# Standard & Poor downgrades US credit: now AA+ not AAA **URL:** \ **Category:** Great Debates\ **Created:** [August 6, 2011, 1:46am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676 "2011-08-06T01:46:32Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [August 6, 2011, 4:19am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/21 "2011-08-06T04:19:53Z")
> [@LonesomePolecat](#): > > But mainly I’d like to ask the lefties on this board: Do you believe that America can take on unlimited debt? > .. > So, how much debt is too much debt? And, other than tax increases, how do lefties propose to deal with the problem of massive public debt? Is there no point at which the financial cost of some program that you advocate outweighs whatever benefits it may provide, assuming there are actually any benefits whatsoever? Or do you believe that our debt is somehow not a real problem? Personally I have been concerned about the national debt for a while. I do not think that blaming it all on the Republicans is the correct response. For at least as long as I’ve been alive (I’m currently 28), both parties have generally been in favor of big spending and offered little in the way of revenue increases to offset that. What I think is that we should cut federal spending. The federal spending that I want to cut is that which is either neutral or harmful towards human well-being. That would include things such as: [ul] [li]The military[/li][li]Farm subsidies[/li][li]Medicare part D, which is really a handout to pharmaceutical companies[/li][li]Subsidies to the oil and energy industry[/li][li]Various other corporate handouts disguised as good things, such as money for ‘employee training’ that never actually occurs.[/li][/ul] However, when I look at the Republican budget plan I don’t see cuts to these programs, or at least not big ones. Even as they complain non-stop about spending and the debt, the Republicans appear bound and determined to protect the military-industrial complex, the agriculture-industrial complex, the energy complex, and every other complex that involves massive corporations. The Republicans only want to cut programs that benefit ordinary people. Let them offer cuts to corporate handouts and they’ll have me on board. ---
**Author:** ![Omg\_a\_Black\_Conservative](https://avatars.discourse-cdn.com/v4/letter/o/7ba0ec/32.png) [@Omg\_a\_Black\_Conservative](https://boards.straightdope.com/u/Omg_a_Black_Conservative)\ **Post date:** [August 6, 2011, 4:49am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/22 "2011-08-06T04:49:59Z")
> [@CaptMurdock](#): > > Really?? Do you really think everybody who styles himself as Left Of Center think that the national debt is paid with Monopoly money? Do you think The Left ™ has absolutely no understanding whatsoever of economics? That they’re a bunch of overage, tied-dyed, granola-eating hippies living in communes and listening to the Grateful Dead? :smack: I do. > [@](#): > > Nobody I know of, styling himself a liberal or even a moderate, has, to my knowledge, said that the federal government should not cut any spending at all. The debate centers around as much a) where to cut as b) how much to cut. Cut the things which contribute the most to the Federal debt. Seems like a no brainer to me. Unfortunately, Democrats/liberals tend to want to mess with those things which would have minimal effect on the Federal debt while refusing mess with those things which constitute the bulk of the Federal debt. It’s seriously like turning a blind eye to the guy who steals 10M from a bank to catch to the guy who stole a .50 candy bar from the store. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [August 6, 2011, 4:52am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/23 "2011-08-06T04:52:56Z")
> [@coremelt](#): > > The idea that anyone could NOT see that it’s the republicans fault is laughable. Clinton gave you your first surplus in decades, the debt was going DOWN. Shrub (Bush Junior) blew it all in the first year of office and started you down this current path, and then his tax cuts finished the job. What surplus? The debt never went down…it continued to grow under Clinton. [http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt\_histo4.htm](http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm) ---
**Author:** ![Shagunathor](https://avatars.discourse-cdn.com/v4/letter/s/e47c2d/32.png) [@Shagunathor](https://boards.straightdope.com/u/Shagunathor)\ **Post date:** [August 6, 2011, 5:08am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/24 "2011-08-06T05:08:56Z")
> [@yorick73](#): > > What surplus? The debt never went down…it continued to grow under Clinton. > > [http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt\_histo4.htm](http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm) Those numbers don’t seem to match the CBO’s, which does show a surplus under Clinton. I wonder what the difference in accounting between the two is. [http://www.cbo.gov/ftpdocs/108xx/doc10871/HistoricalTables.pdf](http://www.cbo.gov/ftpdocs/108xx/doc10871/HistoricalTables.pdf) ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [August 6, 2011, 5:13am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/25 "2011-08-06T05:13:20Z")
> [@Shagunathor](#): > > Those numbers don’t seem to match the CBO’s, which does show a surplus under Clinton. I wonder what the difference in accounting between the two is. > > [http://www.cbo.gov/ftpdocs/108xx/doc10871/HistoricalTables.pdf](http://www.cbo.gov/ftpdocs/108xx/doc10871/HistoricalTables.pdf) The first link counts intergovermental debt (basically the SS and Medicare Trust fund), the CBO just counts debt owed to the public. In anycase, during the last years of the Clinton Administration, the gov’t took in more money then it spent, which I think most people would count as a “surplus”. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [August 6, 2011, 5:14am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/26 "2011-08-06T05:14:21Z")
