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  1. 02 Aug '11 02:43 / 3 edits
    http://www.theatlantic.com/business/archive/2011/07/moodys-raising-the-debt-ceiling-might-not-prevent-downgrade/241930/

    "Time is running out for Washington to get its act together on the debt ceiling. On Wednesday, credit rating agency Moody's put the US debt rating on review for possible downgrade. It had warned that a formal review announcement would come if the debt ceiling dispute was not resolved by July. The firm says that it will downgrade the US in August if the government misses a debt payment. But the rating agency also clearly states that raising the debt ceiling alone will not give it any confidence in the US's ability to tackle its broader deficit problem.

    Here is the dey section from Moody's statement:

    If the debt limit is raised again and a default avoided, the Aaa rating would likely be confirmed. However, the outlook assigned at that time to the government bond rating would very likely be changed to negative at the conclusion of the review unless substantial and credible agreement is achieved on a budget that includes long term reduction. To retain a stable outlook, such an agreement should include a deficit trajectory that leads to stabilization and then decline in the ratios of federal government debt to GDP and debt to revenue beginning within the next few years.

    Raising the debt ceiling is not enough. Even though Republicans turned the debt ceiling debate into a broader discussion about the US's debt trajectory, the market appears to have embraced their approach. This means that there is no quick fix here: a substantial long term deficit plan must be agreed upon by the two parties.

    IF such a plan does arise out of the debt ceiling debate, then we almost certainly will not see one until 2013 at the soonest. Washington will have serious budget talk fatigue after the current debate ends. Politicians also will not want to take any important, controversial votes as the big 2012 election season swings into gear this fall. The market does not want to wait that long for reassurance that the US government intends to fix its deficit problem.

    This idea proposed by Senate Minority Leader Mitch McConnel earlier this week serves as a shining example of what would not pacify Moody's. He has suggested that Congress allow the President a sort of backdoor to avoid default. It would essentially give the President the power to unilaterally raise the debt ceiling unless 2/3 of Congress objects, but it would also allow Congress the ability to formally denonce the President's move.

    Democrats love this idea, because it provides them the ability to raise the debt ceiling without having to endure the deep spending cuts that Republicans are demanding. Some Republicans like the idea, because it allows them an on the record vote against the debt ceiling, but still allows Democrats to raise it and avoid US default.

    But the market will not like the proposal for precisely the same reason that anyone living outside the Beltway probably finds it disgraceful; it fails to solve any real problem. The debt ceiling is a mere technicality. The actual problem is that US borrowing is on an unsustainable path. If you look at the sovereign debt downgrades that have occurred elsewhere, you can see that US debt is on a dangerous path.

    If Washington fails to fix the problem now, then when will it? This is the precise question that worries Moody's, but is the rest of the market really as concerned? If a debt ceiling hike occurs without a deficit reduction plan, then we will know pretty quickly. Rising Treasury yields will signal that Washington has failed to satisfy the market."

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    First the Dems seemed up in arms that the US may default which would then cause a downgrade. You would have thought that this would have been the end of the world how they carried on about it. However, now that their spending ways have been endorsed by the GOP by agreeing to lift the ceiling by some $2.5 trillion, the same thing could happpen, only, now I hear some of them say that a downgrade will not be such a bad thing after all.

    You really can't make this stuff up. All I can say is that a downgrade is inevitable. These politicians are an open book and nothing, I mean nothing, will ever change them. Enjoy the ride till the car reaches the cliff kids!!!
  2. 02 Aug '11 03:45
    I doubt it, but the fact that you're so excited at the prospect (in a good way) is very telling.
  3. 02 Aug '11 05:35
    Originally posted by USArmyParatrooper
    I doubt it, but the fact that you're so excited at the prospect (in a good way) is very telling.
    Yes. It says a lot about how this whole thing went. When one side is actually gleeful over mass pain, it's hard to negotiate with them.

    It reminds me of communism, where the love of humanity renders one indifferent to actual human beings.
  4. 02 Aug '11 12:23
    Originally posted by Kunsoo
    Yes. It says a lot about how this whole thing went. When one side is actually gleeful over mass pain, it's hard to negotiate with them.

    It reminds me of communism, where the love of humanity renders one indifferent to actual human beings.
    Exactly. It makes it easy for them to extort the country to hook up their key constituents, the wealthy.

    "Let the tax cuts for the wealthy expire and we'll refuse to extend unemployment benefits."

    "Let the tax cuts for the wealthy expire and we'll send our country into default"

    I seriously want to punch Boner in the face.
  5. 02 Aug '11 13:03
    Originally posted by USArmyParatrooper
    Exactly. It makes it easy for them to extort the country to hook up their key constituents, the wealthy.

    "Let the tax cuts for the wealthy expire and we'll refuse to extend unemployment benefits."

