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S&P lowers its outlook on U.S. debt


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http://www.washingtonpost.com/business/economy/sandp-lowers-its-outlook-on-us-debt-stocks-decline-sharply/2011/04/18/AFfg7QzD_story.html?hpid=z1

S&P changed its outlook on the United States from “stable” to “negative” and said the federal government could lose its AAA rating if officials fail to bring spending in line with revenues....

...S&P analysts said they had hoped Obama’s fiscal commission, which offered a plan in December to reduce borrowing by nearly $4 trillion over the next decade, would provide the needed momentum to rein in the debt. But Obama declined to embrace those recommendations and put out a budget plan in February than was “below our expectations,” said analyst John Chambers.

Now, the analysts said, odds for a prompt resolution look especially grim. “When you pull all this together … we think the fiscal profile of the United States is increasingly diverging from a number of its triple AAA peers,” Beers said.

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Not really surprising... we need to cut taxes and raise taxes. I really think Obama's plans got hurt when he was politically forced to renew the Bush Tax Cuts. Now, the D's and R's are engaged in a political pissing match while things continue to get worse.

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From reading the economic papers from here and Europe with those controlling the House dead set against raising taxes no one in the world sees the US debt getting any better and deep cuts will do nothing but the hurt the US economy more and that will mean even less tax revenue.

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Why do so many ignore what was said in the OP?

O ignored the commission's recommendations(that he approved) and submitted a budget with increased spending from a previous budget that already was bloated with spending

Govt spending does not mean income

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Why do so many ignore what was said in the OP?

O ignored the commission's recommendations(that he approved) and submitted a budget with increased spending from a previous budget that already was bloated with spending

Govt spending does not mean income

You forget the president alone does not make economic policy

And as long as you have one branch of government that will not consider tax increase or cutting spending on defense or foriegn aide to nations like Israel then what you end up with is the Republican plan to cut domestic spending taking the little remaining money people have to be spent on health care and and some day to day basics which generates little revenue and does nothing to pay down the debt.

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.S&P analysts said they had hoped Obama’s fiscal commission, which offered a plan in December to reduce borrowing by nearly $4 trillion over the next decade, would provide the needed momentum to rein in the debt. But Obama declined to embrace those recommendations and put out a budget plan in February than was “below our expectations,” said analyst John Chambers.

did they forget?...or do they simply recognize reality?

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US Govt getting strong armed by a rating agency... How quickly things change. Republicans are and will continue to be ****ing Republicans, no surprise there... but Obama is a great dissappointment. I guess he got friends in high places too, eh?

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But S&P said neither plan does enough to fix the shortfall, and the tension has cast doubt on whether they will be able to work together on a long-term solution.

"Looking at the gulf between the parties, it has never been wider than now," Beers said. "It takes a lot of political will to bridge this gulf."

Last week, a U.S. congressional report last week blamed ratings companies such as S&P and Moody's Corp. for triggering the financial crisis when they cut the inflated ratings they had applied to complex mortgage-backed securities.

The U.S. debt burden has grown exponentially after a housing bubble burst in 2007 and set off a world financial crisis that toppled several Wall Street banks, drove up the jobless rate and thrust the global economy into recession.

Governments around the world were forced to increase public spending to prevent their economies from lurching into an even worse depression.

The tactics helped spark a recovery but left the U.S. and other advanced economies, which were hit hardest by the crisis, with staggeringly large debt burdens.

Moody's Investors Service, which reaffirmed the U.S. top credit rating on Monday, said the fact that the issue was being taken seriously by lawmakers was "credit positive, although it remains uncertain what sort of budget will actually be adopted."

http://www.bnn.ca/News/2011/4/18/SP-cuts-US-outlook-to-negative-on-fiscal-worry.aspx

If you wanted to cut the cost of medicare and medicaid to the US deficit you could have simply eliminateed both and enacted single payer

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From reading the economic papers from here and Europe with those controlling the House dead set against raising taxes no one in the world sees the US debt getting any better and deep cuts will do nothing but the hurt the US economy more and that will mean even less tax revenue.

I've asked you this before you never really answered it. What percentage of of the GDP do you believe our federal, state, and local government should spend?

Right now the government is spending close to 40% of our GDP while collecting just under 35% of GDP. To balance the budget, those two numbers need to come together. Obviously, most Republicans want to see government spending come down to 35% of GDP keeping taxes where they are. What I'm not understanding is, how much of the difference do Democrats want to come from tax increases and how much do they want to come from spending cuts?

