AP: USA downgraded by S&P

[The Evil Genius]

Only 1% of U.S. households pay neither income or payroll taxes.

Of the 46% who do not pay income tax, 80% of the households earn less than 30k a year. These are the people who should be paying more? Really? At what cost?

The cost of adding more need for welfare and assistance? Which, in the long run, costs more than these people will pay out in new tax collections?

Really? Are we that stupid?

[GibbsFactor]

Only 1% of U.S. households pay neither income or payroll taxes.

Of the 46% who do not pay income tax, 80% of the households earn less than 30k a year. These are the people who should be paying more? Really? At what cost?

The cost of adding more need for welfare and assistance? Which, in the long run, costs more than these people will pay out in new tax collections?

Really? Are we that stupid?

I think it's quite obvious to anyone without a political agenda that taxes need to be raised on anyone making $75K single or $150K married. And the more you make, the more you need to pay, without all the damn breaks. I know you worked for your money. Great. Now give a little back so that the market rises and lets you:

A. actually spend it

B. Profit from your investments.

Because if taxes aren't raised for those mentioned above, there's no point in having the money in the first place.

[ABQCOWBOY]

The source of waste fraud and abuse is the same in both cases private companies over indivuals over billing, if you get caught doing in medicare though you can no longer bill them is the same true with defense contractors?

And WFA in the military coupled with cost over runs has outpaced that in healt care spending

This is not true. If you get caught, you simply close down shop and reopen with a new shingle. I know this for a fact DR. I've seen it happen.

[mcsluggo]

hardly a surprise....incompetence has it's consequences

straight from the horse's mouth....

[ABQCOWBOY]

Good point.

Neither one of these statements is true. It's a combination of both. It's the Debt to income ratios that are in question. Further, it's our inability to provide any sort of plan to deal with these. I don't care if we said, we are going to tax the rich 100% to fix the problem, if the numbers didn't work or the business plan was not sound. they would have downgraded us anyway. Same as if we would have provided a plan that slashed spending to the bone. Same as providing a plan that spent 2 trillion today and saved 2 trillion in the future 10 years. At best, it's zero sum and that won't cut it.

[GibbsFactor]

This is not true. If you get caught, you simply close down shop and reopen with a new shingle. I know this for a fact DR. I've seen it happen.

Yep. That's why you now have doctors/clinics that basically advertise for those using medicare. Come to us, we'll hook you with that drug, medicare will pay for it!

And that's the problem right there.

That's why I'm against medicare. The government has no pride of ownership and no competing brand. It will never be efficient.

[mcsluggo]

holy crap this thread is full of stupid..... even by the well-established low standards set on this board for issues that require party faithful to dig down and sharpen their pointy sticks.

In almost EVERY debate there are shadings of grey, and points and counterpoints to balance, and the end conclusion any thinking person comes up with is nuanced and tinged with a healthy serving of "yes...but....". BUT, NOT IN THIS CASE. This was a COMPLETELY self inflicted wound. and it was PURPOSELY inflicted by the full-retard wing of the RINO party. Holy effin toledo what I wouldn't give to get "my daddy's" republican party back. I would happily vote 100% gop if there was strong surge back towards the evil rino center.

(i DID vote for Frank Wolf, as one of the few centists republicans, occasionally making a stand for sanity... but he seems to be largely in "retreat and cover my own ass until this blows over" as well)

[Larry]

straight from the horse's mouth....

Uh, I suspect you could find some disagreement as to the choice of orifice.

(Permission hereby granted for Taken out of Context)

[skinsdomination09]

everybody wants change but nobodys willing to change

[corsair_joe]

You know what would be nice, if one of the parties decided to chuck its wingnut fringe and appeal to moderates of the other party to form a large centrist coalition. Doesn't matter which, we'd end up with pretty much the same thing.

[gbear]

:secret: Actually, Social Security didn't. Nor is it projected to.

Not one penny of our current debt is due to SS. Nor is any expected to be, for decades.

:secret: The only reason it even gets mentioned in this thread, is the continuing Republican attempts to use the deficit as an excuse to get rid of something that they want to get rid of.

Kind of like NPR and airport subsidies in Democrat districts, only a lot more money.

This would be true if my propossal to just write off debt owed to the government and make SS a pay as you go system in fact rather than just in name. Unfortunately, the more than third of our debt owned by SS still counts. The "interest" on the money we owe ourselves still counts too. Since interest on our debt current accounts for rounghly a third of our government spending, I would think we could trim our current year government outlays by around 6 or 7% simply by agreeing we will keeep paying SS and tossing the Social Security I.O.U.'s in the fire where they probably belong.

