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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Fury on August 06, 2011, 07:07:58 AM
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United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative
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.
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.
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.
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.
The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
Rating Action
On Aug. 5, 2011, Standard & Poor's Ratings Services lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'. The outlook on the long-term rating is negative. At the same time, Standard & Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.
The transfer and convertibility (T&C) assessment of the U.S.--our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for debt service--remains 'AAA'.
Rationale
We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.
Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government's other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.
We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.
The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.
Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011).
Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing.
The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.
The act further provides that if Congress does not enact the committee's recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.
We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO's "Alternate Fiscal Scenario" assumes a continuation of recent Congressional action overriding existing law.
We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings.
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.
Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.
Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.
Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.
When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.
Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers' access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.
Outlook
The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently
assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'.
On Monday, we will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors.
http://www.zerohedge.com/news/sp-downgrades-us-aa-outlook-negative-full-text
Thanks, Obama. I'm actually shocked S&P had the balls to do this. Where were these ratings agencies in 2008 when they were labeling all that mortgage-based trash AAA? Well, better late than never as the US hasn't been AAA for years.
Perhaps this will convey to liberals the severity of our debt problems. However, I doubt it.
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Funny too - the dope Mal says I claim the sky is falling too much.
Well what the fuck more do these liberal pieces of garbage need to see how disastrous the course we are on is?
Disgusting. They voted for this shit stain and still support him even if the nation collapses.
Fuck them.
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Not speaking with regards to Mal as he's actually making something of himself, but the other benefit-leeching parasites haven't the faintest idea about any of this stuff, hence their desire to steer discussion towards simpler topics like Bachmann's sneakers or what cereal Palin eats.
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(http://www.politifake.org/image/political/1102/obama-blames-bush-for-the-economy-dumbcrats-liberals-fail-political-poster-1298240788.jpg)
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(http://www.politifake.org/image/political/1102/obama-blames-bush-for-the-economy-dumbcrats-liberals-fail-political-poster-1298240788.jpg)
The mark of a Keynesian moron.
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Do Keynesians agree with Kenyanomics?
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Do Keynesians agree with Kenyanomics?
Can't see much of a difference, to be honest.
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Where were these guys in 2008? Good question.
Makes me wonder, why now?
Probably has to do with some type of political plan to start directing blame to those who want fiscal sanity. The few of us that are somewhat economically/mathematically intelligent enough know the truth but the overwhelming majority of idiots like Vince have already started blaming the "tea Party" repubs for this.
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Maybe that but I think it has more to do with their credibility. They failed hard in 2008 and not downgrading the US now after claiming they were going to would only destroy what little reputation they had left. The Obama admin was trying to strong-arm them into not doing it and it obviously didn't work out.
But the vilification of people who want fiscal sanity has already started. These same far-leftists, who flip their top anytime someone calls a Muslim a terrorist, have no qualms with calling their fellow Americans that. Strange world.
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CHINA: "America Needs To Accept The Painful Fact That Good Old Days Are Over"
Business Insider ^ | 08/06/2011 | Gus Lubin
China's official comment on the S&P downgrade was harsh and condescending. Released through Xinhua (via Reuters) the statement condemned America for its "debt addiction" and "short-sighted" political wrangling.
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," Xinhua wrote.
America's largest creditor, China said it will accelerate diversification away from US treasuries, and that meanwhile it demands reform: "China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," Xinhua said.
(Excerpt) Read more at businessinsider.com ...
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Fucking damn Chinks are a racist as the tea baggers! Why wont they let a brother borrow more money on the credit card?
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CHINA: "America Needs To Accept The Painful Fact That Good Old Days Are Over"
Business Insider ^ | 08/06/2011 | Gus Lubin
China's official comment on the S&P downgrade was harsh and condescending. Released through Xinhua (via Reuters) the statement condemned America for its "debt addiction" and "short-sighted" political wrangling.
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," Xinhua wrote.
America's largest creditor, China said it will accelerate diversification away from US treasuries, and that meanwhile it demands reform: "China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," Xinhua said.
(Excerpt) Read more at businessinsider.com ...
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Fucking damn Chinks are a racist as the tea baggers! Why wont they let a brother borrow more money on the credit card?
Shameful. I wonder if Obama is proud of what he's done to this country?
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PLEASE ONE PIECE OF TRASH OBAMA VOTER REFUTE THIS
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S&P warns of a second downgrade
Politico ^ | August 6, 2011 | Josh Boak
One day after lowering the nation’s platinum triple-A credit rating, Standard & Poor’s analysts warned Saturday that the U.S. government could face a second downgrade if the economy continues to struggle and the government fails to make the cuts outlined in the debt ceiling agreement.
The ratings agency on Friday downgraded the nation to AA+ for the first time in history, saying partisanship in Washington is preventing dramatic deficit reduction.
(Excerpt) Read more at politico.com
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You know, I am also kind of shocked that S+P had the guts to do this, and they did the right thing. But Im kinda pissed off that they didnt have the guts to pin point a particular political party for this. That would present clarity. If you are going to downgrade a country's bond rating, you have a duty to be very specific in your rationale. When the rumor of this first started coming out yesterday before the official announcement, there was a rumor that the Republicans' refusal to accept additional revenue would be cited as a part of the reason. But I didnt really see that in the S+P report. Unfortunately I believe that S+P is trying to be politically correct by being non specific and criticising "both parties for not working together". Its the same sort of gutless and lazy minded views that a lot of independents and moderates make, and it hurts the country by taking away clarity. The fact of the matter is that its the Democrats by and large that are responsible for this. WE have been living with these tax rates for 8-10 years now, and we have only had this kinds of deficits for the past 2-3 years. Yes, I know there are some irresponsible tea party Republicans who are throwing thier arms up and calling for a reboot of the system, but please guys, please. There are far more Democrats and highly prominent Dems that are calling for MORE spending in the face of this bond downgrade. Its rather quite pathetic and intellectually lazy to blame "both parties" for this.
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AGAIN:
1. NO BUDGET IN 2 + YEARS
2. OBAMA REJECTED SIMPSON BOWLES
3. OBAMA REJECTED THE RYAN PLAN
4. OBAMA REJECTED CUT CAP AND BALANCE
5. OBAMA HAS NOT RELEASED HIS OWN PLAN
6. GOVT SPENDING IS EXPLODING EVERYWHERE & OBAMADOFF AND THE DEMS REFUSE TO CURTAIL THE EXCESS
WHAT MORE DO YOU NEED TO KNOW?
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This presidency and congress are a complete disaster.
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This presidency and congress are a complete disaster.
agreed, sadly in a time when we needed one of the greatest...
