No standards, and poor reasoning, in U.S. downgrade
I can’t remember the last time something as telegraphed beforehand as the Standard & Poor’s downgrade of the federal government’s credit rating was discussed as if it were so shocking to so many people. S&P said a couple of weeks ago that it wanted to see a package of $4 trillion in deficit reductions to go along with the debt deal, or else a downgrade was coming.
Ratings agencies don’t get to set budget policy in this country, and Congress decided to do something else. Congress doesn’t get to set credit ratings in this country, and S&P decided to make good on its threat. The company really wouldn’t have had a shred of its credibility — you might say the very last shred of its credibility — left if it hadn’t done so. In the end, I think that’s what this move was really about: The company unwisely placed a stake in the ground of the debt-ceiling talks, and then had no choice but to do what it had threatened to do.
Why do I think that’s what it was about? Because it certainly wasn’t about the nation’s creditworthiness. The holes in S&P’s logic for choosing this particular time to issue a downgrade tell us as much.
Democracies are messy, and at their messiest when passions run high and opinions are divided. Despite S&P’s tsk-tsking after the fact, there was zero chance Congress was going to let the Aug. 2 deadline come and go without some kind of a deal. Zero. No leader of either party in either chamber of Congress, nor the president, ever voiced a willingness to do so. They framed the debate in terms of what would come along with the inevitable raising of the debt ceiling. Although there were some individual members who voiced a willingness to risk it, the margins of the votes in both the House and the Senate were so large as to demonstrate that these voices, while loud, were far from influential enough to carry the day. Markets were already pricing in the risk of a default before the deal was struck, and you may have noticed that the really big losses didn’t come until afterward (when there just happened to be a lot of other unpleasantness going on elsewhere in the world).
And regardless of whether you agree with my assessment of the chances that Congress would fail to reach a deal, the fact is that a deal was reached. Debts are being serviced just as they were before. S&P is essentially trying to predict the ending of the next debate, which will take place in an entirely different context (i.e., not up against a deadline for raising the debt ceiling).
So we’re back to the size of the reductions. And there are three important points to note here.
- I can neither recall nor locate any statement from S&P when President Obama initially asked for a “clean” increase in the debt ceiling that indicated such a move would have led to a downgrade — even though such a move would have been far worse, given S&P’s rationale now, than what we got in the end.
- The entire history of the U.S. debt ceiling before last week went like this: President asks for increase, Congress grants increase, with no strings attached. I know this, because Democrats pointed it out ad nauseum during the debate as a reason why there should be a clean increase (that is, when they weren’t trying to claim the high ground with Obama’s never-specified plan for $4 trillion in cuts). So, for there to have been any cuts at all attached to the ceiling increase was a historic moment for changing the direction of the nation’s fiscal policy for the better. And how does S&P react? By saying it should have been an even more historic moment.
- In the end Republicans and Democrats, House and Senate, did agree — again, by sizable margins — to almost $1 trillion in new spending caps and the broad outlines of a further $1.2 trillion to $1.5 trillion in further reductions. The political process worked. It may have been messy, it may have been ugly, it may ultimately have satisfied no purists of any stripe. But it worked. The language S&P used in its press release would lead someone who’d gone to sleep July 28 and just awakened to believe no deal had been reached.
As for S&P’s hand-wringing that there won’t be a substantial policy consensus until after next year’s election: There’s an election next year? When did someone put that on the calendar?!?
It’s almost enough to make one wonder whether the folks at S&P had ever before watched any political process — or, indeed, even any contentious and high-stakes business negotiations — take place.
One final point about S&P’s statement itself. If you want to find a lie within it, look for the line about S&P’s having no opinion as to the balance between tax increases and spending cuts. Baloney. The only other way to understand the statement, aside from S&P having left itself no option but to make good on its threat, is to view it as a call for higher taxes. It’s the right of the folks at S&P to believe that’s what should happen, but the fact that taxes haven’t gone up yet has nothing to do with the actual creditworthiness today of the U.S. government.
If we deserve a downgrade, we deserved it a long time ago.
***
Now, all that said, is there any merit to the idea that the United States is a riskier investment today than it was as of Friday afternoon — or even as a result of the tense debt-ceiling negotiations? Should everyone be spooked by U.S. political wrangling?
