And how exactly do we “get our shit together?” By embracing the Tea Party austerity agenda?
This rating has nothing to do with the short-term financial strength of the US and everything to do with politics. S&P is a corrupt company that should have received the corporate death penalty a long time ago, and I find it offensive that they’re making judgments and unduly influencing the political debate with a budget analysis largely pulled out of their asses.
I don’t see how they are trying to unduly influence the political debate. If you read the full text of their statement they take pains to state that they are intentionally agnostic as to what particular mixture of spending cuts and revenue increases we use to move toward balancing the budget. They also do not lay any blame on one particular party for the brinksmanship that almost caused us to default. They simply use the medium-term budget problems and brinksmanship as reasons for their downgrade. If they wanted to blame one party, they would have blamed one party.
That said, I don’t put much stock in ratings agencies since several years before the housing crash. It was pretty obvious that they’ve been pulling ratings out of their ass for almost a decade, so there’s no reason to trust what they say now.
The fact that they’re doing it at all, based on a completely dubious analysis, unduly influences the debate. Witness all the people freaking out about it. Do they know that S&P made a $2 trillion mistake?
The actual level of US debt isn’t terribly troubling. That’s why a $2T error doesn’t matter. Yeah, the debt’s high, and getting higher, and frankly getting into dangerous territory, but it’s not critical yet and won’t be unless nothing is done about it for a fair long while.
However, the US Congress has just told the world that there is a non-zero chance that the US might default on its debt.
Think about that for a minute.
There’s no real question that the US is wealthy enough to make good on its debt. There is now a real question about whether it might be politically willing to make good on its debt. I have to agree with S&P that if I’m looking for the absolute safest place to put my money, that place is no longer T-bills. I would think the sovereign debt of several other countries is safer, given that they have similarly high levels of wealth and responsible, adult governance as well.
Here’s what S&P said:
In other words, we’re not attacking the deficit enough to S&P’s liking. They are telling people that the debt is a problem NOW NOW NOW, and has to be dealt with if the US wants to be rated AAA.
Medium term = NOW NOW NOW?
I imagine by some combination of reducing spending and increasing taxes.
They want it dealt with now. That’s why they referred to the recent deal. It didn’t attack the deficit enough, hence the downgrade.
You do whatever is necessary to avoid default, and the perception that you might default. This would probably mean moving as far from the Tea Party as possible.
The level of debt is an issue, but not a major one. The issue is whether the US can and will continue to service that debt. For the first time in history, there is some doubt about this.
Look, a default would destroy the American economy, and severely damage the world economy. It seems to me that bitching about being called on it is the least productive response. (The last sentence is a general statement, not directed at any particular poster).
Do you think they would have downgraded if a clean debt ceiling bill with no conditions had been passed?
No.
The spending cut provisions are only relevant to the extent that they’re indicative of what Congress is going to be able to agree to come budget time, which is to say, Congress is going to be deadlocked and incapable of agreeing to a budget, and the tough decisions that need to be made (either to raise taxes or to seriously cut defense and social security/medicare) aren’t going to be made.
Yep, in this case the Republicans are like the people you see on “Hoarders.” They let their houses go to shit, and then when somebody comes in to try to help them clean up the place, they spend the whole time bitching and moaning and getting in their way.
Can you give 3 specific examples of things the Republicans did which are analogous to the activities of these hoarders?
Can you link to a newspaper article which gives the particulars of this “bitching”? i.e. something that quotes the Republicans in question and provides the relevant dates, times, and places?
Same thing for “moaning” and “getting in the way.”
I just posted this in the other S&P thread in GD, but I thought here would be a good place too.
[
](http://www.ft.com/intl/cms/af2c4fac-bfc2-11e0-90d5-00144feabdc0.pdf)Emphasis mine.
Question for those who believe the rating makes sense, given the current circumstances…France is currently rated AAA, yet they do not control their own currency, have a much more generous welfare state, and are experiencing the same kind of banking issues the US has experienced. So what exactly merits France’s higher rating?
Your boss should probably fire you for incompetence and not paying attention.
The country was in prime position to start to get its financial house in order when Bush took over with a Republican Senate, House and the Supreme Court. So what did he do? Cut taxes for the wealthy, ran up huge deficits, started an unprovoked foreign war, then signed a Medicare drug bill that was unfunded. If the Republicans were who they claim to be they would have jumped on the opportunity they had and would have made it work. But they are not who they claim to be, they are total hypocrites.
Meanwhile lack of regulation and lack of enforcement of regulations allowed a huge financial crisis to build. After screwing it all up they leave it to the next guy and second guess why he can turn a battleship around in a canal. Talk about crybabies. They take no responsibility while blaming everything on others. The whole House agenda isn’t to get anything done or solve any problems, it’s to obstruct the President.
brazil84 apparently doesn’t read the news.
LOL. Ratings agencies: the new Al-Qaeda
In case people haven’t got it yet; the markets are telling the USA its the system of Gov - while unique and entertaining - is not worth a wank in the financial world if it can’t deliver certainly and clarity in timely fashion.
You might want to check this detail: the United States isn’t a monarchy or a fascist state. Just because one side has the majority doesn’t give them the right to “rule”.