S&P: Another Downgrade Coming

[Wiseacre]

They said today that if we don't find a way to substantially fix our national debt/deficits that another downgrade could happen in 6-18 months. I believe they said they expected to see at least a 4 trillion spending cut and were unsatisfied with the deal that was done.

Maybe this is what we need to spur both sides to work together. The GOP needs to give some ground on revenues and the Dems need to give some ground on entitlements. Don't know that eiher side is willing to budge though. The next election could be a very important referendum on what we're going to do.

 

[Animus]

Wouldn't surprise me if S&P downgrades again. And you're 100% on what needs to be done. Unfortunately neither side will budge on this. I do think we need some form of a sales/consumption tax or tariff to create revenue until better jobs are created.

 

[Neotrotsky]

Will the Left put ObamaCare on the table?

Taxes are tough when you consider

IRS: Not enough rich to cover the deficit

Soak the rich, eh?

They do not have the money.
A report from the Internal Revenue Service found that the rich — 8,274 people with incomes of $10 million per year or more — earned a total of $240 billion in 2009.

Even of you confiscated every dime they earned, you would barely have enough money to cover government spending for 24 days.

Of course, about a quarter of that money already goes to the federal government for federal income. So make that 18 days.

Another 227,000 people earned $1 million or more in 2009.

Millionaires averaged taxes of 24.4% of their income — up from 23.1% in 2008.

They, too, did not earn enough money to come anywhere close to covering the annual deficits that are $1.5 trillion a year.​

Individual tax collections totaled $1,175,422,000,000 in 2009 — or 15.4% of all income.

Doubling federal income taxes for everyone would still leave us $400 billion or so shy of balancing the budget.​

Spending is at 25% GDP when historically it sits around 19-20%
No doubt we have more of a spending problem than tax problem

 

[waltky]

Granny says now all dat outsourcin' comin' back to haunt us...

Obama Presses Congress For Action On Jobs After Credit Downgrade
August 06, 2011 - Amid an avalanche of negative economic news in recent days, President Barack Obama is calling on lawmakers to pass legislation he says will put Americans back to work. The president spoke as another of his financial advisers stepped down, and as a major credit agency lowered the rating of U.S. debt for the first time.

The past week began on a promising note for President Obama, as he and Republicans in Congress reached an agreement on raising the nation’s debt ceiling and cutting its deficit. But as the week went on, stock values tumbled, and the S&P credit agency late Friday downgraded the rating of long-term U.S. debt for the first time ever, from the highest rating of AAA to AA+. Even Friday’s better-than-expected numbers on July unemployment showed an economy that is still not generating enough new jobs to fuel a recovery.

In his weekly radio and Internet address Saturday, Mr. Obama said that with the debt limit debate over for now, he is focusing on job creation. “But in the short term, our urgent mission has to be getting this economy growing faster and creating more jobs. That is what is on people’s minds. That is what matters to families in this country," he said. The president will campaign relentlessly in the coming weeks for public support for his economic program. The campaign will include a bus tour of the central United States.

White House press secretary Jay Carney issued a written statement Saturday, calling on both Democratic and Republican lawmakers to work together to strengthen the economy and reduce U.S. deficits. The statement came one day after the S&P decision to downgrade the U.S. credit rating. Administration officials say S&P made a faulty decision in downgrading U.S. debt. They say they believe the call was based more on the political disagreements during the debt ceiling debate than on the nation’s ability to pay its debts. Credit rating agencies Moody’s and Fitch continue to rate U.S. debt at AAA.

In his weekly address, Mr. Obama again called on Congress, when it returns from vacation in September, to pass aspects of his economic plan. He wants extended tax cuts for low- and middle-income Americans, tax credits for companies that hire military veterans, patent reform, and final approval of free-trade agreements with Panama, Colombia and South Korea. “It is time Congress finally passed a set of trade deals that would help displaced workers looking for new jobs, and that would allow our businesses to sell more products in countries in Asia and South America. Products stamped with three words: Made In America," he said.

MORE

 

[8537]

They said today that if we don't find a way to substantially fix our national debt/deficits that another downgrade could happen in 6-18 months. I believe they said they expected to see at least a 4 trillion spending cut and were unsatisfied with the deal that was done.

Maybe this is what we need to spur both sides to work together. The GOP needs to give some ground on revenues and the Dems need to give some ground on entitlements. Don't know that eiher side is willing to budge though. The next election could be a very important referendum on what we're going to do.

Thanks for a great post. Spot on.

We can only hope that the 6 Dems and 6 R's on the new committee are not partisan ideologues but people in search of a solution - the Gang of Six would be a good start. But I fear we'll get ideologues on both sides to the extent that they deadlock 6-6.

 

[uscitizen]

Ahh this is just proof of who really runs America.

Good to see they are finally coming out of the closet.

 

[Poli_Sigh]

Ahh this is just proof of who really runs America.

Good to see they are finally coming out of the closet.

Well all I can say - I sure wish they were a faster sprinter.

