To the Mods: Can you please change "OUR" in the title of the topic to "US"? So sorry. Forgot this board is international. xD
According to CNBC:
Michele Constantini | PhotoAlto | Getty Images
S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.
U.S. Treasurys, once undisputedly seen as the safest investment in the world, are now rated lower than bonds issued by countries such as the UK, Germany, France or Canada.
The outlook on the new U.S. credit rating is negative, S&P said in a statement, a sign that another downgrade is possible in the next 12 to 18 months.
Anyone who wants to read why S&P downgraded us can go to this link: S&P Downgrade Report
Here's an excerpt from it:
• 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.
This has a lot of consequences as our downgrade is probably going to result in higher interest payments on loans, and the average American family is going to experience those higher rates too.
I hate my country, but I gotta laugh at how bad our Congress was. A bad debt deal didn't do anything but stall the downgrade.
We need to make sure that the politicians who stalled for bullshit political reasons all need to never step a foot in Washington again. The level of political gaming during such a crucial time was just absolutely unacceptable. Gosh, another blow to economy after the turmoil today/yesterday.
an interesting poll in the economist was quite revealing of who were the main (note main) culprits in not compromising on the debt ceiling/budget problems in general.
On August 06 2011 09:49 Klogon wrote: We need to make sure that the politicians who stalled all for all that bullshit political reasons all need to never step a foot in Washington again. The level of political gaming during such a crucial time was just absolutely unacceptable. Gosh, another blow to economy after the turmoil today/yesterday.
To our elected officals I have a sincere message: For fucks sake just go. I don't even want to look at you gagglefucks anymore. Don't bother coming back for your stuff we'll have it sent to you.
Thanks for all the shit sandwiches and graft. It's been a interesting ten years but we're just different people now. It's time for us to go in a new direction with someone that won't hurt us all the time. Just leave.
It's gonna be a darned bloody monday, the timing couldn't be worse than it is now after this weeks losses. Will be "interesting" to see this play out so to say. Is this the first time this has happened?
The world has absolutely no faith in the ability of the American government to reduce borrowing. Whether it be through reduced spending or greater tax revenue (either through broadening the tax base or raising tax rates). And the reason for it that perception is no one expects us to clearly resolve our political disputes over those issues any time soon.
Obama needs to go regardless; he's a failed president. The worst president on the economic front since Herbert Hoover. Hillary should run I'd vote for her over our in over his head current Executive and any of the current crop of GOP "candidates." At least she's a no-nonsense bitch even if she is a Democrat.
By the way, love how the Tea Party is responsible when the Democrats could have passed a budget for 600 days when they had total control of Congress and then had 200 more in charge of the Senate and refused to do so so they could play politics.
The only reason there was a "crisis" was because the budget votes and debt ceiling votes were pressed up right against each other which was the entire point of the Democrats, so they could demagogue the Tea Party, and look how many people here fell for it
The budget votes could have been months ago and we could have had a battle about spending and taxes then, but Democrats wanted to scare people and blame the Tea Party.
Tea Party called their bluff. Now there is no chance of the economy improving and Obama loses next year. Already a foregone conclusion a long time ago that the GOP would re-take the Senate.
Democrats should learn not to play chicken with the country they always lose.
A well-deserved downgrade, sadly ~ its clear that no one in Washington, besides a small minority, is actually sincere about cutting spending.
I do believe that this generation (by which I mean "young persons") will be reneging on Social Security and other entitlement promises. What right does our current crop of legislators have to enslave future generations?
I just got home and turned in the tv to see this on the news. We can't be that surprised because of the brinksmanship that's been going on, but that's crazy that S&P would downgrade us after rating so much junk in the private sector as AAA for so long.
S&P also cited dysfunctional policymaking in Washington as a factor in the downgrade. "The effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges."
I think the tea party definitely contributed to this ^^. Quote taken from a CNN article BTW.
I think it's the responsibility of all American citizens at this point to get informed and work out exactly who doesn't need another term. Not that that will happen of course.
wow, TL news is quick! i don't think this would have an immediate effect come monday the possibility of a US downgrade has been mostly priced in... and investors have been flocking to US treasuries like a safe haven, which it still is (for now) but yeah, the political execution left much to be desired. it did not only call into question the US political stability and willingness to honor its debt, which are core qualities for a AAA credit rating; but it caused so much uncertainty for businesses that could have been planning to hire more people before the circus started
On August 06 2011 10:11 Stijx wrote: I think it's the responsibility of all American citizens at this point to get informed and work out exactly who doesn't need another term. Not that that will happen of course.
It's too bad that less than half of us actually vote.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
Every politician in D.C. is going to be absolutely destroyed in the next election. A summer of childish behavior. Extreme partisianship. Voters are beyond angry and I definitely think a lot of incumbents will be thrown out. Lets hope that means the tea hobbits can go away finally too.
Meh, it was bound to happen sooner or later. AA+ from AAA is actually pretty generous. I have a feeling that these ratings agencies have a (tacit) obligation to keep the ratings high just because they are American.
I wish other countries didn't know about the tea party >.> Bush was embarrassing enough.
This kind of post is embarrassing D:
Every politician in D.C. is going to be absolutely destroyed in the next election. A summer of childish behavior. Extreme partisianship. Voters are beyond angry and I definitely think a lot of incumbents will be thrown out. Lets hope that means the tea hobbits can go away finally too.
More likely than not the next Congress will have a larger Tea Party membership than this one does.
Hope you like getting ruled by hobbits that's the way is blowing with how horribad the Democrats are doing with independents.
People still don't understand the Tea Party, all you're doing is hamstringing your ability to fight them with your attitude. They have the money and the numbers to have a real political impact and they already did last year, they aren't going to go away just because you hold them in contempt or find them embarrassing. If you want to stop them you better figure out a way to slow them down first, the way the Left is trying to deal with them now is just speeding them up.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
The Tea Party is certainly to blame because they took their 20% in the house and refused to compromise in any way. They forced their agenda by refusing to play ball with their own party, let alone the democrats.
They made a political show out of what should have been a mundane task and create this entire problem. You don't need to hold the US economy hostage and risk default (while every other country in the world is trying desprately to avoid it) to get things done.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
They aren't even happy... they were all complaining and still didn't vote for the bill.
Like I'm all for small government but I'm absolutely not for bullshit sandwiches and a refusal to compromise
I think austan goolsbee's interview on the daily show earlier this week (where he was fucking ecstatic to be leaving Washington) was very telling as to how unworkable Washington is. It really seems like our country is currently run but uninformed ideologues.
USA= only country where you can use "intellectual" to slander a politician @_@
On August 06 2011 10:12 On_Slaught wrote: Suprise suprise. The Obama administration is saying that the S&P analysis has deep and fundamental flaws and that it is "amateur hour" at the company.
They did rate CDO junk bonds AAA...
Their track record for AAA municipal and corporate bonds are ridiculously different.
I wish other countries didn't know about the tea party >.> Bush was embarrassing enough.
This kind of post is embarrassing D:
Talking politics on the internet is pretty embarrassing in itself, it's always extremely slanted one way or the other, usually tending to be more left seeing that 68% of youth voters aged 18-26 are liberal, it's almost impossible to talk politics without raves of people blaming Bush or Obama.
On August 06 2011 10:18 Deadlyhazard wrote: What exactly does this mean? I'm not really familiar with this stuff......anything bad for day-to-day life in the U.S. for the future?
In practical terms, not much. The market's been moving for about two days already, S&P's announcement is quite late.
On August 06 2011 10:18 Deadlyhazard wrote: What exactly does this mean? I'm not really familiar with this stuff......anything bad for day-to-day life in the U.S. for the future?
higher interest on loans/mortgages, and credit cards most likely
I'm only generally familiar with the material though, i do not know the particulars
On August 06 2011 10:18 Deadlyhazard wrote: What exactly does this mean? I'm not really familiar with this stuff......anything bad for day-to-day life in the U.S. for the future?
In practical terms, not much. The market's been moving for about two days already, S&P's announcement is quite late.
On August 06 2011 10:18 Deadlyhazard wrote: What exactly does this mean? I'm not really familiar with this stuff......anything bad for day-to-day life in the U.S. for the future?
higher interest on loans/mortgages, and credit cards most likely
I'm only generally familiar with the material though, i do not know the particulars
NOOOO I'm about to transfer to a more expensive college, I can't afford higher interest loans! Gah.
The Tea Party is certainly to blame because they took their 20% in the house and refused to compromise in any way. They forced their agenda by refusing to play ball with their own party, let alone the democrats.
The Democratic Party is certainly to blame because they took their Congressional majorities and refused to even introduce a budget bill to negotiate on for over 600 days. They forced their agenda (manufacture a crisis) by refusing to even bring the ball to the playground, all so they could blame any negative consequences from this brinksmanship on Tea Party intransigence.
Well they got their crisis, too bad they misunderestimated what the results would be.
USA= only country where you can use "intellectual" to slander a politician @_@
In other countries they use other terms to mean the same thing.
USA = only country with so many intellectual achievements that is generally viewed as stupid.
Does anyone have a good, objective source for general info about the whole debt crisis and negotiations?? i've only vaguely followed it, but it's kind of hard with the games going on on both sides
On August 06 2011 10:22 Hawk wrote: Does anyone have a good, objective source for general info about the whole debt crisis and negotiations?? i've only vaguely followed it, but it's kind of hard with the games going on on both sides
The New York Times has these topics where they just follow up on news about them.
On August 06 2011 10:22 Hawk wrote: Does anyone have a good, objective source for general info about the whole debt crisis and negotiations?? i've only vaguely followed it, but it's kind of hard with the games going on on both sides
Finding an objective source of information would be quite a feat.
If you prefer an easy way out; it was the Demicrats fault, you can take my word for it.
On August 06 2011 09:58 Probe1 wrote: To our elected officals I have a sincere message: For fucks sake just go. I don't even want to look at you gagglefucks anymore. Don't bother coming back for your stuff we'll have it sent to you.
Thanks for all the shit sandwiches and graft. It's been a interesting ten years but we're just different people now. It's time for us to go in a new direction with someone that won't hurt us all the time. Just leave.
Not that I disagree with the sentiment, but the freshmen in Congress were the ones most opposed to raising the debt ceiling at all. S&P wanted a larger (pdf, from S&P 7/14) debt deal than we got, and one of the reason a larger debt deal didn't go through was republican pressure for a smaller deal.
Simple (if justified) anger directed at sitting members of Congress was a large part of what got us into this mess. The simple problem is that there is untouchable majority support for both not increasing taxes and protecting the entitlements (mainly Medicare and Medicaid) that are causing our long term budget problems. And politicians will run on this. Republicans ran on attacking Democrats for Medicare cuts at the same time as attacking them for "tax increases".
This isn't exclusively a partisan mess - I'm bringing up the Republican side of the failure here because they got elected in large part due to the "kick the bums out" sentiment that you (and others in this thread) are bringing up. Although I do think the "never accept any tax increases, even in compromise" the Republicans have taken is contributing to the issue.
On August 06 2011 10:18 Deadlyhazard wrote: What exactly does this mean? I'm not really familiar with this stuff......anything bad for day-to-day life in the U.S. for the future?
In practical terms, not much. The market's been moving for about two days already, S&P's announcement is quite late.
It's largely a symbolic gesture.
I'm just speculating but it actually affects quite alot. Think of a bank having a 100% safe asset which AAA was, now that factor is reduced and thus it allows for less lending to the public and also less capital to be kept in stocks which are not certain assets. All this spreading and making some assets less worth is very alarming, especially after this weeks turbulance everywhere. Gold gonna skyrocket even more probably and people flee the stock market not just for the reason with the banks etc but the fear this creates. Going to be VERY BAD!
Edit: A brief bad explanation which might explain abit for those who don't know how it works although I admit it's bad and maybe not too easy to comprehend.
Banks etc are required by certain rules to have at least lets say 8% safe assets at hand for whatever money they lend out. Now random speculation on my part maybe it's only 98% safe now being AA+ since much of their assets are in US bonds and a 2% loss of those 8% safe assets will correspond to something like 0.16% of all money in the US but with the lending will correspond to at least 2% of all lending becoming not allowed anymore, so people will have to sell off to repay their debts banks will have a 2% loss on all assets they have etc meaning bad news.
On August 06 2011 10:22 Hawk wrote: Does anyone have a good, objective source for general info about the whole debt crisis and negotiations?? i've only vaguely followed it, but it's kind of hard with the games going on on both sides
Finding an objective source of information would be quite a feat.
If you prefer an easy way out; it was the Demicrats fault, you can take my word for it.
I don't even know why anyone would even remotely think that. -___-x
That's probably the most incorrect assessment of whose to blame that I've ever seen.
I wanna hear now from all these people on TL who were repeating over and over that the "debt crisis" was overblown, that there was no chance of a downgrade, that it was all manufactured fear mongering by the republicans.
Come out of your holes, naysayers. I know my thread on the US debt was filled to the brim with them. Is S&P part of the republican conspiracy too?
The Tea Party is certainly to blame because they took their 20% in the house and refused to compromise in any way. They forced their agenda by refusing to play ball with their own party, let alone the democrats.
The Democratic Party is certainly to blame because they took their Congressional majorities and refused to even introduce a budget bill to negotiate on for over 600 days. They forced their agenda (manufacture a crisis) by refusing to even bring the ball to the playground, all so they could blame any negative consequences from this brinksmanship on Tea Party intransigence.
Well they got their crisis, too bad they misunderestimated what the results would be.
USA= only country where you can use "intellectual" to slander a politician @_@
In other countries they use other terms to mean the same thing.
USA = only country with so many intellectual achievements that is generally viewed as stupid.
Way to look at it in a vacuum. Not passing a budget bill when default isn't even in view and refusing to budge when the world is telling you you have a week before armageddon is a wildly different approach to politics. Doesn't even compare.
I have a feeling.... that this will have no impact on any upcoming election. Politicians have a way of waving their hands, passing the buck to someone else, and basically distracting the American people to the point that each and every person that has led to this failure of a situation will get re-elected, or the reason they aren't elected has nothing to do with this.
Basically... some politician needs to have the balls to raise taxes. Cuts alone are not enough without severely damaging government programs that are necessary for the progression of our country.
Come out of your holes, naysayers. I know my thread on the US debt was filled to the brim with them. Is S&P part of the republican conspiracy too?
Everyone is part of the Tea Party conspiracy to destroy America.
Remember, the most mindless patriots in the land have a secret burning desire to destroy it. That's the mental gymnastics "progressives" have to go through these days.
Way to look at it in a vacuum. Not passing a budget bill when default isn't even in view and refusing to budge when the world is telling you you have a week before armageddon is a wildly different approach to politics. Doesn't even compare.
I must agree actually, refusing to pass a budget in order to manufacture a political crisis is much, much worse than refusing to abandon your negotiating position simply because the other side has manufactured a crisis and demands you back down to avoid disaster.
One is a malevolent dereliction of duty, the other is a courageous stand against extortion. I'm very proud that the GOP called the Democrats' bluff.
On August 06 2011 10:26 jdseemoreglass wrote: I wanna hear now from all these people on TL who were repeating over and over that the "debt crisis" was overblown, that there was no chance of a downgrade, that it was all manufactured fear mongering by the republicans.
Come out of your holes, naysayers. I know my thread on the US debt was filled to the brim with them. Is S&P part of the republican conspiracy too?
I'm one of them.
I still don't think it's an issue.
What is an issue is how we tackle our debt.
I had too much trust in the political process to solve our problems, I'll admit that.
But I won't back down on our "debt" being an issue. It's our underfunded liabilities, our programs spinning out of control, and our inability to solve our tax problems that create these issues.
Stop fearmongering everybody. >.>
If you notice, had Republicans listened to Democrats and added some revenue that would've cut 4 trillion instead of the 2 trillion (COUGH WHAT S&P WAS LOOKING FOR COUGH), we might've avoided a downgrade.
On August 06 2011 10:22 Hawk wrote: Does anyone have a good, objective source for general info about the whole debt crisis and negotiations?? i've only vaguely followed it, but it's kind of hard with the games going on on both sides
The New York Times has these topics where they just follow up on news about them.
The problem was not so much the republican/democrat divide as it was the divide between the republicans right now. Basically, ppl voted in tea partiers whose mantra was "we will not compromise" to serve in a government who only works because of compromise. Boehner had his back to the wall, because if he concieded one point to the dems (which he did) he would be burned at the stake by tea partiers (which he was).
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
On August 06 2011 10:26 Yttrasil wrote: I'm just speculating but it actually affects quite alot. Think of a bank having a 100% safe asset which AAA was, now that factor is reduced and thus it allows for less lending to the public and also less capital to be kept in stocks which are not certain assets. All this spreading and making some assets less worth is very alarming, especially after this weeks turbulance everywhere. Gold gonna skyrocket even more probably and people flee the stock market not just for the reason with the banks etc but the fear this creates. Going to be VERY BAD!
I have absolutely no doubt that things are going to be really bad, but I think things would have been equally bad even if S&P hadn't downgraded US debt. As I said, the markets were well ahead of S&P for the past 48 hours.
On August 06 2011 10:27 Triscuit wrote: I have a feeling.... that this will have no impact on any upcoming election. Politicians have a way of waving their hands, passing the buck to someone else, and basically distracting the American people to the point that each and every person that has led to this failure of a situation will get re-elected, or the reason they aren't elected has nothing to do with this.
Currently, polls show that Democrats in the House, Democrats in the Senate, and Republicans in the Senate have dropped quite a bit of support. House Republicans have absolutely torpedoed their support. Obama's dropped by about 2% to 47%.
Public approval of Congress in general is literally at a record low.
If you notice, had Republicans listened to Democrats and added some revenue that would've cut 4 trillion instead of the 2 trillion (COUGH WHAT S&P WAS LOOKING FOR COUGH), we might've avoided a downgrade.
So stop it.
If you notice, had Democrats listened to Republicans and stopped demanding more revenue as a last-second addition to the deal, we could have had about 3 trillion in cuts and 800 billion in revenues a week and a half ago. That was the deal Boehner had with Obama before Obama demanded 400 billion more in revenues or the deal was off out of the blue. Boehner stopped negotiating with him and went back to Pelosi and Reid and got a bill hammered out.
We might've avoided a downgrade.
We were actually well on our way to a good compromise before the President's horrible, awful, disgusting class warfare speech and media blitz that ensured there was absolutely no way the Republicans were going to sign onto a deal with his name on it.
On August 06 2011 10:32 DeltaSigmaL wrote: The problem was not so much the republican/democrat divide as it was the divide between the republicans right now. Basically, ppl voted in tea partiers whose mantra was "we will not compromise" to serve in a government who only works because of compromise. Boehner had his back to the wall, because if he concieded one point to the dems (which he did) he would be burned at the stake by tea partiers (which he was).
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
Politifact says that the GM statistic was false I believe. Check it out.
But ultimately, I agree on revenue. I don't know about increasing taxes, but closing tax loopholes is definitely an option.
On August 06 2011 10:34 DeepElemBlues wrote: If you notice, had Democrats listened to Republicans and stopped demanding more revenue as a last-second addition to the deal, we could have had about 3 trillion in cuts and 800 billion in revenues a week and a half ago. That was the deal Boehner had with Obama before Obama demanded 400 billion more in revenues or the deal was off and Boehner stopped negotiating with him and went back to Pelosi and Reid and got a bill hammered out..
So 1.2 billion in revenues and 3 trillion in cuts?
Err...Republicans control one branch of Congress. How is this not a good deal?
...No, strike that. How on earth is this not the best deal ever for the Republican Party since Reagan? Especially since S&P demanded 4.2 trillion in reduction over ten years, not 3.8...
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
On August 06 2011 10:34 DeepElemBlues wrote: If you notice, had Democrats listened to Republicans and stopped demanding more revenue as a last-second addition to the deal, we could have had about 3 trillion in cuts and 800 billion in revenues a week and a half ago. That was the deal Boehner had with Obama before Obama demanded 400 billion more in revenues or the deal was off and Boehner stopped negotiating with him and went back to Pelosi and Reid and got a bill hammered out..
So 1.2 billion in revenues and 3 trillion in cuts?
Err...Republicans control one branch of Congress. How is this not a good deal?
No, strike that. How on earth is this not the best deal ever for the Republican Party since Reagan?
Because Republicans follow the take-no-prisoners religion of "tax cuts always good, tax increases always bad".
On August 06 2011 09:51 DKR wrote: an interesting poll in the economist was quite revealing of who were the main (note main) culprits in not compromising on the debt ceiling/budget problems in general.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
The rich have done an awesome job so far with some of the lowest tax rates in years...
So 1.2 billion in revenues and 3 trillion in cuts?
Err...Republicans control one branch of Congress. How is this not a good deal?
Obama demanded the 400 billion additional revenue come from tax increases, reversing his compromise position with Boehner at literally the end of negotiations when there wasn't much left to do but shake hands and say "nice working with you." Knowing full well that Boehner was not going to accept tax increases as part of the deal. After working with Boehner for weeks and leading him on to believe that Obama was not going to demand tax increases.
Obama = amateur politician.
Because Republicans follow the take-no-prisoners religion of "tax cuts always good, tax increases always bad".
Capital is already deep, deep, deep in hiding thanks to the idiotic Big Government policies of this administration, let's encourage more companies to move out of America, more rich people to move their assets offshore, by raising taxes in a recession!
It's a brilliant religion, Democrats have, where you can tax your way out of a recession.
On August 06 2011 10:07 DeepElemBlues wrote: The only reason there was a "crisis" was because the budget votes and debt ceiling votes were pressed up right against each other which was the entire point of the Democrats, so they could demagogue the Tea Party, and look how many people here fell for it
The budget votes could have been months ago and we could have had a battle about spending and taxes then, but Democrats wanted to scare people and blame the Tea Party.
The 2011 budget was enacted on April 15, 2011. There was a huge battle about spending and taxes then; I'm not sure what you're getting on about. If it had been passed the day Obama originally proposed his 2011 budget on February 10th, 2010 the exact same thing would have happened.
The Tea Party and everyone else didn't need the budget to mess with the debt ceiling; the debt ceiling must be raised independent of the budget and there is no conceivable budget that would have prevented the need for it to be raised, given the current economy. The "crisis" we have originated from the right deciding to demagogue the debt ceiling to a greater extent that had ever previously been done; for better or worse, the left would have happily left the budget discussion to the 2012 budget.
Maybe it's finally time to try capitalism? It's still *never* been tested in the history of mankind.
(In before people whose definition of capitalism is "the economic philosophy of the United States" reply, "OMG LOL YES IT HAS WHAT DEW U CALL TEH US?")
On August 06 2011 10:22 Hawk wrote: Does anyone have a good, objective source for general info about the whole debt crisis and negotiations?? i've only vaguely followed it, but it's kind of hard with the games going on on both sides
Finding an objective source of information would be quite a feat.
If you prefer an easy way out; it was the Demicrats fault, you can take my word for it.
I'd take your word for it, except that you can't spell Democrats which immediately makes your word worthless. It was both sides fault, I follow US politics very closely (mainly because its funny as hell from an outside pov) and both sides are useless atm.
Obama is the first president in my life time that ever had to fight for a debt ceiling increase, whether that be because of his skin colour or just because the batshit insane tea baggers don't know the first thing about mathematics, your politicians were playing Russian Roulette with a fully loaded gun and this is the result.
US tax rates are amongst the lowest in the developed world and is the only country I know where its considered bad to tax the rich. In the UK, when the recession hit we jacked up the tax rate on the highest 1% of earners to 50% and guess what..... we were pretty much out of the shit within months. Yes we've had to do a lot and I mean a lot of cutting, many health services have had budgets slashed for instance, but we raised taxes first and then took another look at the situation.
Let's disregard everything and look at S & P along with the other rating agencies.
It's complete bullshit they are downgrading the USA's credit rating when before the financial crisis they consistently awarded AAA ratings to conglomerates of subprime loans and derivatives. If anyone has seen the documentary the Inside Job, they do a fairly decent job on showing how credit agencies like S & P fucked over our nation and consequently the world.
Sure, perhaps we deserve a downgrade after what happened, but S & P is a nasty, fucked up organization, along with Moody's. Honestly they are using this opportunity to pounce on the USA's credit rating so they can save face after inflating all those shitty loans to AAA several years ago.
So 1.2 billion in revenues and 3 trillion in cuts?
Err...Republicans control one branch of Congress. How is this not a good deal?
Obama demanded the 400 billion additional revenue come from tax increases, reversing his compromise position with Boehner at literally the end of negotiations when there wasn't much left to do but shake hands and say "nice working with you." Knowing full well that Boehner was not going to accept tax increases as part of the deal. After working with Boehner for weeks and leading him on to believe that Obama was not going to demand tax increases.
Obama = amateur politician.
Taking your statement at face value*, S&P demanded 4.2 trillion over the next ten years at the last minute, not 3.8. 3.8=/=4.2.
Once again, how is this not the best deal ever since Reagan?
*To be honest, I have some questions about your chronology, but I'm ignoring that. It's certain that your first numbers are probably accurate, but they hadn't even finished discussing where the cuts would come from, nor where the tax revenues would come from. They were still using different baselines, even before the deal broke down. How on earth was this a finished deal?
On August 06 2011 10:18 Deadlyhazard wrote: What exactly does this mean? I'm not really familiar with this stuff......anything bad for day-to-day life in the U.S. for the future?
In practical terms, not much. The market's been moving for about two days already, S&P's announcement is quite late.
It's largely a symbolic gesture.
Uh, it's really not.
Anything that's backed by or associated with the government (e.g. Fannie Mae and Freddie Mac) will likely suffer reductions in ratings. It means, it will be more expensive to borrow money (i.e. higher interest rates) since it's more likely that the government won't pay it back.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Is it a fact though? Please provide your evidence with citations so that we can verify the alleged fact for ourselves. Thanks
A frightening/illuminating picture from that article:
[/QUOTE]
I think its silly to vote for someone with certain values and beliefs and then have them change those values and beliefs when they get to washington. I want the person to do what I voted him in to do. You don't just vote people into office to get things done you vote them in to represent the people.
Sigh. Despite all the bitching and whining, the end result was the same: we had a deal made. Why can't politicians learn how to fuckin compromise? I mean is it really THAT much to ask for?!
On August 06 2011 10:26 Yttrasil wrote: I'm just speculating but it actually affects quite alot. Think of a bank having a 100% safe asset which AAA was, now that factor is reduced and thus it allows for less lending to the public and also less capital to be kept in stocks which are not certain assets. All this spreading and making some assets less worth is very alarming, especially after this weeks turbulance everywhere. Gold gonna skyrocket even more probably and people flee the stock market not just for the reason with the banks etc but the fear this creates. Going to be VERY BAD!
I have absolutely no doubt that things are going to be really bad, but I think things would have been equally bad even if S&P hadn't downgraded US debt. As I said, the markets were well ahead of S&P for the past 48 hours.
On August 06 2011 10:27 Triscuit wrote: I have a feeling.... that this will have no impact on any upcoming election. Politicians have a way of waving their hands, passing the buck to someone else, and basically distracting the American people to the point that each and every person that has led to this failure of a situation will get re-elected, or the reason they aren't elected has nothing to do with this.
Currently, polls show that Democrats in the House, Democrats in the Senate, and Republicans in the Senate have dropped quite a bit of support. House Republicans have absolutely torpedoed their support. Obama's dropped by about 2% to 47%.
Public approval of Congress in general is literally at a record low.
Markets as in stock traders maybe they were, but whatever formulaes etc with variables of safe and unsafe assets will have to be changed and that is not accounted for in the slightest since they want to be making money out of 100% of their capital. The markets response has been to a larger degree a response to the eurocrisis not a sudden or somewhat unexpected at least at this very moment lowering of the US rating. Again my guess is stocks falling at least 4% on monday after I don't know and gold up by maybe the same amount. Lets just say I wouldn't be wanting to have stocks now and I cannot for the love of god imagining anyone else wanting to own stocks at this moment.
Question is, is there going to be a burst of the obvious bubble we have now or is it for some other time. I'd give it a 30% chance of happening.
On August 06 2011 10:43 Rodiel3 wrote: Many important country ( China, Russia for example ) dont have the AAA note, so this dont mean a lot for USA
Are you kidding me? There's a reason why countries without a AAA end up having to pay higher rates on things like debt payments, and domestically mortgage rates and all that jazz are hiked.
On August 06 2011 10:39 SgtWaffles wrote: Let's disregard everything and look at S & P along with the other rating agencies.
It's complete bullshit they are downgrading the USA's credit rating when before the financial crisis they consistently awarded AAA ratings to conglomerates of subprime loans and derivatives. If anyone has seen the documentary the Inside Job, they do a fairly decent job on showing how credit agencies like S & P fucked over our nation and consequently the world.
Sure, perhaps we deserve a downgrade after what happened, but S & P is a nasty, fucked up organization, along with Moody's. Honestly they are using this opportunity to pounce on the USA's credit agency so they can save face after inflating all those shitty loans to AAA several years ago.
They had very little data to work with in terms of mortgage-backed bonds and their CDOs, and a lot of industry influences that strong-armed them into handing out AAA ratings.
Just because they fucked up before, doesn't mean they should purposely fuck up some more indefinitely into the future. I say good for S&P.
The Fed announced it won't change the risk weights.
On another note, S&P put out a statement saying the reason for the downgrade was because BOTH sides are fighting too much, and that the government wasn't properly look at cutting spending AND raising taxes. Not one, but both.
Yet even after that release, all you see here is one person after another blaming only the republicans, or only the democrats.
Sadly, even though we have a democratic presidency, obama is too chickened out to get his policies out there. Right now he is just being "compromised" into supporting republican-favored bills.
And when its 2012, the republicans will talk about how obama failed to improve the economy (mostly b/c he was carrying out republican policies) lol
Politics is such bullshit, if we had a king or something stuff would actually get done
On August 06 2011 09:51 DKR wrote: an interesting poll in the economist was quite revealing of who were the main (note main) culprits in not compromising on the debt ceiling/budget problems in general.
A frightening/illuminating picture from that article:
Uh... It's neither frightening nor illuminating.
"Compromising to get things done" is essentially a euphemism for "forever expanding government." Getting things done of course means expanding government, almost by definition, which is something many republicans oppose.
I'm against compromise, and I'm certainly not a republican. I'm in favor of gridlock, of more NOT getting done. Whenever republicans and democrats "compromise," it usually means the American people are getting screwed, and the debt and the deficit are expanding.
There is a reason our constitution established 3 competing branches of government, that are meant to check and balance each other... it was to ensure that the government didn't GET TOO MUCH DONE!
On August 06 2011 10:38 DeepElemBlues wrote: Obama demanded the 400 billion additional revenue come from tax increases, reversing his compromise position with Boehner at literally the end of negotiations when there wasn't much left to do but shake hands and say "nice working with you." Knowing full well that Boehner was not going to accept tax increases as part of the deal. After working with Boehner for weeks and leading him on to believe that Obama was not going to demand tax increases.
3 billion in cuts to 1.2 billion in revenue is a significant compromise. Also, you seem to know a remarkable amount about a) How close Boehner was to accepting the deal. b) How successful he would be at getting the Republican caucus to accept any revenue increases. Are you psychic? Because you appear to have read the minds of everyone involved.
Capital is already deep, deep, deep in hiding thanks to the idiotic Big Government policies of this administration, let's encourage more companies to move out of America, more rich people to move their assets offshore, by raising taxes in a recession!
It's a brilliant religion, Democrats have, where you can tax your way out of a recession.
Taxes are at the lowest point in a long time. Moreover, cutting government spending isn't the way out of a recession either. That's one of the sucky things about a recession.
On August 06 2011 10:32 DeltaSigmaL wrote: The problem was not so much the republican/democrat divide as it was the divide between the republicans right now. Basically, ppl voted in tea partiers whose mantra was "we will not compromise" to serve in a government who only works because of compromise. Boehner had his back to the wall, because if he concieded one point to the dems (which he did) he would be burned at the stake by tea partiers (which he was).
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
Politifact says that the GM statistic was false I believe. Check it out.
But ultimately, I agree on revenue. I don't know about increasing taxes, but closing tax loopholes is definitely an option.
Idk man, wsj and other sources all have articles about this. Anyway, it is true that taxes are lowest in years. If the trickle down effect was real, why are low tax rates and bad economy happening at the same time? Everyone hates giving the govenment their money, until they become down on their luck and need to government to save them.
On August 06 2011 09:51 DKR wrote: an interesting poll in the economist was quite revealing of who were the main (note main) culprits in not compromising on the debt ceiling/budget problems in general.
