S&P Downgrades US Credit Rating to AA-Plus

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ProVobis said:
No doubt, but your credit-worthiness is whether you can pay for it or not in a timely way. Even passing a massive revenue-enhancing measure of some type cannot guarantee immediate funds available if the U.S. were attacked, for example. So you have to borrow, even overnight, if necessary. Threatening not to pay on your obligations is not a good thing. Nixon tried it too, but realized he had to abandon the gold standard in order to pay off the debt. They didn’t like having to take our printed currency but they had no choice.
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Until 20 years ago the US debt was financed primarily by US citizens, foreign nations and individuals held very little of our debt. Today foreign countries hold over 28% of the total national debt and over half of the publicly held debt. When you owe that kind of money to friends and enemies you sometimes find yourself dancing to their tune.
 
zz912 said:
I’m wondering why you aren’t willing to pay your fair share. If taxes must be raised, let’s rescind ALL the evil Bush tax cuts. Why are you so greedy? Why won’t you DEMAND to be taxed at the Clinton tax rates?
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I have mentioned this before, but back when I had a weekly radio show I hhad a standing offer to prepare for free the tax returns of anybody who wanted their taxes calculated using the rates in effect before the evil Bush Cuts. . I never had any takers.
 
estesbob said:
I have mentioned this before, but back when I had a weekly radio show I hhad a standing offer to prepare for free the tax returns of anybody who wanted their taxes calculated using the rates in effect before the evil Bush Cuts. . I never had any takers.
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Of course not. They want the other guy to pay.
 
ComputerGeek25 said:
Of course not. They want the other guy to pay.
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Which is the interesting part about this debate. While decrying greed and and ranting about people not being in shared sacrifice the only solution they offer is to raise taxes on everybody else. . Again when 47% of the people pay no federal income tax it is easily convince them that we should raise taxes on the 54% who do. When you rob Peter to pay Pau you always get Paul support
 
estesbob said:
Which is the interesting part about this debate. While decrying greed and and ranting about people not being in shared sacrifice the only solution they offer is to raise taxes on everybody else. . Again when 47% of the people pay no federal income tax it is easily convince them that we should raise taxes on the 54% who do. When you rob Peter to pay Pau you always get Paul support
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What Paul does not seem to realize is that he’s still paying.

If he forces Peter to pay more in transfer payments, Paul also has to get a piece of Peter’s money, not just utilize Peter’s money for programs that don’t benefit Paul, because statistically wages from work go down when transfer payments go up. So, even if Paul pays nothing, unless Paul isn’t a direct recipient of Peter’s money, he’s still paying because he, himself, is paid less because Peter (Paul’s employer) has to pay someone who isn’t working at all in addition to paying Paul.
 
Ridgerunner said:
What Paul does not seem to realize is that he’s still paying.

If he forces Peter to pay more in transfer payments, Paul also has to get a piece of Peter’s money, not just utilize Peter’s money for programs that don’t benefit Paul, because statistically wages from work go down when transfer payments go up. So, even if Paul pays nothing, unless Paul isn’t a direct recipient of Peter’s money, he’s still paying because he, himself, is paid less because Peter (Paul’s employer) has to pay someone who isn’t working at all in addition to paying Paul.
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And when Paul lays Peter off Peter whines about Paul’s greed and demands that Paul be taxed even more in punishment for eliminating his position.
 
When Bernanke prints money to buy bonds, we all end up on the hook for it, rich or poor, whatever the tax rates.

Watch for his announcements today, which will no doubt add to the $14.3 Trillion debt and not one word will be said about it from Congress. Will anyone from the Tea Party protest except wait until the bills come due?
 
ProVobis said:
When Bernanke prints money to buy bonds, we all end up on the hook for it, rich or poor, whatever the tax rates.

Watch for his announcements today, which will no doubt add to the $14.3 Trillion debt and not one word will be said about it from Congress. Will anyone from the Tea Party protest except wait until the bills come due?
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The Federal Reserve HAS TO fund the national debt, by law. It has no choice. So, the administration and congress just raised the debt ceiling hugely and didn’t cut spending meaningfully, and anyone is surprised that the Fed is ginning up the printing presses again?

