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Did The S&P Downgrade Warning Just Make A Debt Ceiling Compromise Even More Difficult?
As S&P noted in its downgrade, and made all too explicit during the follow up call, the rating agency has now started a two year timer on the administration and the legislative branch to come up with not only a fiscal solution, but a credible solution by the end of 2012. Yet as Reuters points out, the "S&P's action -- downgrading its outlook on the U.S. rating to negative from stable -- does not guarantee a deal." Basically expect more posturing from both sides of the aisle, which ironically may merely lead to a cementing of intractable positions, and kick the can so far down the street that not even S&P can see where it lands: a non-compromise compromise that the Hill is so good at, yet one which won't fly any longer. " While the White House dismissed the action, saying all sides were making progress toward agreement, Republicans and Democrats remain far apart on where to make the cuts that will be needed for long-term deficit reduction." Any call for a bipartisan agreement on deficit reduction on fiscal reform is a welcome one, and in that context, I think that (the S&P move) adds to what we believe is some momentum towards that end," said Jay Carney, White House spokesman." Yes, ironically everyone: democrats and republicans are both claiming the S&P decision, which without doubt originated from Wall Street in the first place, validates their policies. Yet the biggest winner out of all this may be the Tea Party: "It is a vindication of the Tea Party and their stance that we are spending too much," Republican Representative Blake Farenthold, a member of the House Tea Party Caucus, said in a telephone interview." ...Or not: if the Tea Party continues "cutting" deficits like it did last week, when it was ultimately uncovered that instead of a $38 billion cut the ultimate impact on the budget was about $353 million, the Tea Party will most certainly burn all its credibility very soon if it continues to "tackle" fiscal sustainability with the same fervor.
From Reuters:
Republicans and Democrats unveiled competing plans to bring deficits down to a sustainable level by the end of the decade, but they differ sharply on how to reach those levels.
Representative Eric Cantor, the No. 2 House Republican, called the Standard & Poor's downgrade of U.S. credit outlook "a wake-up call" against those seeking to "blindly increase" the U.S. debt limit.
Cantor said the S&P action makes clear that any increase in the debt limit must be accompanied by "meaningful fiscal reforms that immediately reduce federal spending and stop our nation from digging itself further into debt."
S&P zeroed in on the differences, saying it saw a risk that U.S. policymakers would not reach agreement on long-term U.S. fiscal woes by 2013.
S&P's action -- and the accompanying fall in U.S. stock prices -- will light a fire under negotiators in Washington, some analysts said.
Not all has changed in the extremely humiliating world of rating agencies: But Moody's Investors Service, S&P's main competitor, read the debate in Washington differently, saying both sides' plans for deficit reduction represent a "potential change in the direction of fiscal policy (that) is credit positive for the U.S. federal government." After all one should never forget that unless Mark Zandi finds a job in the administration very soon, he may end up with some measly $100k a year tenured professor tip, at some D-grade Ivy league University. That said, we tend to agree with Greg Valliere, that today's move from S&P will actually delay the debt ceiling resolution: Greg Valliere, a political analyst for investors at Potomac Research Group, said S&P's action makes a deal even more likely in late June or early July "I think it stiffens the resolve of people that are convinced that we have to take action," Valliere said. At this point, Reuters take a turn for the surreal and notes that apparently Americans actually care about stuff like the economy: Polls show Americans are deeply worried about the state of the country's finances, which will be one of the driving issues in the 2012 presidential and congressional elections. Um, no. All American care about is what the latest iPad app is, what the calorie content of lunch is (even as the gym membership expires never once used), and who is the latest entrant in the zombifying reality TV arena.
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The fact that we are even STILL listening to the rating agencies after one bad call after another tells you that the elite really look down on the masses as stupid assholes who need to bend down on command.....Life is beautiful
Am I wrong in thinking that one of the primary reasons a corporation is formed is (a) some form of legal protection and (b) avoidance of paying taxes at all or at a greatly reduced rate? At my company it's always a mad scramble to get rid of any profit at year end by giving bonuses, paying bills forward, charitable donations, whatever. Here's some interesting numbers from a past Reuters article:
WASHINGTON | Tue Aug 12, 2008 12:54pm EDT
WASHINGTON (Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.
The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.
More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.
I always thought it had a lot to do with the fact that it's much easier to avoid prison time as an executive than as a sole proprietor.
Acting alone, the claim that, "I didn't know what was going on," isn't a sympathetic legal defense.
+1
The last Republican president to balance the budget: Eisenhower
Tax rate for the rich under Eisenhower: 90%
Of course I am not advocating 90%, but is it fair that all risks are passed to the middle class and all benefits are given to the rich?
At some point it's gotta end!
Cycle picked earlier
http://www.readtheticker.com/Pages/Blog1.aspx?65tf=188_euro-approaching-another-cycle-top-2011-04
The Tea Party showed recently that it is wliing to lie and misrepresent to the American people by claiming victory, and then we find out the truth that there really weren't any budget cuts. How are they any better than the other losers? If they want to redeem themselves, let's see how they perform on the debt ceiling. Will they again beat their chests, then promptly give in to the bankers? The tea party needs to start showing interest in monetay policy, not just fiscal policy. Right now they are so worried about damage already done instead of working to prevent future damage. Fight the Fed. Shrink the budget. Hold fast the debt ceiling.
The Tea Party holds nowhere near a majority of the votes in the House OR the Senate (being co-opted notwithstanding!) -- the Blue and Red chapters of the Leviathan party are still in charge -- deal with it!
"a non-compromise compromise that the Hill is so good at"
Did we just become best friends?
Yup
-Stepbrothers
Rating agencies have so little credibilty at this point.
What is hilarious, is Moody's positive outlook. What can they be thinking? Understanding Zandy is a part of the Obama Administration.
Today on CNBC, it was amusing and instructive to watch Haynes and his sidekick "defend" US honor. They were speaking about the S&P downgrade as if they were the few remaining stalwarts left to defend the US.
Then you had the parade of ass clowns being interviewed ALL saying that "well for some time we've know that this was inevitable". What a bunch of #uckin koksukers. It's to bad that you can't go back and quote what these knobs were saying the last time they were on: "S&P to go past 1350" and other statements. Now that the party is coming to an end, these ass clowns are now trying to position themselves as know alls and experts on what was coming.
If I were an investor with these whores, I'd be asking what's changed in the advice I was being given 2 weeks ago.
The #uckin smell of rot in the system is overpowering. The financial markets have become a casino and a pawn shop for sociopaths and narcissists. Do you really think this is going to end well after spending trillions and back into recession???
"if the Tea Party continues "cutting" deficits like it did last week, when it was ultimately uncovered that instead of a $38 billion cut the ultimate impact on the budget was about $353 million, the Tea Party will most certainly burn all its credibility very soon if it continues to "tackle" fiscal sustainability with the same fervor."
*The author clearly does not understand the difference between the "old line" Republicans and the new freshmen. There are significant differences in approach. In my view, the "tea party" folks are mostly fiscal conservatives that understand that the debt situation has to change. I'm not so sure about the old guard Republicans, who seem paralyzed by the Washington ether. Don't think it makes much sense to criticize the people actually trying to do something about the problem.
the Tea Party will most certainly burn all its credibility
OH NOEZ!!!