A frightening/illuminating picture from that article:
Don't tell me you're seriously taking a graph from a non-objectionable source as "frightening and illuminating"
They definitely have some points spot on in that article, but its hardly worth that graph meaning a damn.
Edit: For those not familiar "YouGov" previously "PollingPoint" is one of those internet polling companies based out of UK who give the 20 minute surveys to people of certain demographics who have registered with them, in return they get checks worth £50
On August 06 2011 10:45 Saryph wrote: On another note, S&P put out a statement saying the reason for the downgrade was because BOTH sides are fighting too much, and that the government wasn't properly look at cutting spending AND raising taxes. Not one, but both.
Yet even after that release, all you see here is one person after another blaming only the republicans, or only the democrats.
S&P is paid to be completely politically neutral, they can't show bias or favoritism without losing credibility on the markets.
I feel a storm blowing. I'm stepping out before the black hole seizes me.
On August 06 2011 09:51 DKR wrote: an interesting poll in the economist was quite revealing of who were the main (note main) culprits in not compromising on the debt ceiling/budget problems in general.
A frightening/illuminating picture from that article:
Uh... It's neither frightening nor illuminating.
"Compromising to get things done" is essentially a euphemism for "forever expanding government." Getting things done of course means expanding government, almost by definition, which is something many republicans oppose.
I'm against compromise, and I'm certainly not a republican. I'm in favor of gridlock, of more NOT getting done. Whenever republicans and democrats "compromise," it usually means the American people are getting screwed, and the debt and the deficit are expanding.
There is a reason our constitution established 3 competing branches of government, that are meant to check and balance each other... it was to ensure that the government didn't GET TOO MUCH DONE!
If you really wanted to fix our debt, you wouldn't be saying that.
On August 06 2011 10:32 DeltaSigmaL wrote: The problem was not so much the republican/democrat divide as it was the divide between the republicans right now. Basically, ppl voted in tea partiers whose mantra was "we will not compromise" to serve in a government who only works because of compromise. Boehner had his back to the wall, because if he concieded one point to the dems (which he did) he would be burned at the stake by tea partiers (which he was).
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
Politifact says that the GM statistic was false I believe. Check it out.
But ultimately, I agree on revenue. I don't know about increasing taxes, but closing tax loopholes is definitely an option.
Idk man, wsj and other sources all have articles about this. Anyway, it is true that taxes are lowest in years. If the trickle down effect was real, why are low tax rates and bad economy happening at the same time? Everyone hates giving the govenment their money, until they become down on their luck and need to government to save them.
Don't get me wrong, I'm in favor of tax reform, but I'm not ready to say we need tax increases. Ending the Bush Tax cuts? Alright. Ending tax loopholes? Alright. But I'm not ready yet announce taxes anywhere else just yet.
The 2011 budget was enacted on April 15, 2011. There was a huge battle about spending and taxes then; I'm not sure what you're getting on about. If it had been passed the day Obama originally proposed his 2011 budget on February 10th, 2010 the exact same thing would have happened.
I'm sorry but this must be a joke. You are aware that the 2011 budget was for the Fiscal Year 2011, which runs from Fall 2010 until a few months from now? That isn't the budget that was at issue here, it's Fiscal Year 2012's budget.
The Tea Party and everyone else didn't need the budget to mess with the debt ceiling;
Incorrect :D
the debt ceiling must be raised independent of the budget and there is no conceivable budget that would have prevented the need for it to be raised, given the current economy.
Both parties have said they want to reduce the deficit. Democrats said "let's deal with it later" and with the same kind of "spending cuts" we've seen from Washington for years; no real spending cuts at all. Republicans said not this time, if you're serious about cutting spending, then be serious about it.
The "crisis" we have originated from the right deciding to demagogue the debt ceiling to a greater extent that had ever previously been done;
Hilarious, the Right are being "demagogues" about the debt ceiling while Moody's and S&P were saying again and again that the Democrats' preferred choice, a clean debt ceiling raise, would result in a downgrade.
for better or worse, the left would have happily left the budget discussion to the 2012 budget.
Yeah, this sure is accurate, what with the political media reporting from actual Democratic operatives that they wanted to kick the can until 2013 precisely because they did not want to have that discussion during an election year. Who should I believe, them or you...
Where do you get your information, Democratic Underground?
On August 06 2011 10:39 SgtWaffles wrote: Let's disregard everything and look at S & P along with the other rating agencies.
It's complete bullshit they are downgrading the USA's credit rating when before the financial crisis they consistently awarded AAA ratings to conglomerates of subprime loans and derivatives. If anyone has seen the documentary the Inside Job, they do a fairly decent job on showing how credit agencies like S & P fucked over our nation and consequently the world.
Sure, perhaps we deserve a downgrade after what happened, but S & P is a nasty, fucked up organization, along with Moody's. Honestly they are using this opportunity to pounce on the USA's credit agency so they can save face after inflating all those shitty loans to AAA several years ago.
They had very little data to work with in terms of mortgage-backed bonds and their CDOs, and a lot of industry influences that strong-armed them into handing out AAA ratings.
Just because they fucked up before, doesn't mean they should purposely fuck up some more indefinitely into the future. I say good for S&P.
Good point. I'm just pointing out they are quite hypocritical, considering they never admitted any wrong doing from before as well. Not to mention, AAA scores are still quite common.
Honestly, it's about time. I was waiting for this since like two weeks ago.
All rating agencies are utterly pro US. It is ridiculous how those agencies are able to influence the global financial markets. I think they currently have too much power.
On August 06 2011 10:38 DeepElemBlues wrote: Obama demanded the 400 billion additional revenue come from tax increases, reversing his compromise position with Boehner at literally the end of negotiations when there wasn't much left to do but shake hands and say "nice working with you." Knowing full well that Boehner was not going to accept tax increases as part of the deal. After working with Boehner for weeks and leading him on to believe that Obama was not going to demand tax increases.
3 billion in cuts to 1.2 billion in revenue is a significant compromise. Also, you seem to know a remarkable amount about a) How close Boehner was to accepting the deal. b) How successful he would be at getting the Republican caucus to accept any revenue increases. Are you psychic? Because you appear to have read the minds of everyone involved.
Capital is already deep, deep, deep in hiding thanks to the idiotic Big Government policies of this administration, let's encourage more companies to move out of America, more rich people to move their assets offshore, by raising taxes in a recession!
It's a brilliant religion, Democrats have, where you can tax your way out of a recession.
Taxes are at the lowest point in a long time. Moreover, cutting government spending isn't the way out of a recession either. That's one of the sucky things about a recession.
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
On August 06 2011 10:18 Deadlyhazard wrote: What exactly does this mean? I'm not really familiar with this stuff......anything bad for day-to-day life in the U.S. for the future?
Basically the market is going to tank hard on Monday. I don't know why a lot of people are blaming the tea party, is asking a government to balance its budget and to cut wasteful spending so bad?
On August 06 2011 10:51 DeepElemBlues wrote: Hilarious, the Right are being "demagogues" about the debt ceiling while Moody's and S&P were saying again and again that the Democrats' preferred choice, a clean debt ceiling raise, would result in a downgrade.
One month ago or so (maybe 1 1/2), S&P directly stated a clean ceiling increase was acceptable and that the (-) outlook was completely Congress. They tacked on the rest about three weeks ago (two and a half weeks? Four weeks? I forget), citing that Congress was stupider than they expected and.they had no hope for the future.
On August 06 2011 09:51 DKR wrote: an interesting poll in the economist was quite revealing of who were the main (note main) culprits in not compromising on the debt ceiling/budget problems in general.
A frightening/illuminating picture from that article:
Uh... It's neither frightening nor illuminating.
"Compromising to get things done" is essentially a euphemism for "forever expanding government." Getting things done of course means expanding government, almost by definition, which is something many republicans oppose.
I'm against compromise, and I'm certainly not a republican. I'm in favor of gridlock, of more NOT getting done. Whenever republicans and democrats "compromise," it usually means the American people are getting screwed, and the debt and the deficit are expanding.
There is a reason our constitution established 3 competing branches of government, that are meant to check and balance each other... it was to ensure that the government didn't GET TOO MUCH DONE!
Sure is a lot of baseless claims hidden as fact in this post. Are you a politician?
Also, people stop saying "S&P fucked up during the earlier therefore they must have fucked up now." That is fallacious logic. Either prove their account isn't right now or be quiet.
On that topic there are some clear number errors in their report, which does diminish it's credibility. However I still agree with the general principle about the volatility of politics atm leading to uncertainty in our ability to pay our debts. The market was ahead of the curve earlier this week when we lost 500points...
Capital is already deep, deep, deep in hiding thanks to the idiotic Big Government policies of this administration, let's encourage more companies to move out of America, more rich people to move their assets offshore, by raising taxes in a recession!
It's a brilliant religion, Democrats have, where you can tax your way out of a recession.
Wait, you think capital is in hiding because of gov? If it wasn't for gov bailouts, we would be in 2nd depression right now! The funny thing is that bush began these programs, which did save our economy, and now its being lampooned by tea partiers as "big government". Also, moving assets offshore is illegal. It's tax evasion. To say one will break the law if we enact a law is not an arguement against the law. We have a debt that needs to pay back. Taxing will have some negative effect, but at the same time, spending cuts will also have a negative effect. Don't forget that the USGOV is the biggest employer in America. So to say we shouldn't raise taxes because it hurts the economy is also an invalide agruement because our other option, to cut spending, hurts the economy as well.
3 billion in cuts to 1.2 billion in revenue is a significant compromise. Also, you seem to know a remarkable amount about a) How close Boehner was to accepting the deal. b) How successful he would be at getting the Republican caucus to accept any revenue increases. Are you psychic? Because you appear to have read the minds of everyone involved.
Am I psychic? No, unlike you, I just read Politico, The Hill, etc., and actually know what is going on. I don't display my ignorance with contemptuous questions about whether someone else is "psychic" when they give me information I disagree with.
Taxes are at the lowest point in a long time. Moreover, cutting government spending isn't the way out of a recession either. That's one of the sucky things about a recession.
"Taxes are at the lowest point in a long time" is a non-sequitir to what I said.
Unfortunately for you, the Fed and the Treasury have used every trick up their sleeve to revive the economy and it has failed, and the tricks they have tried have brought our finances to a shambles and now put the economy in a more risky situation. And now we have no more tricks. Well, we can "print" more money which the Fed will soon do with QE3 but it isn't going to do anything.
So unfortunately, keeping government spending at current levels or raising it is no longer an option. The negative consequences of more debt are larger than the negative consequences of cutting government spending in a recession. A recession that wasn't supposed to happen, according to your side of the aisle.
You failed, stop trying to blame your failures on us, take some responsibility please.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
On August 06 2011 10:54 bubblegumbo wrote: It sucks that when the American government fucks up the rest of the world's economy is affect too, yep fuck Washington.
Japan's still stuck in its 2000s trouble.
Europe has Euro problems.
China's has bubble issues that they're fighting.
None are really US-related and has more to do with fundamental economic issues. The only hope for US bonds is that investors think that the rest of the world is weaker.
On August 06 2011 10:54 bubblegumbo wrote: It sucks that when the American government fucks up the rest of the world's economy is affect too, yep fuck Washington.
Japan's still stuck in its 2000s trouble.
Europe has Euro problems.
Neither is US-related. The only hope for US bonds is that investors think that the rest of the world is weaker.
I think Japan is sitting at 2.5x GDP and AA-? Despite Japan's economic troubles, investors still think the JPY is relatively stable. I think the rationale is that Japan is less likely to fuck up again. Who knows.
The obvious to me: If any government has to keep borrowing money to pay for stuff, eventually the credit runs out. This was going to come eventually unless something changed w/r/t government policies, which doesn't seem likely to happen.
What needs to happen: Spending and tax income needs to come much closer together. Not being an economist I'm not going to speculate too far, but it seems to me that the US needs to expand the tax base and/or raise tax rates, as well as cutting back spending (no matter your politics, there are all sorts of cuts that could be made: even if we left military AND federal social spending alone the millions in "pork" could make a significant difference). In other words, good credit is based on the idea that if you want/need to you could pay down the debt, so we need to demonstrate that.
Of course, that's kind of vague.
Who needs to go: Every politician who wastes influence on getting spending for pet (local) projects instead of putting the country first. That's #1. Anybody trying to push through new spending on ANYTHING when we don't have the money to pay for current projects.
Capital is already deep, deep, deep in hiding thanks to the idiotic Big Government policies of this administration, let's encourage more companies to move out of America, more rich people to move their assets offshore, by raising taxes in a recession!
It's a brilliant religion, Democrats have, where you can tax your way out of a recession.
Okay, whoever wrote this: you obviously have no idea what you're talking about, so let me break it down for you:
First, capital isn't deep in hiding because of big government policies. It's in hiding because our recession caused a credit crunch that's keeping all of our capital in the banking system.
Second, companies move out of America because emerging economies just have unfair economic imbalances. It's natural, and it's not the biggest contributor to our problems.
Third, we haven't raised taxes in a recession. In fact, Obama extended tax breaks in December of 2010 for the Middle Class.
And don't say it was because of the Republicans. The Republicans forced Obama to continue tax extensions on top contributors, which has cost us $1.3 trillion in the last decade, in exchange for the middle class.
Spreads for Spain, Portugal, and, more recently, Italy have all gone way, way up compared to Germany or France. Ireland's going through strange stuff, too.
On August 06 2011 10:45 Saryph wrote: On another note, S&P put out a statement saying the reason for the downgrade was because BOTH sides are fighting too much, and that the government wasn't properly look at cutting spending AND raising taxes. Not one, but both.
Yet even after that release, all you see here is one person after another blaming only the republicans, or only the democrats.
S&P is paid to be completely politically neutral, they can't show bias or favoritism without losing credibility on the markets.
I feel a storm blowing. I'm stepping out before the black hole seizes me.
Don't credit rating agencies have an incentive to give good ratings? Who'll they get business from if they're reputed for handing out the worst ratings, on average?
On August 06 2011 10:54 DeltaSigmaL wrote: Wait, you think capital is in hiding because of gov? If it wasn't for gov bailouts, we would be in 2nd depression right now!
We are in 2nd depression right now , how can you solve a debt issue by creating more debt? pure insanity.
Unless you know the ins and outs of getting out of taxes with an organization or business you stand no chance running one in the states. Trying to run something legit and paying all the taxes the government throws at you currently will bleed you dry and you won't last.
Companies and Business's will just keep moving over seas and jobs will continue to be lost because the government has their fingers in literally every loop hole.
Insurance companies IE the bloodsuckers of this country get away with bending the people of this country over and taking them in the rear.
The whole incident in Wisconsin was a joke. The unions flamed and went to war with the Governor saying that he was going to ruin them (union workers) after the bill passed they found out that the bill actually SAVED money for teachers because they could buy cheaper insurance.
Nothing will ever be the same until people start manning up and start shoveling shit and cleaning toilets otherwise known as doing the jobs they don't want to do because they think they are to good for it. MAN THE FUCK UP! and get a fucking job.
On August 06 2011 10:54 DeltaSigmaL wrote: Wait, you think capital is in hiding because of gov? If it wasn't for gov bailouts, we would be in 2nd depression right now!
We are in 2nd depression right now , how can you solve a debt issue by creating more debt? pure insanity.
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
UK has a 0% growth rate because your austerity policies are a joke :D
If they were serious about fixing their government's spending problems and the country's economic malaise they'd make real reform to the NHS and the general governmental regulatory structure.
Instead the UK has tried to have it both ways which has failed spectacularly, as attempts to show Keynesian works through moderate or large doses of it have failed around the globe spectacularly these last few years.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
What has no basis in fact is the idea that government spending stimulates an economy after government debt reaches a certain point.
The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything.
Academics who study this stuff don't know much, judging from their abysmal failures the past few years. Here's an idea: when you're trying to be condescending about intellect, it's better when there are no results to be found. Then you can just pontificate your ass off all day. We tried the way "academics who study this stuff" said, it didn't work.
Turns out, banks and governments can't avoid the consequences of grossly distorting the market with debt piled on debt piled on debt, decades and decades of it. Keynes would personally be appalled at how his theories have been altered from "spend in bad times, save in good times" to "spend in good times, spend in bad times." Keynes was never for that. He understood that you can't deficit spend endlessly, if you do it too much in good times you won't be able to do it enough in bad times without doing worse damage.
The situation we are in now.
But all the academics who study this stuff who came after him, I guess they weren't as smart as some people think.
The lowering of the rating is just a big big slap in the face to the United Stats Government. People blame republicans because they are the ones that tend to not want taxes raised and want to cut from programs that hurt more of the middle/lower man than the upper man. Hopefully this lowering of the rating will get the people in Washington to get their act together and really work on something to fix the economy that we are in now. We are seeing the effects of a long war, un-industrializing, and bad politics.
Does anyone know if this has affected any other currency much?
"Compromising to get things done" is essentially a euphemism for "forever expanding government." Getting things done of course means expanding government, almost by definition, which is something many republicans oppose.
I'm against compromise, and I'm certainly not a republican. I'm in favor of gridlock, of more NOT getting done. Whenever republicans and democrats "compromise," it usually means the American people are getting screwed, and the debt and the deficit are expanding.
There is a reason our constitution established 3 competing branches of government, that are meant to check and balance each other... it was to ensure that the government didn't GET TOO MUCH DONE!
When people say this, it makes no sense. Compromising doesn't always mean expanding the government. How 'bout the latest compromise, where we avoided defaulting, or did you want us to be in an infinite gridlock and default? You think that would be good for the country? (hint: it would not be good). 3 branches were created to ensure each branch had limited power. Checks and balances ensure liberty suppossedly. The founding fathers did not create the branches thinking "Oh, we need a way to make our country inefficient".
On August 06 2011 11:00 Zergneedsfood wrote: If I may say, Japan's problems are not with debt.
The public itself has very low debt holdings and the country saves more than it borrows.
But everything else is bad.
Well, bad for Europe. Good the the United States. Interest rates are at record lows because US debt has become relatively safer due to turmoil in the rest of the civilized world.
I sure hope this is a massive wake up call for US politicians. They arent just screwing around with the lives of Americans, but the entire world's economy is at stake here. The US politicians need to take responsibility for the very important role they have in our world. Too bad the American political system is so fucked up, or maybe some decent people could get voted in.
Income taxes are probably as high as they should be already. After payroll, social security, medicare, FICA, and state/federal income taxes, someone making $100k to $300k is going to send about 50% of their income to the government in some way. And unless you're a doctor, you probably don't make over $300k a year from paychecks alone.
Most of the really rich get their income from capital gains. If you hold an asset for over a year, any returns on it are taxed at 15%. (20% in 2013) But the big difference is that you aren't getting a paycheck, so none of the normal payroll taxes apply.
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
UK has a 0% growth rate because your austerity policies are a joke :D
If they were serious about fixing their government's spending problems and the country's economic malaise they'd make real reform to the NHS and the general governmental regulatory structure.
Instead the UK has tried to have it both ways which has failed spectacularly, as attempts to show Keynesian works through moderate or large doses of it have failed around the globe spectacularly these last few years.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
What has no basis in fact is the idea that government spending stimulates an economy after government debt reaches a certain point.
The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything.
I'm sure you've studied economics, or something of the sort before. But how do you make such conclusive claims about such complex systems? I've studied economics for the last 3 years and I will not dare to make scientific and conclusive claims such as these. What is your evidence and/or reasoning for: - Keynesianism .. failed in moderate to large doses. - UK has 0% growth because of austerity policies. - Government debt doesn't stimulate economy after debt reaches a certain point. (of course you could argue here that you could have a few thousand % debt and you can't argue that the economy will continue to be "stimulated" in a positive way, but if you argue this you must know that your statement was flawed as it's so hard to interpret). - "The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything." - Why?
Don't say "we've tried these things and we're still fucked", as you're just now making the claim that we wouldn't have been worse off without these policies which requires just as much evidence to support.
What's ironic here is that S&P along with Moody's played a large role in the financial crisis, as they carelessly rated subprime mortgage packages and risky CDOs AAA. They based their ratings on the average credit score of each loan in a CDO- as long as the average was above a certain number, the package would be rated AAA, even though it could be half full of terrible mortgages almost guaranteed to default. NOW they take a stand and say the US government loans, still the safest in the world regardless of our current debt talks, are slightly riskier? What a joke.
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
UK has a 0% growth rate because your austerity policies are a joke :D
If they were serious about fixing their government's spending problems and the country's economic malaise they'd make real reform to the NHS and the general governmental regulatory structure.
Instead the UK has tried to have it both ways which has failed spectacularly, as attempts to show Keynesian works through moderate or large doses of it have failed around the globe spectacularly these last few years.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
What has no basis in fact is the idea that government spending stimulates an economy after government debt reaches a certain point.
The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything.
Academics who study this stuff don't know much, judging from their abysmal failures the past few years. Here's an idea: when you're trying to be condescending about intellect, it's better when there are no results to be found. Then you can just pontificate your ass off all day. We tried the way "academics who study this stuff" said, it didn't work. Guess they weren't so smart as you thought.
http://en.wikipedia.org/wiki/Keynesian_economics Yes, spending during recession does work. It's not spending that created the great deppresion, and it's spending that gets us out if it. The problem is that the theory involves two steps. One: deficite spend during bad times. Two: increase tax during good times. Sadly no politician ever wants to propose a tax increase so it never happens and we never get rid of debt...
Edit: and I don't like your anti-intellectual sentiment. It is both baseless and dangerous. If we don't take advice from people who actually spent years studying this stuff, taking examples from history and applying it, who do we listen to? Do we make glen beck our glorious leader? We should listen to some catchy quote from the learned sarah palin?
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
Businesses aren't charities, it's not like you can donate to them and they'll save an American worker's job.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
You haven't convinced me until you provide evidence. If you believe what you believe on the back of what you've just said, I feel you need to learn some skepticism.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
They're already not hiring people. They're just sitting on their cash. Or if they are hiring, it's workers from cheaper labor markets.
On August 06 2011 11:04 Docta Spaceman wrote: What's ironic here is that S&P along with Moody's played a large role in the financial crisis, as they carelessly rated subprime mortgage packages and risky CDOs AAA. They based their ratings on the average credit score of each loan in a CDO- as long as the average was above a certain number, the package would be rated AAA, even though it could be half full of terrible mortgages almost guaranteed to default. NOW they take a stand and say the US government loans, still the safest in the world regardless of our current debt talks, are slightly riskier? What a joke.
This is not true actually, it was a US government agency that created these ratings for the subprimes if I remember correctly, don't remember the name for it though, although independent from the government so to say. The problem was that they earned more money the better ratings they gave thus giving good ratings to bad debt. Anyhow, recommend you to look into it it's very interesting and the lecture I had on it with a very accomplished economist was eye opening to me as to the rest of the class who just had read the news and other sources.
Capitalism is failing in USA. All I hear is the government trying to make jobs, it's not the governments job to make jobs, it's the companies who are supposed give jobs.
On August 06 2011 11:04 Docta Spaceman wrote: What's ironic here is that S&P along with Moody's played a large role in the financial crisis, as they carelessly rated subprime mortgage packages and risky CDOs AAA. They based their ratings on the average credit score of each loan in a CDO- as long as the average was above a certain number, the package would be rated AAA, even though it could be half full of terrible mortgages almost guaranteed to default. NOW they take a stand and say the US government loans, still the safest in the world regardless of our current debt talks, are slightly riskier? What a joke.
This is not true actually, it was a US government agency that created these ratings for the subprimes if I remember correctly, don't remember the name for it though, although independent from the government so to say. The problem was that they earned more money the better ratings they gave thus giving good ratings to bad debt. Anyhow, recommend you to look into it it's very interesting and the lecture I had on it with a very accomplished economist was eye opening to me as to the rest of the class who just had read the news and other sources.
lol all the alarm bells are starting to go off and all the sheeple are still standing on their respective sidelines pointing fingers and blaming the other side. It's left vs. right, red vs. blue, all over again.
More and more I am starting to realize that the problem in many nations is actually their flawed representative/democratic forms of government. The average individual is simply not educated nor intelligent enough to run a country, nor to elect representatives that are capable of running a country. Every election is the pseudo-intellectuals' version of an "American Idol" style popularity contest, while the brain-dead herd animals will vote left/right even if it was a turd sandwich running for their party.
Don't you all realize it doesn't matter wtf each party did in the whole ridiculous "debt deal"? Don't you realize that we simply cannot cut enough, nor raise taxes enough, to truly get ourselves out of the hole we are in? We need a fiscal adjustment equal to approximately 15% of GDP. That is quite simply NOT GOING TO HAPPEN, no matter who is in office or who "compromises" with the other side.
The fact that we can go through this whole debt debate and end up cutting just enough to ensure that we still increase our budget next year is enough to reveal what a whole charade this political system is. We never "cut" anything, we simply reduced the rate of increase in our debt.
This is just a waste of time. People don't look at the actual numbers involved in this situation. Everyone is still stuck in "us vs. them" fantasy land.
It's a sign of the utterly stupid foundations of the system that these firms, who rated junk bonds as 'AAA' based on what turned out to be bribes, are still looked at as influential and serious people. They should be in jail.
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
UK has a 0% growth rate because your austerity policies are a joke :D
If they were serious about fixing their government's spending problems and the country's economic malaise they'd make real reform to the NHS and the general governmental regulatory structure.
Instead the UK has tried to have it both ways which has failed spectacularly, as attempts to show Keynesian works through moderate or large doses of it have failed around the globe spectacularly these last few years.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
What has no basis in fact is the idea that government spending stimulates an economy after government debt reaches a certain point.
The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything.
Academics who study this stuff don't know much, judging from their abysmal failures the past few years. Here's an idea: when you're trying to be condescending about intellect, it's better when there are no results to be found. Then you can just pontificate your ass off all day. We tried the way "academics who study this stuff" said, it didn't work. Guess they weren't so smart as you thought.
Edit: and I don't like your anti-intellectual sentiment. It is both baseless and dangerous. If we don't take advice from people who actually spent years studying this stuff, taking examples from history and applying it, who do we listen to? Do we make glen beck our glorious leader? We should listen to some catchy quote from the learned sarah palin?
There isn't consensus amongst publishing economists. This argument applies to anthropogenic climate change, not fiscal economics.
On August 06 2011 11:11 Fleebenworth wrote: It's a sign of the utterly stupid foundations of the system that these firms, who rated junk bonds as 'AAA' based on what turned out to be bribes, are still looked at as influential and serious people. They should be in jail.
I don't like putting non-violent criminals in jail any more than I like the death penalty, but that's a discussion for another thread. If they're fined and known to be corrupt then they're both punished and not a danger to anyone.
On August 06 2011 10:45 Saryph wrote: The Fed announced it won't change the risk weights.
On another note, S&P put out a statement saying the reason for the downgrade was because BOTH sides are fighting too much, and that the government wasn't properly look at cutting spending AND raising taxes. Not one, but both.
Yet even after that release, all you see here is one person after another blaming only the republicans, or only the democrats.
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.
.....
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.
Which party is more likely to do that?
That said, that would not return the situation to AAA, it'd change it to AA+ (negative outlook) to AA+ (stable outlook).
Longer term:
... 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.
Again, the entitlements are the main issue. Both parties have attacked each other over entitlement cuts freely; the Democrats have shown willingness to pass significant cuts (the Medicare cuts in the Affordable Care Act) but their record on larger reforms is spotty and much of the cuts were (relatively) low hanging fruit. Republicans have voted for changes in the Ryan plan, but said plan had no chance of actually passing (which makes a hero out of everyone) and contained massive tax cuts that rendered it useless in terms of becoming solvent (See the tax policy center ).
On August 06 2011 11:04 Docta Spaceman wrote: What's ironic here is that S&P along with Moody's played a large role in the financial crisis, as they carelessly rated subprime mortgage packages and risky CDOs AAA. They based their ratings on the average credit score of each loan in a CDO- as long as the average was above a certain number, the package would be rated AAA, even though it could be half full of terrible mortgages almost guaranteed to default. NOW they take a stand and say the US government loans, still the safest in the world regardless of our current debt talks, are slightly riskier? What a joke.
This is not true actually, it was a US government agency that created these ratings for the subprimes if I remember correctly, don't remember the name for it though, although independent from the government so to say. The problem was that they earned more money the better ratings they gave thus giving good ratings to bad debt. Anyhow, recommend you to look into it it's very interesting and the lecture I had on it with a very accomplished economist was eye opening to me as to the rest of the class who just had read the news and other sources.
S&P and Moody rated junk CDOs AAA. For starters.
Well they owned and did parts of it, again I don't remember but the problem was not with S&P and Moody but an agency created to rate these bundles of subprime loans etc. Again don't have the papers on me as they are at my parents place but if you can google abit I'm sure you'll find the info as what you are saying is not the whole truth and not the origin of the core problem.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
Unfortunately things are as simple as "basic logic." Corporations have been sitting on a ton of cash through this recession and awhile back were mainly using that money for mergers and acquisitions. The lack of demand is leading to a reluctance to invest in more supply. What matters in regards to taxcuts is giving money to people who are "liquidity constrained." These are people who if they were consumption smoothing would prefer the ability to spend at their normalized income for this period of time (normalized over income they earn during their life).
I do not understand how you would operationalize an argument that a higher marginal income tax would result in businesses actually firing workers. The payroll tax may temporarily discourage acquiring new workers yes and there are mixed arguments about capital gains which I dont feel comfortable talking about with any confidence at the moment.
Edit: As to CDOs, anything not subprime was backed by Freddie/fannie so it was pretty safe to rate well and securitize?
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
UK has a 0% growth rate because your austerity policies are a joke :D
If they were serious about fixing their government's spending problems and the country's economic malaise they'd make real reform to the NHS and the general governmental regulatory structure.
Instead the UK has tried to have it both ways which has failed spectacularly, as attempts to show Keynesian works through moderate or large doses of it have failed around the globe spectacularly these last few years.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
What has no basis in fact is the idea that government spending stimulates an economy after government debt reaches a certain point.
The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything.
Academics who study this stuff don't know much, judging from their abysmal failures the past few years. Here's an idea: when you're trying to be condescending about intellect, it's better when there are no results to be found. Then you can just pontificate your ass off all day. We tried the way "academics who study this stuff" said, it didn't work. Guess they weren't so smart as you thought.
Edit: and I don't like your anti-intellectual sentiment. It is both baseless and dangerous. If we don't take advice from people who actually spent years studying this stuff, taking examples from history and applying it, who do we listen to? Do we make glen beck our glorious leader? We should listen to some catchy quote from the learned sarah palin?
There isn't consensus amongst publishing economists. This argument applies to anthropogenic climate change, not fiscal economics.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
Businesses aren't charities, it's not like you can donate to them and they'll save an American worker's job.
Your not really donating to them. Your just not taking money that they could be using to hire people and expand.
Fucking teaparty republicans need to get the fuck out. They are so selfish and shortsighted that they would risk their sovereign nation's entire economy for a passing political fad.
I'm sure you've studied economics, or something of the sort before. But how do you make such conclusive claims about such complex systems? I've studied economics for the last 3 years and I will not dare to make scientific and conclusive claims such as these. What is your evidence and/or reasoning for:
I'm sure I don't care that you've studied economics, you should have studied a little harder.
- Keynesianism .. failed in moderate to large doses.
What is the economic situation in the United States and Europe right now, after three years of deficit spending in order to take "bad" debt off the private ledger and put it on the public one, and various amounts of "stimulus" spending here and in Europe?
It's a very easy question if you read the headlines.
- UK has 0% growth because of austerity policies.
That isn't my opinion, it's the opinion of various left-leaning commentators. My opinion is that their austerity policies have not been austere enough and also have not been complemented with proper regulatory reform that is necessary for the British economy to get back on its feet.
- Government debt doesn't stimulate economy after debt reaches a certain point.
It's pretty much common sense. Government can take on more debt than any kind of private institution, but even it has a limit (no pun intended). Unless you think that government can just endlessly take on debt without a care.
And the economic results from Europe and the USA the last few days and months are indicative that we are near or have reached that limit. Unless, of course, Germany and France are dictating Greece around just for the hell of it. Definitely not because they're afraid if they keep trying to keep Greece from going down without meaningful change from Greece they might be pulled in too. Definitely not because if Greece does go down they go down.
- "The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything." - Why?
Why, what? Why should it have disabused them? Possibly because the Eurozone and the United States are in slow-motion economic crashes right now despite attempts to credit card their way out of their economic predicaments?
Don't say "we've tried these things and we're still fucked", as you're just now making the claim that we wouldn't have been worse off without these policies which requires just as much evidence to support.
We've tried these things and we're still fucked mostly as a result of these things.
Sorry, but your characterization of what saying that must mean is nonsense. I make no such claim in saying that.
