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Sun’s up in PR? & Politics as Usual?
Good News In Puerto Rico!
S%P came out today with an upgrade for the 51st state. From BBB- to a flat BBB. S%P cited improved revenue for the upgrade. This is baloney.
The change from (-) to neutral is nothing. How does one measure this?
PR was junk. It still is. S%P did (of course) have a caveat. We should
probably ignore this, right?
Puerto Rico’s GO credit rating could be “negatively pressured” if the island fails — in the next two years — to take on its $17 billion unfunded pension liability.
Some facts on the PR puzzle:
-Tax revenue for 2011 is projected at $7.2b. This is down $800mm (10%) from 2007. So much for the S%P call.
-One dollar out every four spent comes from Washington.
-One dollar in every six goes to debt service. Debt service will be $4.4b in 2011
-The GNP to debt ratio is 93% (up from 58% in 2004).
The weather is great. The beaches are beautiful. The food is good and
the drinks are better. The bonds, on the other hand, don’t get on my
“buy” list.
Tough Talk From CBO
Doug Elmendorf, the boss over at the CBO, spoke this
morning. I think he was trying to shake some political trees. He flat
out said that cuts in entitlements were in our future. Strong talk. Some
bits from the speech:
If current policies are continued, the gap between spending and revenues will remain very large even after we return to normal economic conditions.
In Washington “speak” Very Large is the polite way of saying Disaster.
Fiscal policy cannot be put on a sustainable path just by eliminating waste and inefficiency; the policy changes that are needed will significantly affect popular programs or people’s tax payments or both.
Popular Program AKA Social Security.
Doug concludes that what we are doing is unsustainable. His bottom line:
We only have two choices. We deal with it now, or we kick the can a bit
further. If we choose to wait this will be the result:
Increases the likelihood of a fiscal crisis during which investors would lose confidence in the government's ability to manage its budget and the government would lose its ability to borrow at affordable rates.
The number one reason given for delaying the cuts that must come?
Helps older generations by deferring the increases in taxes or the cuts in benefit payments they would face.
When Elmendorf says words like this what he is really means is, “We have to look at Social Security”.
Why do I bring this up? Because Mitch McConnell raised it on Face The Nation this past Sunday. More importantly, John Boehner put this issue on the table last Friday. (link)
Austan Goolsbee was on MSNBC Sunday. He took a different track on SS. He made it pretty clear that the Roosevelt promise of retirement for all would be kept. “Maybe some ‘tweaking’ but no changes.
This is about Presidential Politics. The Republicans have said they will talk about the hard topic of entitlements. The Democrats are going to say “no” to that. So nothing will be accomplished. But this will be a central issue in the next election.
It sure is swell to see the “Non-Partisan” CBO weigh in on this issue on such a “timely”
basis. Especially after McConnell and Boehner teed it up so nicely. Of
course Mr. Elmendorf is smart enough to know that there is no way that SS benefit cuts will happen as long as Obama and a Democratic Senate is around. So this is all talk for now. I wonder what Elmendorf got for the favor.
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- advertisements -
Elmendorf's C.V. (he ain't no GOP hack - just the opposite a Clintonista and Fed alum)
http://www.cbo.gov/aboutcbo/organization/elmendorf_longbio.pdf
Unfunded liabilities, check.
Pensions, check.
GNP:Debt::1:1, check.
You're right, it's a state!
Puerto Rico is the 53rd state. 51 is Isreal, and 52 is England. Something else wherein the reality of things, the real truth of things, the fact of things belies the fiction that the perps find they can easily get away with by keeping the peeps engaged in Oprah, celebrity lives, and in the England, what the prince and the babe are up to.
+1000 HAHAHAHAHA
Standard & Poor proves it value once again :)
Hey, you sold your positions earlier this year huh?
Bet you think you're warren buffett the way things are looking now...
We should send in one of my old sergeants, John Rambo....
he'd sort it out, what you call hell he calls home, you know?
Just watching old footage of his mission to get back the prisoners near the Big Bong bridge, heheheh, when you see the opening titles come up in flames you know its gonna be good.
He'd sort out Puerto Rico in a goddam minute.. bring back some respect.
Good luck Cuba, stay strong or look to Puerto to see what the banksters have in store for you.
Sorry, Bruce, but I have to disagree with you on this one. Elmendorf did not argue that cuts to SS are required. You inferred that. Everybody knows that Medicare, not SS, is the real problem and that those "tweaks" Goolsbee refers to are all that is needed to put SS on track.
And if you think that the Presidential election will be decided by Republicans campaigning to cut SS, you are correct, but only if you are predicting a landslide Democratic win. The time for them to win that battle came and went last December when they refused to restore the Clinton tax brackets. Now, they'll never get SS or Medicare savings, even if it is the right thing to do.
PR used to be a wonderful place to vacation. Now my friend there said it "is way too dangerous."
I would like others to comment on that aspect. I would go there again.
PI, PR, wrong islands, wrong comment, deleted.
if we get a cold on the mainland, PR gets the flu.
Mainland about to get a bad case of (crude oil) flu. what will happen to PR ?
***** "what will happen to PR ? "***** an insurance check??
is in the mail...
http://en.wikipedia.org/wiki/2009_Cata%C3%B1o_oil_refinery_fire