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Both Reid and Boehner's Debt Ceiling Plans Would Still Likely Result In a Credit Downgrade for the United States

George Washington's picture





 

By Washington’s Blog

 The fight between Harry Reid and John Boehner's dueling debt plans is high melodrama.

But the fact is that both plans would likely result in a credit downgrade for the U.S.

Huffington Post notes:

CNN's Erin Burnett relayed word from her sources on Wall Street that the newest Republican plan would not satisfy the credit rating agencies, which have soured on the idea of a short-term solution to the debt ceiling debate....

 

"I think it is important to emphasize that most people think both of the plans are really Band-Aids and don't deal in any significant way with the spending and cost issues in the country," Burnett said. "The issue was that Speaker Boehner's plan does not cut enough spending right away. Harry Reid's plan would cut about $2.7 trillion. Just because it is bigger than Speaker Boehner's plan is really the reason the Boehner plan may still trigger a downgrade."

 

Burnett was far from equivocal. At one point she added that, per a conversation with an investor, "in the short material, either deal will probably be enough." But then she went back to waxing skeptically at the Boehner approach.

 

"Really interesting this afternoon, when I was talking to an investor who had met with the ratings agencies at Standard & Poor, talking about the potential of a downgrade -- which by the way could raise interest rates the same way a potential default could -- and they said the Boehner plan probably wouldn't hit the hurdle to prevent a downgrade," she added. "Even if that deal was reached, you could still get a downgrade. It is unclear whether that would happen for sure, but that would be a real possibility. Whereas the Reid plan, even though a lot of the parts of that are seen by many as gimmicks, probably would pass that hurdle and you wouldn't get that immediate downgrade. That's an interesting distinction."

 

In actuality, the distinction is rather bland. The crux of the difference between the Reid and Boehner approaches is that one would last through the 2012 election by counting the so-called peace-dividend while the other one would require another vote as well as a (likely-to-fail) vote on the balanced budget amendment. Beyond that, they are fairly similar -- each using the cuts agreed to during talks organized by Vice President Joseph Biden, each setting up a powerful congressional committee to find additional deficit-reduction measures.

Paul Craig Roberts - a true conservative, who was a Wall Street Journal editor and Assistant Secretary of the Treasury under Reagan - slams the Republican intransigence on the debt.

But the Democratic plan is no better.

As Fox News reports:

Senate Democrats' inclusion in their proposed debt package of $1 trillion in savings from the wars in Iraq and Afghanistan may not satisfy ratings agencies threatening a credit downgrade since the wars were expected to end with or without a debt deal.

***

A new memo from Goldman Sachs also suggests Congress could end up imperiling the U.S. credit rating by counting war savings.

The memo, provided to Fox News by a GOP aide, said that if the Senate plan and its supposed war savings passes without a follow-up process, "a ratings downgrade could ensue."

***

Nearly half of the deficit reduction in Reid's plan would come from phantom war savings, according to the Goldman memo.

"The (withdrawal of troops from Iraq and Afghanistan) would show up in official budget estimates as savings of about $1.2 trillion versus current law," the memo reads. "If this proposal were to prevail without a credible follow-on process, a ratings downgrade could ensue, since against most outside baseline budget estimates only the first portion of spending cuts, and not the war spending savings, would show up as deficit reduction."

The first portion was estimated to be worth just $1.5 trillion.

"That would leave the fiscal consolidation far short of the ~$4 trillion S&P has said it is looking for, with no catalyst for additional deficit reduction before 2013," Goldman warned.

As Anti War points out:

Senate Democrats have issued a new “savings” plan that would nominally pare the projected deficit by over $1 trillion simply by assuming that the costs of the wars in Iraq and Afghanistan will eventually go away by virtue of those wars ending.

 

This has spawned a myriad of criticism, including a leaked Goldman Sachs memo warning that the nation faces a credit downgrade if it tries to use this sort of on-paper gimmick instead of actual cuts in spending.

 

And indeed, while politicians may be comfortable with the notion that the wars will end at some point in the next decade, it isn’t clear at all that this will be the case. Officials are already talking up continuing in Afghanistan long beyond 2014, while the war in Iraq seems set to be extended for “years to come.”

 

The memo noted that this war savings was only a problem “without a credible follow-on process,” which is to say an actual effort to end those wars. Given strong Democratic opposition to other efforts to end wars (including the ongoing war in Libya), it seems hard to believe officials are looking at doing anything credible about the seemingly endless conflicts.