You can't get around the reality that the policies failed at their intended purpose and we are now in another debt crisis right on the heels of the last one. All we've done since then is take on more debt. So... what might the problem be, Mr. Economics Student? Possibly, taking on more debt at a rate the market can not and will not sustain? This does not mean we shouldn't have spent any money at all; the crash we may have soon would have happened without a doubt if we hadn't spend a lot of money in 2008. But the spending after that has had the opposite effect it was intended to, to the point where the financial health of one of the EU's smallest countries is now inextricably linked with the health of the Euro; surely not a situation anyone would want, but there it is. And to the point where the Chinese and Japanese don't want to buy any more of what the Treasury's selling, well before we reached this moment of downgrade.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
Businesses aren't charities, it's not like you can donate to them and they'll save an American worker's job.
Your not really donating to them. Your just not taking money that they could be using to hire people and expand.
But you're assuming that they'll use the cash they save on labor, which is a totally baseless assumption. Furthermore, who's to say they'll use it on American labor? American workers are pretty expensive to hire compared to the rest of the world.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
Businesses aren't charities, it's not like you can donate to them and they'll save an American worker's job.
Your not really donating to them. Your just not taking money that they could be using to hire people and expand.
Companies don't look at every dollar and say "could we possible hire another person?" there's more to business than just employees. I think this might be getting off topic. Isn't this about the debt? how we should deal with it? Could people please give solutions and defend their solutions instead of only bashing other solutions?
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
UK has a 0% growth rate because your austerity policies are a joke :D
If they were serious about fixing their government's spending problems and the country's economic malaise they'd make real reform to the NHS and the general governmental regulatory structure.
Instead the UK has tried to have it both ways which has failed spectacularly, as attempts to show Keynesian works through moderate or large doses of it have failed around the globe spectacularly these last few years.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
What has no basis in fact is the idea that government spending stimulates an economy after government debt reaches a certain point.
The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything.
Academics who study this stuff don't know much, judging from their abysmal failures the past few years. Here's an idea: when you're trying to be condescending about intellect, it's better when there are no results to be found. Then you can just pontificate your ass off all day. We tried the way "academics who study this stuff" said, it didn't work. Guess they weren't so smart as you thought.
Edit: and I don't like your anti-intellectual sentiment. It is both baseless and dangerous. If we don't take advice from people who actually spent years studying this stuff, taking examples from history and applying it, who do we listen to? Do we make glen beck our glorious leader? We should listen to some catchy quote from the learned sarah palin?
There isn't consensus amongst publishing economists. This argument applies to anthropogenic climate change, not fiscal economics.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
You're just as easily brainwashed as the side that opposes you. Claims without references or supportive evidence. How do you know what you think you know?
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
Businesses aren't charities, it's not like you can donate to them and they'll save an American worker's job.
Your not really donating to them. Your just not taking money that they could be using to hire people and expand.
But you're assuming that they'll use the cash they save on labor, which is a totally baseless assumption. Furthermore, who's to say they'll use it on American labor? American workers are pretty expensive to hire compared to the rest of the world.
Ironically, the pro-business argument has been not to raise taxes, but the lack of domestic demand (which would be helped with higher taxes + more social spending) coupled with the budget issues are the most dangerous things FOR the economy, and you see it in the markets now.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
Businesses aren't charities, it's not like you can donate to them and they'll save an American worker's job.
Your not really donating to them. Your just not taking money that they could be using to hire people and expand.
Or money they could use to raise their personal salaries.
On August 06 2011 10:56 DeepElemBlues wrote: Am I psychic? No, unlike you, I just read Politico, The Hill, etc., and actually know what is going on. I don't display my ignorance with contemptuous questions about whether someone else is "psychic" when they give me information I disagree with.
Protip: The thing to do when a politician proclaims the other side is at fault when it is politically advantageous to do so is to not believe them. I'm aware of "insider" statements that they were close to a deal that was broken off when Obama went for an additional $400 billion in revenue. I just think everyone involved had an agenda, and that a) There is no evidence Boehner would have went for the 3.8 bil deal. "Close" doesn't count. b) The 4.2 bil deal he supposedly walked out on was fundamentally reasonable and it was unreasonable for him to walk out on it.
"Taxes are at the lowest point in a long time" is a non-sequitir to what I said.
Not entirely on topic, admittedly, but I was replying to your whine about the horrors of tax increases. While taxes increases are not by default economy boosts, increasing them slightly will not be a huge burden on the economy.
Unfortunately for you, the Fed and the Treasury have used every trick up their sleeve to revive the economy and it has failed
Actually, the government in general hasn't used a lot of the tricks it could have, particularly c.f. inflation.
The negative consequences of more debt are larger than the negative consequences of cutting government spending in a recession.
I'm not entirely sure that's true. The S&P's long term forecast is largely in regards to a) Political dysfunction. b) The long term entitlement issue. Neither of which have anything to do with mindless advocacy of cutting government spending in a recession. Not that I am fully opposed to cutting government spending, as long as it is done coherently. Further, if the negative consequences of the debt are so large, then why don't they also outweigh the negative effects of tax increases?
Also, I have no idea what the hell "my side" is, as I have neither donated to nor voted for anyone currently in Congress or the Presidency.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
Can you supply references for this or did you just hear it on Fox news or something?
Well isn't it basic logic that rich people own big business's that hire people. So if you tax them more, they are forced to cut back and stop hiring people or lay off workers. So if you follow this basic logic, yes, you are in fact hurting the working class.
Businesses aren't charities, it's not like you can donate to them and they'll save an American worker's job.
Your not really donating to them. Your just not taking money that they could be using to hire people and expand.
But you're assuming that they'll use the cash they save on labor, which is a totally baseless assumption. Furthermore, who's to say they'll use it on American labor? American workers are pretty expensive to hire compared to the rest of the world.
whos fault is that then?
durr, it must be the damn domestic workers fault, demanding a living wage that pays for expenses and allows people to live above the poverty line.
I can't think of who elses fault it must be. Theres really nobody else involved at all. We really shouldn't think of anything but those damn domestic workers demanding too much. It would in fact be the stuff of conspiracy theorists and extremists to think that it would be anyone but those damn greedy workers. We gotta keep tightening that belt and blame nobody but the lazy domestic workers.
and possibly mexicans, its possibly their fault too.
pay no attention to that man behind the curtain!
EDIT: Sorry for potentially excessive sarcasm. I'd better stay out of this thread until I can be sure of being able to be patient enough to post in it.
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
UK has a 0% growth rate because your austerity policies are a joke :D
If they were serious about fixing their government's spending problems and the country's economic malaise they'd make real reform to the NHS and the general governmental regulatory structure.
Instead the UK has tried to have it both ways which has failed spectacularly, as attempts to show Keynesian works through moderate or large doses of it have failed around the globe spectacularly these last few years.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
What has no basis in fact is the idea that government spending stimulates an economy after government debt reaches a certain point.
The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything.
Academics who study this stuff don't know much, judging from their abysmal failures the past few years. Here's an idea: when you're trying to be condescending about intellect, it's better when there are no results to be found. Then you can just pontificate your ass off all day. We tried the way "academics who study this stuff" said, it didn't work. Guess they weren't so smart as you thought.
Edit: and I don't like your anti-intellectual sentiment. It is both baseless and dangerous. If we don't take advice from people who actually spent years studying this stuff, taking examples from history and applying it, who do we listen to? Do we make glen beck our glorious leader? We should listen to some catchy quote from the learned sarah palin?
There isn't consensus amongst publishing economists. This argument applies to anthropogenic climate change, not fiscal economics.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
You're just as easily brainwashed as the side that opposes you. Claims without references or supportive evidence. How do you know what you think you know?
On August 06 2011 11:23 DeepElemBlues wrote: What is the economic situation in the United States and Europe right now, after three years of deficit spending in order to take "bad" debt off the private ledger and put it on the public one, and various amounts of "stimulus" spending here and in Europe?
It's a very easy question if you read the headlines.
Evidence from headlines. And as I expected, an argument of self-evidence.
On August 06 2011 11:23 DeepElemBlues wrote:That isn't my opinion, it's the opinion of various left-leaning commentators. My opinion is that their austerity policies have not been austere enough and also have not been complemented with proper regulatory reform that is necessary for the British economy to get back on its feet.
I was hoping for some piece of reasoning or evidence. I already knew your opinion.
On August 06 2011 11:23 DeepElemBlues wrote: It's pretty much common sense. Government can take on more debt than any kind of private institution, but even it has a limit (no pun intended). Unless you think that government can just endlessly take on debt without a care.
And the economic results from Europe and the USA the last few days and months are indicative that we are near or have reached that limit. Unless, of course, Germany and France are dictating Greece around just for the hell of it. Definitely not because they're afraid if they keep trying to keep Greece from going down they might be pulled in too.
What is the use or interpretation of your original statement if your statement has no definite interpretation. What do you mean by debt that is too much? 50 billion? 1 trillion? 10 trillion? As I acknowledged in my original reply - of course there's a limit.
On August 06 2011 11:23 DeepElemBlues wrote:Why, what? Why should it have disabused them? Possibly because the Eurozone and the United States are in slow-motion economic crashes right now despite attempts to credit card their way out of their economic predicaments?
So we're in X state right now. Do you have evidence that we'd be in a better state without the policies that we've had?
On August 06 2011 11:23 DeepElemBlues wrote:We've tried these things and we're still fucked mostly as a result of these things.
What is your evidence or reasoning for this?
On August 06 2011 11:23 DeepElemBlues wrote:You can't get around the reality that the policies failed at their intended purpose and we are now in another debt crisis right on the heels of the last one. All we've done since then is take on more debt. So... what might the problem be, Mr. Economics Student?
I don't know what the problem is. Neither do you, according to your complete lack of reasoning or evidence for all your beliefs that you've kindly shared with us today.
On August 06 2011 11:23 DeepElemBlues wrote:Possibly, taking on more debt at a rate the market can not and will not sustain?
What does this statement mean? Which market? What market isn't sustaining this?
You then go on to talk about the Eurozone et al. I was actually only talking about the US, as this was the major talking point of this thread and you didn't mention that you were excluding the US from your claims.
"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism"
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
yup we all know that tax cuts and spending cuts in government grows an economy it's why the U.K. has a 0% growth rate.
UK has a 0% growth rate because your austerity policies are a joke :D
If they were serious about fixing their government's spending problems and the country's economic malaise they'd make real reform to the NHS and the general governmental regulatory structure.
Instead the UK has tried to have it both ways which has failed spectacularly, as attempts to show Keynesian works through moderate or large doses of it have failed around the globe spectacularly these last few years.
herp at least that's what people at tea party tell us which has no basis in fact. Way to grow an econ is to spend, improve infrastructure, and educate/train, but what do academics that study this stuff know.
What has no basis in fact is the idea that government spending stimulates an economy after government debt reaches a certain point.
The past few years should have readily disabused even the most foolish of this notion, but we still have people like you who think you can credit card your way out of anything.
Academics who study this stuff don't know much, judging from their abysmal failures the past few years. Here's an idea: when you're trying to be condescending about intellect, it's better when there are no results to be found. Then you can just pontificate your ass off all day. We tried the way "academics who study this stuff" said, it didn't work. Guess they weren't so smart as you thought.
Edit: and I don't like your anti-intellectual sentiment. It is both baseless and dangerous. If we don't take advice from people who actually spent years studying this stuff, taking examples from history and applying it, who do we listen to? Do we make glen beck our glorious leader? We should listen to some catchy quote from the learned sarah palin?
There isn't consensus amongst publishing economists. This argument applies to anthropogenic climate change, not fiscal economics.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
You're just as easily brainwashed as the side that opposes you. Claims without references or supportive evidence. How do you know what you think you know?
For some reason you think that I'm making a claim. I don't have to give you any evidence because I don't know the answer to these questions, unlike you it seems. You actually haven't provided any evidence for your beliefs. This is okay though, I didn't expect any.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Is there anything in the last 70 years of Economic literature regarding crises that you would support?
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
On August 06 2011 11:36 Mohdoo wrote: Karl Marx called it!
"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism"
Karl Marx, Das Kapital, 1867
I always liked this one
"Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." — John Steinbeck
"S&P also changed its assumption that the 2001 and 2003 tax cuts would expire by the end of 2012 'because the majority of Republicans in Congress continue to resist any measure that would raise revenues.'"
[...]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. [...]It appears that for now, new revenues have dropped down on the menu of policy options. [...]The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them. [...]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.
So...there went my entire childhood's worth of patriotism. Looks like it's time to just get drunk and bemoan the fall of the century of the united states.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Yes, we do need more regulation, but that was not my point. My point was that the actions and spending of the government prevented disaster. You claim that these actions merely delayed the bubble and that the upcoming bubble will be worse than the what would've happened if the gov did nothing. How do u substantiate your claim?
Sad, but hopefully this will wake up the politicians in Washington and let them know that they can't just keep throwing money around and that they might have to tighten their belts a bit.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
keynesian isn't always spending from existing fund. Deficit spending works as well, but you do need to recover the money during the upswing, a move that politicains have neglected.
Hate S&P all you want but they did the responsible thing by lowering the rating. This was the first time ever that the Debt Ceiling was used as a bargaining chip and all the way to the final bell. Given that the Debt Ceiling will have to be raised a couple more times in the next 4-5 years, they just didn't want to reward that type of behavior. You can't hold shit hostage and then claim ignorance when people take you seriously.
It's sickening that this happened, we get the government we deserve.
On August 06 2011 10:51 DeepElemBlues wrote: I'm sorry but this must be a joke. You are aware that the 2011 budget was for the Fiscal Year 2011, which runs from Fall 2010 until a few months from now? That isn't the budget that was at issue here, it's Fiscal Year 2012's budget.
Yes, I'm aware. And the debt ceiling would have been breached ... this week, during Fiscal Year 2011 and not a few months from now. I'm not sure where you're going with this, unless you think the Democrats should have had the Fiscal Year 2012 budget passed containing a debt limit increase several months ago, which just confuses me.
Both parties have said they want to reduce the deficit. Democrats said "let's deal with it later" and with the same kind of "spending cuts" we've seen from Washington for years; no real spending cuts at all. Republicans said not this time, if you're serious about cutting spending, then be serious about it.
The Republicans are serious about "Raaar! Spending Bad!" They have given no evidence that they are serious about a coherent way to address entitlements and the long term budget.
The "crisis" we have originated from the right deciding to demagogue the debt ceiling to a greater extent that had ever previously been done;
Hilarious, the Right are being "demagogues" about the debt ceiling while Moody's and S&P were saying again and again that the Democrats' preferred choice, a clean debt ceiling raise, would result in a downgrade.
The party out of power always demagogues about the debt ceiling issue. It's the point of the debt ceiling.
for better or worse, the left would have happily left the budget discussion to the 2012 budget.
Yeah, this sure is accurate, what with the political media reporting from actual Democratic operatives that they wanted to kick the can until 2013 precisely because they did not want to have that discussion during an election year. Who should I believe, them or you...
Where do you get your information, Democratic Underground?
They wanted the debt ceiling issue past the 2012 election, yes, and were serious about this (it was a negotiating point). I have no idea how this contradicts what I said, as the debt ceiling increase =/= budget discussion. The debt ceiling is an entirely pointless construct designed to let whatever party is out of power whine about the irresponsibility of whoever is currently in power. Moody's and S&P tied downgrades to the debt ceiling because they wanted to use it as a convenient test of political will. The government failed S&P's short term test because a deal that fulfilled it (the 4.2 bil compromise) failed. The government is failing S&P's long term test due to a bipartisan inability to be serious about it.
The only times I've ever read Democratic Underground is when it shows up in a google search for something else.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
keynesian isn't always spending from existing fund. Deficit spending works as well, but you do need to recover the money during the upswing, a move that politicains have neglected.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
Agreed in full, this is the problem as there has just been increased spending both in good/great times and now bad times, more for some countries less for some. Problem is when reaching around 100% debt level then there is cause for concern, especially as debt of the population is high as well and not low like in Japan with 200% debt. IF there are no new macro causing productivity to rise immensely like after the world war.
Now the crisis needs us to borrow to stimulate the economy while debt is too high and people are afraid and the last part that people are afraid one cannot stress enough, that is always what is the triggering factor of the crisis and AA+ might be it. So Keynesian is not faulty and how can we get people to spend if there is money to borrow but people are afraid to spend, just what happened in Japan when they had their crisis.
Edit: Question to regard, will Monday be the day that gradually the world's only super-power will stop acting like one globally, with reduced spending for military bases and withdrawal from their abroad operations as part of its inevitable spending cuts? Kind of scary actually and with a possible Euro meltdown the world is going to change quite abit.
I love reading about people blaming these politicians but it is hardly ever mentioned that the citizens of the United States of America put them in office to begin with.
I'm going to quote from V for Vendetta - "Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you're looking for the guilty, you need only look into a mirror."
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
keynesian isn't always spending from existing fund. Deficit spending works as well, but you do need to recover the money during the upswing, a move that politicains have neglected.
Well I think there's room for debate there, I personally don't believe that deficit spending works and I don't think that the multiplier effect exists, but of course it depends on who you talk to.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
keynesian isn't always spending from existing fund. Deficit spending works as well, but you do need to recover the money during the upswing, a move that politicains have neglected.
Well I think there's room for debate there, I personally don't believe that deficit spending works and I don't think that the multiplier effect exists, but of course it depends on who you talk to.
In my eyes, one of the most positive thing to arise from recent history is that its now socially acceptable to question the dominant economic logic.
On August 06 2011 11:11 Fleebenworth wrote: It's a sign of the utterly stupid foundations of the system that these firms, who rated junk bonds as 'AAA' based on what turned out to be bribes, are still looked at as influential and serious people. They should be in jail.
I don't like putting non-violent criminals in jail any more than I like the death penalty, but that's a discussion for another thread. If they're fined and known to be corrupt then they're both punished and not a danger to anyone.
Regardless of your feelings about incarceration, fraud is usually punished with a prison stay in this country. The fact that these firms committed fraud which played NO SMALL PART in disappearing trillions of dollars (which invariably creates more violent crime) and are still looked at as lynchpins of the modern international financial system is not just a joke, it's absurd.
As it is they have faced no punishment of consequence at all for their criminal actions.
On August 06 2011 11:58 iPlaY.NettleS wrote: Lets face facts , the fiat USD is dead , hence the entire world fiat monetary system will collapse with it as faith in paper collapses.
Time to return to a gold/silver backed currency.
All currency is fiat currency. With a "gold standard" the government still just intervenes by changing the foreign currency reserves (and they HAVE to, that's why it can stay at a certain amount of gold per dollar). Have you even looked up why we went off the gold standard? Europe basically used it to attack the US like economic terrorists and we almost ran out of gold. There is nothing more special about gold than anything else. It's just some rare useless thing that we choose to worship. The only difference between our currency and a gold standard currency is that with a gold currency, the government steals a bunch of gold from people and sticks it in a temple. ER I mean fort. Then the government agrees to give a certain amount of gold for paper even though both are useless unless people have faith in them and agree to go through with the ritualistic motions. If anything, the fact that there are now so many practical uses of gold, like computers and such, means that our currency would be subject to shocks and manipulations by specific supply and demand pressures. That makes a gold currency worse now than ever.
On August 06 2011 11:58 iPlaY.NettleS wrote: Time to return to a gold/silver backed currency.
Doing so would kill the economy even faster.
If the economy does collapse, then going back won't hurt more (aside from the disadvantages of losing a fiat currency), but trying to pull off a tranistion now would be insane.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Yes, we do need more regulation, but that was not my point. My point was that the actions and spending of the government prevented disaster. You claim that these actions merely delayed the bubble and that the upcoming bubble will be worse than the what would've happened if the gov did nothing. How do u substantiate your claim?
So I have to prove my claim, but you can arbitrarily claim that the government 'prevented disaster' without substantiating. I see. I will attempt to explain anyways.
When the housing bubble burst, we began to enter a recession.Since I believe in the strength of a free market, I believe businesses need to be allowed to fail when they perform poorly. Businesses that perform well should continue. Part of what created this problem is that banks were allowed to make risky investments with the public's money, due to both the government federally insuring our money (thus making it less risky for the bank to invest) and because investor banks and commercial banks are now essentially the same entity.
The banks essentially gambled with our money and lost. What should have happened afterward is that the banks fail and the federal government gives everyone back their money (since it is federally insured up to $100,000). It would have been a valuable and difficult lesson learned. If you invest poorly, you're fucked. Instead, we have the banks that failed with our money still around, and they're still investing. This seems like a terrible idea because they've already proven to be fiscally irresponsible. Amusingly, though, when an individual is fiscally irresponsible, they don't need to be bailed out, we need to cut entitlements. You can't have it both ways, though. Or I suppose you can, but it's hypocritical. Edit: And even if you make the argument that we should assist the banks because of how interconnected they are, fine, but the funds given were overly generous and without restrictions. We have no guarantee AT ALL after bailing these companies out that they will now become risk free and change to generate profit.
We're already in debt, so we can't actually bail these companies out without borrowing or printing money. So we print lots of money into the economy, and this causes inflation. Interest rates are extremely low, so the money will decrease in value faster than it is put into circulation at some point. Now, if we weren't in such heavy debt already, putting this money into the economy would be a pretty good idea, as it wouldn't cause such a great amount of inflation. However, because of the enormity of our debt, pumping this money into the economy is causing inflation. And in this inflation is another bubble: The bailout bubble. You don't fix a recession by creating another bubble, that just creates another recession as well. As I said before, the recession isn't the disease, the bubble is. The recession is just the market trying to correct itself.
On August 06 2011 11:36 Mohdoo wrote: Karl Marx called it!
"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism"
Karl Marx, Das Kapital, 1867
Or there could be rioting in the streets and we devolve into anarchy. Or people will all follow some new cult and we will have a Neo Confucian Caliphate. The banks won't have to be nationalized, last time they just created the Fed and went into WWII. Do you really think our government would turn communist before starting up some war to unite us together?
Returning to the gold standard is an utterly stupid idea that is not taken seriously by anyone that knows even the smallest amount about economics. How is having less fiscal control in a crisis the solution to anything?
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
keynesian isn't always spending from existing fund. Deficit spending works as well, but you do need to recover the money during the upswing, a move that politicains have neglected.
Well I think there's room for debate there, I personally don't believe that deficit spending works and I don't think that the multiplier effect exists, but of course it depends on who you talk to.
In my eyes, one of the most positive thing to arise from recent history is that its now socially acceptable to question the dominant economic logic.
I'm pretty sure this is sarcasm, but there are entire schools backed by extremely intelligent economists who do not accept the Keynesian multiplier. Milton Friedman was one of these economists.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
keynesian isn't always spending from existing fund. Deficit spending works as well, but you do need to recover the money during the upswing, a move that politicains have neglected.
Well I think there's room for debate there, I personally don't believe that deficit spending works and I don't think that the multiplier effect exists, but of course it depends on who you talk to.
In my eyes, one of the most positive thing to arise from recent history is that its now socially acceptable to question the dominant economic logic.
I'm pretty sure this is sarcasm, but there are entire schools backed by extremely intelligent economists who do not accept the Keynesian multiplier. Milton Friedman was one of these economists.
Yeah, but Milton Friedman was an ideological hack serving the corporate class. His ideas have been widely debunked by modern research.
On August 06 2011 12:12 Fleebenworth wrote: Returning to the gold standard is an utterly stupid idea that is not taken seriously by anyone that knows even the smallest amount about economics. How is having less fiscal control in a crisis the solution to anything?
Well it gives less opportunity for abuse by the Fed. If you think they're doing a good job, then it would be bad, yes.
Economists said spend during 2008-9 and spend we did. It save us from certain depression. If you doubt the depression looke at the climate back then. Lehman, AIG were failing, credit was freezing. Trust in banks was falling, sound familar? Now that things are more or less stable, extreme right wing has the audacity to claim we didn't need that spending. They call it reckless. What they are doing is extremely reckless. (I don't have anything against the right, infact I think they are better at getting things done than the left, it's just the extreme that I do not like.)
It didn't save us from depression. They just made another bubble (the bailout bubble) and it's going to pop and make things worse than they would have been if we simply let the market correct itself. It's not the recession/depression that is the problem, it's the cure. The economic boom is the problem.
Trust in banks was falling. It should have! They made risky investments. They continue to do so. You think things are stable? They're about to fall apart and it's even worse now than it was going to be before. Spending money to stimulate the economy during recession only works if you saved money during the boom. We were already in debt. It made things better for a little bit but now they will be worse.
Good post. A lot of people blame Keynesianism for our economic woes but our leaders haven't really been following Keynes' advice, Keynes said to run surpluses in good economic conditions to have a "rainy day fund" for recession spending. None of the "Keynesians" that everyone's blaming have actually done that. (besides Clinton)
keynesian isn't always spending from existing fund. Deficit spending works as well, but you do need to recover the money during the upswing, a move that politicains have neglected.
Well I think there's room for debate there, I personally don't believe that deficit spending works and I don't think that the multiplier effect exists, but of course it depends on who you talk to.
In my eyes, one of the most positive thing to arise from recent history is that its now socially acceptable to question the dominant economic logic.
I'm pretty sure this is sarcasm, but there are entire schools backed by extremely intelligent economists who do not accept the Keynesian multiplier. Milton Friedman was one of these economists.
yeah, Friedman and Chicago school economics is its own little bubble universe. Very popular amongst the wealthy, pretty much universally reviled by serious economic research.
This is what accountability feels like ladies and gentleman. Own it and quit wishing to put your head back in the sand! We're lucky our rating is AA+. To get to this point and still have so much indecision and inaction could easily have deserved worse.
Personally, I don't see why interest rates rising is such a huge deal? Of course they will rise, times are tough around the world and we've been subsidizing our low rates to hide that. They're still extremely favorable for the US in comparison to almost everyone else. What's changed is that the US can't put on its shiny suit, throw decadent white parties on exclusive beach front property, and then complain about jet fuel anymore. "Take that, take that". Everyone is tired of fronting, even our own people.
It's going to take hard work, growth, and advancement to lower the sense of risk. The good news is that people aren't going to stop working and forget about their dreams and aspirations. We'll suck it up and walk it off. And going forward, we'll make sure to hold our government accountable so that someone else doesn't have to.
Finally, if you don't run a business, please stop talking about high taxes having anything to do with jobs. If a business needs resources to meet their goals (leaving it broad on purpose) then they will create business models to get them, regardless of what the tax rates are - that's what top management does. And guess what happens if they don't? A younger, newer version of them comes along and puts them into retirement or forces them to change.
On August 06 2011 12:46 johanngrunt wrote: So don't vote for any incumbents and hope a new batch of Congressmen have the balls to fix this?
There isn't a lot of difference in policy between the two major parties, and both are far to the right of actual public opinion.
It will take demonstrations and general strikes and a lot of activism to actually fix the deep structural problems imo, or a third party, but the way the media functions, it is extremely unlikely that a third party will just emerge.
On August 06 2011 12:46 johanngrunt wrote: So don't vote for any incumbents and hope a new batch of Congressmen have the balls to fix this?
There isn't a lot of difference in policy between the two major parties, and both are far to the right of actual public opinion.
It will take demonstrations and general strikes and a lot of activism to actually fix the deep structural problems imo, or a third party, but the way the media functions, it is extremely unlikely that a third party will just emerge.
I agree with this. I think our only hope is a third party, but find it unlikely.
im a financial analyst irl, so let me just soothe some worries/confusion:
1) s&p downgraded our long-term debt; the truth is (and argue all you want) that nobody is worried about a default on our BONDS. only our NOTES (notes are defined as 3, 5, 7, and 10yr maturities). the downgrade has zero impact on current financial problems (we are restructuring our mid-term debt; hence the herpderp by s&p).
2) s&p misstated u.s. debt projections by $2 trillion. the us treasury contacted s&p informing them of the misprojection, and the s&p basically said "oops". heeerpaderpppp.
3) this one is opinion-based, so feel free to disagree (the above two are strict fact): why do you think s&p HONESTLY downgraded our long term debt? my answer: the first of the big three to make a bold statement will be given the most media attention, thus generating more hype, and leading to more prestige. classic move by mcgraw hill.
--
in the end of the day, we are screwed. trust me, i'd know; but this downgrade has no actual impact on our cost of financing. if moody's and fitch affirms our debt, but s&p dissents, there's no fear. most debt covenants require a majority of "major credit rating agencies (fitch, moody's, s&p)" to dissent from previously stated ratings in order to have substantive changes. just check out note indentures if you disagree.
On August 06 2011 12:51 gulati wrote: im a financial analyst irl, so let me just soothe some worries/confusion:
1) s&p downgraded our long-term debt; the truth is (and argue all you want) that nobody is worried about a default on our BONDS. only our NOTES (notes are defined as 3, 5, 7, and 10yr maturities). the downgrade has zero impact on current financial problems (we are restructuring our mid-term debt; hence the herpderp by s&p).
2) s&p misstated u.s. debt projections by $2 trillion. the us treasury contacted s&p informing them of the misprojection, and the s&p basically said "oops". heeerpaderpppp.
3) this one is opinion-based, so feel free to disagree (the above two are strict fact): why do you think s&p HONESTLY downgraded our long term debt? my answer: the first of the big three to make a bold statement will be given the most media attention, thus generating more hype, and leading to more prestige. classic move by mcgraw hill.
--
in the end of the day, we are screwed. trust me, i'd know; but this downgrade has no actual impact on our cost of financing. if moody's and fitch affirms our debt, but s&p dissents, there's no fear. most debt covenants require a majority of "major credit rating agencies (fitch, moody's, s&p)" to dissent from previously stated ratings in order to have substantive changes. just check out note indentures if you disagree.
have no fear, valuation investing is here
Just wondering, since you say it doesn't affect anything too much. I know interest rates will be about the same etc BUT won't the direct effect be that whatever bonds etc banks own when Moody's etc also change to AA+ will be worth less causing (even though a default on the bonds is very very improbable) major instability on the markets short term?
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
The real problem and only solution to this "crisis" is the American public.
Will they ever "wake up"?
When will they realize the government doesn't work for you or me? Would've thought this was made more than abundantly clear when the hard-working tax-payers of America bailed out the banks while the crooks on wall-street got off scott free.
These people that you "elect" don't give a shit about you. Is it past the time to stand up and take matters into your own hands?...possibly...maybe even too late.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
The real problem and only solution to this "crisis" is the American public.
Will they ever "wake up"?
When will they realize the government doesn't work for you or me? Would've thought this was made more than abundantly clear when the hard-working tax-payers of America bailed out the banks while the crooks on wall-street got off scott free.
These people that you "elect" don't give a shit about you. Is it past the time to stand up and take matters into your own hands?...possibly...maybe even too late.
Things are going to have to get a lot worse before this happens.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
The real problem and only solution to this "crisis" is the American public.
Will they ever "wake up"?
When will they realize the government doesn't work for you or me? Would've thought this was made more than abundantly clear when the hard-working tax-payers of America bailed out the banks while the crooks on wall-street got off scott free.
These people that you "elect" don't give a shit about you. Is it past the time to stand up and take matters into your own hands?...possibly...maybe even too late.
Things are going to have to get a lot worse before this happens.
"The Churchill Postulate: America will do the right thing, but only when it has exhausted every other solution."
It's sad that the shit congress is doing will affect the rest of the world, seeing as voting americans voted for them. As they say, people choose their leaders after all. It sucks for voters that actually ARE informed about politics but may have to suffer because of those that aren't. This is where universal suffrage can be a problem with really no easy solution.
As far as I understand it the spending and budget had largely already been passed by the Democrats and the Republicans in April. So this is money they had already spent. Voting against raising the debt limit just caused a crisis for no reason. They need to worry about the next budget and the amount their spending in the future if they want to bring the deficit and burrowing down.
To me its seems that the republican's where just trying to cause a crisis which they can blame on Obama since he's in power even though they caused it. I apologise if I’m not understanding the situation correctly but that’s what it looks like to me. Worryingly a lot of republican voters will probably buy this and we’ll start hearing ‘well look what happened to the economy whilst Obama was in power’ even though it was mostly the Tea party and Republicans fault.
On August 06 2011 11:10 Korlinni wrote: Capitalism is failing in USA. All I hear is the government trying to make jobs, it's not the governments job to make jobs, it's the companies who are supposed give jobs.
The United States has never had a capitalistic economy, and what we have now is as far from capitalism as we have EVER been in the entire existence of the country. The definition of capitalism is NOT whatever economic system the United States has.
