US Downgraded
- Thread starter Canceled2
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Bfgrn
New member
The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really? During the housing boom hundreds of billions of dollars of assets later shown to be worthless received high ratings. A Congressional panel called them “essential cogs in the wheel of financial destruction” after their wildly optimistic models led them to give top-flight reviews to complex mortgage securities that later collapsed.
cancel2 2022
Canceled
The trouble with rating agencies is that they have immense power and very little responsibility.
W
WinterBorn
Guest
Damo's America
Its interesting that you think spending more than we take in is acceptable. Isn't that what got us in this mess to begin with?
Bfgrn
New member
NO. It is NOT what got us into this mess. The 'mess' we're in is a deep recession that could turn into a depression. The Mellon/Hoover model FAILS.
Let's LOOK at the results. Austerity or GROWTH. What makes you believe that PUNISHMENT will solve our problems? Is it the right wing ignorance that has ZERO human capital in ANY of their ideology?
“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” That was the advice Hoover received from Andrew Mellon, the Treasury secretary, as America plunged into depression.
W
WinterBorn
Guest
Your sensationalism notwithstanding, the BBA does not mean gutting social programs. It only means the gov't must not spend more than it takes in. There are allowances for emergencies that arise.
This "they want to kill the poor and old people" nonsense is completely without merit. What must be done is to control rampant gov't overspending.
But please feel free to show us all where Damo has proposed anything that would result in the picture you posted??
Bfgrn
New member
There is no sensationalism WB. Reality only...
Boehner's BBA
House Speaker John Boehner’s new budget proposal would essentially require, as the price of raising the debt ceiling again early next year, a choice between deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees, repeal of health reform’s coverage expansions, or wholesale evisceration of basic assistance programs for vulnerable Americans.
The plan is, thus, tantamount to a form of “class warfare.” If enacted, it could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.
Damo's AND WB's America...
W
WinterBorn
Guest
It is absolutely sensationalistic and has no basis in fact.
The BBA does not say a single word about WHERE the spending cuts have to be made. Nor does it say a single word about whether taxes are increased, decreased or if we soak the rich for every nickel they have.
It simply says the gov't must live within its revenues.
Now, if you want to fight against that, you have lost your mind. Regardless of the dancing you do, the S&P lowered our rating because of our debt. Increasing the debt is not the answer. Increasing spending when the revenues aren't there is not the answer.
One day it would be interesting to see you debate without all this "Damo & WB want children to starve!!!" bullshit. But I seriously doubt that will happen. You are clueless as to what anyone else believes.
charver
You lookin' at my pint?
Very much this.
Leaving aside the finger pointing as to who is more at fault for the actual downgrading, why the fuck is anyone taking credit rating agencies seriously? Surely there is something very wrong with a system which allows a small group of unaccountable chaps licence to destroy economies at the stroke of a key.
Despite the fact these people completely missed the last economic crash, only downgrading everybody and everything after the event, the 'markets' take their word as gospel. Although as 'the markets' seem more emotional than a 13 year old girl on her period this is hardly surprising.
I fear the future is guaranteed to be a bedroom painted black to a Leonard Cohen soundtrack.
This is charver...for the Economist...Wall Street.
I was thinking about this. Quite literally a group of people who are literally doing what they tried to blame the TEA Party for... Either do it our way, or we'll "downgrade" you, and there is nothing you can do about that but eat it!
Bfgrn
New member
You are clueless PERIOD.
DRASTIC spending cuts would HAVE TO be made to Social Security and Medicare if a BBA was passed. Children and elderly WILL starve if you right wing scum get your way. The problem is you are TOO fucking stupid to grasp the consequences of your right wing answer for everything...PUNISHMENT.
You continue to dismiss FACTS and replace them with your regressive PUNISHMENT. You are a bunch of medieval doctors who believe blood letting will save lives.
The New Deal SPENDING and progressive programs saved America and saved capitalism, as the rest of the world turned to fascism and communism. WHY do you ignore FACTS?
FDR and the New Deal created the LARGEST increase in GDP in American history.
Gross Domestic Product (GDP)
Percent change from preceding period
GDP percent change based on current dollars
1930 -12.0
1931 -16.1
1932 -23.2
1933 -3.9
1934 17.0 <-----FDR's FIRST budget year.
1935 11.1
1936 14.3
1937 9.7
1938 -6.3
1939 7.0
1940 10.0
1941 25.0
1942 27.7
1943 22.7
1944 10.7
1945 1.5 <-----FDR dies.
http://www.bea.gov/national/index.htm#gdb
FDR had his own right wing regressives to contend with, HERE is where that led.
The Recession of 1937–1938 was a temporary reversal of the pre-war 1933 to 1941 economic recovery from the Great Depression in the United States. Economists disagree about the causes of this downturn, but agree that government austerity reversed the recovery. wiki
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FDR and the New Deal created the LARGEST increase in GDP in American history.
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Need more modern FACTS? The CBO ran two charts on debt.
CBO’s Analysis
The Extended-Baseline Scenario. Under this scenario, the expiration of the tax cuts enacted since 2001 and most recently extended in 2010, the growing reach of the alternative minimum tax, the tax provisions of the recent health care legislation, and the way in which the tax system interacts with economic growth would result in steadily higher revenues relative to GDP.