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You know, I am also kind of shocked that S+P had the guts to do this, and they did the right thing. But Im kinda pissed off that they didnt have the guts to pin point a particular political party for this. That would present clarity. If you are going to downgrade a country's bond rating, you have a duty to be very specific in your rationale. When the rumor of this first started coming out yesterday before the official announcement, there was a rumor that the Republicans' refusal to accept additional revenue would be cited as a part of the reason. But I didnt really see that in the S+P report. Unfortunately I believe that S+P is trying to be politically correct by being non specific and criticising "both parties for not working together". Its the same sort of gutless and lazy minded views that a lot of independents and moderates make, and it hurts the country by taking away clarity. The fact of the matter is that its the Democrats by and large that are responsible for this. WE have been living with these tax rates for 8-10 years now, and we have only had this kinds of deficits for the past 2-3 years. Yes, I know there are some irresponsible tea party Republicans who are throwing thier arms up and calling for a reboot of the system, but please guys, please. There are far more Democrats and highly prominent Dems that are calling for MORE spending in the face of this bond downgrade. Its rather quite pathetic and intellectually lazy to blame "both parties" for this.
The problem is you can't pinpoint one party. There are many people and organizations responsible for this. We did not get to where we are now overnight. This is the result of years and years of mismanagement and failed policies.
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The problem is you can't pinpoint one party. There are many people and organizations responsible for this. We did not get to where we are now overnight. This is the result of years and years of mismanagement and failed policies.
We did not get to where we are over night. We got to where we are over 2.5 years, which is the amount of time Obama has been in power. Democrats want to continue spending even in the face of this downgrade. Obama STILL wants to keep extending unemployment benefits at unprecendented levels. He STILL wants to continue spending on infrastructure projects. Do Republicans want to do any of that? How can you not blame the Dems way more than the Republicans? Another thing that people need to consider is that this is a different crop of Republicans than the ones from the last decade. That's another big reason the "debt hypocracy" charge against the GOP is stupid and silly.
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EDITORIAL: Obama’s downgraded America
The Washington Times ^ | August 6, 2011 | Editorial
Posted on August 6, 2011 11:32:34 PM EDT by jazusamo
S&P tells it like it is: the U.S. is out of money
The Obama administration has made history by presiding over the first-ever downgrade in the U.S. credit rating. President Obama has outdone all his predecessors in wrecking America’s good name. His answer to this problem: Spend even more.
Raising the debt ceiling was sold as a way of guaranteeing the U.S. credit rating. It had the opposite effect, which makes sense to anyone who understands credit. Take a family with a median household income around $50,000. If they spend $85,000 a year and have debt at $300,000 and growing, it’d be foolish to let them borrow more because they don’t have the income to pay it back. Raising the debt ceiling ignored this reality. Then, the Obama administration immediately demonstrated its utter lack of creditworthiness by blowing 60 percent of the initial $400 billion increase in one day, the largest single-day accumulation of debt in U.S. history.
The White House blames the George W. Bush administration for every economic woe, but the numbers speak for themselves. In 2008, the federal budget deficit was around 3 percent of gross domestic product. In 2011, it’s around 11 percent. Total federal debt was $10.7 trillion at the end of 2008 and is currently $14.3 trillion. Debt as a percentage of GDP was a painful 69 percent at the end of the Bush years, but Mr. Obama is pushing it over 100 percent...
(Excerpt) Read more at washingtontimes.com ...
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We did not get to where we are over night. We got to where we are over 2.5 years, which is the amount of time Obama has been in power. Democrats want to continue spending even in the face of this downgrade. Obama STILL wants to keep extending unemployment benefits at unprecendented levels. He STILL wants to continue spending on infrastructure projects. Do Republicans want to do any of that? How can you not blame the Dems way more than the Republicans? Another thing that people need to consider is that this is a different crop of Republicans than the ones from the last decade. That's another big reason the "debt hypocracy" charge against the GOP is stupid and silly.
Yes, but when Obama took office the national debt was already 10 trillion dollars. Now it is 14. How did it get to 10? Let me guess, yes, the fake wars in Iraq and Afghanistan. And a fake consumer based economy.
No, this thing is much greater than Obama. He is only a puppet anyway. You think the powers that be will let some schmuck control a country like USA? The days of a leader making the decisions have been over for decades. And those that do make their own decisions against the wishes of the powers that be have their contracts cancelled.
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Anger Over Credit Rating Resurfaces in Washington
New York Times ^ | August 6, 2011 | LOUISE STORY, JULIE CRESWELL and GRETCHEN MORGENSON
Posted on August 7, 2011 8:06:01 AM EDT by reaganaut1
The frustration in the air was palpable. Officials from the credit ratings agency Standard & Poor’s were meeting with Congressional leaders on a stifling late day in late July to discuss the thorniest issue in Washington: the effort to cut the nation’s deficit and raise the borrowing limit to avert a default.
S.& P. and two financial industry groups listened to various proposals for debt reduction and warned the lawmakers of the impact a default would have on world markets, according to a Congressional staff member in attendance. The staff member said the agency was providing guidance on what target to hit in budget savings, but lawmakers struggled to understand the agency’s views.
Since that meeting, several lawmakers have publicly questioned whether the ratings agencies have the competence to evaluate the country’s finances, and whether it was appropriate for them to be so deeply involved in discussions of fiscal politics. The criticism reached a fevered pitch after S.& P. announced Friday night that it was downgrading America’s credit rating, a decision that thrust the ratings agencies to the center of the debate over the government’s budget, and prompted renewed scrutiny of an industry that has been harshly criticized since the financial crisis.
The ratings agencies’ purview is traditionally viewed as evaluating data and revenue projections for debt issuers, but they have long taken governance into account for ratings of sovereign nations and corporations. In its announcement Friday night, S.& P. cited the political gridlock in Washington during the debt limit debate as a main reason for its decision. “The gulf between the political parties,” S.& P. said, had reduced its confidence in the government’s ability to manage its finances.
(Excerpt) Read more at nytimes.com ...
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Senior executives for the company that downgraded the nation's credit rating on Friday night have made political donations to Democrats over the last several years.
Deven Sharma, the president of Standard & Poor's, contributed to Sen. Kirsten Gillibrand's (D-N.Y.) campaign in 2009 and 2010. He also gave $2,000 to Rep. Jim Himes (D-Conn.) during the 2010 election cycle and Sen. Mary Landrieu (D-La.) and then-Sen. Christopher Dodd (D-Conn.) in the 2008 cycle.
Sharma contributed to one Republican last year, giving $1,000 to Sen. Rob Portman (R-Ohio).
Pat Milano, another senior executive at S&P, contributed to Gillibrand, Landrieu and Dodd over the last couple of cycles, according to data culled from opensecrets.org.
John Weisenseel, senior vice president of finance at the firm, gave $500 to Himes in 2009. Adam Schuman, executive managing director and associate general counsel, contributed to Gillibrand in 2010.
