Moody's reasons for downgrading Britain. By Moody's

[tinydancer]

High debt. Slow growth.

How can it be austerity back firing? Their debt isn't going down. It's rising. Consequently they've been downgraded.

London, 22 February 2013 -- Moody's Investors Service has today downgraded the domestic- and foreign-currency government bond ratings of the United Kingdom by one notch to Aa1 from Aaa. The outlook on the ratings is now stable.

The key interrelated drivers of today's action are:

1. The continuing weakness in the UK's medium-term growth outlook, with a period of sluggish growth which Moody's now expects will extend into the second half of the decade;

2. The challenges that subdued medium-term growth prospects pose to the government's fiscal consolidation programme, which will now extend well into the next parliament;

3. And, as a consequence of the UK's high and rising debt burden, a deterioration in the shock-absorption capacity of the government's balance sheet, which is unlikely to reverse before 2016.

At the same time, Moody's explains that the UK's creditworthiness remains extremely high, rated at Aa1, because of the country's significant credit strengths.
These include (i) a highly competitive, well-diversified economy; (ii) a strong track record of fiscal consolidation and a robust institutional structure; and (iii) a favourable debt structure, with supportive domestic demand for government debt, the longest average maturity structure (15 years) among all highly rated sovereigns globally and the resulting reduced interest rate risk on UK debt.

Moody's downgrades UK's government bond rating to Aa1 from Aaa; outlook is now stable

 

[Star]

.
Using the excuse that they were trying to protect the U.K.'s credit rating the U.K.conservatives via leaders David Cameron and George Osborne embarked on an austerity policy that caused the U.K. to lose it's credit rating -- the U.K's conservative party response? concentrate more wealth in the hands of the few, more austerity, more of the same BS.




Trevor Greetham, Asset Allocation Director: "The Coalition set out trying to please the ratings agencies but the inflexible application of front loaded austerity is partly to blame for the lack of growth that led Moody's to downgrade its UK sovereign debt rating on Friday. Government, consumers and the banking system cannot all attempt to deleverage against a weak global backdrop without damaging the economy. This is a classic case of Keynes' 'Paradox of Thrift'.

"Ironically, it was a deferral of government spending cuts that lost America its AAA rating in August 2011 but the US strategy of putting off fiscal tightening until the economy is stronger looks to be paying off. US interest rates remain exceptionally low, economic activity is well above pre-crisis levels and clear signs of revival in the housing market suggest the economy may be escaping its debt trap.

"There is a lesson here. Sometimes the ratings agencies are best ignored. They played a pernicious role in the run up to the financial crisis, assigning AAA ratings to flawed debt instruments linked to overheated housing markets. The damage to bank capital ratios when these investments turned sour is what created the credit crunch. Now, with economies facing sustained consumer deleveraging pressure as a result, the same ratings agencies have advised governments to add to the pain by implementing aggressive austerity plans when their economies need as much support as the markets will let them give."





telliottmbamsc: "Austerity without a full scale attack on concentrated wealth is abject bullshit against the People. If the 1% wealth were frozen at it’s prevailing level when Austerity measures took effect, or couldn’t rise as a consequence of the effects of Austerity - Austerity measures would never be implemented."
.

 

[tinydancer]

How can austerity programs be working and still have the debt rise?

How can austerity programs be working and still government spending increases?

Moody's you know the company that downgraded Britain, you know, the real deal not some one writing an op ed has said this:

And, as a consequence of the UK's high and rising debt burden, a deterioration in the shock-absorption capacity of the government's balance sheet, which is unlikely to reverse before 2016.

 

[AmyNation]

The reason the debt is rising is because their economy is not earning enough to cover debts. The more they slash(austerity) the less the economy grows, the higher the debt rises.

 

[EdwardBaiamonte]

The more they slash(austerity) the less the economy grows,

how on earth could that make sense??????????

 

[Mad Scientist]

The more they slash(austerity) the less the economy grows,

how on earth could that make sense??????????

Because the Gov't is the largest part of the Economy.

This is what will happen in America.

 

[EdwardBaiamonte]

The more they slash(austerity) the less the economy grows,

how on earth could that make sense??????????

Because the Gov't is the largest part of the Economy.

This is what will happen in America.

so if you slash government spending won't private sector then just go up???????