The markets certainly didn’t think so last week; investors drove down the yields on U.S. Treasurys that they viewed as safe havens. We’ll see what happens today. But Moody’s and Fitch still have Uncle Sam rated AAA, and my understanding is that, from a technical standpoint, that should mean little or no fallout from S&P’s downgrade (i.e., banks aren’t going to have to sell off a bunch of Treasurys just because S&P has them at AA+ now).
From a psychological standpoint, things may be different. But I doubt that anyone saw S&P’s downgrade and realized for the first time that the U.S. government has racked up an alarming amount of debt and has yet to implement no plans to begin reining in said debt. Again, this is not news. The tea party sounded this alarm bell almost two and a half years before S&P got to ringing (and, irony of ironies, is now getting the blame for the downgrade in many quarters).
If there is some good to come out of S&P’s move, it will have to be a sharpening of focus and attention in Washington to make tough choices sooner than later. There may be greater public pressure on members of Congress to do something bold in the way of reforming the tax code and entitlements.
If would be for the good if they were so prodded. But again, prodding politicians isn’t a ratings agency’s job.
– By Kyle Wingfield
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168 comments Add your comment
Point/Counterpoint
August 8th, 2011
5:04 pm
Marie – “As long as a person follows the law in obtaining their wealth, spending their wealth, and filing their taxes — it’s none of your business how much money they have.”
I never said that it was my business. I merely pointed out that if you are in the 2% category (which I am) it is certainly in your best interest to vote Republican (as I used to do when I voted. However, if you fall in or below the 98%, you are better served by the social programs of the Democrats. Personally I don’t really care how someone votes, it’s not my concern, as the outcome rarely, if ever, affects me.
what??
August 8th, 2011
5:07 pm
Linda-
1. So to counter wikipedia, you present an article from…the Heritage Foundation. I’m sure that’s an independent organization(sarcasm).
2. Then you cite WW2 as ending the depression. Wouldn’t that contradict your argument that spending is bad, because if I look at the numbers, spending increased during ww2
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
August 8th, 2011
5:29 pm
Since President Obama took office in January 2009, the United States has embarked on the most ambitious failed experiment in Washington meddling in US history. Huge increases in government spending, massive federal bailouts, growing regulations on businesses, thinly veiled protectionism, and the launch of a vastly expensive and deeply unpopular health care reform plan, have all combined to instill fear and uncertainty in the markets.
This might be above your pay grade, your skill level or even your mental capacity, but if obozo hadn’t blown the budget, we wouldn’t need deficit reduction.
What’s the Tea Party got to do with it?
Linda
August 8th, 2011
5:36 pm
what@5:07, The quote from Henry Morgenthau can be found at a number of other sites. Take your pick. Google him. He’s definitely who I said he was.
The creators of Wikipedia are the first to admit that it is not accurate.
http://en.wikipedia.org/wiki/Reliability_of_Wikipedia
I did not say that spending was bad. What is bad is spending money we do have for junk we do not need or want, adding to the natl. debt, which even the Defense Dept. says is the greatest threat to our natl. security. What is worse than that is borrowing money from & being indebted to countries that do not have our best interests at heart. What is worse than that is printing money out of thin air to buy our own indebtedness, causing hyperinflation, sort of like a non-legislated tax on everyone. What is worse than that is loosing our AAA rating because the US cannot control its spending.
The natl. debt has increased every single solitary year since 1950, except for 3, regardless of the parties in DC & regardless of the marginal tax rates. The US has a spending problem. It must stop.
Jefferson
August 8th, 2011
5:40 pm
S&P realized that without cuts and increases in revenue the debt will not go away. The GOP does not see after the last month of foolishness that their policies won’t pass. Give them all the Congress and the White house and they too will just run up a bill, after all that’s what they always did before, why should anyone think they changed.
Rafe Hollister
August 8th, 2011
5:56 pm
Still waiting to see Barry’s plan to deal with the debt. There are two bills that passed the house and are pending in the Senate. He could get behind either and this mess would be pretty much finished.
Maybe he will skip his upcoming vacation and work on a plan, but then again not. If he doesn’t do something soon that middle initial will stand for Hoover.