Catherine Mathis, senior vice president of marketing and communications, gave $1,000 to Gillibrand and $500 to Portman last year.
Meanwhile, Executive Managing Director Alex Matturi in 2010 contributed $750 to Gilliband.
All of these S&P executives are listed as senior managers on the company's website.
Www.thehill.com
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Yes, but when Obama took office the national debt was already 10 trillion dollars. Now it is 14. How did it get to 10? Let me guess, yes, the fake wars in Iraq and Afghanistan. And a fake consumer based economy.
No, this thing is much greater than Obama. He is only a puppet anyway. You think the powers that be will let some schmuck control a country like USA? The days of a leader making the decisions have been over for decades. And those that do make their own decisions against the wishes of the powers that be have their contracts cancelled.
The deficit in 2008 was 3%. Not great but very managable. Before the Dems took control of Congress it was 2% or under, which is acceptable and below the past 40 year average. It is now 11% of GDP. There is no comparison. Lets talk about the pink elephant here. Obama is the most incompetent and pathetic leader of my lifetime and one of the worst presidents ever. He is one of the least qualified men to be president ever. This guy is a whole new ball game my friend. We will have much better presidents in the future and aalso medicore presidents, and even some more bad presideints, but it is unlikely we will have another one THIS bad again in my lifetime, Democrat or Republican. Thank God.
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Yes, but when Obama took office the national debt was already 10 trillion dollars. Now it is 14. How did it get to 10? Let me guess, yes, the fake wars in Iraq and Afghanistan. And a fake consumer based economy.
No, this thing is much greater than Obama. He is only a puppet anyway. You think the powers that be will let some schmuck control a country like USA? The days of a leader making the decisions have been over for decades. And those that do make their own decisions against the wishes of the powers that be have their contracts cancelled.
eggactly ;D just got done eating 8 egg whites,but your right, you won't find it it on this site though because to many here just follow party lines while their own party fu#ks them over.what do you expect when most get their news from just one source foooox news :D
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eggactly ;D just got done eating 8 egg whites,but your right, you won't find it it on this site though because to many here just follow party lines while their own party fu#ks them over.what do you expect when most get their news from just one source foooox news :D
Hey dips hit. It took 225 years to get to 10 trillion in debt. Obama has blown through almost half of that in 2 years.
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Hey dips hit. It took 225 years to get to 10 trillion in debt. Obama has blown through almost half of that in 2 years.
and the repubs are the best thing since slice bread :D :D :D keep watching your fox news and lisening to beck and rush :D
he also said Until conservatives once again hold Republicans to the same standard they hold Democrats, they will have no credibility and deserve no respect. They can start building some by admitting to themselves that Bush caused many of the problems they are protesting
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and the repubs are the best thing since slice bread :D :D :D keep watching your fox news and lisening to beck and rush :D
he also said Until conservatives once again hold Republicans to the same standard they hold Democrats, they will have no credibility and deserve no respect. They can start building some by admitting to themselves that Bush caused many of the problems they are protesting
And?
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News is reporting that Israel has temp stopped trading on the news. Any of you business savvy people think we should stop it Monday morning? Give it some time maybe?
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News is reporting that Israel has temp stopped trading on the news. Any of you business savvy people think we should stop it Monday morning? Give it some time maybe?
This has been in the making since 2008.
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This has been in the making since 2008.
I'm kind of thinking they should just stop trading for the day and just take a breath to see what's going on around the world, maybe rethink things, I dunno know.
But I don't have the business acumen to really know what that would do, how it would help/harm things, etc., so maybe somebody else has some thoughts on it.
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I'm kind of thinking they should just stop trading for the day and just take a breath to see what's going on around the world, maybe rethink things, I dunno know.
But I don't have the business acumen to really know what that would do, how it would help/harm things, etc., so maybe somebody else has some thoughts on it.
Like I keep saying, until we get rid of the psychotic leftists running the admn, things will only get drastically worse.
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I'm kind of thinking they should just stop trading for the day and just take a breath to see what's going on around the world, maybe rethink things, I dunno know.
But I don't have the business acumen to really know what that would do, how it would help/harm things, etc., so maybe somebody else has some thoughts on it.
Asian markets open at 5 PM. Saudi Arabia's Tadawul dropped 5% yesterday. This evening and tomorrow should be very interesting.
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Dollar to Be 'Discarded' by World: China Rating Agency
CNBC ^ | 7 Aug 2011 | Ee Sing Wong
Posted on August 7, 2011 12:08:35 PM EDT by barmag25
The man who leads one of China’s top rating agencies says the greenback’s status as the world’s reserve currency is set to wane as the world’s most powerful policy makers convene to examine the implication of S&P’s decision to strip the United States of its triple “A” rating.
In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is “gradually discarded by the world,” and the “process will be irreversible.”
Dagong made headlines last week when it became the first rating agency to cut its U.S. credit rating from “A+” to “A” after policymakers in Washington failed to act in a timely manner to lift its debt celing.
However, the announcement failed to register in the markets as investors have yet to decide whether to take the Beijing-based company seriously.
(Excerpt) Read more at cnbc.com ...
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S&P Explains Why The "$2 Trillion Error" Is Irrelevant
Submitted by Tyler Durden on 08/07/2011 11:14 -0400
Baseline Scenario Congressional Budget Office Gross Domestic Product Nominal GDP None ratings
Yesterday we showed that when it comes to projections, the CBO's own track record makes S&P shine in comparison. Apparently this fact was not lost on S&P itself which sent out a note explaining which "clarified assumption used on discretionary spending growth." Basically, as S&P says, "Our ratings are determined primarily using a 3-5 year time horizon. In the near term horizon, by 2015, the U.S. net general government debt with the new assumptions were projected to be $14.5 trillion (79% of 2015 GDP) versus $14.7 trillion (81% of 2015 GDP) with the initial assumption – a difference of $345 billion." So yes, while by 2021 the difference could be $2.1 trillion based on the CBO's current baseline model, the truth is that the CBO's own estimate on revenue and spending projections in a decade will likely have a +/- $10 trillion margin of error. So does anyone really care? In essence all S&P did was point out what Zero Hedge and others have been saying: that a "deficit cutting" plan which is massively back end loaded and has about $20 billion in cuts over the next year is absolutely without credit or merit. And the disingenuity on the side of Treasury to believe that someone would think otherwise is simply appalling. That said, while the markets look set to crash very shortly, the overabundance of catalysts means that it will be more than just the downgrade that throws risk into a tailspin. Although prepare for an all out onslaught by the Treasury on S&P as a scapegoat. After all in USSAA(negative outlook) it is never our fault: it is always someone else's.
