Standard and Poor's downgrades US to AA+
 

..
Thank you, Republicans in the House, for your terrible, incompetent "trickle down" "Reaganomics" fiscal policies, playing around with the fake "debt ceiling crisis" for a month, while you've done nothing at all since your election in January to address the real problem of this country, jobs and growth.

http://www.washingtonpost.com/busine...IxI_story.html

It said the bi-partisan agreement reached this week to find $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would have no luck achieving more savings later on.

S&P’s action is the most tangible vote of disapproval so far by Wall Street on the deal between President Obama and Congress to cut the deficit by at least $2.1 trillion over 10 years. S&P has said that it wanted at least $4 trillion of deficit reduction.


I agree with you Riot. The Republicans caved in and should have been more forceful pushing for bigger cuts.

:zz:

you can't lay this all on one party. obama said when he took office that the economy would be his #1 priority. still waiting for the attention required by him and others.
that said, congress is a joke, and has been a joke for quite some time.

at any rate, not surprised, but still wish it hadn't happened...probably never get aaa back.

There was a deal with $4 trillion, plus tax increases, exactly as S & P outlined in their detail of why they downgraded the rating (and Moody's wanted that, too) That deal was made by Boehner and Obama, and nixed by the Tea Party in the House. Boehner gets to own that failure.

That said, S & P has an SEC problem, as it turns out they may have talked privately to some of their big investors before the downgrade.

Don't forget that S & P is owned by friends of the Bushes.

Of course, we don't have Dodd-Frank, as the Republicans have nixed any closer regulation of Wall Street. Too bad. We have agencies like S & P and Moody's, with their stellar history of rating derivatives, rating us. It will be fun to watch what happens now with Bank of America about to fail, too.

The Republican party owns this. Completely and without question.

Yes, I can. Who blocked the routine raise of the deficit ceiling, threatening the default of the USA for the first time in history? Who said the full faith and credit of the United States to pay it's bills didn't matter? That nothing would happen? It wasn't the Democrats as a party. Who refused deal with our debt by the necessary and essential revenue increases? Not the Dems.
Which party has successfully screwed the US economy just to try and screw Obama politically? It's the Republicans, who can't control their Tea Party faction.

ABC News:

"We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.


"We have also removed both the short-and-long-term ratings from CreditWatch negative," S&P said in a statement.

The downgrade, it said, reflects its opinion that the fiscal consolidation plan which Congress and the administration recently agreed to "falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics".

"More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011," the agency said.

"Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon."


LOLERZ!!!! From the same organization that gave AAA ratings to the CDO's and the Credit Default Swaps....

It's amazing how some love to immediately blame one side or the other when BOTH have been FUGGING you like ignorant pigs....Hopefully it isn't too late for us to realize that neither party has the best interest of this nation in mind and only their short term personal aspirations...












Nah.... it IS too late...:wf:wf

this is so dumb. both parties failed us. You think the repubs own this? Obama is weak and failed you.

the main reason is that we did not cut enough spending and/or increase taxes (or as the dems called it, revenue increase). Both parties failed no matter what you believe. Tea party failed because they wont eliminate loopholes. Obama failed because he did not cut enough or deal with real issues, plus he signed the damn thing and is as weak as anyone i've ever witnessed.

everything we're confronted with now has been years in the making. the current group of eff-ups couldn't figure out a way to avoid this catastrophe...

and it isn't as tho they suddenly realized a couple months ago that we were coming up on this debt ceiling issue. it should never have been left to go this long, and with a bandaid fix for a hemorrhage.

half the people polled said they thought there should have been a tax increase as part of the deal...helll, the bush tax cuts shouldn't have been continued-whose fault is that? the lowering off ss take out-whose fault is that? they were allowed to continue because the next election was right around the corner. d.c. is in election mode 24-7, which is why we are where we are. it's our govts fault, regardless of party.
and i agree, i think obama has proved he's no leader.

from slate:

S&P Downgrades U.S. to AA+, Blames Political Brinksmanship
By David Weigel
| Posted Friday, Aug. 5, 2011, at 10:46 PM EDT

You can do one of two things with the news that Standard & Poor's has downgraded the United States's bond rating, dropping it below AAA status for the first time since 1941. You can stick to your nostroms -- it's the GOP's fault, it's the Democrats' fault, if only we'd listened to the Tea Party, if only Obama had used the 14th amendment -- or you can read what the gnomic ratings agency actually says.

