Another Debt Rating Threat???

Discussion in 'Economy' started by PoliticalChic, Apr 5, 2012.

  1. PoliticalChic
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    PoliticalChic Diamond Member

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    U.S. Debt Rating Downgraded at Egan-Jones


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    April 5, 2012 5:20 PM EDT

    After the bell Thursday, rating agency Egan-Jones downgraded the U.S. credit rating from AA+ to AA, with a negative outlook. The firm cited the country's debt exceeding 100% of GDP.

    According to the report, posted at ZeroHedge:

    Inflection point - when debt to GDP exceeds 100%, a country's financial flexibility becomes increasingly strained. For the first time since WWII, US debt exceeds 100%. From 2008 to 2010, debt rose a total of 23.6% while GDP rose a total of 1.6%. Unfortunately, with an annual federal budget deficit in the area of $1.4T, debt is likely to reach $16.7T as of the end of 2012 while assuming GDP grows 2.5%, total GDP is likely to reach $15.7T. Therefore, as of the end of 2012, debt to GDP is likely to be in the area of 106%. Assuming the federal deficit for 2013 remains at $1.4T and GDP growth is 2.5%, the total debt will rise to $18.1T and GDP will rise to $16.1T, resulting in debt to GDP of 112%. In comparison, France's and Italy's debt to GDP are 81% and 117% respectively. Regarding efforts to address budget problems, the Super Committee was seeking spending cuts of $1.5T over 10 years or merely $150B per year, and was a failure. Obviously, the current course is not enhancing credit quality.
    StreetInsider.com - U.S. Debt Rating Downgraded at Egan-Jones


    Bye, bye Obama........
     
  2. starcraftzzz
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    starcraftzzz Senior Member

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    Its odd. People who believe in free markets IE republicans refuse to notice that after Americans debt downgrade the markets decreased the interest rates on American debt, meaning according to the markets the riskiness of American debt lowered after getting downgraded.
    Conservative are like mid evil blood letters. In the UK the govnermtn implemented austerity measures equal to 6% of GDP, as a result UK's economy reentered recession and unemployment began increasing again. Its odd that America who implement austerity measures not even equal to 1% of GDP had higher deficits the UK before the UK's austerity, but now both countries deficits are equal.
    Never not once has austerity ever worked; every time its tried it failed and results in massive unemployment and a large recession. However history and reality is something conservative don't care about or have any grasp on
     
  3. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    this is way over your liberal head but from Jefferson to Roosevelt both parties competed to reduce dept and shrink government. That was the fastest period of economic growth in human history.

    The idea that tax and spend can work to end a recession is pure and perfect liberal ignorance. Government spending just creates a bubble that bursts to cause another recession. You want another bubble to make up for the housing bubble but lack the IQ to know it.
     
  4. starcraftzzz
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    starcraftzzz Senior Member

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    In reality the period from Jefferson to Roosevelt had economic growth at least 20% lower then after Roosevelt
    A History of the Standard of Living in the United States | Economic History Services
    SO perhaps reality is to over your head.
    ROTFL. The fact that you don't even know what stimulus and austerity is yet you are arguing about it as if you have a clue if very foretelling of your immense ignorance.
    Lets list the times austerity has failed.
    1) GB 2008
    2) Ireland 2008
    3) Spain 2008
    4) Portugal 2008
    5) Greece 2008
    6) Puerto Rico 2008
    7) American 1930
    8) America 2008
    9) Italy 2008
    10) Latvia 2008
    Yep every-time austerity is tried it fails
     
  5. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    actually the USA has had the most austerity( least countercyclical spending) and the most wealth in human history
    this is way over your liberal head but from Jefferson to Roosevelt both parties competed to reduce dept and shrink government. That was the fastest period of economic growth in human history


    actually Jefferson was 1792 while your charts start in 1820. So sorry!!


    The idea that tax and spend can work to end a recession is pure and perfect liberal ignorance. Government spending just creates a bubble that bursts to cause another recession. You want another bubble to make up for the housing bubble but lack the IQ to know it.

    actually dear you clean forgot to say why you think I don't know the difference?????? Odd how you forgot???


    how can you say it failed but clean forgot to say why you feel it failed?
    How exactly can fiscal responsibility fail?? See why we are positive a liberal will be slow??

    dear in 1930 there was a huge depression with 30% of the banks failing. Most economists agree that caused the depression, not austerity. Not to mention that the Hoover Dam and others like it were not examples of austerity


    how is a $trillion
    stimulus austerity??

    one again, how can yet another liberal bubble not burst and deepen a recession?? Austerity is just fiscal responsibility that prevents bubbles and recessions and depressions. Catch ing on now??

    See why we are positive a lliberal will be very very slow??
     

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