US Credit Rating Downgraded by S&P

dandelion

Superior Member
Verified
Gold
Joined
Sep 25, 2009
Posts
13,297
Media
21
Likes
2,705
Points
358
Location
UK
Verification
View
Sexuality
100% Gay, 0% Straight
Gender
Male
We got downgraded because we didn't cut enough and we didn't raise taxes.[
Exactly right

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.
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?


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).
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.

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.
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.

It has been more than amply demonstrated that spending huge sums on political campaigns greatly influences the results.
Ah yes, another serious problem identified with the US system of government which again correctly explains the downgrading.
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.
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!)

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.
 

Bardox

Loved Member
Joined
Jul 1, 2009
Posts
2,234
Media
38
Likes
551
Points
198
Location
U.S.
Sexuality
100% Straight, 0% Gay
Gender
Male
The divide between the parties has been getting wider and wider. Just how wide was shown during the debt ceiling mess. The leaders, if you can call them that anymore, would rather drive the country into the ground rather than compromise on anything. John Boehner should not have gone on TV and said "I got 98% of what I wanted" before seeing what would happen to the credit rating. Now the Democrats can score huge points just over that.
 

dandelion

Superior Member
Verified
Gold
Joined
Sep 25, 2009
Posts
13,297
Media
21
Likes
2,705
Points
358
Location
UK
Verification
View
Sexuality
100% Gay, 0% Straight
Gender
Male
But whatever... I'm sure if we did the research we'd find out that the Wright Brothers, Bill Gates and the inventors of the internet were already exceedingly wealthy before they created the airplane, Microsoft and email.
Bill Gates is rich because IBM couldnt be bothered to develop personal computers and gave him the job of developing an operating system for them. If that is the economic model to success, then it just means be in the right place at the right time. Frequently great inventions are just sitting there desperately trying to get someone to notice them. Perhaps some nerd who never pays taxes because he doesnt have an income and has this insane obsession with.... flying bicycles.

Yes and no. Our history, by and large, also has been formed by creating and expanding civil rights and liberties, starting with the Bill of Rights, expanded by the 14th amendment, and court decisions and federal laws based on them. I hope (and know) someone still comes to this country for freedom of speech, freedom of religion, etc., and not just to be able to shop at Wal-Mart. By limiting your rhetoric to economic opportunities only, your post reminds me of the business executive who, during World War II, said the USA was fighting for its way of life--as exemplified by the electric toaster. (Note: I think the Nazis also had toasters.)
Somehow I am left with an image of how nazis might have put to use an electric toaster. I think the US is currently suffering from its traditional disinterest in world affairs, extending to federal affairs as distinct from state affairs. It is still a continent and a federation of similar but different states with some things in common. This has led to the the federal government running out of control. Most countries nowadays, including all the best regarded ones, have national schemes for health care, pensions, and social benefits. It has been difficult for the US to come to terms with this necessity of a modern nation because of the way its government is structured. It is a simple fact that as our wealth increases these social care things become more important to all of us. They just werent possible when the US constitution was created.
 

B_starinvestor

Experimental Member
Joined
Mar 1, 2006
Posts
4,383
Media
0
Likes
3
Points
183
Location
Midwest
Sexuality
100% Straight, 0% Gay
Gender
Male
Unfortunately, you seem to think that the ones who invent are the ones who are already wealthy. When in reality, the ones that do are those with no money because they are the ones who have the incentive to create something to actually try to get paid. The wealthy only step in when they see someone else's hard work, believes in what it can do, and then finances it in hopes they get something in return.

But whatever... I'm sure if we did the research we'd find out that the Wright Brothers, Bill Gates and the inventors of the internet were already exceedingly wealthy before they created the airplane, Microsoft and email. Just to name a few, of course. And to limit it at that since I'm sure if we did, there wouldn't be much (if not any) evidence of such a thing.

