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United States loses its AAA Credit rating from S & P

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Aunt Spiker said:
But - will the government listen?

It doesn't look like it. I see no evidence that we're going to change the direction of things - but a lot of evidence that the direction of thing swill continue full force.
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Then I would say it high time for the American people to tell the government to get their sh!t together instead of looking for some party to blame. Congress won't act in favor of the people until the people stand up and demands to be heard, as one voice.
 
Hopefully this shot across the bow will be enough to snap Republicans out of it. They can't keep treating 2/3 of the components of deficit reduction as sacred cows. They need to accept revenue increases and military cuts along with entitlement cuts. We can't possibly address the deficit if they keep preventing action to fix it like this.
 
Interesting thread.

Too bad so much of it reminds me of a tent revival meeting where a guy in a white suit is expected to come on stage in the middle of a big musical production and make everything okay.

PROTIP; the hero is dead and has been for decades, he was shot in the back by snake oil salesmen. And we bought it.

This problem has been building for decades. It very well may take decades to fix completely. In order to do that however, all players involved are going to have to forget about the R or the D that comes with their title. may I suggest we replace them with an A? For American, a forgotten breed that used to be upstanding, courageous, bold and involved.

There is hard work ahead, work, not political screeching. Real work and tough choices. Personally, I don't see how we can avoid affecting every single American to one degree or another. We have allowed ourselves to end up in a pretty deep ditch with no visible way out, except by working together and cutting a set of steps in the bank.

As a nation we need to curtail the billions or trillions we spend in other countries who decide to do what we want in exchange for our cash. We are out of cash. We need to stop exporting war, yesterday. Things like the Arts, PBS, etc should have to rely on private donations, not the government.

There are hundreds of things that can be done without negatively impacting us here, and those things should be on the table first. Then we move to the second layer, then the third...

Things need to be done in a business like manner, leaving emotions and pet projects outside the room.

Junkets, Air Force 1, private government helicopters, all of these things only help to isolate the decision makers from the reality that those of us trying to get by must face on a daily basis. I want the decision makers to be out here with us, serving instead of ruling. They are not our overlords, they work for us, the American people. As such we are their bosses, not their servants.

Hell, we have a program that is so big that we don't even know how much it costs us, the HLS, the TPA and domestic spying. A hot sharp knife to its scrotum may pay some huge dividends. Why is it a sacred cow?

Point is, there are things that can and should be done first, and they should be done soon, before the end of the year.

American is crumbling folks, and not just our national infrastructure, but perhaps more importantly, our national sense of who we are.
 
from the Prof

grover and his toadies---LOL!
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I am glad it made you smile instead of taking personal offense despite your obvious sympathies and sharing of he Grover Norquist ersatz ideology. That is a healthy sign.
 
zip98053 said:
Ah, more quality input from apdst. No matter how degenerate the discussion is, you seem to be able to make it even worse.

So, where are the "smart" folks from the Republican side? What great leadership have they shown? They seem willing to let the economy go in the toilet with no facts to indicate that what they want will do anything positive. People who think that there is no difference between believing and knowing are really dangerous. And these Tea Baggers are the worst. Their behavior is irrational and destructive.
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The smart folks on the GOP side are the ones that realize that the government isn't going to fix the economy. The same folks that understand that massive government spending didn't work for Roosevelt and it's not going to work now. They're also the same folks that know that you can't kill jobs, bust your ass to raise taxes, then expect that scenario to lead us out of the depression.
 
apdst said:
The smart folks on the GOP side are the ones that realize that the government isn't going to fix the economy. The same folks that understand that massive government spending didn't work for Roosevelt and it's not going to work now. They're also the same folks that know that you can't kill jobs, bust your ass to raise taxes, then expect that scenario to lead us out of the depression.
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Well what do you think brought us out of the Great Depression?
 