Full S&P note:
Standard & Poor’s Clarifies Assumption Used On Discretionary Spending Growth
New York, Aug. 6, 2011. In response to questions, Standard & Poor’s today said that the ratings decision to lower the long-term rating to AA+ from AAA was not affected by the change of assumptions regarding the pace of discretionary spending growth. In the near term horizon to 2015, the U.S. net general government debt is projected to be $14.5 trillion (79% of 2015 GDP) versus $14.7 trillion (81% of 2015 GDP) with the initial assumption.
We used the Alternative Fiscal Scenario of the nonpartisan Congressional Budget Office (CBO), which includes an assumption that government discretionary appropriations will grow at the same rate as nominal GDP. In further discussions between Standard & Poor’s and Treasury, we determined that the CBO’s Baseline Scenario, which assumes discretionary appropriations grow at a lower rate, would be more consistent with CBO assessment of the savings set out by the Budget Control Act of 2011.
Our ratings are determined primarily using a 3-5 year time horizon.
In the near term horizon, by 2015, the U.S. net general government debt with the new assumptions were projected to be $14.5 trillion (79% of 2015 GDP) versus $14.7 trillion (81% of 2015 GDP) with the initial assumption – a difference of $345 billion.
In taking a longer term horizon of 10 years, the U.S. net general government debt level with the current assumptions would be $20.1 trillion (85% of 2021 GDP). With the original assumptions, the debt level was projected to be $22.1 trillion (93% of 2021 GDP).
The primary focus remained on the current level of debt, the trajectory of debt as a share of the economy, and the lack of apparent willingness of elected officials as a group to deal with the U.S. medium term fiscal outlook. None of these key factors was meaningfully affected by the assumption revisions to the assumed growth of discretionary outlays and thus had no impact on the rating decision.
Www.zero hedge.com
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S&P executive: 1 in 3 chance of future downgrade
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WASHINGTON (AP) -- A Standard & Poor's official says there is a 1 in 3 chance that the U.S. credit rating could be downgraded another notch if conditions erode over the next six to 24 months.
The credit rating agency's managing director, John Chambers, tells ABC's "This Week" that if the fiscal position of the U.S. deteriorates further, or if political gridlock tightens even more, a further downgrade is possible.
Chambers also said Sunday that it would take "stabilization and eventual decline" of the federal debt as a share of the economy as well as more consensus in Washington for the U.S. to win back a top rating.
S&P downgraded the U.S. rating Friday, from AAA to AA+, for the first time.
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ABC Financial Expert Slapping S&P As 'Suspect' Is Undisclosed Obama Fundraiser
NewsBusters ^ | August 07, 2011 | Mark Finkelstein
Posted on August 7, 2011 10:43:52 AM EDT by SanFranDan
The predictable MSM reaction to Standard & Poor's downgrading of the US government's credit rating? Kill the messenger, of course. Yesterday, we noted how Jeff Glor at CBS' Early Show parroted the Obama line about the downgrade being "political."
Today it was ABC's turn. Good Morning America had on Mellody Hobson, a regular ABC "financial contributor" and former host of her own ABC financial-advice show. Hobson hit S&P hard, expressing the view that "everything that they do is suspect."
There's just one little factoid ABC didn't share with viewers. While presented as a presumably objective financial expert, Chicagoan Hobson in fact is an Obama partisan.
Hobson served as a big-time fundraiser during Obama's 2008 presidential campaign and is involved with his 2012 campaign.
(Excerpt) Read more at newsbusters.org ...
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Obama can add another to his mantle: The man who got the US downgraded to AA.
Congrats, God-King! Keep up the good work destroying saving America!
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According to team kneepad I am the one fear mongering.
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After S&P Downgrade, ‘Sunday Night, Pray’ and Other Thoughts From Traders
Yahoo/Finance ^ | 8/7/11 | Chris Nichols
Posted on August 7, 2011 10:50:11 AM EDT by EBH
Monday and Tuesday, he says, will be "very critical," because if the market can absorb the first downgrade in U.S. history, that would create confidence -- but that still has to be seen...
...So what's next? Three options, he notes: Liquidate positions, hold your ground or wait for a larger decline that will open up entry points for long positions.
"This will be no different than any other day for us, but we suspect that several hedge funds will be reporting problems, along with margin problems at many of the CME's firms," he says. "Just because the stock market/S&P has sold off 160 handles in the last 10 days does not mean that the markets won't be down sharply. They will be..."
...Simon Baker, the chief executive of Baker Avenue Asset Management, says he's been completely in cash since the middle of June, when his firm's market sentiment indicators went negative and volatility began to rise sharply.
For Baker Avenue, it won't be a quiet weekend, he explains via email. "We have a special investment committee meeting Sunday afternoon to review all strategies and possible scenarios on Monday," he says, followed by, "Sunday night, pray."
(Excerpt) Read more at finance.yahoo.com ...
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Take that, dips hit!
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The deficit in 2008 was 3%. Not great but very managable. Before the Dems took control of Congress it was 2% or under, which is acceptable and below the past 40 year average. It is now 11% of GDP. There is no comparison. Lets talk about the pink elephant here. Obama is the most incompetent and pathetic leader of my lifetime and one of the worst presidents ever. He is one of the least qualified men to be president ever. This guy is a whole new ball game my friend. We will have much better presidents in the future and aalso medicore presidents, and even some more bad presideints, but it is unlikely we will have another one THIS bad again in my lifetime, Democrat or Republican. Thank God.
Obama is a turd no doubt. He is actually very dangerous because he'll say all the right things to whichever audience is listening and then shamelessly backtrack on ALL his promises. That's why the powers that be love him.
That being said Bush was just as much a douche. They are all whores.
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Obama is a turd no doubt. He is actually very dangerous because he'll say all the right things to whichever audience is listening and then shamelessly backtrack on ALL his promises. That's why the powers that be love him.
That being said Bush was just as much a douche. They are all whores.
indeed sir, I do believe one that at least feins interest in doing whats right for the country would be better than what we have now...
not until ppl start actually caring about what happens in this country will it start to change. Sadly the way the govt has set up the entitlements this will likely never happen.
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Dollar to Be 'Discarded' by World: China Rating Agency
CNBC ^ | 7 Aug 2011 | Ee Sing Wong
Posted on August 7, 2011 12:08:35 PM EDT by barmag25
The man who leads one of China’s top rating agencies says the greenback’s status as the world’s reserve currency is set to wane as the world’s most powerful policy makers convene to examine the implication of S&P’s decision to strip the United States of its triple “A” rating.
In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is “gradually discarded by the world,” and the “process will be irreversible.”
Dagong made headlines last week when it became the first rating agency to cut its U.S. credit rating from “A+” to “A” after policymakers in Washington failed to act in a timely manner to lift its debt celing.
However, the announcement failed to register in the markets as investors have yet to decide whether to take the Beijing-based company seriously.
