BREAKING:AP: S&P Downgrades U.S. Debt From AAA part 2

Keep in mind that what you are actually trying to reduce is the rate of growth in debt relative to GDP. Pipedreams of a balanced budget and of actually paying down debt are at least decades away. Slowly bringing the debt back into a more manageable range is all that is called for and all that is going to happen. This will require the same approach as was used the last time deficits were driven off the charts under Bush-41. And those tactics would be measured growth in spending plus substantial increases in revenues. That's what markets and the ratings agencies were looking for, but that isn't what they got.

 

Do you find this sort of reply clever? More clever by far would have been any indication at all that you understood what was said... that you had any actual mastery of the subject matter at all. But we got the opposite...

Driven by speculators looking for the "next thing" after MBS's went south. And of course, the whole thing was all over in a matter of months. Pump prices were down to $1.50 per gallon by December. This was nothing but an irrelevant short-term blip. It played no role at all in bringing about the credit crisis which had already hit the financial sector a year earlier.

LOLOLOLOL!!!!! There was never any law, policy, regulation, or court order that forced banks or anyone else to lend to anyone not qualified consistent with sound business practices. Your knowledge of the pertinent history is obviously very deeply flawed.

The loans that defaulted leading to the credit crisis were typically written between 2002 and 2006 by private mortgage brokers at high-cost/high-profit terms into subprime and other markets for immediate securitization and sale into the secondary markets through the private label shops that had been hastily constructed for that very purpose by a bunch of cowboy capitalists on Wall Street. Bush egged this process on. He repeatedly battered the GSE's so as turn more market share over to Wall Street, He removed the 12-to-1 leverage limit from the Big Five Wall Street investment banks. His intent was to privatize the mortgage financing industry. Look how well that worked out for us.

Actually, the minority loan applicants turned away in the Citibank case that Obama played a minor role in were as well or better qualified than whites who were approved for loans. They simply lived in a different neighborhood. In discovery, plaintiffs' attroneys uncovered hundreds of examples. Faced with such overwhelming evidence against them, Citibank entered into a settlement agreement involving the provison of signficant mionetary and non-monetary awards to plaintiffs and the restructuring of Citibank's loan approval process. Maybe you should have paid more attention. You are otherwise simply making a fool of yourself in the eyes of all those who did.

In other words, you simply don't have the first clue as to any of the actual history of the credit crisis at all. All you've done is wallow in widely refuted right-wing bunk and baloney. That doesn't count for very much, you know.

 

Pure BS

What S&P ACTUALLY said:

 

in an indirect way S & P was saying "GET OUT OF THE DOLLAR AND FAST" LOL although not in so many words as they want to sugar coat it a bit!

 

Know-nothings. Payroll taxes are indeed collected, and the bulk of those collections goes immediately to pay the retirement, survivor, and disability benefits of current SS recipients. The excess, being surplus to program needs for decades, is invested so as to earn a competitive, market-based rate iof return while still respecting conservation of principal as the primary investment objective. The vehicle of choice is US Treasury securities, and the seller of those notes does with the proceeds exactly what every other seller of notes does. What do you think corporations do with the proceeds of corporate bond sales? What do you think school systems do with the proceeds of school bond sales? Do you think they put them in a coffee can and bury them in the back yard?

 

And this happens by law which made the lie from Obama about not being sure the checks would go out so egregious...As of today, we still collect a good 95% of the money needed to pay SS every month...At the absolute least, by law, we must send a check for that amount...unless BoBo redirects the money, illegally.

 

You gotta start sometime. You seem to be under the impression that Barry has some solutions up his sleeve. He does not, unless spending even more with no budget as a solution. There is no growth because their is no economic plan of any kind, and no one from the administration is not putting one forward. Instead of raising taxes, lets create a business friendly environment that will aloow them to begin to spend their cash on investments, hireing people, and then we will have more tax payers and thus more tax money and thus less deby and thus greater prosperity.

 

Language difficulties? Pelley begins by asking specifically whether Obama can guaranty that August 3 Social Security checks will go out, and Obama responds that it isn't a matter of just Social Security checks, but also veterans' checks, disability checks -- some 70 million checks all told. Pelley interupts to ask if Obama can guaranty that those checks will go out. Obama responds that he cannot guaranty that those checks will go out as there may simply not be money in the coffers to do it. Regardless of what you or Pelley might think, it is clear that Obama was referring the entire time to the full range of checks scheduled to go out, and Pelley's interuption serves only to underscore that point.

Just by the way, the OASI trust fund was in surplus through June 30 by just over $99 billion.

 

Read the papers. Obama sent a multi-volume FY2012 budget to Congress back in February. Republicans whined that it didn't do anything about the long-term issues we face. Obama said, fine. Forget the budget for now. Let's do long-term. Let's do big. Let's sit down right now and fix this once and for all. Republicans weren't up to it. Many plans yielding $4 trillion and up in ten-year debt reduction were put on the table even though Obama had to leave his comfort zone to do it. Republicans couldn't handle it. They ended up tossing away about $2 trillion worth of debt reduction just to be able to say that they had warded off any chance of tax increases on the very wealthy. But not a debt downgrade. Losers.

You mean unleash the great engine of American capitalism? Sounds like the 1890's. That was a horrible time for most people. But why would that matter. Republicans don't care if most people have a horrible time.

