USA Downgraded AGAIN

SAN FRANCISCO (MarketWatch) -- Egan-Jones Ratings Co. said Friday it downgraded its U.S. sovereign rating to AA- from AA on concerns that the Fed's new round of quantitative easing, or QE3, will hurt the U.S. economy. The ratings agency said the Fed's plan of buying $40 billion in mortgage-backed securities a month and keeping interest rates near zero does little to raise GDP, reduces the value of the dollar, and raises the price of commodities. "From 2006 to present, the US's debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%," Egan-Jones said in a note. "In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%."

http://www.marketwatch.com/story/egan-jones-downgrades-us-rating-on-qe3-move-2012-09-14

THANKS OWEBAMA.

Anyone disagree? If so, why?

(yes, I know this isnt Moody's, but I'm betting they will do the same unless there is a dramatic turn around in the budget.)

Republican debate on raising the debt ceiling was the major cause of the initial downgrade. Please discuss what should have Obama done to stop the Republicans regarding the debt ceiling.

http://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis

http://usgovinfo.about.com/od/federalbudgetprocess/a/How-The-Debt-Ceiling-Debate-Hurt-America.htm

Start with one paragraph to explain the debt ceiling and/or what raising it means for a point of reference. Feel free to include any alternatives to raising the debt ceiling that do not include actions to be taken months prior to that issue. Barring invention of a time machine, it could not be done at that point.

This is what the debt ceiling is (short paragraph) this is what Obama should have done (as many paragraphs and visuals as needed) as if you were the president at that point in time.
Post edited by Bigguns 93 at 9/14/2012 4:13:27 PM

Originally posted by: Bigguns 93
raising the debt ceiling was the major cause of the initial downgrade

fixed that for you.

It is quite clear from the rating agency the fixed version is the reason. PERIOD.
Post edited by Stryk at 9/14/2012 4:17:16 PM

Nope, the debate lead to the downgrade.

The contentious debt ceiling debate of 2011 resulted in the first-ever downgrade in the United States credit crating. Standard & Poor's said it reduced the nation's AAA score to AA+ on Aug. 5, 2011, because of the protracted debt ceiling debate and the wide chasm between the political parties in Congress, making good on its threat of a downgrade earlier in the year.

guy should not have used Spain ( )to make a point.

the point he is making stands on its own argument, which I think is wrong, btw.

US dollar is too high, it went down 3%-age points this week or so, it should go to no more than 1.36 against the euro, right now it is 1.31 last time I checked.

if the dollar is not eased, it will would continue to put pressure on inflation everywhere (oil contracts being the direct issue here) on the production side, while consumer side is seeing deflations everywhere (when excluding oil).

Also, crops this years are short 20-30% in most western countries (dont know Asia), this will put pressure later on, already shown in fwd contracts around the world back as early as July 2012

in short, we gotta prepare the dollar (weaken it a bit) so we dont get caught in the shift...or even foster that shift.

Originally posted by: Bigguns 93
Republican debate on raising the debt ceiling was the major cause of the initial downgrade. ....

i think i may go off the resevation here, but I rather do risk that than follow such asinine line of thinking, so here it is:

HIGHER DEBT LEVELS DIRECTLY LEAD TO THE DOWNGRADE, not "raising the debt ceiling"

again...it was not "the ability to potentially get into more debt" that fucked us, it was the factual ACT of REALLY getting into more debt that got us fucked further.

got it?
Post edited by Aria Giovanni.pZ at 9/14/2012 4:24:54 PM

Originally posted by: [-NM-] -SS-

SAN FRANCISCO (MarketWatch) -- Egan-Jones Ratings Co. said Friday it downgraded its U.S. sovereign rating to AA- from AA on concerns that the Fed's new round of quantitative easing, or QE3, will hurt the U.S. economy. The ratings agency said the Fed's plan of buying $40 billion in mortgage-backed securities a month and keeping interest rates near zero does little to raise GDP, reduces the value of the dollar, and raises the price of commodities. "From 2006 to present, the US's debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%," Egan-Jones said in a note. "In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%."

http://www.marketwatch.com/story/egan-jones-downgrades-us-rating-on-qe3-move-2012-09-14

THANKS OWEBAMA.

Anyone disagree? If so, why?

(yes, I know this isnt Moody's, but I'm betting they will do the same unless there is a dramatic turn around in the budget.)

Moody's will undoubtedly do the same (unless some of that monetized money buys off their opinion).

What a world we live in........

We have a central banking cartel printing money to force down interest rates and we have private lenders and credit risk evaluators jacking it right back up because they know that America is on the verge of economic insolvency.

This is what happens to a system that was meant to be free but is hijacked by special interests and cronyism.

Originally posted by: Bigguns 93
Nope, the debate lead to the downgrade.

The contentious debt ceiling debate of 2011 resulted in the first-ever downgrade in the United States credit crating. Standard & Poor's said it reduced the nation's AAA score to AA+ on Aug. 5, 2011, because of the protracted debt ceiling debate and the wide chasm between the political parties in Congress, making good on its threat of a downgrade earlier in the year.