 

[AmyNation]

The more they slash(austerity) the less the economy grows,

how on earth could that make sense??????????

The more they slash(austerity) the less the economy grows,

how on earth could that make sense??????????

Because the Gov't is the largest part of the Economy.

This is what will happen in America.

Exactly.

When you add private sector contaction and a heretofore big spending government suddenly taking austerity measures you get decline.

 

[EdwardBaiamonte]

The more they slash(austerity) the less the economy grows,

how on earth could that make sense??????????

how on earth could that make sense??????????

Because the Gov't is the largest part of the Economy.

This is what will happen in America.

Exactly.

When you add private sector contaction and a heretofore big spending government suddenly taking austerity measures you get decline.

of course money is neither created nor destroyer. When the libutrds don't spend it the private sector can, and when the private sector cant because it is taxed away the libturds can.

There can be no net change in spending.

Simply enough??

 

[AmyNation]

That's a lot of whining but I'm sure it made you feel better

 

[EdwardBaiamonte]

That's a lot of whining but I'm sure it made you feel better

Translation:

as a liberal I lack the IQ to respond substantively, so I'll try to change the subject and imagine no one notices.

 

[AmyNation]

You didn't say anything worth responding to.


If you don't understand how a country whose largest employer is the government is not bouncing back with government spending cuts then I can't help you.

 

[EdwardBaiamonte]

You didn't say anything worth responding to.


If you don't understand how a country whose largest employer is the government is not bouncing back with government spending cuts then I can't help you.

dear, as WW2 ended there were huge huge spending cuts and the economy boomed like never before in the history of the world.

Please just admit as a liberal you can't possibly respond intelligently. Sorry.

 

[AmyNation]

You've already been pwnd on WW2 in a different thread. Besides the fact that the UK today has very little in common with the USA circa 1945.

 

[EdwardBaiamonte]

You've already been pwnd on WW2 in a different thread.

too stupid!! you mean governemnt spending grew after WW 2 ended and thats why the economy boomed??? Who knew!!!!

Besides the fact that the UK today has very little in common with the USA circa 1945.

principle is the same, right?? The more you cut government spending the more the private sector can grow. You can't expect a man to breath better when you are chocking him , can you??

Is this really over your head???

 

[Star]

You didn't say anything worth responding to.


If you don't understand how a country whose largest employer is the government is not bouncing back with government spending cuts then I can't help you.

dear, as WW2 ended there were huge huge spending cuts and the economy boomed like never before in the history of the world.

Please just admit as a liberal you can't possibly respond intelligently. Sorry.

Historylesson/reality check...



<snip>

This is our nation’s debt as a percentage of GDP - all the way from just before World War 2 - up until today.

(Source)​

And yes - our debt was enormous after World War 2 - as it should be - it cost a lot of money to kick the Nazi's butt.

And yes - all it took was two presidents after Roosevelt to bring our debt back down to reasonable levels.

So how’d they do it - how did Truman and Eisenhower reign in our debt?Was it thanks to the conservative fiscal policies that Ron Kirk is touting?

No - we didn’t cut our way to fiscal prosperity like Republicans today want you to believe - we GREW and SPENT our way to prosperity

Coming out of the Great Depression - Franklin Roosevelt tore down a decade of co-called "Conservative policies" that unleashed the "Roaring 20's" bubble economy - and then led to the Stock Market crash in 1929.

Roosevelt immediately jacked up the top income tax rate to keep rich people from gambling with their excess money - and to pay for a "New Deal" to put working class Americans back to work. Under his watch - the top income tax rate went from 25% in 1931 all the way up to 94% by the end of World War 2.

And through the Truman and Eisenhower Administrations - that top tax rate stayed at around 91%.

So yeah - if Mark Kirk wants to take a lesson from the 1950's on how we paid off our debt so fast - then he should consider raising taxes on the rich. What he shouldn't be learning from is what Reagan did with his so-called Conservative policies that exploded our debt in the 1980's.

Under Reagan's watch the top income tax rate plummeted from 70% in 1980 to 28% in 1989 - and by the end of his term more than 3 trillion dollars of debt was on our nation's balance sheets. Corporate taxes also played a key role in paying off our debt.

