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S&P to downgrade USTreasury notes.

Official reasons given will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited.

 

 

 

 

 

 

 

 

 

 

 

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An unnamed source?  You know we can't trust that.  This story only comes from ABC. Notice this version does NOT mention the republicans.

 

 

 

(Reuters) - The U.S. government expects its debt to be downgraded by credit ratings agency Standard & Poor's from its current triple-A rating and is preparing for the event, ABC News said on Friday.

ABC cited an unnamed government official as its source and said it was uncertain whether the rating would drop from triple-A to AA+ or to AA.

The report said the main reasons likely to be cited for a U.S. downgrade by S&P included political confusion surrounding the process of hiking the debt limit and doubt that agreement would be reached on more deficit reductions.

Standard & Poor's warned last month that the United States was at risk of a downgrade if it did not raise the debt ceiling and cut the country's debt by $4 trillion over a decade.

 

Originally Posted by Mr.Dittohead:

S&P to downgrade USTreasury notes.

Official reasons given will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited.

 

 

 

 

I will stop short of calling the heading of this thread a blatant, intentional  lie on the assumption that the O.P got  overly excited, and did not spend the needed  amount of research before posting.

 

BOSTON (TheStreet) -- On March 28, after a week that saw the Dow Jones Industrial Average jump 3%, money manager Jeffrey Sica predicted that the borrowing and spending by the U.S. would prompt a downgrade of U.S. debt. Four months later, it appears that gloomy prediction will come true.

 

Sica, who is president and chief investment officer of Morristown, N.J.-based Sica Wealth Management, a firm with about $1 billion in assets under management, says Standard & Poor's has to make good on the threat to downgrade U.S. debt or lose credibility forever.

 

"In March, I looked at what a colossal failure our government had been at stimulating the economy, and I knew that there was no way these oppositional views would come together," Sica says. "Based on the divisive views from the two parties in Congress, you knew it was going to become an issue. The political divide was becoming extremely evident back in March. Now here we are at the precipice, and it's gotten even more divisive."

 

"Politicians on both sides are saying S&P should not involve itself with political issues," Sica says. "That is the most erroneous comment they can make. Politicians themselves made an economic issue into a political issue." The bickering across the aisle in Congress will force the S&P's hand, he says. "There will be a downgrade. There is no doubt about it. There has to be."

 

Under the S&P guidelines, the agency must look forward from three months to longer than a year in order to assign a credit rating. While the government could come to a temporary solution to raise the debt ceiling, Sica says that S&P will be forced to act and protect its damaged credibility if congressional leaders offer no plan to deal with permanent changes to entitlement programs that could lead to severe deficit problems in the future.

 

"They can't embrace quick-fix solutions. Any potential solution would avoid default, but they need to justify the coveted triple-A rating," Sica says."They need to address the overriding issue. Entitlement programs have been a third rail for both parties in Congress. They won't touch them. If you have any debt and you simply pay interest with no reduction in principle, you do not warrant a triple-A rating. That rating belongs to surplus-oriented entities."

 

http://www.thestreet.com/story...-be-right-thing.html

 

 

 

 

 

 

 

The Repubs chose to make the debt limit a showdown, and they own the anger of the public.  Read this:

http://www.nytimes.com/interac...cs.html?ref=politics

 

The fact is that without federal revenues increasing, there can never be a significant reduction in the national debt, much less consider a balanced budget.  In 2012, when the national debt exceeds 100% of GDP, all the ratings companies will downgrade.  In the last week the debate over the debt limit caused interest rates to increase which has cost the USA an extra $50million in finance charges. 

Last edited by Mr.Dittohead

The Democrats insisted upon a clean debt ceiling bill.  That would have assured a reduction below even the AA+  rating.  At least, the Republicans kept the reduction from being worse without the $2.5 trillion reduction.

 

Congratulations Obama and all, you've achieved something even FDR and Morgenthau managed to avoid during the Great Depression.

Originally Posted by interventor1212:

The Democrats insisted upon a clean debt ceiling bill.  That would have assured a reduction below even the AA+  rating.  At least, the Republicans kept the reduction from being worse without the $2.5 trillion reduction.

 

Congratulations Obama and all, you've achieved something even FDR and Morgenthau managed to avoid during the Great Depression.

This is the most idiotic post of the day. This was a non-crisis, invented by the tea party for purely political purposes.

LOL, if that was true jimi, why did we get a credit downgrade because we did not cut 4 trillion from the debt that the ratings agencies told us too?

 

A Tea Party crises? Try again. Obama went off the spending cliff and now he gets a credit downgrade for a late birthday present.

 

Happy B Day Mr President.

Some of their reasons.

 

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government’s debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. 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 in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

These posts show one of the reasons we are in the mess we are.  The partisan bickering and the all right or all wrong attitude will never solve probs.  It is time for the bickering and casting blame to stop and for that energy to be directed toward taking care of business. If we continue on our present course nothing will change and only get worse.

Originally Posted by b50m:

LOL, if that was true jimi, why did we get a credit downgrade because we did not cut 4 trillion from the debt that the ratings agencies told us too?

 

A Tea Party crises? Try again. Obama went off the spending cliff and now he gets a credit downgrade for a late birthday present.

 

Happy B Day Mr President.

You forgot to mention that S and P gave as part of their reasoning that the US refused to increase their revenues. Whose fault is that? You are just repeating the Tea Party lies that got us into this mess.

Originally Posted by b50m:

Some of their reasons.

 

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government’s debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. 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 in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

Your comments make it apparent that you didn't even read what you posted.