DREAM ON.
http://money.cnn.com/2011/08/06/news/economy/sp_rating_faq/index.htm

Why did this happen now? S&P gave two primary reasons for downgrading U.S. debt: The nation's fiscal path and its broken political system.

The agency has been harping on those two issues for months. S&P argues that the U.S. debt-to-GDP trajectory is unsustainable, and that the politics involved are so caustic that lawmakers are unable to make the tough choices needed to correct the problem.

Its the path we're on combined with politics. Any 'debate' is that fact that the politics won't allow cuts to correct the continuing increased rate debt accumulation.

Originally posted by: Bigguns 93
Nope, the debate lead to the downgrade.

The contentious debt ceiling debate of 2011 resulted in the first-ever downgrade in the United States credit crating. Standard & Poor's said it reduced the nation's AAA score to AA+ on Aug. 5, 2011, because of the protracted debt ceiling debate and the wide chasm between the political parties in Congress, making good on its threat of a downgrade earlier in the year.

I'd argue that 17 trillion dollars of debt with over 8 trillion accrued in the past 4 years caused the downgrade.....but hey, who gives a shit about reality?

It had to have been some singular event and not a systemic flow of terrible decision making over decades.

Originally posted by: Aria Giovanni.pZ
guy should not have used Spain ( )to make a point.

the point he is making stands on its own argument, which I think is wrong, btw.

US dollar is too high, it went down 3%-age points this week or so, it should go to no more than 1.36 against the euro, right now it is 1.31 last time I checked.

if the dollar is not eased, it will would continue to put pressure on inflation everywhere (oil contracts being the direct issue here) on the production side, while consumer side is seeing deflations everywhere (when excluding oil).

Also, crops this years are short 20-30% in most western countries (dont know Asia), this will put pressure later on, already shown in fwd contracts around the world back as early as July 2012

in short, we gotta prepare the dollar (weaken it a bit) so we dont get caught in the shift...or even foster that shift.

Good news for that...........

The EU is tossing money into an insolvency fire (especially poor Germany)

The IMF is tossing money into a burn pit.

And now America is shoveling an additional 40+Billion a month into a pit (indefinitely).

All Western currencies are going to take a shit. And anything tangibly tied to those dollars is going to go right out the fucking roof. So no chance of curbing inflation any time soon.
Post edited by Mockery at 9/14/2012 4:31:53 PM

Originally posted by: Aria Giovanni.pZ

Originally posted by: Bigguns 93
Republican debate on raising the debt ceiling was the major cause of the initial downgrade. ....

i think i may go off the resevation here, but I rather do risk that than follow such asinine line of thinking, so here it is:

HIGHER DEBT LEVELS DIRECTLY LEAD TO THE DOWNGRADE, not "raising the debt ceiling"

again...it was not "the ability to potentially get into more debt" that fucked us, it was the factual ACT of REALLY getting into more debt that got us fucked further.

got it?

solid analysis IMO

Originally posted by: Mockery

Originally posted by: Aria Giovanni.pZ
guy should not have used Spain ( )to make a point.

the point he is making stands on its own argument, which I think is wrong, btw.

US dollar is too high, it went down 3%-age points this week or so, it should go to no more than 1.36 against the euro, right now it is 1.31 last time I checked.

if the dollar is not eased, it will would continue to put pressure on inflation everywhere (oil contracts being the direct issue here) on the production side, while consumer side is seeing deflations everywhere (when excluding oil).

Also, crops this years are short 20-30% in most western countries (dont know Asia), this will put pressure later on, already shown in fwd contracts around the world back as early as July 2012

in short, we gotta prepare the dollar (weaken it a bit) so we dont get caught in the shift...or even foster that shift.

Good news for that...........

The EU is tossing money into an insolvency fire (especially poor Germany)

The IMF is tossing money into a burn pit.

And now America is shoveling an additional 40+Billion a month into a pit (indefinitely).

All Western currencies are going to take a shit. And anything tangibly tied to those dollars is going to go right out the fucking roof. So no chance of curbing inflation any time soon.

this is the deal, Mock, EU and US have a de facto agreement to swing their currency up to 10% every 6 months or so. This gives them up to 3-4% more financing for the short term...until the other one lowers their own currency.

it's the way things will continue to go until a bigger part of the car breaks down and require someone, one of the parties involved to actually go out and make tough decisions that affect the immediate term at that point.

listen this ME crisis might give the muslim world the excuse we need to go in there and take their oil. This would help solve many things for the next 5-10 years or so.

I agree with the downgrades. There is no reason any financial rating for the United States should be propped up simply because it's the US.

If the US is heading toward economic turmoil (which I firmly believe it is), then lower that sucker. If the only way government will change its ways is to be fuck-smacked in the head with lowered ratings, and suffer the consequences, then so be it.