This has nothing to do with 'inventions.' Nice try.:rolleyes:

Paying into a pot vs. taking out of a pot. As an aside, I'm pretty sure Mr. Gates and the Wright Brothers pumped a lot of money into the pot.
 

vince

Legendary Member
Joined
May 13, 2007
Posts
8,271
Media
1
Likes
1,674
Points
333
Location
Canada
Sexuality
69% Straight, 31% Gay
Gender
Male
Bill Gate's mom was on the Board of Directors of IBM at the time and he didn't write DOS, he bought a company and re-sold the OS that they already had. He didn't invent a damn thing.
 

Jason

Superior Member
Verified
Gold
Joined
Aug 26, 2004
Posts
15,616
Media
50
Likes
4,782
Points
433
Location
London (Greater London, England)
Verification
View
Sexuality
90% Gay, 10% Straight
Gender
Male
Whatever, as if these ratings are somehow reliable.

Aren't these the same credit rating agencies that gave AIG triple A credit ratings?

Their fraud was one of principal reasons for the economic meltdown, yet they suffered no consequences.

You are right that there are problems with the rating agencies. But the problems all go the same way. They OVER rate both companies and nations. The reason is a form of moral caution. They know that a downgrade will have a negative impact and are very reluctant to make it - in effect they wait until there is no alternative.

The US downgrade includes putting the USA on negative watch. Unless there is serious progress in reducing the deficit within three months it seems very likely that there will be another downgrade - that is what negative watch means. And another downgrade, and another. And this will quickly impact on the cost of borrowing. This is the scenario that has been faced by several EU economies, and unless there is vigorous action pretty much instantly to hike taxes and slash spending the US economy faces the same problems as many in Europe.

There are now just 18 nations on AAA credit rating, and one of those (France) may well be downgraded.
 

dandelion

Superior Member
Verified
Gold
Joined
Sep 25, 2009
Posts
13,297
Media
21
Likes
2,705
Points
358
Location
UK
Verification
View
Sexuality
100% Gay, 0% Straight
Gender
Male
Is it likely to go down further still before things are addressed? and what will be the cost of this scenario?
Well if I knew I could plan for it.

There has been quite a bit of debate about it now. I think I agree the mark down is really only an acceptance of what has already happened, the US is no longer as safe an investment as it was. This situation has arisen from republicans blocking tax rises and democrats blocking social cuts (though Im sure the republicans have some of their own sacred cows they also refuse to slaughter). At the time of the last UK election it was argued that the worst possible outcome would be indecision and no majority. I dont wholly agree, because a party firmly pursuing a bad course could do enormous damage. But indecision and paralysis is pretty bad.

So on balance, yes.
 

TomCat84

Expert Member
Joined
Nov 23, 2009
Posts
3,414
Media
4
Likes
172
Points
148
Location
London (Greater London, England)
Sexuality
100% Gay, 0% Straight
Gender
Male
Well if I knew I could plan for it.

There has been quite a bit of debate about it now. I think I agree the mark down is really only an acceptance of what has already happened, the US is no longer as safe an investment as it was. This situation has arisen from republicans blocking tax rises and democrats blocking social cuts (though Im sure the republicans have some of their own sacred cows they also refuse to slaughter). At the time of the last UK election it was argued that the worst possible outcome would be indecision and no majority. I dont wholly agree, because a party firmly pursuing a bad course could do enormous damage. But indecision and paralysis is pretty bad.

So on balance, yes.

The Democrats haven't been blocking cuts to social programs. They've been blocking cuts when they are the ONLY thing on the chopping block, and taxes have been taken off the table.
 

B_VinylBoy

Sexy Member
Joined
Nov 30, 2007
Posts
10,363
Media
0
Likes
68
Points
123
Location
Boston, MA / New York, NY
Sexuality
90% Gay, 10% Straight
Gender
Male
This has nothing to do with 'inventions.' Nice try.:rolleyes:

Yet you can't prove anything I said wrong. I should say that it was most certainly a nice and successful try, because if it wasn't you wouldn't be trying to brush it off. That's certainly not your style around here. Nobody knows for sure the budgets or net worth of the Wright Brothers before they made the airplane. But they were born into a family of seven children and neither of them received a high school diploma. Their father was a traveling bishop. Does this sound like major wealth to you? And can you say with a straight face that the Wright Brothers are not credited for inventing the world's first successful airplane?