Michael H. Smith
August 8th, 2011
6:13 pm
Not too sure I’d agree with your why now point on the down-grade, Kyle. However, I would certainly not disagree with your why no down-grade long before now? The difference is probably twofold in my view: 1) The amount of spending and monetizing presently at the rate it is occurring. 2) On top of, the amount of debt accumulated to date with no efforts to run balanced budgets (let alone Democrats actually writing budgets anymore ) and the failure to address sound fiscal pay down of the debt principle (not simply making payments on just the interest).
Otherwise all this said, the U.S. must still be seen as a good risk by most investors if money moving toward U.S. Notes & Bonds is any indications. Altho, we still need to get our fiscal house in order: Like say doing what Italy says it intends to do by enduring an austerity program and cutting government regulations?
Moderate Line
August 8th, 2011
6:18 pm
Kyle, very good article. I had not thought of how arbitrary this rating was in relation to a country debt. There two things that are interesting from my perspective:
52% of spending is in defense, social security and medicare. Two of these are entitle programs than can be balance by simply paying out less money. Military spending is about 20% which could be cut. I am not advocating cutting any of these but if push comes to shove they can be cut. Also, the US is currently taxing people at 29.6% of GDP while Sweden is taxing 54.2% of GDP.
Whether you take a liberal approach and raise taxes or conservative approach by cutting spending or a combination of both there is allot of room for balancing the budget compared to other OCED countries.
Linda
August 8th, 2011
6:25 pm
Jefferson@5:40, The American people voted overwhelmingly in 11/10 for a new wave of conservatives: the Tea Party. Isn’t it ironic that Reps., along with the Tea Party, PASSED at least 2 bills in the House that would have saved the US AAA credit rating, yet are accused by liberals of “not changing?”
“They” did not do that before because the Tea Party did not exist until Obama created them in 2/09.
Moderate Line
August 8th, 2011
6:26 pm
Linda
August 8th, 2011
4:02 pm
Progressives have changed the history books. Those of us who are older know that it was WWII that finally ended the Great Depression.
++++
What exactly was WWII but stimulus spending which absolutely did nothing to the economy as far economic output except produce weapons. You are actually making classical Keynes argument.
Here are the deficits during WWII as a percentage of GDP. This is Paul Krugman’s argument.
1940 -3.0
1941 -4.3
1942 -14.2
1943 -30.3
1944 -22.7
1945 -21.5
1946 -7.2
Michael H. Smith
August 8th, 2011
6:34 pm
Defense, social security and medicare will be cut further. However, please don’t get the usual lie started about where the real money is being spent and it is not defense. I did notice no mention of cutting Medicaid was made?
Social Security, Medicare and Medicaid spending was called unsustainable for a reason and that reason is the very definition of the word “unsustainable”?
Funny thing what happen down in Galveston, Texas to those folks who where allowed to opt out of our Social Security ponzi-system in order to “privatize” or as I prefer, “individualize” their own retirement program.
From USA Today ~
A model for Social Security reform
Our experience has shown that even low-income workers would do better, but a guarantee would ease their worries. Moderate- and higher-income workers would do much better, as ours do, because they have invested more in the plan and are not prejudicially punished or “topped out” on retirement benefits, as they are in Social Security.
In today’s debate about whether to partially privatize Social Security, the Galveston County plan is sometimes demagogued. But our experience should be judged factually and fairly, not emotionally, politically or on the basis of hearsay. We sought a secure, risk-free alternative to the Social Security system, and it has worked very well for nearly a quarter-century. Our retirees have prospered, and our working people have had the security of generous disability and accidental death benefits.
Most important, we didn’t force our children and grandchildren to be unduly taxed and burdened for our retirement care while these fine young people are struggling to raise and provide for their own families.
What has been good for Galveston County may, indeed, be good for this country
http://www.usatoday.com/news/opinion/2005-03-15-benefits-reform-galveston_x.htm
Lil' Barry Bailout (Revised Downward)
August 8th, 2011
6:38 pm
Washington (CNN) – President Barack Obama turns his attention to campaign politics Monday night, as he headlines two events for the Democratic National Committee and his re-election campaign.