After I had a short sale of my house, my FICO score got dinged about 150 points. Now there are all kinds of debates on the fairness and usefulness of FICO scores, but on some level (no matter how small), it's an indicator of financial stability. I fucked up and got dinged. The same should happen to the US government. If it's fucking up and unwilling or unable to improve, then downgrade them.

Originally posted by: Aria Giovanni.pZ

Originally posted by: Mockery

Originally posted by: Aria Giovanni.pZ
guy should not have used Spain ( )to make a point.

the point he is making stands on its own argument, which I think is wrong, btw.

US dollar is too high, it went down 3%-age points this week or so, it should go to no more than 1.36 against the euro, right now it is 1.31 last time I checked.

if the dollar is not eased, it will would continue to put pressure on inflation everywhere (oil contracts being the direct issue here) on the production side, while consumer side is seeing deflations everywhere (when excluding oil).

Also, crops this years are short 20-30% in most western countries (dont know Asia), this will put pressure later on, already shown in fwd contracts around the world back as early as July 2012

in short, we gotta prepare the dollar (weaken it a bit) so we dont get caught in the shift...or even foster that shift.

Good news for that...........

The EU is tossing money into an insolvency fire (especially poor Germany)

The IMF is tossing money into a burn pit.

And now America is shoveling an additional 40+Billion a month into a pit (indefinitely).

All Western currencies are going to take a shit. And anything tangibly tied to those dollars is going to go right out the fucking roof. So no chance of curbing inflation any time soon.

this is the deal, Mock, EU and US have a de facto agreement to swing their currency up to 10% every 6 months or so. This gives them up to 3-4% more financing for the short term...until the other one lowers their own currency.

it's the way things will continue to go until a bigger part of the car breaks down and require someone, one of the parties involved to actually go out and make tough decisions that affect the immediate term at that point.

listen this ME crisis might give the muslim world the excuse we need to go in there and take their oil. This would help solve many things for the next 5-10 years or so.

We would have one hell of a cockroach extermination issue on our hands........with some 1 in 4 people on Earth being Muslim that would be one ugly Jihad.

Not saying it couldn't be done.....because most of them are savagely retarded.......but it would take some serious focus and dedication.

Originally posted by: Neechoo Cheeska
I agree with the downgrades. There is no reason any financial rating for the United States should be propped up simply because it's the US.

If the US is heading toward economic turmoil (which I firmly believe it is), then lower that sucker. If the only way government will change its ways is to be fuck-smacked in the head with lowered ratings, and suffer the consequences, then so be it.

After I had a short sale of my house, my FICO score got dinged about 150 points. Now there are all kinds of debates on the fairness and usefulness of FICO scores, but on some level (no matter how small), it's an indicator of financial stability. I fucked up and got dinged. The same should happen to the US government. If it's fucking up and unwilling or unable to improve, then downgrade them.

Exactly.........it's also a great mechanism for the market to correct the wishful thinking of our central planners at the FED.

Ding that credit rating high enough and our interest rates will skyrocket.



Just as they did in Greece. Someone has to be honest when a country is bankrupt and can no longer continue its current path and the credit lenders, who give such countries money, are exactly the entity to do it.

it would literally be a clash of civilizations.

but, not all muslims are bad people. Obama is just a bad president.

But not as bad as Bushie was.

No one is ready for such clash at the moment, though. It's in no one's agendas. Intl financing systems need to be re-herded and circled within national boundaries a bit more than they are now before the shit hits the fan at such scale. Unless there is absolute cordination at the top levels, which wont happen. Dont forget, the Chines and Russians still exist!

i was only wishful typing.

Originally posted by: Bigguns 93
Republican debate on raising the debt ceiling was the major cause of the initial downgrade. Please discuss what should have Obama done to stop the Republicans regarding the debt ceiling.

http://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis

http://usgovinfo.about.com/od/federalbudgetprocess/a/How-The-Debt-Ceiling-Debate-Hurt-America.htm

Start with one paragraph to explain the debt ceiling and/or what raising it means for a point of reference. Feel free to include any alternatives to raising the debt ceiling that do not include actions to be taken months prior to that issue. Barring invention of a time machine, it could not be done at that point.

This is what the debt ceiling is (short paragraph) this is what Obama should have done (as many paragraphs and visuals as needed) as if you were the president at that point in time.

If you say so. Did you ever consider this:

Without a debt ceiling increase, the gvt can either do one of three things: gvt shutdown, reduce spending, or raise taxes to offset spending.

If they shut it down, many gvt employees dont get paid and could cause havoc in world financial markets because of the failure to pay debts on US Treasuries.

If they reduce spending (a conservative value, unlike progressives such as Krugman who advocates more gvt 'stimulus'), the budget moves toward a balanced budget, which in turn, prevents the automatic downgrading of US credit rating and promotes stability. The diametric opposite happens when you increase it.. and proven when the stock market plunged over 600 points within a week as investors dropped US Treasuries and went to find better investment vehicles. If they raise taxes, that removes disposable income that is used to keep the economy moving. Reducing spending power is a very bad idea in a recession.

