S&P Cuts US Credit Rating to AA+

[moreluck]

So, you stand among Moreluck and possibly give the rich another $1 Trillion in tax cuts, and then cut Medicare, SS, Education or Military by yet another added Trillion ?

The plans you spout are not my ideas.....All I said was it's a SPENDING problem not a revenue problem...........you add stuff like... "give the rich another $1 Trillion in tax cuts, and then cut Medicare, SS, Education or Military by yet another added Trillion ?" ............That gibberish is all your add-ons.

 

[clueless]

My apologies if this was already posted--I found this in my inbox this morning--it's the Fed's response to the downgrade:

Released by the Board of Governors of the Federal Reserve System yesterday:

Joint Press Release

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
National Credit Union Administration
Office of the Comptroller of the Currency
For immediate release August 5, 201

Agencies Issue Guidance on Federal Debt

Earlier today, Standard & Poor's rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+. With regard to this action, the federal banking agencies are providing the following guidance to banks, savings associations, credit unions, and bank and savings and loan holding companies (collectively, banking organizations).

For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. The treatment of Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities under other federal banking agency regulations, including, for example, the Federal Reserve Board's Regulation W, will also be unaffected.

http://www.federalreserve.gov/newsevents/press/bcreg/20110805a.htm

 

[Babagounj]

(OTM) — Senior executives for the company that downgraded the nation’s credit rating on Friday night have made political donations to Democrats over the last several years.
Deven Sharma, the president of Standard & Poor’s, contributed to Sen. Kirsten Gillibrand’s (D-N.Y.) campaign in 2009 and 2010. He also gave $2,000 to Rep. Jim Himes (D-Conn.) during the 2010 election cycle and Sen. Mary Landrieu (D-La.) and then-Sen. Christopher Dodd (D-Conn.) in the 2008 cycle.
Sharma contributed to one Republican last year, giving $1,000 to Sen. Rob Portman (R-Ohio).
Pat Milano, another senior executive at S&P, contributed to Gillibrand, Landrieu and Dodd over the last couple of cycles, according to data culled from opensecrets.org.
John Weisenseel, senior vice president of finance at the firm, gave $500 to Himes in 2009. Adam Schuman, executive managing director and associate general counsel, contributed to Gillibrand in 2010.
Catherine Mathis, senior vice president of marketing and communications, gave $1,000 to Gillibrand and $500 to Portman last year.

 

[The Other Side]

(OTM) — Senior executives for the company that downgraded the nation’s credit rating on Friday night have made political donations to Democrats over the last several years.
Deven Sharma, the president of Standard & Poor’s, contributed to Sen. Kirsten Gillibrand’s (D-N.Y.) campaign in 2009 and 2010. He also gave $2,000 to Rep. Jim Himes (D-Conn.) during the 2010 election cycle and Sen. Mary Landrieu (D-La.) and then-Sen. Christopher Dodd (D-Conn.) in the 2008 cycle.
Sharma contributed to one Republican last year, giving $1,000 to Sen. Rob Portman (R-Ohio).
Pat Milano, another senior executive at S&P, contributed to Gillibrand, Landrieu and Dodd over the last couple of cycles, according to data culled from opensecrets.org.
John Weisenseel, senior vice president of finance at the firm, gave $500 to Himes in 2009. Adam Schuman, executive managing director and associate general counsel, contributed to Gillibrand in 2010.
Catherine Mathis, senior vice president of marketing and communications, gave $1,000 to Gillibrand and $500 to Portman last year.

How is this relevant to the conversation??

Peace.

 

[The Other Side]

The plans you spout are not my ideas.....All I said was it's a SPENDING problem not a revenue problem....

FAIL!

Standard and Poors disagrees with you MORELUCK. They were very clear in their statement. The failure of congress to make "effective" cuts and RAISE REVENUES was the reason for the downgrage.

The partisan positioning of the republicans in failing to compromise and INCLUDE additional revenues contributed to the downgrade. From the S&P:
""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. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.""


Standard and Poors wanted to see effective tax revenues increased as well as spending cut and NOT JUST spending cuts as the tea party republicans insisted.

The republicans have ruined this economy as an act of sabotage against our president and now YOU ALL get to pay for it. Congratulations.

The only way to fix this now is to return to congress and kill the bush tax cuts for the top 1% which NONE of you belong to. Standard and Poors will upgrade the rating once tax increases have been met.

Todays new polling shows over 70% of americans believe the republicans are responsible for what is happening. Only 44% blame Obama, whos winning this argument?

Peace.

 

[moreluck]

Failure to make effective cuts IS spending too much........means the same thing last time I checked.

Oh, and the S&P disagrees with me, yeah, they called and told me that last night!!......I don't even know them.....S&P is salt & pepper to me!

Don't get me wrong. I`m not trying to make a monkey out of you. I can`t take the credit.