 

Here's a partial text, really the meat and potatoes, of the S&P statement on the downgrade.

"We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress CONTAINING THE GROWTH IN PUBLIC SPENDING, ESPECIALLY ON ENTITLEMENTS, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade."

Cut, cap and balance made it through the House but was tabled by the Senate. While it was still a possibility, the markets were stable. The tumble began after the final deal was signed, which also led to the S&P downgrade.

I heard Obama 'mention' a grand deal, but never saw details of it. This crisis is CLEARLY a case of overspending. Here's a link that has a graphic that shows Obama's deficits vs Bush. http://washingtonexaminer.com/blogs...9s-failed-stimulus-program-cost-more-iraq-war

I uploaded the chart for easy viewing.

 

Seems that the S&p guys didnt like the fact that republicans cant do math. How can anybody have any confidence in a regime that is willing to gut the economy in order to protect the tax cuts to the megawealthy. Deficit spending to extend temporary tax cuts that failed to do what they were designed to do.. Its just as stupid as the democrats refusing to make changes to SS and medicare..

 

So you don't mind the Bush Tax Cuts expiring for everyone then?

 

The S&P was looking for at least $4 trillion in reduction of spending increase. They got ONE with a promise of another 1.5 to be named later. How forking slow do you want to "recover"?

 

There aren't any Bush tax cuts. Obama bought them when he extended them.

 

My mistake, I thought it was going to happen in late September 2011. However, I gess this is a sign the investment marketeers want the market to adjust so they can buy in and move some money to the healthcare sector.

All they need to do is keep the investor emotion high and tight. Shock and Awe them.

Wait till you see what happens to the bond market later this year or early next year. A lot of investors have no clue on how the bond market works and only invest in it now because they think it's a safe investment. Bad move. The bond market is a higher risk market than the stock market at this time, and the returns are in the negative and the risk is high.

 

The following S&P statement was emphasized by Otter:

"In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability."

There is no question that Medicare is wrought with waste, fraud & abuse. However, apart from the dogma-washed wingnuts, it has already been established that the problem isn't the patient or those who need medical attention. It is the for-profit healthcare industry that has to be overhauled here, not your benefits! Holy $h!+. Otter placed great emphasis on the above quote, when in fact S&P is clearly making reference to Medicare's long-term fiscal sustainability. S&P doesn't say, the social bread-basket is why we're $14 Trillion in debt, see? You can gut the social programs to zero, get rid of public education, end all environmental policy... none of that would change a single thing, debt would continue to accrue!

Too many don't understand the current economic model that's engaged, which is often described as post-Bretton Wood. It is structured on DEBT!!! The premise debated by our corrupt politicians is false!

 

If that's what they were looking for, they should have said so. What they actually said was that they were looking for debt reduction. Debt reduction of course has two potential components -- spending cuts, and the one that causes you to run and hide in the closet, tax increases. S&P was quite pointed in criticizing those who run and hide in the closet over either of those components. In other words, you are part of the problem, not part of the solution.

You will never get any recovery at all from spending cuts. Cuts in consumer and business spending after all are what drove jobs and the GDP down to start out with. If spending cuts did any good, we should be rolling in the clover by now.

 

LOL. Was there any duress involved? You know, like some Republican hostage-taking incident or other?

 

Wow - more pure

So you think the statement by S&P:

"In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability."

Means that

??? Really???? It’s an inescapable conclusion that S&P doesn’t consider ObamaCare an effective reform of the largest of the entitlement crises we face. ObamaCare is an ADDITIONAL entitlement -NOT a containment - to the other entitlements that we cannnot sustain in present form. ObamaCare just magnified the fiscial crisis.

Come on now. Let's talk reality - which is what S&P does. Without entitlement reforms, we are going over the cliff fiscally. The government has promised more then it can deliver. We need to face this truth:

Time to be adults, face the truth, and make the necessary cutbacks to survive as a nation.

 

Well in case you haven't noticed Keynesianism is a non-starter because the world bond market isn't going to allow America to engage in another stimulus without major financial stress and Bernanke is out of options and can't launch QE3 without fear the inflation hawks will strike.

The whole "government must save us" is DEAD. Government is completely gridlocked, broke, and cannot borrow anymore money. There is nothing the government can do to "create or save" jobs. The private sector has decided Americans are too ungrateful of workers to employ because Obama and Democrats have convinced them that America hates business.

What did you seriously think was going to happen after November 2010 the GOP was going to just roll over and let Obama do what he wants? No. We're going ot make him beg, scrap, plead and beggar and humiliate himself for every dollar of funding. Exactly what Congress SHOULD be doing to the President.

 

I heard that interview...the question was about SS, the answer might have been about other checks but BoBo certainly did not do a thing to correct any error in perception on the part of the media, who almost ALL noted the SS check comment.

Scaring granny was the purpose and result.

 

I have to admit I was really surprised by this spin...the attempt to blame the only folk who are demanding fiscal responsibility while exonerating the guilty in the White House and Senate is amazing.

Mein Kampf vol I chapter 10 on the Art of the 'Big Lie'

 

Once again it wasn't the policies of Bush 41 but the efforts of a Democrat Congress.

Read this and become informed instead of a shill and parrot for idiot DNC talking points:

http://www.davemanuel.com/history-of-deficits-and-surpluses-in-the-united-states.php

 

All government can do is get out of the way...