Dont let those facts utterly decimate your rhetoric though.

So when the republicans made a deal with Owebama the Redistributionist, it wasnt the debate that caused it; it was the simple fact they caved and gave him more money instead of forcing his hand to stop spending and definitely didnt want to raise taxes as thats what many new representatives were sent there to do by their constituency. I know neither side wanted a shutdown because of the damage it would have done to the markets.

Yep, sure is their fault alright.

Originally posted by: [-NM-] -SS-
The diametric opposite happens when you increase it.. and proven when the stock market plunged over 600 points within a week as investors dropped US Treasuries and went to find better investment vehicles.

personally i do not believe the stock market is a good singular piece of data to measure economic health with, however, since you are using it as the proof to make your point against an owebama policy, you should probably be aware that under your hated leader, the stock market has performed very well. based upon your own indicator, you would have to concede that the stock market has proven that obama's overall economic policy is a resounding success


Post edited by Pixel at 9/14/2012 6:15:12 PM

--------------------------------------------------------------------------------------------
The right is more virtuous than the left. They have twice as many virtues because they have double the standards.

Originally posted by: Pixel

Originally posted by: [-NM-] -SS-
The diametric opposite happens when you increase it.. and proven when the stock market plunged over 600 points within a week as investors dropped US Treasuries and went to find better investment vehicles.

personally i do not believe the stock market is a good singular piece of data to measure economic health with, however, since you are using it as the proof to make your point against an owebama policy, you should probably be aware that under your hated leader, the stock market has performed very well. based upon your own indicator, you would have to concede that the stock market has proven that obama's overall economic policy is a resounding success

It is a terrible indicator indeed (and I admire you having the fortitude to call that out). All the stock market does is point to the direction of the next economic bubble.......not growth, wealth creation, nor prosperity

Bush doubled our deficit from 4.5 to 9 trillion in eight years (most of it at the end when the housing bubble went bust)........Obama has almost doubled it again, from 9 to 16 trillion, in just four short long years.

Can you imagine what the stock market would look like if you dumped 146 Billion dollars into the stock market every single month over four years (7* trillion/48 months)?

That's 4.7 Billion a day......every single fucking day for four years, or 200 Million an hour.

If that doesn't make it grow like mad nothing will.......

And that's not even getting into the off the books spending the Fed has been secretly doing, or any of the QE1 and QE2, garbage.

Or derivatives speculation shit like this......

http://articles.businessinsider.com/2012-04-24/wall_street/31390709_1_pension-funds-derivative-exposure-bailout

The technical definition of a ponzi schema is to constantly need and require fresh new capital, at a faster and faster rate, in order to keep up with your promises to pay prior investors.

That's what that stock market graph represents. It represents future stolen money being promised to old ingrained investors. It points to a new bubble being created with money that does not exist (except on a stock ticker). There is a reason Wall-Street runs this economy, runs both Presidential choices, and runs this country (if not the world).

Just like all those broken public pension promises.....this 401k bag is also going to be snatched out from under everyone before they will be able to collect it.

Post edited by Mockery at 9/14/2012 7:17:24 PM

Originally posted by: Pixel

Originally posted by: [-NM-] -SS-
The diametric opposite happens when you increase it.. and proven when the stock market plunged over 600 points within a week as investors dropped US Treasuries and went to find better investment vehicles.

personally i do not believe the stock market is a good singular piece of data to measure economic health with, however, since you are using it as the proof to make your point against an owebama policy, you should probably be aware that under your hated leader, the stock market has performed very well. based upon your own indicator, you would have to concede that the stock market has proven that obama's overall economic policy is a resounding success

I have as much love for him as you did Bush.

We'll call it even.

Now, I understand that you are deploying a favorite talking point of the left to throw up how well the stock market has done under Owebama.

But here is why I know you arent well versed in the markets and accountancy (but acknowledge you have a college degree): One, you created the idea that I said the stock market is the be all, end all as a measure of economic health. No, I told you why the market was effected, not the stocks themselves. Read what I said again.

Secondly, stocks are not the same as bonds. Yes, there are bond markets where they are traded, but they are not stocks, they are bonds. These financial instruments are used to finance debt -short and long term- both by business and gvt. Stocks are investments that are not under any obligation to pay anything back at a set [interest] rate and provide an equity stake in the organization as opposed to a debtor security stake. Stocks repay investors through dividends, not an interest rate, which if you didnt know, are taxed TWICE (once at the corporate level and then paid again by the investor as income).

The ability to borrow money has a huge effect on the stock market as I pointed out. Without liquidity, things get gummed up real quick. Just look back on when credit tightened in 2009. So what do you do if you dont have the money to pay it back, whether it is financed through more debt or not?