 

[wkmac]

This is the last time I'm posting this....grab a beer, relax and pay attention to the guy with the year's calendar................

Interesting and he does have a point using his narrow methodology but he's only telling half the story.

Here's a way to save huge sums of money and restore a very strong free market and vastly lessen the size of the "owned" state. Get rid of ever means of welfare, subsidization, socialization, price supports and all manner to tax credits, tax breaks and other tax benefits. Strip it all down clean to the bone. Nobody gets nothing and everyone pays for the gov't essentials. Do that and it will be painfully obvious why this guy is only telling half the story and you'd see who would scream the loudest about losing their gov't welfare!

The welfare state for the poor was actually created to solve the problems created by the welfare state for the rich. Back in the New Deal, Social Security and AFDC were promoted by “socialists” like GE head Gerard Swope and the Business Advisory Council in order to put a floor under aggregate demand. Government-enforced monopoly and unequal exchange redistribute wealth upward with a backhoe, and then the welfare state for the poor gives back some of it with a teaspoon.

You damn right!

Also I was making similar points here in that the biggest purveyor of big gov't is so often overlooked just like the guy in the video did. And even at least Michael Moore, for all his faults, admits we don't have a true free market and at least from that point we have an agreed principle to work from and then from there the discussion is about strategy.

And cudos to the young man for posing an excellent question and fostering the discussion. As a student of George Washington I hope he went to the Economics Society lecture with Sheldon Richman on Capitalism verses the Free Market
The full lecture is under that name on YouTube and is very much worth the watch. You can also see it here.

 

[island1fox]

So if we do as you say and continue to cut spending and unemployment continues to go up, who's to blame then? Saddest part? Had we let the Bush tax cuts expire, debt would have been wiped out in 7 to 10 years. Imagine that. All of us paying 3.5 to 4% in taxes and it all goes away.

bbsam,
We are a consumer economy --like it or not .
Removing four to five percent from all peoples pockets will obviously put a further crunch on spending.
No spending-no buying-no products used or produced--no products to deliver ---more layoffs --less jobs --less revenues collected by government.
This is not rocket science.
Obama had a chance to end this three years ago. The trillion dollar stimulous should have created a tax holiday across the board for twelve months. The taxes you would have paid would have been spent across the entire economy --not given to unions and special interest groups to keep public employees temporarily employed. Now the money is gone and the only shovel ready job that was completed was to dig a much deeper hole for us to get out of .
Welfare, excuse me entitlement programs must be reigned in. We have developed generations of bottom feeders that do not pay any federal tax.

 

[wkmac]

I was just reading this article at Reason on the S&P downgrade and a thought occurred to me. If the folks at S&P as well as other organizations were so smart, why didn't they downgrade the US credit rating or threaten too earlier as a means to firing a shot across the bow of the US Ship of State? What if they had done this for example during the Bush years?

Or is it, they've been enjoying the "all you can eat" food bar at the gov't trough too and now that the cupboard in bare.........

What happens to our own credit rating when we have to many credit cards or the trends on our personal debt are seen as rising? Never knew those ratings waited for us to fall off the cliff before they downgrade. Oh wait, they don't work that way to they!

 

[klein]

So Ifox, your the typical Tea Partier... cuts, cuts, and more cuts.
Put infrastructure on hold and lay off construction workers, cut Military and lay off soldiers and supply firm staff, cut education and lay off teachers and professors.
Add another 2 percent to the unemployment rate, and pay more unemployment bennies, and receive less revenue (income taxes).

Putting people out of work means less money for them = less they can buy = less production and sales and more lay offs.

Can't win either way, but none of you understood Obama's "balanced" plan.... oddly enough.

Anyways, it's old school now..... new "taxes" are on it's way... just that they are not taxes, but higher interest rates, that don't help anyone or the budget at all. Actually harms the budget as the Government will need to pay back more now as before, due to the higher interest alone.

But, you are right : Obama could have stopped it 3 years ago, by ending those Bush tax cuts !

 

[moreluck]

So Ifox, your the typical Tea Partier... cuts, cuts, and more cuts.
Put infrastructure on hold and lay off construction workers, cut Military and lay off soldiers and supply firm staff, cut education and lay off teachers and professors.
Add another 2 percent to the unemployment rate, and pay more unemployment bennies, and receive less revenue (income taxes).

Putting people out of work means less money for them = less they can buy = less production and sales and more lay offs.

Can't win either way, but none of you understood Obama's "balanced" plan.... oddly enough.

Anyways, it's old school now..... new "taxes" are on it's way... just that they are not taxes, but higher interest rates, that don't help anyone or the budget at all. Actually harms the budget as the Government will need to pay back more now as before, due to the higher interest alone.

But, you are right : Obama could have stopped it 3 years ago, by ending those Bush tax cuts !

