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  1. #51
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    S&P wanted the 4 trillion plan Obama offered that would also raise much needed revenues, instead of just 2 trillion in straight cuts. They also took this deal to indicate that Republicans will succeed in trying to extend the Bush Tax Cuts again, which the rating agency didn't want. That, on top of not doing a clean debt deal, with all the infighting, showing them that we falter too long on public debt owed.

    However, S&P is only 1 or the Big 3 rating agencies. And now there's controversy on whether they made a $2 trillion error in their math.
    You're only telling half the story. I sense the bias in this one...

    This is from the downgrade statement from S&P

    Rationale
    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.
    Our lowering of the rating was prompted by our view on the rising public
    debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). 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. We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt
    ceiling. In addition, we believe that the act provides sufficient clarity to
    allow us to evaluate the likely course of U.S. fiscal policy for the next few
    years. 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. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.
    S&P does think that revenues are important, but not as important and containing entitlement spending.

    And the 2 trillion error was in predicting debt burden a few years out. S&P estimated it would be 22 trillion, whereas the general consensus states that it will be about 20 trillion. 2 trillion out of 20 trillion isn't that big of a deal as far as errors go.

  2. #52
    Senior Member Survive & Stay Free's Avatar
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    The more I read about these topics the more I suspect the financial puppeteers are engaged in a final epic battle to put the Keynesian genies away for good.

  3. #53
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    In other news, gold broke 1700 dollars an ounce

  4. #54
    Senior Member BAJ's Avatar
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    With all the debt clocks someone posted, it seems that the whole system is broken.

    Also, it seems with debt that a number with zeros behind it is transferred from one computer to another computer...electronically. Then because of belief in this number, it is translated into goods.

    So what is the solution? I was going to make a thread about this when I found this thread.

    If we have resources to feed and cloth everyone and provide them with medical care, then why don't we just do it?

    Why are 10% of the population allowed 66% of the wealth? What do they need it for? There is only so much food, housing and resources that one person can consume. All that conspicuous consumption is just there to insure some kind of breeding rights or something.

    When will we get sick of the entire system? Why can't we evolve beyond it?

    I guess because the people with more zeros in their computer are the ones in power. I imagine they pretty much control and manipulate everything to increase the numbers of zeros in a computer. I start to believe everything is contrived or exploited for that end.

    I imagine we need some kind of amazing revolution. I'm not sure how it will come about. It would require humanitarian or altruistic people to gain ultimate power without corrupting themselves...like "Animal Farm" with a different conculsion.

    So what can be done?

  5. #55
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    ""Why are 10% of the population allowed 66% of the wealth?

    Sounds dangerously you'de like to forcefully take it away from them, who would you give such power?

  6. #56
    Senior Member BAJ's Avatar
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    Quote Originally Posted by Tantive View Post
    ""Why are 10% of the population allowed 66% of the wealth?

    Sounds dangerously you'de like to forcefully take it away from them, who would you give such power?
    Ha, ha! Where do you think they got it from? Do you think the U.S. Military is for our "safety"? U.S. corporations extract resources globally, raping the land, only benefiting a few share-holders and a few dignitaries in those countries. The common people are left with next to nothing.

    If foreign leaders can't be bribed to play along, then they get assassinated or have their country invaded. In short, exploitation occurs by force.

    Worse, we pay them to do this. The system is set up so that the "rich get richer". We pay for these wars and actions to allow for U.S. economic penetration.

    I think I'd already describe who. Who specifically? I don't know this yet.

  7. #57
    Senior Member lowtech redneck's Avatar
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    Quote Originally Posted by Jenaphor View Post
    For anyone who voted in the Tea Partiers, reconsider for the next election. Your lifestyle and country rely on it.
    The Democrats behaved no better, and more voted against raising the debt ceiling at the last minute (which buys us a little time) than did the Republicans (presumably members of the Tea Party caucus, who despite their intransigence at least made cutting the debt a national priority).

    I'll believe the two parties are serious about the debt problem when they start voting on entitlement reform and tax raises on the middle-class along with the upper-class (raising taxes only on the wealthy risks long-term economic growth for relatively little short-term gain).

  8. #58
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    Quote Originally Posted by lowtech redneck View Post
    The Democrats behaved no better, and more voted against raising the debt ceiling at the last minute (which buys us a little time) than did the Republicans (presumably members of the Tea Party caucus, who despite their intransigence at least made cutting the debt a national priority).

    I'll believe the two parties are serious about the debt problem when they start voting on entitlement reform and tax raises on the middle-class along with the upper-class (raising taxes only on the wealthy risks long-term economic growth for relatively little short-term gain).
    You're spinning. It was a do or die vote. The Tea Party held everyone at gun point to get their reforms pushed through without raising taxes on the wealthy. Not acceptable considering the magnitude of the problem. That the Tea Party were willing to default to get cuts without revenue increases was pure and utter stupidity. Understand something. I don't normally support tax increases for anyone but this truly is getting beyond ridiculous. S&P had it right.

    Discobiscuit, what you've quoted is opposite of what you're trying to illustrate. S&P is saying that what's happened which includes no tax revenue increases, isn't enough.

  9. #59
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    Idealogues need to get their heads out of their asses. It's damn dark up that tunnel with little to no oxygen. It takes compromise and compromise hasn't been happening with the Tea Party. This is serious. The international financial community is saying "we don't trust the U.S. to come to any agreements enough to ensure that our investment into your country won't be defaulted on". And do you blame them? I certainly don't and side strongly with them.

    /rant

  10. #60
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    Discobiscuit, what you've quoted is opposite of what you're trying to illustrate. S&P is saying that what's happened which includes no tax revenue increases, isn't enough.
    Uhh no.

    I'm trying to illustrate that of the two partial solutions, those being revenue increases and cuts to entitlements, that reducing entitlement spending will ultimately be vastly more important to extricating ourselves from our current problems.

    We have to start somewhere, and these two solutions in in addition to the defense cuts mentioned early are our best options for first steps to take. Entitlements, healthcare and defense comprise to majority of our financial expenditures, so where better to find savings than in the fattest parts of the budget.

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