It's also an argument to imprision a dozen Dems starting with this jackwagon...
''Fannie Mae and Freddie Mac are not facing any kind of financial crisis.''
Posted on 07/27/2011 12:35:07 AM PDT by greeneyes
Egan-Jones downgrades U.S. rating to AA+ from AAA
-Small ratings agency unlikely to have market-moving implications, but comes amid possible downgrades from larger ratings agencies.
-Egan-Jones cites rising debt-to-GDP ratio for downgrade rather than delay in raising the debt ceiling.
By Andrew Ackerman and Mark Taylor
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Egan-Jones Ratings Co. over the weekend lowered its rating on U.S. debt, the ratings firm's president, Sean Egan, announced Monday.
(Excerpt) Read more at nasdaq.com ...
Is this an argument for keeping the debt low i.e. no increase in debt limit?
It's also an argument to imprision a dozen Dems starting with this jackwagon...
''Fannie Mae and Freddie Mac are not facing any kind of financial crisis.''
‘imprision’= imprison
If substantial cuts are made, it will probably have a very negative impact on the economy. If no action is taken USA looses AAA rating and interest rates skyrocket almost overnight. Huge negative impact on the economy, and makes debt situation worse.
Catch 22 is finally here and now for Congress Critters. Increasing the debt limit and cutting spending might give some breathing room. The problem is bad enough that anyone supporting the necessary actions is unlikely to get reelected.
Another way to say it: We have been going 90 miles an hour down a dead-end road, and there's just a few hundred feet of road left. As Egan-Jones notes, the fed’s printing of money and subsequent devaluation is just defacto default.
Failure to raise the debt limit just means that chaos happens overnight. Buying some time by raising it could allow for a more orderly and logical transition to austerity measures.
Or are we too hell bent on self destruction to stop?
It will happen one day.
Better that we owe less when it happens.
That’s a good question. I say no more foreign aid. Might have to keep oil producers happy though. I say convert to natural gas ASAP.
No more studying methane gas produced by cow dung, or measuring penis either, and no more EPA etc. etc. you know the drill. Seems to me we need to cut spending by 50% to have any hope of getting out of this anytime soon.
We need to pay down the debt ASAP, not just cut deficit spending.
Comparison of nObama’s first year and current year
U.S. Federal Government Spending Comparison, 2008 and 2011
Figures given in billions of U.S. Dollars
Category_______ FY 2008 FY 2011 INC/(DEC) INC/(DEC) %
Pensions_______ 659.8_____793.2_____133.4____20.22%
Healthcare_____ 671.4_____882.0_____210.6____31.37%
Education______ 101.8_____129.8______28.0____27.50%
Defense________ 729.6_____964.8_____235.2____32.24%
Welfare________ 322.3_____495.6_____173.3____53.77%
Protection_____ 47.1_______60.7_______13.6____28.87%
Transportation_ 77.6_______94.5_______16.9____21.78%
General________ 20.8_______33.2_______12.4____59.62%
Other__________ 99.3______158.4______59.1____59.52%
Interest_______ 252.8_____206.7_____-46.1____-18.24%
Total__________ 2,982.5____3,818.9____836.4____28.04%
U.S. Federal Government Revenue Comparison, 2008 and 2011
Figures given in billions of U.S. Dollars
Category_______________ FY 2008 FY 2011 INC/(DEC) INC/(DEC) %
Ind. Inc. Tax___________1,145.8__956.0___-189.8_____-16.56%
Corp. Inc. Tax___________304.3____198.4___-105.9___-34.80%
Social Ins. Taxes________900.2____806.8____-93.4____-10.38%
Ad-valorem Taxes_______140.1____132.9_____-7.2___-5.14%
Fees & Charges___________0.0________0.0_____0.0
Bus & Other Rev__________33.6_____79.5_____45.9___136.61%
Total___________________2,524.0___2,173.6___-350.4____-13.88%
Surplus/(Deficit)________-458.5__-1645.3__-1,186.8____258.84%
My own little proposed spending cuts - a starting point - in 2011 spending levels, in Billions, without touching Social Security, Medicare or Defense...
Notice that it is ALL IN ONE YEAR, THROUGH REDUCTIONS AND MOSTLY COMPLETE ELIMINATIONS OF AGENCIES:
_________________________________________________________________________
Education__________________ $129.8 billion
Transportation (I propose
a limit of $10 billion)_________ $84.5 billion
Basic research______________ $18.7 billion
Agriculture, forestry
, fishing and hunting _________ $32.8 billion
Fuel and energy_____________ $26.9 billion
Pollution abatement_________ $10.9 billion
Protection of biodiversity
and landscape_______________ $13.9 billion
Housing development_______ $35.5 billion
Community development_____ $25.7 billion
Recreational and
sporting services_____________ $4.1 billion
General Government
(I propose cutting the
current amount in half)_______ $16.6 billion
Welfare (eliminate)_________ $495.0 billion
Grants to States
for Medicaid________________ $276.2 billion
R & D Health
(includes NIH)______________ $36.1 billion
Total reduction to annual
spending_________________ $1,206.7 billion
_________________________________________________________________________
After all that cutting - $1.2 TRILLION...
The Deficit would “only” be a few hundred BILLION if Revenue remains on the same track as the past few years.
Woo-hoo !
Yeh, that’s why I say the Congress Critters have kicked the can down the road so often they have forced themselves into a catch 22, and screwed the American citizens worse than ever.
Well, one or the other or some of all four has to happen:
1) Federal employees and/or contractors get laid off by the boatload
2) SS checks get shrunk
3) Medicare starts cutting what they pay to the healthcare industry
4) We borrow more and kick the can a few months down the road
So which group or group of groups is going to win over a majority of Congresscritters and which ones will take the big hits ?