teamosil said:
Hopefully this shot across the bow will be enough to snap Republicans out of it. They can't keep treating 2/3 of the components of deficit reduction as sacred cows. They need to accept revenue increases and military cuts along with entitlement cuts. We can't possibly address the deficit if they keep preventing action to fix it like this.
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Since 1978 when I started paying attention to who runs this country, either the left or right it is of my opinion (actually fact) that both parties have a serious spending problem. Now if we continue to blame one side opposed to another we will get no where except more in debt. That said, since 1978 the blame game has not resolved a single issue, what it has done is divided us so those who cheer lead us on will remain in power at our expense and now at the expense of our country as one credit rating. Don't be fooled by our politicians, the blame game has a positive effect on their careers just look at the freshman fiances opposed to the senior when exiting congress.
 
winston53660 said:
Well what do you think brought us out of the Great Depression?
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A belief in the country. We did not emerge because of the spending. That's a fallacy. We were still struggling like today until WWII. We won WWII and everyone had a great belief in America.

What brought us out of our malaise wasn't spending but a belief in the country. It's the same thing Reagan did. It's the exact opposite of "default, default, default" (which both parties did) when they knew there wasn't going to be a default.
 
1Perry said:
A belief in the country. We did not emerge because of the spending. That's a fallacy. We were still struggling like today until WWII. We won WWII and everyone had a great belief in America.

What brought us out of our malaise wasn't spending but a belief in the country. It's the same thing Reagan did. It's the exact opposite of "default, default, default" (which both parties did) when they knew there wasn't going to be a default.
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I'm sorry you can not take belief to the bank.
 
There are several astonishing things about this downgrade.

First, maybe it's been mentioned somewhere in this thread, but S&P made a $2 TRILLION math error in their calculations. The WH pointed this out to them but they elected to go ahead with the downgrade anyway! This from one of the principle firms that, by repeatedly assigning AAA ratings to near worthless MBAs, contributed as much as anyone to the financial meltdown. Why anyone would take them seriously is beyond me.

This would be like your auto insurance agent running a red light and T-boning your car, and then raising your rates because you got in an accident.

Second, this was clearly as much, if not more, about our political dysfunction than it was about our debt situation:

"The firm's conclusion 'was pretty much motivated by all of the debate about the raising of the debt ceiling,' John Chambers, chairman of S&P's sovereign ratings committee, said in an interview. 'It involved a level of brinksmanship greater than what we had expected earlier in the year.'"

In other words, the main factor in the downgrade was the Republican's hostage-taking tactic, coupled with their refusal to negotiate over revenues. This was an own-goal ... an entirely self-inflicted wound.
 
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1Perry said:
A belief in the country. We did not emerge because of the spending. That's a fallacy. We were still struggling like today until WWII. We won WWII and everyone had a great belief in America.

What brought us out of our malaise wasn't spending but a belief in the country. It's the same thing Reagan did. It's the exact opposite of "default, default, default" (which both parties did) when they knew there wasn't going to be a default.
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I think more people are coming to understand what you mention above often called behavioral economics. There is a lot to be said about the way people feel about the economy.

However there is a price being paid for the culling out of the manufacturing sector in the U.S. People had to replace jobs that were relatively high paying with low paying service sector jobs. America paid the price for expanding the middle class for many millions in Asia. Where is the growth in the US. Service sector and health care.

It would have been great if Obama had elected to spend the first two years of his Presidency on long term economic issues like free trade versus fair trade like he talked about during his campaign. Maybe he can begin to address the long term economic needs of the country. He can afford to. he will have $1 billion in campaign funds and a weak opponent. Plus the country is looking for real solutions to a very difficult set of problems. maybe this is too optimistic but there is a possibility.
 
Sheik Yerbuti said:
WW2 = massive government spending + massive government jobs
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Actually, it was the tax cuts after WW2 that did it.

If it were true that the war ended the depression, then why are we pulling out of Iraq and Afghanistan? Why do Libbos support massive defense cuts? Why are we in a depression, now? Where does the money come from for all that spending?
 
AdamT said:
There are several astonishing things about this downgrade.

