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United States loses its AAA Credit rating from S & P

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Red Crow said:
Obama hurt himself because of his policies and his spending.
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The downgrade came as a result of uncertainty that would could successfully attack our debt problem because the Democrats and Republicans can't work together on the issue. That was the goal of Republican party of "no." They brought the government to a complete standstill with their "my way or the highway" approach. The president, being the leader of the nation, gets the blame. They got what they wanted.
 
Goldenboy219 said:
I like what you had to say; could you elaborate on this point a bit more?
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Obama has been the only person who offered serious cuts to mandatory spending. He has, as evidence of this debt deal, offered massive cuts to defense and medicaid. This is why his approval rating has dropped; loss of his bases support. He has a balanced approach, unfortunately he may have waited to long, its hard to say if a balanced approach would have based through the pre 2010 congress and it definitely want pass now.

The debt deal we have now wont cut enough even in the committee, as they will come to a deal to avoid cuts in defense and medicare.
 
apdst said:
Glad you agree. How does it feel to be as knowledgeable as me?
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Let me remind you what you said since you already seem to have forgotten ...

"Actually, it was the tax cuts after WW2 that did it." ~ apdst
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I don't agree with that at all.
 
RStringfield said:
It's not a strawman because I did not attribute the argument to you or anyone (at least not currently, it would be the argument in the long term from the left as they would refuse to admit failure when Clinton era levels proved to not be enough).

Clinton era rates on the "rich" are not going to be able to finance the looming deficits in SS and Medicare. You are delusional, uninformed or lying if you suggest it will.
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Your argument is itself a strawman. Here is an article from 1999.

Had Clinton-esque management of the federal budget been maintained throughout the last decade, the national debt would be far less of a concern.
 
Eighty Deuce said:
That is incorrect. Grossly so. Repeal of all the Bush Tax Cuts, if they did not change spending behavior one iota, would yield about $340 billion per year. Well less than 3% of current GDP. Our current Federal Spending is projected at about 25.5% of GDP, and climbing. Historic Federal spending is closer to 19-20% of GDP. Full implementation of Clinton taxes, which were on the boom-time dot-com bubble, would not close half the gap as compared to historic averages. Not to mention that such implementation would drive down GDP, and revenue, and possibly produce no net increase at all in revenue.

We have a spending problem.
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Eliminating the Bush tax cuts would raise an additional $4 trillion over the next decade, which was the targeted amount of overall deficit reduction in the debt ceiling "negotiations."

But you are right -- I was mistaken; eliminating the cuts now would not buy itself flatten the debt curve. I was thinking of a study that analyzed the situation under the assumption that the tax cuts had never been implemented. In that scenario -- even with the wars and the financial meltdown -- the debt would still be quite manageable.
 
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Eighty Deuce said:
Which is true. It did not end until the war ended.
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Here ya go ... here's a link to contact the Encyclopædia Britannica ...

Encyclopdia Britannica, Inc. Corporate Site

... contact them and tell them they're wrong. :roll:

Great Depression

Great Depression, worldwide economic downturn that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world, sparking fundamental changes in economic institutions, macroeconomic policy, and economic theory. Although it originated in the United States, the Great Depression caused drastic declines in output, severe unemployment, and acute deflation in almost every country of the world. Its social and cultural effects were no less staggering, especially in the United States, where the Great Depression represented the harshest adversity faced by Americans since the Civil War.


Eighty Deuce said:
Now, can you add anything to the thread, or are you just a snipe ?
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Correcting idiocy is sniping? I'm not sniping ... I'm educating. :2wave:
 
Sheik Yerbuti said:
Let me remind you what you said since you already seem to have forgotten ...

"Actually, it was the tax cuts after WW2 that did it." ~ apdst
​
I don't agree with that at all.
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And, you would be wrong. The United States was staring bankruptcy in the face, until after 1945. There's no way the depression was over, with bankruptcy right around the corner.
 
Unemployment leveled off before America entered the war. The government was paying contractors price plus profit which helped hiring and productivity. These are facts. This doesn't mean the New Deal was the greatest thing since sliced bread. It created some more problems, namely worker riots. However Keynesian economics did work. Government spent money on factories and contractors and they hired people and increased American productivity.
 
