Martin Crutsinger of the Associated Press reports that the United States credit rating has been downgraded by Standard & Poors. The government was issued an AAA rating in 1917, and it has never been lowered before.
The drop to AA-plus was expected. The three major credit rating agencies, including Fitch and Moody’s, warned during the summer’s budget quarrel that if the federal government failed to cut expenses enough, it risked a downgrade. S&P has said the downgrade is due to failure to cut enough expenses. Moody’s has said it is keeping the AAA rating for government debt, but it might lower it in the future.
Some selling is expected when the market opens on Monday morning. This week’s stock market lost 699 points on the Dow, the worse week since October of 2008.
U.S. debt appears to be safe and well-regarded, but a fear that it is unstable or unreliable could spike interest rates and increase the government’s expense for paying interest. The U.S. government fought this downgrade. A statement from the Treasury department said, "A judgment flawed by a $2 trillion error speaks for itself."
In addition to lowering the rating from AAA to AA-plus, S&P is issuing a "negative outlook," meaning there is a significant possibility of further lowering the ratting to AA. Such a downgrade may occur if the reductions in spending are smaller than Congress and the president have agreed to make, interest rates rise or new fiscal pressures arise.
S&P said it is "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 anytime soon."
--summarized from http://news.yahoo.com/p-downgrades-us-credit-rating-aaa-003628509.html
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There is only one way to reduce the debt responsibly, in a manner that will restore a AAA rating. Three things have to be done:
1. We must cut Medicare and Medicaid.
2. We must cut Social Security
3. We must end military adventures in Iraq, Afghanistan, Libya and robotic drone use in Pakistan, Yemen and other locations around the world. We can’t afford it anymore.
It would help if we just sawed off and burned down useless government departments like "Homeland Security" and "Energy," but I don’t think Congress is capable of such realism.
Social Security is not an insurance policy. Social Security is a payroll tax, as the Supreme Court stated decades ago. People and employers both pay a payroll tax. The government qualifies beneficiaries, and, if there is enough money and if there is no over-riding national emergency, then those who are qualified receive middle class welfare payments. There is no "insurance." There is no "security." There never was. There certainly isn’t any social security now, with government unable to control expenses. It has to be cut.
Medicare is another payroll tax. The benefits constitute another middle class welfare benefit that the government will allow if there is no emergency. Malpractice lawyers and hypochondriacs make out like bandits under Medicare. Everyone else loses.
OK? Get this straight. We have to cut military adventures, social security and Medicare. Your government owes the old, the disabled and the poor a stable currency, a simple and obvious responsibility that is not being honored. If you want to torture the unfortunate, debase their currency – and this is exactly what it happening.
Social Security, Medicare and the Pharmaceutical "benefit" (Medicare part D) are lies. They represent lies eructed by ambitious politicians who wanted to stay in power and were willing to issue irresponsible, unsustainable benefits in order to do so. Franklin Roosevelt wanted a third term, so he pushed through Social Security. He’s dead now and we can’t sustain it. Lyndon Johnson wanted a second term (giving him a 10 year presidency second only to his idol, FDR), so he pushed through Medicare. He’s dead now. A drunk driver, "W" Bush, wanted a second term, so he pushed through a pharmaceutical "benefit." It passed, he got re-elected, but Medicare part D is financially irresponsible.
The net unfunded debt of Social Security and Medicare, according to the government trustees, is at least $45 trillion dollars. $70 trillion might be a more accurate number. How can these promises be kept by a stagnant USA $14 trillion economy?
These unpayable obligations were run up by ambitious but now dead politicians. We have to bury the lies and reduce the programs. There is no other responsible course of action.
Whatever you do, don’t trust any politician who is willing to RISK sandbagging the elderly, sick and disabled with a worthless currency. The inhumanity of our politicians, as bad as that is, simply must not be allowable at this level of debauchery and cruelty. It’s hard to make the right decision, because modern politicians know very well that to stay in power, they must EFFECTIVELY posture as "caring" when the video cameras are on. They have to be good character actors to survive the next election they face. Each congressman and Senator has a staff of about four dozen to keep this image in place. Congress spends nearly $5 billion a year on itself to keep this situation comedy running.