In truth, in the world of [international] finance, it's incredibly complicated, but suffice to say that even though the stock market has done OK, it is not a good idea to use it to support the policies of Owebama. If the stock market was a good indicator, our CREDIT rating wouldnt have been downgraded, unemployment wouldnt be in the shitter, and we wouldnt be over $16 Trillion in debt.

Disagree?

Originally posted by: Pixel

Originally posted by: [-NM-] -SS-
The diametric opposite happens when you increase it.. and proven when the stock market plunged over 600 points within a week as investors dropped US Treasuries and went to find better investment vehicles.

personally i do not believe the stock market is a good singular piece of data to measure economic health with, however, since you are using it as the proof to make your point against an owebama policy, you should probably be aware that under your hated leader, the stock market has performed very well. based upon your own indicator, you would have to concede that the stock market has proven that obama's overall economic policy is a resounding success

When Obama took office the DJIA was 7,949.09, today it closed at 13,593.37 - That's a 71% increase during his first term. To put those numbers in perspective, that's 16 points better than Clinton's second term. Bush oversaw declines of 1 and 24 percentage points in his two terms, respectively. The Dow bottomed out in March of 2009, just after Obama signed into law ARRA and before it had really kicked in. Look how its performed since:

http://stockcharts.com/freecharts/historical/djia2000.html

By this metric alone, he's been an overwhelming success.

At spending money that he does not have.

No President in History has put this country further into debt faster than this administration.

Almost 7 trillion in 4 short years.

Bet if any of us had the keys to this type of liquidity we could pull off a speculation bubble that would make even housing bubble look tame.
Post edited by Mockery at 9/14/2012 7:14:54 PM

I'm curious Mock, where did $8 Trillion come from?

I have him at just over $6 Trillion. Is there something I missed?

My numbers come from the US debt clock based upon the day he was sworn in through present day.

Originally posted by: [-NM-] -SS-
I'm curious Mock, where did $8 Trillion come from?

I have him at just over $6 Trillion. Is there something I missed?

My numbers come from the US debt clock based upon the day he was sworn in through present day.

Half of TARP that he was handed from the previous administration (that was appropriated in that budget year Bush was still in office)......and the Omnibus (which was not and I now revise).

Mainly it is an error on my part.......between the omni mistake it is 16 not 17 trillion currently. I will modify my posts and redo the math. Good spot and thanks for point out the discrepancy.

Edit.......all previous posts corrected.
Post edited by Mockery at 9/14/2012 7:18:37 PM

Originally posted by: Mockery

Originally posted by: [-NM-] -SS-
I'm curious Mock, where did $8 Trillion come from?

I have him at just over $6 Trillion. Is there something I missed?

My numbers come from the US debt clock based upon the day he was sworn in through present day.

Half of TARP that he was handed from the previous administration (that was appropriated in that budget year)......and the Omnibus (which was not and I now revise).

Mainly it is an error on my part.......between the omni mistake it is 16 not 17 trillion currently. I will modify my posts and redo the math. Good spot and thanks for point out the discrpency.

No worries. It just made me wonder if I had missed something is all.

However, there is a caveat to the debt accumulated under him: he took over a budget from Bush, but on the flipside he will pass along his budget to whoever replaces him. So to be equitable, I consider starting the clock from the time they take over until the time they leave.

And I don't want to make it a partisan issue either. I can't stand either of our last two Presidents.

My bigger point, outside of pointing fingers, is that this isn't sustainable. Our policy of reckless spending to keep up the stock market and sustain our economy is not going to be able to last forever. No country on Earth has been able to escape out from the deficit monster once it has gotten too out of control. Greece and Japan have run into the same trap, both from trying to spend their way out of debt. Both have been forced into austerity because they ran out of other options. Both are fucked for the foreseeable future.

Some will say that it is the austerity that causes them this problem......but those are the same people who blame deflation instead of speculator spending bubbles.

You wouldn't have austerity......you wouldn't have deflation if you didn't spend too much money and encourage reckless spending habits.

If it wasn't for the needless (but profitable) boom you would never see a bust......

What we are going through today was pointed out and predicted for what it was way back in 1998 by a Democrat of all people........

http://en.wikipedia.org/wiki/Brooksley_Born

Despite her warnings, despite showing us our future, nobody has listened to anything she said and each new economic collapse has only become more costly and made the next pending collapse all the more dangerous/hard to evade.

http://www.pbs.org/wgbh/pages/frontline/warning/view/

One hell of a documentary and just as applicable to today as it was back then.......Republican, Democrats, anyone should be able to take something from this one.
Post edited by Mockery at 9/14/2012 8:07:35 PM

Originally posted by: Stryk

Originally posted by: Bigguns 93
Nope, the debate lead to the downgrade.

The contentious debt ceiling debate of 2011 resulted in the first-ever downgrade in the United States credit crating. Standard & Poor's said it reduced the nation's AAA score to AA+ on Aug. 5, 2011, because of the protracted debt ceiling debate and the wide chasm between the political parties in Congress, making good on its threat of a downgrade earlier in the year.