In other words, the Democrats don't actually want to end the wars ... but want to get credit for reducing the debt by pretending that they are going to end them.

As I've noted for years our government leaders won't even talk about slashing the military-industrial complex, which is ruining our economy with unnecessary imperial adventures?

America is losing its strength because it is trying to act like an empire ... even when it has run out of money to do so. See this, this and this.

 


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Thu, 03/01/2012 - 03:47 | Link to Comment kathyink
kathyink's picture

Interesting article with many valid points. Definitely going to send this to my printer so I can read it at leisure before I sleep. Though Barrack Obama seems to open want to end wars and bring the troops home, his administration and many of the Democrats seem opposed to doing so. So now they are proposing another debt ceiling rising, and all their previous efforts to cut spending seem to be in vain.

Kathy - http://www.cartridgeshop.co.uk

Thu, 02/23/2012 - 04:24 | Link to Comment kathyink
kathyink's picture

There are so many things that the government is doing wrong because of the political agendas embedded in the decision making process that would use up tonnes of ink catridges to print out on paper. I certainly hope they stop the silly fights and do something proper for once.

Kathy - http://www.cartridgeshop.co.uk/Catalog/160/Cheap-Canon-Printer-Ink-Cartridges-From-Cartridge-Shop.html

Wed, 07/27/2011 - 10:04 | Link to Comment mess nonster
mess nonster's picture

Downgrade, default and collapse! I call for it! Bring on the agentur of the nihilists and atheists! Unleash the ghost of Albert Pike to feast upon the helpless forms of the disenfranchised elite!

Wed, 07/27/2011 - 11:56 | Link to Comment the left behinds
the left behinds's picture

don't forget the anarchists!

Wed, 07/27/2011 - 09:22 | Link to Comment DavidC
DavidC's picture

Create a crisis (make a crisis out of a drama) watch the markets tank and then have Benny come in with QE3 to 'Save the day'.

Wed, 07/27/2011 - 09:03 | Link to Comment Sambo
Sambo's picture

This Black & White House game is getting to be boring....these guys should start using some grey matter, put public interest above their own, and default. The world does not need spineless pretenders.

Wed, 07/27/2011 - 08:53 | Link to Comment MobBarley
MobBarley's picture

It's possible that this thing is manufactured so that when they fail to reach

an agreement and the US goes into a technical default Obama can pull

the 14th Amendment out of the hat and then the courts will find in

the Presidents favor, congress not having the authoritah to default

on a debt obligation, and then the President will order them to print

more money. Just like in Nazi Germany. A covert method of POTUS

seizing complete financial control.

As an aside, the warden rattles the cage reminding the prisoners

where their bread comes from.

Wed, 07/27/2011 - 08:13 | Link to Comment the not so migh...
the not so mighty maximiza's picture

good article GW

Wed, 07/27/2011 - 06:43 | Link to Comment fishface
fishface's picture

 

 

 

As it seams there will be a credit downgrade no matter what compromise about raising the debt ceiling will be accomplished
There will be no plan on how to reduce the debt, maybe some vague ideas but definately no plan

I hope as a follow up the american people downgrade their parties
This filth has to go!!!

 

Wed, 07/27/2011 - 04:41 | Link to Comment AldousHuxley
AldousHuxley's picture

In this interview, Sir Goldsmith discusses the ramifications of free-trade agreements that were about to take place in 1994 (GATT), as you can retrospectively see, he correctly predicted many of the things that happened after that.

 

http://www.youtube.com/watch?v=YW6KkF6aa_A&feature=related

Wed, 07/27/2011 - 06:18 | Link to Comment sumo
sumo's picture

"as you can retrospectively see, he correctly predicted many of the things that happened after that"

After seeing his interview with Charlie Rose, I read Sir James Goldsmith's book "The Trap":

http://www.amazon.com/Trap-James-Goldsmith/dp/0786701854

Recommended. He was correct about so many things.

Unlike, say, shit-for-brains neo-classical economists, and Wall St whores like Greenspan, Rubin, Geithner, Summers, Paulson, Gramm, ...

The Big Lie of TPTB is "Oh, if only we had seen it coming, we would have done something."

The reality is "Oh, if only we had seen you coming, we would have shut you down sooner. Like Brooksley Born, heh heh."

http://news.firedoglake.com/2010/04/07/brooksley-born-excoriates-alan-gr...

