;
Obama threatening to veto the bills;
Obama going on national TV and, with a sad face, saying (sigh) that he didn’t know if the social security checks would be paid this coming month – a blatant disgraceful lie.
So, the Democrats, who operate in the Keynesian ideology of Tax-and-Spend your way to prosperity And Power (oh, and increase entitlements to bribe the voters to vote for you!!!)…well, the Democrats blocked all GOP-TP attempts to get Congress to control the spending, review and reform entitlements (Cantor and Ryan have been saying for months that this review/reform is vital); cut departments and costs; reform taxation loopholes; and, and..operate within a balanced budget.
So – the GOP have been very specific about dealing with the broken economic infrastructure of the govt-controlled economy; the Democrats have blocked every step. Their focus is only on 2012 and…Power.
Nice diversion attempt!
Cut-Cap-Balance have nothing to do with fixing the economy!
It has everything to do with some of the peoples elected politicians faced with the governments plugged up toilet and decades of [having to] prop up the private sector economies.
The ONLY TeaParty-GOP economic revitalization plans are the same old superficial ‘political’ talking points of …. “lower taxes and less regulations. Ask one of them what either of the tax rates should be according to their expert calculations and and you get NO answer! Ask one of them specifically what government regulations must be repealed and you get no specific answer. In other words, their ‘economic revitalization plans’ goes to the ZERO column.
I’m guessing neither party’s socalled economic plans impressed the S&P folks or their counterparts who continue to ‘warn’ the nation. Their ratings criteria is NOT limited solely to a governments spending and debt conditions.
Likewise, it supports the ratings folks position when the vast privately held assets are being [invested] in foreign markets and their profits increassingly come from foreign markets. It further supports the rating folks when the major global players continue with increase, considering to diversify and divest their support and holdings in the USD. American people have obviously become quite comfortable with supporting foreign consumer goods and services…and energy economies.
The American people are now beginning to reap what they have sown and now desparately playing the game of…. pin the tail on your neighbor! A fickle, dysfuntional nation of peoples and thus, a dysfunctional government.
What are the precise TeaParty-GOP demanded decreased tax rates…or any tax reforms?
What precisely are government regulations the TeaParty-GOP wants to repeal?
Yes “as low as we can get through a vote” has been the goal forever. That isn’t a responsible plan, because:
1) most republicans have signed the “I will never raise taxes” pledge therefore once the tax rate is too low to sustain out way of life, we are simply screwed as a nation. And we already passed that threshold. After all there is more than one kind of tax, the idea that EVERY SINGLE TAX is too high is ludicrous. Having a “never adjust tax rates” pledge is a pledge to not govern.
2)Once as low as will work has been achieved, the goal is still lower lower lower….
Not having a set of fixed, proven tax goals and not having published a set of consequences for reaching each goal means the public has never been given a rational choice of what we want.
3) Our government programs are not arbitrary. The big ones, the ones that take the lion’s share of the money are quite essential and if you poll the public about each of those big programs the majority of people like them and want them left alone.
All the polls that ask people whether they want to cut “entitlements” are misleading. Those polls are deliberately designed to take advantage of the fact that people aren’t experts who know exactly where the mass of our money goes. Policy is made in specifics not in making misinformed decisions about fictional massive wastes of money that turn out to not exist.
The big fight (that the democrats lost) was over the marginal tax rate for wealthy people. It’s now 35%. Under the Regan tax cuts it was 50%.. The average for all the years we’ve had income taxes is %60
If it went up to the almost 40% it was under Clinton, most of our deficit would disappear. No doubt if we had the Reagan tax structure we wouldn’t need cuts.
Good luck! Social and political zealots never have any interest in reality….just their subscribed talking points. Oh, and we musn’t forget the philosophers and….. theorist experts who lead them.
All that private sector trillions folks talk about sitting out on the sidelines…..well its being invested in selected foreign markets. Oh, and that private sector economy conservatives talks about…they incresing move significan portion of operations to selected foreign economies for larger profits. So I hope no to many fall for the ‘investment’ song being sung. The private sector is investing….in foreign economies.
But wait! Not just the big boys of the private sector are investing in foreign economies! America’s consumers are side by side with the big boys investing in foreign economies…BIG time! Heck, lets not forget the folks with personal investments and retirements plans either…as they most likely haven’t a clue they too, are investing in selected foreign economies.
The unsustainable failures of America starts with the people…their greed and corruption; advancing their disease throughout the government via their zillions of special interest lobbyists, that has destroyed the nations private sector economies and the government…..liberals AND ‘conservatives.
Don’t expect to see anybody around the globe investing in widget production if a nations government and their consumers haven’t the money to consume them. Investments for production are adjusted to consumer consumption. Investments in innovation ‘follows’ consumer trends and needs. It’s rare in these these times when somebody invents something so stark and revolutionary as fire or electricity.
The overwheling patent applications for the last many decades has been; in the case of Utility patents…improvement of an existing idea. In the case of Design, it is simply defined….artist/aesthetic and can’t be functional. Plant patents…the least-frequently issued type of patents, does plug along and is most common in agruculture.
China, India, Japan and a few European countries pretty well donminate today, in the other classes of utility patents. That is not to say America does not innovate but it does so with a high ratio of ‘imported foreign’ talent or in global scientific consortiums. We no longer live in the times of Edison’s Wright’s, or Ford folks!
Are you a moron Josh or just a Democrat (same thing really). The GOP want to pay the debt OFF which has SKYROCKETED under Obambi and the REGIME. They also want to stop Obambi and his reckless Regime continuing on his profligate path of overspending and BALANCE the budget not CONTINUE to run the debt UP as he is doing. Something which Obambi and the moonbats seem incapable of understanding far less doing. As Mr McCawber said income $3 expenditure $3.50 result MISERY , income $3 expenditure $2.50 result HAPPINESS. This CANNOT be done with TAXATION so the sooner the left wing moonbats realise that it is their PROFLIGATE SPENDING which is the problem the better.