A) Federal employees and unions
B) Senior citizens (cut ss payments)
C) The healthcare industry (cut medicare)
D) Too afraid to start large, tough measures to put government back in it’s cage (raise the debt ceiling and borrow more)
What creditor in his right mind thinks that getting a higher limit on over-the-limit credit cards is better than cutting spending?
Stop SS payments to people who have never paid in, and raise the retirement age another year. Maybe raise the taxable wage ceiling. Transition to private system.
Medicare already only pays doctors 1/3 of the bill, the quickest thing to do would be to stop Obama care. Then, maybe look at Implementing a premium for part A and raise it for part B. Medicare only costs about $100.00 for part B, and part A is free.
Many possibilities. No doubt we will continue to take from the needy and give to the greedy. The working poor and middleclass should get prepared for BOHICA.
“What creditor in his right mind thinks that getting a higher limit on over-the-limit credit cards is better than cutting spending?”
It is not an either/or situation. They are downgrading due to the long term projections. They are ok with a short term raise, as long as the long term is addressed. If better policies are implemented, like Reagan did, then there will be more revenues due to more people working.
Kinda like when you have a temporary cash flow problem and unexpected expenses. The biggest issue from the charts I have reviewed in the incredible balloning of health care with Obama care and baby boomer Medicare.
In what way?
If no action is taken USA looses AAA rating and interest rates skyrocket almost overnight.
Skyrocket to what level?
Failure to raise the debt limit just means that chaos happens overnight.
How? What do you mean by chaos?
I don't believe any of your dire predictions. The only chaos I see is if there is rioting because the crack addicts - no, welfare addicts don't get their fix.
Ok. Believe what you want.
Spending for politicians is like heroin to a junky.
To stop is going to cause a lot of pain.
To not stop simply leads to death.
It seems most would rather go blindly over the cliff.
Ask Democrats “if you were a Republican, what would you cut?”, and they may finally find some meaningful cuts...
And when there is little to none private sector growth, i.e. no more income, the higher debt should facilitate another downgrade.
Government borrowing is currently running about 10% of GDP. Or in other words, about 10% of our current “GDP” is borrowed dollars. Take those borrowed dollars out of the system overnight and you lose 10% of GDP overnight. So cutting spending will cause pain. Likely lots of pain. Either suffer the pain of borrowing detox or crash the system. It took decades to build this box we find ourselves in. Alice in wonderland economics...
“Take those borrowed dollars out of the system overnight and you lose 10% of GDP overnight.”
Which is why we’re in a depression not a series of recessions. We’re 5 years in this depression and it’s getting harder for the kleptocrats to deny. As long as they can pass on more debt to later generations they’ll keep stealing.
Its pretty scary when you think about the actual implications that 10% of current GDP is funny money.
If you don’t mind, do you know where that came from? I was wondering if I could use the figures?
http://www.usgovernmentspending.com/index.php
Seems close enough for horseshoes and hand grenades, i.e., for my purposes. I’m talking about complete elimination for most of them. For example, Dept. of Education and Welfare.
I think they did this at least a week ago. It didn’t affect things much as they are small. It is annoying when Obama etc ignore it though.
ratings that meet reality - let’s see, if I took out 250 million credit cards and maxed them all out, would I deserve a good credit rating? And don’t tell me the ratings are about the future not the past - past behavior predicts future behavior. Expand the tax base and unfetter the economy or we’re screwed.
Thank you. One mistake they make- what they call “Public Debt,” is actually what most call total debt, which includes non-public debt.
I remember the days in early 1982 when the “oil depression” hit Texas and the gulf coast.
I was sitting in the office looking at my accounts receivables and growing more alarmed by the day at just how high they were becoming. With what business I had left being added to the pile daily, it was growing larger and larger.
The problem was that I was looking at money that was not being received (nor, as I found out later that it never would) was piling on top of the good money. Eventually bankruptcy filings from my customers started coming in and it was at that time that I developed a firm grasp of “real world” cash flow and how to survive such a disaster.
The only reason I kept the business from going under was the fact that I NEVER financed it for any reason. It was built one dollar at a time and still survives after 32 years of operation. There was never anyone there to “call my note” from the banks.
Now, the whole Government is facing the same thing. Revenues are less than the expenditures. Simple as that.
The Government’s solution to the problem is to keep on spending but worse yet......it’s all financed and the interest expenses are rising faster that the funded debt. Now, they want to raise the credit limit so they can spend more by borrowing more. It’s like making the minimum payment on credit cards while the balance keeps going up as each payment is made. The end result will be simple bankruptcy. There is not way to prevent it while this attitude continues.
While this is a simple comparison of a small business to the government, the principle is a comparison of a private (for profit organization) verses a governmental entity (an appropriated funded entity) and how out of the real world our government operates.
The fact is that the debt our government owes will never be balanced due to the fact that government managers (elected officials) only pay attention to staying in office and that means satisfying the most important voters...THE LOUD ONES. The ones who make the most noise...not the ones who mind their manners and quietly present their needs and proposals.
Until we have two important constitutional amendments added, (1) the requirements for a balanced budget and (2) TERM LIMITS, will the problem ever be corrected.
I doubt that either one will ever be enacted simply because we have the fox guarding the hen house.
To stop is going to cause a lot of pain.
To not stop simply leads to death.
It seems most would rather go blindly over the cliff.”
I would seem so. What they are doing now is like playing that old game of hot potato.
Our politicians are like an economic Amy Winehouse.
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