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S&P Explains Why The "$2 Trillion Error" Is Irrelevant

Tyler Durden's picture


Yesterday we showed that when it comes to projections, the CBO's own track record makes S&P shine in comparison. Apparently this fact was not lost on S&P itself which sent out a note explaining which "clarified assumption used on discretionary spending growth." Basically, as S&P says, "Our ratings are determined primarily using a 3-5 year time horizon. In the near term horizon, by 2015, the U.S. net general government debt with the new assumptions were projected to be $14.5 trillion (79% of 2015 GDP) versus $14.7 trillion (81% of 2015 GDP) with the initial assumption – a difference of $345 billion." So yes, while by 2021 the difference could be $2.1 trillion based on the CBO's current baseline model, the truth is that the CBO's own estimate on revenue and spending projections in a decade will likely have a +/- $10 trillion margin of error. So does anyone really care? In essence all S&P did was point out what Zero Hedge and others have been saying: that a "deficit cutting" plan which is massively back end loaded and has about $20 billion in cuts over the next year is absolutely without credit or merit. And the disingenuity on the side of Treasury to believe that someone would think otherwise is simply appalling. That said, while the markets look set to crash very shortly, the overabundance of catalysts means that it will be more than just the downgrade that throws risk into a tailspin. Although prepare for an all out onslaught by the Treasury on S&P as a scapegoat. After all in USSAA(negative outlook) it is never our fault: it is always someone else's.

Full S&P note:

Standard & Poor’s Clarifies Assumption Used On Discretionary Spending Growth


New York, Aug. 6, 2011. In response to questions, Standard & Poor’s today said that the ratings decision to lower the long-term rating to AA+ from AAA was not affected by the change of assumptions regarding the pace of discretionary spending growth. In the near term horizon to 2015, the U.S. net general government debt is projected to be $14.5 trillion (79% of 2015 GDP) versus $14.7 trillion (81% of 2015 GDP) with the initial assumption.


We used the Alternative Fiscal Scenario of the nonpartisan Congressional Budget Office (CBO), which includes an assumption that government discretionary appropriations will grow at the same rate as nominal GDP. In further discussions between Standard & Poor’s and Treasury, we determined that the CBO’s Baseline Scenario, which assumes discretionary appropriations grow at a lower rate, would be more consistent with CBO assessment of the savings set out by the Budget Control Act of 2011.


Our ratings are determined primarily using a 3-5 year time horizon.


In the near term horizon, by 2015, the U.S. net general government debt with the new assumptions were projected to be $14.5 trillion (79% of 2015 GDP) versus $14.7 trillion (81% of 2015 GDP) with the initial assumption – a difference of $345 billion.


In taking a longer term horizon of 10 years, the U.S. net general government debt level with the current assumptions would be $20.1 trillion (85% of 2021 GDP). With the original assumptions, the debt level was projected to be $22.1 trillion (93% of 2021 GDP).


The primary focus remained on the current level of debt, the trajectory of debt as a share of the economy, and the lack of apparent willingness of elected officials as a group to deal with the U.S. medium term fiscal outlook. None of these key factors was meaningfully affected by the assumption revisions to the assumed growth of discretionary outlays and thus had no impact on the rating decision.



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Sun, 08/07/2011 - 11:18 | 1532519 azengrcat
azengrcat's picture

Officer S&P: I clocked you going 98 MPH in a 55 MPH Zone

Krugman: I was going 96 MPH you nitwit!  You're a racist and should be disbarred from duty, this is a right wing cabal!

Sun, 08/07/2011 - 11:24 | 1532543 WestVillageIdiot
WestVillageIdiot's picture

And then he blew the officer for good measure. 

Sun, 08/07/2011 - 11:42 | 1532627 Van Halen
Van Halen's picture

While gurgling that it was all the TEA Party's fault.

Sun, 08/07/2011 - 12:55 | 1532911 Michael
Michael's picture

The mainstream media reporter cunts and cocksuckers, mostly liberals, have gone full bore tilt against the Tea Party and S&P.