(Excerpt) Read more at cnbc.com ...
TOPICS: Business/Economy; Foreign Affairs; Government; News/Current Events; Click to Add Topic
KEYWORDS: Click to Add Keyword
Maybe he needs to go on another world apology tour...that'll help. ::)
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Take that, dips hit!
dips hit?
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America “Makes The Cut” – So What Happens Next?
Around the world, starting Monday, all eyes are on the markets. The tension is palpable. The uncertainty is ample. And anger is heavy in the air. As predicted, the debt ceiling deal was not only NOT enough to assuage economic fears, it actually exacerbated them, triggering a flight from the Dow, and creating a decisive opportunity for ratings agency S&P to cut the once perfect U.S. credit rating from AAA to AA+.
At Alt-Market, we often talk about points of balance, and how certain moments in history become highly visible indicators of balance lost. If we pay close attention, and know what we are looking for, these moments can be recognized, allowing us time to shield ourselves from the explosion and the resulting financial shrapnel. The past two weeks have culminated into one of these defining events that tell us the tide has fully turned, and something new and dangerous is just over the horizon. The question now is; what should we expect?
The nature of the credit downgrade situation is not necessarily “unprecedented” in history, but it is surely unprecedented on the scale we see currently in the U.S. It is difficult to predict how exactly the investment world will react. Some consequences, though, are probable, if not inevitable. Let’s examine the events we are likely to see in the coming weeks as well as the coming months, as nations attempt to adjust to America’s final plunge…
1) Ratings Agencies Under Attack
This has already begun. Italian authorities have raided the offices of S&P and Moody’s, apparently perturbed that their credit rating is not under their control. The U.S. is accusing S&P of making “accounting mistakes” and jumping the gun on the American downgrade. The battle between insolvent governments and the ratings agencies from here on will escalate quickly. More offices will be investigated and raided. The mainstream media will try to assert that the downgrades are “not that important”, and that the U.S. will recover quite nicely without a perfect score. Eventually, as the collapse becomes more evident, ratings agencies will fill the role as the go to scapegoat / economic hitman at which all governments will point accusing fingers.
“S&P is gonna’ cut you man! S&P’s a blade-man, man!”
In my view, it’s all theater. First, let’s set aside the recent ratings cuts altogether and look at the facts. The U.S. should have been downgraded years ago, especially after the Federal Reserve decided to begin purchasing U.S. Treasury Bonds in place of dwindling foreign interest and turned to monetizing our debt to the point of rampant inflation. Italy and numerous other EU members should have been downgraded to junk status a long time ago as well. If anything, the ratings agencies over the past few years have been PROTECTING the credit reputations of many countries which in no way deserve it. The recent downgrades are long overdue…
Second, suddenly governments and MSM pundits feel it necessary to point out the large part ratings agencies played in the derivatives bubble and subsequent credit crisis? Please! They were perfectly content with S&P or Moody’s giving fraudulent top ratings for toxic garbage securities, and even defended agency actions after the bubble burst! Now, after they finally start doing their jobs by downgrading bad debt, governments want an investigation?
Third, ratings agencies were not alone in the creation of the derivatives bubble. The private Federal Reserve artificially lowered interest rates and flooded the markets with cheap fiat. International banks used this fast money to create the easy mortgage groundswell and the derivatives poison that was fed it into the system. Ratings agencies went along with the scam and graded the worthless securities as AAA. The federal government and the SEC allowed all of this to take place by purposely ignoring the crime and refusing to apply existing regulations in investigating the fraud.
The Bottom line? You CANNOT create an economic crisis like the one we face today without collusion between big business, government, regulatory bodies, and ratings agencies. The Obama Administration is well aware of this, and the attacks on S&P are nothing more than a show. S&P is not to blame for the downgrade this past weekend. They are ALL to blame.
2) Increased Borrowing Costs
While the mainstream will attempt to downplay the effects of a U.S. downgrade, they cannot deny that our country’s borrowing costs have just gone up. This causes several unfortunate circumstances to develop. Our ability to continue funding our liabilities is now greatly diminished, unless we turn to the Federal Reserve even more in the purchasing of treasury bonds. If investors and central banks can’t get AAA protection for their money in America, they will simply turn to other countries that still retain a top credit rating. The safety of dollars and treasuries already held by other countries will come under question. In response to the S&P downgrade, China, our largest creditor, has openly stated that U.S. securities can no longer be trusted, and that the dollar must be replaced as the world reserve currency. If the dollar does not take an immediate dive starting this week, it certainly will over the course of the Fall season. There are, indeed, many direct consequences in light of a U.S. downgrade. Anyone who says otherwise is living in dreamland.
3) European Union Feeling The Pain
The EU is on a direct interception course with disaster, just as we are, however, being that the U.S. dollar is a widespread world reserve currency, all nations will be affected by our particular downgrade, as opposed to the Greek downgrade, for example, whose effects were minor in comparison.
The European Central Bank has initiated its own TARP measures, and due to the quickening implosion of Spain and Italy, is fully prepared to print fiat Euros in a desperate attempt to control the damage. European reliance on the American consumer has proved fatal. The result is an ever expanding avalanche of fiat on both sides of the Atlantic in an insane race to the bottom between our respective currencies. This development fits perfectly with the IMF plan to introduce Special Drawing Rights (the SDR) as the new global reserve currency, though I’m sure it’s all just a coincidence…
The ECB is also facing serious resistance from Germany, which has been shelling out the largest portion of bailout funds for countries like Greece, Ireland, and Portugal. Germany is tired of playing sugar daddy to the EU, which could conceivably lead to a breakup of the union itself, even with the implementation of fiat injections.
4) Blame Game Overdrive
The blame game is about to get ugly. When economic catastrophe is on the line, civility goes out the window. Who will be the primary target besides ratings agencies? Why fiscal conservatives, of course! Obviously, the Tea Party is full of “terrorists”, and real conservatives are the true culprit behind the collapse because we have this annoying tendency of pointing out that our spending addicted government is dragging us hogtied on a speedboat to Hades.
Please, America, don’t blame the Federal Reserve for feeding the derivatives bubble and destroying our currency. Don’t fret over global banks like Goldman Sachs that deliberately conjured the credit crisis. Don’t attack the government for lending a helping hand to these entities in their quest for complete financial centralization. Instead, shoot the messenger. We love that…
5) Drastic Measures
An announcement by the Fed of yet a third QE stimulus package is a certainty. If the market reaction is especially negative this week, an announcement could even be made before this month is out. I have no doubt, QE3 will be the undoing of this country. Any further devaluation of the dollar will NOT be tolerated by creditor nations who have much to lose if the process of U.S. inflation continues. Treasuries will be dumped. The dollar will be dumped. And, America will have little choice but to hyperinflate to keep up with rising debt burdens.