Paying into a pot vs. taking out of a pot. As an aside, I'm pretty sure Mr. Gates and the Wright Brothers pumped a lot of money into the pot.

You can believe that if you wish, but without evidence you have nothing to stand on factually. However, I will say that as someone who was (and in some ways still is) heavily into computer programming I can tell you that you don't need lots of dough to create or invent anything. Most innovations on the internet and for computers were done by people with little to no major accumulation of wealth and created something that one of the major conglomerates thought was good enough to incorporate into their systems. Even Apple wasn't the inventor of what would become multifinder (although they are credited for being the computer company that brought it to the table). When in fact, a couple of people took their own computer, hacked it so it could do something it never did before, and they showed it to Steve Jobs. They were then brought to California, all expenses paid, to show Apple exactly what they did. The rest is history (if you care to research it). Facebook, Napster, MySpace... all created by college kids. Surely they weren't rich, or can you prove that before their fame Mark Zuckerberg, Tom Anderson and Shawn Fanning were rolling in the dough when they decided to break open a computer and start coding?

Seriously star... when does the faith based belief subside and we focus on the facts?
 
Last edited:

Jason

Superior Member
Verified
Gold
Joined
Aug 26, 2004
Posts
15,616
Media
50
Likes
4,782
Points
433
Location
London (Greater London, England)
Verification
View
Sexuality
90% Gay, 10% Straight
Gender
Male
At the time of the last UK election it was argued that the worst possible outcome would be indecision and no majority. I dont wholly agree, because a party firmly pursuing a bad course could do enormous damage. But indecision and paralysis is pretty bad.

The events of the week or so following the 2010 UK election were pretty amazing. We saw two political parties both tear up their manifesto and come up with a coalition agreement for the good of the nation. Both parties made concessions that on election day would have seemed impossible. We got from the process a stable government around a set of agreed policies, and the markets love it. Party supporters hate it of course.

The US desperately needs both parties to sign up to key planks of the required austerity programme, so that the markets know it will work whoever is in power. Both have to agree major spending cuts and major tax hikes with a view to stopping the increase in the deficit within say five years. It isn't about Democrat or Republican winning the argument or the next election - it is about both agreeing for he good of the nation. What comes first, political party or nation?
 

Thedrewbert

Superior Member
Joined
Aug 16, 2005
Posts
850
Media
29
Likes
4,042
Points
398
Age
45
Location
Pittsburgh
Sexuality
99% Gay, 1% Straight
Gender
Male
We got downgraded because we didn't cut enough and we didn't raise taxes.
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.

Bullshit yourself. Simply expiring the Bush tax cuts and ending the two wars would cut about 60% of the current deficit.

chart_of_the_day_bush_policies_deficits_june_20101.gif


Going from a 35% marginal rate to a 39.5% marginal rate is NOT a 66% increase.

And Bullshit on yourself again because I said we needed BOTH spending cuts AND tax increases.
 

Thedrewbert

Superior Member
Joined
Aug 16, 2005
Posts
850
Media
29
Likes
4,042
Points
398
Age
45
Location
Pittsburgh
Sexuality
99% Gay, 1% Straight
Gender
Male
This entire scenario is so incredibly simple, yet we continue to push and shove and allow politics to govern math.

We have a relatively small percentage of our population that produces things and pay into a pot (taxes/U.S. treasury.) We have a large percentage of people who produce nothing, do not pay into the pot, and take out of the pot. This part of the population is growing exponentially.

The pot is running dry. The pot has been downgraded.

There isn't much more to discuss.

Eh, the "pot" got their tax cuts on the promise they would provide jobs. They didn't keep their promise. There are 6 job seekers for every job being offered. Do you think perhaps it is a problem other than "the people who produce nothing"? These people want jobs, want to work, want to produce, but companies simply are not hiring... they are just hording the cash.

And the "pot" isn't drying up at all. Corporations are making record profits.
 