Open note to Rick Perry–
Much as most of us would like to see you go to Washington, I believe the problems of the US are beyond solving. Oh, you’d try to the very best of your ability, but there is too much rot for anyone to conquer.
Rather, I wish you would stay here in Texas and preside over the last beacon of democracy as America falls apart.
When it happens, and it will, other states and even regions are going to depend on Texas to be the rallying point. I write this as a disillusioned, sad American,a veteran, but I must write it in honesty.
PIBill, I’ve been thinking the same thing BUT,,,,,,,I also agree with thecableguy that probably a large part of why Texas is doing so well is because we haven’t let the Texas government screw it up. Recently, Perry has been a good conservative leader but he has definately had socialist and big government tendancies in the past. Of course, anyone can “see the light”, some call them a flip flopper but I believe that it is possible for someone to learn from theirs and other’s mistakes and decide to take the right path. I now believe that Perry is on the right path, hopefully he feels it in his heart and not just for politics. I also feel that we need him here in Texas, secession may be our only way out someday.
This is what flirting with Socialism gets you: a ruined economy, an entitlement-addicted populace, and the Abyss fast approaching.
We are so boned.
You elect a Community Organizer with zero business experience and you get what you deserve. Thank heaven Oblama didn’t have to call off his 3 birthday parties or Fundraisers that are really important.
Zero ‘business’ experience?
Ha! The dolt didn’t even have any real ‘job’ experience!
OY VEY!
i’ve been wondering how Obama will react to the S&P rating. After all, it ‘says something’ about his economy!
But Obama, who has a pathological need to control, has a habit of ignoring that which he cannot control. Or, what he doesn’t like. Or, what is not behaving properly, i.e., in a subservient manner to him.
He ignored the 2010 election results. He ignores laws he doesn’t like (such as his duty to protect the border). He ignored the fact that Congress had refused to pass cap-and-trade; Obama got his unelected EPA to carry out those policies anyway. And, apart from having his minions blaming the GOP/TP for the rating, I’ll bet that Obama will ignore it.
During the debt crisis – which, again, he could have dealt with a year ago, but which was a blatant attempt of his to destroy the Tea Party – Obama was on the MSM just about every day. Threatening to veto, fear-mongering…and now that he’s got his free-until-after-the-election debt ceiling raise, Obama is back to what he likes best: golf, parties and campaigning before carefully selected adoring audiences.. Oh, and handing out some of that extra trillions to his base, to buy their votes. It’s all about Obama.
The beltway, legacy media is as much to blame for the downgrade as the Congress or President, if not more so. For example, they fiddled over Palin’s Alaska emails while our economy burned. The Tea Party was talking about the Debt Ceiling even more the 2010 election. The elite punditry class waited until the supposed deadline was looming.
The Fourth Branch of government is even more odious than the 1st and 2nd in this matter.
I agree with your concern about the lack of objective journalism of the media and the partisan nature of its focus, but the media doesn’t make legislation. Congress and the Executive makes legislation.
The key problem in the US economy is that it moved into a focus on consumption of wealth rather than the investment of wealth and the production of wealth. That is, a robust economy must ensure that its population keeps enough of their wealth to invest into production. New factories, upgrading equipment, hiring more workers. This first part of the triad of an economy: investment, production, consumption is vital.
Linked to this false focus is the growth of the entitlement programs; they started out as valid safety nets but have transformed into ways-of-life for a vast and growing non-productive class of consumers-only. This population doesn’t produce wealth; it uses the taxpayer money for its consumer needs!
The result these two actions is that wealth-producing section of the economy of the US, its investment section, has been reduced in size. The non-wealth producing sector – who live off the taxpayer money – has increased.
Entitlement reform is a basic necessity to repair the economy. The ratio of people using entitlements must be reduced and they must be restored to functioning only as a safety net not a way of life.
Taxation reform, not increase of taxes, but reform, is also necessary. Around 47% of the US population pay no taxes – and I don’t refer here to the illegal economy – which is another area. I do not advocate raising but instead reducing taxes. The US tax level is among the highest in the industrial world.
Obama and the Democrats, who ignore the basic requirement of an economy, …keeping money in the hands of private businesses so that they can invest – have destroyed the US economy.
His ‘stimulus’ didn’t deal with the investment infrastructure but with the consumer infrastructure – the money went to maintain his unionized buddies – the public service employees.
Obama’s need to control people, by making them dependent on government, and thus reducing their independence as private businesses, means that he expands govt programs. So, employment in the public sector has increased while the private sector has reduced. His health care bill, with its many waivers for his union buddies, means that small businesses won’t hire workers and health costs will increase.
His EPA rules – and Obama overlooks that Congress rejected cap and trade – so EPA carries them out anyway – means that new energy sources in the US are non-existent.
The whole focus of Obama is on Himself and his power. He has no interest in, or even understanding of, the economy. Or America. His disgraceful behavior re the debt ceiling is clear evidence that he is quite ready to throw the US economy under the bus – to achieve his goals. In this case, he wanted the debt ceiling raised until after his re-election, and he wanted money to use to hand out as ‘more entitlements’ to buy the electorate. Watch him…he’s already starting more entitlements and special deals..for votes.
The GOP/TP plan of Cut,Cap and Balance remains an excellent infrastructure for dealing with these three key problems: the need to enable increased investment funding within the private sector, the need for entitlement reform, the need for taxation reform. And..less regulation of business.
Will Obama do this? No; his agenda is to decrease the power of the people, not to increase it.