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.

OK: The deal wasn't big enough in the short-term. Advantage, Tea Party.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

That statement assigns the blame a lot more broadly. It's Washington's fault. It can't make real deals. Democrats were willing to bend on entitlements during the "grand bargain" negotiations; Republicans were unbending on taxes. The last point is important, because S&P really opens fire on the Republicans.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

This is not crazy. This what Republicans imply about the supercommittee -- they will not accept plans that increase taxes, and despite the fact that they've agreed to let the Bush tax cuts lapse on January 1, 2013, they are making noises about not accepting a return of the rates. The best possible scenario, if we assume that stance, is what I wrote about today -- tax reform plans that start in the supercommittee and win over a committed Congress.

We actually have all the tools we need to recover the bond rating. The question is whether our political actors do that, or whether they see the openings to craft political narratives. Obama shouldn't have spent so much! (That spending included around $400 billion of tax cuts in the stimulus and $500 billion in the November 2010 Bush tax cut extension.) The Tea Party blew up the process! (More true -- I don't see how the passage of Cut, Cap, and Balance, with its requirement that the states force a Balanced Budget Amendment into effect over the next few years, after which point we need supermajorities for tax hikes... yeah, not quite sure how this gets us out of this!) It's easier to imagine a round or 10 of political point-scoring than, for the first time, some sober assessment of what's going on.

Sorry but when you spend like a crackwhore paying people to destroy cars, building railroads no one wants buying up all the bad mortgages, loaning money and thinking receiving 50%-70% back is great and giving away seniors' Social Security money to countries like Egypt and Pakistan your credit rating is bound to go down.

Guess the Dems stated plan of 'spending to prevent going bankrupt' didn't work so well. Kind of like bailing water into a sinking ship rather than bailing it out. And Repubs whimped out once again settling for promises to cut spending rather than actual cuts.

Nonsense. Obama and Boehner made a deal with those very revenue increases and $4 trillion in spending you speak of, the Dem leadership signed off on it in the House and Senate. Boehner couldn't get it through his Republican House due to the idiots in the Tea Party. The GOP queered that deal. Not the Dems.

So no matter what you believe, or how much you want to blame Obama for being weak (and yes, he is a weak negotiator here) the deal was there, the deal was done, the Republicans screwed the deal up and have sole ownership of this. Along with having sole GOP ownership of making a routine debt ceiling rise into a two-months-long political circus.

The Dems didn't obstruct the debt ceiling increase. The GOP did.
The Dems didn't tie paying our past debt into a nonsensical political circus about future spending. The GOP did.
The Dems didn't refuse to raise taxes or cut loopholes. The GOP did.
The Dems weren't the ones that publicly said that not raising the debt ceiling wouldn't cause any problems, that it was a lie that it mattered, causing the world to think we are crazy and irresponsible about our debt obligations. The GOP did.
The Dems agreed to spending cuts twice as large as the final offer, including entitlements, but the GOP refused it.

The two parties are not the same. Blaming both parties equally just doesn't have any validity in truth.

And the Republicans get extra credit for being irresponsibly stupid, and laying off 94,000 people and costing us $250 million in lost revenues, while holding out for 16.5 million in silly cuts, on their way out of town to vacation

BTW, two Dem senators - no Republicans - showed up to pass a bill that extends the FAA for another month, until Congress gets back to town. So at least those people get to go back to work until this is settled. Thanks to the Democrats.

just a reminder:


http://www.msnbc.msn.com/id/40675581...bush-tax-cuts/


and based on s&p's remarks, i think if they announced that these tax cuts would be axed immediately, the rating would be back to AAA in no time.