    "Let the tax cuts for the wealthy expire and we'll send our country into default"

    I seriously want to punch Boner in the face.
    If you think I'm gleeful over the prospect your nuts. However, when Biden calls the Tea Party a bunch of terrorists for possibly tirggoring the same event that it appears Biden and company are triggoring, then I can only think he would label himself a terrorist, or Satan sandwich, or Beelzebub taco, or whatever cray left wing label you wish to use.

    So the question begs, what should be done with these "terrorists" who are wrecking the Republic?
  6. 02 Aug '11 13:18
    Originally posted by USArmyParatrooper
    Exactly. It makes it easy for them to extort the country to hook up their key constituents, the wealthy.

    "Let the tax cuts for the wealthy expire and we'll refuse to extend unemployment benefits."

    "Let the tax cuts for the wealthy expire and we'll send our country into default"

    I seriously want to punch Boner in the face.
    The idea that everyone should continually always do what you want or they are highjacking the country is just absurd. Liberals used to be open minded and would argue that we should appreciate difference in people.
    Now whether it is you or (other liberal posters on this site) or the New York Times editorial page, there is no end to the extent you will go to insult others.

    There certainly is good reason to think the nation is spending too much money and that the fact that the US needs to exceed its 14.3 trillion dollar debt limit is as close to a neon sign as we are ever going to get that we should stop spending. I don't think making that by pointing out that government spending has increased over 30% under Obama and we cannot keep taking to fund our crazy spending habits means anyone is highjacking the country. I don't think you making the argument that Congressmen should be punched in the face is reasonable (although perhaps I am wrong on this part).

    Maybe the fact that you are unhappy with the compromise between a split Congress and a president who you voted for is a sign that you are a the radical and that it is very difficult to please your unreasonable demands.
  7. 02 Aug '11 13:37
    Originally posted by quackquack
    The idea that everyone should continually always do what you want or they are highjacking the country is just absurd. Liberals used to be open minded and would argue that we should appreciate difference in people.
    Now whether it is you or (other liberal posters on this site) or the New York Times editorial page, there is no end to the extent you wil ...[text shortened]... that you are a the radical and that it is very difficult to please your unreasonable demands.
    Threatening to cut off unemployment benefits IS extortion.

    Threatening to send the country into default (which nobody denies would be devastating to the country and world) IS extortion.

    It's one thing to go after the things you want. It's another thing entirely to threaten to f*** everyone in order to get it.

    If it was really about the deficits the Republicans wouldn't be using these thug tactics to avoid taxing the rich what they used to pay in the 1990's. Yes, we have huge deficits in no small part due to the sagging economy, which decreases revenue and increases costs (unemployment insurance and such).

    Taxes are at their lowest rate since the 1950's, and the Republicans would rather send the world economy into an epic crisis than tax the rich a very small amount more. Yeah, sure they care about the deficit. For crying out loud even Ronald Reagan raised taxes multiple times. Capital gains taxes under Reagan were at 28%. George H.W. Bush raised taxes.

    They've implemented a scorched earth strategy in the name of regaining their power. And sadly it's working because most Americans don't pay attention.

    It's nothing personal against Boner. I want to punch everyone in the face who's willing to destroy this country for selfish gain.
  8. 02 Aug '11 14:38
    Originally posted by USArmyParatrooper
    Threatening to cut off unemployment benefits IS extortion.

    Threatening to send the country into default (which nobody denies would be devastating to the country and world) IS extortion.

    It's one thing to go after the things you want. It's another thing entirely to threaten to f*** everyone in order to get it.

    If it was really abo ...[text shortened]... to punch everyone in the face who's willing to destroy this country for selfish gain.
    Unemployment benefits do not last for life. At some point they get cut off. You are entitled to your beliefs, but it is simply not a mainstream view that refusing to indefinitely extend unemployment benefits is extortion.

    The US was not going to default and it did not default. People had different views over settlement terms. It is not a mainstream view to call negotiation wishes extortion either.

    Federal nominal rates are lower but state and city taxes are at record height. Deductions are at record lows. Regulation is insance and essentially is a huge tax on many businesses. The economy is not doing well and all people (even those who you believe should pay more) have less money to pay for things including taxes.

    Your continual desire to expand government and have others pay for it (for example pass ground breaking legislation giving everyone healthcare but have only a small segment of society pay for this hige economic burden) in my view, is the height of selfishness. Unlike you I do not support punching anyone (including yourself) in the face. I accept compromise and express my displeasure as I am often not happy with government either, but I understand everything I don't like is not extortion.
  9. 02 Aug '11 15:41 / 1 edit
    Originally posted by USArmyParatrooper
    Threatening to cut off unemployment benefits IS extortion.

    Threatening to send the country into default (which nobody denies would be devastating to the country and world) IS extortion.

    It's one thing to go after the things you want. It's another thing entirely to threaten to f*** everyone in order to get it.

