On Friday, Standard & Poor's reduced the credit rating for long-term U.S. government debt by one notch, from AAA, to AA+.
The Obama Administration responded by taking to the airwaves, hammering away at anyone or anything responsible for the (gasp) downgrade. Treasury Secretary Tim Geithner even attacked S&P's credibility, saying the company’s record has been terrible and its arithmetic worse. According to the Treasury department, the credit-ratings firm made a $2 trillion math error, calling it the "amateur hour."
I guess you could call all this a theme. Paul Krugman certainly got the message, writing on The New York Times Web site that "it's hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy?”
Of course, it didn’t end there. The Administration, still not convinced that the American people won’t soon turn their frustrations towards the White House, also blamed Republicans. Campaign advisor David Axelrod even called it a “tea party downgrade.”
My father used to say that there’s a time and place for everything, and I wish it had been a message he delivered to President Obama instead of me because I’m convinced at this point that the only real amateurs are the hacks currently whispering into the ear of the President.
Ok, so maybe that was a low blow, but the point here is this. S&P has made a decision that has struck a nerve with investors, but not all of them. Billionaire Warren Buffett says the S&P is flat wrong, period. No name calling, no threats, just some billionaire logic saying, if anything, the downgrade may change his opinion of the S&P. Heck, ole Warren even told CNBC that he may even buy U.S. Treasuries that yield nothing if he had to do it. That’s good to know.
Moody’s also has me smiling a little. That ratings agency has reaffirmed America’s AAA status, disagreeing with its rival S&P. But not all is glorious at Moody’s either, saying all eyes must remain on the U.S. budget deficit and more importantly how it’s handled moving forward. Good luck with that.
So, once again we're turning to the President for answers. I’m just wondering where the White House plans to send me next. Change we can believe in? I guess President Obama was talking about my pocket change since before this is over, it may be all I have left.
Fran Hopkins
9:59 pm on Monday, August 8, 2011
It's true that this White House seems to accept no responsibility whatsoever for the unprecedented financial decline of the United States of America. Don't their fingers get tired from all the pointing? They won't acknowledge that their policies are only making things worse. We have only more blame and more of the same to look forward to until November 2012.
Nick Muson
11:55 am on Tuesday, August 9, 2011
What do you want exactly? I don't get it. Blaming people isn't wrong when they deserve it, right? Is it better to pretend the world was created in 2009? What the hell do you people want?
Right of Center
8:49 am on Tuesday, August 9, 2011
Columnist Mark Steyn recently said
"one party that wants to floor it and put its foot on the pedal as we go over the cliff, and another party that says oh, no, no, no, it’s okay, vote for us, we’re only going to go over the cliff in third gear."
All of the recent bitterness is over whether we primise to *try* (in the future of course) to reduce the 9 Trillion we will *add* to the debt in the next decade to 8 Trillion.
Cuts and taxes will be needed, but taxes should be the last resort.
Nick Muson
11:59 am on Tuesday, August 9, 2011
What if this whole "OUR DEBT IS KILLING US!" is just a big lie? Ever consider that in the short term our debt is perfectly reasonable? And in the long term the only big problem is end-of-life healthcare?
Ever think this is just a cyclical right-wing drum to pound on when they're not the ones spending the money, and actually our country is still incredibly wealthy and just suffering the predictable effects on revenue that comes with the massive 2008 recession?
Don
8:29 pm on Wednesday, August 10, 2011
The reason the debt is high is that, on the average, "U.S. Is One of the Least Taxed Developed Countries" See just how big the gap is here:
http://ctj.org/ctjreports/2011/06/us_one_of_the_least_taxed_developed_countries.php
Right of Center
12:19 pm on Tuesday, August 9, 2011
We borrow an amount twice the entire GDP of Canada each and every year. No big whoop.
Don
8:34 pm on Wednesday, August 10, 2011
Canadians pay around 1% more than Americans do in income taxes, but that includes free healthcare. Its estimated that health insurance equivalent to what every Canadian gets would now cost a family over $50,000 a year in the US. If they could even find it. US medicine is under so much pressure to not diagnose anything that even rich people find they are getting terrible healthcare - its becoming an ingrained habit in the medical profession. The kind of medicine you see on TV where doctors do the tests they need to diagnose illnesses thoroughly is rare to nonexistent. Privately, Ive had both nurses and doctors tell me that they cannot deliver real healthcare anymore in this system, its criminal. Many are retiring, or wish to.
Americans who can who have health issues should, if they can afford to, try to go somewhere else until this problem is solved.
Don't hold your breath.
