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This crisis has been brewing long before the advent of the TEA Party.
It was Obama and the Democrats blowing through $3 TRILLION in National Debt the first two years that created the Tea Party in the first place.
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Originally Posted by Winter_Sucks
The tea party didn't cause the problem, but they blocked the solution and that led to our downgrade.
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Originally Posted by HappyTexan
S&P said cut $4 trillion and they refused to do it.
Obama's offer was $4 TRILLION over 10 years starting in 2013. When you add in Obamacare, declining revenues, Social Security default and all the other spending in the pipe-line heading everyone's way, and the low growth forecasts and high unemployment, plus the deficits from 2011 and 2012, it ended up being less than $2 TRILLION.
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Originally Posted by monkeywrenching
the strange thing I find, is that even I as a normal american can look at the budget and cut 3.2 trillion out of the budget, I dont see how the politicians cant do it.
I know they are looking out for favors, lining their own pockets and the like. but if I can do it, then why dont they?
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Lobbyists swarm supercommittee
In just six weeks, nearly 200 companies and special interests have reported that they’re lobbying the 12-member supercommittee.
You can cut the "right" $1.5 TRILLION and not affect economy, or you can cut the "wrong" $1.5 TRILLION and throw the country into a depression. You can also do a half-fast job and cause a lasting recession.
Government just cannot admit when it's wrong, and it would rather die than down-size itself. "Shrinking government" is an oxymoron to them.
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Originally Posted by fibonacci
Yet countries like France maintain AAA ratings with even worse debt than us?
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The French government has raised its public debt forecasts from this year until the end of 2014, a new report by the budget ministry showed on Tuesday.
The report puts public debt at 85.4 percent of gross domestic product at the end of 2011, 86.9 percent of GDP at end-2012, 86.4 percent at end-2013 and 84.8 percent at end-2014.
The previous forecasts were, respectively, 84.6 percent, 86.0 percent, 85.6 percent and 84.1 percent.
France's debt does NOT exceed its GDP, which is why France's debt is not being down-graded. If and when France's debt exceeds its GDP, then it's credit rating will be down-graded.
US debt will exceed its GDP and continue to grow way ahead of GDP.
Japan's debt can exceed its GDP, because the Japanese people have an extraordinarily high savings rate, while Americans not only save nothing, they spend every penny they have and go deeper into debt.
As an investor, my question is if there are problems, can Japan raise taxes to cover its debt, and the answer is clearly yes, but for the US, the answer is clearly no, because raising taxes reduces disposable income and results in a worsened economy.
Oh ... but you are so wrong. Pulling out of Iraq and Afghanistan coupled with the regime changes to radical Muslim groups in Libya, Egypt and several other countries ... will lead to World War III. The next shoe to drop is Israel being attacked from all sides.
Then let Israel defend itself.
What's so wrong with letting the Israelis deal with the consequences of their own religious fanaticism?
You don't have much of a future and you can't keep spending $1.5 TRILLION that you don't have every year. As soon as you realize there's no such thing as OPM (Other People's Money) you'll be a lot better off.
What exactly are you referring to? The U.S. has a $14 trillion dollar economy last time I checked. It has trillions in revenue. The devil is in the details. I don't know what you're talking about when you say "$1.5 trillion that (we) don't have." We *do* have that kind of money....it's just that we don't have that kind of money to spend irresponsibly.
What have we done since the last downgrade to better ourselves ?
We are on our THIRD deficit committee and each and every time all the suggested cuts coming from them get shot down.
We have done nothing but talk about spending since we raised the debt ceiling and got downgraded.
Do any of you think we don't deserve this ?
Looks like the ratings agencies are continuing to strong arm the government regulators from looking into their books related to the AAA ratings these agencies gave to knowingly toxic CDO derivatives that led to the economic disaster in 2008. It's BLACKMAIL, it's as simple as that. The first US downgrade had little to do with our debt to GDP ratio and political atmosphere. There's always been politics in Washington, but all of the sudden S and P downgrades the US economy right before the government starts gearing up for an investigation into ratings agencies roles in the 2008 mortgage derivatives crisis? Yet countries like France maintain AAA ratings with even worse debt than us? It's absolutely unbelievable what Wall St. is trying to pull. These financial institutions are now more powerful than our so called 'elected government'.
I believe this. Look folks, the rating agencies had no qualms with subprimes, now they have issues with the wealthiest nation on earth? I smell a rat.
If the Tea Party had never existed, we STILL would have been downgraded. Standard and Poors clearly stated that $4 trillion need to be cut in order to indicate fiscal responsibility and avoid a credit downgrade, and our brilliant leaders could come up with less than half that. In effect, our leaders PROVED that they could not be fiscally responsible, no matter what the consequences.
Here's the question that econo-tards like the one who started this thread need to ask: What effect does this 'downgrade' have? What effect did the last downgrade have? The U.S. is still paying its creditors. As long as the U.S. is paying creditors, then silly little pet tricks like this are going to do more damage to the credibility of the ratings agencies like S&P than to the faith that people have in the U.S. government's ability to pay its bills.
So go ahead, downgrade U.S. credit for no reason while the U.S. keeps paying its bills. Keep it up and the credit ratings will have....zero credit. Zing!
I believe this. Look folks, the rating agencies had no qualms with subprimes, now they have issues with the wealthiest nation on earth? I smell a rat.
Precisely.
That's why I have absolutely no faith in these credit downgrades. They're essentially worthless; it's just that people who follow finance have yet to catch on.
It's really no different than the stock market itself these days. There's been no real investing going on for at least a good four years. It's mainly a game in which people try to do the equivalent of financial surfing, hoping to hang twenty while catching the next big but short-lived speculative investment wave.
What have we done since the last downgrade to better ourselves ?
We are on our THIRD deficit committee and each and every time all the suggested cuts coming from them get shot down.
We have done nothing but talk about spending since we raised the debt ceiling and got downgraded.
Do any of you think we don't deserve this ?
Because the radical conservatives on the committee are proposing cuts that are neither helpful nor necessary. They're blinded by ideology and they're placed in the political straight jacket that is their campaign pledge never to vote for a tax increase.
It is probably necessary to make trillions in spending cuts -- over time. It is not necessary, nor is it helpful, to make trillions of dollars in cuts all within a year or two. That would just ensure that a lot of people would be unemployed.
A part of me is fearful that people would be dumb enough to support this kind of crap without knowing the consequences, because there's a good chance that they could go through with this. Another part of me, however, thinks it might actually do us some good. A part of me thinks, okay, let's cut it all and see what happens. If we're lucky, then the republitards get to tell us that it wasn't such a problem and we all end up having a laugh over it. But if we're not, well, I guess we'll see the impact. Hopefully then, this generation of Americans will see why Republicans didn't get control of both houses of congress for 40-50 years.
yes indeed. the spending has not stopped. no austerity measures, so you adjust the credit rating.
standard banking procedure.
strange thinking. banks make loans, our government demands they loan to bad risks. the government accuses them of discriminating against poor people. the banks comply. the banks fail. the government becomes poor, the banks label them a bad risk. the government feels the banks are discriminating against it. .
Last edited by Huckleberry3911948; 10-24-2011 at 06:08 PM..
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