No…for the fourth time. IF revenues exceeded outlays (on and off budget), THEN the national debt would not have increased. The money borrowed from the trust funds was spent…not saved. A portion was used to pay down public debt but the intragovernmental debt and the national debt both increased more than the public debt decreased. Hence, more was spent than was received. Or, if you prefer, outlays exceeded revenues.
Rebuilding the infrastructure is not intended as a waste of money. It is honest work that needs to be done. One "expert’ on TV today, said putting a bridge rebuilding off for 2 years results in 5 times the cost.
Putting people back to work will not be all deficits. The workers pay taxes. They increase demand . The salvation of the economy is to get people back to work one way or the other. If we just continue to cut, there is no rebound mechanism. it is like giving up and saying we can do nothing. Cutting results in needs for more cuts. What kind of America do we visualize . A small. weak one with low taxes and no programs for anybody who isn’t rich. Or do we face up to the problems and level the p-laying field so all people get benefit ?
it does explain why the white house was calling for, asking people to call congress for a balanced plan, with revenue and cuts. going for the “big” deal.
boehner walked away. they went with the cuts only plan.
the only way the white house could have been any more obvious is if they said flat out: “s&p will downgrade us if you don’t sign on to this.”
i’ll also bet that it was said behind the closed doors. perhaps not in the exact words above, however, something close to it.
I think combining all government revenues and expenditures is what leads to false conclusions. For example, if a corporation owns a chain of restaurants which loses $2 million a year and a chain of supermarkets that makes $5 million a year, and you ask how the restaurant chain is doing, it doesn’t help to say that the corporation made $3 million. You need to look at the figures for the restaurants alone.
Likewise, when you add in SS’s $200 billion surplus to the federal deficit, you’re not really seeing how well the US is doing at balancing the budget. You need to look at the figures for the general fund alone.
S&P says there is a one in 3 chance that they will downgrade it further. Now lets get the rating agency leaders in jail for their part in the mortgage theft. They feel pretty confident that they can shake up the world markets .
Yeah, the U.S. finding manufactured reasons to jail executives from S&P in response to this would inspire confidence in the U.S. in the market.
Confidence that we were turning into Russia, anyway…
There are 3 ratings agencies. Only s&P has downgraded the US. They have threatened to do it again. Yet what about the others? If we are so bad, why don’t they do it too?
Something is not quite right.
Agreed, but you don’t know whether S&P is too low or the others are too high. (Or all three are too high, which seems unlikely.) Perhaps Moody’s & Fitch have a vested interest in the status quo? Perhaps companies whose calculations rely on having the USA be the gold standard (so to speak) are reluctant to look to closely lest they have to re-calculate every single rating from scratch?
I have a slight suspicion that downgrading the US credit was a tactic for S & P. If the government had intended to go after them for their terrible behavior in the mortgage fiasco, they can not now. It would look like retribution for the downgrade instead of doing justice.
They AAA rated subprime mortgages for years. Those are definitely wrong. Now they are suddenly gifted with high ethical standards. They hid them well the last couple decades.
Looks like the reaction of the markets to the S&P’s downgrade is to…treat U.S. treasury bonds as even more desirable than ever!
As I write this, the yield on 10-year Treasuries is down to an astonishingly low 2.37%. And the U.S. can borrow money for 5 years at less than the inflation rate - inflation-indexed 5-year Treasuries have a current yield of -0.75%.
The U.S. government can borrow money for cheaper than free!!
If the bozos that run our government (and I’m looking at the GOP; most Dems would go along with this in a heartbeat) had a clue, they’d be borrowing as much money as we could use to sink into infrastructure projects NOW, while both capital and labor are as cheap and freely available as they are likely to ever be - unless the economy gets even worse, of course.
Because, you know, if someone paid you to borrow money, rather than the other way around, you’d borrow if you could make intelligent use of the money. Hell, you’d probably borrow just to invest in the stock market.
The DOW is down 340 right now. The stockmarket no longer is a reflection of the economy. It is a gambling casino with the movers being high speed computers that buy and sell millions of shares in fractions of a second. They also buy and sell across the globe hunting for the smallest bit of info that results in huge trades.
Since Obama came in ,the market doubled. In the past we would think that portended a good financial future. Not any more.
I don’t parse that quote the way you did, not by a long shot. To me it says, the budget cuts/taxes aren’t enough to ensure a logical fiscal recovery.
This is the laughable part of this whole deal (well almost as laughable as the fact that the SS Trust Fund debate somehow showed up in this thread too…). S&P was shockingly late in dropping the ratings on Ireland, Spain, and Iceland. Now, when they are proactive about the ratings for the US, the markets don’t give two shits. S&P’s ratings are pretty much worthless. I might go so far as to say that debt ratings for sovereign governments in general are worthless.
US Bonds are still the safest investment in the world, just like they were last week. Risk is relative - compare UK bond prices (AAA according to S&P) with US ones…
I don’t even thing the equity market movements have as much to do with the S&P downgrade as they do with the European debt issues, and the general economic outlook (sluggish GDP growth and recession fears in particular).
From the S&P 8 page report
Compared with previous projections, our revised base scenario, now assumes the tax cuts of 2001 and 2003 ,due to expire in 2012 , will remain in place. We have changed our assumptions on this because the majority of republicans continue to resist any measure that would raise taxes.
Perhaps our conservatives can figure it out. but i doubt it.