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S & P: America Could Default Even if Debt Ceiling is Raised
As I noted yesterday, America could default even if the debt ceiling is raised.
One of the big, government-sponsored American rating agencies has just confirmed my post.
Specifically, Standard & Poor's announced today:
[We're
putting U.S. debt on] CreditWatch with negative implications ... owing
to the dynamics of the political debate on the debt ceiling, there is
at least a one-in-two likelihood that we could lower the long-term
rating on the U.S. within the next 90 days ....
The political
debate about the U.S.’ fiscal stance and the related issue of the U.S.
government debt ceiling has, in our view, only become more entangled.
***
We
may lower the long-term rating on the U.S. by one or more notches into
the 'AA' category in the next three months, if we conclude that
Congress and the Administration have not achieved a credible solution to the rising U.S. government debt burden and are not likely to achieve one in the foreseeable future.
The Washington Post adds:
S&P
managing director John Chambers said in an interview ... even if the
parties agree to raise the debt ceiling, it may not be enough to avert a
downgrade. Chambers said the country must implement a plan to reduce
the annual budget deficit by roughly $4 trillion over 10 years, which makes the debt manageable over the long term.
The
White House and Congress have discussed a plan that big, but
negotiations have more recently centered on a smaller deal, at $2
trillion or less.
“That could still lead to a downgrade,” Chambers said.
Knee-jerk conservatives may say, "yes, we have to slash all social support programs like unemployment benefits and food stamps".
Knee-jerk liberals might say "raise taxes instead of cutting any spending".
But the truth is that plugging the major holes in our economy is more important than either cutting spending or raising taxes.
And
stopping bailouts and giveaways for the top .1% of the richest elite
(which weaken rather than strengthen the economy, as shown here, here and here) and slashing spending on unnecessary imperial wars (which reduce rather than increase our national security, as demonstrated here and here) is what the budget really needs.
As I wrote last year:
Why aren't our government "leaders" talking about slashing the military-industrial complex, which is ruining our economy with unnecessary imperial adventures?
And why aren't any of our leaders talking about stopping the permanent bailouts for the financial giants who got us into this mess? And see this.
And why aren't they taking away the power to create credit from the private banking giants - which is costing our economy trillions of dollars (and is leading to a decrease in loans to the little guy) - and give it back to the states?
If we did these things, we wouldn't have to raise taxes or cut core services to the American people.
I pointed out the next month:
If
there's any shortfall, all we have to do is claw back the ill-gotten
gains from the fraudsters working for the too big to fails whose
unlawful actions got us into this mess in the first place. See this, this, this, this and this.
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Honestly, who gives a fuck what the rating agencies say? Hopefully any reference to ratings will be removed from all laws and regulations in retaliation. That would be a huge positive.
"never waste a good crisis"
The S&P guy is still delusional. So we cut 4T over 10 years...but the debt still rises 1.2T per year at CURRENT spending levels WITH the "cut"...
Does he really think running a 1.2T budget deficit every year is sustainable ??? He's as much a joke as the assclowns in DC.
+1
The debt will not only be defaulted on, it will be repudiated.
It is mathematically impossible for it to be paid.
Its purpose is not spending. Its purpose is the bondage of the people to pay it back.
We're not gonna pay it.
Can anyone refudiate this?
Honest and Sound Criticism of Zarlenga’s American Monetary Act
Critique of an Austrian Critique
https://libertyrevival.wordpress.com/2010/06/22/honest-and-sound-critici...
More Smoke and Mirrors Folks - There is a third way out...
https://libertyrevival.wordpress.com/2010/07/14/milton-friedman-pay-off-...
https://libertyrevival.wordpress.com/2010/11/27/capitalism-without-monet...
https://libertyrevival.wordpress.com/2010/10/25/money-supply-for-liberta...
https://libertyrevival.wordpress.com/2010/01/13/the-henry-george-conspir...
How about we hang those guilty of Treason and use the monies to get our house in order?
I know thats skipping all the drama and it is skipping the problem and going directly to the answer.. but I am lazy, so lets not do the problem.. lets do the answer..
can we do that.. just skip to the answer and ignore the problem of 50 fucking years of thievery?
America is going to default. Raising the debt ceiling only sends the signal that that default can happen through parabolic papering-over of the existing (and incremental) debt.
The whole conversation linking the debt ceiling to default is a misdirection. It's like, if you don't diet and exercise more, you're going to die. Well, you're going to die anyway, it's just a matter of timing.
When the Tea Party folks get serious about real cuts in the military budget (which may well play better than most think back at home), this will give an opportunity for some dems to rediscover their anti-war sympathies. Right now, everyone in both parties is so afraid of offending the Israel lobby (which wants the huge military budget) that they are paralyzed.
Not that the MSM will ever notice this...
When Tea Party zealots get serious on cuts they WONT cut the military. Becuase the Tea Party is the front group for the corporations. Plain and simple. They will cut anything public to be sold on the cheap to the "private sector" (e.g. TP funders such as Big Corporation). But oh no the holy military and it's trillions in contracts. Only dumb americans can drink the tea party koold aid...
jews run the MSM and finance...why would the MSM "notice" them when they ARE the MSM?
Only antisemitism of the 1st degree dislodges them from this stranglehold.
I'm still not sure how failure to raise the ceiling causes default. Default is when you stop paying on your debts, not when you can't get more credit.
Murdoch's not Jewish, is he?
DavidC