Nick Muson
12:37 pm on Tuesday, August 9, 2011
Thank you Right of Center! That is a perfect example of what I am talking about. A statistic like that has absolutely no meaning out of context. It's perfect right-wing meme: one sentence, easy to remember, cutsey, and meaningless.
Tammy
12:46 pm on Tuesday, August 9, 2011
Well, if it is no big deal to raise the debt ceiling which quite simply allows us (the USA ) to borrow even more money from Hu to pay for Greece, then BORROW AGAIN to payback Hu, thus increasing the national debt to $13 Trillion to China even more. Well thank you prez. Maybe next April 15, 2012 we should cut to the chase and mail the checks to President Hu of China. We will never get out of this pickle. In a way it is good we are going 'Green' cuz these children will be re-using and re-purposing everything as will we very soon if you haven't started already.
Nick Muson
1:09 pm on Tuesday, August 9, 2011
$13 Trillion
Another number that, without any context, is completely meaningless, but makes lazy people feel warm and fuzzy.
Oh the innumeracy of it all!
Right of Center
1:19 pm on Tuesday, August 9, 2011
The number is now 15 trillion or $15,000,000,000,000.00 (I realize it's hard to keep up with the total.)
Which is now 100% of GDP.
Right of Center
1:24 pm on Tuesday, August 9, 2011
Visualize it this way:
http://mercatus.org/publication/how-much-federal-spending-borrowed-every-dollar
43% of every dollar spent by the government is borrowed.
Perhaps it's "cutsey, and meaningless" but would you run your personal finances that way?
Nick Muson
1:36 pm on Tuesday, August 9, 2011
I have a mortgage. My debt is almost 200% of my GDP. Am I irresponsible? Or did I make an investment I am perfectly capable of paying for over 30 years?
What if I lose my job, and for a month or 2 I have an extremely reduced income (a personal recession). Now, for a few months, my debt service compared to my income is crazy high. If I am confident that I can get a job again, it's no big deal if I borrow against my 401K or credit cards to tide me over, right?
It all depends on the context.
Don
8:41 pm on Wednesday, August 10, 2011
Every soldier in Afghanistan costs $1 million a year to keep there, a cool million. Most of that money goes to well connected defense contractors. If you investigate the thousands of grants that have been given to rebuild this or that, a huge percentage of them were never completed. Its like a huge scam. Steal as much you can. Thats the kind of spending we should cut. You respond with 9-11. You know, there is a certain group of people here in the US for whom 9-11 was a financial windfall. I think that we need to be very wary of terrorism as being actually coming from where they say it is. I would also like to point out that many members of Osama Bin Laden's family were close friends of the Bush family. In fact, one of OBL's half brothers is on the record as partnering with a young George W. Bush in an airline venture in the 1980s. While GWB's father was the President. Yes, they were business partners. Business partners.
Don
8:50 pm on Wednesday, August 10, 2011
Nicholas, I sympathize with your feelings and if I didn't know what I do i would say they were true, but I think your assumptions are wrong. I think the rules of the game are changing and we need to realize that this recession isn't like the others, its different. Jobs are vanishing because business practices are changing. The kind of high paying, easy job that many Americans grew up doing, are vanishing very quickly. It used to be that if you spoke English well, could do basic arithmetic, and could handle, say MS Word and Excel on a computer, you could probably get a job. Now, its a very different landscape but we still are not getting it. People who are not studying every possible hour to build up their skills are going to find they cant get a job. Any job. We all have to wear many hats. And the kinds of jobs that pay the kinds of wages that somebody can support a family on without a very substantial skill level are doomed.
When I walk into an office, and see the things that most people spend 90% of their time doing, I know that the big job losses are still ahead of us. Because they are all too frequently easily automated. The owners of the businesses just don't realize it.
By committing to insurance through jobs, Obama walked into a trap. Because those jobs are going away NO MATTER WHAT, and now, the GOP is going to happily blame it on him.
Right of Center
1:38 pm on Tuesday, August 9, 2011
"I have a mortgage. My debt is almost 200% of my GDP. Am I irresponsible? Or did I make an investment I am perfectly capable of paying for over 30 years?"
Is the US purchasing land? Will it have something to "sell" in 30 years to make good the investment? Or are we just funding an expense budget?
(whoops!)
Nick Muson
1:42 pm on Tuesday, August 9, 2011
Jeez, ROC, I guess I have more faith in the US than you do.
Don
3:35 pm on Wednesday, August 10, 2011
As I understand it, the debt divided by the number of individual Americans is substantial. But the benefits of all that excess spending have disproportinately gone to a very few. It would be very unfair to do as the right suggests and charge people who got absolutely nothing (except having their jobs exported for a tax break) to pay for the money that was stolen by a very few. But thats what this hype is leading up to.