It makes me so sad to see how raising taxes on the people who're already making a million + a year seems like the end of the world to some republicans. Even if that isn't allowed, shouldn't closing tax loopholes to gain back a few hundred million a year be reasonable? One prominent example is general electric. From what I've read, they managed to get billions in tax benefits while being one of the most profitable companies in the US, something that makes no sense to me.
I know that the US dollar is gonna dive come monday which means I'm going down to the states when my CAD is good, getting my shopping and all of my back-to-school done and wish obama and the rest of the USA's elected officials good luck in surviving whatever shitstorm may follow.
Well, ain't that fucking fantastic. At the rate things are going, I can only see two ways out: the country dying or Obama declaring a state of emergency and taking charge.
On August 06 2011 13:47 Acritter wrote: Well, ain't that fucking fantastic. At the rate things are going, I can only see two ways out: the country dying or Obama declaring a state of emergency and taking charge.
AA+ doesn't quite mean the end of the country. Things are bad, but they aren't nation-ending bad. It's not like China is about to send 1,000,000 troops in to pillage the lands, lol. Life will be less comfortable, people will think more, and perhaps someday the future will be better. Sometimes it takes a slap in the face.
On August 06 2011 13:42 Lmui wrote: It makes me so sad to see how raising taxes on the people who're already making a million + a year seems like the end of the world to some republicans. Even if that isn't allowed, shouldn't closing tax loopholes to gain back a few hundred million a year be reasonable? One prominent example is general electric. From what I've read, they managed to get billions in tax benefits while being one of the most profitable companies in the US, something that makes no sense to me.
I know that the US dollar is gonna dive come monday which means I'm going down to the states when my CAD is good, getting my shopping and all of my back-to-school done and wish obama and the rest of the USA's elected officials good luck in surviving whatever shitstorm may follow.
Shoring tax loopholes and tax increases have the potential to generate hundreds of billions, not hundreds of millions (friendly FYI). Combined with smart spending cuts, yeah, it makes sense.
About the dollar diving come Monday: I'm not sure what you mean. Inflation has been a problem for a while, but I haven't heard anything about something dramatic happening on Monday. Share? I'm curious.
On August 06 2011 13:42 Lmui wrote: It makes me so sad to see how raising taxes on the people who're already making a million + a year seems like the end of the world to some republicans. Even if that isn't allowed, shouldn't closing tax loopholes to gain back a few hundred million a year be reasonable? One prominent example is general electric. From what I've read, they managed to get billions in tax benefits while being one of the most profitable companies in the US, something that makes no sense to me.
I know that the US dollar is gonna dive come monday which means I'm going down to the states when my CAD is good, getting my shopping and all of my back-to-school done and wish obama and the rest of the USA's elected officials good luck in surviving whatever shitstorm may follow.
So often I see people complain about "tax loopholes" and yet nobody ever specifies exactly what particular part of the tax law they are referring to. Another example. Which "loophole" are you referring to exactly, so we can discuss intelligently ?
Does anyone trust what the ratings agencies say after the financial crisis in 2008? Rating all those resold subprime mortgages AAA, when they were in fact total crap?
The US credit rating should have been downgraded years ago.
On August 06 2011 13:47 Acritter wrote: Well, ain't that fucking fantastic. At the rate things are going, I can only see two ways out: the country dying or Obama declaring a state of emergency and taking charge.
AA+ doesn't quite mean the end of the country. Things are bad, but they aren't nation-ending bad. It's not like China is about to send 1,000,000 troops in to pillage the lands, lol. Life will be less comfortable, people will think more, and perhaps someday the future will be better. Sometimes it takes a slap in the face.
On August 06 2011 13:42 Lmui wrote: It makes me so sad to see how raising taxes on the people who're already making a million + a year seems like the end of the world to some republicans. Even if that isn't allowed, shouldn't closing tax loopholes to gain back a few hundred million a year be reasonable? One prominent example is general electric. From what I've read, they managed to get billions in tax benefits while being one of the most profitable companies in the US, something that makes no sense to me.
I know that the US dollar is gonna dive come monday which means I'm going down to the states when my CAD is good, getting my shopping and all of my back-to-school done and wish obama and the rest of the USA's elected officials good luck in surviving whatever shitstorm may follow.
Shoring tax loopholes and tax increases have the potential to generate hundreds of billions, not hundreds of millions (friendly FYI). Combined with smart spending cuts, yeah, it makes sense.
About the dollar diving come Monday: I'm not sure what you mean. Inflation has been a problem for a while, but I haven't heard anything about something dramatic happening on Monday. Share? I'm curious.
i believe he means when the stock market opens again. forecast is things are gonna be shitty
On August 06 2011 13:47 Acritter wrote: Well, ain't that fucking fantastic. At the rate things are going, I can only see two ways out: the country dying or Obama declaring a state of emergency and taking charge.
Declare a state of emergency and have the president take charge? Algeria is not revolting, and America is not France. It doesn't work that way here.
Facts matter. People blaming Obama for this have a very very short memory.
What an interesting chart. You list policy changes, but seeing as Obama comes after Bush, most of Obama's budget is simply Bush's + His trillion plus added on top. Of course he could have cut stuff from what Bush did, but clearly Bush didn't spend enough. That simply lists changes, not actual deficits ran on a year to year basis. Bush made 5 trillion in debt in 8 years, Obama did that in 2.5 years, who is the fiscal conservative??? Neither, but thanks for the very biased and misleading poll, it is what people love on TL, whatever supports their stupid views.
On August 06 2011 14:02 ControlMonkey wrote: Does anyone trust what the ratings agencies say after the financial crisis in 2008? Rating all those resold subprime mortgages AAA, when they were in fact total crap?
The US credit rating should have been downgraded years ago.
Again as I mentioned before, it wasn't those agencies it was another US government agency bundling and rating the subprime loans who did that. The credability of Moody's etc is not bad and it's a hella lote more believeable it's AA+ negative outlook than AAA.
I consider myself an economic conservertive. But God I hate Republicans when it comes to econmic policy. They promote this false advertising that we can somehow balance the budget by eliminating "wasteful spending"
What they don't talk about is that the federal governments income was $2,161B last year. Social Security, Medicare, Medicaid, Defense, and Interest payments cost over $2,400B by themselves.
So even if we kill all of the following: the department of education, the department of homeland security, the department of veteran affairs, the entire federal court system, the white house, congress, food stamps, farm subsidies, foreign aid, nasa, the epa, the fdc, the fec, and the postal service...
...we'd still be in deficit.
Raising taxes is the logical thing to do. Tax rates in the US are 10% lower than most other developed countries. Just a 5% increase in tax rates across the board would balance the deficit without any cuts whatsoever.
Sure it sucks to raise taxes in a recession, but so does cutting social security/healthcare/defense. Not even tea party politicians are stupid enough to publically support cutting those areas of spending. But they'll certainly continue to whine about the deficit in order to score political points.
What's so silly about this situation is that financial markets and credit institutions are not worried about the U.S. having any actual issues paying of their debt/interest rates if they wanted to.
On August 06 2011 13:47 Acritter wrote: Well, ain't that fucking fantastic. At the rate things are going, I can only see two ways out: the country dying or Obama declaring a state of emergency and taking charge.
Declare a state of emergency and have the president take charge? Algeria is not revolting, and America is not France. It doesn't work that way here.
I agree with you mindcrime. While this obviously isn't an ideal situation, it's a FAR cry from the doom and gloom everyone's harping on about. We're hardly all going to die in a fire if Obama doesn't declare marshal law.
On another note, the markets are SURE to take another beating come monday...I work at an investment bank, it just means lots and lots of really long hours ahead for me
Edit:
On August 06 2011 14:09 RoboBob wrote: Sure it sucks to raise taxes in a recession, but so does cutting social security/healthcare/defense. Not even tea party politicians are stupid enough to publically support cutting those areas of spending. But they'll certainly continue to whine about the deficit in order to score political points.
I feel like that's exactly what the tea party wants to do though. I feel like they think they're "taking back washington" by being extremely, EXTREMELY uncompromising on a lot of issues that, frankly, need to be compromised on.
I, personally, am becoming more and more frustrated with how hard line they're all going. The reason we have elected officials is not to bend to the whim and fancy of the public, but to make more educated and informed decisions than the public. That's why we live in a republic and not a direct democracy.
So I know this is a serious matter and all, and it's dumb to get obsessed with the details of the terminology, but freaking out over being assigned an "AA+" rating just sounds so silly. It'd be like flipping tables over being demoted from "Super-Duper Fantastically Excellent" to just "Fantastically Excellent"
On August 06 2011 14:10 Popss wrote: What's so silly about this situation is that financial markets and credit institutions are not worried about the U.S. having any actual issues paying of their debt/interest rates if they wanted to.
They're just worried they might not want to ^^
Can you blame them? Regarding money USA doesn't even seem to give a damn about their own economy and well being. Why should they treat companies, constitutions, trade outside the country any different?
On August 06 2011 09:49 Klogon wrote: We need to make sure that the politicians who stalled for bullshit political reasons all need to never step a foot in Washington again. The level of political gaming during such a crucial time was just absolutely unacceptable. Gosh, another blow to economy after the turmoil today/yesterday.
It doesn't matter which politicians it is/was. They're all corrupt or will be corrupted. They line their pockets with US dollars. Now, perhaps when they fuckover US citizens they might need to take in Euros or whatever the Chinese currency is. Either way even if there is ONE person looking out for us in Congress there are still 99 to vote against them. Fucking shame really that the best run government can't ever last. The selfless person running the whole show, he who can look objectively at anything and decide which side is more worth it to the people. Not the person who can look to each side for a paycheck. Fuck em all.
Also people really need to understand that economic scholars talking about economic policy is pretty much the same as NFL coaches talking about their coaching philosophy.
So even if you've won the Superbowl or a Nobel Price theres still gonna be people who've done the same that'll have fundamental issues with your approach to coaching a team or solving the economy.
Point is you can't say "Oh but economist XX said YY" and take it as some kind of truth set in stone because thats not how it works.
Facts matter. People blaming Obama for this have a very very short memory.
What an interesting chart. You list policy changes, but seeing as Obama comes after Bush, most of Obama's budget is simply Bush's + His trillion plus added on top. Of course he could have cut stuff from what Bush did, but clearly Bush didn't spend enough. That simply lists changes, not actual deficits ran on a year to year basis. Bush made 5 trillion in debt in 8 years, Obama did that in 2.5 years, who is the fiscal conservative??? Neither, but thanks for the very biased and misleading poll, it is what people love on TL, whatever supports their stupid views.
Do you know the difference between mandatory and discretionary spending? Because that's quantified on that graph.
Yes, Obama has been in power for less time than Bush. But he's also dealing with a recession that has depressed already low revenues to a point not seen since the administration that desegregated the military (yea that was a long time ago).
On August 06 2011 14:02 ControlMonkey wrote: Does anyone trust what the ratings agencies say after the financial crisis in 2008? Rating all those resold subprime mortgages AAA, when they were in fact total crap?
The US credit rating should have been downgraded years ago.
Again as I mentioned before, it wasn't those agencies it was another US government agency bundling and rating the subprime loans who did that. The credability of Moody's etc is not bad and it's a hella lote more believeable it's AA+ negative outlook than AAA.
If you are talking about Freddy Mac/Fanny May, my understanding is that they bought and passed on the mortgages as securities to investors. They passed them on with the implicit backing of the US government, as they were government sponsored entities (GSE).The large banks also securitised mortgages and on-sold them. However, I believe that S&P, Moody's etc did the ratings for those securities, not the GSEs.
If you can remember the actual name of this government ratings agency, let me know, i'd love to read about it.
Facts matter. People blaming Obama for this have a very very short memory.
What an interesting chart. You list policy changes, but seeing as Obama comes after Bush, most of Obama's budget is simply Bush's + His trillion plus added on top. Of course he could have cut stuff from what Bush did, but clearly Bush didn't spend enough. That simply lists changes, not actual deficits ran on a year to year basis. Bush made 5 trillion in debt in 8 years, Obama did that in 2.5 years, who is the fiscal conservative??? Neither, but thanks for the very biased and misleading poll, it is what people love on TL, whatever supports their stupid views.
Do you know the difference between mandatory and discretionary spending? Because that's quantified on that graph.
Yes, Obama has been in power for less time than Bush. But he's also dealing with a recession that has depressed already low revenues to a point not seen since the administration that desegregated the military (yea that was a long time ago).
Obama excuses. Thats all he has is excuses. His trillion dollar stimulus means he is responsible for the current debt situation. This next election Obama's only hope is to run the most negative campaign in history. He will use the race card to a level that has never been seen.
Facts matter. People blaming Obama for this have a very very short memory.
What an interesting chart. You list policy changes, but seeing as Obama comes after Bush, most of Obama's budget is simply Bush's + His trillion plus added on top. Of course he could have cut stuff from what Bush did, but clearly Bush didn't spend enough. That simply lists changes, not actual deficits ran on a year to year basis. Bush made 5 trillion in debt in 8 years, Obama did that in 2.5 years, who is the fiscal conservative??? Neither, but thanks for the very biased and misleading poll, it is what people love on TL, whatever supports their stupid views.
Do you know the difference between mandatory and discretionary spending? Because that's quantified on that graph.
Yes, Obama has been in power for less time than Bush. But he's also dealing with a recession that has depressed already low revenues to a point not seen since the administration that desegregated the military (yea that was a long time ago).
Obama excuses. Thats all he has is excuses. His trillion dollar stimulus means he is responsible for the current debt situation. This next election Obama's only hope is to run the most negative campaign in history. He will use the race card to a level that has never been seen.
good to see a good well constructed argument
i find reading this stuff interesting and i'd rather read through debates without having to go through this
Facts matter. People blaming Obama for this have a very very short memory.
What an interesting chart. You list policy changes, but seeing as Obama comes after Bush, most of Obama's budget is simply Bush's + His trillion plus added on top. Of course he could have cut stuff from what Bush did, but clearly Bush didn't spend enough. That simply lists changes, not actual deficits ran on a year to year basis. Bush made 5 trillion in debt in 8 years, Obama did that in 2.5 years, who is the fiscal conservative??? Neither, but thanks for the very biased and misleading poll, it is what people love on TL, whatever supports their stupid views.
Do you know the difference between mandatory and discretionary spending? Because that's quantified on that graph.
Yes, Obama has been in power for less time than Bush. But he's also dealing with a recession that has depressed already low revenues to a point not seen since the administration that desegregated the military (yea that was a long time ago).
Obama excuses. Thats all he has is excuses. His trillion dollar stimulus means he is responsible for the current debt situation. This next election Obama's only hope is to run the most negative campaign in history. He will use the race card to a level that has never been seen.
good to see a good well constructed argument
i find reading this stuff interesting and i'd rather read through debates without having to go through this
Excuse me i was pointing out that the person i quoted was not giving an argument, but an appeal to how hard poor obama has had it without acknowledging his steps to fix it has made things worse. You have just become a hypocrite with your trolling of me.
Facts matter. People blaming Obama for this have a very very short memory.
What an interesting chart. You list policy changes, but seeing as Obama comes after Bush, most of Obama's budget is simply Bush's + His trillion plus added on top. Of course he could have cut stuff from what Bush did, but clearly Bush didn't spend enough. That simply lists changes, not actual deficits ran on a year to year basis. Bush made 5 trillion in debt in 8 years, Obama did that in 2.5 years, who is the fiscal conservative??? Neither, but thanks for the very biased and misleading poll, it is what people love on TL, whatever supports their stupid views.
Do you know the difference between mandatory and discretionary spending? Because that's quantified on that graph.
Yes, Obama has been in power for less time than Bush. But he's also dealing with a recession that has depressed already low revenues to a point not seen since the administration that desegregated the military (yea that was a long time ago).
Obama excuses. Thats all he has is excuses. His trillion dollar stimulus means he is responsible for the current debt situation. This next election Obama's only hope is to run the most negative campaign in history. He will use the race card to a level that has never been seen.
good to see a good well constructed argument
i find reading this stuff interesting and i'd rather read through debates without having to go through this
Excuse me i was pointing out that the person i quoted was not giving an argument, but an appeal to how hard poor obama has had it without acknowledging his steps to fix it has made things worse. You have just become a hypocrite with your trolling of me.
It's amazing to me that people still don't realize that the entire problem is the ideological gridlock. S&P has made it very clear that part of their determination was the political mess in Washington. These guys are grandstanding, pointing fingers. Everyone wants to make the other side look horrible instead of actually solving these problems. This isn't a game anymore. Go on drinking that kool aid, blaming the other side of the aisle for everything that happens, and watch this country get run into the ground.
On August 06 2011 15:09 {CC}StealthBlue wrote: We refuse to ACTUALLY deal with entitlements. We refuse to raise revenues. Our leaders are self-serving jackasses. We don't deserve AAA.
Completely agree. The country needs to make cuts and increase revenue. Plain and simple.
Bring offshore funds from corporations back into the country Make small cuts across the board (very small cuts) Reduce military forces abroad Make small increases in taxes Fix tax loopholes Social security reform (why hasnt this happened yet?) Reduce spending on social programs by cutting costs (invest in more digital so you use less physical, be more efficient, just improve things being run) Manage employee's of government run organizations (ie: make sure that everything is being run efficiently and well... from what i hear from some people that have had government jobs is that there are a lot of lazy people working for the govt)
The only reason there was a "crisis" was because the budget votes and debt ceiling votes were pressed up right against each other which was the entire point of the Democrats, so they could demagogue the Tea Party, and look how many people here fell for it.
If you leave your wallet lying around and someone takes the opportunity to steal it, I think you'd still blame the thief.
A well deserved downgrade, given that the US government is current spending ~$1.40 for every dollar in revenue it takes in and trillion dollar plus deficits are projected for the forseeable future, with the total public sector debt levels to hit crisis levels in just 10 years even under fairly rosy projections given the growing debt problems in the euro area. Without significant deficit reductions, the US will basically be the next Greece in about a decade.
The ratings agencies track record is one of consistently overrating bad debt and taking too long to downgrade debt with worsening outlooks; downgrades of US debt are well past due.
S&P would have downgraded U.S Debt had Obama's plan passed as well. The only thing that would have averted it was somthing like Bowles-Simpson or the Ryan Budget passing. Regardless, S&P is full of idiots and U.S. T-Bill debt is still the most reliable stuff in the world, and everyone knows it based on our interest rates.
But nothing has changed; these ratings are utterly meaningless. If they couldn't spot the problem in the first place why are investors going to care now they've suddenly caught on? It didn't change much in Japan and it won't change much in the USA.
On August 06 2011 11:11 jdseemoreglass wrote: lol all the alarm bells are starting to go off and all the sheeple are still standing on their respective sidelines pointing fingers and blaming the other side. It's left vs. right, red vs. blue, all over again.
More and more I am starting to realize that the problem in many nations is actually their flawed representative/democratic forms of government. The average individual is simply not educated nor intelligent enough to run a country, nor to elect representatives that are capable of running a country. Every election is the pseudo-intellectuals' version of an "American Idol" style popularity contest, while the brain-dead herd animals will vote left/right even if it was a turd sandwich running for their party.
Don't you all realize it doesn't matter wtf each party did in the whole ridiculous "debt deal"? Don't you realize that we simply cannot cut enough, nor raise taxes enough, to truly get ourselves out of the hole we are in? We need a fiscal adjustment equal to approximately 15% of GDP. That is quite simply NOT GOING TO HAPPEN, no matter who is in office or who "compromises" with the other side.
The fact that we can go through this whole debt debate and end up cutting just enough to ensure that we still increase our budget next year is enough to reveal what a whole charade this political system is. We never "cut" anything, we simply reduced the rate of increase in our debt.
This is just a waste of time. People don't look at the actual numbers involved in this situation. Everyone is still stuck in "us vs. them" fantasy land.
Out of all the posts that I have read in this thread, yours is the only one that actually made sense in my eyes. Thanks. We all just have to brace for the impact that is going to come in time.
On August 06 2011 13:42 Lmui wrote: It makes me so sad to see how raising taxes on the people who're already making a million + a year seems like the end of the world to some republicans. Even if that isn't allowed, shouldn't closing tax loopholes to gain back a few hundred million a year be reasonable? One prominent example is general electric. From what I've read, they managed to get billions in tax benefits while being one of the most profitable companies in the US, something that makes no sense to me.
I know that the US dollar is gonna dive come monday which means I'm going down to the states when my CAD is good, getting my shopping and all of my back-to-school done and wish obama and the rest of the USA's elected officials good luck in surviving whatever shitstorm may follow.
So often I see people complain about "tax loopholes" and yet nobody ever specifies exactly what particular part of the tax law they are referring to. Another example. Which "loophole" are you referring to exactly, so we can discuss intelligently ?
Went out for a bit so I didn't have a chance to reply earlier but, just a few links to websites that're reasonably well known (I don't know what bias there is in them, you'll have to look at it for yourself) I just googled "tax loopholes rich america" and got a good amount of results.
What I got out of it was material goods for the rich and corporations that have no choice but to work within America (private jets, gas/oil companies) get massive tax credits, and the extra hundred or so billion from closing said holes would be a huge boon to the government in this time of need.
One other thing was, didn't general electric make an absurd profit (around 6 billion?) while not paying a cent in taxes due to tax credits? What gives?
EDIT::
What I was referring to by I'm going down to US on monday is mainly that bad news in the US economy generally sends the canadian dollar upwards, which means I exchange some CAD for USD, go down and have myself a nice shopping spree.
Let's assume I just had my birthday, turned 18 so I can vote. I vaguely understand that our country is in trouble concerning the economy. How am I supposed to understand which politicians are promoting solid ideas that will fix our situation? How can I vote for a president when I don't understand global economics?
On August 06 2011 11:58 iPlaY.NettleS wrote: Lets face facts , the fiat USD is dead , hence the entire world fiat monetary system will collapse with it as faith in paper collapses.
Time to return to a gold/silver backed currency.
All currency is fiat currency. With a "gold standard" the government still just intervenes by changing the foreign currency reserves (and they HAVE to, that's why it can stay at a certain amount of gold per dollar). Have you even looked up why we went off the gold standard? Europe basically used it to attack the US like economic terrorists and we almost ran out of gold.
I was under the impression it was more to do with the USA not being able to afford the Vietnam war. Good thing we don't still have a gold backed USD then , all those wars the US is involved in these days are going gangbusters for you guys right??
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Sucks for the US but it was to be expected. A lot fo you got it right, though, vote those incompetent idiots who brought you into this mess out of office!
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
Because that decreases the deficit by 3B, 4B cut with 1B tax decreases it by 5B...
There's no real point in trying to place the blame on any one person or party. I can see why a lot of people put a lot of blame on the Tea Party, but it's not as if they encompass the entire GOP. The compromise we saw should have come weeks or even months earlier, but both sides decided to cause drama.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
4 trillion in spending cuts plus additional 1 trillion in tax revenue. That's a total of 5 trillion saved, twice as much as the 2.4 trillion from the deal.
All I can really tell is that the next election year is going to be pretty interesting. It's hard to understand what this all means for normal people like us, but it just goes to show how incompetent our current leaders are lol.
I believe this downgrade reflects reality but I believe the USA can turn things around. With the great entrepreneurial spirit your citizens have this downgrade will only last months.
A few tips to bring in cash to the government: privatize/sell out the public postal system (United States Postal Service) and Amtrak.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
I think your problem was just pinpointed, America
Now let's all get together and have a countries with massive deficits party, mine is invited too sadly!
Politics in the US are such a mess... which is scary because Europe seems to always follow their trends a few years later.
But seriously, some of the most powerful men in this country are also some of their stupidest, most mediocre people. These people are supposed to be the elite...
Here comes the second civil war! Republicans vs Democrats! For every second they waste things are getting worse, if the Democrats try and do anything then they will fall out of favour and Republicans will take over. Then the Republicans will just brush the problems into a corner again and act like the US is still the greatest nation in the world.
On August 06 2011 17:54 Hakker wrote: All I can really tell is that the next election year is going to be pretty interesting. It's hard to understand what this all means for normal people like us, but it just goes to show how incompetent our current leaders are lol.
2012 election won't change much.
The same idiots who voted in the current congress are going to be voting again. They may pick different candidates, but the current political environment fosters stupid leaders.
Wow this is such a big deal. I'm wondering where investors will go and everything seems shaky. Sovereign bonds are shaky, stocks will be shaken by this news too, real estate people still seem to not trust it after the 2008 crash. Seems like gold or the CHF is the only semi-decent investment to at least preserve your money.
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
Because 4+1 = 5 whereas 3+0 = 3. 5 > 3.
If you're a member of the American electorate then I think I'm beginning to understand why the credit rating is getting downgraded.
In my eyes (an outsider to USA), your whole country seems to be in a deadlock. Democrats are blaming the republicans and republicans are blaming the democrats.
Who cares who is wrong and who is right, what you need to do is work out a solution. You can assign the blame later, in the next elections.
Republicans control the house, and democrats control the senate. If you can't end the blame game and start doing something, then you will stay in a deadlock for a long time.
On August 06 2011 18:14 KwarK wrote: If you're a member of the American electorate then I think I'm beginning to understand why the credit rating is getting downgraded.
We can only blame ourselves for electing these imbeciles. I really hope fellow voters learn their lessons and open their eyes to who they are electing, and actually think for themselves. Maybe I am expecting too much....
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
Because 4+1 = 5 whereas 3+0 = 3. 5 > 3.
If you're a member of the American electorate then I think I'm beginning to understand why the credit rating is getting downgraded.
Change "electorate" to "Congress" and it starts to become even more clear because I can assure you that there are many in Congress right now that did not fully grasp this idea.
On August 06 2011 18:11 sekritzzz wrote: Wow this is such a big deal. I'm wondering where investors will go and everything seems shaky. Sovereign bonds are shaky, stocks will be shaken by this news too, real estate people still seem to not trust it after the 2008 crash. Seems like gold or the CHF is the only semi-decent investment to at least preserve your money.
This downrating has been coming for quite a while now though.. the rating bureaus warned weeks ago that this would happen. So I doubt the stock markets will go down that rapidly since a lot of it is probably already taken into account.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
I think your problem was just pinpointed, America
Now let's all get together and have a countries with massive deficits party, mine is invited too sadly!
By the problem being pinpointed, are you referring to the principle of the limited role of the federal government and therefore limited income taxes ? I can't speak for other countries, but in the U.S., limited government and limited taxation is kind of a founding principle.
i read in the OP that interest rates for the USA will increase. But whats the main problem of a decreased rating? Like why is it important to have a higher rating?
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
I think your problem was just pinpointed, America
Now let's all get together and have a countries with massive deficits party, mine is invited too sadly!
By the problem being pinpointed, are you referring to the principle of the limited role of the federal government and therefore limited income taxes ? I can't speak for other countries, but in the U.S., limited government and limited taxation is kind of a founding principle.
Oh boy....
He's referring to the poster's inability to do basic math.
4 trillion in cuts + 1 trillion in additional revenue(taxes/whatever) = 5 trillion in deficit reduction. The guy said 3 trillion in cuts instead of 5 in cuts because he subtracted the increased revenue from the proposed cuts which is lol-worthy.
He's implying Americans can't do basic math and probably referring to the same thing with Congress.
On August 06 2011 09:49 Klogon wrote: We need to make sure that the politicians who stalled for bullshit political reasons all need to never step a foot in Washington again. The level of political gaming during such a crucial time was just absolutely unacceptable. Gosh, another blow to economy after the turmoil today/yesterday.
yep! as non american i followed this and to be honest it was like some fucking kids, who just wanted to shit on barack obama i dont know how such people got such a position in the goverment to be honest, but i hope in the next election the folks will not vote for them!
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
And yet they own how much capital? I look at it this way; play Final Fantasy VII. You can level up materia and sell them for a huge profit if you pick the right one. Let's go with the "All" materia. It sells for 1.7 million gil at max level. Sell ten of these, and you have 17 million gil. But honestly, how much gil do you need in the damn game? Half of that? The extra is just laying around. Why not increase their taxes to where that money is actually used, instead of the money being "invested" into "jobs" that these richest in America "create" while actually cutting thousands upon thousands of jobs and giving themselves millions in bonuses because they "earned it".
This happened because S&P saw what the American people is starting to see. When you've got Boehner and the rest of the sane (or as sane as you can get in Congress) Republicans being held by the balls by the Tea Party freshmen into demanding unrealistic cuts without any new taxes it's absurd. Why not raise taxes to pre-Bush levels? How about pre-Clinton? All of those would be lower than when Reagan was president.
I leave the thread with this. I worked for two months the summer of 2010 (I would have this summer, but no one would hire me in this marvelous Reaganomics economy) for a factory. I made around 2000 dollars before taxes. In federal and state and local tax I lost around 400 dollars before the temp agency took their cut. Around tax refund season I got 132 dollars back. So I paid a good 250 dollars in taxes. Okay, whatever. I accept that. I know it's not much compared to what people with actual, regular jobs pay.
But really, if I pay that much, won't the bigger corporations pay more? As in, more than 250 dollars in taxes?
GE, a multi-national and multi-billion dollar company, reported 14.2 billion dollars in international revenue and 5.1 billion dollars in revenue that occurred here in the United States. How much did they pay in taxes? Zero dollars. 0. Null. Not even a cent. Not only that, but the United States paid them 3.2 billion in tax refunds. They paid less taxes than I did, and they got a tax refund how many times higher than I did? They paid fewer taxes than every middle-class and poor person in the United States.
How is that even fair. How. And when the Democrats want to close enough tax loopholes to help make up a trillion dollars in revenue (a move that, if you read the New York Times article I link below, Reagan did when he found out back during his time in office that GE and other huge corporations were dodging taxes by loopholes and other means) the Tea Party holds everyone up with a bunch of "Well then fine, let's let America default." And when they're told that might crash the American economy, and along with it the world's economy, they shrug. They want to start a global great depression because a few millionaires and billionaires might have to actually pay the taxes they were supposed to pay when the tax code was written up.
Closing tax loopholes isn't raising taxes. It's stopping the cheats from cheating us anymore. But, you know, they "create jobs" with that money. Tell that to the numerous unemployed in this country. Especially explain that to the numerous "99ers," the people who have gone over their alloted 99 weeks on unemployment benefits. Because they're just lazy assholes who want to starve. That sounds about right.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
Whatever it is, it's not enough since it's the rich people that gotten you into this in the first place.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
And yet they own how much capital? I look at it this way; play Final Fantasy VII. You can level up materia and sell them for a huge profit if you pick the right one. Let's go with the "All" materia. It sells for 1.7 million gil at max level. Sell ten of these, and you have 17 million gil. But honestly, how much gil do you need in the damn game? Half of that? The extra is just laying around. Why not increase their taxes to where that money is actually used, instead of the money being "invested" into "jobs" that these richest in America "create" while actually cutting thousands upon thousands of jobs and giving themselves millions in bonuses because they "earned it".
This happened because S&P saw what the American people is starting to see. When you've got Boehner and the rest of the sane (or as sane as you can get in Congress) Republicans being held by the balls by the Tea Party freshmen into demanding unrealistic cuts without any new taxes it's absurd. Why not raise taxes to pre-Bush levels? How about pre-Clinton? All of those would be lower than when Reagan was president.
I leave the thread with this. I worked for two months the summer of 2010 (I would have this summer, but no one would hire me in this marvelous Reaganomics economy) for a factory. I made around 2000 dollars before taxes. In federal and state and local tax I lost around 400 dollars before the temp agency took their cut. Around tax refund season I got 132 dollars back. So I paid a good 250 dollars in taxes. Okay, whatever. I accept that. I know it's not much compared to what people with actual, regular jobs pay.
But really, if I pay that much, won't the bigger corporations pay more? As in, more than 250 dollars in taxes?
GE, a multi-national and multi-billion dollar company, reported 14.2 billion dollars in international revenue and 5.1 billion dollars in revenue that occurred here in the United States. How much did they pay in taxes? Zero dollars. 0. Null. Not even a cent. Not only that, but the United States paid them 3.2 billion in tax refunds. They paid less taxes than I did, and they got a tax refund how many times higher than I did? They paid fewer taxes than every middle-class and poor person in the United States.
How is that even fair. How. And when the Democrats want to close enough tax loopholes to help make up a trillion dollars in revenue (a move that, if you read the New York Times article I link below, Reagan did when he found out back during his time in office that GE and other huge corporations were dodging taxes by loopholes and other means) the Tea Party holds everyone up with a bunch of "Well then fine, let's let America default." And when they're told that might crash the American economy, and along with it the world's economy, they shrug. They want to start a global great depression because a few millionaires and billionaires might have to actually pay the taxes they were supposed to pay when the tax code was written up.