Sure it would, just eliminating the tax cuts would cut our deficit in half in about 10 years. It think that is the biggest mistake Obama has made. He did get a little additional stimulus and unemployment for the trade, but the tax cuts would have been the better deal.

However: did you see Cantor on that Crazy Jim Financial guy show? (I think it's on MSNBC) Cantor said unemployment and the economy was the biggest thing right now. So Jim says, "Well, then, you'll extend unemployment benefits?" (because obviously that helps the unemployed and the economy) and Cantor looks puzzled and says, "No"

i don't watch any of those shows, i'd be too tempted to throw a shoe through my tv screen.

at any rate, our oh so smart leaders need to get together and figure out what to do to grow some jobs, how to encourage the private sector to hire, and how to get people to put their cash to work, rather than shove it into the bank. bony is going to start charging to hold cash, as it's not something they can invest-the depositor might want it back too soon., so they have to have it available at a moments' notice.

Repealing the threat that is Obamacare would produce jobs Monday. Private jobs that is and after all they are all that count.

Obama brags he's created 100,000 new federal jobs. So despite the common sense approach the private sector is taking the Fed is hiring and hiring big!

How much does 100,000 jobs and beni's paid for in part by SS withholding cash add to the debt? And this is somehow an accomplishment?

Eliminate H1b Program and give 30 days notice to all H1b's that are on the "hard to get" extentions and you have 1 million + jobs created in a month. Anyone that tells you US workers don't have the skill set is an absolute fukin liar.

http://www.slate.com/id/2301171/

S&P Is Right. It's Congress' Fault.
The politics of sovereign-debt ratings downgrades.
By Annie Lowrey
Posted Monday, Aug. 8, 2011, at 3:47 PM ET

an excerpt:


In its note, the ratings agency does raise questions about the United States' long-term fiscal stability. In a world in which one party refuses to raise taxes—any taxes at all—balancing the budget in a reasonable timeframe becomes very, very difficult. It means enormous cuts to defense and safety-net programs and to investment in infrastructure, education, and research. That does not mean good things for growth.

and further down:

But Washington threatened a debtpocalypse, if not a default, for 11 excruciating weeks. Despite clear signs that the debt-ceiling impasse was hurting the economy, policymakers insisted on drawing the fight out until the very last minute. When it was all over, Senate Minority Leader Mitch McConnell promised to do it again the next time we need to raise the debt ceiling, and the time after that, and the time after that. We might be able to pay our debts, but it is far from clear that we will always be willing to pay them. Given all that, it hardly seems wrong for S&P to take our daft political climate into serious consideration.

Yeah. We'll see how well that works for them in the 2012 elections. I think the "far right domestic terrorist" component of the right has had it's day in the sun, and the buyer's remorse is strong in many.

one of the bloomberg guys said he is eagerly awaiting the wisc recall, that a republican smack-down there might put reps in dc on notice. guess we'll see.

and speaking of the campaign:

http://www.msnbc.msn.com/id/44063660/ns/politics/

2012 campaigns and the downgrade effect
Keep an eye on 10 states with highest unemployment rates; Obama won six in 2008


The downgrading of U.S. government bonds by Standard & Poor’s has become a campaign-shaping event for President Barack Obama and whoever his Republican adversary turns out to be. In fact, it's ensured that the 2012 election will be fought on the battlefield of debt and unemployment.

The reverberation from that demotion means that Electoral College math (270 electoral votes needed to win) is now on a collision course with budget math (trillions of dollars in reduced spending and increased taxes), and labor market math (14 million unemployed).

Of the 10 states that now have the highest unemployment rates, Obama won six of them in 2008.

Four of them — Nevada, Florida, Michigan, and North Carolina — account for nearly a quarter of the electoral votes needed to win the presidency.


and further down, something i'm curious about:

Who will serve on new 'super-committee'? Might that committee produce the compromise that Obama seeks?

Here’s one test: Whether the committee includes at least one Republican who has supported increases in revenues — not necessarily achieved through higher income tax rates, but through a simpler, more efficient tax code — and at least one Democrat who has supported cuts in entitlement spending that go beyond those assumed in last year’s health care overhaul (which aims for about $500 billion in reduced Medicare outlays over the next ten years).

