Exactly rightWe got downgraded because we didn't cut enough and we didn't raise taxes.[
The perception is that the US government is incompetent, that is why it was downgraded. Whether or not tax rises could cover all the deficit, congress set its face against ANY! That just makes no sense to anyone. But while on the subject, someone posted a graph elsewhere showing just 7% of revenue was coming from corporate taxes. Does that not strike anyone else as ridiculously small since companies are what make money?Bullshit. You would have to raise taxes 66% to make a dent in this debt scenario. Good luck passing a 66% tax increase. The downgrade occurred because there weren't sufficent spending cuts. The handouts are in full force.
And that is the other reason the US and most other countries need to be downgraded. This is not just a US issue but a world issue. EVERY country in the world which relies upon constant loans is at risk of default, whether or not they stand a reasonable chance of paying it back eventually. The recent debt ceiling farce was an artificial crisis but if the banks simply stopped lending to everyone there would be a real crisis and US defaults. The entire world finance system is screwed and it is time this risk was recognised in the ratings. If one country somewhere defaults it may result in banks running out of cash to lend to anyone.We're not broke, we are just unwilling to set our tax rate to match our spending rate. If we really set spending to match what we are taking in and didn't increase taxes there would be rioting in the streets (like in Spain, Portugal, Italy, Greece, and France).
It is worse than that. Elections are decided by swing voters, so politicians are really only interested in the few who can be persuaded by crazy claims and make crazy policies just for them.If all the politicians are corrupt, it is the fault of the voters for refusing to elect honest politicians. Politicians who tell voters the truth are not elected. To be elected, politicians have to tell voters what the voters want to hear, regardless of whether it is true.
Ah yes, another serious problem identified with the US system of government which again correctly explains the downgrading.It has been more than amply demonstrated that spending huge sums on political campaigns greatly influences the results.
In other words, you are advocating raising taxes. I understand the US is very bad at adopting sales taxes, which have this great benefit that everyone pays them when they spend. 5% sales tax? The UK now has a basic 20% VAT rate on sales, and a lot more than that on fuel. (fuel? the US uses more per head than anyone else in the world and more than most of them put together. tax it!)5. Spending is the problem, not taxes. If everyone chipped in 5% of what they were given, we would have no problems. Too many people (over 50% of Americans) pay 0 taxes.
The trouble as I am sure you understand is that we now have every bad thing happening at once. Bush took the easy way out when he could have raised more money. Now it is a worse time to be raising extra money because it will depress the economy at a time it needs to be encouraged. The only way to do that is be very clever on exactly what you tax. The congress does not seem to be very clever, because it needs to tax money which is being saved, not money already being spent on US goods and services.
The only way out is pain. At the moment the whole world seems to be increasing debt in the hope of buying itself out of having to repay that debt. All I see is the stakes going up all the time.