S&P Cuts U.S. Outlook

[8537]

Please explain how your comment relates to the Obama Administration's desire to increase the Debt Ceiling, and how much a downgrade will affect the cost of doing so.

You wanna REALLY see a downgrade on both our debt and economic outlooks? Vote against raising the debt ceiling.

It'll be Dow 5000, Mortgage rates of 15% and a freeze in the credit markets by summer - and Republicans will have their wish.

What's the alternative....a worthless dollar....?

Two different, fairly significant and serious alternatives have been offered in the past three weeks: The Ryan plan, which reduces the deficit by 4.5T over 10 years and the administration proposal that achieves a bit less reduction in 12 years.

But if you want Republicans to vote to cause a severe recession, have at it.

 

[Avorysuds]

100 years of progressive nanny statism.. and here we are. It's over folks. It's collapsing under it's own weight.

THIS is the point, lol. If small Government was so bad but we have not had it for almost 100 years then why have we managed to reach this point again?

 

[ScreamingEagle]

You wanna REALLY see a downgrade on both our debt and economic outlooks? Vote against raising the debt ceiling.

It'll be Dow 5000, Mortgage rates of 15% and a freeze in the credit markets by summer - and Republicans will have their wish.

What's the alternative....a worthless dollar....?

Two different, fairly significant and serious alternatives have been offered in the past three weeks: The Ryan plan, which reduces the deficit by 4.5T over 10 years and the administration proposal that achieves a bit less reduction in 12 years.

But if you want Republicans to vote to cause a severe recession, have at it.

As if a Republican vote today will cause anything...

but wouldn't a severe recession be better than an all out world depression....?

 

[8537]

What's the alternative....a worthless dollar....?

Two different, fairly significant and serious alternatives have been offered in the past three weeks: The Ryan plan, which reduces the deficit by 4.5T over 10 years and the administration proposal that achieves a bit less reduction in 12 years.

But if you want Republicans to vote to cause a severe recession, have at it.

As if a Republican vote today will cause anything...

It caused a LOT - including cuts in this year's budget and a counterproposal of similar scope. The two sides have now agreed to cut 4T over a decade+, and now it's just working out the details. The parameters of the discussion are a positive step (though I'd prefer to wait until the economy is on more stable footing for most cuts)

but wouldn't a severe recession be better than an all out world depression....?

Well yes, but we're not about to cause a worldwide all-out depression. Even S&P says our rating has a 66% chance of remaining AAA. There are a host of industrialized nations around the world who do quite well with a slightly lower rating and we're not even likely to be downgraded to that.

 

[BlindBoo]

OMG. The sky is falling, the sky is falling......oh wait, no it's not. Typical

S&P said Monday it sees material risk that policymakers might not agree on how to address budgetary challenges by 2013, which would render the U.S. fiscal profile weaker than that of other triple-A-rated countries.

S&P said Monday the U.S.'s rating is supported by its flexible and highly diversified economy and a consistent global preference for the U.S. dollar, which gives it "unique external liquidity."

A senior Treasury Department official said that Standard & Poor's negative outlook underestimates the country's ability to face fiscal challenges.

"We believe S&P's negative outlook underestimates the ability of America's leaders to come together to address the difficult fiscal challenges facing the nation," said assistant secretary Mary Miller.

Ms. Miller said that it is well within the country's capacity to address its fiscal situation and noted that both Democrats and Republicans agree it is time to start reducing deficits as a share of gross domestic product.

S& P said that it doesn't take any position on the outstanding proposals from the White House and Congress to cut the deficit, but views proposals from President Barack Obama and House Republicans as a starting point"

The answer is obvious

[ame=http://www.youtube.com/watch?v=N8LZGQ4MkvQ]YouTube - The Beatles - Come Together (Custom Music Video)[/ame]

 

[ScreamingEagle]

It caused a LOT - including cuts in this year's budget and a counterproposal of similar scope. The two sides have now agreed to cut 4T over a decade+, and now it's just working out the details. The parameters of the discussion are a positive step (though I'd prefer to wait until the economy is on more stable footing for most cuts)

Well yes, but we're not about to cause a worldwide all-out depression. Even S&P says our rating has a 66% chance of remaining AAA. There are a host of industrialized nations around the world who do quite well with a slightly lower rating and we're not even likely to be downgraded to that.