When they have their temper tantrums in support of their POTUS and things they want like their artificial recovery they willed to work, picking obvious childish arguments becomes an everyday occurrence showing their true colors. ie; MSM cunts and cocksuckers. 

Sun, 08/07/2011 - 14:04 | 1533219 macholatte
macholatte's picture

......and where is the MSM outcry for the politicians to get their asses back to Washington and FIX this mess?

*3% tax surcharege on income over $1M

*Nuke Afganistan and bring the troops home

*Freeze all federal wages and entitlements for 5 years (no bonuses, no COLA, no increases of any kind)

* cut federal retirement (excluding active duty military) back to 60% of average wages for previous 10 years worked

* etc, etc, etc


WTF is wrong with that?



Sun, 08/07/2011 - 12:02 | 1532704 slaughterer
slaughterer's picture

The White House, the administration and the Treasury have proven to be really lame in their response to S&P.    Not to mention Europe, whose CC today seems to have only resulted in nothing.  What do you do with a world mismanaged by its leaders?  

Sun, 08/07/2011 - 12:03 | 1532709 EhKnowKneeMass
EhKnowKneeMass's picture

So, if you had visited the den of a liberal, such as Mr. Krugman,, there was a poll posted there. The question was, Do you agree with the decision to downgrade the credit rating of the United States? Can anybody guess how many people have voted thus far, as of 11:50 EST? Do note that the poll has been open for more than 12 hours. The answer is, effing, 1963. Let me bold that for you: 1963. Now, guess what the number would have been, had the question been: Do you like Justin Weiner's latest hairstyle? The number of respondents would have been in hundreds of thousands.

This game cannot be won. The people are asleep and there is nothing you can do about it. Shut down your website, ZH, go make love to a beautiful women or better yet make love to hundreds of 'em, eat a lovely steak, drink a nice wine, smoke a nice cigar and just veg. You will be called a fear monger, a doomer, one who does not believe in humanity and the american way of life - we always bounce back. You are wasting your time, just shut it down and enjoy your life. Now, if you are enjoying the warmth of women while doing all this, then, by all means, please continue. I keep my sanity by visiting this place, so before you leave please give me a couple of days notice. I will hit a rehab.

Sun, 08/07/2011 - 14:08 | 1533239 macholatte
macholatte's picture

...go make love to a beautiful women or better yet make love to hundreds of 'em, eat a lovely steak, drink a nice wine...


Damn near eloquent.


Sun, 08/07/2011 - 15:01 | 1533436 assembler
assembler's picture

Or, you could take this time to get right with God, 'cause it's all coming down.

Sun, 08/07/2011 - 11:20 | 1532522 ElvisDog
ElvisDog's picture

Kudos for S&P pointing out the ridiculous long-term assumptions built into CBO models (3% blended interest rates, 4% annual GDP growth, unemployment falling to 6%, etc., etc.,)

Sun, 08/07/2011 - 11:27 | 1532555 WestVillageIdiot
WestVillageIdiot's picture

"a "deficit cutting" plan which is massively back end loaded"

The term back-end loaded is great.  That is what we are going to get from these clowns in Washington that have been voted in by the robots that walk are streets.  Your back end will be loaded. 

What used to be called "Personnel" departmens are now called "Human Resources".  This allows corporate drones to say, "our greatest resource is our people".  The human resources that are supposed to get things in shape are our dipshits in Congress.  By that fact alone we should be downgraded to BBB- or lower.  Is there a GGG- with an outlook negative rating? 

Sun, 08/07/2011 - 11:34 | 1532587 Azannoth
Azannoth's picture

I guess S&P hase nothing more to loose, I hope they stick to their guns

Sun, 08/07/2011 - 12:08 | 1532733 Widowmaker
Widowmaker's picture

Good luck with that. S&P needs to shut the fuck up and explain the decades of incorporated fraud.

They won't, record bonuses are coming, and the fraud and robbery continues.

Fuck them and their political risk taking.

They have plenty to lose, and lose they will.