But don’t be fooled. They don’t care who goes broke or who suffers as long as they retain power.
The drop to AA-plus was expected. The three major credit rating agencies, including Fitch and Moody’s, warned during the summer’s budget quarrel that if the federal government failed to cut expenses enough, it risked a downgrade. S&P has said the downgrade is due to failure to cut enough expenses. Moody’s has said it is keeping the AAA rating for government debt, but it might lower it in the future.
Some selling is expected when the market opens on Monday morning. This week’s stock market lost 699 points on the Dow, the worse week since October of 2008.
U.S. debt appears to be safe and well-regarded, but a fear that it is unstable or unreliable could spike interest rates and increase the government’s expense for paying interest. The U.S. government fought this downgrade. A statement from the Treasury department said, "A judgment flawed by a $2 trillion error speaks for itself."
In addition to lowering the rating from AAA to AA-plus, S&P is issuing a "negative outlook," meaning there is a significant possibility of further lowering the ratting to AA. Such a downgrade may occur if the reductions in spending are smaller than Congress and the president have agreed to make, interest rates rise or new fiscal pressures arise.
S&P said it is "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 anytime soon."
--summarized from http://news.yahoo.com/p-downgrades-us-credit-rating-aaa-003628509.html
= = = = = = = = = = = = = = = = = = = = = = = = = = = =
There is only one way to reduce the debt responsibly, in a manner that will restore a AAA rating. Three things have to be done:
1. We must cut Medicare and Medicaid.
2. We must cut Social Security
3. We must end military adventures in Iraq, Afghanistan, Libya and robotic drone use in Pakistan, Yemen and other locations around the world. We can’t afford it anymore.
It would help if we just sawed off and burned down useless government departments like "Homeland Security" and "Energy," but I don’t think Congress is capable of such realism.
Social Security is not an insurance policy. Social Security is a payroll tax, as the Supreme Court stated decades ago. People and employers both pay a payroll tax. The government qualifies beneficiaries, and, if there is enough money and if there is no over-riding national emergency, then those who are qualified receive middle class welfare payments. There is no "insurance." There is no "security." There never was. There certainly isn’t any social security now, with government unable to control expenses. It has to be cut.
Medicare is another payroll tax. The benefits constitute another middle class welfare benefit that the government will allow if there is no emergency. Malpractice lawyers and hypochondriacs make out like bandits under Medicare. Everyone else loses.
OK? Get this straight. We have to cut military adventures, social security and Medicare. Your government owes the old, the disabled and the poor a stable currency, a simple and obvious responsibility that is not being honored. If you want to torture the unfortunate, debase their currency – and this is exactly what it happening.
Social Security, Medicare and the Pharmaceutical "benefit" (Medicare part D) are lies. They represent lies eructed by ambitious politicians who wanted to stay in power and were willing to issue irresponsible, unsustainable benefits in order to do so. Franklin Roosevelt wanted a third term, so he pushed through Social Security. He’s dead now and we can’t sustain it. Lyndon Johnson wanted a second term (giving him a 10 year presidency second only to his idol, FDR), so he pushed through Medicare. He’s dead now. A drunk driver, "W" Bush, wanted a second term, so he pushed through a pharmaceutical "benefit." It passed, he got re-elected, but Medicare part D is financially irresponsible.
The net unfunded debt of Social Security and Medicare, according to the government trustees, is at least $45 trillion dollars. $70 trillion might be a more accurate number. How can these promises be kept by a stagnant USA $14 trillion economy?
These unpayable obligations were run up by ambitious but now dead politicians. We have to bury the lies and reduce the programs. There is no other responsible course of action.
Whatever you do, don’t trust any politician who is willing to RISK sandbagging the elderly, sick and disabled with a worthless currency. The inhumanity of our politicians, as bad as that is, simply must not be allowable at this level of debauchery and cruelty. It’s hard to make the right decision, because modern politicians know very well that to stay in power, they must EFFECTIVELY posture as "caring" when the video cameras are on. They have to be good character actors to survive the next election they face. Each congressman and Senator has a staff of about four dozen to keep this image in place. Congress spends nearly $5 billion a year on itself to keep this situation comedy running.
But don’t be fooled. They don’t care who goes broke or who suffers as long as they retain power.
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