But what do we do next? just keep raising the debt ceiling and print the dollar out of existence...?

i'm sure that's in BO's plans...there's no real "come together" with him.....remember his trashing Paul Ryan recently...?

 

[expat_panama]

aw, and here I thought the sky was falling...

 

[The Rabbi]

You wanna REALLY see a downgrade on both our debt and economic outlooks? Vote against raising the debt ceiling.

It'll be Dow 5000, Mortgage rates of 15% and a freeze in the credit markets by summer - and Republicans will have their wish.

What's the alternative....a worthless dollar....?

Two different, fairly significant and serious alternatives have been offered in the past three weeks: The Ryan plan, which reduces the deficit by 4.5T over 10 years and the administration proposal that achieves a bit less reduction in 12 years.

But if you want Republicans to vote to cause a severe recession, have at it.

Way to spin.
At least you acknowledge that Ryan's proposal is serious.
In fact it is Obama's proposal that is not serious, has never been serious. Obama's proposals will save money in year 10-12, not right now.
There is no Democratic proposal. There is only a well-crafted GOP proposal. Pass the Ryan budget.

 

[8537]

But what do we do next? just keep raising the debt ceiling and print the dollar out of existence...?

As the economy improves, we see revenues increase dramatically and we cut spending.

i'm sure that's in BO's plans...there's no real "come together" with him.....remember his trashing Paul Ryan recently...?

I remember both sides panning each other's plans - and for good reason. But the discussion is on longer "should we cut" but "what should we cut" which is a substantial policy change compared to the past 10 years.

 

[8537]

What's the alternative....a worthless dollar....?

Two different, fairly significant and serious alternatives have been offered in the past three weeks: The Ryan plan, which reduces the deficit by 4.5T over 10 years and the administration proposal that achieves a bit less reduction in 12 years.

But if you want Republicans to vote to cause a severe recession, have at it.

Way to spin.
At least you acknowledge that Ryan's proposal is serious.

Oh, it's serious alright. Parts of it are wholly laughable and unworkable, but it's a start. I'm not sure how those who oppose the latest health care reform bill think replicating it to the most unhealthy risk pool in the nation will make things better.

 

[KissMy]

Thanks for the post, I was wondering why the markets are crashing.

 

[The Rabbi]

Two different, fairly significant and serious alternatives have been offered in the past three weeks: The Ryan plan, which reduces the deficit by 4.5T over 10 years and the administration proposal that achieves a bit less reduction in 12 years.

But if you want Republicans to vote to cause a severe recession, have at it.

Way to spin.
At least you acknowledge that Ryan's proposal is serious.

Oh, it's serious alright. Parts of it are wholly laughable and unworkable, but it's a start. I'm not sure how those who oppose the latest health care reform bill think replicating it to the most unhealthy risk pool in the nation will make things better.

So it's serious. Except the parts that aren't serious.
Are you serious??

 

[8537]

Way to spin.
At least you acknowledge that Ryan's proposal is serious.

Oh, it's serious alright. Parts of it are wholly laughable and unworkable, but it's a start. I'm not sure how those who oppose the latest health care reform bill think replicating it to the most unhealthy risk pool in the nation will make things better.

So it's serious. Except the parts that aren't serious.
Are you serious??

No, it's all serious - It's a substantive proposal. It just happens to contain items that are unworkable.

Yes, I'm serious.

 

[ScreamingEagle]

But what do we do next? just keep raising the debt ceiling and print the dollar out of existence...?

As the economy improves, we see revenues increase dramatically and we cut spending.

How and when is that going to happen exactly...?
waiting.....waiting.......waiting......that trillion dollar stimulus really improved things didn't it?....waiting.......2.5 years and still waiting........

i'm sure that's in BO's plans...there's no real "come together" with him.....remember his trashing Paul Ryan recently...?