I hope those paid bloggers get paid well. They will NEED it.
Don
8:54 pm on Wednesday, August 10, 2011
Ask the experts.. They tell us that the US, which used to produce more VALUE than any other nation in the world, has changed its approach. Now instead of producing a growing amount of our so called wealth, we hire the people of other nations to produce it, and then we try to mark it up, at a profit. That is the classic superpower mistake, and it never works.
We need to take 3/4 of that money we throw into a black hole we call "defense" and use it to defend our future by building the kinds of skills in our people they can build real wealth with in the future. We need to call an end to the big Ponzi scheme and start fresh, on a much less grandiose path. We can do it. But we have to LOSE THE HUBRIS.
Right of Center
1:49 pm on Tuesday, August 9, 2011
So in the end, your argument is faith based. (not surprising, really).
Seems rather "one sentence, easy to remember, cutsey, and meaningless." to me, but you are entitled to your own faith.
Nick Muson
2:00 pm on Tuesday, August 9, 2011
LOL, Right of Center. You really got me there!
You don't have any evidence that our debt level is too high. You just believe it is. You throw numbers around without any context and call it math. The number 13 trillion doesn't scare me even a little, in a gigantic and wealthy country like the US (even with all those zeroes! SO SCARY!).
Don
3:37 pm on Wednesday, August 10, 2011
We spend as much on "our" "defense" as the next 10 largest nations combined.
But nobody is telling the truth about that. Neither "party" is.
Right of Center
2:12 pm on Tuesday, August 9, 2011
Don't forget the "$0.43 of every $1.00 spent is borrowed" figure. Is that too complex or without enough context to understand?
(That figure alone is plenty scary, even without many zeros at all)
I hope for your sake you manage your personal finances better than that.
Don
9:03 pm on Wednesday, August 10, 2011
And thanks to the gridlock in Washington, in ONE DAY, the interest on it just became around 15-20% more expensive. We went from one of the AAA countries, to a second tier country, in the same league as dysfunctional Belgium and tiny (but beautiful) New Zealand. Also, we gave the rest of a world a unavoidable message that our once stable government's mandate to rule is increasingly threatened by unfettered greed- and potentially dysfunctional.
Nick Muson
2:51 pm on Tuesday, August 9, 2011
So what number would be ok, ROC? What number is unsustainable? What if we just kept paying that .43 on the dollar, every year, forever? Would that necessarily be a bad thing, on it's own? Is it a short-term problem or a long-term problem? If it's a long-term problem, are drastic steps really necessary when there are so many unemployed and our infrastructure in deteriorating before our eyes?
That's what I mean by maybe this is a manufactured, politically motivated crisis. And when I ask people who claim to be so smart about it, like you do, to explain EXACTLY why it is so much worse now than it's ever been, all they do is spout magic numbers or go on the attack.
Is the debt a short-term problem that demands drastic action? You have some responsibility to prove your argument beyond listing all the zeros in 13 trillion or quoting our debt-load.
Right of Center
3:24 pm on Tuesday, August 9, 2011
I hate to break it to you Nickolas, but when you have to borrow just to make your living expenses, ALL the borrowing is unsustainable. It's just a matter of time when it catches up to you. It's called "living beyond your means" the more you borrow the sooner you go broke.
http://www.davemanuel.com/history-of-deficits-and-surpluses-in-the-united-states.php
Notice anything toward the bottom of that chart?
If you were putting 43% of all your daily living expenses on a credit card, would you think some kind of immediate action is needed?
Nick Muson
4:18 pm on Tuesday, August 9, 2011
Funny about context, ROC, when I spent less-than 5 minutes looking at that table you linked to.
For 2008, it says the deficit was 455bn. Let's put aside for a moment that this represents a 600bn increase in the deficit during GW's administration. Funny thing is that TARP, a creation of GW, somehow goes under the "D" year of 2009, which balloons the deficit by a cool trillion. Neither you nor the author of the table makes that distinction. Funny, no? So, if we assume that TARP was about 800bn, that means Obama only "owns" about 600bn for 2009, less than GW spent in a month of that same year.
We all know that you were all nice n' quite like while GW went from a 150M yearly surplus to a 1.2 trillion dollar yearly deficit in 8 years. Everyone knows it. The VAST majority of the right was happy when GW used the power of the purse to forward their agenda, spending be damned.
When Cheney said deficits don't matter, he didn't mean they didn't matter financially. He meant they didn't matter POLITICALLY, because you are your ilk don't punish republicans for it. You love it.