> [@yorick73](#): > > What surplus? The debt never went down…it continued to grow under Clinton. > > [http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt\_histo4.htm](http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm) The total outstanding debt would include the increasing balances held in the Social Security Trust Fund. In contrast, the debt held by the public would exclude the trust fund. Clinton was, indeed, paying down the debt to the public. ---
**Author:** ![BigT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bigt/32/12044_2.png) [@BigT](https://boards.straightdope.com/u/BigT)\ **Post date:** [August 6, 2011, 5:26am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/27 "2011-08-06T05:26:29Z")
> [@Omg\_a\_Black\_Conservative](#): > > I do. Which means you are speaking out of prejudice and not actual facts, which means you have no knowledge of the situation and that everything you say on it can be safely ignored. I’ve never seen anyone walk so easily into an obvious trap. Hint: the correct answer to “are you prejudiced” is supposed to be “no.” ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [August 6, 2011, 5:30am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/28 "2011-08-06T05:30:05Z")
> [@Simplicio](#): > > The first link counts intergovermental debt (basically the SS and Medicare Trust fund), the CBO just counts debt owed to the public. In anycase, during the last years of the Clinton Administration, the gov’t took in more money then it spent, which I think most people would count as a “surplus”. If the government took in more money than it spent then the national debt would have gone down instead of up. ---
**Author:** ![Finagle](https://avatars.discourse-cdn.com/v4/letter/f/b19c9b/32.png) [@Finagle](https://boards.straightdope.com/u/Finagle)\ **Post date:** [August 6, 2011, 5:30am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/29 "2011-08-06T05:30:08Z")
> [@yorick73](#): > > What surplus? The debt never went down…it continued to grow under Clinton. > > [http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt\_histo4.htm](http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm) That chart only goes through 1999. If you look at the historical data for 2000, it looks like the debt had indeed shrunk by a tiny bit. In 1999, the remaining balance on the debt limit was 263 billion while at the end of 2000 it was 369 billion. (for the same total debt limit of 5.5 trillion). There might be some kinds of accounting magic going on there, and certainly it wasn’t a dramatic reverse, but at various points at the end of Clinton’s term, the debt did seem to be heading down. ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [August 6, 2011, 5:33am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/30 "2011-08-06T05:33:38Z")
> [@yorick73](#): > > If the government took in more money than it spent then the national debt would have gone down instead of up. It did. Hence the CBO numbers. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [August 6, 2011, 5:33am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/31 "2011-08-06T05:33:48Z")
> [@Ravenman](#): > > The total outstanding debt would include the increasing balances held in the Social Security Trust Fund. In contrast, the debt held by the public would exclude the trust fund. Clinton was, indeed, paying down the debt to the public. The balances held in the SS trust fund are intragovernmental debt. Spending the money in the SS trust fund to pay down public debt is nothing more than a shell game. Total debt increased. ---
**Author:** ![Omg\_a\_Black\_Conservative](https://avatars.discourse-cdn.com/v4/letter/o/7ba0ec/32.png) [@Omg\_a\_Black\_Conservative](https://boards.straightdope.com/u/Omg_a_Black_Conservative)\ **Post date:** [August 6, 2011, 5:33am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/32 "2011-08-06T05:33:57Z")
> [@BigT](#): > > Which means you are speaking out of prejudice and not actual facts, which means you have no knowledge of the situation and that everything you say on it can be safely ignored. Well, since Democrats/liberals tend to believe that the government should spend _more_ money, and that there are enough rich people to fund those government expenditures, I’d think it safe to say if anyone should be ignored, it should be them, on account of living in a fantasy world. > [@](#): > > I’ve never seen anyone walk so easily into an obvious trap. Hint: the correct answer to “are you prejudiced” is supposed to be “no.” Why’s that the correct answer? ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [August 6, 2011, 5:39am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/33 "2011-08-06T05:39:50Z")
> [@yorick73](#): > > The balances held in the SS trust fund are intragovernmental debt. Spending the money in the SS trust fund to pay down public debt is nothing more than a shell game. Total debt increased. If you think the SS fund is a shell game, then the conclusion is that debt went down. After all, if the SS fund “doesn’t count”, then we don’t owe it money and its silly to count it as debt. Again, revenues were larger the expenditures in 1999, which is a surplus by pretty much any sensible definition. If you count the debt owed to the SS fund, then your counting spending on SS in future decades as part of the 1999 budget, which makes little sense. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [August 6, 2011, 5:42am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/34 "2011-08-06T05:42:12Z")
> [@Simplicio](#): > > It did. Hence the CBO numbers. The CBO numbers simply are not telling the whole story. It only lists public debt. Pull out your calculator and see for yourself that their numbers don’t add up. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [August 6, 2011, 5:47am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/35 "2011-08-06T05:47:33Z")