Flyersfan314 said:
Unemployment leveled off before America entered the war. The government was paying contractors price plus profit which helped hiring and productivity. These are facts. This doesn't mean the New Deal was the greatest thing since sliced bread. It created some more problems, namely worker riots. However Keynesian economics did work. Government spent money on factories and contractors and they hired people and increased American productivity.
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If Keynesian economics had worked, the depression wouldn't have lasted as long as it did.
 
apdst said:
Everybody was in the army, or working in a defense factory. Doesn't mean that the depression was over, since the private sector hadn't recovered.
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The recession ended when the economy started expanding in 1939. It's not debatable.
 
apdst said:
Everybody was in the army, or working in a defense factory. Doesn't mean that the depression was over, since the private sector hadn't recovered.
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Just exactly how are you going to define a depression?
 
apdst said:
Everybody was in the army, or working in a defense factory. Doesn't mean that the depression was over, since the private sector hadn't recovered.
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When unemployment falls to those levels.... the depression was over. According to the National Bureau of Economic Analysis, the actual recession was over as of June 1938. Hopefully this is not too complicated.
 
The Giant Noodle said:
They lowered it because congress didnt go far enough to shore up its finances. This is 100% on the fault of the Tea Party and Republicans. They needed to raise taxes on the wealthy and didnt. Now we have this!!!!!!!!!!! :soap
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Bipartisan nonsense has no place in a serious discussion.

donsutherland1 said:
The political dysfunctionality that was displayed in abundance ahead of the debt ceiling agreement played a role in the downgrade. In part, S&P declared:

...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.

Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.

Standard & Poor's Downgrades US Credit Rating From AAA to AA+ - ABC News

Aside from political dysfunctionality, the long-term sustainable growth rate is probably lower than the 3% figure that has been cited widely on account of a variety of structural issues. If, in fact, that is the case, then tax revenues will grow more slowly than anticipated over the medium-term and beyond, making it even more difficult for the nation to address its long-term imbalances.

Finally, IMO, the U.S. would do well to conclude a credible fiscal consolidation agreement over the next year, preferably prior to the election. If that doesn't happen, S&P will likely carry through with another downgrade. Once downgrades begin to occur, the pace of such downgrades can accelerate if meaningful progress toward addressing fiscal imbalances isn't demonstrated. Ratings downgrades can increase interest rates, making the fiscal challenges even greater. Hence, a vicious self-reinforcing cycle can take hold.
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As I've already said in another thread, any meaningful fiscal policy is unlikely, and even if it did occur by some fluke, the odds are, it would be reversed in the next election.

SheWolf said:
So they basically gave our government too much credit, and thought they were capable of solving the debt ceiling crisis in a timely, professional manner. This is embarrassing. I hope the government gets their act together as a result of this.



Nothing says our government is broken like this...

I don't even know what to say... :(

It's just going to be an interesting Monday to see the pundits try to spin it, and they probably will try.
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And they will. Guaranteed. Americans have been lied to for so long, people rarely even know the difference.

Please, America-turn off your TVs! It's distraction.

Sheik Yerbuti said:
The downgrade came as a result of uncertainty that would could successfully attack our debt problem because the Democrats and Republicans can't work together on the issue. That was the goal of Republican party of "no." They brought the government to a complete standstill with their "my way or the highway" approach. The president, being the leader of the nation, gets the blame. They got what they wanted.
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This is the result of our failed two party system. When will people acknowledge the root of our problems?
 
AdamT said:
Eliminating the Bush tax cuts would raise an additional $4 trillion over the next decase, which was the targeted amount of overall deficit reduction targeted in the debt ceiling "negotiations."

But you are right -- I was mistaken; eliminating the cuts now would not buy itself flatten the debt curve. I was thinking of a study that analyzed the situation under the assumption that the tax cuts had never been implemented. In that scenario -- even with the wars and the financial meltdown -- the debt would still be quite manageable.
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Again, you are having to make some broad assumptions as to what the tax increases would do. If you look just at the percentage of increase in tax rates, and then slice that out of likely GDP, then you do get $4T. However, tax increases do not exist in a fishbowl. They will stimy GDP, so the pie will not be as large as projected. Tax rates change behavior.

With regard to "what-if's", in hindsight one can look at the cost of the Wars (about $1.5 T so far) and the tax cuts (about $3 T), and then make assumptions that our $14.5 T debt would only be $10.0 T right now. Possibly. But like so many things, we do not know what else would have gone differently. Had Al Qeada been able to better sustain itself in the last decade, we do not know if that would have yielded another major attack or two here, or in Europe. If and when we get the news bulletin that a major city has suffered a terrorist nuke, it will rock GDP by trillions.

If Medicare had been set up as a balanced program, what then ? As a percent of budget, entitlements are more than twice what they were 40 years ago, from something like 30% to 66%.
 
Goldenboy219 said:
When unemployment falls to those levels.... the depression was over. According to the National Bureau of Economic Analysis, the actual recession was over as of June 1938. Hopefully this is not too complicated.
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It was a fake decline. The government can't fix the economy. It didn't happen during the great depression and it's not going to work, now.
 
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