Closing tax loopholes isn't raising taxes. It's stopping the cheats from cheating us anymore. But, you know, they "create jobs" with that money. Tell that to the numerous unemployed in this country. Especially explain that to the numerous "99ers," the people who have gone over their alloted 99 weeks on unemployment benefits. Because they're just lazy assholes who want to starve. That sounds about right.
“In a rational system, a corporation’s tax department would be there to make sure a company complied with the law,” said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. “But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative.”
That's a very strange look on corporate goals actually. Maximization of profits and minimization of expenses are main goals of any business and they will use every legal way to reach these goals. Blaming corporations for that is ridiculous.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
And yet they own how much capital? I look at it this way; play Final Fantasy VII. You can level up materia and sell them for a huge profit if you pick the right one. Let's go with the "All" materia. It sells for 1.7 million gil at max level. Sell ten of these, and you have 17 million gil. But honestly, how much gil do you need in the damn game? Half of that? The extra is just laying around. Why not increase their taxes to where that money is actually used, instead of the money being "invested" into "jobs" that these richest in America "create" while actually cutting thousands upon thousands of jobs and giving themselves millions in bonuses because they "earned it".
This happened because S&P saw what the American people is starting to see. When you've got Boehner and the rest of the sane (or as sane as you can get in Congress) Republicans being held by the balls by the Tea Party freshmen into demanding unrealistic cuts without any new taxes it's absurd. Why not raise taxes to pre-Bush levels? How about pre-Clinton? All of those would be lower than when Reagan was president.
I leave the thread with this. I worked for two months the summer of 2010 (I would have this summer, but no one would hire me in this marvelous Reaganomics economy) for a factory. I made around 2000 dollars before taxes. In federal and state and local tax I lost around 400 dollars before the temp agency took their cut. Around tax refund season I got 132 dollars back. So I paid a good 250 dollars in taxes. Okay, whatever. I accept that. I know it's not much compared to what people with actual, regular jobs pay.
But really, if I pay that much, won't the bigger corporations pay more? As in, more than 250 dollars in taxes?
GE, a multi-national and multi-billion dollar company, reported 14.2 billion dollars in international revenue and 5.1 billion dollars in revenue that occurred here in the United States. How much did they pay in taxes? Zero dollars. 0. Null. Not even a cent. Not only that, but the United States paid them 3.2 billion in tax refunds. They paid less taxes than I did, and they got a tax refund how many times higher than I did? They paid fewer taxes than every middle-class and poor person in the United States.
How is that even fair. How. And when the Democrats want to close enough tax loopholes to help make up a trillion dollars in revenue (a move that, if you read the New York Times article I link below, Reagan did when he found out back during his time in office that GE and other huge corporations were dodging taxes by loopholes and other means) the Tea Party holds everyone up with a bunch of "Well then fine, let's let America default." And when they're told that might crash the American economy, and along with it the world's economy, they shrug. They want to start a global great depression because a few millionaires and billionaires might have to actually pay the taxes they were supposed to pay when the tax code was written up.
Closing tax loopholes isn't raising taxes. It's stopping the cheats from cheating us anymore. But, you know, they "create jobs" with that money. Tell that to the numerous unemployed in this country. Especially explain that to the numerous "99ers," the people who have gone over their alloted 99 weeks on unemployment benefits. Because they're just lazy assholes who want to starve. That sounds about right.
“In a rational system, a corporation’s tax department would be there to make sure a company complied with the law,” said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. “But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative.”
That's a very strange look on corporate goals actually. Maximization of profits and minimization of expenses are main goals of any business and they will use every legal way to reach these goals. Blaming corporations for that is ridiculous.
It's actually not just their goal, but their obligation to their shareholders to maximize profits. However, I think the point the author was trying to make is that those loopholes shouldn't exist. GE shouldn't get to pay no taxes just because they're good at manipulating the system. I'm not mad at them for that, I would want to maximize profits too if I were in their shoes, but I think the system should be fixed so that it isn't possible anymore. Now, the amount of money corporations pour into lobbying to make sure these tax cuts and loopholes stick around is something to be upset about, but you could also paint that as "maximizing profits" I suppose.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
And yet they own how much capital? I look at it this way; play Final Fantasy VII. You can level up materia and sell them for a huge profit if you pick the right one. Let's go with the "All" materia. It sells for 1.7 million gil at max level. Sell ten of these, and you have 17 million gil. But honestly, how much gil do you need in the damn game? Half of that? The extra is just laying around. Why not increase their taxes to where that money is actually used, instead of the money being "invested" into "jobs" that these richest in America "create" while actually cutting thousands upon thousands of jobs and giving themselves millions in bonuses because they "earned it".
This happened because S&P saw what the American people is starting to see. When you've got Boehner and the rest of the sane (or as sane as you can get in Congress) Republicans being held by the balls by the Tea Party freshmen into demanding unrealistic cuts without any new taxes it's absurd. Why not raise taxes to pre-Bush levels? How about pre-Clinton? All of those would be lower than when Reagan was president.
I leave the thread with this. I worked for two months the summer of 2010 (I would have this summer, but no one would hire me in this marvelous Reaganomics economy) for a factory. I made around 2000 dollars before taxes. In federal and state and local tax I lost around 400 dollars before the temp agency took their cut. Around tax refund season I got 132 dollars back. So I paid a good 250 dollars in taxes. Okay, whatever. I accept that. I know it's not much compared to what people with actual, regular jobs pay.
But really, if I pay that much, won't the bigger corporations pay more? As in, more than 250 dollars in taxes?
GE, a multi-national and multi-billion dollar company, reported 14.2 billion dollars in international revenue and 5.1 billion dollars in revenue that occurred here in the United States. How much did they pay in taxes? Zero dollars. 0. Null. Not even a cent. Not only that, but the United States paid them 3.2 billion in tax refunds. They paid less taxes than I did, and they got a tax refund how many times higher than I did? They paid fewer taxes than every middle-class and poor person in the United States.
How is that even fair. How. And when the Democrats want to close enough tax loopholes to help make up a trillion dollars in revenue (a move that, if you read the New York Times article I link below, Reagan did when he found out back during his time in office that GE and other huge corporations were dodging taxes by loopholes and other means) the Tea Party holds everyone up with a bunch of "Well then fine, let's let America default." And when they're told that might crash the American economy, and along with it the world's economy, they shrug. They want to start a global great depression because a few millionaires and billionaires might have to actually pay the taxes they were supposed to pay when the tax code was written up.
Closing tax loopholes isn't raising taxes. It's stopping the cheats from cheating us anymore. But, you know, they "create jobs" with that money. Tell that to the numerous unemployed in this country. Especially explain that to the numerous "99ers," the people who have gone over their alloted 99 weeks on unemployment benefits. Because they're just lazy assholes who want to starve. That sounds about right.
“In a rational system, a corporation’s tax department would be there to make sure a company complied with the law,” said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. “But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative.”
That's a very strange look on corporate goals actually. Maximization of profits and minimization of expenses are main goals of any business and they will use every legal way to reach these goals. Blaming corporations for that is ridiculous.
It's actually not just their goal, but their obligation to their shareholders to maximize profits. However, I think the point the author was trying to make is that those loopholes shouldn't exist. GE shouldn't get to pay no taxes just because they're good at manipulating the system. I'm not mad at them for that, I would want to maximize profits too if I were in their shoes, but I think the system should be fixed so that it isn't possible anymore. Now, the amount of money corporations pour into lobbying to make sure these tax cuts and loopholes stick around is something to be upset about, but you could also paint that as "maximizing profits" I suppose.
Funny, I guess in effect that just means corporate entities have larger power rather than this mythical "big government" everyone was so afraid of.
I wonder whether corporations driven only by profit would make better decisions for the general population than democratically selected representatives..
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
I would be interested in the source for this statement.
On August 06 2011 20:09 hifriend wrote: Funny, I guess in effect that just means corporate entities have larger power rather than this mythical "big government" everyone was so afraid of.
I wonder whether corporations driven only by profit would make better decisions for the general population than democratically selected representatives..
There's nothing inherently wrong with corporations being profit-driven. The issue is that the tax loopholes exist.
To use a Starcraft analogy, I wouldn't blame players for using an OP strategy. Rather, I'd blame Blizzard for not balancing properly and hope for a patch.
Yet somehow, in all this talk about the debt problem, 'patching' the corporate tax loopholes isn't even on the table.
What's funny is the typical American reaction to this.
"We own the rest of the world blah blah blah"
"Credit rating agencies are stupid"
"China kills baby girls"
The thing is the rest of the world isn't so easily misdirected as you guys are. Time to face up your mistakes and be prepared to be homeless. No one is going to bail you out, no one cares about you, you brought this on yourselves and damn you fucking deserve it.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
I would be interested in the source for this statement.
Found some info (google is your friend ^^)... Appears that the top 1% has about a third of the wealth, the top 5% (including the top 1%) has about 2/3 of the wealth and the bottom 95% has about 1/3 also. So if each person has the pay the same tax%, then it is very logical that the top 1% pays the same or more than the bottom 95%... As they both have the same share in the wealth.
I'd say your statement is a very clever spin on the immense wealth inequality in the US...
On August 06 2011 20:26 Necrosjef_ wrote: What's funny is the typical American reaction to this.
"We own the rest of the world blah blah blah"
"Credit rating agencies are stupid"
"China kills baby girls"
The thing is the rest of the world isn't so easily misdirected as you guys are. Time to face up your mistakes and be prepared to be homeless. No one is going to bail you out, no one cares about you, you brought this on yourselves and damn you fucking deserve it.
Credit rating agencies are stupid. Well, maybe not stupid but intentionally misleading. They've known for a long time that the US credit rating shouldn't be AAA.
Good for the stock markets to come falling down, because we need more strength in currency markets which have been taking a bad beating with the inflation recently
It was bound to happen, but given how a lot of countries are still just as fucked, if not more, than the US, investors will still be drawn to them. It'll certainly affect them, but not too much imo. It just sounds like a huge, cataclysmic news because it's unprecedented.
expected and fair but i think AA+ is still to good sry but if they rate greek and other countrys that bad then usa is like A or A+ max
anyways bad for world economy but expected after this republican desaster "we not allow more money" thing ... say thanks to the tea party !!!
ps: also isnt true that the rich pay 95% of the taxes they nearly pay enough for their money there is NO rich taxes (republicans not allow it) so the most money is paid by the poors (alot more people) ...
How is that even fair. How. And when the Democrats want to close enough tax loopholes to help make up a trillion dollars in revenue (a move that, if you read the New York Times article I link below, Reagan did when he found out back during his time in office that GE and other huge corporations were dodging taxes by loopholes and other means) the Tea Party holds everyone up with a bunch of "Well then fine, let's let America default." And when they're told that might crash the American economy, and along with it the world's economy, they shrug. They want to start a global great depression because a few millionaires and billionaires might have to actually pay the taxes they were supposed to pay when the tax code was written up.
Please , the US has been on a downward spiral long before the tea party came to be. In fact if you recall it was Clinton who was in power when Glass-Steagal was repealed back in 1999 , that is where the majority of the current economic crisis stems from.
On August 06 2011 20:29 Blix wrote: Found some info (google is your friend ^^)... Appears that the top 1% has about a third of the wealth, the top 5% (including the top 1%) has about 2/3 of the wealth and the bottom 95% has about 1/3 also. So if each person has the pay the same tax%, then it is very logical that the top 1% pays the same or more than the bottom 95%... As they both have the same share in the wealth.
I'd say your statement is a very clever spin on the immense wealth inequality in the US...
I have touched on this before , a large part of the issue with increasing income inequality in the USA is due to offshoring of factories and now white collar jobs to cheap labour locations like China , India & Mexico.
People didn't want to listen though , sad how so many people still think offshoring is somehow good for the US economy.
The problem in the USA is, in essence, that the rich are too powerful and completely dominate the political process. Just look at Citizens United v. Federal Election Commission which is just insane.
On August 06 2011 20:26 Necrosjef_ wrote: What's funny is the typical American reaction to this.
"We own the rest of the world blah blah blah"
"Credit rating agencies are stupid"
"China kills baby girls"
The thing is the rest of the world isn't so easily misdirected as you guys are. Time to face up your mistakes and be prepared to be homeless. No one is going to bail you out, no one cares about you, you brought this on yourselves and damn you fucking deserve it.
On August 06 2011 21:04 [SuNdae] wrote: If you ask my opinion, the world isn't going to see a day when US manages to pay off that debt, not a chance.
I don't follow this stuff too closely. Has there ever been any real goal of eliminating the debt in the recent past? All I've heard was discussion that involved bringing the budget back to a surplus/bringing the total deficit back to appropriate levels in line with national GDP.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
And yet they own how much capital? I look at it this way; play Final Fantasy VII. You can level up materia and sell them for a huge profit if you pick the right one. Let's go with the "All" materia. It sells for 1.7 million gil at max level. Sell ten of these, and you have 17 million gil. But honestly, how much gil do you need in the damn game? Half of that? The extra is just laying around. Why not increase their taxes to where that money is actually used, instead of the money being "invested" into "jobs" that these richest in America "create" while actually cutting thousands upon thousands of jobs and giving themselves millions in bonuses because they "earned it".
This happened because S&P saw what the American people is starting to see. When you've got Boehner and the rest of the sane (or as sane as you can get in Congress) Republicans being held by the balls by the Tea Party freshmen into demanding unrealistic cuts without any new taxes it's absurd. Why not raise taxes to pre-Bush levels? How about pre-Clinton? All of those would be lower than when Reagan was president.
I leave the thread with this. I worked for two months the summer of 2010 (I would have this summer, but no one would hire me in this marvelous Reaganomics economy) for a factory. I made around 2000 dollars before taxes. In federal and state and local tax I lost around 400 dollars before the temp agency took their cut. Around tax refund season I got 132 dollars back. So I paid a good 250 dollars in taxes. Okay, whatever. I accept that. I know it's not much compared to what people with actual, regular jobs pay.
But really, if I pay that much, won't the bigger corporations pay more? As in, more than 250 dollars in taxes?
GE, a multi-national and multi-billion dollar company, reported 14.2 billion dollars in international revenue and 5.1 billion dollars in revenue that occurred here in the United States. How much did they pay in taxes? Zero dollars. 0. Null. Not even a cent. Not only that, but the United States paid them 3.2 billion in tax refunds. They paid less taxes than I did, and they got a tax refund how many times higher than I did? They paid fewer taxes than every middle-class and poor person in the United States.
How is that even fair. How. And when the Democrats want to close enough tax loopholes to help make up a trillion dollars in revenue (a move that, if you read the New York Times article I link below, Reagan did when he found out back during his time in office that GE and other huge corporations were dodging taxes by loopholes and other means) the Tea Party holds everyone up with a bunch of "Well then fine, let's let America default." And when they're told that might crash the American economy, and along with it the world's economy, they shrug. They want to start a global great depression because a few millionaires and billionaires might have to actually pay the taxes they were supposed to pay when the tax code was written up.
Closing tax loopholes isn't raising taxes. It's stopping the cheats from cheating us anymore. But, you know, they "create jobs" with that money. Tell that to the numerous unemployed in this country. Especially explain that to the numerous "99ers," the people who have gone over their alloted 99 weeks on unemployment benefits. Because they're just lazy assholes who want to starve. That sounds about right.
“In a rational system, a corporation’s tax department would be there to make sure a company complied with the law,” said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. “But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative.”
That's a very strange look on corporate goals actually. Maximization of profits and minimization of expenses are main goals of any business and they will use every legal way to reach these goals. Blaming corporations for that is ridiculous.
I personally disagree with not blaming them for certain actions, the way I see it is that if a person is being an asshole but keeps perfectly to the law, he is still an asshole regardless.
The whole concept of "the rich pay all the taxes in the U.S." is only true when a great many facts are omitted. First of all, look at how we are taxed. I live in Florida so I pay 6% sales tax, also a large chunk of what you pay for gasoline is taxes, many "luxuries" such as cigarettes and alcohol have large taxes on them, I pay 3 separate taxes on my income (Federal income tax, medicare, and social security), any bill my home generates such as electricity, cable, telephone ect., when you look closely there are anywhere from 5 - 15 taxes and charges from the government. Obviously, you can see how many of these taxes would be paid much more by the masses than by wealthy individuals. Many places in the US have state, county, or city taxes on income as well. So if you ignore all of these and only count "federal income tax (not medicare and social security)" than the statement becomes closer to truth. But also remember than many wealthy individuals have armies of tax attorneys, accountants, and can use the huge loopholes on corporate taxes to avoid paying most of their tax liabilities. They are experts at hiding their actual wealth from taxable income. Likewise, the U.S. government has become expert at hiding the amount of taxes the average person pays, by taxing you a little bit, 50 times. I'd bet almost any U.S. citizen you asked would find it impossible to figure out exactly every penny they've paid into the government in the last year.
Basically, it's is a lie and it's been told over and over so people have begun to accept it as truth. Their is a great book I read called "rich dad, poor dad" and it goes into some detail about corporations functions with regards to taxes and the history of income tax in the U.S. But the rich DO NOT pay 90% of the taxes in the U.S. they just have the biggest soapboxes to spew that kind of propaganda.
The huge problem in the U.S. is that corporate interests are running and ruining the country. People want to believe that the people in charge have the same morality as the rest of us, they don't. People want to believe their vote matters, it doesn't. I don't believe in a two party system, where the two parties actively shut down any attempt for new parties to get a foothold, that we have any real choice. We just shuffle the same shit around every few years and we still end up with shit. Think that I'm crazy? Take a look at this http://projects.propublica.org/bailout/list This is just the tip of the ice burg.
The whole mortgage crisis, take some facts into consideration. First of all the federal reserve banks board or directors is made up by top people from central banks in the U.S. The "FED" as it's often referred to IS NOT owned or managed by the federal government. So these private individuals control the money flow and base interest rates in the U.S. The banks appraise the value of houses so they have control over this variable in the market as well. The banks are also the same people who decided to give out bad loans. Can't be approved for a 120,000$ loan? No problem, well just give you two 60,000$ loans. My point is the major banks in the U.S. control most of the variables in the U.S. housing market, interest rates, the loans, and the value of the homes. How does this bubble happen if they didn't do it on purpose? Vast incompetence?
You're probably wondering "why would they do that?" Well look at whats happened. The banks end up with all the money you paid towards the loans, they end up with the house, a ton of smaller banks go bankrupt and the larger banks buy them up at discount prices thus gaining all of their assets, then the government takes your tax dollars and hands it to the poor struggling banks, so they don't fail all because the average American won't pay his bills. Or at least that last part is how it's often presented.
Here is an interesting quote. Some food for thought. "The few who understand the system, will either be so interested from it's profits or so dependent on it's favors, that there will be no opposition from that class." - Mayer Amschel Bauer Rothschild “Give me control of a nation's money and I care not who makes it's laws." - Mayer Amschel Bauer Rothschild
Wondering what has happened to America's middle class? It's simple, Free trade. Anything we used to produce here can be produced much cheaper in a country with people who will work for just a few dollars per day, with no unions or benefits. The U.S. used to have taxes or tariffs on imported goods from countries like China and Mexico. These taxes were to protect the American worker, so we could compete on even footing in our own markets with imported goods. Free trade only benefits corporations. They produce products for next to nothing, import it to the U.S. and make billions. This is what has happened to Americas middle class. Now we all work in the "service industry". The U.S. economy is just recycling the same money around over and over. The few areas where our country is still competing globally, are drying up fast.
Basically, America has been sold out for profit. Our government is corrupt beyond repair, and most Americans are so blind and ignorant to how badly themselves and their children are being betrayed that they will actual fight and argue to uphold a system which is going to abuse them and strip them and their families of any wealth and rights they have. America's economy is a time bomb, it is going to utterly collapse and fail and no one is going to be there to bail us out. It's just a matter of when, but in most of our lifetimes we will probably see our currency collapse. Then people will wake up one day and realize that America doesn't produce enough food to feed itself, enough clothing to clothe itself, enough gasoline to run our cars, or have the manufacturing base to produce any major exports. Our only major export is our currency, and if it ever ceases to be valued by other countries we are utterly screwed. Note that when I saw major exports I am saying that in comparison to our imports, I do realize that there are a handful of things we do export. But, they are a drop in a very large bucket.
It's only a matter of time. We don't have the will to change or fix things. Our media is biased, corrupt and most people believe the lies that are being fed to them. I know I'm horribly pessimistic, but I feel that this is the reality and gravity of the situation.
Once we had some moral, honest leaders, I'd like to share some of thier thoughts. Because I'm sure most people reading this post think it's laughable and I must be nuts.
"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States" — Sen. Barry Goldwater (Rep. AR)
"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill." — Charles A. Lindbergh, Sr. , 1913
"From now on, depressions will be scientifically created." — Congressman Charles A. Lindbergh Sr. , 1913
"The financial system has been turned over to the Federal Reserve Board. That Board as ministers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money" -- Charles A. Lindbergh Sr., 1923
"The Federal Reserve bank buys government bonds without one penny..." — Congressman Wright Patman, Congressional Record, Sept 30, 1941
"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it". — Congressman Louis T. McFadden in 1932 (Rep. Pa)
"The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers — Congressman Louis T. McFadden (Rep. Pa)
"Some people think the Federal Reserve Banks are the United States government's institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers" — Congressional Record 12595-12603 — Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932
"I have never seen more Senators express discontent with their jobs....I think the major cause is that, deep down in our hearts, we have been accomplices in doing something terrible and unforgivable to our wonderful country. Deep down in our heart, we know that we have given our children a legacy of bankruptcy. We have defrauded our country to get ourselves elected." — John Danforth (R-Mo)
"These 12 corporations together cover the whole country and monopolize and use for private gain every dollar of the public currency..." — Mr. Crozier of Cincinnati, before Senate Banking and Currency Committee - 1913
"The [Federal Reserve Act] as it stands seems to me to open the way to a vast inflation of the currency... I do not like to think that any law can be passed that will make it possible to submerge the gold standard in a flood of irredeemable paper currency." — Henry Cabot Lodge Sr., 1913
Most of these qutoes are 70-100 years old, funny how accurate many of them are. Wake up america, we don't need "change" we need a revolution. We are only at the beginning stages of a long and painful downward spiral.
The richest 1% pay 38.02% on income taxes (on 20.00% of income). The bottom 95% pay 41.82% on of income taxes (on 65.27% of income).
b) Income Taxes =/= Taxes.
Total tax burden is a lot closer than income tax burden, because while income tax is a progressive tax (that is, it taxes richer a higher % than poorer), that is not true of all taxes (such as sales taxes, payroll taxes, etc).
See Citizens for Tax Justice (pdf). If you will note, once total tax burden is taken into account, the gap is much closer.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
And yet they own how much capital? I look at it this way; play Final Fantasy VII. You can level up materia and sell them for a huge profit if you pick the right one. Let's go with the "All" materia. It sells for 1.7 million gil at max level. Sell ten of these, and you have 17 million gil. But honestly, how much gil do you need in the damn game? Half of that? The extra is just laying around. Why not increase their taxes to where that money is actually used, instead of the money being "invested" into "jobs" that these richest in America "create" while actually cutting thousands upon thousands of jobs and giving themselves millions in bonuses because they "earned it".
This happened because S&P saw what the American people is starting to see. When you've got Boehner and the rest of the sane (or as sane as you can get in Congress) Republicans being held by the balls by the Tea Party freshmen into demanding unrealistic cuts without any new taxes it's absurd. Why not raise taxes to pre-Bush levels? How about pre-Clinton? All of those would be lower than when Reagan was president.
I leave the thread with this. I worked for two months the summer of 2010 (I would have this summer, but no one would hire me in this marvelous Reaganomics economy) for a factory. I made around 2000 dollars before taxes. In federal and state and local tax I lost around 400 dollars before the temp agency took their cut. Around tax refund season I got 132 dollars back. So I paid a good 250 dollars in taxes. Okay, whatever. I accept that. I know it's not much compared to what people with actual, regular jobs pay.
But really, if I pay that much, won't the bigger corporations pay more? As in, more than 250 dollars in taxes?
GE, a multi-national and multi-billion dollar company, reported 14.2 billion dollars in international revenue and 5.1 billion dollars in revenue that occurred here in the United States. How much did they pay in taxes? Zero dollars. 0. Null. Not even a cent. Not only that, but the United States paid them 3.2 billion in tax refunds. They paid less taxes than I did, and they got a tax refund how many times higher than I did? They paid fewer taxes than every middle-class and poor person in the United States.
How is that even fair. How. And when the Democrats want to close enough tax loopholes to help make up a trillion dollars in revenue (a move that, if you read the New York Times article I link below, Reagan did when he found out back during his time in office that GE and other huge corporations were dodging taxes by loopholes and other means) the Tea Party holds everyone up with a bunch of "Well then fine, let's let America default." And when they're told that might crash the American economy, and along with it the world's economy, they shrug. They want to start a global great depression because a few millionaires and billionaires might have to actually pay the taxes they were supposed to pay when the tax code was written up.
Closing tax loopholes isn't raising taxes. It's stopping the cheats from cheating us anymore. But, you know, they "create jobs" with that money. Tell that to the numerous unemployed in this country. Especially explain that to the numerous "99ers," the people who have gone over their alloted 99 weeks on unemployment benefits. Because they're just lazy assholes who want to starve. That sounds about right.
“In a rational system, a corporation’s tax department would be there to make sure a company complied with the law,” said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. “But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative.”
That's a very strange look on corporate goals actually. Maximization of profits and minimization of expenses are main goals of any business and they will use every legal way to reach these goals. Blaming corporations for that is ridiculous.
I personally disagree with not blaming them for certain actions, the way I see it is that if a person is being an asshole but keeps perfectly to the law, he is still an asshole regardless.
But as long as being an asshole is not illegal, i see nothing wrong with it.
The Tea Party is certainly to blame because they took their 20% in the house and refused to compromise in any way. They forced their agenda by refusing to play ball with their own party, let alone the democrats.
The Democratic Party is certainly to blame because they took their Congressional majorities and refused to even introduce a budget bill to negotiate on for over 600 days. They forced their agenda (manufacture a crisis) by refusing to even bring the ball to the playground, all so they could blame any negative consequences from this brinksmanship on Tea Party intransigence.
Well they got their crisis, too bad they misunderestimated what the results would be.
On August 06 2011 11:00 DeepElemBlues wrote: Turns out, banks and governments can't avoid the consequences of grossly distorting the market with debt piled on debt piled on debt, decades and decades of it. Keynes would personally be appalled at how his theories have been altered from "spend in bad times, save in good times" to "spend in good times, spend in bad times." Keynes was never for that. He understood that you can't deficit spend endlessly, if you do it too much in good times you won't be able to do it enough in bad times without doing worse damage.
This is the core of the problem right there.
Sadly politicians believe it's more important to be re-elected rather than making the correct decisions.
On August 06 2011 20:26 Necrosjef_ wrote: What's funny is the typical American reaction to this.
"We own the rest of the world blah blah blah"
"Credit rating agencies are stupid"
"China kills baby girls"
The thing is the rest of the world isn't so easily misdirected as you guys are. Time to face up your mistakes and be prepared to be homeless. No one is going to bail you out, no one cares about you, you brought this on yourselves and damn you fucking deserve it.
On August 06 2011 21:04 [SuNdae] wrote: If you ask my opinion, the world isn't going to see a day when US manages to pay off that debt, not a chance.
I don't follow this stuff too closely. Has there ever been any real goal of eliminating the debt in the recent past? All I've heard was discussion that involved bringing the budget back to a surplus/bringing the total deficit back to appropriate levels in line with national GDP.
During Clinton (Democrat what an irony, even though with Republican dominated legislature) times, when US had pretty big surplus there was a goal to repay a debt and it was somewhat reasonable even with early 2000 economic problems, but two wars and tax cuts killed any such possibility and current depression just expanded the whole problem to current clusterfuck.
On August 06 2011 17:37 RaLakedaimon wrote: Job markets so fucking shitty I wonder if things can pick up one day, sad to see things just continuing to get worse because we all choose to pick horrible leaders, or maybe there just is never a good alternative to those shown to us. Hate to see all of us average Americans having to deal with shit like this since we aren't the ones that got any benefit before our economic downfall. May not be right but fuck I hate rich people in this country.
The richest 1% of the country pays more in income taxes than 95% of the country, combined. How much is enough ?
And yet they own how much capital? I look at it this way; play Final Fantasy VII. You can level up materia and sell them for a huge profit if you pick the right one. Let's go with the "All" materia. It sells for 1.7 million gil at max level. Sell ten of these, and you have 17 million gil. But honestly, how much gil do you need in the damn game? Half of that? The extra is just laying around. Why not increase their taxes to where that money is actually used, instead of the money being "invested" into "jobs" that these richest in America "create" while actually cutting thousands upon thousands of jobs and giving themselves millions in bonuses because they "earned it".
This happened because S&P saw what the American people is starting to see. When you've got Boehner and the rest of the sane (or as sane as you can get in Congress) Republicans being held by the balls by the Tea Party freshmen into demanding unrealistic cuts without any new taxes it's absurd. Why not raise taxes to pre-Bush levels? How about pre-Clinton? All of those would be lower than when Reagan was president.
I leave the thread with this. I worked for two months the summer of 2010 (I would have this summer, but no one would hire me in this marvelous Reaganomics economy) for a factory. I made around 2000 dollars before taxes. In federal and state and local tax I lost around 400 dollars before the temp agency took their cut. Around tax refund season I got 132 dollars back. So I paid a good 250 dollars in taxes. Okay, whatever. I accept that. I know it's not much compared to what people with actual, regular jobs pay.
But really, if I pay that much, won't the bigger corporations pay more? As in, more than 250 dollars in taxes?
GE, a multi-national and multi-billion dollar company, reported 14.2 billion dollars in international revenue and 5.1 billion dollars in revenue that occurred here in the United States. How much did they pay in taxes? Zero dollars. 0. Null. Not even a cent. Not only that, but the United States paid them 3.2 billion in tax refunds. They paid less taxes than I did, and they got a tax refund how many times higher than I did? They paid fewer taxes than every middle-class and poor person in the United States.
How is that even fair. How. And when the Democrats want to close enough tax loopholes to help make up a trillion dollars in revenue (a move that, if you read the New York Times article I link below, Reagan did when he found out back during his time in office that GE and other huge corporations were dodging taxes by loopholes and other means) the Tea Party holds everyone up with a bunch of "Well then fine, let's let America default." And when they're told that might crash the American economy, and along with it the world's economy, they shrug. They want to start a global great depression because a few millionaires and billionaires might have to actually pay the taxes they were supposed to pay when the tax code was written up.
Closing tax loopholes isn't raising taxes. It's stopping the cheats from cheating us anymore. But, you know, they "create jobs" with that money. Tell that to the numerous unemployed in this country. Especially explain that to the numerous "99ers," the people who have gone over their alloted 99 weeks on unemployment benefits. Because they're just lazy assholes who want to starve. That sounds about right.
“In a rational system, a corporation’s tax department would be there to make sure a company complied with the law,” said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. “But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative.”
That's a very strange look on corporate goals actually. Maximization of profits and minimization of expenses are main goals of any business and they will use every legal way to reach these goals. Blaming corporations for that is ridiculous.
I personally disagree with not blaming them for certain actions, the way I see it is that if a person is being an asshole but keeps perfectly to the law, he is still an asshole regardless.
Problem is corporation is not a person. Groups of people behave as assholes if the structure of the group allows it as responsibility is spread between the members of the group. This allows even groups consisting of pretty good people to commit even very evil acts. That is why giving corporations same rights a person has is a road to hell as in case of most people even if the law has holes their moral compass and peer pressure will keep them from doing bad things. Groups of people (corporations, governments,...) have no such mechanisms to not do evil stuff and need to be well regulated to prevent such things
On August 06 2011 09:58 On_Slaught wrote: I hope the tea party people are happy.
This.
The Tea Party is less than 20% of congress. Please don't be so naive to think that this is all the Tea Party's fault.... They're apart of the problem, but so is the rest of our government. All of them...
err, yes it is. They can effectively block any legislation because of the ruckus and noise they make. It's even worse in the Senate where one person can effectively lockdown the entire Senate because of the current filibuster rules.
The Democrats brought an extremely conservative budget with 4 trillion in cuts across the board including SS/Medicare/Medicaid but since it had 1 trillion dollars in tax revenue, the GOP whole-scale rejected it. The Tea Party is going to destroy America.
Are you saying that the democrats wanted to put more money into the budget with new taxes in order to take more money out of the budget with cuts? That doesn't sound right, even to me.
It was 4 trillion dollars in cuts with 1 trillion dollars in added revenue to offset the cuts.
If by "revenue" you mean "taxes" then why didn't they propose cutting 3 trillion and not adding any burden to the taxpayers at all? Why do the cuts need to be offset?