First, maybe it's been mentioned somewhere in this thread, but S&P made a $2 TRILLION math error in their calculations. The WH pointed this out to them but they elected to go ahead with the downgrade anyway! This from one of the principle firms that, by repeatedly assigning AAA ratings to near worthless MBAs, contributed as much as anyone to the financial meltdown. Why anyone would take them seriously is beyond me.

This would be like your auto insurance agent running a red light and T-boning your car, and then raising your rates because you got in an accident.

Second, this was clearly as much, if not more, about our political dysfunction than it was about our debt situation:

"The firm's conclusion 'was pretty much motivated by all of the debate about the raising of the debt ceiling,' John Chambers, chairman of S&P's sovereign ratings committee, said in an interview. 'It involved a level of brinksmanship greater than what we had expected earlier in the year.'"

In other words, the main factor in the downgrade was the Republican's hostage-taking tactic, coupled with their refusal to negotiate over revenues. This was an own-goal ... an entirely self-inflicted wound.
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Does anyone really know what our debt number will be 10 years from now? Can anyone predict what our GDP will be for the Q3 of this year.

Not that this will stop the blame game. Can't wait until tomorrow so you can have another 3 hours worth of talking points from Geithner.
 
AdamT said:
There are several astonishing things about this downgrade.

First, maybe it's been mentioned somewhere in this thread, but S&P made a $2 TRILLION math error in their calculations. The WH pointed this out to them but they elected to go ahead with the downgrade anyway! This from one of the principle firms that, by repeatedly assigning AAA ratings to near worthless MBAs, contributed as much as anyone to the financial meltdown. Why anyone would take them seriously is beyond me.

This would be like your auto insurance agent running a red light and T-boning your car, and then raising your rates because you got in an accident.

Second, this was clearly as much, if not more, about our political dysfunction than it was about our debt situation:

"The firm's conclusion 'was pretty much motivated by all of the debate about the raising of the debt ceiling,' John Chambers, chairman of S&P's sovereign ratings committee, said in an interview. 'It involved a level of brinksmanship greater than what we had expected earlier in the year.'"

In other words, the main factor in the downgrade was the Republican's hostage-taking tactic, coupled with their refusal to negotiate over revenues. This was an own-goal ... an entirely self-inflicted wound.
Click to expand...

So you believe we should be governed according to what bankers want? Why?

We did nothing to deal with our long term problems and our representatives showed that they lacked the will to deal with those problems. Sure, one way to address it would be to raise taxes to crushing levels. The bankers don't care if we are all enslaved for their benefit and apparently neither does much of the left. But, the bankers now see that there is deep opposition to that course but not enough to make the changes necessary. The American people are still living in a fantasy land where you can have low taxes and huge entitlements. When they wake up they will find themselves in a nightmare.
 
AdamT said:
There are several astonishing things about this downgrade.

First, maybe it's been mentioned somewhere in this thread, but S&P made a $2 TRILLION math error in their calculations. The WH pointed this out to them but they elected to go ahead with the downgrade anyway! This from one of the principle firms that, by repeatedly assigning AAA ratings to near worthless MBAs, contributed as much as anyone to the financial meltdown. Why anyone would take them seriously is beyond me.

This would be like your auto insurance agent running a red light and T-boning your car, and then raising your rates because you got in an accident.

Second, this was clearly as much, if not more, about our political dysfunction than it was about our debt situation:

"The firm's conclusion 'was pretty much motivated by all of the debate about the raising of the debt ceiling,' John Chambers, chairman of S&P's sovereign ratings committee, said in an interview. 'It involved a level of brinksmanship greater than what we had expected earlier in the year.'"

In other words, the main factor in the downgrade was the Republican's hostage-taking tactic, coupled with their refusal to negotiate over revenues. This was an own-goal ... an entirely self-inflicted wound.
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The likelihood of this was predicted weeks ago ...
Majority Of Economists Say U.S. Credit Rating Will Be Downgraded

The United States will lose its top-notch AAA credit rating from at least one major rating agency, according to a Reuters poll that also found wrangling over the debt ceiling has already damaged the economy.