DREAM ON.
http://money.cnn.com/2011/08/06/news/economy/sp_rating_faq/index.htm

Why did this happen now? S&P gave two primary reasons for downgrading U.S. debt: The nation's fiscal path and its broken political system.

The agency has been harping on those two issues for months. S&P argues that the U.S. debt-to-GDP trajectory is unsustainable, and that the politics involved are so caustic that lawmakers are unable to make the tough choices needed to correct the problem.

Its the path we're on combined with politics. Any 'debate' is that fact that the politics won't allow cuts to correct the continuing increased rate debt accumulation.

Nice attempt at pure fiction. Unfortunately, actual FACT is available.

From S+P Downgrade report

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.

http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the
growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process.

..........

Nevertheless, we view the U.S.
federal government's other economic, external, and monetary credit attributes,
which form the basis for the sovereign rating, as broadly unchanged.

http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563



But other than S+P saying it, I could quote an number of financial sources from WSJ, CNN Money, Market Watch to analyst from any of the major financial houses.

Do I really need to post more than the actual credit rating companies report on why they downgraded the debt? No.

Back to the point - describe the debt ceiling, say what you would have done as President to get the opposing party, which controlled congress, to vote to pass the increase and not allow it to become a public debate creating the panic thus lowering our debt rating.

Perpetual gridlock and stagnation is definitely a contributing factor.....that I don't disagree with.

But if we weren't broke as a bad joke and if both parties weren't hell bent on spending even more money.......all the gridlock on Earth wouldn't matter, nor justify, lowering our credit rating.

Nobody is trying to shut down the government....these two parties aren't even fighting about spending cuts (in the bigger picture).......they are primarily arguing about which special interest group and discretionary programs deserve a larger slice of the pie (at the expense of a program they don't agree with).

Democrats want more domestic spending and less military budgeting.......Republicans more military budgeting and less for pretty much everything else.

If we lived within our means.......gridlock would be inconsequential to this discussion, but we don't live within our means and don't have any likelihood of that changing in the foreseeable future.
Post edited by Mockery at 9/14/2012 8:37:27 PM

Originally posted by: Bigguns 93

Originally posted by: Stryk

Originally posted by: Bigguns 93
Nope, the debate lead to the downgrade.

The contentious debt ceiling debate of 2011 resulted in the first-ever downgrade in the United States credit crating. Standard & Poor's said it reduced the nation's AAA score to AA+ on Aug. 5, 2011, because of the protracted debt ceiling debate and the wide chasm between the political parties in Congress, making good on its threat of a downgrade earlier in the year.

DREAM ON.
http://money.cnn.com/2011/08/06/news/economy/sp_rating_faq/index.htm

Why did this happen now? S&P gave two primary reasons for downgrading U.S. debt: The nation's fiscal path and its broken political system.

The agency has been harping on those two issues for months. S&P argues that the U.S. debt-to-GDP trajectory is unsustainable, and that the politics involved are so caustic that lawmakers are unable to make the tough choices needed to correct the problem.

Its the path we're on combined with politics. Any 'debate' is that fact that the politics won't allow cuts to correct the continuing increased rate debt accumulation.

Nice attempt at pure fiction. Unfortunately, actual FACT is available.

From S+P Downgrade report

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.

http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the
growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process.

..........

Nevertheless, we view the U.S.
federal government's other economic, external, and monetary credit attributes,
which form the basis for the sovereign rating, as broadly unchanged.

http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563



But other than S+P saying it, I could quote an number of financial sources from WSJ, CNN Money, Market Watch to analyst from any of the major financial houses.

Do I really need to post more than the actual credit rating companies report on why they downgraded the debt? No.

Back to the point - describe the debt ceiling, say what you would have done as President to get the opposing party, which controlled congress, to vote to pass the increase and not allow it to become a public debate creating the panic thus lowering our debt rating.

I think you have a reading comprehension problem on S&P's statement. Its clearly about where the debt is going. The 'controversy' aspect is the inability to form a plan to curb it.

Originally posted by: Mockery
At spending money that he does not have.

No President in History has put this country further into debt faster than this administration.

Almost 7 trillion in 4 short years.

Bet if any of us had the keys to this type of liquidity we could pull off a speculation bubble that would make even housing bubble look tame.

The biggest surge in government spending came in 2007 & 2008.

http://www.factcheck.org/2012/06/obamas-spending-inferno-or-not/

Mitt Romney claims President Barack Obama’s spending amounts to an “inferno.” But who is really responsible for the huge jump that took place in fiscal 2009? Here are some undisputed facts:

-Fiscal 2009 began Oct. 1, 2008. That was before Obama was elected, and nearly four months before he took office on Jan. 20, 2009.
-President Bush signed the massive spending bill under which the government was operating when Obama took office. That was Sept. 30, 2008. As The Associated Press noted, it combined “a record Pentagon budget with aid for automakers and natural disaster victims, and increased health care funding for veterans returning from Iraq and Afghanistan.”
-Bush also signed, on Oct. 3, 2008, a bank bailout bill that authorized another $700 billion to avert a looming financial collapse (though not all of that would end up being spent in fiscal 2009, and Obama later signed a measure reducing total authorized bailout spending to $475 billion).
-On Jan. 7, 2009 — two weeks before Obama took office — the nonpartisan Congressional Budget Office issued its regular budget outlook, stating: “CBO projects that the deficit this year will total $1.2 trillion.”

