Progressives greatest success: USA AAA Credit rating will be cut

[Care4all]

Unless the Fed monetizes the entire debt, which they may do, causing eventual hyperinflation. They will then try to pay the debt down with inflated dollars and may have some success if we do not succumb to complete currency value destruction.

does the average worker's pay go up as well, but it is meaningless due to the inflation? how does that all work?

 

[loosecannon]

Unless the Fed monetizes the entire debt, which they may do, causing eventual hyperinflation. They will then try to pay the debt down with inflated dollars and may have some success if we do not succumb to complete currency value destruction.

does the average worker's pay go up as well, but it is meaningless due to the inflation? how does that all work?

I assume it will work like a steal wage cut in which your wages rise but not in inflation adjusted terms. But many people won't realize the wage cut since the dollar value of their pay increases.

But we may increase our global competitiveness enough to stimulate exports and create jobs, pay down the debt and serve globalization's primary purpose which is global wage parity.

If we do run into real probs we may have to let the Fed default (since they own our debt) and that may keep the nation alive and well without a federal default. But I am stretching, this is a decade away at least imo.

Remember that despite all the furor over potential hyperinflation every major developed economy is struggling to weaken their own currencies for these same reasons.

 

[Care4all]

Unless the Fed monetizes the entire debt, which they may do, causing eventual hyperinflation. They will then try to pay the debt down with inflated dollars and may have some success if we do not succumb to complete currency value destruction.

does the average worker's pay go up as well, but it is meaningless due to the inflation? how does that all work?

I assume it will work like a steal wage cut in which your wages rise but not in inflation adjusted terms. But many people won't realize the wage cut since the dollar value of their pay increases.

But we may increase our global competitiveness enough to stimulate exports and create jobs, pay down the debt and serve globalization's primary purpose which is global wage parity.

If we do run into real probs we may have to let the Fed default (since they own our debt) and that may keep the nation alive and well without a federal default. But I am stretching, this is a decade away at least imo.

Remember that despite all the furor over potential hyperinflation every major developed economy is struggling to weaken their own currencies for these same reasons.

Didn't we give up our century old policy to keep the "dollar" strong under the bush administration already?

 

[boedicca]

Unless the Fed monetizes the entire debt, which they may do, causing eventual hyperinflation. They will then try to pay the debt down with inflated dollars and may have some success if we do not succumb to complete currency value destruction.

does the average worker's pay go up as well, but it is meaningless due to the inflation? how does that all work?

No. It means lower living standards. Wages will increase, but given high unemployment, not enough to eliminate the destruction of purchasing power and higher tax burden (the Feds will most likely not properly index tax brackets for inflation). More and more people who are middle class will experience bracket creep and pay higher taxes.

That's the objective after all.

 

[loosecannon]

Didn't we give up our century old policy to keep the "dollar" strong under the bush administration already?

Then or even earlier, but yeah. Now we are doing it at top speed to try to out debase the EU, China and Japan.

 

[Care4all]

Didn't we give up our century old policy to keep the "dollar" strong under the bush administration already?

Then or even earlier, but yeah. Now we are doing it at top speed to try to out debase the EU, China and Japan.

i am ignorant but willing to learn, on the topic...as you can probably see by my questions/comments.... I am going to read up more on this, so I am not at such a disadvantage in discussions / debate on this....

 

[Care4all]

Unless the Fed monetizes the entire debt, which they may do, causing eventual hyperinflation. They will then try to pay the debt down with inflated dollars and may have some success if we do not succumb to complete currency value destruction.

does the average worker's pay go up as well, but it is meaningless due to the inflation? how does that all work?

No. It means lower living standards. Wages will increase, but given high unemployment, not enough to eliminate the destruction of purchasing power and higher tax burden (the Feds will most likely not properly index tax brackets for inflation). More and more people who are middle class will experience bracket creep and pay higher taxes.

That's the objective after all.

I agree....the tax bracket at the very top has NOT kept up with inflation....the upper middle class is lumped in with the millionaires and BILLIONAIRES.....which needs fixing NOW, let alone down the road when inflation hits bigtime.

for me and the hubby, I would personally like to see interest rates go up so that our CD's can earn more than the stupid 1.8% interest....

We own our home and cars, no loans, no credit card debt....but we seem to still be going backwards on our savings, when true inflation is calculated.

I realize though that higher interest rates may not be good for those of us having to pay the higher debt payment out of our taxes, and for businesses needing front money, and people wanting to buy homes on a mortgage etc....

all hell could break loose.....and we as a country could be in worse shape.

lowering our credit rating does mean interest rates for the govt borrowing will go up, right?

 

[kiwiman127]

Wasn't the concept of weakening the dollar was to increase exports because of the US's record trade deficits?

 

[Care4all]

Wasn't the concept of weakening the dollar was to increase exports because of the US's record trade deficits?

seeee, that's what i remember reading a few years back.....not that i really understand it all.....but did it work? doesn't seem so? but i do not know for certain?

 

[Flopper]

Unlike a number of countries that are going through a debt crisis, we have the ability to get this under control without major disruption to the economy. Our tax rates are low. There are many ways spending can be cut so the burden would not fall on any one group. We don't need to wipe out the deficit overnight. We just need to get started.

Congress needs the impetus to make the hard decisions which may come in the form of a Moody negative forecast for treasury bills.

 

[loosecannon]

Wasn't the concept of weakening the dollar was to increase exports because of the US's record trade deficits?