According to the White House schedule, the president first attends a gathering of approximately 140 guests at a private residence in the nation’s capital. A DNC official says proceeds from the $15,000 per family gathering will go to the Obama Victory Fund.
———————————-
Meanwhile, your 401(k) is going into the toilet.
Priorities.
Michael H. Smith
August 8th, 2011
6:42 pm
Moderate Line
August 8th, 2011
6:26 pm
By your and Krugman’s argument, in turn says War is the ultimate means of debt settlement and wealth redistribution as social justice delivered by the measure of who out gunned whom.
I don’t think that is a argument made by Keynes, it is rather one which was made by Roman Empire.
the red herring
August 8th, 2011
6:46 pm
i vote mainly republican nationally because the democratic party is simply nothing more than the party of welfare, unions, and government. I will vote mainly tea party in the future as i feel the Rhinos in congress are strictly for the people such as Jack (e.g. bush) . I have accumulated some wealth mainly by working 2 to 3 jobs and operating a private business most of my 50+ years in the work force. I wish to be taxed but taxed fairly. I don’t want to pay taxes while 50% of america does not and while we give away all sorts of subsidies to people who will not work and to people who are here illegally. I do not think i should have to pay extreme taxes to educate other people’s children when i have none–while those very people pay nothing towards their children’s educations. America should live within her means and should have a balanced budget every year. If we did we would be closer to full employment and taxes would be less of a percentage of our wages while being more for the government. You can’t reward people for not working and then expect them to work. Socialism simply does not work—you need incentives for people to want to work and succeed. Some of those incentives include having money for food/clothes/entertainment. If there are no incentives then people simply will live off of freebies provided by the government—then on the next election who will those people vote for??—you are right –they will vote for the candidate who promises them the most free stuff (redistribution of wealth). that’s what we have now and it is not working.
Michael H. Smith
August 8th, 2011
6:51 pm
Socialism simply does not work,
Nuff’ said!
Linda
August 8th, 2011
6:55 pm
Moderate@6:26, So, you want to start another war? Go ahead. We’re already in 3, counting the non-war war in Libya in which we are not taking sides, in addition to bombing Pakistan & Yemen. Better get Obama to check with the UN & Paul Krugman. While he’s at it, he might inform Congress this time.
WW II spending might have ended the Great Depression, but it looks to me that spending for 3-4-5 wars in 2011 just ain’t cutting the mustard.
Linda
August 8th, 2011
7:00 pm
red herring@6:46, An intelligent & hard-working American. What we need more of.
Michael H. Smith
August 8th, 2011
7:01 pm
While he’s at it, he might inform Congress this time.
You mean inform Congress – that old potted plant – before he informs everybody that is a real nobody in this world, including the janitor of the U.N., Linda?
Linda
August 8th, 2011
7:18 pm
Michael@7:01, Yep. I just hate it when Congress learns of a new war after they have already left DC for the weekend, from watching Fox News, especially after Obama has taken off for Brazil to buy oil we already have.
Moderate Line
August 8th, 2011
7:23 pm
Michael H. Smith
August 8th, 2011
6:42 pm
Moderate Line
August 8th, 2011
6:26 pm
By your and Krugman’s argument, in turn says War is the ultimate means of debt settlement and wealth redistribution as social justice delivered by the measure of who out gunned whom.
I don’t think that is a argument made by Keynes, it is rather one which was made by Roman Empire.
++++
You should read what I wrote. Where did I advocate Keynes economics? I only stated that when people say WWII ended the depression they are actually advocating Keynes economics. Also, how does Keynes economics combat inflation by rationing which was done in WWII.
Linda
August 8th, 2011
7:24 pm
What we need in Washington, DC today, more than anything, are donations of hearing aids & straight jackets.
Moderate Line
August 8th, 2011
7:24 pm
Linda
August 8th, 2011
6:55 pm
Moderate@6:26, So, you want to start another war? Go ahead. We’re already in 3, counting the non-war war in Libya in which we are not taking sides, in addition to bombing Pakistan & Yemen. Better get Obama to check with the UN & Paul Krugman. While he’s at it, he might inform Congress this time.