Roosevelt jacked those up too - from 12% to 40%. And Republican Dwight Eisenhower raised them again - up to 52% in the 1950's.

Corporate taxes accounted for about a third of all government revenue during the 1950's and 1960's.
Today - thanks to a much lower 35% tax rate and corporate lobbyists - corporate taxes make up less than 7% of all government revenue and most large corporations pay little or no income taxes...no wonder we're going bankrupt.

And then there's labor policies. While America was paying off its World War 2 debt - Truman and Eisenhower continued Roosevelt's pro-labor agenda.

Take a look at what Harry Truman had to say back in 1948 - about the Democrats pro-labor policies:

The reason is that the people know that the Democratic Party is the people's party, and the Republican Party is the Party of special interest, and it always has been and always will be....

Workers have benefited by the progress which has been made in carrying out the programs and principles set forth in the 1952 Republican platform. All workers have gained and unions have grown in strength and responsibility, and have increased their membership by 2 millions. Furthermore, the process of free collective bargaining has been strengthened by the insistence of this Administration that labor and management settle their differences at the bargaining table. This policy has brought to our country an unprecedented period of labor-management peace and understanding." ...

Wages and salaries in this country have increased from 29 billion dollars in 1933 to more than 128 billion dollars in 1947. That's labor, and labor never had but one friend in politics, and that was the Democratic Party and Franklin D. Roosevelt....

The total national income has increased from less than 40 billion dollars in 1933 to 203 billion dollars in 1947, the greatest in all the history of the world. These benefits have been spread to all the people, because it's the business of the Democratic Party to see that the people get a fair share of these things.
​

From the Republican Party's official platform in the 1956 election!

Under the Truman and Eisenhower's administrations - nearly a third of all private sector workers in America belonged to unions. And because of that - as Truman and Eisenhower just point out - workers were bringing in healthy wages, which meant they were paying more in taxes - and the government was collecting more revenue to pay off its debt.

Thanks to unions - the pay ratio between a CEO and a worker on the factory floor was about 30 to 1 back then...today it's more like 600 to 1. Workers are now getting screwed with low wages and, thus, many don't even make enough to pay federal income taxes.
So yeah...if we REALLY want to pay off our debt - how about instead of busting up unions - we start promoting unions - promoting workers having more money in their pockets - to stimulate our economy AND raise everyone's wages.

And finally there's government spending. Over and over again - you hear Republicans say we need to cut spending - but that's not what Truman and Eisenhower did to pay off our debt - they INCREASED spending.

<snip>

.

 

[EdwardBaiamonte]

You didn't say anything worth responding to.


If you don't understand how a country whose largest employer is the government is not bouncing back with government spending cuts then I can't help you.

dear, as WW2 ended there were huge huge spending cuts and the economy boomed like never before in the history of the world.

Please just admit as a liberal you can't possibly respond intelligently. Sorry.

Historylesson/reality check...



<snip>

This is our nation&#8217;s debt as a percentage of GDP - all the way from just before World War 2 - up until today.

(Source)​

And yes - our debt was enormous after World War 2 - as it should be - it cost a lot of money to kick the Nazi's butt.

And yes - all it took was two presidents after Roosevelt to bring our debt back down to reasonable levels.

So how&#8217;d they do it - how did Truman and Eisenhower reign in our debt?Was it thanks to the conservative fiscal policies that Ron Kirk is touting?

No - we didn&#8217;t cut our way to fiscal prosperity like Republicans today want you to believe - we GREW and SPENT our way to prosperity

Coming out of the Great Depression - Franklin Roosevelt tore down a decade of co-called "Conservative policies" that unleashed the "Roaring 20's" bubble economy - and then led to the Stock Market crash in 1929.

Roosevelt immediately jacked up the top income tax rate to keep rich people from gambling with their excess money - and to pay for a "New Deal" to put working class Americans back to work. Under his watch - the top income tax rate went from 25% in 1931 all the way up to 94% by the end of World War 2.

And through the Truman and Eisenhower Administrations - that top tax rate stayed at around 91%.

So yeah - if Mark Kirk wants to take a lesson from the 1950's on how we paid off our debt so fast - then he should consider raising taxes on the rich. What he shouldn't be learning from is what Reagan did with his so-called Conservative policies that exploded our debt in the 1980's.