If the joint committee wants significant reductions in entitlements costs, it might need to rethink the Democrats’ landmark achievement of 2010: health care reform. For instance, starting in 2014, the health care overhaul expands Medicaid by 17 million beneficiaries (about a one-third increase), with $627 billion in new spending in the first ten years.

Former Wisconsin Sen. Russ Feingold, who flirted with running for the Democratic presidential nomination in 2008 and who now leads a group called Progressives United, told his supporters, “We must make sure the Democrats appointed by Harry Reid and Nancy Pelosi are willing to hold the line, insisting on new revenue and no cuts to Social Security or Medicare benefits.”

Obama didn’t use the word “cuts” Monday, instead offering the calming phrase, “modest adjustments to health care programs like Medicare.”

Loyal Democratic voters will be eyeing that committee to see if proposed Medicare and Medicaid cuts would indeed be “modest” or threatening to them.

...and that's my beef with obamacare above.. 'it saves medicare money' they yell 'it's wonderful'.

but look at medicaid. that's a $127 billion net increase in spending between the two.

I think they can win 2 or 3 out of 5 tomorrow, then get the 1 more Dem holding their seat at the next election, to retake the Senate (they need 3).

People on the far left are talking about "Progressive Spring" starting with Wisconsin, then spreading to Ohio and Florida (where ALEC and the RGA has been most active)

From the horse's mouth

http://yourdaddy.net/2011/08/08/stan...dit-downgrade/

Everyone picks out what they want to believe.




That is more the problem.

If these ratings companies are so good at their job and so credible then what the hell were they doing in 2005,2006, and 2007 when they were rating the mortgage backed securities AAA?

And how did the portfolio's of the Execs of S&P fair the last few days ? Information on a definite downgrade ahead of time was worth Billions.

i found it interesting that after warren buffett hammered s & p that they downgraded berkshire hathaway.

Some of you guys are so desperate to exonerate Obama for this mess, it's sickening. Face it - he was never up to the task of being president. All the window dressing in the world won't make this guy look any better. He's done.

I'd give him a 20% chance of being re-elected if the republicans had a strong candidate. They dont, so I still think its 50/50.

But there are very few people happy with Obama right now. He will have a tough time.

The sad thing is it doesnt really matter.. the next guy will prob be similar to Obama and Bush.

All politicians are alike to some degree. I just want the next guy, and everyone after that, to agree that from now on we spend LESS than we take in, every year, until this debt is gone.

Point taken. I'd be happy to vote for Mr. Paul if he gets the nomination, and could support him in the primary if my state has any say by then.

I kind of agree with that and it's sad. I do think America is waking up a bit as demonstrated by the Tea Party. But right now it would be nearly impossible for a platform of raising taxes, to pay down the debt while eliminating most every government program to do the same to be successful. The problem is no one ever refuses a benefit and even if they do (as in the case of Wisconsin's rail money) it's immediately and mindlessly given to someone else.

The fact Obama threatened the military and seniors of not getting their checks unless the ceiling is raised and then the first thing he does once he receives the loan is send $100,000,000.00 to Somalia is sickening! We are broke and sinking and this guy is throwing our life vests off like he's trying to feed the birds.

Politicians do not understand basic economics at all. This is why they bring in experts like Geithner to explain it to them...

:zz: Nobody has said they are good and credible, they are awful, and everyone knows it. The market even told them so yesterday, as they rushed to American treasuries. Safest haven in the world during financial unrest.

It's OK, we learned yesterday that because we have always been AAA we will always be AAA. No worries. Back to work.

You mean where S & P called in their biggest investors days before the downgrade, to discuss it with them, in possible violation of SEC rules? :rolleyes:

Wall Street makes money when the market crashes. They don't care what happens to the market, they just want to be on the right side when it moves. It's private investors with retirement accounts who are giving it away.

Of course, the Republicans are blocking everything they can out of the newly created Consumer Financial Protection Bureau.