Thedrewbert

Superior Member
Joined
Aug 16, 2005
Posts
850
Media
29
Likes
4,042
Points
398
Age
45
Location
Pittsburgh
Sexuality
99% Gay, 1% Straight
Gender
Male
Glad to oblige:

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.

2% of Americans make over 50% of the income.

The 50% of American who pay nothing in taxes (except, ya know, state, property, and others) already have nothing left after they have bought food and shelter.

You're worried about someone flipping hamburgers paying at least 5% of their income in taxes... they're worried about how they are going to afford dinner.

Unless you're talking about raising the minimum wage to a living wage.... then sure, that could be discussed.
 

TomCat84

Expert Member
Joined
Nov 23, 2009
Posts
3,414
Media
4
Likes
172
Points
148
Location
London (Greater London, England)
Sexuality
100% Gay, 0% Straight
Gender
Male
2% of Americans make over 50% of the income.

The 50% of American who pay nothing in taxes (except, ya know, state, property, and others) already have nothing left after they have bought food and shelter.

You're worried about someone flipping hamburgers paying at least 5% of their income in taxes... they're worried about how they are going to afford dinner.

Unless you're talking about raising the minimum wage to a living wage.... then sure, that could be discussed.

And besides, they normally do pay federal taxes during the year- they just probably get it all back in credits when they file. Essentially, the US government is getting an interest free loan from them.
 

B_starinvestor

Experimental Member
Joined
Mar 1, 2006
Posts
4,383
Media
0
Likes
3
Points
183
Location
Midwest
Sexuality
100% Straight, 0% Gay
Gender
Male
Eh, the "pot" got their tax cuts on the promise they would provide jobs. They didn't keep their promise. There are 6 job seekers for every job being offered. Do you think perhaps it is a problem other than "the people who produce nothing"? These people want jobs, want to work, want to produce, but companies simply are not hiring... they are just hording the cash.

I wholeheartedly disagree. Most on unemployment and welfare aren't seeking employment in any capacity. Some % would like to be employed, however, i would argue that the vast majority have no ambition whatsoever. They are 'entitlement seekers' for life.

And the "pot" isn't drying up at all. Corporations are making record profits.

the 'pot' is drying up. Please see "U.S. debt downgrade for first time in American history" all over the news.

Also, from your previous post - sales taxes and property taxes don't go to the feds.
 

B_starinvestor

Experimental Member
Joined
Mar 1, 2006
Posts
4,383
Media
0
Likes
3
Points
183
Location
Midwest
Sexuality
100% Straight, 0% Gay
Gender
Male
We got downgraded because we didn't cut enough and we didn't raise taxes.

Bullshit yourself. Simply expiring the Bush tax cuts and ending the two wars would cut about 60% of the current deficit.

http://ravenbrooks.com/wp-content/u...the_day_bush_policies_deficits_june_20101.gif

Going from a 35% marginal rate to a 39.5% marginal rate is NOT a 66% increase.

And Bullshit on yourself again because I said we needed BOTH spending cuts AND tax increases.

LOL. Nice chart. Everything from TARP to Afghan to Iraq is buried in that chart. A meager rise from 35% to 39.6% is like a fart in the wind.

Obama has fucked things up beyond belief. Downgrading our credit for the first time in 235 year existence of the U.S.

It is a blessing, because that should be it for this administration. We will never fix anything with this group in there. The worst president in U.S. history, right on the tail of the 2nd worst president in history.

Our generation was dealt a shitty hand.
 

B_VinylBoy

Sexy Member
Joined
Nov 30, 2007
Posts
10,363
Media
0
Likes
68
Points
123
Location
Boston, MA / New York, NY
Sexuality
90% Gay, 10% Straight
Gender
Male
Obama has fucked things up beyond belief. Downgrading our credit for the first time in 235 year existence of the U.S

If you actually read the report that came from S&P, they clearly blamed it on Congress and its inability to come together and negotiate. They didn't blame it on Obama, but whatever... he's the "figurine" of the nation so he's an easy target when people don't want to really look at the problem honestly... even though his approval ratings still remained stable while Congress is at it's lowest approval rating in history.

Hate is SO in this season. LOL!!!