Tea Partiers might not protest, but they ought to. But protesting Fed action would be misplaced. It’s congress and the administration that are to blame, and 2/3 of that blame rightly falls on the Democrats who control the white house and the senate. 1/3 falls on the Republicans in the House who didn’t have the courage to defy the Democrat controlled media and do what they knew they ought to do.
 
Ridgerunner said:
The Federal Reserve HAS TO fund the national debt, by law.
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Not so. Individuals and foreign governments can also buy bonds to pay the immediate bills as well. Over the amount that’s collected from tax revenues, that is. The FED adds to the national debt out of thin air, that’s the problem and there are moral hazards, to be sure. They themselves own over $3 Trillion of the national debt and the taxpayer pays THEM interest on it. (And they are free to print however much they want to buy as many bonds or toxic assets or anything else they want.) Another $500 Billion got lost somewhere in Europe, by the way, and Bernanke even admitted it when testifying to the House. The FED are the big “spenders” adding to the debt right now. The rest are obligations and Accounts Payables.

That’s the way the accounting systems were set up. Don’t you remember the new Congress which threatened not to fund any one of Obama’s programs even if they had passed it during the last Congress? Only means the Fed isn’t allowed to print for these new programs but can do almost anything else. Much of that 2009 stimulus money of $900 Billion may never live to see the light of day.
 
estesbob said:
I have mentioned this before, but back when I had a weekly radio show I hhad a standing offer to prepare for free the tax returns of anybody who wanted their taxes calculated using the rates in effect before the evil Bush Cuts. . I never had any takers.
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Are you sure you had listeners?
 
ProVobis said:
Not so. Individuals and foreign governments can also buy bonds to pay the immediate bills as well. .
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You’re right and I was wrong. The Fed is not required to purchase the government’s debt, it just funds it indirectly by creating more fiat money with which to absorb it. cnbc.com/id/40031685/Wilbur_Ross_Federal_Reserve_Is_Directly_Funding_the_Federal_Deficit_Consumer_More_Levered_Than_at_the_Peak_of_2007

Presumably, as with QE2, interest rates would have spiked had it not done so. It appears the Fed is going to “keep interest rates low” into 2013. One assumes it is another way of expressing “quantitative easing” designed to keep the government’s demand for money from forcing interest rates upward.

But the real economists might differ with that assumption.
 
Ridgerunner said:
Presumably, as with QE2, interest rates would have spiked had it not done so. It appears the Fed is going to “keep interest rates low” into 2013. One assumes it is another way of expressing “quantitative easing” designed to keep the government’s demand for money from forcing interest rates upward.
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As you say, presumably. But the market might have driven them down anyway, from the looks of things. As it is, we paid a big price for it, through taxes or future price inflation or plain lack of further economic demand.

Did you note that there were three dissenters on record against the Fed announcement today?
 
ProVobis said:
As you say, presumably. But the market might have driven them down anyway, from the looks of things. As it is, we paid a big price for it, through taxes or future price inflation or plain lack of further economic demand.

Did you note that there were three dissenters on record against the Fed announcement today?
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I didn’t, but I’m not entirely surprised.

The stock market did improve today, seemingly based on the Fed’s accommodative posture. But one worries some that it was based on such a posture’s encouragement to the “carry trade” and not much more.
 
Ridgerunner said:
Giving Sub the benefit of the doubt, one assumes he/she was being wry; suggesting that people won’t listen to things they find unpleasant to hear.

But on the other hand, it could have been rudeness. 🤷
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Actually my Mother was very polite.
 
rlg94086 said:
Sure. Reagan was president from January, 1981 to January, 1989.
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wow, i didn’t pay attention to politics back then, but i can’t believe that i couldn’t remember reagan being president for almost the entire decade of the 80’s!!!:bigyikes:

i must have been really out of it!!:whacky:

thanks for correcting me.🙂
 
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