 

Wed, 07/27/2011 - 02:50 | Link to Comment Tyranny is Love
Tyranny is Love's picture

Any chance that Obama's backers 'TPTB' want the debt negotiations to fail? Obama can then declare a State of Emergency and under that emergency he can claim he has the power to borrow/set new debt limit/suspend the limit/one or all of the above. It would be a financial equivalent of the fire in the Riechstag. It could also be used to set the precedent that the Office of the President has control (or partial control) of the purse strings.

 

It's my understanding that previous laws have invested in the office of the president wide ranging, vaguely defined executive powers in the event of an emergency, without specifying what that emergency would be.

 

Also what happens if one person has the power to make war, (kinetic action), declare a state of emergency/martial law, and control of purse strings? I think there's a name for that?

 

As I'm not an American please correct me if I'm off the mark.

Wed, 07/27/2011 - 04:49 | Link to Comment New World Chaos
New World Chaos's picture

Ratings agencies acting up at the same time makes me think you might be right.  A downgrade of the US would cause a chain reaction in the bond market even without a technical default.  Perhaps the puppetmasters have decided to pull the plug on America in order to buy the Euro a little more time?

Wed, 07/27/2011 - 04:39 | Link to Comment AldousHuxley
AldousHuxley's picture

Laura Tyson See Start of a `Lost Decade' for Many Americans

She was a spokesperson in favour of GATT, arguing with Sir James Goldsmith on Charlie Rose that American jobs will be increased by the trade agreement. Now that traitor is saying that displaced workers face lost decade.

 

LAURA TYSON; Candidates for Obama's Inner Circle

BEING CONSIDERED FOR A top economic post, possibly in a return tour as director of the National Economic Council.

 

WATCH AND EMAIL TO ALL

A prophetic interview with Sir James Goldsmith in 1994 Pt2

http://www.youtube.com/watch?v=SZTzPmn-87w&NR=1

Wed, 07/27/2011 - 01:27 | Link to Comment MethodMan
MethodMan's picture

So.... living within our means and within our budget is a DEFAULT.

We must increase our unsustainable debt load or our credit rating will go DOWN.

Ponzinomics 101 I suppose.

 

Wed, 07/27/2011 - 02:02 | Link to Comment bigelkhorn
bigelkhorn's picture

I have to say that obamas lies are catching up with him.

I know that people say us americans are dumb but I beg to differ, the internet is an amazing place and many people are waking up in droves. 

Yes the system is collapsing, but people are waking up. It was bound to happen!!! 

http://www.forecastfortomorrow.com

Wed, 07/27/2011 - 01:22 | Link to Comment Amish Hacker
Amish Hacker's picture

When governments become corrupt, their main focus is on transferring wealth from the many to the few. War is the most effective way yet devised for doing this, hence endless war is the central element of current policy.

Wed, 07/27/2011 - 09:14 | Link to Comment unknownknowns
unknownknowns's picture

 

 

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that justifies it." Frederic Bastiat

Wed, 07/27/2011 - 01:43 | Link to Comment Weisbrot
Weisbrot's picture

how can you write that about such fine upstanding folks ?

 

http://www.huffingtonpost.com/2011/07/26/david-wu-resigns-sex-scandal_n_...|maing5|dl1|sec1_lnk3|81368#s316271&title=David_Wus_Alleged

 

 

Wed, 07/27/2011 - 01:13 | Link to Comment e_goldstein
e_goldstein's picture

Fuck 'em, it (the system), or whatever. I think a lot of us were looking for this positive outcome years ago.

Tue, 07/26/2011 - 23:55 | Link to Comment Clinteastwood
Clinteastwood's picture

That a downgrade by some faceless, nameless agency could spark financial armageddon confirms there is no leadership in Washington, none. Who gives a flying fart about Moodys/S&P?  Weren't they the same agencies rating all those MBS and CDOs AAA?  If we had a president like Ron Paul or John Kennedy the following would have already gone viral and won the day:

........DEFAULT ALREADY AND GET IT OVER WITH!!

Wed, 07/27/2011 - 01:22 | Link to Comment darkstar7646
darkstar7646's picture

Civil War, the moment you do.

(Protip: The downgrade should've happened back in April. It's inevitable now.)