Sun, 08/07/2011 - 11:21 | 1532526 firstdivision
firstdivision's picture

Should have used the 10% GDP growth that Ben Bernanke uses.

Sun, 08/07/2011 - 11:28 | 1532563 WestVillageIdiot
WestVillageIdiot's picture

A guy with a 2-inch dick always dreams of 10 percent growth.  I bet Mrs. Bernanke dreams of 20 percent growth while she stares at the UPS guy walking down the driveway.

Sun, 08/07/2011 - 11:21 | 1532527 Troy Ounce
Troy Ounce's picture


Moral of the story: politicians just can't spend less because of their urges to get re-elected.


Sun, 08/07/2011 - 11:29 | 1532569 WestVillageIdiot
WestVillageIdiot's picture

Buying votes ain't cheap. 

Sun, 08/07/2011 - 11:22 | 1532534 rajat_bhatia
rajat_bhatia's picture

Fuck You ZeroHedge! You Pessismist!!! Believe in Hope and Change!! Thats the American Way!!!

Sun, 08/07/2011 - 11:36 | 1532599 snowball777
snowball777's picture

How're those gold shorts holding up, Skippy?

Sun, 08/07/2011 - 11:41 | 1532625 EhKnowKneeMass
EhKnowKneeMass's picture

No, fuck you, you Interjectionphile! Now, go mount a Bos primigenius indicus that freely roam the streets in your village. Or, better yet, mount the entity from whom you have inherited the XX chromosome.   

Sun, 08/07/2011 - 11:22 | 1532536 cossack55
cossack55's picture

USSAA?  Is that like the United States of Debt?  America the Debtiful? The Star-spangled Debt Instument. Help me out here William Banzai.

Sun, 08/07/2011 - 11:35 | 1532595 Azannoth
Azannoth's picture

It should read USAA+ from now on till S&P makes it USA+ and than USB-

Sun, 08/07/2011 - 11:23 | 1532537 Arch Duke Ferdinand
Arch Duke Ferdinand's picture


Learn why America's younger generation has no Protesters!

Eight Reasons Young Americans Don't Fight Back: How the US Crushed Youth Resistance

"""The ruling elite has created social institutions that have subdued young Americans and broken their spirit of resistance....."""


Experts: Fukushima 'off-scale' lethal radiation level infers hundreds of millions dying.

"""Fukushima nuclear power plant radiation recordings of external gamma radiation have been so high this week, they went off scale said veteran nuclear expert Arnie Gunderson on Thursday after the famous physicist, Dr. Chris Busby told the Japanese people this week that radioactive air contamination there now is 300 times that of Chernobyl and 1000 times the atomic bomb peak in 1963, possibly inferring that hundreds of millions of people are now dying from Fukushima radiation, including people in the United States...."""

OT: hilarious 2 min video

upside down...

Sun, 08/07/2011 - 12:44 | 1532867 augie
augie's picture

We socially engineer children to be consumers by limiting their self worth through product identfication, and then get angry when "the youth movement" is too busy getting high and playing xbox? WTF did you think was going to happen, PARENTS? Fuck off, children will lead the way once it's cool to do so, if any of you have a problem with that maybe you shouldn't contribute to a society which cultivates "cool".

if you agree, than i appologize for the flippant vulgarity. 

Sun, 08/07/2011 - 11:23 | 1532538 Long-John-Silver
Long-John-Silver's picture

Exponential Debt Bitchez!

Sun, 08/07/2011 - 11:30 | 1532573 WestVillageIdiot
WestVillageIdiot's picture

"The sky's the limit." 

Sun, 08/07/2011 - 11:33 | 1532580 Doyle Hargraves
Doyle Hargraves's picture

Hockey Sticks Bitchez!!!

Sun, 08/07/2011 - 11:23 | 1532539 falak pema
falak pema's picture

This nit picking is like trying to look for a needle in the hay stack as if it were the philosopher's stone. And forget the big, huge immense, giga, godzillon like picture of US debt and its galloping progress every day, month etc. So now its on the table.

