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Moody's Warns It May Downgrade US Credit Rating

donsutherland1

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From CNBC:

The United States may lose its top-notch credit rating in the next few weeks if lawmakers fail to increase the country's debt ceiling, forcing the government to miss debt payments, Moody's Investors Service warned Wednesday.

Moody's is the first of the big-three rating agencies to place the United States' Aaa rating on review for a possible downgrade, which means it is close to cutting its rating.

News Headlines

IMO, this move is wholly justified. The U.S.--intense finger-pointing and attempts at blame-shifting by all parties notwithstanding--is acting in a fashion that suggests that it is not a AAA state. Outcomes, not excuses, matter. As such, the U.S. bears, and ought to bear, the burden of proving that it deserves to maintain its AAA rating. To do so, I believe the debt ceiling needs to be raised with a modest fiscal consolidation package.

Afterward, over the next 6-12 months it has to adopt a credible fiscal consolidation strategy and it must put in place mechanism to address its present political dysfunctionality. The former would show that it is addressing is credit-related issues. The latter would provide a degree of confidence that the U.S. would have a reasonable prospect of implementing and sustaining a credible fiscal consolidation program. Failure to raise the debt ceiling in a timely fashion and then failure to demonstrate significant progress on the other two elements 6-12 months afterward should lead to a credit downgrade to a level that better reflects its actual risk.
 
They've been threatening to do it for months.

Where have you been?
 
I think Obama should just tell them they can't. :mrgreen:
 
Raise the limit or not there is absolutely zero reasons why we should miss a debt payment. Paying Pakistan and bombing Libya is not a debt we owe.
 
Im not going to pretend I understand all the inner workings, but as I understand it not only is there no risk of us not paying our debt, but (again, as I understand it) by law we MUST pay our debt first and there is plenty of money to pay the interest on the debt, medical costs, social security, etc. However there is a ton of other programs we are in danger of not paying that is what is at risk. Fed employees...foreign assistance, highway funds, etc. All extending ourt debt ceiling will do is enable us to go deeper in debt and that WILL put us at risk of eventually not being able to pay.

Look...we are incurring a trillion plus in new debt every YEAR. THAT is what is not sustainable. I believe they have their priority right (spending cuts FIRST) but in addition to MASSIVE cuts there is simply going to HAVE to be some form of increased taxation. Demonstrating fiscal responsibility with regard to spending will secure our credit rating. Until that happens...be honest...would YOU loan this government money???
 
Im not going to pretend I understand all the inner workings, but as I understand it not only is there no risk of us not paying our debt, but (again, as I understand it) by law we MUST pay our debt first and there is plenty of money to pay the interest on the debt, medical costs, social security, etc. However there is a ton of other programs we are in danger of not paying that is what is at risk. Fed employees...foreign assistance, highway funds, etc. All extending ourt debt ceiling will do is enable us to go deeper in debt and that WILL put us at risk of eventually not being able to pay.

I think you're correct. All I'll add here is that even if we do hit the debt limit and don't default, interest rates on the Treasury bonds will still be driven up, compounding the problem. The government is basically going to face a whole host of choices, all of them extremely unpleasant.

Look...we are incurring a trillion plus in new debt every YEAR. THAT is what is not sustainable. I believe they have their priority right (spending cuts FIRST) but in addition to MASSIVE cuts there is simply going to HAVE to be some form of increased taxation. Demonstrating fiscal responsibility with regard to spending will secure our credit rating. Until that happens...be honest...would YOU loan this government money???

Agreed. The biggest obstacle to getting new revenue, however, is the weak state of the economy. (of course, different sides have radically different proposals about how to fix it).
 
Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in Debt

Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in Debt Talks

Leading credit rating agency Moody's said Wednesday that the U.S. government's impeccable credit rating was under review for a potential downgrade as tensions boil over in Washington with time running out to raise the nation's borrowing limit.

President Obama walked out of high-level negotiations Wednesday, saying according to a Republican aide, "I've reached my limit. This may bring my presidency down, but I won't yield on this."

I think it is time everyone accepts the fact that the person driving every political strategy for the Democrats right now is none other than the POTUS. This is where all responsibility lies and, as he so eloquently put it, “the buck stops here”. This is truer today than it has ever been.

If Obama doesn’t get his tax hikes and spending increases, he will do what?
 
Re: Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in D

Healthcare spending is ‘off the table’, tax cuts are ‘off the table’, refusal to spend more on stimulus is ‘off the table’, social security is ‘off the table’, Medicare is ‘off the table’, Libya is ‘off the table’, EPA Cap and Trade enforcement is ‘off the table’, and the list goes on and on.

If the President really thinks it is better to refuse to pay social security recipients or our military personnel than it is to accept spending cuts as a condition for raising the debt ceiling, maybe he was lying about his vote against raising the debt ceiling as a US Senator.
 
Re: Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in D

Obama "stormed out of the room" but promised to resume talks Thursday, the GOP aide said.
"We are very far apart right now," House Majority Leader Eric Cantor said, calling Obama's exit from the talks Wednesday "abrupt."
"He became very agitated, said 'Ronald Reagan wouldn't sit here. You either have to compromise on the dollar figure or the grand bargain,'" Cantor said. "He said, 'Don't call my bluff. I'm going to the American people on this.'"


Read more: Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in Debt Talks - FoxNews.com

The only thing "on the table" seems to be "Raise Taxes, spend more" and he's very upset the GOP won't do his bidding.
 
Re: Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in D

The only thing "on the table" seems to be "Raise Taxes, spend more" and he's very upset the GOP won't do his bidding.

Once again you should read the source you quote past the first couple paragraphs:

Democrats have insisted on raising new revenues in any deal that would include deep spending cuts. But Republicans are adamantly opposed to any tax increases, even if it is limited to closing tax loopholes for the wealthiest Americans.

Oh wait, so spending cuts are on the table, not spending increases. So dishonest and overblown rhetoric, all in one post. Well done!
 
Re: Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in D

Once again you should read the source you quote past the first couple paragraphs:



Oh wait, so spending cuts are on the table, not spending increases. So dishonest and overblown rhetoric, all in one post. Well done!

History Redress, we've heard these promises before. Reafan signed on to a Dem deal for 3-1 Cuts/Taxes. He got the opposite.

Pray Tell, aside the military, where are these "cuts" the Dem's are promising hmm?
 
Re: Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in D

History Redress, we've heard these promises before. Reafan signed on to a Dem deal for 3-1 Cuts/Taxes. He got the opposite.

Pray Tell, aside the military, where are these "cuts" the Dem's are promising hmm?

So basically anything a Democrat says to you is a lie even when it directly contridicts what you said they said. Even when your own article contridicts your statement after you imply your statement is based on the article.

Why do you bother posting articles when 1) they refute you, 2) you pretend what they said isn't true?
 
Re: Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in D

So basically anything a Democrat says to you is a lie even when it directly contridicts what you said they said. Even when your own article contridicts your statement after you imply your statement is based on the article.

Why do you bother posting articles when 1) they refute you, 2) you pretend what they said isn't true?
Stawman much?
 
Re: Moody's Weighs Downgrading U.S. Credit Rating as Obama Says He 'Won't Yield' in D

History Redress, we've heard these promises before. Reafan signed on to a Dem deal for 3-1 Cuts/Taxes. He got the opposite.

Pray Tell, aside the military, where are these "cuts" the Dem's are promising hmm?

Wait, what does Reafan have to do with this? How many people who were in congress then are still in congress? If every one is lying, how can we trust you? Or republicans? Or newspaper sources?
 
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