Because 4+1 = 5 whereas 3+0 = 3. 5 > 3.
If you're a member of the American electorate then I think I'm beginning to understand why the credit rating is getting downgraded.
Fortunately I don't vote at 4am. Disregard me, gentlemen. I need some time to eat breakfast and relearn math.
On August 06 2011 23:17 Tien wrote: You can't blame the 2 wars alone.
Social security and Medicare DOUBLED in cost within 10 years.
Medicare was 300 bill a year, now its 800 bill a year. Social security was 400 Bill a year, now its 700 Bill a year.
In just 10 years, 2 programs added 800 Bill more to their expense figures.
By 2015, Medicare and Social security will reach 1trillion and 800 Bill respectively.
These 2 programs are going to be the wrench that breaks the American economic machine.
Source your facts please. Social security is currently running at a surplus. That's right, the program does not cost the government money (yet), the gov actually borrows money from the Social security fund. It is only in 2017 that Social security is projected to start costing money. http://www.time.com/time/business/article/0,8599,1890542,00.html
On the other hand, we never saw a cent out of iraq, afganistan. (Oil prices actually went up! I jest--kinda).
On August 06 2011 23:17 Tien wrote: You can't blame the 2 wars alone.
Social security and Medicare DOUBLED in cost within 10 years.
Medicare was 300 bill a year, now its 800 bill a year. Social security was 400 Bill a year, now its 700 Bill a year.
In just 10 years, 2 programs added 800 Bill more to their expense figures.
By 2015, Medicare and Social security will reach 1trillion and 800 Bill respectively.
These 2 programs are going to be the wrench that breaks the American economic machine.
True, strangely their costs rose during Republican era. After so many assholish moves I would not be surprised if they allowed the costs to grow so much without finding money to actually fund them on purpose, so they can point to them and say that they need to be cancelled, as many Republicans dislike Social security and Medicare, but could not touch them without losing elections.
EDIT:Seems even I got convinced by rhetoric Totally forgot the data about Social security.
On August 06 2011 21:41 Reborn8u wrote: Wondering what has happened to America's middle class? It's simple, Free trade. Anything we used to produce here can be produced much cheaper in a country with people who will work for just a few dollars per day, with no unions or benefits. The U.S. used to have taxes or tariffs on imported goods from countries like China and Mexico. These taxes were to protect the American worker, so we could compete on even footing in our own markets with imported goods. Free trade only benefits corporations. They produce products for next to nothing, import it to the U.S. and make billions. This is what has happened to Americas middle class. Now we all work in the "service industry". The U.S. economy is just recycling the same money around over and over. The few areas where our country is still competing globally, are drying up fast.
Free trade does benefit the consumer. The consumer is now able to buy the same quality good imported from a country who has a comparative advantage in producing that good, at a cheaper price.
You should realise that promoting the idea that the Government should subsidise inefficient industries that are not able to compete internationally such as the agricultural sector ($20 billion a year in subsidies) is absurd and a waste of resources.
On August 06 2011 21:41 Reborn8u wrote: Wondering what has happened to America's middle class? It's simple, Free trade. Anything we used to produce here can be produced much cheaper in a country with people who will work for just a few dollars per day, with no unions or benefits. The U.S. used to have taxes or tariffs on imported goods from countries like China and Mexico. These taxes were to protect the American worker, so we could compete on even footing in our own markets with imported goods. Free trade only benefits corporations. They produce products for next to nothing, import it to the U.S. and make billions. This is what has happened to Americas middle class. Now we all work in the "service industry". The U.S. economy is just recycling the same money around over and over. The few areas where our country is still competing globally, are drying up fast.
Free trade does benefit the consumer. The consumer is now able to buy the same quality good imported from a country who has a comparative advantage in producing that good, at a cheaper price.
You should realise that promoting the idea that the Government should subsidise inefficient industries that are not able to compete internationally such as the agricultural sector ($20 billion a year in subsidies) is absurd and a waste of resources.
It is not so clear cut. It does not benefit the customer if that customer cannot now afford it due to losing his job/getting paid less. I am not agreeing with him, just saying that the situation is really complex.
On August 06 2011 21:41 Reborn8u wrote: Wondering what has happened to America's middle class? It's simple, Free trade. Anything we used to produce here can be produced much cheaper in a country with people who will work for just a few dollars per day, with no unions or benefits. The U.S. used to have taxes or tariffs on imported goods from countries like China and Mexico. These taxes were to protect the American worker, so we could compete on even footing in our own markets with imported goods. Free trade only benefits corporations. They produce products for next to nothing, import it to the U.S. and make billions. This is what has happened to Americas middle class. Now we all work in the "service industry". The U.S. economy is just recycling the same money around over and over. The few areas where our country is still competing globally, are drying up fast.
Free trade does benefit the consumer. The consumer is now able to buy the same quality good imported from a country who has a comparative advantage in producing that good, at a cheaper price.
You should realise that promoting the idea that the Government should subsidise inefficient industries that are not able to compete internationally such as the agricultural sector ($20 billion a year in subsidies) is absurd and a waste of resources.
If we didn't subsidize agriculture, our food prices would rise. Every year there is a lull in demand, or a surplus in supply (perhaps do to good weather?) food prices fall and this discourages farmers from farming the next year. They leave the industry and their fields will become abandoned. The government views agriculture as a form of national security because feeding ourselves is inportant. I would rather spend money on corn than missles. Also, do you know what one of our main exports is? Food. We sell food to countries like China.
On August 06 2011 21:41 Reborn8u wrote: Wondering what has happened to America's middle class? It's simple, Free trade. Anything we used to produce here can be produced much cheaper in a country with people who will work for just a few dollars per day, with no unions or benefits. The U.S. used to have taxes or tariffs on imported goods from countries like China and Mexico. These taxes were to protect the American worker, so we could compete on even footing in our own markets with imported goods. Free trade only benefits corporations. They produce products for next to nothing, import it to the U.S. and make billions. This is what has happened to Americas middle class. Now we all work in the "service industry". The U.S. economy is just recycling the same money around over and over. The few areas where our country is still competing globally, are drying up fast.
Free trade does benefit the consumer. The consumer is now able to buy the same quality good imported from a country who has a comparative advantage in producing that good, at a cheaper price.
You should realise that promoting the idea that the Government should subsidise inefficient industries that are not able to compete internationally such as the agricultural sector ($20 billion a year in subsidies) is absurd and a waste of resources.
It is not so clear cut. It does not benefit the customer if that customer cannot now afford it due to losing his job/getting paid less. I am not agreeing with him, just saying that the situation is really complex.
In the short run Free trade will usually not benefit the USA, as it usually involves jobs going oversees.
Usually in the Long long it will benefit everyone as cheaper goods = people buy more which can lead to more jobs,
Overall Free trade is good for the WORLD as a whole, but it can sometimes be hurtful to individual nations.
The problem is, if your not part of the global economy, or dont help grow it, youll have 330million consumers (USA population) instead of a potential 7 billion.
On August 06 2011 23:17 Tien wrote: You can't blame the 2 wars alone.
Social security and Medicare DOUBLED in cost within 10 years.
Medicare was 300 bill a year, now its 800 bill a year. Social security was 400 Bill a year, now its 700 Bill a year.
In just 10 years, 2 programs added 800 Bill more to their expense figures.
By 2015, Medicare and Social security will reach 1trillion and 800 Bill respectively.
These 2 programs are going to be the wrench that breaks the American economic machine.
Source your facts please. Social security is currently running at a surplus. That's right, the program does not cost the government money (yet), the gov actually borrows money from the Social security fund. It is only in 2017 that Social security is projected to start costing money. http://www.time.com/time/business/article/0,8599,1890542,00.html
On the other hand, we never saw a cent out of iraq, afganistan. (Oil prices actually went up! I jest--kinda).
You're right, but I was talking in aggregate terms.
Iraq is the world's 2nd biggest oil reserve and as of right now we haven't seen 1 nickle from it. Money is going somewhere, but not in American public pockets.
At least the Tea Party achieved preventing a tax increase for rich people. Because god forbid what would happen if people with a lot of money had to share a bit of it.
Stop pointing fingers at the rich as if they are the problem to American deficits.
Pointing fingers at the rich and demanding more tax revenue from them completely ignores the massive amounts of out of control spending that American leaders engage in.
This is 100% the responsibility and fault of American leadership in the last 10 years.
On August 06 2011 21:41 Reborn8u wrote: Wondering what has happened to America's middle class? It's simple, Free trade. Anything we used to produce here can be produced much cheaper in a country with people who will work for just a few dollars per day, with no unions or benefits. The U.S. used to have taxes or tariffs on imported goods from countries like China and Mexico. These taxes were to protect the American worker, so we could compete on even footing in our own markets with imported goods. Free trade only benefits corporations. They produce products for next to nothing, import it to the U.S. and make billions. This is what has happened to Americas middle class. Now we all work in the "service industry". The U.S. economy is just recycling the same money around over and over. The few areas where our country is still competing globally, are drying up fast.
Free trade does benefit the consumer. The consumer is now able to buy the same quality good imported from a country who has a comparative advantage in producing that good, at a cheaper price.
You should realise that promoting the idea that the Government should subsidise inefficient industries that are not able to compete internationally such as the agricultural sector ($20 billion a year in subsidies) is absurd and a waste of resources.
If we didn't subsidize agriculture, our food prices would rise. Every year there is a lull in demand, or a surplus in supply (perhaps do to good weather?) food prices fall and this discourages farmers from farming the next year. They leave the industry and their fields will become abandoned. The government views agriculture as a form of national security because feeding ourselves is inportant. I would rather spend money on corn than missles. Also, do you know what one of our main exports is? Food. We sell food to countries like China.
The main reason why one of your main exports is agricultural goods is because of government subsidies, which in turn cripples global demand for agricultural goods that COULD have been produced in a different country at a cheaper price.
On August 06 2011 23:17 Tien wrote: You can't blame the 2 wars alone.
Social security and Medicare DOUBLED in cost within 10 years.
Medicare was 300 bill a year, now its 800 bill a year. Social security was 400 Bill a year, now its 700 Bill a year.
In just 10 years, 2 programs added 800 Bill more to their expense figures.
By 2015, Medicare and Social security will reach 1trillion and 800 Bill respectively.
These 2 programs are going to be the wrench that breaks the American economic machine.
Source your facts please. Social security is currently running at a surplus. That's right, the program does not cost the government money (yet), the gov actually borrows money from the Social security fund. It is only in 2017 that Social security is projected to start costing money. http://www.time.com/time/business/article/0,8599,1890542,00.html
On the other hand, we never saw a cent out of iraq, afganistan. (Oil prices actually went up! I jest--kinda).
You're right, but I was talking in aggregate terms.
Iraq is the world's 2nd biggest oil reserve and as of right now we haven't seen 1 nickle from it. Money is going somewhere, but not in American public pockets.
Well why should it, it should go to the pockets of the Iraqi's. The only way it should go to US is if it was a war of conquest.
On August 06 2011 23:17 Tien wrote: You can't blame the 2 wars alone.
Social security and Medicare DOUBLED in cost within 10 years.
Medicare was 300 bill a year, now its 800 bill a year. Social security was 400 Bill a year, now its 700 Bill a year.
In just 10 years, 2 programs added 800 Bill more to their expense figures.
By 2015, Medicare and Social security will reach 1trillion and 800 Bill respectively.
These 2 programs are going to be the wrench that breaks the American economic machine.
Source your facts please. Social security is currently running at a surplus. That's right, the program does not cost the government money (yet), the gov actually borrows money from the Social security fund. It is only in 2017 that Social security is projected to start costing money. http://www.time.com/time/business/article/0,8599,1890542,00.html
On the other hand, we never saw a cent out of iraq, afganistan. (Oil prices actually went up! I jest--kinda).
You're right, but I was talking in aggregate terms.
Iraq is the world's 2nd biggest oil reserve and as of right now we haven't seen 1 nickle from it. Money is going somewhere, but not in American public pockets.
Well why should it, it should go to the pockets of the Iraqi's. The only way it should go to US is if it was a war of conquest.
It was a war of conquest, why do you think America is still there? To help build Iraqi homes?
American army controls the oil fields. American government is the one that put a puppet Iraqi oil minister in place.
American government controls this oil. Money is going somewhere, just not in American or Iraqi public pockets.
On August 06 2011 21:41 Reborn8u wrote: Wondering what has happened to America's middle class? It's simple, Free trade. Anything we used to produce here can be produced much cheaper in a country with people who will work for just a few dollars per day, with no unions or benefits. The U.S. used to have taxes or tariffs on imported goods from countries like China and Mexico. These taxes were to protect the American worker, so we could compete on even footing in our own markets with imported goods. Free trade only benefits corporations. They produce products for next to nothing, import it to the U.S. and make billions. This is what has happened to Americas middle class. Now we all work in the "service industry". The U.S. economy is just recycling the same money around over and over. The few areas where our country is still competing globally, are drying up fast.
Free trade does benefit the consumer. The consumer is now able to buy the same quality good imported from a country who has a comparative advantage in producing that good, at a cheaper price.
You should realise that promoting the idea that the Government should subsidise inefficient industries that are not able to compete internationally such as the agricultural sector ($20 billion a year in subsidies) is absurd and a waste of resources.
If we didn't subsidize agriculture, our food prices would rise. Every year there is a lull in demand, or a surplus in supply (perhaps do to good weather?) food prices fall and this discourages farmers from farming the next year. They leave the industry and their fields will become abandoned. The government views agriculture as a form of national security because feeding ourselves is inportant. I would rather spend money on corn than missles. Also, do you know what one of our main exports is? Food. We sell food to countries like China.
The main reason why one of your main exports is agricultural goods is because of government subsidies, which in turn cripples global demand for agricultural goods that COULD have been produced in a different country at a cheaper price.
Calling it exports is being too gracious already. It's the dumping of goods below market prices, with disastrous consequences for parts of the world. US government does it, EU does too, and it's impossible to get rid off due to the power of farmers in the political process (ty Iowa and France!).
On August 06 2011 23:47 Dyme wrote: At least the Tea Party achieved preventing a tax increase for rich people. Because god forbid what would happen if people with a lot of money had to share a bit of it.
Lol! Who do you think pays the taxes in this country?
It was clear that this was going to happen; still, it is just horrible. Stupid rating agencies :/ First Europe and now the US, this is going to be a tough time for the world, especially the developing countries and tax payers.
On August 06 2011 23:17 Tien wrote: You can't blame the 2 wars alone.
Social security and Medicare DOUBLED in cost within 10 years.
Medicare was 300 bill a year, now its 800 bill a year. Social security was 400 Bill a year, now its 700 Bill a year.
In just 10 years, 2 programs added 800 Bill more to their expense figures.
By 2015, Medicare and Social security will reach 1trillion and 800 Bill respectively.
These 2 programs are going to be the wrench that breaks the American economic machine.
Source your facts please. Social security is currently running at a surplus. That's right, the program does not cost the government money (yet), the gov actually borrows money from the Social security fund. It is only in 2017 that Social security is projected to start costing money. http://www.time.com/time/business/article/0,8599,1890542,00.html
On the other hand, we never saw a cent out of iraq, afganistan. (Oil prices actually went up! I jest--kinda).
You're right, but I was talking in aggregate terms.
Iraq is the world's 2nd biggest oil reserve and as of right now we haven't seen 1 nickle from it. Money is going somewhere, but not in American public pockets.
Well why should it, it should go to the pockets of the Iraqi's. The only way it should go to US is if it was a war of conquest.
It was a war of conquest, why do you think America is still there? To help build Iraqi homes?
American army controls the oil fields. American government is the one that put a puppet Iraqi oil minister in place.
American government controls this oil. Money is going somewhere, just not in American or Iraqi public pockets.
You're seeing something similar happen in Libya. Who do you think is giving all these rebels arms and supplies?
Why do you think NATO and other European countries have such vested interest in the stability of Libya?
It's all about the oil.
I was not saying how it is, but how should it be, since you implied it should go to American pockets. And it was not really war of conquest as it was not presented as such and it factually did not end up with conquest of Iraq.
On August 06 2011 21:41 Reborn8u wrote: Wondering what has happened to America's middle class? It's simple, Free trade. Anything we used to produce here can be produced much cheaper in a country with people who will work for just a few dollars per day, with no unions or benefits. The U.S. used to have taxes or tariffs on imported goods from countries like China and Mexico. These taxes were to protect the American worker, so we could compete on even footing in our own markets with imported goods. Free trade only benefits corporations. They produce products for next to nothing, import it to the U.S. and make billions. This is what has happened to Americas middle class. Now we all work in the "service industry". The U.S. economy is just recycling the same money around over and over. The few areas where our country is still competing globally, are drying up fast.
Free trade does benefit the consumer. The consumer is now able to buy the same quality good imported from a country who has a comparative advantage in producing that good, at a cheaper price.
You should realise that promoting the idea that the Government should subsidise inefficient industries that are not able to compete internationally such as the agricultural sector ($20 billion a year in subsidies) is absurd and a waste of resources.
But free trade sucks if you can't replace jobs lost to offshoring. I agree protecting thoses industries is a horrible waste of money. It's money that can be spent restructuring and specializing in industries to gain a competitive comparative advantage in doing so jobs are replaced in the first place. Same thing happening in the PIGS and Italy now, they are simply not competitive enough to survive
I'm surprised that they don't deduct a percentage of all politicians paychecks. They're overpaid as is and would honestly cut back on some of the issues if they cut per say as little as 10% of their total amount paid per fiscal year.
I mean the president gets like 250k a year, politicians get anywhere from 125-175k a year. Sure 10% seems to be alot but in all reality its not.
But yet they're going to stop paying individuals who hold government jobs or withhold active duty military pay. Sorry no. I didn't enlist to active duty years ago just so my pay can get withheld and so a politician can keep their sole income.
Hopefully this doesn't last that long but who knows. I've been debating about leaving the country and residing elsewhere after my term of enlistment just because of the economy alone.
On August 06 2011 23:52 Tien wrote: Stop pointing fingers at the rich as if they are the problem to American deficits.
Pointing fingers at the rich and demanding more tax revenue from them completely ignores the massive amounts of out of control spending that American leaders engage in.
This is 100% the responsibility and fault of American leadership in the last 10 years.
Some of us aren't even talking about raising taxes on top tier income earners.
Some of us are just saying we end the tax cuts that we've given to them since 2001 because...you know...prosperity ended a long time ago?
The Bush tax cuts amount to $1.3 trillion dollars in deficits in the last decade. Ending them alone would've pushed closer to the $4 trillion needed to avoid a downgrade.
On August 06 2011 23:52 Tien wrote: Stop pointing fingers at the rich as if they are the problem to American deficits.
Pointing fingers at the rich and demanding more tax revenue from them completely ignores the massive amounts of out of control spending that American leaders engage in.
This is 100% the responsibility and fault of American leadership in the last 10 years.
Some of us aren't even talking about raising taxes on top tier income earners.
Some of us are just saying we end the tax cuts that we've given to them since 2001 because...you know...prosperity ended a long time ago?
The Bush tax cuts amount to $1.3 trillion dollars in deficits in the last decade. Ending them alone would've pushed closer to the $4 trillion needed to avoid a downgrade.
Yeah. Well, with the Bush tax cuts set to expire late next year, and with the real possibility of Obama losing the presidency, the Bush tax cuts expiring is not even a probability to be taken into account at this point.
Anyone trying to present the credit downgrade as anything other than S&P saying sternly "you guys are straight fucking retarded for not raising taxes" - not verbatim, obviously - is delusional or ignorant, purposefully or not, willfully or not. To the point where it's not worth arguing with them: if you rob government on the base of falsified claims re American taxation of the right to raise revenues, you rob them of the ability to properly deal with budgetary problems, and therefore rob the government of their ability to actually lead the people anywhere beyond eating themselves. It reflects poorly on S&P to continue to endorse the country.
You gave yourselves an austerity plan when you didn't have to; you could have raised taxes but you didn't. You do it to yourseeeeeeeeeelf.
Like, for real:
On August 5 2011 apocalypsetime S&P wrote: 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.
On August 07 2011 00:38 johanngrunt wrote: Limit all politicians to one term, then they don't have to worry about re-election and just do what's good instead.
Not likely to happen though.
That's not going to necessarily help, since they could get in to office and have no reason to do what's good since they'll never get back in anyways.
On August 07 2011 00:38 johanngrunt wrote: Limit all politicians to one term, then they don't have to worry about re-election and just do what's good instead.
Not likely to happen though.
That would just make politicians push harder their ideological agenda instead of caring about what voters want.
The tea party has good intention but their way of doing it is just destructive.
On August 07 2011 00:38 johanngrunt wrote: Limit all politicians to one term, then they don't have to worry about re-election and just do what's good instead.
Not likely to happen though.
Or they do everything to benefit themselves in one term, accept bribes, and be sleazier in general because they won't need to run again.
Actually on the first glance I would say nothing would really happen. Since one side knows that the other side knows that they will lose reelection possibilities, they would gamble on the chance that the other side capitulates first. But since both sides do that, we get the current scenario. And going deeper into the mind games you do not get any different result. But I might be wrong, someone needs to analyze it through game theory perspective
the thing that i find... so strange, about all of this is that america, with one of the smallest public service sectors in the developed world is talking about budget cuts as much as tax rises. and yet the countries with the biggest public sectors dont have debt problems
american politics seems so far removed from the european model that its hard for some one like me to even comprehend the things half the US politicians are even saying. its just that crazy/stupid
On August 07 2011 00:38 johanngrunt wrote: Limit all politicians to one term, then they don't have to worry about re-election and just do what's good instead.
Not likely to happen though.
Or they do everything to benefit themselves in one term, accept bribes, and be sleazier in general because they won't need to run again.
This. Re-election is just part of the kickback game.
1) You can find many articles pointing out how revenue increased (that last actually with references) despite the cuts.
Whether or not the increases were due to the cuts or just to general economic growth is a different question of course, but this brings me to
2) "Tax income losses" are almost entirely hypothetical. People say $1.3 trillion, or $1.8 trillion, or whatever number of dollars, were "lost" because of the cuts. However, since revenue increased, what this actually means is the following: assuming all the people who were paying taxes after the cuts had instead been paying taxes at the non-cut rate, we would have had brought in the one-point-whatever trillion more.
This is a reasonable assumption to make (and I'm not privy to the models used to justify it), but has to be subjected to the common sense test. Do we know what was actually done with the money instead of paying it into the IRS? If it was mostly spent or invested, then turning it into tax revenue instead would have meant less money in the private sector, and therefore less growth, and the actual tax revenue growth would have been similarly smaller. On the other hand if it was mostly saved, then maybe the figure's legitimate, since the money wouldn't have been "active" (although it would still have increased the banking reserve).
(Although, without double-checking all the sources, maybe the $1.x trillion figure is the end result after adjusting for the possibilities mentioned above.)
3) It seems to me almost impossible to reconcile the two charts in the original article. The first gives projected deficits for the Obama administration, every one of which is greater than any Bush deficit, and the first two of which have already come up short of actual deficits. Yet somehow the second chart manages to suggest that the Obama administration will only add about 1/3 of what Bush did?
(Honestly that seems so weird that I'd appreciate an explanation, as I'm convinced I'm missing something there. Even "biased reporting", not that I suspect that here, wouldn't leave a gaping hole like that.)
4) One way or another, if Bush's policies led us into big holes, one of Obama's responsibilities should have been to get us out - like he campaigned for, among other things, pulling out of Iraq and Afghanistan, neither of which (unless I've missed it, and it would have been huge news) have happened yet. So at least part of the blame for continued Middle East war costs falls on the Obama administration's shoulders at this point (and the entirety of the Libya thing).
On August 07 2011 02:07 turdburgler wrote: the thing that i find... so strange, about all of this is that america, with one of the smallest public service sectors in the developed world is talking about budget cuts as much as tax rises. and yet the countries with the biggest public sectors dont have debt problems
american politics seems so far removed from the european model that its hard for some one like me to even comprehend the things half the US politicians are even saying. its just that crazy/stupid
The essential problem in the USA is that most of the public sector is on the Federal level at this point in time. This would essentially be like the EU trying to oversee, administer, and regulate welfare programs for every country on the same model regardless of population dispersion, local income levels, any local programs, and so forth. There are some residual state programs, but the majority of aid to citizens is administered at the federal level, which creates huge inefficiencies.
It wasn't always this way: states and even local counties and townships used to pick up most of the public works thing, but over the course of two world wars and public safety scandals and growing nationalism most of that ended up in federal hands.
So now you have a situation where a significant number of people want to end the overweight inefficient federal programs, and a significant number of people want to keep "help for the unfortunate" without looking at the inefficiencies, but because of the slow political demise of state and local programs very few are even thinking in terms of re-localizing the aid and welfare programs, even though that's probably what needs to happen.
(Also, while there are countries with bigger public works that are fine, the countries with the biggest, as I understand it - Greece, Italy, Ireland, etc - are definitely also having problems. At some point it becomes at least as much an issue of how competent the administration is as what the model they're pursuing is. Geniuses can make almost anything work; idiots can screw up anything.)
In my honest opinion the whole stock market should be outlawed. This system with stocks has nothing todo with the real market, it is a hinderance to the real market and people working in this sector are useless parasites sucking of from the real industry and market.
This whole rating shit is just horrible and nothing more then throwing dice and betting and has nothing todo with the actual market.
My take : Tax levels are at their lowest in years. GM pays exactly 0$ in tax. For some reason, people are suggesting that we reduce taxes on the rich. We need to both increase taxes and cut spending.
You can't tax the rich without hurting the poor that's a fact. Taxing the rich just means less jobs.
lol says who?
Its only in US where the rich pays so little taxes its allmost 0. In alot of countries lats take my country Denmark the rich pays huge amount of taxes and they still create jobs. And im preatty sure our "poor" well we dont really got any poor people but those with low income got a hell of alot higher living standard then the poorest in the US.
My oppinion as an outsider when I look at US is its not a democracy anymore its run by mega corporation and there only concern is maximise profit for the rich.
What needs to be done in the US for the American people is first get rid of the lobbiest make sure electors cant get money from private donators and then you can start get things done thats good for the country and american people and not just the rich and mega corporations.
On August 07 2011 02:37 Holy_AT wrote: In my honest opinion the whole stock market should be outlawed. This system with stocks has nothing todo with the real market, it is a hinderance to the real market and people working in this sector are useless parasites sucking of from the real industry and market.
This whole rating shit is just horrible and nothing more then throwing dice and betting and has nothing todo with the actual market.
The stock markets have existed since the 17th century... It's never one thing that goes wrong in these kind of crisis there are a lot of causes and it's certainly not as simple as to just outlaw a whole system...
It is very very interesting how Taxes get handled in America. In Germany for example we have Taxrates up to 45% (at around 100.000e a year), now there is a recent discussion about lifting these numbers to 49%. So this is quite a bit more than you guys have and now i do not get it at ALL why the republicans (and Tea Party?) completely block anything related to higher taxes.
On August 07 2011 02:37 Holy_AT wrote: In my honest opinion the whole stock market should be outlawed. This system with stocks has nothing todo with the real market, it is a hinderance to the real market and people working in this sector are useless parasites sucking of from the real industry and market.
This whole rating shit is just horrible and nothing more then throwing dice and betting and has nothing todo with the actual market.
The stock markets have existed since the 17th century... It's never one thing that goes wrong in these kind of crisis there are a lot of causes and it's certainly not as simple as to just outlaw a whole system...
Yeah derivatives and CDO's are sketchy as hell tho. what with those investment banks paying off the rating agencys to continually rate subprime loans at AAA.
I'm not American, and I have no interest in Republicans vs Democrats, it makes no difference to me.
I've got 2 points on this situation though,
1st, I think people should be aware of the real 'Stalling' game that goes on, because this happens in Politics all the time.
Everything has this form:
Party A and Party B disagree on something. That thing X has a deadline after which something bad will happen if no agreement is reached.
Party A takes an unreasonable position against thing X Party B takes an unreasonable position in favour of thing X
Both parties intentionally make their position hard for the other side to agree to.
Both parties then appeal to the public, claiming they are willing to negotiate, but that it is the other party being unreasonable. Both sides claim the other side is holding everyone hostage because of the deadline.
As the deadline approaches, the side who was able to convince the majority of the public that the crisis was the other side's fault, wins.
Both parties have basically forced each other to stall, while convincing people only one side is forcing it.
The more major the public support for one side of the debate, the more stubborn the winning side can be and the more unreasonable the agreement will be in that side's favour.
This formula basically is followed for Politics, Unions, Player's Associations, Religious Groups, between Nations etc...
The key the public needs to eventually realize is despite any appearance otherwise, BOTH sides are always responsible, because at any point one side could just concede and agree with the other. Because of this, the 'deadline' will never be hit unless both sides actually WANT it to be hit.
My 2nd point however,
The lowering of the US credit Rating, is neither a reflection on this actual situation occurring, nor is it actually anything of any particular concern.
The Credit Agencies would never give any consideration to the idea that the US could have 'missed the deadline' because there is simply no universe in which that would have been allowed to occur. A Military coup of the nation would happen before the United States was allowed to actually default on payments...it was never going to happen no matter what.
The downgrade of rating is formulaic, based on total debt loads and the reliabilities of future revenues. Downgrading to AA reflects the possibility that long term revenues may not keep pace with future borrowing.
The reason this does not overly matter is because....everyone knew this already. Despite being the 'risk free vehicle' everyone has always incorporated their own risk element to holding US Treasuries when calculating the risk levels of their portfolios. That risk has never actually been 'Zero'. As the situation changed over the past few years, the implied risk in US securities has risen already.
The change in credit rating won't change the reality...it merely reflects the reality that is already taken into account by investment firms throughout the world.
Americans will never elect anyone who plans to spend less money in reality, so eventually this is going to hit a wall...but it likely won't be for quite some time.
EDIT: The average salary of finance people I just graduated an MBA program with, will be higher than the majority of national politicians in my country. The problem is not these guys being Overpaid...It's them being paid so Low that no one in their right mind would give up their financial or legal practice making millions a year to take a job paying like $150k/year....so you get crazy/stupid people instead.
On August 07 2011 02:27 VGhost wrote: Points on this chart.
The first two links - as you admit - don't address the actual effect of the tax cuts, just saying that revenue increased after them, not that the tax cuts caused the revenue increase. The $1.4 trillion is from CBO estimates, I think.
There is a bit of an analysis here saying they reduced revenues regardless of supply side effects, but it doesn't go into too much detail.
3) It seems to me almost impossible to reconcile the two charts in the original article. The first gives projected deficits for the Obama administration, every one of which is greater than any Bush deficit, and the first two of which have already come up short of actual deficits. Yet somehow the second chart manages to suggest that the Obama administration will only add about 1/3 of what Bush did?
(Honestly that seems so weird that I'd appreciate an explanation, as I'm convinced I'm missing something there. Even "biased reporting", not that I suspect that here, wouldn't leave a gaping hole like that.)
1) The economy. It tanked, and revenues tanked along with it. (This is the biggest factor in the size of the current deficit). So with less money coming in, the gap between the spending an the income grew. 2) Obama is also adding to the deficit the continuation of Bush policies (taxes, defense spending, Medicare Part D). He's just adding much less new stuff.
4) One way or another, if Bush's policies led us into big holes, one of Obama's responsibilities should have been to get us out - like he campaigned for, among other things, pulling out of Iraq and Afghanistan, neither of which (unless I've missed it, and it would have been huge news) have happened yet. So at least part of the blame for continued Middle East war costs falls on the Obama administration's shoulders at this point (and the entirety of the Libya thing).
I entirely agree with that. We're on timetables to get out of both, but we're still there.
On August 07 2011 02:07 turdburgler wrote: the thing that i find... so strange, about all of this is that america, with one of the smallest public service sectors in the developed world is talking about budget cuts as much as tax rises. and yet the countries with the biggest public sectors dont have debt problems
american politics seems so far removed from the european model that its hard for some one like me to even comprehend the things half the US politicians are even saying. its just that crazy/stupid
In terms of cost-efficiency, our healthcare system sucks. On steroids. American spends similar amounts of public money per person in relation to GDP as other countries (and much more money overall), despite not having single-payer. Combine that with somewhat lower revenues ...
On August 07 2011 04:01 EnderSword wrote: A Military coup of the nation would happen before the United States was allowed to actually default on payments...it was never going to happen no matter what.
This statement kills your credibility. Even though your entire first comment is true and makes perfect sense, this coup would never happen. Our country places so much faith in the electoral process the only way that would ever happen is through an upheaval of it (president refusing to step down)
It must be a political downgrade. The USA is nowhere close to having trouble making interest payments. Unless they are being completely stupid, Standard & Poors must have made the decision based on the fact the US political system is screwed up beyond recognition.