Those who believe that the U.S. is not expendable in terms of the world economy, and believe that foreign nations will continue pouring money into our coffers because they “have to”, are kidding themselves. We are dealing with an engineered global shift. For central bankers, the U.S. economy is no less expendable than an aging sports car. It can easily be replaced with something newer, shinier, and more compact. Something that will get more girls. The call for “international regulation” of U.S. finances will become the rallying cry of elites across the planet, as well as the largest holders of our exponential debt. The current system will be sacrificed to make way for an IMF controlled body of unaccountable economic overseers.
This is not theory. This is not conjecture. This is reality. The credit downgrade of the U.S. is a concrete trigger point that sets all of the above proceedings in motion.
People will ask for hypotheses on time frames for the events above. I don’t have any, though this week’s market attitudes will be revealing as to the speed that events will take shape. So many interacting factors are present that any specific time predictions on the progress of collapse would be unrealistic. For the short term, watch Federal Reserve activity carefully. Introduction of new QE will be extraordinarily volatile. For the long term, watch wholesale and retail prices of goods, along with treasury auctions and foreign flights from U.S. bonds. One thing is certain, the final half of 2011 will be remembered as a historical turning point for us all. That said, the trials ahead were never the issue. That which is most important is how we RESPOND in these moments. How we adapt. How we function. How we fight back. Disasters do not make history. We make history. As overwhelming as the currents of such events may feel, in the end, they are subservient to the actions of resolved men. Nothing is fated. The conclusion depends upon us.
http://oathkeepers.org/oath/2011/08/07/warning-us-loses-aaa-credit-rating-consequences-will-be-dire
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United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative
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.
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.
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.
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.
The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
Rating Action
On Aug. 5, 2011, Standard & Poor's Ratings Services lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'. The outlook on the long-term rating is negative. At the same time, Standard & Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.
The transfer and convertibility (T&C) assessment of the U.S.--our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for debt service--remains 'AAA'.
Rationale
We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.
Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government's other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.
We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.
The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.
Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011).
Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing.
The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.
The act further provides that if Congress does not enact the committee's recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.
We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO's "Alternate Fiscal Scenario" assumes a continuation of recent Congressional action overriding existing law.
We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings.
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.
Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.
Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.
Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.
When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.
Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers' access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.
Outlook
The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently
assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'.
On Monday, we will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors.
http://www.zerohedge.com/news/sp-downgrades-us-aa-outlook-negative-full-text
Thanks, Obama. I'm actually shocked S&P had the balls to do this. Where were these ratings agencies in 2008 when they were labeling all that mortgage-based trash AAA? Well, better late than never as the US hasn't been AAA for years.
Perhaps this will convey to liberals the severity of our debt problems. However, I doubt it.
You fucktard, the document produced blames repubs for the downgrade right in the text. LOLOLOLOLOLOLOLOLOLOLOOL OL
jesus ignorance is bliss.
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Wrong moron - they said the spending cuts are not nearly enough and not likely to get enacted.
We need to cut spending - how hard is that for you to grasp moron?
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Wrong moron - they said the spending cuts are not nearly enough and not likely to get enacted.
We need to cut spending - how hard is that for you to grasp moron?
oh did they? mind pointing out were in the 9 page document they highlighted that as the reason?
do we have to do this? its going to be embarassing for you.
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You fucktard, the document produced blames repubs for the downgrade right in the text. LOLOLOLOLOLOLOLOLOLOLOOL OL
jesus ignorance is bliss.
::)
i would leave out the ad-hominems because its an obvious sign of someone loosing an argument.
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I didnt read the whole thing but this line seems to suggest that there needs to be more cuts, that a further downgrade would result if more cuts arent performed.
Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur.
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oh did they? mind pointing out were in the 9 page document they highlighted that as the reason?
do we have to do this? its going to be embarassing for you.
LOL i asked you to point it out to me and you told me to read it myself...
please do point it out...
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I didnt read the whole thing but this line seems to suggest that there needs to be more cuts, that a further downgrade would result if more cuts arent performed.
Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur.
nope its the damn tea party I tells ya...
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I didnt read the whole thing but this line seems to suggest that there needs to be more cuts, that a further downgrade would result if more cuts arent performed.
Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur.
yes it does. didnt say it didn't however that is not the whole story, its clear that increased taxes and removing the bush tax breaks are an equal component based on the document. This is were the republican comment comes in that they refuse to increase taxes and remove the breaks thus in order to decrease the defeceit much more cutting is needed. Thus, the cuts aren't enough in light of no revenue and the stubborness shown leads SandR to assume it will continue and thus the current plan is useless as debt will continue to climb in its current form.
so the best solution is a balanced agreement with revenue increases, if not then the current cuts are not enough and more need to be made.
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yes it does. didnt say it didn't however that is not the whole story, its clear that increased taxes and removing the bush tax breaks are an equal component based on the document. This is were the republican comment comes in that they refuse to increase taxes and remove the breaks thus in order to decrease the defeceit much more cutting is needed. Thus, the cuts aren't enough in light of no revenue and the stubborness shown leads SandR to assume it will continue and thus the current plan is useless as debt will continue to climb in its current form.
so the best solution is a balanced agreement with revenue increases, if not then the current cuts are not enough and more need to be made.
PLEASE POST YOUR QUOTE...
they cuts arent enough period...not in the face of no revenue increases...PERIOD!!!
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LOL i asked you to point it out to me and you told me to read it myself...
please do point it out...
oh did i?
my response to the above request went a little something like this liar
"jesus read the report before you open your mouth. Nevermind you just believe anything without evidence, a syndrome of your faith. Page 4, on the bottom of the report. I suggest you read past that too an examine the actual underpinnings of what your party has implemented, pure shite."
i gave you the area and exact page LOL, nice try though. You must be only able to read the first 5 words of any response
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PLEASE POST YOUR QUOTE...
they cuts arent enough period...not in the face of no revenue increases...PERIOD!!!
why all the lies, i told you to read it yourself did i?
i already posted the quotes, why are you such a liar, isn't it a sin or something? Im starting to feel bad for you.
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why all the lies, i told you to read it yourself did i?
i already posted the quotes, why are you such a liar, isn't it a sin or something? Im starting to feel bad for you.
ahhh come on now, you were more than willing to post it earlier...
now that your being called out your want to back peddle?
not another correlation is causation backfire?
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Hey Necro - do you realize we are getting massive revenue increases just with obamaCare alone?
500 billion in new taxes you ignorant jackass.
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ahhh come on now, you were more than willing to post it earlier...
now that your being called out your want to back peddle?
not another correlation is causation backfire?
wtf its like two posts above where i pointed out your lie, you said i told you to read it yourself, i then quoted my response to you from that thread where i gave you the exact page (its still there dummy) and section. I literally just showed you lying and you respond with this?