Under Reagan's watch the top income tax rate plummeted from 70% in 1980 to 28% in 1989 - and by the end of his term more than 3 trillion dollars of debt was on our nation's balance sheets. Corporate taxes also played a key role in paying off our debt.

Roosevelt jacked those up too - from 12% to 40%. And Republican Dwight Eisenhower raised them again - up to 52% in the 1950's.

Corporate taxes accounted for about a third of all government revenue during the 1950's and 1960's.
Today - thanks to a much lower 35% tax rate and corporate lobbyists - corporate taxes make up less than 7% of all government revenue and most large corporations pay little or no income taxes...no wonder we're going bankrupt.

And then there's labor policies. While America was paying off its World War 2 debt - Truman and Eisenhower continued Roosevelt's pro-labor agenda.

Take a look at what Harry Truman had to say back in 1948 - about the Democrats pro-labor policies:

The reason is that the people know that the Democratic Party is the people's party, and the Republican Party is the Party of special interest, and it always has been and always will be....

Workers have benefited by the progress which has been made in carrying out the programs and principles set forth in the 1952 Republican platform. All workers have gained and unions have grown in strength and responsibility, and have increased their membership by 2 millions. Furthermore, the process of free collective bargaining has been strengthened by the insistence of this Administration that labor and management settle their differences at the bargaining table. This policy has brought to our country an unprecedented period of labor-management peace and understanding." ...

Wages and salaries in this country have increased from 29 billion dollars in 1933 to more than 128 billion dollars in 1947. That's labor, and labor never had but one friend in politics, and that was the Democratic Party and Franklin D. Roosevelt....

The total national income has increased from less than 40 billion dollars in 1933 to 203 billion dollars in 1947, the greatest in all the history of the world. These benefits have been spread to all the people, because it's the business of the Democratic Party to see that the people get a fair share of these things.
​

From the Republican Party's official platform in the 1956 election!

Under the Truman and Eisenhower's administrations - nearly a third of all private sector workers in America belonged to unions. And because of that - as Truman and Eisenhower just point out - workers were bringing in healthy wages, which meant they were paying more in taxes - and the government was collecting more revenue to pay off its debt.

Thanks to unions - the pay ratio between a CEO and a worker on the factory floor was about 30 to 1 back then...today it's more like 600 to 1. Workers are now getting screwed with low wages and, thus, many don't even make enough to pay federal income taxes.
So yeah...if we REALLY want to pay off our debt - how about instead of busting up unions - we start promoting unions - promoting workers having more money in their pockets - to stimulate our economy AND raise everyone's wages.

And finally there's government spending. Over and over again - you hear Republicans say we need to cut spending - but that's not what Truman and Eisenhower did to pay off our debt - they INCREASED spending.

<snip>

.

dear, do you agree that spending was cut 40% as WW 2 ended and the economy boomed??? and that the upcoming sequester cuts will be a stimulus???

Please don't try to change the subject to cover up your liberal ignorance. You are not fooling anyone.

 

[Rshermr]

The more they slash(austerity) the less the economy grows,

how on earth could that make sense??????????

It will not to you ed. Because you are a con tool. You are completely incapable of rational discussion.

 

[EdwardBaiamonte]

The more they slash(austerity) the less the economy grows,

how on earth could that make sense??????????

It will not to you ed. Because you are a con tool. You are completely incapable of rational discussion.

too stupid as usual!! They slashed 40%
as WW2 ended to free up the private economy and the economy boomed like never before. Sorry!!

 

[Rshermr]

dear, as WW2 ended there were huge huge spending cuts and the economy boomed like never before in the history of the world.

Please just admit as a liberal you can't possibly respond intelligently. Sorry.

Historylesson/reality check...



<snip>

This is our nation&#8217;s debt as a percentage of GDP - all the way from just before World War 2 - up until today.

(Source)​

And yes - our debt was enormous after World War 2 - as it should be - it cost a lot of money to kick the Nazi's butt.

And yes - all it took was two presidents after Roosevelt to bring our debt back down to reasonable levels.

So how&#8217;d they do it - how did Truman and Eisenhower reign in our debt?Was it thanks to the conservative fiscal policies that Ron Kirk is touting?