WW II spending might have ended the Great Depression, but it looks to me that spending for 3-4-5 wars in 2011 just ain’t cutting the mustard.
++++
No. I do not believe Keynes economics works. Your the one who made and argument for it.
Michael H. Smith
August 8th, 2011
7:27 pm
Ken Langone speaking to President Obama
Just make sure that money actually reduces federal spending and isn’t simply shifted elsewhere. I guarantee you that many millionaires and billionaires will gladly forego it—as my wife and I already do when we forward those checks each month to charity.
~
There you have you haters of the “Eeeeeeeeeeeeeeeeeeeeeeevil Riiiiiiiiiiiiiiiiiiiiiiiiiich”!
Write this down you so-called pee-gressives with a bad case of bed-wetting kool-aid drinking wealth envy: The people of wealth in this country – like Home Depot’s Ken Langone and Bernie Marcus) will gladly step up to the plate so to speak and put their money on the our tax table – Just make sure that “money actually reduces federal spending and isn’t simply shifted elsewhere”.
Moderate Line
August 8th, 2011
7:31 pm
Michael H. Smith
August 8th, 2011
6:34 pm
Defense, social security and medicare will be cut further. However, please don’t get the usual lie started about where the real money is being spent and it is not defense. I did notice no mention of cutting Medicaid was made?
++++
I did not mention medicaid because I don’t know the percentage of spending for medicaid but it is an entitlement program just like social security.
20% of the budge is in defense. I mention all three so where did I lie. You are the one who is putting words in mouth which I did not say so I would if anyone is being dishonest it would be you.
Michael H. Smith
August 8th, 2011
7:35 pm
Moderate Line
August 8th, 2011
7:23 pm
You should read what I wrote. Where did I advocate Keynes economics? I only stated that when people say WWII ended the depression they are actually advocating Keynes economics. Also, how does Keynes economics combat inflation by rationing which was done in WWII.
~
Then it is you who should go back and read as I said War, as in this case WWII is NOT Keynes economics as you purport people say WWII ended the depression are actually advocating Keynes economics.
Again, War including WWII was not Keynes economics.
The Rule of Rome
The spoils of war goes to whom?
The Victor!
Not to the greatest spender or biggest employer.
buck@gon
August 8th, 2011
7:38 pm
Kyle,
You’re just wrong. China and Japan aren’t buying our debt anymore–that is a practical downgrade. We have more people out of work and on food stamps than any time in history–that is another reason to suspect the US Gov. We haven’t passed a budget period; in fact, Obama hasn’t passed a budget as chief executive of anything in his life.
Sorry Kyle, but when leadership is weak in the top office, and when creditors are looking suspiciously at a debtor, it matters not one whit what the CBO said or did not say. If the board of GE, headed by Jeff Immelt were committed to a mental institution today, I’d bet you even money GE gets seriously dinged by S&P for a time at least. (WARNING: DON’T DO BUSINESS WITH THESE BOZOS!) Heck, were we to always take the CBO seriously, we might acknowledge the reality that CBO is entirely correct ONLY when Congress tells them what the rules will be and before things happen. Once legislation is in action, the CBO is nearly always wrong!
So when the political masters in Washington who pay the salaries of “nonpartisan” CBO employees have said exactly how and with what tools the economic wizards at the CBO may use to score legislations, deals or budgets. If the CBO were right, then Obamacare would be a “cost-saving” deal, and the prescription drug benefit would cost 1/3 of what it does. If I believed the CBO were right, I’d also try and sell you the idea that NPR is “nonpartisan” or that because I live in Atlanta that I’m nonpartisan about the Braves.
Fortunately, S&P is under no such obligation to tell the truth only as the government sees it. Standard and Poors may have made some mistakes, but at least they are making some effort to be objective and honest. Given what I point out above, that effort is not by any means at all unreasonable.
Linda
August 8th, 2011
7:39 pm
Moderate@7:24, No, I did not. You have me mixed up with a commenter above.