 

[waltky]

Granny gonna move her money from T-bills to Halliburton an' Blackwater stocks...

S&P rating: Ripple effects of downgrade
August 6, 2011: The United States has lost its AAA rating from credit rating agency Standard and Poor's. So what happens now?

The reaction might be muted. The United States is the world's largest economy and remains a good credit risk. Even after a downgrade, the government will likely still be able to pay its bills for years to come. But since this has never happened before, it's difficult to say how the financial markets will respond. "We've never been through this before. People don't know what to expect," said Ted Weisberg of Seaport Securities, who has spent decades on the floor of the New York Stock Exchange. "So you have to be careful."

First -- the downgrades from S&P probably aren't over. It's likely that S&P will soon downgrade the debt of mortgage finance giants Fannie Mae and Freddie Mac, along with AAA-rated insurance groups. Fannie and Freddie, which were taken over by the government in 2008, fuel home sales by purchasing mortgages from banks. Also facing downgrades are other entities that rely heavily on the federal government -- like the Federal Home Loan Banks, which support consumer credit by making loans to other banks.

Those are the consequences of a downgrade to AA+ as listed by S&P in a report last month. Highly-rated businesses are expected to be let off the hook. Corporations that are based in the United States that have a AAA rating -- like Johnson & Johnson -- should keep their sterling credit rating. The downgrade could also rumble out into the broader economy. The net effect is difficult to predict, but S&P has offered some ideas about the impact their own downgrade could have on domestic markets.

MORE

 

[Ravi]

Ahh this is just proof of who really runs America.

Good to see they are finally coming out of the closet.

Sigh. This is so true. How is it that they know more than Congress? They are just as apt to predict incorrectly as anyone else.

It almost feels as if they are using their power as a tool to control the country.

Why not let the markets decide?

 

[Ravi]

Also, didn't the Democrats just agree to trillions in cuts in order to get the debt ceiling raised? How then does S&P criticize them for not agreeing to cut?

 

[Neotrotsky]

Probably because they took ObamaCare off the table

 

[BoycottTheday]

Maybe it wasnt a good time to increase the fed limo fleet from 238 to 412.

What the odds its more than 412 now. Not one more penny of my money.

So i really cant be bothered to care, bring it down, those of us who work hard will just build it up again.

I say we start one big commune, and anyone who doesnt want to work

Gets booted out! Thats the way communes work ya know.

 

[LadyGunSlinger]

Also, didn't the Democrats just agree to trillions in cuts in order to get the debt ceiling raised? How then does S&P criticize them for not agreeing to cut?

Really??? REALLY???!! How can you or anyone else sit here and act like we're all so damn stupid we don't know the difference in BULLSHIT theatrics and the truth??!! Do any of you leftists give a good shit that our nation is out of money and time??? Cutting 2 trillion MAYBE in 10 years while spending 14 trillion.. and that's a cut to leftists?????? WOW, just wow.. Is this what a public education creates??

 

[Neotrotsky]

Was Papa Obama's first request to raise the ceiling only?

How far would that have lowered our rate?

 

[WillowTree]

Cut Cap and Balance would have done the trick but the dimwits wouldn't even look at it. and the pointed fingers, mocked, and did a film of Congressman Ryan pushing granny over the cliff. And now they want to blame the Tea Party. The dimocrats are just despicable.

 

[BoycottTheday]

My D word for the Day is Desperate.

 

[LadyGunSlinger]

Cut Cap and Balance would have done the trick but the dimwits wouldn't even look at it. and the pointed fingers, mocked, and did a film of Congressman Ryan pushing granny over the cliff. And now they want to blame the Tea Party. The dimocrats are just despicable.

They are liars, thieves, and brain-dead rotted zombies who cannot be trusted with the keys to a jail cell much less the keys to any government office. 2012 is on the way.. their time is short and their desperation more apparent as each new day approaches. The Democrat Party allowed their party to be hijacked by the most extreme far left kooks and now they have in essence buried themselves out of power for perhaps decades to come. NO ONE will trust them again and with good reason. At heart they are nothing more than the Communists of old who use to hide and run for cover... they thought under this Marxist they could safely stick their heads out from beneath their socialist pillow and let this Nation see who they really are and would be embraced... just goes to show you how INSANE they are. Get back under your rocks where you belong..

 

[Ravi]

Cut Cap and Balance was just a freak show.

Sadly, as are the current crop of Republicans.

But now you've wandered off topic.

 

[Neotrotsky]

Papa Obama first wanted to raise the ceiling only

Good thing we had the Republicans to show him the way

 

[LadyGunSlinger]

Cut Cap and Balance was just a freak show.

Sadly, as are the current crop of Republicans.

But now you've wandered off topic.

Your leftist held all three branches and NEVER offered a budget for how long??? Where was and is King Obama's plan?? We'll all wait for you to provide that link.. Also, while you're at it, show us how a CUT is a cut when it adds TRILLIONS to the debt???