Wed, 07/27/2011 - 01:10 | Link to Comment Fish Gone Bad
Fish Gone Bad's picture

What is the point of even having a ceiling if it just keeps going up and up and up?  Does anyone remember who does this all the time?  Little kids.  This is a grown up version of "do over".

I need to call "shenanigans" on Obama.  Either he was full of crap in 2006 when he voted against raising the debt ceiling with this (in)famous speech (http://www.afa.net/Blogs/BlogPost.aspx?id=2147501733)

 "The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

Or Obama is full of crap now.  Politicians hate to be caught talking out of both sides of their mouths.

Wed, 07/27/2011 - 01:46 | Link to Comment Cole Younger
Cole Younger's picture

The ceiling is for one thing and one thing only. Only Congress can authorize borrowing. Article 1, section 2. Enumerated powers. If the treasury had to come to congress every time it needed to borrow a few billion and legislation had to be passed to do so, congress would spend 99.9% of its time passing borrowing bills. 

Tue, 07/26/2011 - 23:19 | Link to Comment zorba THE GREEK
zorba THE GREEK's picture

No need to hit the bottle HS , There will be a last minute deal and life will go on. 

Just make sure you get out of equities and into PMs. By the way, a hungry seagull swooped down and

 took a bologna sandwich out of my wife's hand today at the beach. (for real) Tell your kin to back off or I

will be feeding them alka selser tablets wrapped in bologna.

Tue, 07/26/2011 - 22:56 | Link to Comment HungrySeagull
HungrySeagull's picture

Last Thursday night, the House sent a decent bill to the Senate.

Friday Morning, Reid deemed it dead, the Senate voted to table it so they can get out of DC for a few days weekend.

 

And now here we are almost a week and I have given up on any hope because our Leaders don't know what they want.

It's going down into the history books as "Reid's Folly" I blame him specifically for the losses incurred if not a total break down of our Nation financially. Obama and his lack of plan and threats of Default is irrevelant. The 14th amendment is shaky and our Banks are a lipstick on a pig, but still a pig.

I have been sober 20 years and it's getting close to the time I crack a bottle of Schnapps.

Tue, 07/26/2011 - 22:40 | Link to Comment Joebloinvestor
Joebloinvestor's picture

Does a downgrade of the country mean the same for the bags of shit our esteemed bankers sell to the rest of the world as AAA+++?

 

Tue, 07/26/2011 - 21:45 | Link to Comment BigDuke6
BigDuke6's picture

the USA, from being a guiding light in the world and founded on the best of western ideals to see it become an exporter of war and debt is hard to watch.

A curse be on the banksters, and the msm.

Tue, 07/26/2011 - 21:32 | Link to Comment max2205
max2205's picture

It's a BIG BAG OF SUCK.

Tue, 07/26/2011 - 22:58 | Link to Comment gangland
gangland's picture

 

this CONgressional circle-jerk cluster fcuk is a national control fraud, run out of new york with 535 + 9 + wh fully complicit stoog criminals.

Worse Than Hoover

"Barack Obama’s style of governing largely reflects an acceptance of the status quo.   His “economic experts” also reflects this preference.  As Baker argued, “it’s as if, after winning election in 1932, FDR had brought Andrew Mellon back to the Treasury.”

To the extent that he displays any kind of radicalism, it is to roll back the frontiers of the New Deal and Great Society, in effect gutting the Democratic Party of its core social legacy."

http://neweconomicperspectives.blogspot.com/2011/07/by-marshall-auerback...

Looting: The Economic Underworld of Bankruptcy for Profit (Romer&Akerlof)

http://www.signallake.com/innovation/Looting1993.pdf  (live link)

From Bill Black's Blog:

"No economist should be allowed to graduate from a doctoral program without reading Akerlof & Romer.  It would also be salutary to expose any doctoral candidate interested in finance or regulation to the relevant work of criminologists and public administration scholars. 

Collectively, our work on control fraud has shown great predictive strength while neoclassical economic work (both macro and micro) and “modern finance” have suffered repeated, abject predictive failures.

 

Every financial regulatory agency should have a “chief criminologist.”  The financial regulatory agencies are civil law enforcement entities whose primary responsibility is to limit control fraud, but they virtually never have anyone in authority with expertise in identifying, investigating, and sanctioning control frauds."

http://neweconomicperspectives.blogspot.com/2011/07/high-price-of-presid...

 

 

 

Wed, 07/27/2011 - 09:37 | Link to Comment Escapeclaws
Escapeclaws's picture

Shutting the barn door after the horse has left.