> [@Simplicio](#): > > If you think the SS fund is a shell game, then the conclusion is that debt went down. After all, if the SS fund “doesn’t count”, then we don’t owe it money and its silly to count it as debt. > > Again, revenues were larger the expenditures in 1999, which is a surplus by pretty much any sensible definition. If you count the debt owed to the SS fund, then your counting spending on SS in future decades as part of the 1999 budget, which makes little sense. You are missing my point. The money in the SS fund was spent. The public debt was paid down by borrowing more money from the SS fund in the form of intragovernmental debt. Public debt went down and intragovernmental debt went up. This is the equivalent of taking money out of your left pocket, putting in in your right pocket, and claiming that you now have more money than you started with. ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [August 6, 2011, 5:53am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/36 "2011-08-06T05:53:54Z")
> [@yorick73](#): > > You are missing my point. The money in the SS fund was spent. No it wasn’t. The fund grew in 1999. Its projected to be spent in the future, but it wasn’t spent in 1999. The fund continued to grow for the next decade. > [@](#): > > The public debt was paid down by borrowing more money from the SS fund in the form of intragovernmental debt. Public debt went down and intragovernmental debt went up. This is the equivalent of taking money out of your left pocket, putting in in your right pocket, and claiming that you now have more money than you started with. But again, when you add everything up, the government made more in tax revenues then it spent in expenditures. If you ignore all the passing from pocket to pocket, the gov’t ended up in the black. ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [August 6, 2011, 5:59am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/37 "2011-08-06T05:59:35Z")
> [@Omg\_a\_Black\_Conservative](#): > > Cut the things which contribute the most to the Federal debt. Seems like a no brainer to me. Hey, this is good news. A liberal like me and a conservative like you both agree that we should cut defense spending. That’s [the biggest chunk of federal expenditures](http://www.usgovernmentspending.com/), after all. Now that we’re in agreement about what we want to cut, the rest is just details. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [August 6, 2011, 6:06am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/38 "2011-08-06T06:06:12Z")
> [@Simplicio](#): > > No it wasn’t. The fund grew in 1999. Its projected to be spent in the future, but it wasn’t spent in 1999. The fund continued to grow for the next decade. Of course it was. Any surplus in a government trust fund is used to buy government bonds. In effect the trust funds are lending this money to the government. This money is then spent by the government for everyday operations. > [@Simplicio](#): > > But again, when you add everything up, the government made more in tax revenues then it spent in expenditures. If you ignore all the passing from pocket to pocket, the gov’t ended up in the black. You cannot ignore the passing from pocket to pocket. That is what the CBO did and that is the problem. How can you claim there was a surplus yet we borrowed $133 billion in Clinton’s last budget, $18 billion the year before, and $130 billion the year before that. If there was a surplus you would expect either the national debt would decrease or, if the entire surplus were spent, the debt would stay the same. National debt increased every year. ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [August 6, 2011, 6:06am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/39 "2011-08-06T06:06:46Z")
> [@Simplicio](#): > > But again, when you add everything up, the government made more in tax revenues then it spent in expenditures. If you ignore all the passing from pocket to pocket, the gov’t ended up in the black. To expand on this with made up numbers, the gov’t made 50 dollars from income tax and 50 dollars from SS payroll taxes, and then the general fund spent 55 dollars while SS spent 40. The General fund borrows five from the SS fund to cover its expenses, and so intragovermental debt is increased by 5. But thats just passing money from one pocket to another, at the end of the day, the gov’t still made five dollars more then it spent. Parts of it owe other parts money, but its still running a total surplus. ETA: > [@](#): > > You cannot ignore the passing from pocket to pocket. That is what the CBO did and that is the problem. How can you claim there was a surplus yet we borrowed $133 billion in Clinton’s last budget, $18 billion the year before, and $130 billion the year before that. See above. We borrowed it from ourselves. The total financial situation of the gov’t improved, and we ran surpluses by any reasonable definition. ---
**Author:** ![Omg\_a\_Black\_Conservative](https://avatars.discourse-cdn.com/v4/letter/o/7ba0ec/32.png) [@Omg\_a\_Black\_Conservative](https://boards.straightdope.com/u/Omg_a_Black_Conservative)\ **Post date:** [August 6, 2011, 6:08am UTC](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676/40 "2011-08-06T06:08:32Z")
> [@ITR\_champion](#): > > Hey, this is good news. A liberal like me and a conservative like you both agree that we should cut defense spending. That’s [the biggest chunk of federal expenditures](http://www.usgovernmentspending.com/), after all. Now that we’re in agreement about what we want to cut, the rest is just details. You could cut defense spending to 0% and it still wouldn’t solve our debt. I’m okay with cutting defense, SS and Medicare spending by 50%. Are you? Oh, and as per your link, the biggest contributor to federal expenditure is healthcare (18%) with pensions and defense spending being tied for second (16%). So if you want to cut the ‘biggest’ expenditure in its entirety, then that’d be health care spending and the rest would be just details. (Though I’m sure you wouldn’t go for that.) [Previous page](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676.md?page=1) [Next page](https://boards.straightdope.com/t/standard-poor-downgrades-us-credit-now-aa-not-aaa/591676.md?page=3)