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I've asked you this before you never really answered it. What percentage of of the GDP do you believe our federal, state, and local government should spend?

Right now the government is spending close to 40% of our GDP while collecting just under 35% of GDP. To balance the budget, those two numbers need to come together. Obviously, most Republicans want to see government spending come down to 35% of GDP keeping taxes where they are. What I'm not understanding is, how much of the difference do Democrats want to come from tax increases and how much do they want to come from spending cuts?

As I stated before it does not need to be a set percentage, during war for example and times of great need it will increase and the more debt you have the more you need.

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If you wanted to cut the cost of medicare and medicaid to the US deficit you could have simply eliminateed both and enacted single payer

Why do that when there is already a tax specifically for them?

Reduce benefits or increase the tax...or both

If they are incapable of that simple feat it lends no confidence to them managing others

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Why do that when there is already a tax specifically for them?

Reduce benefits or increase the tax...or both

If they are incapable of that simple feat it lends no confidence to them managing others

If money is going to private entities to sell medicare or mediaid policies you are losing money to those operating for profits

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As I stated before it does not need to be a set percentage, during war for example and times of great need it will increase and the more debt you have the more you need.

One more time. There is an existing gap RIGHT now. How much of that gap do you want to come from spending cuts (cuts in anything...it can include defense spending if you like) and how much do you want to come from tax increases. Give me the amount you want to see us spend right now as the world is at this very moment in history. 35%? 45%? What?

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One more time. There is an existing gap RIGHT now. How much of that gap do you want to come from spending cuts (cuts in anything...it can include defense spending if you like) and how much do you want to come from tax increases. Give me the amount you want to see us spend right now as the world is at this very moment in history. 35%? 45%? What?

You cut military spending by 2 percent of the GDP and 1 percent in foriegn aide, subsidies for farms and corps and means test tax breaks and social programs and you have decresed spending by 3 percent and they add let the tax cuts for the rich expire and there is you other 2 percent to make up the five percent gap

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You cut military spending by 2 percent of the GDP...

This is a good idea but its already factored in to future spending plans. Currently, defense spending eats up 6.4% of GDP. By 2015, it is expected to account for 4.67% of GDP. If you cut another 2 percent of the GDP from the military, that will bring military spending down to 2.67% of GDP...almost a 2/3 reduction in military spending in 4 years. I don't think that's attainable.

Still, I do agree with you that defense should see some decrease. Maybe bring defense spending down to 2001 levels...3.5% of GDP. That would be drastic and it would mean the end to war in Iraq, Afghanistan, and Libya. Can't say I'd be sad about that.

That means that we could see 20% of the difference between spending and taxes made up in defense cuts, or 1% of GDP, if Obama would end all foreign wars immediately.

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This is a good idea but its already factored in to future spending plans. Currently, defense spending eats up 6.4% of GDP. By 2015, it is expected to account for 4.67% of GDP. If you cut another 2 percent of the GDP from the military, that will bring military spending down to 2.67% of GDP.

The SP warning was based on the next 2 years you are talking about 4 years down the road and you do not know want the revenue will be there to be 2.67

If you cut funding now by 300 billion you would still be out spending the next 5 nations combined.

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Thank you for giving some numbers. That's all I was looking for. I don't think its possible to move any faster in cutting the military than I mentioned in my last post so we'll disagree there, but that's secondary. Its just nice to get a handle on how much you want to see cut and now much you want to see taxes increased.

Basically, you're looking at making up 40% of the gap in tax increases and 60% in spending cuts. I'd prefer something closer to 20/80. If we ended up at about 30/70, I'd be very happy.

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Thank you for giving some numbers. That's all I was looking for. I don't think its possible to move any faster in cutting the military than I mentioned in my last post so we'll disagree there, but that's secondary. Its just nice to get a handle on how much you want to see cut and now much you want to see taxes increased.

Basically, you're looking at making up 40% of the gap in tax increases and 60% in spending cuts. I'd prefer something closer to 20/80. If we ended up at about 30/70, I'd be very happy.

Problem is when you cut to much domestically it can cause revenues to go down also.

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If you cut funding now by 300 billion you would still be out spending the next 5 nations combined.

But we use them more than the next 10 nations combined.

But I support cutting both funding and usage in a reasoned fashion

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But we use them more than the next 10 nations combined.

But I support cutting both funding and usage in a reasoned fashion

Think about that you are fighting in Afghanistan to make it stable and it is China that land rights there, why not walk away and let them worry about the mess close to their home

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