CBO attributed the rapid rise in spending to the bank bailout and the federal takeover of Fannie Mae and Freddie Mac – plus rising costs for unemployment insurance and other factors driven by the collapsing economy (which shed 818,000 jobs in January alone).

Another factor beyond Obama’s control was an automatic 5.8 percent cost of living increase announced in October 2008 and given to Social Security beneficiaries in January 2009. It was the largest since 1982. Social Security spending alone rose $66 billion in fiscal 2009, and Medicare spending, driven by rising medical costs, rose $39 billion.

How Much Did Obama Add?

But it’s also true that Obama signed a number of appropriations bills, plus other legislation and executive orders, that raised spending for the remainder of fiscal 2009 even above the path set by Bush. By our calculations, Obama can be fairly assigned responsibility for a maximum of $203 billion in additional spending for that year.

Either way, it is like arguing if brain cancer is better than lung cancer.


Post edited by DirtyMitten at 9/14/2012 8:53:09 PM

Originally posted by: Stryk
I think you have a reading comprehension problem on S&P's statement. Its clearly about where the debt is going. The 'controversy' aspect is the inability to form a plan to curb it.

I think you believe that. The first sentence

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy

Even though S+P said it, its not true? They are the ones who lowered the rating. They said why they did it. But that's "reading comprehension"? Wow. What can you say to someone who see the emperor's new clothes even when you have the tailors signed confession its a farce?
Post edited by Bigguns 93 at 9/14/2012 8:54:47 PM

http://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrade,_2011

Pretty good S&P section.......for all parties interested.

Originally posted by: Mockery
http://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrade,_2011

Pretty good S&P section.......for all parties interested.

Yeah, it has quotes directly from S+P. Only if you go to the S+P site there is no chance somebody "changed history" like the do from time to time in Wiki

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.

S+P knew the debt burden before the debate. If it was purely the debt burden, then the downgrade would have happened early. The debate caused them to say " Holy shit these fuckers might just do it". A loud, public display is what pushed things over the top.

A Spaniard once argued with me that borrowed money "future debt" is money in the bank and has more buying power in the future than the same borrowed money of today.

At 6 trillion I would expect everyone to be driving Corvette's as taxi's by now if it were true...

I hope everyone is ready for another short notice stock market correction in the near future once this kick the can down the road euphoric feeling wears off. "Prediction" DJI down to the 12k line minimum. And if a re-election is immanent I say the 8k line looks very doable.

I hope like hell I'm wrong here on the prediction!

Originally posted by: Dieslut
A Spaniard once argued with me that borrowed money "future debt" is money in the bank and has more buying power in the future than the same borrowed money of today.

At 6 trillion I would expect everyone to be driving Corvette's as taxi's by now if it were true...

I hope everyone is ready for another short notice stock market correction in the near future once this kick the can down the road euphoric feeling wears off. "Prediction" DJI down to the 12k line minimum. And if a re-election is immanent I say the 8k line looks very doable.

I hope like hell I'm wrong here on the prediction!

The upcoming fiscal cliff alone + another credit downgrade could do that regardless of who wins this election. I actually feel bad for whatever sucker gets handed the bag of shit called our economy this November.

Originally posted by: DirtyMitten
The biggest surge in government spending came in 2007 & 2008.

http://www.factcheck.org/2012/06/obamas-spending-inferno-or-not/

Mitt Romney claims President Barack Obama’s spending amounts to an “inferno.” But who is really responsible for the huge jump that took place in fiscal 2009? Here are some undisputed facts:

-Fiscal 2009 began Oct. 1, 2008. That was before Obama was elected, and nearly four months before he took office on Jan. 20, 2009.
-President Bush signed the massive spending bill under which the government was operating when Obama took office. That was Sept. 30, 2008. As The Associated Press noted, it combined “a record Pentagon budget with aid for automakers and natural disaster victims, and increased health care funding for veterans returning from Iraq and Afghanistan.”
-Bush also signed, on Oct. 3, 2008, a bank bailout bill that authorized another $700 billion to avert a looming financial collapse (though not all of that would end up being spent in fiscal 2009, and Obama later signed a measure reducing total authorized bailout spending to $475 billion).
-On Jan. 7, 2009 — two weeks before Obama took office — the nonpartisan Congressional Budget Office issued its regular budget outlook, stating: “CBO projects that the deficit this year will total $1.2 trillion.”

