AP: USA downgraded by S&P

[DRSmith]

Anyone really think we are world power now? If we didn't have nukes; Russia and China would've already invaded us.

Why would China invade you since you are a big consumer of their goods

[zoony]

Anyone really think we are world power now? If we didn't have nukes; Russia and China would've already invaded us.

you are an idiot. seriously, just stop posting.

[Thiebear]

Though 1 of the 3 ratings went down... Having watched the HOF speeches ALL night..

We just have to work harder than everyone else, do what needs to be done.

And then talk about how poor we were at the start and lots of great things about our momma.

[Jumbo]

[mardi gras skin]

I KNOW ALL of the leaders in the Republican party have said they don't support any real increases in taxes.

The Charles Krauthammer article ACW posted claimed that Republicans were willing to increase revenue by $800 billion. I figured it was Charles being Charles but I went looking to see if he was making it up anyway. According to the LA Times, the Republicans were willing to raise revenue by a substantial amount....just not as much as Obama wanted.

http://www.latimes.com/news/nationworld/nation/la-na-obama-boehner-20110723,0,3014755.story?page=2

How the Obama-Boehner debt talks collapsed

On Friday, July 15, it seemed the perseverance had paid off.

That day, GOP leaders invited White House officials to Capitol Hill for a private meeting. On the White House side were Chief of Staff William Daley and Treasury Secretary Timothy F. Geithner. Representing the House were Boehner and Rep. Eric Cantor (R-Va.), the majority leader who has taken a leading role among the conservative flank.

The Republicans made an offer: between $3 trillion and $3.5 trillion in spending reductions, and nearly $800 billion in revenue increases over 10 years through overhauling the tax code. Geithner and Daley took it back to the White House.

On Sunday, Boehner and Cantor were invited to the White House for a private, unannounced meeting with Geithner, Daley and Jacob Lew, the director of the White House Office of Management and Budget. Obama, who was at church that morning, popped in a couple of times.

The White House was agreeable to parts of the deal — notably, the proposal for nearly $800 billion in added tax revenue.

"They were willing to accept our number," the GOP aide said. The group also talked about overhauling the tax code.

"We walked out of the room thinking we were making good progress on the tax reform," the aide said.

The meeting did not become public until Monday, and even then, the proposal was not disclosed.

On Monday, Republicans said they were waiting for the White House to provide a counteroffer on ways to make sure Congress would take up tax reform.

One way to do it would be to have a "trigger" in any debt ceiling legislation providing that if Congress did not act on tax reform, then tax cuts for the wealthy put into effect under the George W. Bush administration would expire.

The next day, however, a bipartisan group of senators referred to as the Gang of Six unveiled its own deficit reduction proposal that included more than $1 trillion in tax revenue.

According to the Republicans, that proposal changed the debate. Later Tuesday, the White House said it needed to see an additional $400 billion in new tax revenue, aligning it more closely with the goals in the Gang of Six proposal.

So apparently, at one point in the process Republicans were willing to raise taxes.

[DRSmith]

So they would have gotten 3.5 trillion in cuts and only 1.2 trillion in revnue seems like they would have gotten what they wanted

[RedskinsFan44]

I have a hard time believing Boehner went from being willing to raise revenues 800 bilion to 0 just because Obama asked for more. Boehner stated multiple times before the negotiations that revenue increases were off the table, and the TEA party is emphatic in their opposition. I think moderate Republicans are willing to look at the revenue side, but fear the party splitting, so they choose to save their political futures over what needs to be done. The Dems are essentially doing the same when they say "no cuts to medicare".

[mardi gras skin]

So they would have gotten 3.5 trillion in cuts and only 1.2 trillion in revnue seems like they would have gotten what they wanted

That's irrelevant. Peter said he knew that all the Republican leadership were unwilling to raise revenue. But before the gang of 6 got involved, emboldening Obama to push for more, republicans offered to increase revenue by $800 billion.

I haven't heard Pelosi detail how much (if any) reduction she's willing to make in entitlement spending.

---------- Post added August-7th-2011 at 08:13 AM ----------

I think moderate Republicans are willing to look at the revenue side, but fear the party splitting, so they choose to save their political futures over what needs to be done. The Dems are essentially doing the same when they say "no cuts to medicare".

I think you're right. I think that's where we are now. I don't know if that's where we were a month ago.

[DRSmith]

Everything must be on the table as the U.S. Congress works to cut the deficit, including Medicare, Social Security and entitlements, House Minority Leader Nancy Pelosi told CNBC Monday.

"All the money is fungible, and at the end of the day the deficit has to be reduced," the California Democrat said the day the $14.3 trillion debt ceiling expired.

http://www.cnbc.com/id/43047086/Medicare_Entitlements_on_the_Table_for_Cuts_Pelosi

[Woofer]

The finger pointing won't help. When there is a problem, no matter whose fault it is, it is the responsibility of all concerned to COME UP WITH a PLAN to fix the problem.

I see this all the time at work, "It wasn't me, it was them!" "It's not MY fault!"

Everyone needs to step up, design a plan of action, and then have the courage to implement it. After the problem is resolved, you can bring out the Blame Game cards and deal a hand.

[aREDSKIN]

Here's another POV-

Standard and Poor’s explanation for why it downgraded U.S. debt is written in such a way that it can be seized upon by all ideological stripes. The statement cites the unwillingness of Republicans to raise taxes and of Democrats to agree to entitlement cuts. And the rating agency’s discourse about the political dysfunction will provide column fodder for Washington pundits who long for the days when both parties would work together to reach compromises. But make no mistake, when all the dust settles, it will be difficult for President Obama to escape blame for this.