[Tulane Skins Fan]

Military spending absolutely counts. And it should be cut. Tax reform is needed. No question.

But the belief that we need to tax certain people MORE is faulty. If it's a shared burden, have the stones to call for everyone to pay more.

I don't even know what you're fighting at this point.

You realize when you talk about reforming social security, medicare and medicaid, that that is essentially taking more from only those people. Corporations aren't getting hurt by that. Billionaires aren't getting hurt by that.

Essentially, what I think you're saying, is that taxes across the board should be raised, and the sick, elderly and poor should also lose in addition to that. Because that would be a "shared burden."

[mcsluggo]

You know what would be nice, if one of the parties decided to chuck its wingnut fringe and appeal to moderates of the other party to form a large centrist coalition. Doesn't matter which, we'd end up with pretty much the same thing.

i would get a huge stiffie from that!

(and... if one party (and only one party) DOES succeed at that grab... they will have at least a one-decade free reign dominance of American politics.

[Tulane Skins Fan]

Both parties would have to chuck their wingnuts. When one party has any wingnuts, they are able to prevent anything from getting done.

[GibbsFactor]

i would get a huge stiffie from that!

(and... if one party (and only one party) DOES succeed at that grab... they will have at least a one-decade free reign dominance of American politics.

The problem with bringing in a new people under a different party is the lobbyists. They own policy and when you put new bucks in, they get completely swallowed up by K Street.

It doesn't matter if you are a donkey or an elephant. BigBusiness is what runs policy around here.

[mcsluggo]

there have always been wingnuts. there always WILL be wingnuts. the problem is when you give them the keys to the car.

[twa]

straight from the horse's mouth....

At least I recognize the incompetence is in both parties and present and former leadership.

My credit rating is just fine ,as is my net worth....maybe ya'll need to appoint me ruler:pfft:

[panel]

everybody wants change but nobodys willing to change

This is the most true thing said. Everyone says that they want major spending changes, but mention Social Security, Defense, or Medicare (the things that NEED to change in order for us to succeed) and everyone starts going crazy. Any candidate that says they are going to get us out by cutting Social Security, Defense, or Medicare will lose to another candidate that says that things can be fixed without major losses to these programs, even though it is not possible.

The tax code should be simplified, with tax rates that bring in more revenues, that go toward paying off the debt.

[Larry]

This would be true if my propossal to just write off debt owed to the government and make SS a pay as you go system in fact rather than just in name. Unfortunately, the more than third of our debt owned by SS still counts. The "interest" on the money we owe ourselves still counts too. Since interest on our debt current accounts for rounghly a third of our government spending, I would think we could trim our current year government outlays by around 6 or 7% simply by agreeing we will keeep paying SS and tossing the Social Security I.O.U.'s in the fire where they probably belong.

Now, if you want to claim that the debt was borrowed from SS, then you have a point.

But the claim I responded to was:

Those bush tax cuts also contributed to our debt. Just like social security and medicare did.

Now, when the claim is "SS contributed to the debt", then that's like claiming that your mortgage company contributed to your debt, because they allowed you to borrow money from them.

Damn those evil Chinese for loaning us money when we were begging for it! We didn't cause our debt by borrowing. They caused it by lending it to us.

----------

And frankly, the above, satire, reasoning is downright sane, compared to your plan to reduce the debt by simply declaring that part of it doesn't exist.

Which is before we even get to your completely ludicrous claim that "interest on our debt current accounts for rounghly a third of our government spending".

[NoVaO]

I will say this. Everybody in the room new the potential consequences of not dealing with this issue seriously. Adding immediate debt and cutting that debt over a period of 10 years was stupid.

Ridiculous. Entitlement reform is a long term thing. Even Ryan's plans didn't touch them till 2020. If you add short term debt now, it will be off our books within three, four, five years, and we'd be borrowing at dirt cheap interest rates. Long term deficit reduction and short term stimulus are not contradictory. Even the head of S&P this morning said we have plenty of room to maneuver in the short term.

You may say that the original plan was too in favor of the GOP but in retrospect, it probably needed to be more in favor of some of those ideas.

This whole fight has been on Republican turf. The original plan looked to be 3:1 cuts to revenue ratio. And the tax reform that was shaping up was more the closing of loopholes rather than raising taxes on the rich.

4.7 was the number i distinctively heard over a period of 6 to 8 years. 2.4 was the number I heard in a period of 2 years or immediately. Instead, what we got was more debt now with the promise of cutting the same amount in 10 years.