You should fess up. You are no more moderate than Obama. Change your name.
buck@gon
August 8th, 2011
7:40 pm
Testing
whatfor
August 8th, 2011
7:42 pm
For those who keep referring to France – who still has a AAA rating by S&P – perhaps you should view this chart – it is a chart of forward looking (as well as past) federal debt (entitlements primarily) as a percentage of projected GDP – you can see clearly how the US is so much higher than other countries.
http://online.wsj.com/article/SB10001424053111904480904576494671106889768.html?mod=WSJ_hps_sections_news#project%3DDebtGDP_1104%26articleTabs%3Dinteractive
Furthermore – I thought it was King Obama who stated a couple of years ago that rating agencies ought to be free of political persuasion or pressure. Of course, he said a lot of things that he has since contradicted – so no real surprise there.
Moderate Line
August 8th, 2011
7:43 pm
Michael H. Smith
August 8th, 2011
7:35 pm
Moderate Line
August 8th, 2011
7:23 pm
You should read what I wrote. Where did I advocate Keynes economics? I only stated that when people say WWII ended the depression they are actually advocating Keynes economics. Also, how does Keynes economics combat inflation by rationing which was done in WWII.
~
Then it is you who should go back and read as I said War, as in this case WWII is NOT Keynes economics as you purport people say WWII ended the depression are actually advocating Keynes economics.
Again, War including WWII was not Keynes economics.
The Rule of Rome
The spoils of war goes to whom?
The Victor!
Not to the greatest spender or biggest employe
+++
Read Krugman who is the staunches advocate Keynes economics and how it relates to the theory of Keynes.
Plus what spoils did we received compared to Rome. Rome fought wars specifically for plunder where we went and rebuilt the actual countries we beat. Did Rome rebuild Carthage.
WWII was
a) Deficit spending – to stimulate the economy
b) rationing – to control inflation
http://www.mrctv.org/node/102232
You my friend are a liberal and don’t know it. I am not because I don’t believe in Keynes economicas
buck@gon
August 8th, 2011
7:45 pm
Kyle,
What’s going on here. I just made a brilliant post (again), but it’s not up. Are you opening my mail too?
Kyle Wingfield
August 8th, 2011
7:50 pm
buck@gon: Not sure what the problem was. I’ve pushed through your comment.
Linda
August 8th, 2011
7:58 pm
Obama said today, “…I intend to present my own recommendations over the coming weeks on how we should proceed…”
My goodness! Finally a plan from the White House? Will this one be in writing? Why now? Why not 2 years ago or in April when S&P warned of a downgrade? Why weeks from now? Why not today? Why is Obama still keeping the doors open to the EPA?
I’m holding my breath!
Michael H. Smith
August 8th, 2011
7:58 pm
Read Krugman who is the staunches advocate Keynes economics and how it relates to the theory of Keynes.
Plus what spoils did we received compared to Rome. Rome fought wars specifically for plunder where we went and rebuilt the actual countries we beat. Did Rome rebuild Carthage.
WWII was
a) Deficit spending – to stimulate the economy
b) rationing – to control inflation
http://www.mrctv.org/node/102232
You my friend are a liberal and don’t know it. I am not because I don’t believe in Keynes economicas
~
I’m not anything close to a liberal, I know the difference between wealth redistribution from War as posed to Keynes (which you seem no to understand)and I wouldn’t waste my time reading your friend Krugman.
Plus what spoils did we received compared to Rome?
Did you really type that question with a straight face?! I can’t believe you.
Well okay, apart from a great deal of wealth transferred from the once British Empire, you could say about half the world we decided to politely plunder to our benefit and sometimes the benefit of others.
Michael H. Smith
August 8th, 2011
8:12 pm
Rome fought wars specifically for plunder where we went and rebuilt the actual countries we beat.
I will take you to task on that one my friend but only after I know that you are familiar with the Banana Wars. Especially our CIA Guatemalan Civil War.
Don’t get me wrong it’s still my country but I’m not going to be arrogantly sanctimonious about the fact at times we need a good bath.
Linda
August 8th, 2011
8:14 pm
buck@gon@7:38, I agree. Your post was brilliant.
Michael H. Smith
August 8th, 2011
8:17 pm
Article link from which a the Langone quote was taken with my apologies.
Stop Bashing Business, Mr. President
If we tried to start The Home Depot today, it’s a stone cold certainty that it would never have gotten off the ground.
