[CNBC] S&P contacts White House to notify about a downgrade coming

double post

 

Well, treasuries are actually up. And do the Bush tax cuts now count as Bush/Obama tax cuts since Obama extended them? I am for letting them expire as part of a grand bargain.

In any case, I think the market selloff is due to Europe and the euro falling potentially apart. The S&P decision isn't causing anyone to sell treasuries.

 

i fully expected the tax cuts not to be expired till 2012 when this country voted those idiots in last year.

 

You don't think that would lead to a period of contraction/recession?

 

"[T]ax increases on higher-income families are the least damaging mechanism for closing state fiscal deficits in the short run. Reductions in government spending on goods and services, or reductions in transfer payments to lower-income families, are likely to be more damaging to the economy in the short run than tax increases focused on higher-income families." - Joseph Stiglitz

http://www.cbpp.org/cms/?fa=view&id=1032

One should increase govt spending so it's counter-cyclical. Unfortunately govt coffers are running low, so revenue needs to be raised. Taxing specific groups of people addresses the problem of low revenue while allowing a spending-increase-in-a-recession policy to continue.

 

Well, from all rational discussion on the downgrade it seems the main culprit in S&P's decision was the republican refusal to consider any revenue increase as part of a balanced approach to the fiscal crisis.

Once again we can thank the tea party for their contribution to the discussion.

 

lol

http://www.zerohedge.com/news/senate-probing-sp-downgrade

 

Tea party candidate have been in office for 6 months and you blame them for the downgrade. Personally I say if you can't create a budget then you have no right to blame anyone about the downgrade (Reid).

 

well, it does seem rather coincidental that a political movement started crowing with their little heads about "NO TAX INCREASE EVER", and then S&P downgraded the US credit rating largely based on the anticipated position of Congress towards taxes in the near future.

 

How smart does S&P look by today btw?

S&P to market:Let's Downgrade US' credit for first time in history!

market: Let's pile into US Treasuries more so than ever in history?

Nice job, S&P. Maybe you can sell the "S&P" brand to MSCI before you turn out he lights I guess.

 

For those not convinced that the S&P has no clue what they are doing, Nate Silver breaks down their history pretty well.

http://fivethirtyeight.blogs.nytimes.com/2011/08/08/why-s-p-s-ratings-are-substandard-and-porous/

 

ahh, a mention of good old ireland!

a very good posterchild for why even if you balance your budgets properly, if you can't control your banks, the whole system goes down down down.

a valuable lesson you would've thought the world would have learned. of course S&P just loves to sometimes base ratings on what they think should happen---and not what actually does (free-market heaven Ireland will right that ship!)

More countries need to embrace the social democratic economic model---you'll notice it's the one with the least problems currently (Canada, Sweden, Denmark, Norway, Germany).

 

this is awesome i'd rep you again, but i have to rep other people first.

 

http://www.nationalreview.com/articles/273907/obama-makes-history-our-aaa-credit-editors

http://www.powerlineblog.com/archives/2011/08/tea-party-downgrade-they-cant-possibly-sell-it.php

 

SMH

seriously, smh.

 

Nope, I think it would bring in more revenue, and if there is a period of contraction, it is going to happen regardless.

DD

 

you obviously are not paying attention to the rational thinkers in this analysis.

typical tea party response

 

When posting articles from known partisan sources, realize you're only disseminating misinformation for certain powerful and wealthy people who wish to muddle debate and discussion on this issue so nothing concrete gets done to fix it.

Your source edited the press release to fit its partisan ideology. My quote is the complete one. The bolded statement below highlights how not raising taxes troubles the agency, and notice how it's missing from your quote.

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.

We lowered our long-term rating on the U.S. because we believe that the
prolonged controversy over raising the statutory debt ceiling and the related
fiscal policy debate indicate that further near-term progress containing the
growth in public spending, especially on entitlements, or on reaching an
agreement on raising revenues is less likely than we previously assumed and
will remain a contentious and fitful process.

See link for the full press release:
http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563

 

S&P tells you the 'key' to keeping a AAA was to fix entitlement reform and specifically Medicare. Democrats put forth a proposal that contains no entitlement reform. The Tea Party's one common agenda is to reduce spending mostly by entitlement reform. And you think the Tea Party is why S&P downgraded the US?

You are also misinterpreting the line you made bold. increase revenue does not necessarily mean tax increase. In fact S&P tells you:

“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.” This is not the website I linked, it is S&P.

 

tallanvor, please read page 4 of the official report.

You probably won't.