More bureauracy is not the answer. The chief criminologist would just become the point person for finding ways to cover up, whitewash, disguise, or render impervious to prosecution, criminal activity.

What is needed is a citizenry that holds the government accountable. This means that we cease to think of anyone in government as our "leaders".  They are not our leaders, they are our servants.

We do need representatives who will fight for us and not fall for this "bipartisan" nonsense.

 

 

Tue, 07/26/2011 - 21:24 | Link to Comment Implicit simplicit
Implicit simplicit's picture

I don't really consider the rating agencies as honorable (not paid off) agencies. If they issue a downgrade, the right people will condone it and know early. It's part of the Ponzi babble. 

Wed, 07/27/2011 - 09:25 | Link to Comment Escapeclaws
Escapeclaws's picture

Far from honorable, they are absolute trash. They played a major role in the collapse of the economy with their tip-of-little-finger length ratings process. If such a thing were possible, they should be subject to clawbacks and their upper-level personel should be investigated for ethics breaches.

Tue, 07/26/2011 - 21:20 | Link to Comment booboo
booboo's picture

I feel bad for all them folks who in protest and out of love and country and, well, darn it, just because they thought the Bush tax cuts were the "worst financial mistake in history", kept on paying a higher rate. You know all them rightous folk. I am sure most of you wrote an extra check to the Treasury, right? Hello? Anyone out there? Didn't think so. Let me guess, You qualify for the EITC, BUT them other fuckers need to pay more.

How about this, the other 50% of this country experience the joys of paying some income tax, that way they will be less inclined to be so eager to demand others pay more.

In the meantime, take your SNAP Card down to Walmart and at least buy some paper and pens for your kids.

Tue, 07/26/2011 - 21:09 | Link to Comment apberusdisvet
apberusdisvet's picture

Idiots and bandaids do not an AAA make.

Tue, 07/26/2011 - 20:56 | Link to Comment BanksterSlayer
BanksterSlayer's picture

This morning, Daniel Arbess was on Bloomberg TV and he quite bluntly expressed the opinion that a credit downgrade is more than 50% likely, with our without a debt ceiling increase. This is at the end of this video clip:

http://youtu.be/F0cyEKkMqNQ

 

Tue, 07/26/2011 - 20:56 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

America is losing its strength because it is trying to act like an empire ... even when it has run out of money to do so.

America is losing its strength because it is trying to act like maintain an empire ... even when it has run out of hasn't had the money to do so for a long time.

Tue, 07/26/2011 - 21:46 | Link to Comment gangland
gangland's picture

 

will you stop doing that quote box thingy? i actually wanted to give you an up arrow this time and it is blocking them!   hit return a couple times before using that thing so it doesnt block the arrows codi! :P 

wait, or are you doing that on purpose methinks.....i see whatcha maht be doin tharrr.

 

 

hahahah i did it too and it worked! now nobody can junk me! im junk proof!  bwahahahaha!

 

Tue, 07/26/2011 - 21:50 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Actually you can slip in an up arrow click. But no down arrows for you. :>)

Tue, 07/26/2011 - 22:19 | Link to Comment gangland
gangland's picture

 

you still out trick me! your kung fu is powerful indeed ;], darn you codiiiiiiiiii :P

 

i coudlnt figure it out, but mystery is good.

Tue, 07/26/2011 - 22:54 | Link to Comment gangland
gangland's picture

let's play shall we?

what if macain would have won?

"Democrats were united on one issue in the 2008 presidential election: the absolute disaster that a John McCain victory would have produced. And they were right.

McCain as president would clearly have produced a long string of catastrophes:

He would probably have approved a failed troop surge in Afghanistan, engaged in worldwide extrajudicial assassination,

destabilized nuclear-armed Pakistan, failed to bring Israel’s Benjamin Netanyahu to the negotiating table,

expanded prosecution of whistle-blowers, sought to expand executive branch power,

failed to close Guantanamo,
failed to act on climate change,
pushed both nuclear energy and opened new areas to domestic oil drilling,
failed to reform the financial sector enough to prevent another financial catastrophe,
supported an extension of the Bush tax cuts for the rich,
presided over a growing divide between rich and poor,

and failed to lower the jobless rate.

Nothing reveals the true state of American politics today more, however, than the fact that Democratic President Barack Obama has undertaken all of these actions and, even more significantly, left the Democratic Party far weaker than it would have been had McCain been elected.