CBO attributed the rapid rise in spending to the bank bailout and the federal takeover of Fannie Mae and Freddie Mac – plus rising costs for unemployment insurance and other factors driven by the collapsing economy (which shed 818,000 jobs in January alone).

Another factor beyond Obama’s control was an automatic 5.8 percent cost of living increase announced in October 2008 and given to Social Security beneficiaries in January 2009. It was the largest since 1982. Social Security spending alone rose $66 billion in fiscal 2009, and Medicare spending, driven by rising medical costs, rose $39 billion.

How Much Did Obama Add?

But it’s also true that Obama signed a number of appropriations bills, plus other legislation and executive orders, that raised spending for the remainder of fiscal 2009 even above the path set by Bush. By our calculations, Obama can be fairly assigned responsibility for a maximum of $203 billion in additional spending for that year.

Either way, it is like arguing if brain cancer is better than lung cancer.

'Undisputed facts'... really?

Ok, let's take a look at this one:

Bush also signed, on Oct. 3, 2008, a bank bailout bill that authorized another $700 billion to avert a looming financial collapse (though not all of that would end up being spent in fiscal 2009, and Obama later signed a measure reducing total authorized bailout spending to $475 billion).

[Actually he signed the Dodd-Frank Bill. I highly recommend you read 2,000+ pages, especially the OLF. What do you notice about it?]

Vs.

Jan. 12 (Bloomberg) -- President-elect Barack Obama asked the Bush administration to notify Congress he plans to seek the remaining $350 billion in financial-rescue funds, White House spokeswoman Dana Perino said.

“President Bush agreed to the president-elect’s request,” Perino said. “We will continue our consultations with the president-elect’s transition team, and with Congress, on how best to proceed in accordance with the requirements of the statute.”

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXTl_q8nIqk8

http://abcnews.go.com/GMA/Economy/story?id=6626721&page=1#.UFQB841lTZw

So their fact is wrong. Obama asked for and received the other half of that $700 Billion in TARP whether he spent it or not. It needs to be credited to him and not Bush. Title XIII of Dodd-Frank does limit TARP spending, but can be waived by the President ( http://www.law.cornell.edu/uscode/text/12/5225 ). Just another little detail left out -no biggie.

Then there is this GLARING fact from 2009 that 'Fact check' left out called "Stimulus". Ever heard of it? Here's what happened (notice the date):

February 18, 2009, 4:07 p.m. ET

DENVER -- President Barack Obama signed his $787 billion economic stimulus package into law Tuesday, with an upbeat speech emphasizing the road to recovery.

http://online.wsj.com/article/SB123487951033799545.html

So there you have it. Owebama signed for $350 Billion from Bush and an additional $787 Billion from Congress in 2009. Then look at the additional spending since then amounting to over $1 Trillion a year.

Do the math. I'm sure it was just a mere 'oversight' on their part and Romney must be lying about Owebama's spending that has seen the debt go from $10 Trillion to $16 Trillion in 4 short years.

Originally posted by: Dieslut
A Spaniard once argued with me that borrowed money "future debt" is money in the bank and has more buying power in the future than the same borrowed money of today

What a stupid fuck, no wonder Spain is in such shitty shape.

Time Value of Money is pretty clear. Money is worth more today than in the future. Here's what I mean: Having money now is more valuable than having money in the future because you can earn interest on it. Example: Would you prefer $1,000 today earning 10% /year interest or $1,050 a year from now?

Which one provides you more money a year from now?

Also, you can discount what that 1050 is worth in its present value instead of future value too.

Based on what we owe and what we make every year, our rating should be junk.

Any normal business would be.

Originally posted by: [-NM-] -SS-


What a stupid fuck, no wonder Spain is in such shitty shape.

Time Value of Money is pretty clear. Money is worth more today than in the future. Here's what I mean: Having money now is more valuable than having money in the future because you can earn interest on it. Example: Would you prefer $1,000 today earning 10% /year interest or $1,050 a year from now?

Which one provides you more money a year from now?

Also, you can discount what that 1050 is worth in its present value instead of future value too.

Sounds very similar to how a ponzi scheme is presented to the victim... But that is the true definition of investment; since when has this ever worked on a grand scale correctly? Everything now days has risk up the wazoo!

Originally posted by: Bigguns 93
Republican debate on raising the debt ceiling was the major cause of the initial downgrade. Please discuss what should have Obama done to stop the Republicans regarding the debt ceiling.

http://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis

http://usgovinfo.about.com/od/federalbudgetprocess/a/How-The-Debt-Ceiling-Debate-Hurt-America.htm

Start with one paragraph to explain the debt ceiling and/or what raising it means for a point of reference. Feel free to include any alternatives to raising the debt ceiling that do not include actions to be taken months prior to that issue. Barring invention of a time machine, it could not be done at that point.

This is what the debt ceiling is (short paragraph) this is what Obama should have done (as many paragraphs and visuals as needed) as if you were the president at that point in time.

You're a fucking idiot. That's like saying you're credit score was lowered because you debated on paying your credit card bill