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I just saw this thread so I don't know what has been said so far, but I wanted to post that Cavuto just interviewed the managing director of the committee that downgraded us at S&P and the reasons cited were that we're not on a good fiscal path and that the issues in Washington don't lead them to believe we will solve the problem sufficiently. The outlook is negative over the next 6-24 months.
He also said we have a 1 in 3 chance of being downgraded again, and that only 5 countries have regained AAA rating and it took between 9 and 18 years to do so. WE ARE SO SCREWED.
Lastly, he verified that the $4T in cuts was what they were looking for and cited the Obama proposal from April and the Ryan plan as being examples of plans that would have been okay.
I'm going off memory here and that interview was over an hour ago, so please correct me if I am wrong here.
Reposting this for those who haven't seen it yet. This from the S&P report:
Quote:
– More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
– Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.
– The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.
Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures.
It appears that for now, new revenues have dropped down on the menu of policy options. 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.
Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41).
In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid).
A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).
Until the word 'compromise' becomes part of both parties' vocabulary, you are correct, we are 'so screwed.' The brinksmanship evidenced in the negotiations and 'I'm right, you're wrong' attitude, has told the world we are willing to throw the baby out with the bath water and our creditors and standing in the world be damned.
What's next - an actual default? Not inconceivable.
Maybe this forum is not as Tea Party/Fox News Happy as I thought.
Yes, quite the vote there. C/D is a good benchmark of this country and that shows how strongly divided this country is and this will reflect in the polls next year. Might be another closely fought elections.
That was the intention of just two voting choices. A third one, like some ran their mouths about the lack of options, is only only gonna skew the numbers.
Yes, quite the vote there. C/D is a good benchmark of this country and that shows how strongly divided this country is and this will reflect in the polls next year. Might be another closely fought elections.
That was the intention of just two voting choices. A third one, like some ran their mouths about the lack of options, is only only gonna skew the numbers.
Not really.
I think if a third option was on the poll "Do you blame all of the above", a significant majority would blame everyone.
Reposting this for those who haven't seen it yet. This from the S&P report:
Until the word 'compromise' becomes part of both parties' vocabulary, you are correct, we are 'so screwed.' The brinksmanship evidenced in the negotiations and 'I'm right, you're wrong' attitude, has told the world we are willing to throw the baby out with the bath water and our creditors and standing in the world be damned.
What's next - an actual default? Not inconceivable.
Best post on this thread. Good one, Ariadne. I actually had quoted you earlier in the thread.
The downgrade is all about the brinkmanship. The tea party and the GOP as a collective went more rabid on the President, holding the negotiations hostage. The picture is clear from the last 2 weeks.
And every GOP candidate stoked it with rhetoric. But now they are spending time speaking about how this is so grave and has occurred for the first time under O's watch. The doublespeak is evident and these factions will continue to disrupt negotiations all the way through to the elections.
I think if a third option was on the poll "Do you blame all of the above", a significant majority would blame everyone.
But as I asked earlier, do people get to blame both and abstain from voting next year?? Somebody takes "more" blame, though both are to blame.
And I believe the GOP is more to blame on this one. Some negotiation came up close on the heels of August 2. Surely when you can agree to something on Aug 2, you can possibly agree on it earlier on say, Jul 25. Yet the chances were exploited for partisan mileage. That was the brinkmanship S&P describes. A deal about 10 days earlier would have presented a willingness to promptly address the problem and would have restored "investor confidence".
Instead, all this wrangling weighed on the indices in the market all thru the last week prior to Aug 2. It has simply cast a shadow about whether this congress is "capable" or is "willing to be responsible" to address the problem.
But as I asked earlier, do people get to blame both and abstain from voting next year?? Somebody takes "more" blame, though both are to blame.
And I believe the GOP is more to blame on this one. Some negotiation came up close on the heels of August 2. Surely when you can agree to something on Aug 2, you can possibly agree on it earlier on say, Jul 25. Yet the chances were exploited for partisan mileage. That was the brinkmanship S&P describes. A deal about 10 days earlier would have presented a willingness to promptly address the problem and would have restored "investor confidence".
Instead, all this wrangling weighed on the indices in the market all thru the last week prior to Aug 2. It has simply cast a shadow about whether this congress is "capable" or is "willing to be responsible" to address the problem.
There is usually a third party of independent candidate in almost every voting field on the ballots I fill out.
I wonder if there can ever be a third front in this country that can actually win elections. It's always been Tweedledum or Tweedledee
And it will always be till the end of space-time.
Predators and prey.
Males and females.
Positives and negatives.
Creditor and debtors.
Protons, neutrons and electrons. (neutrons being the neutral or third party in the equation like gays and hermaphrodites).
Conservative and liberal.
Republican and democrat.
I wonder if there can ever be a third front in this country that can actually win elections. It's always been Tweedledum or Tweedledee
I tell people the same thing.
Regardless if they have a D or an R behind their name, its the same party.
So you have to be willing, so feed up with Washington, that you say "Damn the torpedoes".
Democrats have to be willing to let Sarah Palin win, by throwing their vote away on a third party candidate. Republicans have to be willing to allow President Obama win, by throwing their vote away on a third party.
You have to be willing to take the worst possible scenario from the other side, a house full of the opposite party then you like, and they hold the President, to really change things.
I've gotten to that point. Neither party is representing me except on a handful of issues. I will be voting independent or third party. Damn the torpedoes
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