Its time they addressed it the way they want Berlusconi et al. to do so in EU. Instead of saying we, the market will short you to hell with huge CDS and interest rate spikes; but nobody, nobody, nobody's mother on grandma does that to us and our own spreads...FED and Congress where r u ????


Sun, 08/07/2011 - 11:32 | 1532577 WestVillageIdiot
WestVillageIdiot's picture

"I can't see the forest because of all of these fucking trees.  Somebody get me my chainsaw.  I'll get to the bottom of this."

Sun, 08/07/2011 - 11:23 | 1532541 Winston Smith 2009
Winston Smith 2009's picture

"In the near term horizon, by 2015, the U.S. net general government debt with the new assumptions were projected to be $14.5 trillion"

The national debt clock says that we are already at $14.575 trillion.

Please explain. What's the difference between that figure and "U.S. net general government debt."

Sun, 08/07/2011 - 11:28 | 1532561 Maxter
Maxter's picture

Exactly my thoughts when I read this too.  Aren'T we already at 14.5 trillion?

Sun, 08/07/2011 - 11:34 | 1532584 TexasAggie
TexasAggie's picture

Also in any explanation, the debt ceiling increase by the end of FY12 will have a national debt of 16.7T, and this wiill exceed the GDP unless we get >10% GDP (I guess that is what the Dept of Commenrce will use, and the GAO, and CBO over the next 4 Q).

Also, no one is factoring in the long-term SSTF debt and the Medicare deficeit. If any large US Corp used these accounting tricks to hide their long-term pension issues the BOD would be serving jail terms. (I know the way they get away with this is an old SC ruling that the gov doesn't have to pay SS or medicare).

Also, our Congress people keep talking about entitlements and they cannot touch these programs, so where in hte Constitution does it say we have programs that cannot be reduced?

Sun, 08/07/2011 - 11:55 | 1532663 mind_imminst
mind_imminst's picture

The FED and Treasury will rip the face of the bond shorts if they get too out of control. Rates will never rise to 6% like in Spain and Italy, unless it is a major event/collapse/black swan, that the US PTB did not see coming. They can see your plain old vanilla bond vigalantes coming from a mile away and will print to infinity to rip the short's faces off. They will buy treasuries. They will keep rates low....unless or until the true collapse happens.

Sun, 08/07/2011 - 12:32 | 1532816 Bam_Man
Bam_Man's picture

"Net General Government Debt" does not include the $ trillions of Treasury IOU's in the "Social Security Trust Fund". 

Pretending it "doesn't count" because "we owe it to ourselves". Which infers that it "doesn't have to be paid back". ROFLMAO. The next generation is S-O-O-O f**ked, they have no idea.

Sun, 08/07/2011 - 11:24 | 1532542 Derpin USA
Derpin USA's picture

I thought we all recognized this debt debate was a manufactured crisis.

If that's so, doesn't it make S&P's statements during the debate and its subsequent downgrade part of that manufacturing process?

Is their motivation not highly suspect?

Why do cuts they were willing to allow to be back-end loaded up to 10 years from now absolutely have to occur right now and not sometime over the next 3-5 years?

We have S&P in league with China's Dagong mouthpiece while Moody's and Fitch have reaffirmed their AAA ratings. Hmmmmmmm.

Sun, 08/07/2011 - 11:34 | 1532588 WestVillageIdiot
WestVillageIdiot's picture

Do we really think there is some group that is smart enough to coordinate EVERYTHING?  I still think it is just greedy, self-interested devils everywhere, willing to knife each other in the back at any time.  Most of the time their common goal is the status quo.  Look out, all you peasants, when it is something else. 

Sun, 08/07/2011 - 11:39 | 1532615 Derpin USA
Derpin USA's picture

Well, we are talking about the same group of right-wing financiers who were able to effectively hijack the Ron Paul movement and turn it into the Tea Party via astroturfing and a helpful hand from Fox News.

Sun, 08/07/2011 - 11:52 | 1532675 gwar5
gwar5's picture



Stop it.