On August 07 2011 04:01 EnderSword wrote: A Military coup of the nation would happen before the United States was allowed to actually default on payments...it was never going to happen no matter what.
This statement kills your credibility. Even though your entire first comment is true and makes perfect sense, this coup would never happen. Our country places so much faith in the electoral process the only way that would ever happen is through an upheaval of it (president refusing to step down)
While it was meant as a 'last possible option' - there are certainly dozens of things that would prevent a default before this ever occurred (The most likely being the President would simply raise the cap with executive authority)
I don't know if people in fact realize the seriousness of what would truly occur if the US seriously DID default of its debt. As such, while incredibly, incredibly unlikely....I do stand by the statement that the US is more likely to fall into a civil war than it is to not pay out its Treasury bills. You vastly over-estimate the power of the people or 'faith' in something or other (Which is baffling given your 2000 election in which this was basically disregarded already)...Not paying that debt would likely lead to a war and the financial collapse of the world.
Essentially imagine a situation where the West Coast US was invaded...but the President just kept saying 'No' and refusing to agree to mobilize the army to defend the country. Eventually it would just mobilize itself. It would be the same situation here...there is no possible case in which that debt would not be payed by some method.
Essentially you took the most dramatic and 'for illustration purposes only' statement, and then commented on it and nothing else.
Well not to be anti american and all but their tax system is rather iffy and it just seems that every time there is more debt they just raise the debt ceiling.
I hope you guys dont get an absolutely terrible monday, although it wont be pretty regardless.
On August 07 2011 04:01 EnderSword wrote: A Military coup of the nation would happen before the United States was allowed to actually default on payments...it was never going to happen no matter what.
This statement kills your credibility. Even though your entire first comment is true and makes perfect sense, this coup would never happen. Our country places so much faith in the electoral process the only way that would ever happen is through an upheaval of it (president refusing to step down)
While it was meant as a 'last possible option' - there are certainly dozens of things that would prevent a default before this ever occurred (The most likely being the President would simply raise the cap with executive authority)
I don't know if people in fact realize the seriousness of what would truly occur if the US seriously DID default of its debt. As such, while incredibly, incredibly unlikely....I do stand by the statement that the US is more likely to fall into a civil war than it is to not pay out its Treasury bills. You vastly over-estimate the power of the people or 'faith' in something or other (Which is baffling given your 2000 election in which this was basically disregarded already)...Not paying that debt would likely lead to a war and the financial collapse of the world.
Essentially imagine a situation where the West Coast US was invaded...but the President just kept saying 'No' and refusing to agree to mobilize the army to defend the country. Eventually it would just mobilize itself. It would be the same situation here...there is no possible case in which that debt would not be payed by some method.
Essentially you took the most dramatic and 'for illustration purposes only' statement, and then commented on it and nothing else.
The US defaulting on a bunch of loans that were due just after august the 2nd was a very real possibility, and yes, that would have had terrible consequences. Obviously the loans would be paid back in full in the end, but even defaulting for only a couple of days would have been a big deal.
That's the point of it tho, and that's what S&P are saying (partially) with their downrating: The US political system is fucked up to such an extent that we don't think they'll be able to come up with a reasonable economic solution.
Essentially what happened in the US is that by being unable to agree (in a timely, decent fashion) on a way to reduce the deficit, they've increased the debt even more. When the next round of refinancing the loans comes up (and they do all the time), the US won't get the same low interest rates they were enjoying before.
If US politicians had simply passed a clean debt bill straight away, and continued these pointless shouting matches on the sideline anyhow, the entire country (democrat or republican) would have been better off.
On August 07 2011 04:41 Romantic wrote: It must be a political downgrade. The USA is nowhere close to having trouble making interest payments. Unless they are being completely stupid, Standard & Poors must have made the decision based on the fact the US political system is screwed up beyond recognition.
Well, you can actually look at the report.
S&P US Report They don't just like say 'We're downgrading it...LOL!' they kinda write papers about it.
The reasons cited were that the agreement did not allow enough of a debt cap raise to meet medium term obligations, and that The US Debe to GDP levels were 2nd highest in their Peer group and Rising, while their peer's levels were dropping.
You can also look at the above criteria for a rating of Public Sovereign debt. It's all actually written pretty much in layman's terms and quite readable.
Look stuff up and read before coming up with random theories and conspiracies. Odds are the changing of a financial rating...has some mathematical or financial justification.
On August 07 2011 04:01 EnderSword wrote: A Military coup of the nation would happen before the United States was allowed to actually default on payments...it was never going to happen no matter what.
This statement kills your credibility. Even though your entire first comment is true and makes perfect sense, this coup would never happen. Our country places so much faith in the electoral process the only way that would ever happen is through an upheaval of it (president refusing to step down)
While it was meant as a 'last possible option' - there are certainly dozens of things that would prevent a default before this ever occurred (The most likely being the President would simply raise the cap with executive authority)
I don't know if people in fact realize the seriousness of what would truly occur if the US seriously DID default of its debt. As such, while incredibly, incredibly unlikely....I do stand by the statement that the US is more likely to fall into a civil war than it is to not pay out its Treasury bills. You vastly over-estimate the power of the people or 'faith' in something or other (Which is baffling given your 2000 election in which this was basically disregarded already)...Not paying that debt would likely lead to a war and the financial collapse of the world.
Essentially imagine a situation where the West Coast US was invaded...but the President just kept saying 'No' and refusing to agree to mobilize the army to defend the country. Eventually it would just mobilize itself. It would be the same situation here...there is no possible case in which that debt would not be payed by some method.
Essentially you took the most dramatic and 'for illustration purposes only' statement, and then commented on it and nothing else.
The US defaulting on a bunch of loans that were due just after august the 2nd was a very real possibility, and yes, that would have had terrible consequences. Obviously the loans would be paid back in full in the end, but even defaulting for only a couple of days would have been a big deal.
The 2nd was never actually a deadline, it was simply the payment date...but that payment could be made from cash the government had. The 2nd was used as kind of the 'public' deadline for arguments and so forth, because the real deadline...August 8th....really no one was willing to screw around with.
They used the 2nd because that's the date they had to begin to use funds otherwise bookmarked to pay the treasuries. The 8th to the 10th is when they would have like actually ran out of money and actually defaulted. People were really pushing that Aug 2nd date though, presumably because no one would want to actually screw around with the real date, its a bit too serious.
On August 07 2011 04:41 Romantic wrote: It must be a political downgrade. The USA is nowhere close to having trouble making interest payments. Unless they are being completely stupid, Standard & Poors must have made the decision based on the fact the US political system is screwed up beyond recognition.
Well, you can actually look at the report.
S&P US Report They don't just like say 'We're downgrading it...LOL!' they kinda write papers about it.
The reasons cited were that the agreement did not allow enough of a debt cap raise to meet medium term obligations, and that The US Debe to GDP levels were 2nd highest in their Peer group and Rising, while their peer's levels were dropping.
You can also look at the above criteria for a rating of Public Sovereign debt. It's all actually written pretty much in layman's terms and quite readable.
Look stuff up and read before coming up with random theories and conspiracies. Odds are the changing of a financial rating...has some mathematical or financial justification.
Just to have the overview posted here (emphasis mine):
Overview • 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 thelong-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.
On August 07 2011 02:37 Holy_AT wrote: In my honest opinion the whole stock market should be outlawed. This system with stocks has nothing todo with the real market, it is a hinderance to the real market and people working in this sector are useless parasites sucking of from the real industry and market.
This whole rating shit is just horrible and nothing more then throwing dice and betting and has nothing todo with the actual market.
Without the stock market good luck getting economic growth past what was happening in the feudal eras. Young fledging companies with massive potential would nearly find it impossible to finance themselves through borrowings alone in opposed to a injection of funds through an IPO.
Basically we would be left with an small economy comprised of purely private or government firms. Think of the stock market as part of the engine that actually forces firms to grow at a speed that would be noticeable. Whether you enjoy a world without the stock market is probably tied to if you would enjoy living in the 19th century.
On topic though the whole thing is purely psychological and apart from the initial fallout probably long term changes would be few. There are few to no alternatives to the US market in terms of liquidity and historical depths in using treasury bonds and bills to do stuff.
EDIT: The average salary of finance people I just graduated an MBA program with, will be higher than the majority of national politicians in my country. The problem is not these guys being Overpaid...It's them being paid so Low that no one in their right mind would give up their financial or legal practice making millions a year to take a job paying like $150k/year....so you get crazy/stupid people instead.
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
EDIT: The average salary of finance people I just graduated an MBA program with, will be higher than the majority of national politicians in my country. The problem is not these guys being Overpaid...It's them being paid so Low that no one in their right mind would give up their financial or legal practice making millions a year to take a job paying like $150k/year....so you get crazy/stupid people instead.
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
Ya...but isn't that just kinda something dumb guys think its funny to say?
If your Senators were good at their jobs...wouldn't they be worth Millions?
If a Good Senator could pass a plan making the military 1% more efficient...he's saved you Billions of dollars.
If a Good Congressman pushes for one more little thing to be covered in a Healthcare bill, he could help 10,000 people.
If a really good President chose the advice of General A over General B...he could save you Billions, save lives and shorten a war by months or years.
You're used to bad politicians because you don't Pay them hardly anything, and you elect ones that lie to you the best.
If the President got $1 Billion a year, was allowed to have a Harem of women and he got to keep Air Force One at the end, you'd have the smartest god damn man in the country as President and you wouldn't even know who George Bush or Barack Obama were.
Downgrading the credit rating of a country which only has debts in its own currency makes no sense.
Obviously, the US economy has problems, but this is a political downgrade. The tea party politicians have proved themselves more than willing to play Russian roulette with the country's economy, and it is now becoming apparent to the rest of the world that there are actually politicians in the US that would like to see it default on its debt, and that those politicians actually have a lot of influence.
Hopefully this will be something of a wake up call, but my guess is the tea party extremists will find a way to pin the blame for this on Obama, then he loses the election in 2012 only to be replaced by a tea party backed republican who drives the country down an even steeper slope.
On August 07 2011 19:02 Serthius wrote: Downgrading the credit rating of a country which only has debts in its own currency makes no sense.
Uh...why?
If I hold American debt, to be paid in American Dollars...I need to be confident not only that you'll pay me back, but that the thing you pay me with with be worth something.
That's specifically one of the 5 criteria used to issue a Bond Rating...the stability of your currency's value and Money Supply.
Also, if you think those Tea Party people were even going to let the thing default, you're on crack. I know everyone was acting like they had 'hours to go' but they had about 6 days left.
Higher spending is just as responsible for this rating cut as a lower debt ceiling is.
On August 07 2011 03:44 Pimpmuckl wrote: It is very very interesting how Taxes get handled in America. In Germany for example we have Taxrates up to 45% (at around 100.000e a year), now there is a recent discussion about lifting these numbers to 49%. So this is quite a bit more than you guys have and now i do not get it at ALL why the republicans (and Tea Party?) completely block anything related to higher taxes.
They do it cause they want their money for themselves. They earned it, it's theirs. Stupid government always trying to take money from stupidly rich people to help the poor, suffering, and needy in the world. The rich tea party people need that money to go on vactions, and buy giant boats that they drive to a LAKE to go putting around in the water ONCE a YEAR.
I seriously seriously hate people with money in this country for the most part. Let's just put a flat take on the top 4 wealthiest people in the Nation, 50%. They'll still make billions of dollars, just not as many billions.
You guys must be delusional to think that it was the Tea Party's fault that US credit was downgraded.
"S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits."
Woopsy. Is that the Tea Party's fault? Perhaps Americans should slash down on their deficit instead of trying to enlarge it through social welfare programs and wars.
"S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits."
Woopsy. Is that the Tea Party's fault? Perhaps Americans should slash down on their deficit instead of trying to enlarge it through social welfare programs and wars.
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.
This shows that both entitlement reform and increase of revenue are the biggest issues S&P has.
Tea Party has constantly voted against any form of revenue increases.
On August 07 2011 19:02 Serthius wrote: Downgrading the credit rating of a country which only has debts in its own currency makes no sense.
Uh...why?
If I hold American debt, to be paid in American Dollars...I need to be confident not only that you'll pay me back, but that the thing you pay me with with be worth something.
Also, if you think those Tea Party people were even going to let the thing default, you're on crack. I know everyone was acting like they had 'hours to go' but they had about 6 days left.
Higher spending is just as responsible for this rating cut as a lower debt ceiling is.
The US controls the dollar printing presses. It can print more dollars.
You may think there's no way the politicians would let the US default, but quite a lot of people, and among them the guys at the rating agency, seem to disagree. This guy says it better than me:
"America’s ability to pay is neither here nor there: the problem is its willingness to pay. And there’s a serious constituency of powerful people in Congress who are perfectly willing and even eager to drive the US into default. The Tea Party is fully cognizant that it has been given a bazooka, and it’s just itching to pull the trigger. There’s no good reason to believe that won’t happen at some point."
EDIT: The average salary of finance people I just graduated an MBA program with, will be higher than the majority of national politicians in my country. The problem is not these guys being Overpaid...It's them being paid so Low that no one in their right mind would give up their financial or legal practice making millions a year to take a job paying like $150k/year....so you get crazy/stupid people instead.
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
Ya...but isn't that just kinda something dumb guys think its funny to say?
If your Senators were good at their jobs...wouldn't they be worth Millions?
If a Good Senator could pass a plan making the military 1% more efficient...he's saved you Billions of dollars.
If a Good Congressman pushes for one more little thing to be covered in a Healthcare bill, he could help 10,000 people.
If a really good President chose the advice of General A over General B...he could save you Billions, save lives and shorten a war by months or years.
You're used to bad politicians because you don't Pay them hardly anything, and you elect ones that lie to you the best.
If the President got $1 Billion a year, was allowed to have a Harem of women and he got to keep Air Force One at the end, you'd have the smartest god damn man in the country as President and you wouldn't even know who George Bush or Barack Obama were.
Real great men are motivated by their will to accomplish something. Being a politican, and especially being the president, shouldn't be motivated by personal gain (and for the president it's more or less a requirement that it isn't if he's going to be a good one). In essence what I'm trying to tell you is that you're wrong. The problem doesn't lie with the salaries, and you're vastly oversimplifying a very complicated issue.
Salaries are an issue only in so far as it allows a flourishing private sector to corrupt a poorer public sector. I'm not sure a Billion a year is sensible, but payment which is comparable with a CEOs wage might be appropriate, though it's possible CEOs wages are overinflated.
What would work is a total mandated stripping of privacy from the lives of politicians during their times in office. If every word spoken by politicians was recorded and available for everyone to examine I think you'd end up getting people with more integrity in office. Other problems would arrise of course but I think it's an interesting approach to a solution.
EDIT: The average salary of finance people I just graduated an MBA program with, will be higher than the majority of national politicians in my country. The problem is not these guys being Overpaid...It's them being paid so Low that no one in their right mind would give up their financial or legal practice making millions a year to take a job paying like $150k/year....so you get crazy/stupid people instead.
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
Ya...but isn't that just kinda something dumb guys think its funny to say?
If your Senators were good at their jobs...wouldn't they be worth Millions?
If a Good Senator could pass a plan making the military 1% more efficient...he's saved you Billions of dollars.
If a Good Congressman pushes for one more little thing to be covered in a Healthcare bill, he could help 10,000 people.
If a really good President chose the advice of General A over General B...he could save you Billions, save lives and shorten a war by months or years.
You're used to bad politicians because you don't Pay them hardly anything, and you elect ones that lie to you the best.
If the President got $1 Billion a year, was allowed to have a Harem of women and he got to keep Air Force One at the end, you'd have the smartest god damn man in the country as President and you wouldn't even know who George Bush or Barack Obama were.
Riiiiiight, so you personally attack me for stating the truth and FYI i'm an Engineer. I wasn't talking about politics either you completely missed the point there. I was talking about the wages and salaries that are given to the financial services sector.
On August 08 2011 09:02 Dapper_Cad wrote: Salaries are an issue only in so far as it allows a flourishing private sector to corrupt a poorer public sector. I'm not sure a Billion a year is sensible, but payment which is comparable with a CEOs wage might be appropriate, though it's possible CEOs wages are overinflated.
What would work is a total mandated stripping of privacy from the lives of politicians during their times in office. If every word spoken by politicians was recorded and available for everyone to examine I think you'd end up getting people with more integrity in office. Other problems would arrise of course but I think it's an interesting approach to a solution.
I kind of doubt that. We already know that they lie to us, but that doesn't stop them from doing it. I'm not sure having more evidence of something we already know would help. You can suggest as many solutions as you want to how to get better politicians, but there's only one way: Vote good ones in.
On August 08 2011 09:02 Dapper_Cad wrote: Salaries are an issue only in so far as it allows a flourishing private sector to corrupt a poorer public sector. I'm not sure a Billion a year is sensible, but payment which is comparable with a CEOs wage might be appropriate, though it's possible CEOs wages are overinflated.
What would work is a total mandated stripping of privacy from the lives of politicians during their times in office. If every word spoken by politicians was recorded and available for everyone to examine I think you'd end up getting people with more integrity in office. Other problems would arrise of course but I think it's an interesting approach to a solution.
I kind of doubt that. We already know that they lie to us, but that doesn't stop them from doing it. I'm not sure having more evidence of something we already know would help. You can suggest as many solutions as you want to how to get better politicians, but there's only one way: Vote good ones in.
I think Julian Assange makes an interesting argument for the power of transparency, I'm just playing with it. I think there's a great difference between knowing that your country went to war on a lie and hearing the meeting where that lie was hammered out. I'm thinking Iraq of course, but even if that was 100% government straight shooting the case still stands in abstract I think, that knowing a lie is being told is different from the lie in front of you. Somewhere in this vid (bit late to go rooting around in it now, but I can find the quote if you ask) Žižek makes the same point.
EDIT: The average salary of finance people I just graduated an MBA program with, will be higher than the majority of national politicians in my country. The problem is not these guys being Overpaid...It's them being paid so Low that no one in their right mind would give up their financial or legal practice making millions a year to take a job paying like $150k/year....so you get crazy/stupid people instead.
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
Ya...but isn't that just kinda something dumb guys think its funny to say?
If your Senators were good at their jobs...wouldn't they be worth Millions?
If a Good Senator could pass a plan making the military 1% more efficient...he's saved you Billions of dollars.
If a Good Congressman pushes for one more little thing to be covered in a Healthcare bill, he could help 10,000 people.
If a really good President chose the advice of General A over General B...he could save you Billions, save lives and shorten a war by months or years.
You're used to bad politicians because you don't Pay them hardly anything, and you elect ones that lie to you the best.
If the President got $1 Billion a year, was allowed to have a Harem of women and he got to keep Air Force One at the end, you'd have the smartest god damn man in the country as President and you wouldn't even know who George Bush or Barack Obama were.
Riiiiiight, so you personally attack me for stating the truth and FYI i'm an Engineer. I wasn't talking about politics either you completely missed the point there. I was talking about the wages and salaries that are given to the financial services sector.
Wait so people in the financial sector do nothing productive? Then by the same logic architects are useless because all they do is draw stuff while the construction workers do the actual building and economists too because who needs a plan for the economy when people in the "real market" (farmers, miners, builders) can allocate resources amongst themselves.
People in the financial sector are people who structure funds, and firms to ensure that they can actually buffer themselves and run at optimal levels with the aim of reducing risks for a given level of return. I'm guessing like the vast majority of the population whenever you think of financial sector workers you think of speculators in the stock market right? Well Joe the plumber can actually open up a portfolio but that doesn't make him a financial worker.
Riiiiiight, so you personally attack me for stating the truth and FYI i'm an Engineer. I wasn't talking about politics either you completely missed the point there. I was talking about the wages and salaries that are given to the financial services sector.
Calling something you said wrong when it was wrong isn't a personal attack. I quoted what you said below. Care to tell me how it relates to facts in the real world?
On August 07 2011 14:59 BordZ wrote:
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
How does a sector that allows private individuals to finance stuff like houses and small businesses "not contribute anything" to society? A person with the education level that you profess to have should frankly know better.
This whole mess happened because certain congressmen/women are morons who made it into their seat through self-righteous idiots voting because their high school education and watching of Fox News makes them feel as if they know how complex systems work. "Families have to cut and make sure our budget is balanced! Blah blah can't borrow forever!" Here's a little bit of info: the US Government isn't a family and is governed by rules and conditions you will NEVER face as an individual or family. Pretty graphs, big numbers, and libertarian propaganda youtube videos are not substitutes for actual knowledge of how financial and treasury systems work from a purely academic standpoint. Just because you can balance your checkbook doesn't mean you understand ANYTHING about defaults, credit ratings, or the debt ceiling. Your "common sense" approach is nothing more than a veil over the spectacle of how little you actually understand.
Interesting fact: GOP had to bring in top economists to convince Tea Party congressmen/women that a default is a bad thing and it will happen without action. Even then, many still refused to believe it. It's like trying to convince first graders that Santa isn't real.
EDIT: The average salary of finance people I just graduated an MBA program with, will be higher than the majority of national politicians in my country. The problem is not these guys being Overpaid...It's them being paid so Low that no one in their right mind would give up their financial or legal practice making millions a year to take a job paying like $150k/year....so you get crazy/stupid people instead.
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
Ya...but isn't that just kinda something dumb guys think its funny to say?
If your Senators were good at their jobs...wouldn't they be worth Millions?
If a Good Senator could pass a plan making the military 1% more efficient...he's saved you Billions of dollars.
If a Good Congressman pushes for one more little thing to be covered in a Healthcare bill, he could help 10,000 people.
If a really good President chose the advice of General A over General B...he could save you Billions, save lives and shorten a war by months or years.
You're used to bad politicians because you don't Pay them hardly anything, and you elect ones that lie to you the best.
If the President got $1 Billion a year, was allowed to have a Harem of women and he got to keep Air Force One at the end, you'd have the smartest god damn man in the country as President and you wouldn't even know who George Bush or Barack Obama were.
Riiiiiight, so you personally attack me for stating the truth and FYI i'm an Engineer. I wasn't talking about politics either you completely missed the point there. I was talking about the wages and salaries that are given to the financial services sector.
Wait so people in the financial sector do nothing productive? Then by the same logic architects are useless because all they do is draw stuff while the construction workers do the actual building and economists too because who needs a plan for the economy when people in the "real market" (farmers, miners, builders) can allocate resources amongst themselves.
People in the financial sector are people who structure funds, and firms to ensure that they can actually buffer themselves and run at optimal levels with the aim of reducing risks for a given level of return. I'm guessing like the vast majority of the population whenever you think of financial sector workers you think of speculators in the stock market right? Well Joe the plumber can actually open up a portfolio but that doesn't make him a financial worker.
It's true that the financial sector is the oil that helps keep the engine running, but we can always ask if we have too much of that oil or if it's too rich of oil for the task.
There are financial firms that literally make money by hosting computers that automatically buy/sell stocks based on trends, without any human input. There are people in the system that do little more than invest client money into the S&P, then skim a fraction of the earnings. In essence, there are even firms/people who simply resort to "penny shaving" (like in Office Space or Superman III) in order to pay their bills.
I'm not saying these firms are bad guys who deserve to be gutted, but rather we should always scrutinize the practices of people who handle our money.
EDIT: The average salary of finance people I just graduated an MBA program with, will be higher than the majority of national politicians in my country. The problem is not these guys being Overpaid...It's them being paid so Low that no one in their right mind would give up their financial or legal practice making millions a year to take a job paying like $150k/year....so you get crazy/stupid people instead.
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
Ya...but isn't that just kinda something dumb guys think its funny to say?
If your Senators were good at their jobs...wouldn't they be worth Millions?
If a Good Senator could pass a plan making the military 1% more efficient...he's saved you Billions of dollars.
If a Good Congressman pushes for one more little thing to be covered in a Healthcare bill, he could help 10,000 people.
If a really good President chose the advice of General A over General B...he could save you Billions, save lives and shorten a war by months or years.
You're used to bad politicians because you don't Pay them hardly anything, and you elect ones that lie to you the best.
If the President got $1 Billion a year, was allowed to have a Harem of women and he got to keep Air Force One at the end, you'd have the smartest god damn man in the country as President and you wouldn't even know who George Bush or Barack Obama were.
Riiiiiight, so you personally attack me for stating the truth and FYI i'm an Engineer. I wasn't talking about politics either you completely missed the point there. I was talking about the wages and salaries that are given to the financial services sector.
Wait so people in the financial sector do nothing productive? Then by the same logic architects are useless because all they do is draw stuff while the construction workers do the actual building and economists too because who needs a plan for the economy when people in the "real market" (farmers, miners, builders) can allocate resources amongst themselves.
People in the financial sector are people who structure funds, and firms to ensure that they can actually buffer themselves and run at optimal levels with the aim of reducing risks for a given level of return. I'm guessing like the vast majority of the population whenever you think of financial sector workers you think of speculators in the stock market right? Well Joe the plumber can actually open up a portfolio but that doesn't make him a financial worker.
It's true that the financial sector is the oil that helps keep the engine running, but we can always ask if we have too much of that oil or if it's too rich of oil for the task.
There are financial firms that literally make money by hosting computers that automatically buy/sell stocks based on trends, without any human input. There are people in the system that do little more than invest client money into the S&P, then skim a fraction of the earnings. In essence, there are even firms/people who simply resort to "penny shaving" (like in Office Space or Superman III) in order to pay their bills.
I'm not saying these firms are bad guys who deserve to be gutted, but rather we should always scrutinize the practices of people who handle our money.
This was a much more artistic response than the one I had planed and hits the nail on the head with the engine metaphor.
Riiiiiight, so you personally attack me for stating the truth and FYI i'm an Engineer. I wasn't talking about politics either you completely missed the point there. I was talking about the wages and salaries that are given to the financial services sector.
Calling something you said wrong when it was wrong isn't a personal attack. I quoted what you said below. Care to tell me how it relates to facts in the real world?
being paid more the 150k for not contributing anything productive to society is a travesty in itself to be completely honest.
How does a sector that allows private individuals to finance stuff like houses and small businesses "not contribute anything" to society? A person with the education level that you profess to have should frankly know better.
I never called him wrong, i just said its sad that people in the financial sector get paid to much.
Greenspan taking advice from Robert Mugabe , says to just print more money.Anybody think this will end well??
http://www.cnbc.com/id/44051683 No Chance of Default, US Can Print Money: Greenspan Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P's decision to downgrade America's credit rating.
"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default" said Greenspan on NBC's Meet the Press
If the President got $1 Billion a year, was allowed to have a Harem of women and he got to keep Air Force One at the end, you'd have the smartest god damn man in the country as President and you wouldn't even know who George Bush or Barack Obama were.
I disagree. You would get the one who can act as if he was the best man for the job and when you look at just the act before the election Obama did a very good job. And i think that is the real problem, that is most extrem in the US but it happens in every country. The value of truth is declining and people don't vote for the best man they vote for the best act. If the public does not start to inform itself about what the guys they vote really do they will get screwed over and over again.
Just take the Teaparty for example they made clear before they were voted in that they will not cooperate with the democrats. They were really honest but know their voters are angry with them because they did what they said they will do. Don't blame the Teaparty for this mess. Blame the public. In the end it's them who have the power to change things and if they fall for cheap acts than all they get is cheap acts. Every State gets the politics it deserves in the long run. So please stop bashing your congress and start bashing your neighbours for this ! :>
For the effects of the Downgrade : I think the Washington just got another campaign topic and not much more, because for now the markets haven't lost confidence in us bonds. But for local goverments this could go badly. Article to the local goverment topic
Edit : To the money printing thing : China and Europe will not accept a very weak Dollar as world currency and then we just may create a new crisis because there is not really another currency atm that is fit for the job. I think everybody knows the state of the euro and the us and europe can't except the chinesse currency because they allready think the chinesse goverment manipulates it's value to its advatage.
If the President got $1 Billion a year, was allowed to have a Harem of women and he got to keep Air Force One at the end, you'd have the smartest god damn man in the country as President and you wouldn't even know who George Bush or Barack Obama were.
I disagree. You would get the one who can act as if he was the best man for the job and when you look at just the act before the election Obama did a very good job. And i think that is the real problem, that is most extrem in the US but it happens in every country. The value of truth is declining and people don't vote for the best man they vote for the best act. If the public does not start to inform itself about what the guys they vote really do they will get screwed over and over again.
Just take the Teaparty for example they made clear before they were voted in that they will not cooperate with the democrats. They were really honest but know their voters are angry with them because they did what they said they will do. Don't blame the Teaparty for this mess. Blame the public. In the end it's them who have the power to change things and if they fall for cheap acts than all they get is cheap acts. Every State gets the politics it deserves in the long run. So please stop bashing your congress and start bashing your neighbours for this ! :>
For the effects of the Downgrade : I think the Washington just got another campaign topic and not much more, because for now the markets haven't lost confidence in us bonds. But for local goverments this could go badly. Article to the local goverment topic
Edit : To the money printing thing : China and Europe will not accept a very weak Dollar as world currency and then we just may create a new crisis because there is not really another currency atm that is fit for the job. I think everybody knows the state of the euro and the us and europe can't except the chinesse currency because they allready think the chinesse goverment manipulates it's value to its advatage.
agreed. im in a non US country and 99% of my friends think obama is a good president justg by looking at his charisma, lol. Though i can bet not one of them know about his policies/political views
The crushing weight of an unregulated economic rule can be just as restricting as the leash of a strong government. While basic logic supports Milton Friedman’s argument in Capitalism and Freedom that “every act of government intervention limits the area of individual freedom,” he fails to recognize that intervention can protect some freedoms and that the unregulated market create more tyrants than any political system (Friedman, 2007, p. 13). Without a government strong enough to force some regulations on the economy, corporate elites will gain power as rulers and manipulate the middle and lower classes with the economy. The correct balance to maximize freedoms while protecting the public is slightly different than Friedman’s proposed system, allowing the government more control. This analysis will cover the position of Friedman in Capitalism and Freedom and the errors in such thought, then introduce a system that is a healthy balance between totalitarianism and free market rule. A well-balanced system of government, one that has an open but regulated market and a government strong enough to properly enforce all of the necessary regulations as well as protect the people from economic abuse, is the best possible option.
Friedman has a valid point when he argues that government rules and regulations restrict the public’s freedom, but that does not mean such restrictions are not generally beneficial, if not necessary. When a government has too much power, it can almost completely remove the public’s freedom. With the force of the military and other methods of controlling the public, the government can regulate almost every aspect of a person’s life. However, the basic duty of government is to protect its citizens, which is only possible to do by limiting their freedoms. These are easily justified limits on freedom, such as “one man’s freedom to murder his neighbor must be sacrificed to preserve the freedom of the other man to live” (Friedman, 2007, p. 26). Friedman agrees there must be some limits and laws, but is an advocate of the free market, which he claims will protect freedom in both economic and political settings. To an extent, rule by the market will give people economic freedoms that are not available in most societies, but there are also drawbacks of this form of rule. Nonetheless, it is impossible to deny that the government operates on restrictions and regulations.
Friedman’s proposition that a free market could replace many sections of government and help create more freedoms still has a certain reliance on a government “to provide a means whereby we can modify the rules, to mediate difference among us on the meaning of the rules, and to enforce compliance with the rules on those few who would otherwise not play the game” (Friedman, 2007, p. 25). He believes the government simply needs to stand by the sidelines and mediate interactions among companies and the public when corruption could take place. Yet, Friedman is unwilling to allow the government to have many tools of power to administrate these groups. This reliance on government requires much more control by the government than Friedman seems willing to admit. Thus, an expansion of government powers over what Friedman proposes is necessary to assure moderate equality and freedom for all citizens.
Large-scale problems would commonly arise if the government was relatively powerless. Unless the entire world was ruled by the market, without governments or with very limited governments, the states under market rule would face the threat of invasion or abuse from nations with strong governments and military. Since a standing army is, economically, a waste of resources when it is not being used entirely for national defense, it is very unlikely that a large, if any, military would exist in a state under economic rule. Though mercenaries could be hired when need arose, it is highly unlikely that they would be hired and respond quickly and efficiently enough to stop a planned invasion, not to mention the question of who would do the hiring. Even if these issues were worked out, nothing would prevent this force from taking over the country when they were not on a job, which they would be compelled to do since they would not have a source of income without war. Of course, additionally, these militant leaders would not be likely to uphold the ways of the previous government and society, and, thus, the system would completely fall apart. It only takes a single issue, such as military defense, to show the fragility of a nation bound more by economic freedom than by political solvency.