No - we didn&#8217;t cut our way to fiscal prosperity like Republicans today want you to believe - we GREW and SPENT our way to prosperity

Coming out of the Great Depression - Franklin Roosevelt tore down a decade of co-called "Conservative policies" that unleashed the "Roaring 20's" bubble economy - and then led to the Stock Market crash in 1929.

Roosevelt immediately jacked up the top income tax rate to keep rich people from gambling with their excess money - and to pay for a "New Deal" to put working class Americans back to work. Under his watch - the top income tax rate went from 25% in 1931 all the way up to 94% by the end of World War 2.

And through the Truman and Eisenhower Administrations - that top tax rate stayed at around 91%.

So yeah - if Mark Kirk wants to take a lesson from the 1950's on how we paid off our debt so fast - then he should consider raising taxes on the rich. What he shouldn't be learning from is what Reagan did with his so-called Conservative policies that exploded our debt in the 1980's.

Under Reagan's watch the top income tax rate plummeted from 70% in 1980 to 28% in 1989 - and by the end of his term more than 3 trillion dollars of debt was on our nation's balance sheets. Corporate taxes also played a key role in paying off our debt.

Roosevelt jacked those up too - from 12% to 40%. And Republican Dwight Eisenhower raised them again - up to 52% in the 1950's.

Corporate taxes accounted for about a third of all government revenue during the 1950's and 1960's.
Today - thanks to a much lower 35% tax rate and corporate lobbyists - corporate taxes make up less than 7% of all government revenue and most large corporations pay little or no income taxes...no wonder we're going bankrupt.

And then there's labor policies. While America was paying off its World War 2 debt - Truman and Eisenhower continued Roosevelt's pro-labor agenda.

Take a look at what Harry Truman had to say back in 1948 - about the Democrats pro-labor policies:

The reason is that the people know that the Democratic Party is the people's party, and the Republican Party is the Party of special interest, and it always has been and always will be....

Workers have benefited by the progress which has been made in carrying out the programs and principles set forth in the 1952 Republican platform. All workers have gained and unions have grown in strength and responsibility, and have increased their membership by 2 millions. Furthermore, the process of free collective bargaining has been strengthened by the insistence of this Administration that labor and management settle their differences at the bargaining table. This policy has brought to our country an unprecedented period of labor-management peace and understanding." ...

Wages and salaries in this country have increased from 29 billion dollars in 1933 to more than 128 billion dollars in 1947. That's labor, and labor never had but one friend in politics, and that was the Democratic Party and Franklin D. Roosevelt....

The total national income has increased from less than 40 billion dollars in 1933 to 203 billion dollars in 1947, the greatest in all the history of the world. These benefits have been spread to all the people, because it's the business of the Democratic Party to see that the people get a fair share of these things.
​

From the Republican Party's official platform in the 1956 election!

Under the Truman and Eisenhower's administrations - nearly a third of all private sector workers in America belonged to unions. And because of that - as Truman and Eisenhower just point out - workers were bringing in healthy wages, which meant they were paying more in taxes - and the government was collecting more revenue to pay off its debt.

Thanks to unions - the pay ratio between a CEO and a worker on the factory floor was about 30 to 1 back then...today it's more like 600 to 1. Workers are now getting screwed with low wages and, thus, many don't even make enough to pay federal income taxes.
So yeah...if we REALLY want to pay off our debt - how about instead of busting up unions - we start promoting unions - promoting workers having more money in their pockets - to stimulate our economy AND raise everyone's wages.

And finally there's government spending. Over and over again - you hear Republicans say we need to cut spending - but that's not what Truman and Eisenhower did to pay off our debt - they INCREASED spending.

<snip>

.

dear, do you agree that spending was cut 40% as WW 2 ended and the economy boomed??? and that the upcoming sequester cuts will be a stimulus???

Please don't try to change the subject to cover up your liberal ignorance. You are not fooling anyone.

Ed, get back to your meds. You are way out of this league. Explain why reagan raised taxes and borrowed enough to triple the national debt AFTER his tax decreases, which you tout, led to unemployment rates of over 10.8%. And why the economy improved as he used stimulus spending and GREW the size of the gov. Simple short time span.
And by the way, ed, even you could, should you care to, understand that WWII was the single biggest stimulus to that point in time. You are simply a con tool. I know you do not want to understand anything, since your job is simply to post dogma.