Never was this deal going to include cuts within the next two years. The economy is way to fragile for that, and spending cuts hurts economic growth. I'm not sure what you mean we're incurring more debt now. Our long term projected debt was decreased by $2+ trillion. The problem obviously is that it failed to address entitlements and tax reform.

That was never going to get it done. It was a bad deal all the way around but it was really bad of the President to allow that to happen. He new what had to be done and he ignored it. Was he the only one? Nope. Were the Democrats the only party? Nope. Is he the leader of this Country and of the Free World? Yep. He deserves the lions share of the fault here. That's what comes with leadership. I don't know what else to say.

Sorry, I don't agree at all. Obama wanted to do something big. Boehner couldn't get enough votes to do it. And remember, if Republicans had their way, we would be doing this all again 6 months from now and the cuts would have only been $900 billion or something similar.

S&P specifically mentioned our political dysfunction, using the debt ceiling bargaining tool, and Republicans insistence on a lack of revenue as the biggest impediments. They told us to not tie a debt package to the debt ceiling. This is on Republicans because 1. They were the ones who used the debt ceiling as a hostage to get their demands and 2.) They were the ones who nixed on type of Grand Bargain deal and 3.) They were the ones who promised to take the debt ceiling hostage again.

---------- Post added August-8th-2011 at 02:04 PM ----------

Ok, people need to get this through their heads...we have a LONG term debt problem. Our short term debt problem would go away with the expiration of the Bush tax cuts. My point here is that our short term debt is not all that big.

However, we have a short term economic growth and unemployment problem. Even the head of the S&P this morning said we have a good amount of room to maneuver in the short term. We are not bankrupt -- far from it.

What are the negative consequences of spending? It's not a recession. It's high inflation and higher interest rates. And since the time S&P downgraded, investors have continued to flock to U.S. treasuries and the interest rate has lowered further. Investors have essentially ignored S&P's downgrade.

What's going on in the stock market right now has much more to do with world wide economic concerns with Europe and the slowing down of our economy. It's not our debt and deficit.

The bottom line is you can do long term entitlement and tax reform, while at the same time invest in our future right now. The two are not contradictory.

[War Paint]

So the Dow is down around 280-310 before Obama talks. It's now down 430 after Obama's speech. It's time to man up O-Bots. The president you voted for is a complete disaster. I know many who voted for him are smart. You are just too prideful to admit you are wrong. It took me, a former Bush supporter, a while before I could admit I was wrong and that Bush was also bad.

[Larry]

You know what would be nice, if one of the parties decided to chuck its wingnut fringe and appeal to moderates of the other party to form a large centrist coalition. Doesn't matter which, we'd end up with pretty much the same thing.

Just pointing out that the evidence suggests that tha's what the Democrats did.

That's how they got control of Congress.

That's also how they got a group in Congress that doesn't do what the Party leadership wants them to do. They gained seats by supporting people who don't always vote with the Party.

[China]

I found Alan Simpson's views interesting. They show how broken things are in Washington:

http://crfb.newamerica.net/blogposts/2011/my_view_alan_simpson-55232

[gbear]

I thought interest was roughly a fifth. Sorry I posted it wrong. SS owned about a third (where the number stuck in my head) or our debt.

Logic behind saying the debt doesn't exist:

1) Right now the fed sends out checks from SS funds it has collected. It has opperated on a "Pay as you go" basis since Vietnam.

2) What it collects has not been tied to what it needs to spend on current retirees. It collects more than is spent.

3) Paying off this debt can only happen with increased revenue.

4) The current plan for SS does in fact have a running out point where it goes to negative.

5) Absent a change in direction, when it goes negative per year other federal revenue will have to make up the difference to make the payments.

6) All current plans are for the negative to be as pretend as the positive has been. I have seen not one politician say they will let the elderly go hungry in a box under the freeway.

7) My paycheck knows little difference between the SS tax and the income tax. The only difference is I hope to some day make enough to not pay SS in December. Both lower the amount which makes it to my bank account.

Which of these do you see changing? If nothing will change, then why not officially call it what it is and has been for 40 years, "pay as you go." The moment we committ to this plan, SS has essentially bought annuitiees with their portion of the debt.

Now as for the contributed to the debt, I am not saying it has done anything wrong, bu we are "paying interest" on the money. I put it in quotes because I think we can be more properly said to be barrowing more to pay the interest on money barrowed from SS. The additional barrowing costs rightly contribute to the debt.

[GibbsFactor]

I found Alan Simpson's views interesting. They show how broken things are in Washington:

http://crfb.newamerica.net/blogposts/2011/my_view_alan_simpson-55232

I should hope EVERY American knew that was going on and is the status quo. If you don't, you aren't paying attention.