That's the core of it, but it also helps pay down debt because you get to repay the debt with smaller dollars.

 

[loosecannon]

Congress needs the impetus to make the hard decisions which may come in the form of a Moody negative forecast for treasury bills.[/B]

Congress is the problem tho. They are punch drunk!

 

[william the wie]

LC, I disagree with you strongly on one point.

Most of the money supply is tied up in the financial system and with the accounting gimmicks in place there is no way to know whether bad debts in the system exceed the national debt. My SWAG is that complete liquidation of the national debt might be insufficient to pay for write downs.

 

[loosecannon]

Well That's cool, Willie, cuz I disagree with me on every point.

None of this makes sense except in a topsy turvy world of fantasy economic paradigm.

That it would be possible for bad debt to exceed our national debt is evidence of that. The bottom line imo is that strategic default is almost certain now that we are in the phase of strategic currency debasement. I am hoping when I say that maybe the fed can die and that the consequences will be very tolerable.

You have said so yourself, bond default has surprisingly small consequences as a rule.

I am afraid that multi trillion dollar deficits are with us hereafter.

 

[william the wie]

Well That's cool, Willie, cuz I disagree with me on every point.

None of this makes sense except in a topsy turvy world of fantasy economic paradigm.

That it would be possible for bad debt to exceed our national debt is evidence of that. The bottom line imo is that strategic default is almost certain now that we are in the phase of strategic currency debasement. I am hoping when I say that maybe the fed can die and that the consequences will be very tolerable.

You have said so yourself, bond default has surprisingly small consequences as a rule.

I am afraid that multi trillion dollar deficits are with us hereafter.

The closest approximation to the mess we are in now is the one that inspired Adam Smith in 1776.

Political corruption was so bad that Parliament was bought and sold in stock alley.

Overstretch was so bad that the armed forces went on strike 20 years later: the Nore and Spithead mutiny.

The national debt was so high that the treasury issued a consolidated debt issue with no redemption date so it would be possible to keep the debt financed.

 

[CrusaderFrank]

the deficit he inherited was running at $1.5 trillion, so it looks like he is making progress in reducing the deficit....though I can agree, nearly not enough.

this is not done in a sum zero.

the new govt can only work with what they are LEFT in running yearly deficits, and work from there...bush's last deficit was running nearly $1.5 trillion, and now it is nearly 1.3 trillion.....it will go up to about 1.7 trillion if the tax cuts are extended and the republicans in the house do not cut their spending accordingly...

Obama's adding across the board increases at every department and added new Czars, took over auto industry, banks and health care.

He's done everything he can to make a financial collapse all but certain.

You're either not paying attention or don't understand what's happening

Bush and Delay sucked and in my version of Dante's Inferno they are under Satans ass in the 9th Circle for the damage they caused when they could have helped

-can you show these increases that obama HAS DONE across the board as YOU STATE?

-Banks and bailout policy was done first under the Bush administration

-the auto bail out and policy was ALSO first done under president bush's recomendation

-Czars have ALWAYS BEEN PART of EVERY president the past century, at least....nothing new there at all, but the noninformed noisemakers.

Oh, I know what's going on, and it AIN'T what you are claiming.

but I do agree with your last statement!

and hope you have a Merry Christmas Frank.

Merry Christmas.

 

[Toro]

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

If the tax cuts don't happened, Moody's won't put the US on watch.

Therefore, don't cut taxes.

Great "thinking"

Therefore Dems should raise taxes and then we'd be an AAAAA credit right?

MOODY'S: "Cut taxes and we'll cut the rating."
CONSERVATIVES: "It's not the tax cuts."

What part of Moody's saying "Cut taxes and we'll cut the rating" is so hard to understand? What sort of alternative universe do conservatives live in?

 

[CrusaderFrank]

If the tax cuts don't happened, Moody's won't put the US on watch.

Therefore, don't cut taxes.

Great "thinking"

Therefore Dems should raise taxes and then we'd be an AAAAA credit right?

MOODY'S: "Cut taxes and we'll cut the rating."
CONSERVATIVES: "It's not the tax cuts."

What part of Moody's saying "Cut taxes and we'll cut the rating" is so hard to understand? What sort of alternative universe do conservatives live in?

First, how is maintaining present rates a "cut"?

Second, following their Bizzaroland "the Federal Government IS the Us economy" Logic, wouldn't a big fat tax increase be the way to boost the US economy?

 

[Toro]

Great "thinking"

Therefore Dems should raise taxes and then we'd be an AAAAA credit right?

MOODY'S: "Cut taxes and we'll cut the rating."
CONSERVATIVES: "It's not the tax cuts."

What part of Moody's saying "Cut taxes and we'll cut the rating" is so hard to understand? What sort of alternative universe do conservatives live in?

First, how is maintaining present rates a "cut"?

Second, following their Bizzaroland "the Federal Government IS the Us economy" Logic, wouldn't a big fat tax increase be the way to boost the US economy?

OK

edited

MOODY'S: "Maintain the tax cuts and we'll cut the rating."
CONSERVATIVES: "It's not the tax cuts."

What part of Moody's saying "Maintain the tax cuts and we'll cut the rating" is so hard to understand? What sort of alternative universe do conservatives live in?

 

[Toro]

MOM: "Don't stick that fork in the electrical socket. You'll get electrocuted."
CONSERVATIVES: "It's not sticking the fork in the electrical socket that will get you electrocuted."