I remember both sides panning each other's plans - and for good reason. But the discussion is on longer "should we cut" but "what should we cut" which is a substantial policy change compared to the past 10 years.

The only reason BO is even talking cuts is for political reason.....the majority of the country wants to cut spending so he's going to "talk" it....

.

 

[8537]

But what do we do next? just keep raising the debt ceiling and print the dollar out of existence...?

As the economy improves, we see revenues increase dramatically and we cut spending.

How and when is that going to happen exactly...?
waiting.....waiting.......waiting......that trillion dollar stimulus really improved things didn't it?....waiting.......2.5 years and still waiting........

The economy has grown for five straight quarters and created over a million private sector jobs in the past year. It's gone from losing 750K jobs per month to creating 100k or so. It's gone from losing an annualized 7% of GDP to gaining 2-4%.

if you chose to ignore that, I can't help.

i'm sure that's in BO's plans...there's no real "come together" with him.....remember his trashing Paul Ryan recently...?

I remember both sides panning each other's plans - and for good reason. But the discussion is on longer "should we cut" but "what should we cut" which is a substantial policy change compared to the past 10 years.

The only reason BO is even talking cuts is for political reason.....the majority of the country wants to cut spending so he's going to "talk" it....

.
He proposed 4T in deficit reduction. Republicans proposed 4T+. The new benchmark is 4T in cuts.

If you chose to ignore that both sides have offered ideas and agreed on a new parameter for discussions, I can't help.

 

[boedicca]

Go ahead and ignore this if you wish.

The markets don't like it. And buyers of U.S. debt will certainly use this to demand higher interest rates, which will worsen the deficit.

This is why they will raise the debt ceiling. Not doing so could precipitate a crisis that would make 2008 look like a cakewalk.

Perversely, investors are buying US bonds. 0-5 year debt is trading 3-7 higher, the 10 year is flat while the 30 year is off 18.

The debt ceiling was raised by $1.9T a year ago. The Stimulus spending was supposed to be a one time expense. Most of the TARP money has been repaid.

The problem is that Obama took those programs and has baked them into the U.S. spending baseline. This spending needs to be UNWOUND instead of being a structural part of the budget which is financed with annual increases in the debt limit.

 

[boedicca]

...Of course we will be in second place within a decade or a bit over.
As I have said for several years, our golden age is over.
Just get over it and live with what we have.

Maybe all is not lost. Yet. From L.A. Times Business:

"The United States kept its AAA rating, but the downgrade means that S&P analysts believe there is at least a 33% chance that the agency will have to lower its credit rating on U.S. debt in the next two years."

That is really cold comfort, bub.

If we don't cut spending and reduce the deficit, that chance is 100%.

 

[boedicca]

Please explain how your comment relates to the Obama Administration's desire to increase the Debt Ceiling, and how much a downgrade will affect the cost of doing so.

You wanna REALLY see a downgrade on both our debt and economic outlooks? Vote against raising the debt ceiling.

It'll be Dow 5000, Mortgage rates of 15% and a freeze in the credit markets by summer - and Republicans will have their wish.

B'loney.

We have money. We just need to pay our debts first, and then reduce spending to levels we can afford with the remainder.

 

[8537]

Please explain how your comment relates to the Obama Administration's desire to increase the Debt Ceiling, and how much a downgrade will affect the cost of doing so.

You wanna REALLY see a downgrade on both our debt and economic outlooks? Vote against raising the debt ceiling.

It'll be Dow 5000, Mortgage rates of 15% and a freeze in the credit markets by summer - and Republicans will have their wish.

B'loney.

We have money. We just need to pay our debts first, and then reduce spending to levels we can afford with the remainder.

eh, no. We don't have a rainy day fund set-aside for when Republicans decide to pull stunt wheelies on the American people.

If we fail to raise the deby ceiling, bond prices will skyrocket and the dow will respond by collapsing - and worldwide debt markets will freeze as the value of the dollar falls off a cliff.

 

[boedicca]

That's the hysteria the Obama Administration is spinning, but it's not a fact.