You go find "Obama's balanced plan" !! It's not written anywhere. His was a bunch of talking points and maybe some napkin scribbling. He had NO PLAN !!! Find it.
And you know, higher interest rates only apply to people buying things.......quit spending and you won't notice interest rates at all.

 

[moreluck]

This from one of the "guys in charge"...........

http://video.foxnews.com/v/1096403273001/timothy-geithner-wrong-on-us-credit-rating

 

[klein]

And you know, higher interest rates only apply to people buying things.......quit spending and you won't notice interest rates at all.

So, what are you saying ?
Stop paying mortgages and/or car & personal loans and no one will need to worry about higher interest rates ?

 

[moreluck]

So, what are you saying ?
Stop paying mortgages and/or car & personal loans and no one will need to worry about higher interest rates ?

Why do you take everything to the ridiculous side???? If you are in the market for a car....don't buy one just yet. Don't go shopping and run up your credit cards. If you were house hunting, put it on hold for now.

If you have a mortgage, of course you have to pay it........................but a lot of people who haven't are now being forgiven a big part of their debt by the likes of B. of A. One of my mortgages is from B. of A. , but I pay my mortgage every month and on time......they aren't forgiving any of my debt. They suck!

 

[cheryl]

CHINA: "America Needs To Accept The Painful Fact That The Good Old Days Are Over" - Business Insider

China's official comment on the S&P downgrade was harsh and condescending. Released through Xinhua (via Reuters) the statement condemned America for its "debt addiction" and "short-sighted" political wrangling.

 

[moreluck]

CHINA: "America Needs To Accept The Painful Fact That The Good Old Days Are Over" - Business Insider

China's official comment on the S&P downgrade was harsh and condescending. Released through Xinhua (via Reuters) the statement condemned America for its "debt addiction" and "short-sighted" political wrangling.

That's it, we need to tell Georgia to quit supplying them with chopsticks !!!

 

[Buddybrown]

Thanks TEA PARTY, you took the argument TOO FAR. You screwed all americans tonight. 8/5/11 Americans will remember this. The republicans will run for cover all weekend. Peace.

So with your LACK OF LOGIC the party that said cut, cap and balance and to stop spending will run for cover?!? What a joke! There is no argument, we need to stop spending. The S&P and anyone with half a brain knows we need to see real cuts in spending. Finally a wakeup call for all the foolish spending idiots in D.C. WAKE THE friend UP!!

 

[The Other Side]

If you are in the market for a car....don't buy one just yet. Don't go shopping and run up your credit cards. If you were house hunting, put it on hold for now.

CAN YOU SPELL RECESSION? If anyone took your advice, we'd head right into a depression. Stop consumer spending for a while? Seriously? What happens to GDP? Dont buy a car? What happens to the tax revenue that isnt collected during that period?

It doesnt take a mathematical genious to know that if you stop buying, tax revenue isnt collected and the DEFICIT GROWS larger!

Geez, does anyone really have a clue?

Peace.

 

[The Other Side]

So with your LACK OF LOGIC the party that said cut, cap and balance and to stop spending will run for cover?!? What a joke! There is no argument, we need to stop spending. The S&P and anyone with half a brain knows we need to see real cuts in spending. Finally a wakeup call for all the foolish spending idiots in D.C. WAKE THE friend UP!!

that same party argued needlessly for 6 months and refuse to compromise. The VERY THING that Standard and Poors criticized! Failure to secure increased revenues in cooperation with cuts is what the ratings agencies were looking for.

Instead, Political wrangling, speech making, talking points, rhetoric and stupid partisan nonsense has caused this nations rating to be dropped. Overseas markets were hit hard this morning and sunday nights future markets will get crushed.

Commodities will skyrocket and that will be an INSTANT tax increase on ALL OF US.

YES, stupid actions by the "tea party terrorists" is the common factor in every denunciation of the congressional actions.

CUT CUT CUT without increase revenues is a plan to fail. S&P points this out clearly. It may sound good on the elephant channel, but it doesnt sound good on wall street.

Peace.

 

[klein]

I assume the first thing to go down Sunday night is the US dollar, which in turn will bring up commodity prices - so TOS, you are right !
And just for your knowledge, since last June (2010) the US dollar already fell 17% in average against other world currencies.

The head of S&P was on Wolgang Blitz earlier today.
The AA+ rating is actually followed by a negative outlook, too. And within 6-24 months they will take another look on how the US manages it's budget, and if they don't come closer to a balanced budget... they will downgrade the credit rating even further.

Oh, Blitz asked how long would it take the US to get it's AAA rating back if they manage to get most of their finances in order.
Answer : Only 5 countries have done that sofar. The quickest time it took was 9 years and the longest was 18 years.
So, by no means expect to get that perfect credit rating anytime soon, and find a way to cut another 7 more trillion over the next decade , too !

Maybe Obama will lose his re-election in 2012, and then we'll see if the GOP can balance the budget on cuts alone - and I'll bet on it, that they can't !