Defenders of Obama will attempt to pin the blame on his predecessor, President Bush, and on intransigent Tea Party radicals in the current Congress. But that would leave out the part in between. For his first two years in office, Obama’s party controlled both chambers of Congress – for part of that period, he had a filibuster proof majority in the Senate. During that time period, he and his fellow Democrats could have passed his supposedly ideal, long-term, deficit-reduction package -- one that represented a “balanced approach” between spending cuts and tax increases. It also could have delayed the deficit reduction for several years, so it wouldn’t have affected the current weak economy or the “investments” he considers crucial. Forget about actually accomplishing serious deficit reduction -- he didn’t even attempt it.

When Obama came into office, he argued that we needed deficit spending to boost the economy, so he passed a $800 billion stimulus package. Then, in one of his first supposed pivots to the deficit, he convened a ‘fiscal responsibility summit’ in February 2009. But that actually turned out to be part of a different pivot altogether. It was during that summit that then White House Budget Director Peter Orszag declared, “health care reform is entitlement reform.”

Continues........http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/obama-won%E2%80%99t-escape-blame-credit-downgrade

[DRSmith]

Most of this has been discussed earlier in the thread, I said Obama failed to show leadership espicially when it came to the Dem controlled house.

And everyone has said healthcare spending is something that needs to fixed and it will lower your debt, Frum even wrote on it this week.

[Tulane Skins Fan]

FWIW, the root cause of the debt problem today is two unpaid wars and tax cuts that were not offset by spending cuts. I say that because ten years ago, we were running a yearly surplus.

[DRSmith]

I think the bigger problem was the mindset that was part of the 2000 election.

When the government was running surpluses there were those who thought it was the peoples money and it should be given back to them and there were those who said it should go into paying down the people's debt.

Funny how those voices who once talked about taxes being the people,s money are not saying the debt is the eople's debt and all should pay it.

[aREDSKIN]

FWIW, the root cause of the debt problem today is two unpaid wars and tax cuts that were not offset by spending cuts. I say that because ten years ago, we were running a yearly surplus.

Are you trying to claim that there were no federal deficits prior to Bush 2?

[Larry]

Are you trying to claim that there were no federal deficits prior to Bush 2?

No, he didn't.

Did you save your receipt, when you bought all that straw?

[ACW]

Does this mean interest rates will go up? Good, my spending account needs more cash. Silver lining.

[aREDSKIN]

No, he didn't.

Did you save your receipt, when you bought all that straw?

Well "root cause" certainly implies the severity of the problem. Thus my QUESTION.

[Tulane Skins Fan]

Are you trying to claim that there were no federal deficits prior to Bush 2?

I didn't say that. The debt was not what it is today prior to bush 2 though. It was not at the stage that it could have cost us our credit rating. In fact the debt was being paid back, or at least able to be paid off through the surplus that existed in 2000.

I will note that that surplus was created by bit dems and the GOP working together. But two wars and the bush tax cuts were not paid for. In fact the wars were not even put on the ledger somehow. That's absurd. And it got us in big trouble. We should have used the good economic times to pay off our debt. Instead we came up with more.

Would anyone really have objected to a war tax? In the aftermath of 9/11. Not any real objection.

[DRSmith]

Does this mean interest rates will go up? Good, my spending account needs more cash. Silver lining.

No one knows and probablynot likely since the Fed is the one who sets the prime rate, now the interesting thing is if interest rates goes up on treauries this will increase the interest payments needed but since more than half the debt is owned by the US this will mean the Feds holdings and the Social Security holdings will increase.

---------- Post added August-7th-2011 at 12:22 PM ----------

Would anyone really have objected to a war tax? In the aftermath of 9/11. Not any real objection.

No but adding another tax to go to Iraq would have caused a bgger outcry.

Amazing when Bush took office the projection was the US would have paid off it's debt by the end of the decade and some people thought it was immoral that the government was running surpluses like that.

One thing that helped Canada whether this better was the Liberals paying off portions of the debt when they had surpluses.

[McD5]

So Trump did come out after this downgrade, as he probably should. He said “Well, I don’t think anybody can be [a fan of how the President's handling things]. I haven’t heard anybody- even his biggest allies are not fans so much anymore."

But instead of announcing he is entering the race, he suggests that he wouldn't be surprised to see another Dem challenge Obama for the nomination.

That seems unlikely, but probably puts any Trump talk to rest for good.

[twa]

No one knows and probablynot likely since the Fed is the one who sets the prime rate, now the interesting thing is if interest rates goes up on treauries this will increase the interest payments needed but since more than half the debt is owned by the US this will mean the Feds holdings and the Social Security holdings will increase..

Que?.....you are leaving out something there

[Seabee1973]

I think some of the revenue from the gang of six they got greedy some of that revenue was by taxing churches

[redskins59]

I don't care what S&P says, but the fact of the matter is the democrats WERE willing to cut entitlements. On the other hand, the Republican party, led by the tea party, just did not want to increase taxes. How many times did Obama say that he was willing to reform medicare/social security. The tea party republicans were just too stubborn and unwilling to compromise.

If the United States heads the way of Greece, in the end, taxes need to be raised. Greece has raised taxes twice already in two years. The tea party stance is a losing proposition.

Decades ago, the wealthy paid more than 70% in taxes. It is half of that right now.

[mardi gras skin]

FWIW, the root cause of the debt problem today is two unpaid wars and tax cuts that were not offset by spending cuts. I say that because ten years ago, we were running a yearly surplus.

But the debt problem today really isn't the big concern. That can and will come down. The real debt problem is that, for the foreseeable future, entitlement obligations are exploding. Especially medicare. If we cut our defense spending to zero, entitlements would still swallow us up eventually.

As we're looking to reduce future deficits, entitlement spending is the major elephant in the room. They have to come down.