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Hey Necro - do you realize we are getting massive revenue increases just with obamaCare alone?
500 billion in new taxes you ignorant jackass.
sure, what does that have to do with the report stating facts? the revenue produced and the cuts proposed do not work. The revenue from obamacare does not matter in this debate, what about that cant you understand. I cant respond to you anymore you side track every fucking thread with lies and deception. Once you have run out of ground on one subject you just change gears, if someone posts something about anyone other then obama you bring him up, its an odd obsession. Look at your post count, take a break.
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wtf its like two posts above where i pointed out your lie, you said i told you to read it yourself, i then quoted my response to you from that thread where i gave you the exact page (its still there dummy) and section. I literally just showed you lying and you respond with this?
just post it man...
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just post it man...
no i posted it twice, i dont have the document open im not your internet disc jockey, i gave you the page three times now, the link in the thread and the area of the page.
what do i have to post it ten times? go to the thread its on page 1 of bachmann, its about my fifth post. If you search the regular document its on page 4 at the bottom.
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
its the last paragraph of the fourth page. It is referring to the thought that the bush tax cuts would be removed, they assume they will remain now. The other section also comments on all this in more depth about cuts and revenue.
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Ok you stupid liberal obama dildo pieces of fucking trash:
LETS DO THIS AGAIN FOR YOU BRAIN DEAD JERKOFFS
1. OBAMAA+ SPENT THE FIRST TWO YEARS SPENDING LIKE A CRACK WHORE WHO WON LOTTO
2. OBAMAA+ ADDED A NEW ENTITLEMENT TO AN ALREADY OVERBURDENED SYSTEM
3. OBAMAA+ REJECTED THE SIMPSON BOWLES RECS OF A YEAR AGO! (WOULD HAVE AVOIDED DOWNGRADE)
4. OBAMAA+ REJECTED THE RYAN PLAN (WOULD HAVE AVOIDED DOWNGRADE)
5. OBAMAA+ REJECTED CUT, CAP, AND BALANCE (WOULD HAVE REJECTED DOWNGRADE)
6. OBAMAA+ NEVER PRESENTED HIS OWN PLAN
7. OBAMAA+ REJECTED REID/BOEHNERS' INITIAL PLAN INCLUDING 800 BILLION OF REVENUE (WOULD HAVE AVOIDED DOWNGRADE)
8. WE ARE SPENDING AT LEVELS AT 23% OF GDP. HISTORICAL NORMS ARE 18-20%
9. TAX RECIEPTS ARE TRADITIONALLY 18% OF GDP OR SO.
THE ISSUE IS SPENDING - NOT TAXES.
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A tax increase in this economy at this moment would be further suicide, it would just further enlarge the government and suck more blood from the host.
It wouldn't raise much in the way of "revenue" anyways as there is 9% U.E, zero real growth and stagnant wages. Taxing the rich makes for a great cliche, a great tag-line and excellent class-warfare garbage but it would be pissing in the ocean, so to speak. You'd have to raise taxes on all brackets to even see any relevant revenue, and yes, that means actually have the 50% of the population that has no income tax liability start to pay their fair share. Anyways, you'll get your tax hike ,that you want so desperately, when the payroll tax cut is rolled back in the near future.
How much more money would that suck out of the economy that is in critical condition?
That's what everyone is missing, you could double the rates and still fall well short of erasing the deficit.
S&P wanted at least 4 trillion in cuts, it didn't get it, so they downgraded the nations credit rating. The political wrangling from both sides influenced the decision as well, no talk of serious entitlement reform (where 100 trillion in unfunded liabilities is) defense cuts or tax reform either.
You can be played by the media/govt. complex and drink down the distraction propaganda all you want, but facts are facts.
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Just print mo money!
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We need to cut spending across the board. Rand Paul has the best plan by far from what I can tell.
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DOW futures already down 258 points and gold flirting with $1700. Thanks, Barack!
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DOW futures already down 258 points and gold flirting with $1700. Thanks, Barack!
Bachman and Palins' fault.
guy! Why should they be against printing money we dont have!
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Bachman and Palins' fault.
####! Why should they be against printing money we dont have!
ABC's Cokie Roberts blamed it on the Constitution today:
COKIE ROBERTS: This group of people in New York [Standard and Poor’s] is actually talking about more government rather than less government, Congressman. In fact, the reason they like France and Great Britain is because they’re parliamentary systems where the majority gets what it wants no matter what.
And the problem that we have here is the Constitution of the United States of America which actually does require people to come together from different perspectives whether it's divided government or not. We have divided branches of government under any circumstance.
Read more: http://newsbusters.org/blogs/noel-sheppard/2011/08/07/cokie-roberts-problem-we-have-here-constitution-united-states-america#ixzz1UOSYyYBq
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no i posted it twice, i dont have the document open im not your internet disc jockey, i gave you the page three times now, the link in the thread and the area of the page.
what do i have to post it ten times? go to the thread its on page 1 of bachmann, its about my fifth post. If you search the regular document its on page 4 at the bottom.
we've 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
its the last paragraph of the fourth page. It is referring to the thought that the bush tax cuts would be removed, they assume they will remain now. The other section also comments on all this in more depth about cuts and revenue.
LOL hahahhaah you took one little blurb about the bush tax cuts something the report says itself that "congress" not simply the reps backed when passing their ext...
and disregarded the entire rest of the report talking about the debt cuts not being enough, the debt ratio growing in regards to GDP
and you get from a 9 page report...one paragraph and thinks its all the tea parties fault?
hahahah
your even better than straw man broham....stick around your idiocy is some needed spice around here.
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hahahh reading it again they werent talking about their view soley on downgrading but their view on the debt ratio for the upcoming years GIVEN the fact the spending will stay the same or increase....
goodness gracious talk about taking something out of context...
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LOL hahahhaah you took one little blurb about the bush tax cuts something the report says itself that "congress" not simply the reps backed when passing their ext...
and disregarded the entire rest of the report talking about the debt cuts not being enough, the debt ratio growing in regards to GDP
and you get from a 9 page report...one paragraph and thinks its all the tea parties fault?
hahahah
your even better than straw man broham....stick around your idiocy is some needed spice around here.
you obviously didnt read the document now did you. I have said all of what you just said, you clearly have issues with reading posts or actually listening to what other people say, perhaps its arrogance or adhd i dont know but i already mentioned all of the above.
im gone to a movie but if you want to continue with this beating i can resume tom, however, im going camping tom afternoon and wont be on for days. you have yourself a good night there tommy. Try reading whats being discussed insted of waiting your turn to speak.
its not out of context, also, ill respond if i get the chance tom, you clearly are reading parts of it. sit down and read it.
