Progressives greatest success: USA AAA Credit rating will be cut

Discussion in 'Economy' started by CrusaderFrank, Dec 14, 2010.

  1. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Progressives have finally succeeded in tipping the USA toward a Cloward-Piven chaotic economy as Moody announces it will seek to cut the rating if the "Tax cut" pact passes.

    They've works tirelessly to swamp our economy with unsustainable social spending and union benefits and now what the UAW did for Detroit, Progressives want to do to the country.

    News Headlines
     
  2. loosecannon
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    loosecannon Senior Member

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    This doesn't sound like new news. And it doesn't sound like action is imminent.
     
  3. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    Taxes aren't a problem, government spending is.
     
  4. william the wie
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    william the wie Gold Member

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    The bond bear is definitely growling. Non-TIPS long treasury yields have been edging up. The 30 year treasuries have seen slight but slowly sinking prices since August. 10 year treasury prices started declining in October. Since long treasuries of different maturities are not issued constantly and off run bonds decline after issuance the size and date of the decline can be disputed and even the causal factor of the factor can be disputed the real questions are:

    Is the US going to be put on credit watch any time soon? That depends on what happens in the rest of the world since credit ratings are measured on a curve.

    Will anyone but the president's party be blamed for the mess? No.

    Can the problem be turned around? Not likely.
     
  5. NYcarbineer
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    NYcarbineer Diamond Member

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    Taxes pay for government spending. Republicans keep insisting on cutting taxes without comparable reductions in spending.
     
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  6. Modbert
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    Modbert Daydream Believer Supporting Member

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    The same rating companies that was giving out AAA credit ratings to subprime mortgages? :eusa_eh:
     
  7. Dr.House
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    Dr.House Lives on in syndication!

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    Conservatives insist on cutting taxes and reductions in spending...

    You idiots just want to keep wasting money... You failed, now get out of the way....
     
  8. william the wie
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    william the wie Gold Member

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    That would be correct sir.
     
  9. PoliticalChic
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    PoliticalChic Diamond Member

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    1. Great find, CF. Sometimes the past catches up with the future.

    a. “In 2010, these interest payments (net of some interest income) will claim $209 billion, or about 6 percent of the budget.” Policy Basics: Where Do Our Federal Tax Dollars Go? — Center on Budget and Policy Priorities

    b. Based on future ability to pay its debts, each nation is give a rating. “The big three agencies are Fitch, Moody's and Standard & Poors. What they do is assess how likely a borrower is to be able to repay its debts and help those trading debt contracts in the secondary market.” Debt crisis: how Fitch, Moody's and S&P rate each country's credit rating. Visualised - with a spreadsheet. UPDATED | World news | guardian.co.uk.

    c. The costs of borrowing are contingent on the rating. Currently the US is listed as AAA, Stable…and this keeps the interest costs of borrowing low. Recently, for example, Greece was downgraded to BB+, Negative, and the cost of its debt rose to over three time that of the US.

    d. Moody’s warned that if the U.S. credit rating was at risk if economic growth was slower than the Obama administration projects. US credit rating at risk, Moody's warns - Telegraph
    And this is an administration fraught with bogus calculations!

    e. JUPITER, FL--(Marketwire - May 10, 2010) - Weiss Ratings, an independent rating agency covering the nation's financial institutions, issued a challenge today to Standard & Poor's, Moody's and Fitch: To downgrade the long-term sovereign debt of the United States in order to help protect investors and prod Washington to fix its finances. Weiss Ratings Challenges S&P, Moody's and Fitch to Downgrade Long-Term U.S. Debt

    2. The International Monetary Fund, the IMF, recent report on “Gross Financial Needs,” figures out how much money each nation needs to raise each year based on deficit, and maturity length of existing bonds; i.e. dependent on issuing new debt. The US is second worst of all advanced economies, needing 32.2% of GDP just to keep everything going [table 6, page 23].! Compare to the nations we read about in trouble: Greece is 21.5%, Portugal 21.8%, and Spain 20.7%. http://www.imf.org/external/pubs/ft/fm/2010/fm1001.pdf

    3. Now get this: the IMF report calculates the percent of GDP that each advance country willl need to cut from deficit in order to be at a sustainable level of debt in 2030. For the U.S., it’s 12% of GDP over the next 20 years. [table 1, page 60] That would be $85 billion per year, cut, with no increases in debt…You up for it?

    4. This hasn't gone unnoticed...lately I've seen articles like this:

    "So why are Democrats now looking to partially nationalize existing 401(k) plans into the exact same kind of private/public pension system?
    Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
    House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
    Hmm …. “a system of guaranteed retirement accounts to which all workers would be obliged to contribute.” That sounds very, very familiar, doesn’t it? Don’t we already do this with Social Security?
    A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal. …
    Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
    The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
    That means your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year-on-year. In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution. Instead, Uncle Sam would give you your “matching” funds — up to a whopping $600 per year! Whoopee!"
    Democrats to kill 401(k)s for … privatized Social Security? Hot Air
     
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  10. B. Kidd
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    B. Kidd Gold Member

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