By KEN LANGONE
http://online.wsj.com/article/SB10001424052748704361504575552080488297188.html
Lil' Barry Bailout (Revised Downward)
August 8th, 2011
8:18 pm
Linda: Obama said today, “…I intend to present my own recommendations over the coming weeks on how we should proceed…”
———————-
His 2012 budget would have been an excellent place to do that. Instead, he shirked his responsibility and waited for Republicans to do the heavy lifting. It’s unfortunate that, as S&P pointed out, his lack of cooperation and in fact his willingness to DO HIS JOB put in doubt Washington’s ability to address his deficit problem.
“The Obama Downgrade” it is.
Linda
August 8th, 2011
8:18 pm
Obama’s supporters say he can multi-task. I bet you a gallon of gas that he can’t cook a five-course meal & blog at the same time, which I just did.
Mine did not even include arugula. Bless his heart. Perry was right to pray for him. I do, too.
Lil' Barry Bailout (Revised Downward)
August 8th, 2011
8:23 pm
Obozo is just plain lazy. As one of the WSJ columnists said today, if he can’t get what he wants by decree, he’s not interested.
Moderate Line
August 8th, 2011
8:26 pm
Michael H. Smith
August 8th, 2011
8:12 pm
Rome fought wars specifically for plunder where we went and rebuilt the actual countries we beat.
I will take you to task on that one my friend but only after I know that you are familiar with the Banana Wars. Especially our CIA Guatemalan Civil War.
Don’t get me wrong it’s still my country but I’m not going to be arrogantly sanctimonious about the fact at times we need a good bath.
++++
I was referring to WWII the orginal subject. The only way you can make your argument is either
A)Putting words in my mouth like saying my “friend Krugman”. I believe I have been clear that I do not support Keynes economics in relation to stimulus spending which would put me at odds with Krugman. I do not believe the stimulus spending did anything but put off temporalily a drop in GDP.
B) We were specifically talking about WWII and it’s affect on the Depression so in order to prove your point you switch to the Banna Wars. How do the Banna wars show how the United States acted as Rome did during WWII? Did we plunder Japan? Did we plunder Germany? Did we plunder Italy? We rebuilt Europe and Japan.
I am well aware of the policies that we carried out in Latin American but their connection to WWII is lost on me.
joe beans
August 8th, 2011
8:28 pm
We’re not a democracy. America is a constitutional republic
Lil' Barry Bailout (Revised Downward)
August 8th, 2011
8:28 pm
30,000 college students kicked out of food aid program in Michigan
Paul Egan/ Detroit News Lansing Bureau
Lansing — Michigan has removed about 30,000 college students from its food stamp program — close to double the initial estimate — saving about $75 million a year, says Human Services Director Maura Corrigan.
“Maybe (students) could go get a part-time job — that’s what I did,” said Corrigan, a former justice of the Michigan Supreme Court who attended Detroit’s Marygrove College and University of Detroit Mercy School of Law.
“Students should be focusing on their education, not whether or not they’ll be able to eat dinner or whether they can manage to find a job and balance it on top of their studies,” one student said in a Friday email interview from Mount Pleasant.
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Yeah, someone ELSE should be working a bit extra to pay for this parasite’s handout.
From The Detroit News: http://detnews.com/article/20110808/POLITICS02/108080356/30-000-college-students-kicked-out-of-food-aid-program-in-Michigan#ixzz1UUFK7H93
Lil' Barry Bailout (Revised Downward)
August 8th, 2011
8:38 pm
“While the historic downgrade of U.S. debt is certainly a major event, the real story is the continued failure of the U.S. economy to recover from recession. From March 2009 to July 2011, the Dow Jones had surged more than 90% on the assumption that the economic crisis was a thing of the past. I always argued otherwise. It is now dawning on investors and economists that the massive monetary stimulus only resulted in the illusion of health, while delivering in exchange a depreciated currency, crushing debt, and a moribund private sector. But this will not stop Washington from doing more damage with the same policies that hurt us in the first place.”–Peter Schiff
Linda
August 8th, 2011
8:51 pm
Moderate, Your comment @ 6:18 was a tell-all. You said, “Two of these are entitle(ment) programs that can be be balance(d) by simply paying out less money…I am not advocating cutting any of these…”
Evidently, you have not read the S&P report.