Right of Center
4:36 pm on Tuesday, August 9, 2011
it's doesn't matter who you blame. Blame who you like. The fact of a ballooning debt set to bankrupt the country remains.
Don
9:14 pm on Wednesday, August 10, 2011
You know and I know the right couldn't care less about the deficit. What they want to do is end all social programs, and reverse the gains we saw since the nation almost exploded from the huge inequalities that were exposed in the Great Depression. Now things are almost as bad as they were then for many people, but we have a very modest patchwork quilt of social programs. Without those programs, many poor people would literally starve. Without better skills, better schools, we can give up on half of the people in the country, they just wont have the skills to get and keep a job at any wage. We need to re-prioritize.
The very same small businesspeople who most complain about "liberals" are the group that will be hurt the most if the economy implodes. Their businesses will die from lack of customers. There is nothing more heartbreaking that people whop beleived something for their entire lives and then they realize that it was all a lie. Its not a pretty sight. They should try to put themselves in others shoes. then they will be surprised to find that others who they might expect were against them look out for them too.
We should all try to look ahead a few years. What we are doing now is not sustainable. In many places, post tax cutting, schools dont even have current schoolbooks. The teachers - the underpaid, often struggling themselves, teachers have to buy paper and pencils for the kids themselves.
Nick Muson
4:52 pm on Tuesday, August 9, 2011
I was just showing how, once you put numbers in context their meaning may become more complicated. You prefer simplistic explanations for complex problems. You FEEL like .43 on the dollar is too much, you FEEL like 13 Trillion is too much, but that's seems to be the sum total of your argument. I ask you if you can quantify anything or put anything in a meaningful context, and for whatever reason you won't. I'm not saying you can't, but you sure haven't so far.
I've given you a couple of opportunities to show whether you are interested in anything besides partisan homilies, and honestly you aren't. It's the same old right-wing Coulter technique for talking to liberals: never admit a thing, always attack. You sound like a partisan, and you debate like a partisan, and you don't bother to back up your arguments with anything but tired metaphors about family finances.
Right of Center
5:12 pm on Tuesday, August 9, 2011
.43 Nickolas, getting close to half. Borrowed. You can have partisan arguments about who is to blame. Or who sounds "Coulterish" but that fact remains.
Nick Muson
6:53 pm on Tuesday, August 9, 2011
Ok. Let's keep things superficial. What 43% of government spending would you cut? Let's hear your big plan.
Even Rich Lowry, right-wing moron extraordinaire, dismisses a balanced budget amendment as pointless. Tell me why he's wrong Are you right-of-center or complete fringe wingnut?
Don
3:32 pm on Wednesday, August 10, 2011
I would hope they start admitting the existence of, and then, cut that black budget, since it officially "does not exist". Its a HUGE amount of money, and its completely unregulated.
walleroo
8:50 am on Wednesday, August 10, 2011
Don't waste your breath, Nickolas. ROC is the head speech writer for Hu Jintao.
http://www.nytimes.com/2011/08/07/business/global/china-a-big-creditor-says-us-has-only-itself-to-blame.html
Don
9:22 pm on Wednesday, August 10, 2011
Unfortunately, they have a good point. We need new leaders.. (and I think the GOP is more at blame, than the Dems for the huge debt. After all, they are the ones who keep giving gifts to the rich. Many fo the rich they profess allegiance to would not mind paying higher taxes. They have pointed out to me that they CAN afford to.
You can't take it with you.
Don
3:29 pm on Wednesday, August 10, 2011
We are in the banana republican pattern. The banana republic pattern, repeated many times around the world has been for the little people to be expected to pay the rich's gambling debts. They by then have hidden their loot. Thats what happens when the IMF steps in with austerity, things like subsidies to buy healthcare and social security vanish, prices rise and wages fall. Everything is privatized. Healthcare becomes too expensive for most people. People do what they can to survive, many often end up emigrating elsewhere to find work at low wages. Thats the way the system operates, "we" should know, we created it.
Don
11:13 pm on Thursday, August 11, 2011
Fran, This "crisis" was coming for a very long time, and pundits have been predicting it imminently since well before the election. If you want to get a senior official at the IMF's perspective read this: The Quiet Coup: http://www.theatlantic.com/doc/200905/imf-advice The powerful elites of many countries have used them as their personal piggy bank for a long time. Our leaders are not unique in that. One has to wonder, what we can do to regain some accountability from elected officials, after they leave office. Both parties are guilty as could be. They are laughing at us.
The first thing we need to do is end corporate personhood. Corporate personhood is where the US went wrong. Corporations do not die, they are not people. Their money should not be viewed as free speech. The political contributions they make are bribes, plain and simple. Bribery should be punished for what it is.