Few issues are more important than seeing behind the screen of a myth-making mass media, and understanding what this demonstrates about how power in America really works—and what needs to be done to change it."

http://www.zcommunications.org/if-mccain-had-won-by-fred-branfman

i will out lefty a lefty. but riddle me this? where is the
fucking hopey changey yes we fucking can thing that was suppossed to not do all of the above?

jusaskin

Wed, 07/27/2011 - 03:13 | Link to Comment StychoKiller
StychoKiller's picture

Wouldn't ya just love to have been a fly on a wall when the Banksters had that ultra-classified meeting with Obamatron, telling him just what the job of President really is?!

Wed, 07/27/2011 - 09:57 | Link to Comment mess nonster
mess nonster's picture

Transcript of Bankster's meeting with the Obamatron:

O: Yo daddy-o's what's shakin'?

Bkstrs: Mr. Obama, we have decided that you should be the next President of the United States.

O: Sheeit! Damn, y'all, who da foo?

Bkstrs: Be that as it may, in exchange for the office, we ask only for a few concessions-

O: I jus' want dem fine acown bittces! Way da hos?

Bkstrs: Mr. McCain agrees in principle to our demands, but we prefer you, since we're trying to bump up our diversity profile.

O: Yo, damn'son, gimme da pen, I' sign it, whatevah. Sheeit! Gimme da bittces, y'all!

Bkstrs: So, we are in agreement?

O: Wert. Fuckin' a, straightup. Bump it, homedog!

Wed, 07/27/2011 - 12:27 | Link to Comment gangland
gangland's picture

 

i junked ya cause that was really lame dude, #epicfail!

dont want to be associated with that crap.

 

Tue, 07/26/2011 - 20:43 | Link to Comment blindman
blindman's picture

.
.
.
at some point you have to consider that the destruction of the country
is the goal of the decision makers. the people and institutions, infrastructure
and ways and means to be obliterated for designs yet to be conceived by
the global over lords, represented by the international and some domestic banking interests.
don't you want to play in their sand box?
the tool of destruction is debt which conveniently is "money" and the
unit that they have a monopoly on the production.
.
hmmm?
ps. they want it all and you will let them have it because you
do not want to make a disturbance or bother the innocent while
they watch the t.v. or sleep or enjoy the so many diversions of
the good life enjoyed by those brave speculators sucking at the
breast of the printing cartridge, squid-like/esk/onic.

Tue, 07/26/2011 - 20:41 | Link to Comment rwe2late
rwe2late's picture

 

It’s never been about saving the “world’s economy”.

Not with TARP. And not with the ‘debt ceiling’.

It’s always been about keeping the money flowing upward,

no matter how poor the banksters’ investments,

nor how much they lost in derivatives gambling.

Federal Reserve handed out $16 TRILLION to banksters (i.e. themselves)

http://www.marketoracle.co.uk/Article29506.html 

 

One way to begin breaking the hold of the global financial vampires is to DEFAULT.

Let the Federal Reserve (a private banking cartel despite the name)

take the losses for their bad business investments.

Wed, 07/27/2011 - 10:33 | Link to Comment DaveyJones
DaveyJones's picture

"Federal Reserve handed out $16 TRILLION to banksters (i.e. themselves)" In a nutshell. If you look at this and see the world of difference between that and the response to the S&L crisis, you can only conclude this place has gone completely criminally corrupt.

Wed, 07/27/2011 - 03:07 | Link to Comment StychoKiller
StychoKiller's picture

"The name of the game is 'Bailout'":

"The Creature From Jekyll Island, a Second Look at the Federal System",
5th Ed., G. Edward Griffin, ISBN:  978-0-912986-45-6

Tue, 07/26/2011 - 20:05 | Link to Comment ZeroPoint
ZeroPoint's picture

Here's a new flash: All roads lead to a credit down grade. 

Tue, 07/26/2011 - 20:45 | Link to Comment George Washington
George Washington's picture

Nah, we would avoid a downgrade if we immediately:

(1) End the imperial wars; (2) End bailouts and QE; (3) Prosecute fraud and claw back ill-gotten gains; (4) end Bush tax cuts, which David Stockman said were the worst fiscal mistake in history; and (5) slashed pensions for public employees, at least when they are pegged to an artificially inflated last year's salary ...

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