The real financiers that matter, those funding governments, don't care about ideology or national interests, they only care about policies that benenfit them, and the policies that benefit them right now are continuence of the social welfare state debt economy and the wars for oil and monetary supremacy.

Sun, 08/07/2011 - 12:02 | 1532706 Derpin USA
Derpin USA's picture

Absolutely. You're not connecting the two. The financiers of the Tea Party "movement" are trying to cut welfare help to citizens while maintaining the warfare/corporate-welfare oligarchy. That's the fucking Tea Party agenda!

Don't you get it? THEY'RE THE ENEMY!

Sun, 08/07/2011 - 12:36 | 1532843 Doyle Hargraves
Doyle Hargraves's picture

You almost had me until you said something about the evils of cutting welfare. As if corporate welfare and non corporate welfare were any different at all. They are are still robbing from producers to give to non producers or giving to producers that will produce if they are subsidized. But lemme guess, your guys on the left are working for 'the people', right? They have nothing to gain by keeping the welfare industrial complex going, right? In your world, it would be shut the fuck up, checks in the bank on the 1st of the month as long as you do as we say and don't think too much, a philosphy to which you obviously are a subscriber. How about this, you obviously haven't figured it out yet: there are NO DIFFERENCES between the 'left' and 'right'. They both suck the same dicks, and do the same devil's bidding. People like you are the fucking enemy and the bad part is you are your own worst enemy. You continue to shoot yourself in the foot with this whole left is good, tea party bad paradigm because you are too blind to see you are gonna get looted no matter what as long as you believe that there are more than a handful of people in dc that give a fuck about anything but themselves.

Sun, 08/07/2011 - 12:45 | 1532874 Derpin USA
Derpin USA's picture

I agree that the Democrats we have in power now are too consumed with the same evil of the Republicans: dependence upon donations to get re-elected. We need to take money out of politics. We need a Constitutional amendment that makes all campaigns publicly financed and prohibits corporations from advocacy of candidates while requiring their advocacy of legislation to be direct and transparent.

You can disagree with my philosophical agenda. I won't take it personally. But to say that the Tea Party isn't the most representative group of the warfare/corporate-welfare oligarchy is to lie to yourself.

The Tea Party:

Is not anti-war.

Is not in favor of cutting any defense spending and in fact wants more.

Is not in favor of eliminating corporate welfare.

Is only interested in gutting the social system we've built up over the decades so that the warfare/corporate welfare oligarchy can continue unabated.

How do you not see this?

Sun, 08/07/2011 - 13:46 | 1533128 Doyle Hargraves
Doyle Hargraves's picture

Who said I do not see it? I just said if you believe there are more than a handful of people in dc that give a fuck about anyone but themselves than you are your own worst enemy. And as usual Derpin, like so many other 'fights' I have had with you you again validate my every point without me having to do to much but sit here and read your drivel...

see here: "Democrats we have in power now are too consumed with the same evil of the Republicans: dependence upon donations to get re-elected"-this implies democrats not in power are any different, they are not. I just got done explaining how your democrat good republican bad is just stupidity and if you look at the garbage coming out dc you would notice there is little daylight between either party, if any at all.

Let me guess also at this piece: "We need a Constitutional amendment that makes all campaigns publicly financed and prohibits corporations from advocacy of candidates while requiring their advocacy of legislation to be direct and transparent."-let me guess on this one though, only those mean ole Koch Bros., and their ilk would be banned not the many money laundered alledged non profits funneled money from Soros, et al. because after all they are 'for the people', right? Your for equality on all this as long as equality benefits the welfare industrial complex you support. That is just the same fascism as you say the 'tea party' represents, just representative of a different industry (the welfare industry).