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you obviously didnt read the document now did you. I have said all of what you just said, you clearly have issues with reading posts or actually listening to what other people say, perhaps its arrogance or adhd i dont know but i already mentioned all of the above.
im gone to a movie but if you want to continue with this beating i can resume tom, however, im going camping tom afternoon and wont be on for days. you have yourself a good night there tommy. Try reading whats being discussed insted of waiting your turn to speak.
its not out of context, also, ill respond if i get the chance tom, you clearly are reading parts of it. sit down and read it.
no what you did was take a small paragraph out of context b/c it wasnt even talking about their view on our credit rating only on our debt ratio and try to make it all about the reps and refusing to raise taxes...
quote your posts where you blame obama and his spending...
Ive seen ones where you defend his spending...
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no what you did was take a small paragraph out of context b/c it wasnt even talking about their view on our credit rating only on our debt ratio and try to make it all about the reps and refusing to raise taxes...
quote your posts where you blame obama and his spending...
Ive seen ones where you defend his spending...
;D
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You guys should get to sleep so you can wake up early tomorrow and continue to obsessively bash Obama on the bodybuilding message boards.
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You guys should get to sleep so you can wake up early tomorrow and continue to obsessively bash Obama on the bodybuilding message boards.
is that why youre so good a deflecting and knee padding?
you get your beauty rest? ;)
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You guys should get to sleep so you can wake up early tomorrow and continue to obsessively bash Obama on the bodybuilding message boards.
Another shitty troll that never actually refutes anything and instead has to rely on failed attempts at personal insults.
Seen it tried a million times before by gimmicks and trolls more intelligent than you. They were both irrelevant and ineffective and so are you. :)
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China Isn't Exactly Floating The Yuan But...
Earlier we speculated that the one thing that could throw this whole fiasco into a complete tailspin is for China to float the renminbi, which would catch an already frazzled America unawares, as China submits a formal bid for its currency to become the de facto global reserve. Well, that didn't quite happen. However, at a massive 0.23% change in the fixed overnight rate, a move that very much hurts China, it is about as symbolic of an intraday change as can be. The PBoC set the Monday USDCNY fixing at a record high of 6.4305, up from 6.4451. While it is unknown whether this near record rate of FX change will be sustained, China just sent a very clear message to the US, following the previously noted opeds in both Xinhua and FT, in which various Chinese individuals blasted the current situation America finds itself in. The only question now is whether China will proceed with a very demonstrative dump of US bonds tomorrow to reinforce the purely political statement it just made in FX.
(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/USDCNY.jpg)
http://www.zerohedge.com/news/china-isnt-exactly-floating-yuan
Funny thing is that China's economy is heading for the cliff, too. Factor that in with their rampant corruption and book cooking that makes the US's look like child's play and they have zero chance of replacing the dollar with the Yuan. Not that they're going to try.
Thanks, Obama!
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Obama can add another to his mantle: The man who got the US downgraded to AA.
Congrats, God-King! Keep up the good work destroying saving America!
Yup, it is natural for the dems to blame the repubs, but the truth is that Obama will go down in history as the president on whose watch the US got downgraded to AA for the first time in history.
That and many other things, like the highest unemployment rate for black men in the US ever.
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You guys should get to sleep so you can wake up early tomorrow and continue to obsessively bash Obama on the bodybuilding message boards.
Let's see........
Take politics out of the equation and look at this from a typical person point of view:
- Very high gas prices
- increased food prices
- very high unemployment
- now our credit rating is AA for the first time in history
- because of the clean air act pur energy costs are likely to rise 25%
- we are still in 2 wars and more or less in a third
I am sure the list could go on and on and all you have respond with is ridiculing people for bashing OB on a message board? ::)
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President Obama: "The Buck Stops Elsewhere"
Eric Cantor, Majority Leader ^ | 8/8/11 | Brian Patrick
FYI –
Once again, when it comes to President Obama, the buck stops somewhere else.
•John Harwood: “Do you feel that you or the administration’s policies are in any way responsible for this downgrade?”
•Secretary Geithner: “Absolutely not. You’ve seen the president work incredibly hard and make really amazing progress trying to heal the damage caused by this terrible crisis. And you saw him work his heart out to try and bring both parties together to reach agreement on a long-term fiscal deal. Made some progress, didn’t solve it all, but a very good down payment.” (The New York Times, 8/8/11)
The Facts:
•Since Taking Office, President Obama Has Added $3.9 Trillion To The Debt. (TreasuryDirect.gov, 8/8/11)
•President Obama Chose To Ignore The Biggest Drivers Of The Nation’s Debt In His Budget. President Obama, in his fiscal 2012 budget proposal, chose instead to duck. To duck, and to mask some of the ducking with the sort of budgetary gimmicks he once derided. "The fiscal realities we face require hard choices," the president said in his budget message. (The Washington Post, 2/15/11)
•The President’s Budget Assumes An Additional $9.5 Trillion In Deficits Over The Next 10 Years. (CBO, April 2011)
•The Administration Made Clear They Planned To Ignore The Debt Crisis Altogether By Calling For A Clean Debt Limit Increase. “... we believe that we should move quickly to raise the debt limit and we support a clean piece of legislation to do that. (Press Briefing, 4/11/11)
•Under President Obama The Debt To GDP Ratio Has Soared. They boosted federal spending to 25% of GDP in 2009, 23.8% in 2010 (as TARP repayments provided a temporary reduction in overall spending), and back nearly to 25% this fiscal year. Meanwhile, debt to GDP climbed to 53.5% in 2009, 62.2% in 2010, and is estimated to hit 72% this year—and to keep rising. These are all figures from Mr. Obama's own budget office. Rather than change direction this year, Mr. Obama's main political focus has been to preserve those spending levels by raising taxes. His initial budget in February for fiscal 2012 proposed higher spending. (The Wall Street Journal, 8/8/11)
•For Thought: President Obama Has Increased The Debt At Nearly Three Times The Rate President Bush Did. “During Obama's presidency to date, the national debt has risen by an average of $1.723 trillion a year — or by a jaw-dropping $1.116 trillion more, per year, than it rose even under Bush. .. In his first two fiscal years, Obama will run up a total of $2.826 trillion in deficit spending ($1.294 trillion in 2010, an estimated $1.267 trillion in 2011 (p. 23), and the $265 billion in "stimulus" money that was spent in 2009). Thus, Bush ran up an average of $410 billion in deficit spending per year, while Obama is running up an average of $1.413 trillion in deficit spending per year — or $1.003 trillion a year more than Bush.” (NPR, 1/25/11)
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Yup, it is natural for the dems to blame the repubs, but the truth is that Obama will go down in history as the president on whose watch the US got downgraded to AA for the first time in history.
Yep, definitely something will be hearing again late next year. :D