Why S&P Really Downgraded US Credit Rating (vanity but linked to their report)

S&P PDF Official Document ^ | 6 Aug 2011 | S&P and SkyPilot

[SkyPilot]

As I was watching the "spin" on MSNBC, CNN, and almost every other cable show last night regarding S&Ps decision to downgrade the soverign US credit rating for the first time in our nation's history, it was amazing to me that every liberal commentator and every Democrat appearing on the shows avoided the monster in the room at all costs:

ENTITLEMENTS

Entitlements are breaking the back of this nation. During the debt deal and its aftermath, Democrats made it clear they would not budge (or even address) the crippling effects of Medicare, Medicaid, or Social Security.

S&P's report did - right up front. In fact, it mentions Entitlements as the biggest problem.

Funny how the Lamestream Media missed that language, considering it is on the front page of the PDF document that S&P released on Friday night.

_____________________________________________________________________

Rationale

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. ...Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, 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. Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden.

[SkyPilot]

So there you have it.

Everyone who has a brain knows we have to cut Entitlements, but no one will do it. We now have one in seven Americans walking around with a Food Stamp (now called SNAP) debit card in their back pocket. We have millions of people collecting Social Security checks and SSI disability. Parents of children with mild ailments such as heart murmurs or sleep apnea have learned how to get their children classified as disabled so that they collect checks for life. Illegal aliens have sucked the Medicaid fund dry. Some inner city minority populations depend on government direct deposits in the form of AFDC, daycare cash payments, nutitional assistance, special minority loans for business, and Section 8 housing for almost all of that community's income. Unemployment payments have now reached half a Trillion dollars since Obama took over - half a Trillion for people not to work.

What will Washington do? It looks like they will slash miltiary veterans programs, decimate the Defense Budget, and freeze military salaries come November.

Under debt deal, military pay, veterans programs in play for cuts

This will do almost nothing to stop the implosion, but because Entitlements are "off the table" - our Government will appear desperate to convince the public it is doing something.

This is the beginning of the end. I am filled with a deep and abiding fear that nothing will be done until the whole system collapses.

And the cause of it all will be a segment of Americans and worthless politicians who were motivated by nothing more than pure envy and greed.

"The righteousness of the upright will deliver them, But the treacherous will be caught by their own greed."

Proverbs 11:6

[SF_Redux]

people sure have alot of problems learning that SS is NOT an entitlement.. it has been used like a govt person checking account

[saganite]

Right after your bolded sentence is this:

“or on reaching an agreement on raising revenues”

As far as S&P is concerned either will do. Cut spending or increase taxes. You don’t seriously expect Dems to “see” the problem as excessive spending do you? There will be more and more calls for taxes.

[PanzerKardinal]

Preach it brother!

[muawiyah]

Hmm ~ here's the way to deal with it ~ whether or not Social Security is an "entitlement" is irrelevant to the equation. If you NO LONGER COLLECT FICA and you CEASE PAYMENTS TO BENEFICIARIES and REFUND DEPOSITS (which is what they are since they're taken out of after-tax income) ~ the US Treasury ends up in negative territory!

If you do the same with Medicare, Unemployment Insurance and Workman's Compensation System, it only gets worse.

I remember when the big issue with Social Security was what to do with it when it'd completely consumed the entire US debt burden and had cash left over to invest somewhere else.

That was right after the Reagan Era changes.

The Democrats sure answered that didn't they ~ they simply dipped into the kitty and spent it on all sorts of nonsense.

[SkyPilot]

Everyone who has worked for the past 2 generations has paid into the Social Security ponzi scheme.

Only some will benefit from it. It is not an "earned" Entitlement. There is no money in a "trust fund."

Because so many people receive direct deposit Social Security checks, our politicians will not address how it is killing our nation. In order to protect Social Security, veteran's and active duty military health insurance (TRICARE) is under attack. If a veteran who served in multiple combat zones has not "earned" anything that cannot be slashed, then millions of Americans who draw Social Security because they now are still breathing are subject to the same fiscal laws of nature.

Your attitude is indicative of the problem: people think they "paid" into Social Security, and they want money back. Social Security was nothing more than a tax, and the revenues from that tax have long been spent. See debt: $14.5 Trillion Dollars.