I can read it just fine. Our downgrade came about because our government can't get their act together, won't reform entitlements or the tax code, won't stop spending and won't close loopholes to increase revenue. Heck, even stop the top tax rate of 35% and go back to 39%.

 

But to blame all this on the Tea Party is what is ridiculous.

Originally Posted by b50m:

I can read it just fine. Our downgrade came about because our government can't get their act together, won't reform entitlements or the tax code, won't stop spending and won't close loopholes to increase revenue. Heck, even stop the top tax rate of 35% and go back to 39%.

 

But to blame all this on the Tea Party is what is ridiculous.

You have a reading disability.

This is what John Chambers, managing director and chairman of Standard & Poor’s sovereign ratings committee, had to say about the reason for the downgrade:

“If you get to $4 trillion mentioned by the President in an April 13 speech, by the Bowles-Simpson commission and by Congressman Paul Ryan, that along with economic growth would’ve done the trick” to preserve the Triple-A, he told Cavuto.
Chambers in the conference call with clients last week said the $4 trillion was just a start, calling it “a good down payment.”


Read more: http://www.foxbusiness.com/mar...ouble/#ixzz1UH2CFP7m

And just who panned the Bowles-Simpson and the Ryan plan?

Originally Posted by Flatus the Ancient:

This is what John Chambers, managing director and chairman of Standard & Poor’s sovereign ratings committee, had to say about the reason for the downgrade:

“If you get to $4 trillion mentioned by the President in an April 13 speech, by the Bowles-Simpson commission and by Congressman Paul Ryan, that along with economic growth would’ve done the trick” to preserve the Triple-A, he told Cavuto.
Chambers in the conference call with clients last week said the $4 trillion was just a start, calling it “a good down payment.”


Read more: http://www.foxbusiness.com/mar...ouble/#ixzz1UH2CFP7m

And just who panned the Bowles-Simpson and the Ryan plan?



Gingrich.

Romney.

Most everybody that wants to be reelected. 

 

In explaining their decision Standard & Poors cites both the decision by Republicans in Congress to turn the debt ceiling into a political football and the Republicans intransigence on tax increases. Some excerpts from the release:

[...]The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

[...]It appears that for now, new revenues have dropped down on the menu of policy options.

[...]The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

[...]Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

In explaining their decision Standard & Poors cites both the decision by Republicans in Congress to turn the debt ceiling into a political football and the Republicans intransigence on tax increases. Some excerpts from the release:

[...]The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

[...]It appears that for now, new revenues have dropped down on the menu of policy options.

[...]The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

[...]Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

You do know that S&P was referring to the entire Bush tax cuts including the rates for lower incomes and the welfare-state spreading of wealth. All those things will also end at the end of 2012.

In December, Congress extended through 2012 a series of tax cuts enacted under former President George W. Bush. Obama's proposed new budget calls for letting the tax cuts expire for the wealthy at the end of 2012, while making them permanent for individuals making less than $200,000 and couples making less than $250,000.

http://money.msn.com/tax-tips/...f9-aa31-ebfd96e030a2

Also you left this out of S&P's statement:

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.

http://uk.finance.yahoo.com/ne...-1687321529.html?x=0

It would seem that S&P is only interested in protecting the investors in our bonds by pushing the US to make responsible budget choices. As long as the investor isn't hammered by our spendthrift ways, they really don't care how we get to solvency as long as we get there.

In all the the finger-pointing and blaming going on in the media, there is one important thing not being discussed: 

David Beers, global head of sovereign and international public finance ratings at S&P, told "Fox News Sunday" that governments and Congresses come and go, but spending on entitlements persistently drags U.S. debt further into the red.

 

"The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest," Beers said.


Read more: http://www.foxnews.com/politic...grade/#ixzz1UMLqUr6a

In just a few years the expensive part of Obamacare kicks in with more people being placed in Medicaid and the subsidized insurance pools will start. The descent into Gehenna will be so fast the air friction will burn away the hand basket.

Originally Posted by Flatus the Ancient:

In all the the finger-pointing and blaming going on in the media, there is one important thing not being discussed: 

David Beers, global head of sovereign and international public finance ratings at S&P, told "Fox News Sunday" that governments and Congresses come and go, but spending on entitlements persistently drags U.S. debt further into the red.

 

"The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest," Beers said.


Read more: http://www.foxnews.com/politic...grade/#ixzz1UMLqUr6a

In just a few years the expensive part of Obamacare kicks in with more people being placed in Medicaid and the subsidized insurance pools will start. The descent into Gehenna will be so fast the air friction will burn away the hand basket.

Anyone who quotes Faux News is not interested in the truth. There is no such thing as "Obamacare". Using that term is also an indicator of someone who isn't interested in the truth. 

You really are an idiot ain't ya Jimi?

 

Since David Beers was speaking to Chris Wallace on Fox News Sunday, don't you think you would use Fox news as a source?

 

Besides that, he said entitlements are the biggest component of  spending, period.

 

BTW, everyone says Obamacare, just like Hillarycare and Romneycare.

Or do you go around saying The Affordable Health Care Act all the time?

Originally Posted by b50m:

You really are an idiot ain't ya Jimi?

 

Since David Beers was speaking to Chris Wallace on Fox News Sunday, don't you think you would use Fox news as a source?

 

Besides that, he said entitlements are the biggest component of  spending, period.

 

BTW, everyone says Obamacare, just like Hillarycare and Romneycare.

Or do you go around saying The Affordable Health Care Act all the time?

"Everyone" doesn't say it. Only the Obama haters, like you. I don't talk much about something that, mostly, doesn't take effect for three more years. Nobody is going to run for anything, successfully, running against the provisions that have taken effect so far, unless they want to lose. And don't even ask what provisions have already taken effect. Look it up yourself.

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