A small majority of economists -- 30 out of 53 -- surveyed over the past two days said the United States will lose its AAA credit rating from one of the three big ratings agencies -- Standard & Poor's, Moody's or Fitch.

Respondents saw a 20 percent chance of a new recession over the next year, a prospect that some economists say has been compounded by the acrimonious political fight over what is normally a procedural legislative vote on the debt.

Lawmakers have one week left to hash out a deficit-cutting plan without which Republicans in Congress have said they will not raise the legal $14.3 trillion debt limit, risking a potentially devastating government debt default in August.

"We believe that Congress will act with an 11th hour deal to raise the debt ceiling. However, the risk of that deal failing increases with each passing day," said Guy LeBas, director at Janney Capital Markets.

"I would say that the chance of a U.S. ratings downgrade is now more likely than not."

July 26, 2011
​
 
This is good news. Hopefully, it'll hurt Obama, and convince foreign countries to STOP loaning the U.S. money. This is why I wanted the U.S. Government to default.
 
apdst said:
Actually, it was the tax cuts after WW2 that did it.

If it were true that the war ended the depression, then why are we pulling out of Iraq and Afghanistan? Why do Libbos support massive defense cuts? Why are we in a depression, now? Where does the money come from for all that spending?
Click to expand...

The truth is that it was a combination of factors:

* massive government spending which drastically reduced the unemployment rate;
* the GI bill, which provided a more educated work force; and
* we were the only major economy in the world that didn't have its factories and infrastructure bombed out.
 
ElCid said:
This is good news. Hopefully, it'll hurt Obama, and convince foreign countries to STOP loaning the U.S. money. This is why I wanted the U.S. Government to default.
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It's going to hurd republicans more than Obama. Americans may be slow on the uptake, but they aren't stupid.
 
1Perry said:
A belief in the country. We did not emerge because of the spending. That's a fallacy. We were still struggling like today until WWII. We won WWII and everyone had a great belief in America.

What brought us out of our malaise wasn't spending but a belief in the country. It's the same thing Reagan did. It's the exact opposite of "default, default, default" (which both parties did) when they knew there wasn't going to be a default.
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Look at the dates....
 
AdamT said:
The truth is that it was a combination of factors:

* massive government spending which drastically reduced the unemployment rate;
* the GI bill, which provided a more educated work force; and
* we were the only major economy in the world that didn't have its factories and infrastructure bombed out.
Click to expand...

Along with more stability in the private sector, which encourged people to get out and invest money and grow businesses.

WW2, independently, didn't have jack to do with it.
 
1Perry said:
A belief in the country. We did not emerge because of the spending. That's a fallacy. We were still struggling like today until WWII. We won WWII and everyone had a great belief in America.

What brought us out of our malaise wasn't spending but a belief in the country. It's the same thing Reagan did. It's the exact opposite of "default, default, default" (which both parties did) when they knew there wasn't going to be a default.
Click to expand...

What brought our economy out of the recession wasn't that we "won" World War II, it was that we fought it, and the demand for war materiel mobilized the country's economic production...

Of course winning the war and not being occupied helps.
 
RStringfield said:
So you believe we should be governed according to what bankers want? Why?

We did nothing to deal with our long term problems and our representatives showed that they lacked the will to deal with those problems. Sure, one way to address it would be to raise taxes to crushing levels. The bankers don't care if we are all enslaved for their benefit and apparently neither does much of the left. But, the bankers now see that there is deep opposition to that course but not enough to make the changes necessary. The American people are still living in a fantasy land where you can have low taxes and huge entitlements. When they wake up they will find themselves in a nightmare.
Click to expand...

The bankers just pointed out what we knew already: one of our political parties -- the one that starts with an R -- is completely fixated on thumbing its nose at the President and could not care less if it harms the country in the process.

No one is suggesting that we raise taxes to "crushing levels". That is a straw man argument. The blindingly obvious solution to our problem is to add short-term stimulus and do significant cutting and modest tax increases in the mid/long term. Eliminating the Bush tax cuts, i.e., going back the Clinton rates that allowed the economy to flourish, would stop the growth of the debt in and of itself.
 
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