I might as well ask for all of my State, Federal, and local tax money back into the "SkyPilot fund." There is no 'there' there.

We will go into the abyss because people wanted "their check."

[PieterCasparzen]

Cutting Social Security and Medicare, but leaving the Unconstitutional Department of Education in place, does not make any sense.

Get rid of all unnecessary departments - then AFTER that is ALL DONE, see if any reductions are needed in SS.

Otherwise, SS will just get decreased every year (like it has been because COLA has been denied) in order to pay for more Federal employees.

[muawiyah]

S&P's ambition is neither ~ their interest is quite obvious ~ they want the interest rate paid on US securities to increase substantially ~ the new debt authorization sold at .25% which is a lot lower than the 5.25% the bondholders would have preferred to get.

Think of what S&P is up to as a manifestation of another stage in a broad based criminal conspiracy.

[SF_Redux]

skypilot, I am surprised you can even tie your shoes
I guess you can tie your shoes

[SF_Redux]

take away all the freeloaders that never paid a penny into the govt has give it too

[mrsmith]

“spent it on all sorts of nonsense.”

Even worse, they used (and are using) it just to make the loan payments on even MORE money to spend on even more nonsense.

And, really- that’s our debt problem in a nutshell.

[DeaconRed]

I believe that if we concentrated on FRAUD in all departments we could make a big dent in our debt.
Back in the early 80's I worked for the US Postal service. I worked at a bulk mail center.
Every month the supply room had orders to throw out brand new supplies. The facility had a huge fence around it so no one could get to the dumpster. It bothered me and I tried to report it. No body gave a damn. This was at least a $1,000.00 per month at this one location. They got brand new supplies every month.
On top of that the Managers of the facility were paid on a production basis. They got a good salary and were paid a bonus depending on volume of mail. They would resort sorted mail to get a higher count so they could get a bigger bonus, no wonder the postal service is broke.

This was one facility. I am sure it went on in every federal department.
I am sure Social Security is paying claims they should not be paying. We all know medicare gets scammed.
Getting the fraud eliminated everywhere could go a long way to getting us back on track.

[PieterCasparzen]

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%

Social Security is part of the first number, Pensions.

You want the breakdown of Pensions for 2011 ? Here it is:

Federal employee retirement and disability (602)_____________$127.1
Social security (651)_________________________________________$748.4
Employer share, employee retirement (on-budget) (951)_____($67.1)
Employer share, employee retirement (off-budget) (952)_____($15.1)

Please help me to understand -

FEDERAL EMPLOYEE RETIREMENT AND DISABILTY COST 16% OF EVERYONE’S SOCIAL SECURITY PAYMENTS ?

Just how many Federal employees are retired and at just what pay ?????

And there is NO TALK OF REDUCING FEDERAL EMPLOYEE PAY OR BENEFITS.

AAAAHHHHHHHHHHHHHHH !

[q_an_a]

that would be one good step

[TalBlack]

“...reaching an agreement on raising revenues is less likely than we previously assumed”

They assumed that the government MUST now understand that the game is over. Wrong. Watch now the tragedy unfold.

[jamaksin]

"A reward once given becomes a right." from Frederick Herzberg (American industrial psychologist, from his classic The Motivation to Work, circa 1959).

The War on Poverty, several "Education" Presidents, a couple of Bridges to "Shovel Ready" projects (aka Jobs) and gratis cellphones, etc., have all shown little results except those are now "rights."

[Earthdweller]

You can’t explain to a entrenched parasite that he is not entitled...it makes absolutely no logic to him at all. Nice try tho...

[firebrand]

Also, and related to your post, is the fact that no one yet knows who will be on the 12-member committee called the “Super Congress,” or how they will vote on various issues. It can all go whichever way they want it to go, with no Tea Party to rein everything in.

That is called uncertainty. Our chance to make a decisive move to head off disaster has passed.

Just as Obama makes end runs around Congress, Congress has made an end run around the Tea Party.

[firebrand]

Tie your shoes.

[sodpoodle]

Too bad that the ‘Taxed Enough Already’ movement was tagged as a ‘PARTY’.

How come there are ‘INDEPENDANTS’, but no ‘Independent PARTY’????????????