    If it was really abo to punch everyone in the face who's willing to destroy this country for selfish gain.
    But the same people preaching that we cannot cut unemployment benefits and scaring grandma into thinking her social security check will not come in the mail are the same ones giving their corporate cronies like GE tax breaks to the point that they payed no income tax last year as well as starting another war in Libya etc.

    The fact is that the economy has taken a hit and everyone is feeling it.....except in government which has expanded some 30%.
  10. 02 Aug '11 15:51
    Originally posted by quackquack
    Unemployment benefits do not last for life. At some point they get cut off. You are entitled to your beliefs, but it is simply not a mainstream view that refusing to indefinitely extend unemployment benefits is extortion.

    The US was not going to default and it did not default. People had different views over settlement terms. It is not a mainstrea ...[text shortened]... en not happy with government either, but I understand everything I don't like is not extortion.
    Cutting off unemployment benefits when unemployment was at 9.4 percent would have been a huge blow to the economy, causing more lost homes, more debt defaults and less people money being spent in the economy.

    Saying "there won't be a default" is a deflection. The Republicans used the threat of default as a method of extortion.

    IF state and local taxes are at an all time high (citation please) that's a state and local matter. The fact is the government is taking in it's lowest levels of taxes as a percent if income since the 50's, making your claim that deductions are at an all time low (citation please) irrelevant.

    Since the Bush tax cuts the job market shrank, the middle and lower income wages shrank, and the incomes for the wealthy increased. Those dame tax cuts have contributed enormously to our
    national debt.

    Rolling back just top earners to what they paid in the 90s would amount to a considerable amount of new revenue. You sure do want the poor, the elderly and the unemployed to make sacrifices the have a real affect on their lives. But God forbid the Koch brothers make a small one that won't affect their quality if life in the slightest.
  11. 02 Aug '11 16:18
    Originally posted by USArmyParatrooper
    Cutting off unemployment benefits when unemployment was at 9.4 percent would have been a huge blow to the economy, causing more lost homes, more debt defaults and less people money being spent in the economy.

    Saying "there won't be a default" is a deflection. The Republicans used the threat of default as a method of extortion.

    IF state and lo ...[text shortened]... Koch brothers make a small one that won't affect their quality if life in the slightest.
    The fact that you having increased your hostility (both verbally and physcially towards conservates) does not make any of your points more valid. When debt clock was ticking and the Democrats rejected a plan that they did not like, I would never call that extortion (but you seem to believe that the equivalent is). Why does that not make the Democrats the party of "no"? (presumably an insult to the Republicans who seemed to realize earlier on that there are limits to governmental spending). I think that all the name calling that liberals have made recently has made them truly believe that they are correct about everything.

    There are all sorts of solutions to our debt problem. I think an excellent idea would be to cut spending to the levels they were when Obama took office. A 30% increase in spending in three years (during a non-inflationary period) is a huge problem. When 14.3 trillion dollars of debt is not enough, perhaps there are dumber ideas than having a balanced budget ammendment.

    Aren't unemployment benefits at 99 weeks? How is that not enough? If you lose your job the government should support you forever?

    Wealthy people who live in places like NYC pay more than 50% of their income in taxes. That is pleanty sacrifice to me.
  12. Subscriber AThousandYoung
    Poor Filipov :,(
    02 Aug '11 16:33
    A small group of people have all the money and they refuse to spend it yet they demand rent. How are we supposed to handle that? Just meekly die off for the convenience of the wealthy? No sir.
  13. 02 Aug '11 16:35
    By the way, the debacle has already cost the US 1.7 billion in interest.

    http://money.cnn.com/2011/08/01/markets/debt_ceiling_treasury_bills/index.htm
  14. 02 Aug '11 16:35
    Originally posted by quackquack
    The fact that you having increased your hostility (both verbally and physcially towards conservates) does not make any of your points more valid. When debt clock was ticking and the Democrats rejected a plan that they did not like, I would never call that extortion (but you seem to believe that the equivalent is). Why does that not make the Democrats th ...[text shortened]... laces like NYC pay more than 50% of their income in taxes. That is pleanty sacrifice to me.
    Again this 50% figure. Can you cite an example of someone who would pay more than 50% in taxes in NYC?
  15. 02 Aug '11 16:37
    Originally posted by whodey
    But the same people preaching that we cannot cut unemployment benefits and scaring grandma into thinking her social security check will not come in the mail are the same ones giving their corporate cronies like GE tax breaks to the point that they payed no income tax last year as well as starting another war in Libya etc.

    The fact is that the economy has taken a hit and everyone is feeling it.....except in government which has expanded some 30%.
    And except insurance companies, which are making record profits. Also banks, which get to operate as investment firms because nobody bothered to demand that they issue loans if we bailed them out.

    Oh, and the richest 5 percent who are sitting on the largest cache of money in history, but refuse to invest it in jobs.