See my post from hours ago. Keep up.
Moderate Line
August 8th, 2011
8:52 pm
Linda
August 8th, 2011
7:39 pm
Moderate@7:24, No, I did not. You have me mixed up with a commenter above.
You should fess up. You are no more moderate than Obama. Change your name.
+++
I do not believe in Keynes economics therefor I do not believe WWII got us out of the depression. I actually believe in Milton Friedman’s policy in relation to WWII. If you believe WWII got us out of the recession you believe what most if not all liberal economist believe got us out the the depression. You may be correct that I am not a moderate because I support Friedman’s view over Keynes but that would mean that I am a conservative whereas you seem to agree with Keynes and Krugman’s view which is stimulus spending from WWII got us out the depression.
http://www.thefreemanonline.org/featured/the-great-depression-according-to-milton-friedman/
Moderate Line
August 8th, 2011
9:03 pm
Linda
August 8th, 2011
8:51 pm
Moderate, Your comment @ 6:18 was a tell-all. You said, “Two of these are entitle(ment) programs that can be be balance(d) by simply paying out less money…I am not advocating cutting any of these…”
Evidently, you have not read the S&P report.
See my post from hours ago. Keep up.
++++
Read what wrote. I notice how you left off the other part of my post. I am saying you can cut,tax or both and balance the budget. The point of my entire statement was most Eurpopeans countries only have the option of cutting because they governments are already taxing people at an incredible high rate. For example Denmark and Sweden are taxing people in the range of 45%. They also have the same problem we have as far demographics in terms of age but yet they have not been downgrade we have.
I only made the point of saying I am not advocating cutting to focus in the fact that S&P was mistaken as Kyle stated. They were missing the fact that the United States has more leeway in terms of how it handles it’s debt.
I am sure what you are trying to prove but I believe that cuts will have to be imposed at some point if health care cost continue.
Rafe Hollister
August 8th, 2011
9:16 pm
Moderate, we get it, you are rambling and are not sure what you are or what you believe, somewhat like the Spender in Chief.
Moderate Line
August 8th, 2011
9:19 pm
They also have tax rates lower than we have and spending higher than we have.
I should say higher tax rates. Whoops. I was also being scarcastics in regards to Canada, New Zealand and Australia being conservative.
And to think it socialism which is driving the US to lose credit rating but all the countries with AAA ratings are more socialistic than the US. Perhaps S&P is really being sponsored by George Soros.
Michael H. Smith
August 8th, 2011
9:19 pm
B) We were specifically talking about WWII and it’s affect on the Depression so in order to prove your point you switch to the Banna Wars. How do the Banna wars show how the United States acted as Rome did during WWII? Did we plunder Japan? Did we plunder Germany? Did we plunder Italy? We rebuilt Europe and Japan.
I am well aware of the policies that we carried out in Latin American but their connection to WWII is lost on me.
~
I can stick strictly to WWII it if means anything to you but really it won’t. My reason for jumping was in fact due to your expansion by way of this: (we) rebuilt the actual countries we beat. No we haven’t rebuilt all the countries we beat Banana Wars and CIA Guatemalan civil war are prime examples.
Now we’re onto that rebuilding. We rebuilt part of Germany, some of Europe and gave the other half to the communist U.S.S.R. along with a good deal more of Europe. Very noble of us. Nevertheless, perhaps we learned how to avoid WWIII in Europe by doing so, though, we did it through “our will be done nation building” for our own benefit more so than for that of Germany and Japan.
Now once and for all on your Keynes economics business, much of which took place BEFORE WWII in the form of the New Deal, which is not seemingly directly related to WWII but it could be argued the War effort made possible the biggest public works program ever imaged. However, had we lost that war, WWII, and been out gunned so to speak, it would have been very clear even more so than in our winning of it that we were operating under the Rule of Roman economics and not that of Keynes.
You can argue all you want from this point on but I’ll not join you further for the point has been overly made by half, IMHO. War redistributes wealth and settles debt by the simple means of who out guns whom, “might alone is right” and determines the prosperity or austerity thereafter, to which Keynes economics is irrelevant.
I certainly don’t advocate war as the economic solution.