The Alternative Fiscal Scenario. The budget outlook is much bleaker under the alternative fiscal scenario, which incorporates very different assumptions about revenues: that the tax cuts enacted since 2001 and extended most recently in 2010 will be extended; that the reach of the alternative minimum tax will be restrained to stay close to its historical extent; and that over the longer run, tax law will evolve further so that revenues remain near their historical average of 18 percent of GDP.
This scenario also reflects the assumptions that Medicare’s payment rates for physicians will remain at current levels (rather than declining by about a third, as under current law) and that some policies enacted in the March 2010 health care legislation to restrain growth in federal health care spending will not continue after 2021. In addition, the alternative scenario includes an assumption that spending on activities other than the major mandatory health care programs, Social Security, and interest on the debt will not fall quite as low as under the extended-baseline scenario.
With significantly lower revenues and higher outlays, debt held by the public would grow much more rapidly than under the extended-baseline scenario, reaching levels far above any ever experienced in U.S. history.
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Mere parsimony (frugality, stinginess) is not economy. Expense, and great expense, may be an essential part in true economy.
Edmund Burke
300 Economists Warn Congress: Don't Kill Growth And Jobs In The Name Of Deficit Reduction
A small army of economists warned Congress on Thursday not to focus on deficit reduction instead of job creation or else risk a 1937-style double-dip recession.
"History suggests that a tenuous recovery is no time to practice austerity," says a statement signed by more than 300 economists and policy experts. "In the Great Depression, Franklin Roosevelt's New Deal generated growth and reduced the unemployment rate from 25 percent in 1932 to less than 10 percent in 1937. However, the deficit hawks of that era persuaded President Roosevelt to reverse course prematurely and move toward budget balance. The result was a severe recession that caused the economy to contract sharply and sent the unemployment rate soaring."
Democrats in Congress have had 1937 in mind since March 2009. "We're not going to let it happen again," vowed House Speaker Nancy Pelosi (D-Calif.) at the time.
Nevertheless, deficit hawks dominated the debate in Congress this summer as Democratic leaders struggled to reauthorize a series of programs created by the 2009 stimulus bill. Pelosi and her counterparts in the Senate have had seemingly little choice other than to sacrifice things like COBRA health insurance subsidies and enhanced unemployment benefits to win the support of deficit-hawkish Democrats and moderate Republicans.
"This is about a high road to recovery versus a low road to fiscal balance," said Bob Kuttner of the American Prospect and co-author of the statement, along with the Center for Economic and Policy Research's Dean Baker and the Robert Borosage and Roger Hickey from the Institute for America's Future. "The proper sequencing is: You get the recovery first, that requires increased public investment. And then the road to fiscal balance is much less arduous because people are working, businesses are investing, and tax revenues go up because you're back in recovery.
"There is also a low road to fiscal balance, where you have austerity and you get the budget balanced at the cost of whacking the real economy."
Click HERE to download a PDF of the report.
W
WinterBorn
Guest
Hey numbnuts, it is YOU who are ignoring the facts. Have you not seen me posting that the DoD budget should be cut by at least 1/3, if not more? That alone would save us more than cutting every social program out there.
If you ever decide to discuss things in a civil manner, let me know. I get tired of this name calling and assumptions about what I want. The only times you have actually participated , you quickly found out you were wrong about what you THOUGHT I wanted, and left the thread. YOu never thought to apologize for calling me all sorts of vile names, despite the fact that you even admittedthey were untrue.
Jeezs I am tired of half-wit, uneducated fools trying to tell me what I do or do not believe. Does that sentence look like debate?
Bfgrn
New member
I don't give a flying fuck what you SAY you believe. You are too fucking stupid to comprehend the consequences of what you SUPPORT.
You can SAY you don't want people to drown, but policies that throw them in the river WILL make them drown.
signalmankenneth
Verified User
S&P did the right thing!
S&P did the right thing in downgrading the US AAA rating to AA+, because there were not revenue enhancements in the Debt Deal or the foreseeable future. You can not balance the budget or reduce the debt on cuts alone?!!
S&P did the right thing in downgrading the US AAA rating to AA+, because there were not revenue enhancements in the Debt Deal or the foreseeable future. You can not balance the budget or reduce the debt on cuts alone?!!
apple0154
MEOW
Bfgrn
New member
Excerpts of what S&P said to explain the downgrade:
Some excerpts from the release:
[...]The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.
[...]It appears that for now, new revenues have dropped down on the menu of policy options.
[...]The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.
[...]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.
Standard & Poors indicates that they could improve their rating for the U.S. if “the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating.”ref
Some excerpts from the release:
[...]The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.
[...]It appears that for now, new revenues have dropped down on the menu of policy options.
[...]The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.
[...]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.
Standard & Poors indicates that they could improve their rating for the U.S. if “the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating.”ref
They should have closed the loopholes, though. I'll never understand the TEA insistence on seeing that as a "tax increase."
How do you think job creation is going to be affected by our being downgraded? What will interest rates be like for small businesses?
It would have been easier to close some loopholes & show a good faith effort to increase revenue.