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Discussion in 'Off-Topic' started by info, Aug 5, 2011.
This is ominous:
U.S. loses AAA credit rating from S&P
New York Times: S&P Downgrades US Long Term Debt
And this was the "change we can believe in" :/
At this rate we are sinking fast and I really don't know what they are going to do now. I was listening to a commentator on the radio say that the S&P rating was "a big ado about nothing. Something like a reverse beauty pageant... we are the least ugly of them all."
It's a catchy way to describe things, but the situation is pushing investors to put their money elsewhere, in other currencies, gold, etc. and this could eventually end badly. Not that I am pessimist, I'm just trying to look at the numbers here.
Paul Krugman had an excellent opinion piece in the New York Times after yesterday's dramatic drop in the Dow:
If I were being totally cynical, I would say that the oligarchs were in a win-win situation. A lower credit rating may lead to an increase in interest rates for US debt instruments, which is more money in the pockets of those who regularly buy these products. Then, those in Congress who have a fetish for spending cuts can demand offsets to keep total federal spending at a specified level.
I also recall when Moody's and other ratings agencies were accused of using their ratings to force nations like Greece and Spain to agree to bankers' terms to deal with their sovereign debt issues.
Good thing I am not a cynic.
It is never a good thing when a nations credit rating is reduced. This makes the big money necessary very expensive, will result in double digit inflation and in the case of the US, a total pull back and restructuring of foreign and domestic policy.
Runaway spending is finally catching up to the idiots who have been voted into office and with the current recession they cannot tax the rich enough to pay the bills....and will finally have to cut spending back to post Carter levels.
You can expect more rhetoric from those who caused the problems until enough of them are replaced that the remaining politicians jump on the bandwagon.
Revolution is not likely to ever happen in the US, but a complete turn over of those serving in Washington is necessary...and the new government needs to stop spending money like it belongs to them.
Some sobering specifics, in a nutshell, on the downgrade and how it may affect us from tonight's ABC Evening News with Diane Sawyer. Bianna Golodryga gives a disturbing explanation of "What this Downgrade Means."
The runaway spending you talk about accelerated during the Bush Administration, in part to pay for the wars in Iraq and Afghanistan. And amazingly enough, when some balked at the levels of spending, GOP officials said, "deficits don't matter.". But now, magically they are supposed to matter very much. Odd. And by the way, note that I am not making any comment here about the legitimacy of the war in Iraq, so as to not get sidetracked.
The tax burden has been shifted to the middle class for years now. In addition, we have seen job losses and stagnant wages. The tax cuts for higher income taxpayers was supposed to result in a boost to the economy. This did not happen.
And the tax cuts for the wealthy still give us this anomaly: a married couple with two children and income from a trust consisting of $100,000 in capital gains and dividends pay ZERO tax. The same couple with the same income from wages pay income tax, social security tax, Medicare tax.
But in addition to the need to dump a continuation of stupid tax policy, the issue is jobs and wages, not federal spending. And here I don't see much coming from either party. Worse, some in the GOP seem to believe that the middle class has outlived its usefulness.
Guys, I suggest you re-read Rule No. 1 of the forum rules http://www.ipadforums.net/forum-rules-help-info/2119-forum-rules-everybody-please-read.html