Another issue that would have a large impact on a nation is Friedman’s dislike of the minimum wage and how it corresponds to the freedom of the poor; in a free economy, there will still be rich and poor, and, since the poor will have very little influence on the economy, they will have little influence on the state. This will create a powerless poor that will be open to abuse from the rich. Friedman denounces the minimum wage, which is one of the few regulations keeping the corporate elite from gaining a crushing economic hold on the middle and lower class (Friedman, 2007, p. 35). Without a minimum wage, which Friedman lists as one of the intrusive rules of the government that should be eliminated, once a person hits a rough spot in their finances, they can be forced down by companies searching for profits and stuck in a position where they are competing with other low-income people for extremely low paying jobs (Friedman, 2007, p. 35). Even if the United States kept the same economic and political policies but removed the minimum wage, the lower class would fall into turmoil quickly followed by the rest of the general economy. The minimum wage is a necessary requirement to keeping a closer gap between the different economic classes. Therefore, Friedman’s model without the minimum wage would not effectively protect the public from abuse as would a larger government model that had control over economic regulations such as the minimum wage.
Not only would these companies abuse the poor under Friedman’s lack of restrictions, but they would abuse natural resources, too. Friedman does not support national forest among other methods of environmental protection, which are necessary to protect the public as well as the environment. Without such protections, companies would exploit natural resources to keep their profits high. The environment would fall to heavy deforesting and mining, because the short-term profits would be more appealing than long-term environmental protection. Sets of regulations are necessary to protect the environment from being polluted and destroyed by hungry companies. Environmental protection helps keep the air clean for people to breathe, water safe for drinking and renewable resources available for use.
Even with a small government to regulate and make sure all of the companies obey the few rules and regulations, the large companies would be basically untouchable by the government. With the amount of influence they would have and the ability to manipulate the government, they could avoid any restrictions with bribery and corruption. Without the ability to influence the government on the same level as the large companies, the poor and even middle class would be oppressed and be forced to worry more about keeping up with their bills than attempting to engage in politics to help change their situation. Thus, the market rule can degrade into more of a totalitarian rule by the CEOs and other economic elites without even higher governmental restrictions than Friedman views as valid. It is necessary for the government and its members to have enough incentive and control that will be less prone to simply sell-out to the large companies. The government needs to have a strong hand in control of parts of the economy that is resistant to corruption to prevent abuse from crushing the lower classes.
With each power that Friedman wishes to remove from the government, another problematic issue arises that leads to more threats to freedom than the freedom the power’s removal gives the governed. Yet, while an economy-run nation would allow company elites to rule over the majority of the population through economic manipulation, a very strict government would be similar in terms of oppression. Friedman notes “the typical state of mankind is tyranny, servitude, and misery,” which describes a majority of governments before the nineteenth century (Friedman, 2007, p. 24). Thus, an extremely strict government would definitely limit the freedom of its people beyond what is necessary to protect them properly. With a strong government rule restricting freedoms and a free-market rule not protecting freedoms well enough, the only possible answer to a society with as much freedom as possible is a healthy balance between the two. While Friedman notes many activities that “cannot… validly be justified” by his vague terms of the responsibilities of government, he does not clearly state the boundaries between necessary restrictions and unnecessary limits of freedom (Friedman, 2007, p. 35).
Another regulation that benefits and protects the public and their freedoms, and that Friedman seems to leave out of his bounds of government, is health and work regulations. These regulations protect people from being harmed by poor work conditions, exposure to hazardous chemicals, and other issues that might arise when companies care more for profits than the well-being of their workers. It is a citizen’s right to breath air that will not cause their lungs and body damage as much even if another citizen wishes for the right to pollute by driving vehicles and burning coal in factories. However, as Friedman quotes Supreme Court Justice William O. Douglas, “‘My freedom to move my fist must be limited by the proximity of your chin’” (Friedman, 2007, p. 27). Thus, to protect workers from harmful chemicals, the work places must be regulated. Friedman might argue that capitalism would eliminate companies who had poor working conditions, but it is likely people would be unwilling to leave a steady job to escape the work environment if they were even aware that they were being exposed to toxins or unsafe environment and equipment. Therefore, the government must regulate work and environment safety standards to protect its citizens. Even regulation and taxation of imports and exports when they are fit to protect and aid the economy are beneficial to a nation. While this goes strongly against the idea of free market, it would provide great protection of the economy and would be unlikely reduce trade greatly as the countries that participate in high amounts of trade with the country would likely rather lose a little profit than lose trade abilities with such a significant producer and consumer. China had previously done a very good job protecting its economy through these methods. These tariffs and the previous rules and regulations are just a few examples of how restrictions that Friedman dismisses as unnecessary actually provide economic stability, protect the public and allow for many more freedoms than could exist under an unregulated market rule.
With a free-market rule creating problems and abuse on par with a crushingly strong government, the best option is rule by a government that can properly enforce all of the necessary regulations on the economy and the people, as well as protect the people from possible abuse by strong economic powers. Friedman’s idea of a lightly regulated economic rule seems promising, but, in the end, is flawed in its ability to protect the citizen’s rights from abuse by other powers. Trading one tyrant for another is not a solution, but simply a different problem. While a capitalist economy can be beneficial, it is absolutely necessary for restrictions to be placed upon it to prevent abuse of the public, the environment and other possible victims of the brutality of the corporate battles for profit.
Many people, even economists, believe that the world has become “flat” due to technology and globalization, allowing for innovation and education that would never have been imaginable previously, but also causing a decrease in economic diversity.1 Economic globalization is the integration of the various smaller economies of the world, such as those within a country, into a single world-wide economy. It has allowed for unprecedented economic growth and diversity, but has caused many conflicts over economic policies. There cannot be a large number of restrictions among economies when combining them or else neither side would profit. Thus, government and economy are related by the government’s influence upon economic regulations and its attempts to manage globalization. One economist simply explained this relation as “economics is concerned with expanding the pie while politics is about distributing it” (Alesine, 1994, p. 465).
Many supporters of globalization believe in the need for free trade, the lack of restrictive regulations on the economy. A number of economists believe that increasing globalization through advancing free trade is beneficial to the economies and people around the world. However, a prominent Turkish economist and Harvard professor, Dani Rodrik, disagrees with this view. He instead argues that the same if not more government regulation is needed to help support globalization (Rodriguez 1999). With these conflicting views, there is a large amount of debate over which path is best for the world: free trade or limited globalization. In this paper, I will first cover and analyze the various opinions on free trade, covering why free trade is supported, the ways tariffs are harmful, and how equality can be easily lost with restrictions and regulations on trade. Then I will counter with arguments for protectionism, showing how tariffs promote equality in wages, the economic growth that globalization bring with protectionism, where free trade agreements fail under weak governments, and the safety nets needed to control globalization. I have come to a conclusion on the approach that needs to be taken to best benefit the people of the world. The approach that needs to be taken to protect the economy while supporting globalization is the implementation of both global and national institutions of regulation which do not greatly restrict globalization, but protect the balance of equality and create more economic stability.
Free Trade
A large number of people advocate free trade and claim an open market will improve national and global economies by encouraging balanced trade through a capitalist system. Supporters of free trade are opponents of the practice of protectionism, which advocates the restriction of the market through various barriers, such as subsidies, tariffs and quotas. One free trade supporter and published economist, Jan Tumlir, claims that “all protection is a redistribution of income and wealth within the protecting country” and that providing protection to an economy increases the cost of goods within the economy (Tumlir, 1985). The general view of free trade is that reducing competition within a country’s economy will also reduce efficiency within the protected industries and raise the prices in those industries. Tumlir argues in his book Protectionism: Trade Policy in Democratic Societies that the costs paid by industries and consumers to protect the economy’s long-run growth rate and provide stability are higher than it is worth and will plunge the country into a downward economic spiral (Tumlir, 1985). He admits protectionism “eventually raises the general level of money wages” but counters that “the sectors producing import substitutes and tradeable goods are able to pass the higher costs to consumers” (Tumlir, 1985, p. 6). These higher costs are greater than the increase in wages, so even the workers who benefit from increased wages suffer when it comes to purchasing the products that they produced. Herein lies the argument for avoiding protectionism and encouraging expansion of free trade.
Not only is protectionism as a whole potentially harmful to economies, but tariffs can also deal a powerful blow on their own. In his book, The Choice: A Fable of Free Trade and Protectionism, Russell Roberts explores the state of America and its economy in 2000 if tariffs had been imposed in 1960 to protect American jobs (Roberts, 2001). As the book is written in a story-like first person view, the narrator explains how the president’s bill to increase tariffs lead to a lack of trade:
“His first bill ‘protected’ Americans from foreign televisions. His second bill eliminated all imports and will stay in force permanently. What you see around you in a self-sufficient America. But without imports, America has to devote a lot of resources to make things they hadn’t made before. Those items got so expensive, people could not afford the same cars as they did before.” (Roberts, 2001, p. 33)
The argument the narrator makes with the story is that tariffs choked the competition from foreign markets so much that they stopped trading with the United States completely, since other markets with lower or no tariffs were more profitable to sell to (Roberts, 2001). While this situation is a bit of an extreme, it does express a potential drawback of tariffs: restriction of globalization. If one country enforces tariffs higher than other countries’ tariffs, it will encourage their trading partners to look for other possible markets without the same taxations. This could be harmful to both the country imposing the tariff and those that are involved in trade with that country. The country itself will likely lose export markets due to rebuttal tariffs implemented in response to the original tariffs as well as the diversity of its own market place and the general benefits of globalization (Shutt 1985). Being self-sufficient, the country would be forced to produce goods that it imported from other countries previously. Rice, for example, that might have been previously imported from another country would now have to be grown within the state, taking up land and resources that were not previously used. In the case of small countries or ones with more limited resources, this would be a path to destruction, as they could not be self-sufficient and would be forced to remove the tariffs that were preventing trade to prevent a complete collapse of their own economy from impossible to meet consumer demands. Therefore, Roberts’ world of a self-sufficient United States, lacking market diversity and forced to use precious resources on goods that were previously inexpensive in the globalized market, could be a realistic danger of implementing tariffs.
Tariffs and other tools of protectionism are also extremely difficult to implement equally and fairly. As recently as 2007 there have been complaints from the public about the few tariffs that affect the United States. Men’s and women’s clothing imports are taxed differently in the United States, men face higher import taxes on items such as woolen shirts, while women’s sport items are taxed higher, allowing for what some claim to be sexual discrimination to develop through by taxation encouraging women to wear different clothes than men.2 Even with the World Trade Organization, the North American Free Trade Agreement and other such agreements and entities giving the United States the façade of a free trade supporter, these tariffs display the situation in a different light. A recent article in the New York Times illuminated yet another discrepancy with the so-called free trade policies of the United States; a habit of picking and choosing the outcomes of globalization, protesting and disallowing the sales and purchases of companies from some countries.3 Another article notes that the previous trend of economic liberalization had stagnated and countries are starting to erect the barriers they previously tore down to expand globalization.4 Thus, many supporters of free trade and globalization are weary of how governments are currently handling the economy and support freeing it further from the grasp of politicians.
The Other Side: Protection
Free trade supporters are convinced that each move that reduces interaction with the global economy is a positive step, and many people balk at the mention of tariffs due to fear of Roberts’ scenario of economic and industrial stagnation created by import taxes. However, Branko Milanovic and Lyn Squire have done studies that encourage a different perspective. They studied “a large dataset of average tariff rates all covering the period between 1980 and 2000,” a period of great economic globalization (Milanovic and Squire, 2005, p. 2). They found that reducing tariffs creates inequality in wages in similar occupations and industries in countries below the world median income, while the opposite occurred in richer countries (Milanovic and Squire, 2005). This inequality arises in the form of unequal wage income and the distribution of such income. Another issue is the effects on a country which did not change any of its trade policies, at least with respect to tariffs and other forms of taxation. Milanovic and Squire’s model shows that even if a country does not change its trade policies, “global expansion of trade reduces the export volumes or prices” of the country (Milanovic, 2005, p. 4). Not only would the country’s exports suffer, but it would not reap the benefits of globalization and fall behind countries which it had previously ranked higher than economically. Thus, when a major country reduces tariffs, many of the other countries in the same economy are forced to take similar action, and if the economy is global, then all must react the same way to protect themselves. Tariffs are necessary to uphold global equality in the workplace, and the removal of even one tariff could affect the entire global economy.
An investigation in 2001 by the World Bank entitled Globalization, Growth, and Poverty: Building an Inclusive World Economy showed China, India and Vietnam had great gross domestic product (GDP) growth in the mid to late twentieth century, much higher than the growth of the United State’s economy’s booming growth in the early twentieth century (Maddison 2001). Even more surprising is that “by standard measures, such as the height of import tariffs and prevalence of non-tariff barriers, India, China and Vietnam were among the most heavily protected countries in the early 1990s” (Rodrik, 2007, p. 5). In fact, their average tariffs were between 31.2 and 50.5 during that time and China and Vietnam were not even members of the World Trade Organization, so they were not compelled to follow regulations forced upon other countries, yet their growth rates were still between 3.3 and 7.1%, which is extremely impressive in terms of growth (World Bank 2005). On the other hand, Latin America suffered and produced a dismal economic performance when they attempted to liberalize their economy by removing all possible barriers. Rodrik expands upon this situation:
Here the paradox is not just that Latin America did worse than Asia, it is also that Latin America did worse than its pre-1980s performance. Let’s recall that the pre-1980s were the era of import substitution, protectionism, and macroeconomic populism. That the region did better with these discredited policies than it has under open-market policies is a fact that is quite hard to digest within the conventional paradigm. (Rodrik, 2007, p. 6)
The free trade policies of Latin America in the 1990s have done little to nothing to advance their economies and much to harm and destabilize them. Latin America is a perfect example of how following the policies supported by free trade can be economically tragic. Thus, the support for tariffs and other economic barriers that some may see as constraints on globalization have actually been quite beneficial for a number of countries that have still reaped the benefits of globalization while protecting their own markets.
Tariffs cannot just be thrown about by governments without proper research and analysis, however. In fact, there are many aspects of an economy that must be analyzed and delicately regulated to prevent globalization from dragging everyone down the same drain of economic failure. Dani Rodrik argues for a new orthodoxy that “emphasizes that reaping the benefits of trade and financial globalization requires better domestic institutions, essentially improved safety nets in rich countries, and improved governance in poor countries (Rodrik, 2007, p. 3). This has been supported by research done by Aaron Tornell, Frank Westermann and Lorenza Martinez in their study of North American Free Trade Agreement (NAFTA). They observed why Mexico failed to attain great gross domestic product (GDP) growth in the 1990s, and why its GDP and exports have stagnated since 2001 (Martinez et al. 2004). They claim in their paper that it was not the trade expansion that NAFTA encouraged that brought about the crisis in Mexico, but “the lack of further judicial and structural reform after 1995” (Martinez et al., 2004, p.2). Globalization can produce extraordinary growth of exports and foreign domestic investment, but only when there is proper governance.
The argument that the safety nets and government regulations encouraged by Rodrik and the study of Mexico and NAFTA would reduce the benefits of globalization is based on the presumption that “insufficiently open markets continue to impose constraint on the world economy” (Rodrik, 2007, p. 3). Rodrik argues that this presumption is no longer valid, because lacking trade is no longer a constraint on the global economy and continues the argument that it is “lack of policy space-˗ and not lack of market access-˗ which is (or likely to become soon) the real binding constraint on a prosperous global economy” (Rodrik, 2007, p. 4). Globalization is highly unstable and, as explained previously, contributes to inequality without proper regulation. A range of institutional complements are required to support globalization’s benefits and prevent the inequality and instability shown in Milanovic and Squire’s study and by Latin America that arises from the blending of the world’s economies. An example of such institutions could be a work environment regulatory agency, which many countries have in place but tend to be poorly enforced (Krueger 1996). The conditions of factories in some of these countries, though, are not even close to what they claim as their national standards. This allows for abuse of the workers to benefit companies in these nations and, thus, reduces the quality of the workplace and the lowers the cost of production. One example of this issue is in China, where lacking restrictions on industries has left dozens of ponds in the Fujian Provence toxic and dangerous, causing great problems for the fishermen and thousands of people who consume the fish at risk for numerous health problems.5 If there were more strictly implemented laws both nationally and internationally, the factories in China would not be able to dump toxic waste into the environment without serious punishment. This would protect both the people of China and everyone around the world who now might consume these toxic fish thanks to globalization spreading the product across the globe. The safe production of products in a country is no longer just that country’s concern, because globalization spreads such products to other nations, so globalization itself encourages restriction on free trade to prevent such incidents. Having moderators to ensure equality, safety and protection for both workers and consumers would be beneficial to the entire world.
In the End
The arguments for restricted globalization and more free trade are both very compelling. After reviewing these different articles and studies, I agree that globalization is beneficial to all economies of the world. There are no problems with expanding consumer and producer bases, globalization can provide an economic boost for all parties involved. However, I have found that institutions and regulations are required to keep the global economy from becoming imbalanced. As intimidating as some people may find them, reasonable tariffs, ones that do not create unreasonable restrictions on foreign imports while helping to protect the economy from the full force of negative outside influences, are beneficial to the economies of their respective countries and provide stability and protection for them. Other institutions also seem quite necessary to protect workers and consumers as well as encourage fair play on the parts of the nations. Without such restrictions, it seems quite likely that smaller countries and the poor could be abused or crushed under the weight of the global economy. We need to step back from the free trade mindset and recognize restrictions are necessary to protect ourselves from the unstableness of globalization. As Dani Rodrik wrote, “the only way to save globalization is to not to push it too hard” (Rodrik, 2007, pp. 31).
Works Cited:
Alesina, Alberto, and Dani Rodrik. 1994. Distributive Politics and Economic Growth. Quarterly Journal of Economics 109: 465-90.
Dahl, Robert. 1989. Democracy and Its Critics. New Haven, Connecticut: Yale University Press. Friedman, Milton. 2007. Capitalism and Freedom. New York, New York : Anthem Press. Krueger, Alan B. 1996. Observations on International Labor Standards and Trade. Working Paper W5632. Princeton, New Jersey: Princeton University.
Maddison, Angus. 2001. The World Economy: A Millennial Perspective, OECD.
Martinez, Lorenza, Aaron Tornell, and Frank Westermann. 2004. NAFTA and Mexico’s Economic Performance. Working Paper 1155. Los Angeles, Cali.: University of California.
Milanovic, Branko, and Lyn Squire. 2005. Does Tariff Liberalization Increase Wage Inequality? Some Empirical Evidence. Working Paper W11046. Washington, D.C.: World Bank.
Rodriguez, Francisco, and Dani Rodrik. 1999. Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-national Evidence. Maryland: Department of Economics, University of Maryland. Rodrik, Dani. 2007. How to Save Globalization from its Cheerleaders. The Journal of International Trade and Diplomacy 1 (2): 1-33.
Shutt, Harry. 1985. The Myth of Free Trade: Patterns of Protectionism Since 1945. London, England: Economist Books.
Tumlir, Jan. 1985. Protectionism: Trade Policy in Democratic Societies. Washington, D.C.: American Enterprise Institute.
World Bank. 2005. “Economic Growth in the 1990s: Learning from a Decade of Reform,” Washington, DC: World Bank.
Oh, and raise freaking taxes, especially on the top 2-5% and stop giving them tax breaks and free money for doing things like not making "farm land" out of property that is actually in the middle of a city like LA.
You all realize the tea party has only been around about a year, and these problems were decades in the making?
Im not a tea party person, but its ironic that the people who point out the debt problem get the blame for it rather than the people who inccured the debt.
And to you people blaming "the unregulated free market", i just dont know whether to laugh or cry anymore. There are more regulations on the books now than there ever has been in human history. If you really think a few more regulations is gunna fix things then your just..... sigh.... nevermind.
On August 08 2011 23:46 Equity213 wrote: You all realize the tea party has only been around about a year, and these problems were decades in the making?
Im not a tea party person, but its ironic that the people who point out the debt problem get the blame for it rather than the people who inccured the debt.
And to you people blaming "the unregulated free market", i just dont know whether to laugh or cry anymore. There are more regulations on the books now than there ever has been in human history. If you really think a few more regulations is gunna fix things then your just..... sigh.... nevermind.
Good post in reference to the unregulated free market. The market is already highly regulated. Monopolies and businesses "too big to fail" that end up failing don't just pop up on their own because Jimmy the founder was highly innovative. They happen because of restrictions on new businesses, aka "regulations" which stifle competition. Then I hear arguments that we need to impose restrictions on the businesses to prevent economic abuse, the very businesses that we helped to create and give such power in the first place.
I saw this crap coming a week ago and should have sold my stock last monday. Now I lost 20%, probably more than that since the company doesn't sell on weekends and when the order eventually goes through, well it's not good..
On August 08 2011 23:51 Playguuu wrote: I saw this crap coming a week ago and should have sold my stock last monday. Now I lost 20%, probably more than that since the company doesn't sell on weekends and when the order eventually goes through, well it's not good..
On August 08 2011 23:51 Playguuu wrote: I saw this crap coming a week ago and should have sold my stock last monday. Now I lost 20%, probably more than that since the company doesn't sell on weekends and when the order eventually goes through, well it's not good..
FML
Should have sold when the reps refused to negotiate.
The Tea Party is certainly to blame because they took their 20% in the house and refused to compromise in any way. They forced their agenda by refusing to play ball with their own party, let alone the democrats.
They made a political show out of what should have been a mundane task and create this entire problem. You don't need to hold the US economy hostage and risk default (while every other country in the world is trying desprately to avoid it) to get things done.
This is why we still have these stupid partisan politics.....drones man.....people who dont inform themselves and are fed by media propaganda.....I think its been said in this thread but ill say it again.....the democrats controlled congress for 2+ years!!!! They had MORE than 600 days to pass a budget on DEMOCRATIC terms.....they could have passed whatever budget they wanted, but did they?....no they didn't they waited until the last minute so that they could say "look what the big bad tea party did".....all the tea party did was call their bluff and say no new taxes.....Im not for or against the tea party and I for damned sure am not for republicans or democrats anymore.....the reason this country is the dire straights that it is, is because of un informed ppl who buy whatever the media feeds them......please guys Im begging everyone in this forum to get informed.....dont watch fox news and dont watch cnn....do a little digging and find out why and how you are being lied to and herded like sheeple!
Well Obama says that America will always be a AAA rated country Source
Next thing we know in the news, Obama degrades the S&P rating to A-- . Well one thing for sure, the US debt crisis is going to impact the entire world. For people who dont understand what crisis America is going through, here is a nice video for everyone to understand
On August 08 2011 23:51 Playguuu wrote: I saw this crap coming a week ago and should have sold my stock last monday. Now I lost 20%, probably more than that since the company doesn't sell on weekends and when the order eventually goes through, well it's not good..
FML
Should have sold when the reps refused to negotiate.
I tried to, I couldn't find my account info and my username was tied to some arbitrary number
Hopefully this will get voters to care less about the D or R next to a candidate's name when going to the booth. Vote out the idiots and keep in the ones doing their jobs.
On August 09 2011 04:49 Romantic wrote: Nobody should care what S&P thinks. The markets don't.
Worst post ever, especially considering the timing of it.
Dow down 630~ points (5.55%) Nasdaq down 6.9% S&P down 6.66%
p.s. I pity Bank of America shareholders. A horrible trading day+ lawsuit from AIG = Losing about 17 billion dollars in a single day.
Yes, and Obama's speech didn't seem to help things either. It's hard to determine the affect of it, but it sure didn't help. D -1.85% s&p -2.09% nas -2.41%
He keeps saying "balanced approach", makes me so mad. Just one more of the annoying buzzwords politicians and pundits like to toss around (like besmearch, bootstraps, demonize, usurp, skin in the game, demagogue)
He could have just raised it himself via 14th amendment (or so I've heard). Actually this is wrong, but still thought I'd put it out there. Still he could have done a little more to ensure this crap didn't happen.
Also Boehner is just as bad. He said he was 98% happy with the deal, when they all knew what had to happen to avoid the bond downgrade (or maybe they didn't and that's the problem).
On August 09 2011 04:49 Romantic wrote: Nobody should care what S&P thinks. The markets don't.
Worst post ever, especially considering the timing of it.
Dow down 630~ points (5.55%) Nasdaq down 6.9% S&P down 6.66%
p.s. I pity Bank of America shareholders. A horrible trading day+ lawsuit from AIG = Losing about 17 billion dollars in a single day.
Yes, and Obama's speech didn't seem to help things either. It's hard to determine the affect of it, but it sure didn't help. D -1.85% s&p -2.09% nas -2.41%
He keeps saying "balanced approach", makes me so mad. Just one more of the annoying buzzwords politicians and pundits like to toss around (like besmearch, bootstraps, demonize, usurp, skin in the game, demagogue)
He could have just raised it himself via 14th amendment (or so I've heard). Actually this is wrong, but still thought I'd put it out there. Still he could have done a little more to ensure this crap didn't happen.
Also Boehner is just as bad. He said he was 98% happy with the deal, when they all knew what had to happen to avoid the bond downgrade (or maybe they didn't and that's the problem).
Obama appearing made things worst because it made everyone realize its big enough for the president to come out and say something about it. I tuned into bloomberg for a second and I found it funny seeing all these paid "analysts" telling everyone there is nothing to fear and this is just temporary! Its ridiculous. The problem with the markets is that it isn't short term. EU debt problem needs at least 2 years to settle/fix itself, and i'm being hella optimistic. USA debt problem wont be solved for at least a decade. Hell, in a decade they are cutting 2/15 trillion worth of debt! Thats how ridiculous their deal is, hence the needed downgrade.
Not to mention all the Quantitative easing Bernanke has been doing and might do his 3rd round soon. UK/US prices have almost doubled across the floor in supermarkets the past 2 years.
If you acutally payed attention in 8th grade civics (for all of you Americans here) The president has no power over congress until it passes a bill or he enacts the 14th ammendment (which is incredibly hard to do) Also the house is controlled by republicans so the democrats couldn't just send something through congress to the president. Personally I think republicans are to blame since they wouldn't agree to just raise the debt ceiling (which we have done many times.)
Not sure if serious.. Have you read how people are responding to this debt crisis'?
You can't fool and manipulate the financial markets indefinitely.. History has proven this..
On August 09 2011 05:15 isM wrote: The Dow cared today.
On August 09 2011 05:20 sekritzzz wrote: Worst post ever, especially considering the timing of it.
Dow down 630~ points (5.55%) Nasdaq down 6.9% S&P down 6.66%
p.s. I pity Bank of America shareholders. A horrible trading day+ lawsuit from AIG = Losing about 17 billion dollars in a single day.
Fundamental misunderstanding of the situation. S&P downgraded US treasuries. If anybody cared, you would expect them to demand higher rates for treasuries. Opposite happened; 10-year treasuries dropped .22% to under 2.4%. May as well be giving the US Federal Government money.
You think a worldwide loss in stock prices is the result of a downgrade of US treasuries, while the treasuries themselves are doing fine?
What triggered economy fears? To some extent I think this is a Wile E. Coyote moment, with investors suddenly noticing just how weak the fundamentals are. Also, the mess in Europe.
If USA growth goes negative, I have a bad feeling that records will be broken on how low things can go and how fast.
On August 09 2011 05:20 sekritzzz wrote: Worst post ever, especially considering the timing of it.
Dow down 630~ points (5.55%) Nasdaq down 6.9% S&P down 6.66%
p.s. I pity Bank of America shareholders. A horrible trading day+ lawsuit from AIG = Losing about 17 billion dollars in a single day.
Fundamental misunderstanding of the situation. S&P downgraded US treasuries. If anybody cared, you would expect them to demand higher rates for treasuries. Opposite happened; 10-year treasuries dropped .22% to under 2.4%. May as well be giving the US Federal Government money.
You think a worldwide loss in stock prices is the result of a downgrade of US treasuries, while the treasuries themselves are doing fine?
Better than fine. Treasury is basically STEALING money at this point. The sad part is that US treasuries are still probably one of the safest bets around due to the Euro crisis, Arab Spring, and China's general instability when it comes to investment.
What triggered economy fears? To some extent I think this is a Wile E. Coyote moment, with investors suddenly noticing just how weak the fundamentals are. Also, the mess in Europe.
If USA growth goes negative, I have a bad feeling that records will be broken on how low things can go and how fast.
It's still growing, but it's not outpacing the demand for growth. If you look at stock prices over the past 2 years, it's obvious that investors got ahead of themselves and created an "optimism bubble." Now it's bust and we're going to be back where we were in 2009, but with slightly lower unemployment.
yeah same here. My shares are getting killed, but thankfully i own alot of gold, and im gunna short the market tommorow. We might get a bounce soon, we are coming close to old support. We are in a bear market now though, this is kinda scary hehe. Oh well have fun with it.
They wouldn't have had to raise the debt ceiling by 2.4 Trillion if Rummy hadn't lost 2.3 Trill down the back of the sofa...
Still , the day after he announced that he couldn't find the dough the records with possible leads as to where the money went at the Pentagon were destroyed in the 9/11 attacks.Good for him i guess.Get rid of government waste before you raise taxes , if losing 2.3 trillion isn't government waste then what is?
On August 07 2011 19:02 Serthius wrote: Downgrading the credit rating of a country which only has debts in its own currency makes no sense.
Uh...why?
If I hold American debt, to be paid in American Dollars...I need to be confident not only that you'll pay me back, but that the thing you pay me with with be worth something.
Also, if you think those Tea Party people were even going to let the thing default, you're on crack. I know everyone was acting like they had 'hours to go' but they had about 6 days left.
Higher spending is just as responsible for this rating cut as a lower debt ceiling is.
The US controls the dollar printing presses. It can print more dollars.
You may think there's no way the politicians would let the US default, but quite a lot of people, and among them the guys at the rating agency, seem to disagree. This guy says it better than me:
"America’s ability to pay is neither here nor there: the problem is its willingness to pay. And there’s a serious constituency of powerful people in Congress who are perfectly willing and even eager to drive the US into default. The Tea Party is fully cognizant that it has been given a bazooka, and it’s just itching to pull the trigger. There’s no good reason to believe that won’t happen at some point."
But printing more dollars lowers the value of dollars...You still get your rating lowered if your currency is at a risk of dropping a lot.
On August 10 2011 10:57 ddrddrddrddr wrote: Can you burn money to increase the value of your country's currency?
yes.. with a slight modification. If the total sum that symbolizes money in some form is reduced, each dollar will be more valuable. for example if you make the decision to all the banks to "remove" half of their money currently in their system, thus reducing all earnings by the customers of the bank by half the dollar becomes increasingly stronger against other currency.
On August 10 2011 11:21 Cubu wrote: What happens if someone where to secretly tamper with the number in the computer database so as to make it lower?
That's not so easy.
It would be equivalent to secretly tampering with the number that the bank says is in your savings account, or the number of shares of a stock that you own.
In other words, very difficult to impossible to achieve, let alone get away with while avoiding scrutiny.
On August 10 2011 10:57 ddrddrddrddr wrote: Can you burn money to increase the value of your country's currency?
Technically. Much of the money isn't actually on physical paper, though. It's just a number in a computer database.
What happens if someone where to secretly tamper with the number in the computer database so as to make it lower?
That would indeed cause deflation, which would increase the value of our currency. However, there are problems that come with deflation, just like there are problems that come with inflation. Most notably the deflationary spiral. "A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price."
I listened to a discussion on NPR's fresh air with an economist/writer for TIME. The point he made was so simple. He said this is not a discussion between a Christian and Muslim about the nature of Hell. It's money. "You can literally split the difference." He made an impression on me. It sounds so simple, and it in fact it should be. He also impressed upon the fact that if Congress did nothing, something they are very good at, and let the Bush tax cuts expire, it would bring in trillions in tax revenue (I forgot the number).
Yet the idiots in Washington (not all of them, but enough to screw us all over, and it in fact really did screw everyone over, even their rich friends) could not do such a simple thing as compromise, largely because of the stupid stubbornness of the Tea Party. I'm ashamed to be friendly to Republicans (mostly independent but I lean that way more often than not) if they can't get over their egos and desire fore reelection.
Michael Bennett, a senator from my state (CO) who I probably would not have voted for in the last election, has impressed me with his overall desire to work across the aisle. I'm sure he has views I don't like or agree with, but a willingness to work with others is a trait I'm coming to value above many ideals.
On August 10 2011 10:57 ddrddrddrddr wrote: Can you burn money to increase the value of your country's currency?
The burning of large amounts of money is illegal in most countries afaik.
In the US, burning bank notes is illegal. But the law doesn't particularly seem to be enforced when it comes to single bills being lit on fire symbolically.
EPT
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