Debt

All posts tagged Debt

Fight or flight

Posted by Jeremydium on August 7, 2011
Posted in: Politics. Tagged: , , , , , . Leave a Comment

The worse things get, the more I either want to lash out in every direction or just shut down completely. I figure everybody has an opinion and more often than not they are willing to share it with you whether you want to hear it or not, so I don’t think that I’m providing a specific service that you can’t get anywhere else, at least on these matters.

Take for example the Standard and Poor’s downgrade of the United States’ credit rating from AAA to a AA+, the first time this has happened in our history. Not only is this development disheartening at face value, the enormity of what it will mean for every one of us and for the country as a whole can’t be overstated.

While there are plenty of reasons to contest S&P’s decision, from the fact that its calculations were off by $2 trillion, to S&P’s role in approving the toxic garbage that got us into this economic mess in the first place, to the question of whether a for-profit company should have any say in a sovereign nation’s internal affairs at all, it’s impossible to deny what it means for our standing around the world. What’s also impossible to deny, is who is to blame for the downgrade.

Yes, the U.S. is carrying a lot of debt, but we weren’t downgraded because of that; we were downgraded because the Republicans in Congress turned what should have been a simple procedure with a long history of precedent into a political dogfight, one in which they threatened the world with the possibility that the U.S. wouldn’t pay its bills. And what’s more, they’ve already made it abundantly clear that they intend to pull this same kind of crap again and again, especially since they know that it works.

The Republicans in their bizarre subservience to the Tea Party got the hostage that they took killed, and don’t think for a second that it will cause them to rethink this brand of political terrorism.

It goes without saying that Republican leaders are now giddily lining up to blame President Obama for this latest global embarrassment; it goes without saying because that was the intention all along, to burn the economy to the ground, sabotage it from the inside, and hang it all around the neck of a man they hate more than they love America and its people.

The marrow-deep audacity required to do something like this is nothing short of mind-boggling. You’ve probably heard this analogy a lot lately, but it’s fitting: It’s the child who murders his parents and then pleads for leniency from the court because he’s an orphan. I keep wondering how much will be too much, at what point the current crop of Republicans will stop and realize that they’re literally destroying our country, when they’ll finally wake up from their wet dream of unchecked power and feel something approaching shame.

I imagine that it will never happen. They’ve proven over and over again that there’s no depth they won’t sink to, no maneuver that crosses the line, no lie too offensive, no hypocrisy that’s unthinkable. So it rests with us to heap the shame on them they seem to fundamentally lack.

I can’t help but to also blame the political media for so much of what’s been allowed to happen. It’s time they honored their responsibility to the truth, as opposed to contriving some comforting form of fake objectivity, and did so with a firm understanding of what’s at stake.

The debt ceiling fight, the credit downgrade, the implementation of hostage politics, all of it stemmed not as a result of a “broken government” in which both sides share equal blame; these things were the direct result of one party, the one that tallied up an unprecedented debt then manufactured a phony crisis over that debt which has already cost us our credit rating and could very well lead to a partial collapse of our fragile economy.

What they’ve done will hurt people. It will destroy lives. And the entire reason for it is simply that the GOP wants control of the White House again. After utterly ruining us, the Republicans are seeking to assume complete dominance of our national and global policy again. This is reality. This is the what’s happening. And while the press should be equally adversarial when it comes to its coverage of our leaders, it should not ignore the truth or pretend that there are two sides. The truth is the truth. Period.

S&P downgrades US debt

Posted by Jeremydium on August 6, 2011
Posted in: Economy. Tagged: , , , , , , , , . Leave a Comment

OK, so Standard and Poors has gone ahead with the downgrade. It’s a strange situation.

Read the entire S&P press release here.

Couple of items that jumped off the page:

– The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

On the one hand, it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The same people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?

Also, it turns out that S&P got the math wrong by $2 trillion, and after much discussion conceded the point — then went ahead with the downgrade anyway.

On the other hand, good job Republicans. Your sabotage strategy continues to work.

Here are paragraphs four and five. These are major reasons for the downgrade.

– More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

– Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

So it seems the S&P is frustrated with Republican obstructionism. They don’t say it explicitly, but it’s obvious. When has the White House, or the Democrats for that matter, ever resisted calls to compromise? Never. The Democrats have twisted themselves into knots trying to compromise (or straight-up capitulate), while the Republicans refuse any attempt to compromise, even when Democrats give the 100% of what they demand, because Mitch McConnell and others have made it clear that their only goal is to obstruct and flummox the President and the economy for their own political gain. Nothing more, nothing less.

The Republicans get 95 percent of the blame for this, but don’t expect the cable news and Sunday show doofs to give you this analysis. Count on more of the “both sides” meme and try not to let your head explode.

Great Recession part 2

Posted by Jeremydium on July 12, 2011
Posted in: Economy. Tagged: , , , , . Leave a Comment

The latest prediction, from Jay Powell, is that the GDP will drop by about 10 percentage points in the month of August if Congress doesn’t raise the debt ceiling.

Put into perspective, the lowest level for the GDP during the Great Recession was around -7 percent. We’re currently hovering at around +2 percent. With a drop of 10 percent — do that math. If GDP drops from its present level, the GDP would sink deeper than the Great Recession. And that’s just in the first month.

Meanwhile the Republicans continue to play grab-ass with the debt ceiling. (I can’t believe we’re even debating this!)

Via The Economist:

“And the closer you look, the more unprincipled the Republicans look…. Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans.”

Of course I disagree with the “both sides” nonsense but the fact remains: the Republicans are gambling with our individual livelihoods and the well-being of the world’s economy, and they’ve admitted their desire for economic failure in the interest of defeating President Obama in 2012.

Investigations? Anyone?

Also keep in mind that the Republican leadership, (McConnell, Boehner and Cantor) voted to raise the debt ceiling five times during the Bush Administration when the national debt grew from $5.95 trillion to $9.815 trillion. Good job on the national debt, guys. You’re doing great!

Make them pay

Posted by Jeremydium on July 3, 2011
Posted in: Politics. Tagged: , , , , , . Leave a Comment

I fully expect the Democrats to cave on the debt ceiling talks when push comes to shove, but the sentiment here is absolutely right:

The resolution offered by Senate Majority Leader Harry Reid (D-Nev.) on Thursday asks lawmakers to sign off on a “Sense of the Senate” that “any agreement to wealthier taxpayers should reduce the budget deficit should require that those earning $1,000,000 or more per year make a more meaningful contribution to the deficit reduction effort.”

The measure comes as Democrats argue tax breaks for businesses and the wealthy should be eliminated to help close the deficit. Republicans say such tax increases would hurt the economy.

Reid’s bill, S. 1323, is entitled “Sense of the Senate on Shared Sacrifice.”
It makes a series of findings that set up an argument for why wealthier people should pay more taxes to reduce the deficit.

The Republicans insist that any increase in taxes on the uber-wealthy would be disastrous for the economy and ruin the country. But reality says otherwise.

There is nothing wrong with bringing what they pay in taxes back to what it has been in the past. The supposed onerous taxes on the Paris Hilton crowd didn’t seem to inhibit the great economic engine of America from generating wealth during the economic booms of the 1990s and 1940s.

The Democrats would be wise to note that there’s already one political party in America that happily does the bidding of the robber barons, they don’t need to help.