Finally, "Is only interested in gutting the social system we've built up over the decades so that the warfare/corporate welfare oligarchy can continue unabated.": I am interested in gutting the entire social system we have built up over the last few decades! We cannot afford it plain and simple. You cannot make any argument about raising taxes, cutting defense, or any other hare brained scheme that will even put a dent in the costs the social system makes us incur and we will continue to incur for the long foreseeable future. There is no way in hell to get the money without putting the fuck on every future generation, and at some point that future generation will take power and cut the looters off for self preservation. Of course I have my doubts the system will last that long. There are too many takers, that do not need to be takers. They are people like you that believe the system is there for their benefit. It isn't! Where the hell is there a difference between the miltary industrial complex and the welfare industrial complex? It is still one class of people robbing another at the point of a gubmint gun in order to do what they want without any responsibility for themselves. Be it the person receiveing the benefits (when most of them DO NOT need them) or the person making a buck off administering the benefits (which judging from your general disposition you are probably one of them). I am all for gutting the whole social system to death with my own fucking bayonet and proudly photographing it's butchering with the system's blood up to my fucking eyeballs.  

I am also against our empire and wars  and this is where I know you are a stupid troll and this will be the last post I deal with you huffpo trolling ass. If you knew one thing about true tea partiers (i.e. Ron Paul was the original), you would know that ending wars and closing foreign bases is a central plank to the philosophy. Not for any other reason then we cannot afford it. That goes double for corporations, banks and the fed. Most tea partiers want to defund it all. It is funny because you democrats ran the shit unabated 2006-2010 and did nothing to stop corporate welfare just gave out corporate welfare to the companies you thought deserved it more (GM, Chrysler, Ethanol subsidies, Green Energy subsidies), yet you still argue tea party is for corporate welfare (HINT: it is best to know the policies of what you support and what the policies of the faction you are against before going and arguing for/against it on a site like ZH, it doesn't work as well as it does on huffpo,kos,etc. those sites are designed especially for sheep like you and the whole democrat good tea party bad, no I don't know why they are bad they just are), See all your arguments, no matter how hard you try to disguise them let your true hard core "I'm a flaming democrat" attributes shine through. It is really sad though, because when the country goes down in flames as it soon will, you will still be there clutching your democrat good tea party bad mantra not understanding what the hell is happening, and when the check doesn't arrive on the 1st because the US gubmint is bankrupt, and in hiding you may begin to realize that you were wrong all that time, and you may have to rely on the CHARITY of those of us who never had any faith whatsoever in 'the social system' you seem to have so much faith in (that cannot operate without the forced contributions of people like me). I just hope you are not responsible for anyone's life but your own, because I would hate to think that anyone is relying on your poor judgement.

Sun, 08/07/2011 - 14:06 | 1533229 Derpin USA
Derpin USA's picture

Who said I do not see it? I just said if you believe there are more than a handful of people in dc that give a fuck about anyone but themselves than you are your own worst enemy.

I agree.

And as usual Derpin, like so many other 'fights' I have had with you you again validate my every point without me having to do to much but sit here and read your drivel...

Really? Because you typed out a fucking manifesto in response.

I just got done explaining how your democrat good republican bad is just stupidity and if you look at the garbage coming out dc you would notice there is little daylight between either party, if any at all.

I am in favor of the Democratic Party's general principles, not how they vote or govern. I agree with you.

-let me guess on this one though, only those mean ole Koch Bros., and their ilk would be banned not the many money laundered alledged non profits funneled money from Soros, et al. because after all they are 'for the people', right?

Wrong. I am for removing all private money and corporate advocacy for all candidates, up to and including unions and non-profits. I am fine with any group presenting their perspective on policy so long as it is completely transparent and no subterfuge is used.

I am interested in gutting the entire social system we have built up over the last few decades!

So you voted Republican/Tea Party this last election?

Isn't that the common refrain? "BOTH SIDES ARE BAD SO I VOTED REPUBLICAN."

I'll answer the rest of your verbose attempt at taking me down if you deny that. Otherwise, blow me.

Sun, 08/07/2011 - 15:25 | 1533494 Doyle Hargraves
Doyle Hargraves's picture


"I am in favor of the Democratic Party's general principles, not how they vote or govern"-If they do not vote or govern their principles than that makes them fake which makes you fake. I do not compromise my principles and the only pol I half way trust is Ron Paul, and as far as I have seen via his voting record he votes on principle. There is not one democrat out there that can say that debt brotha included, because as you said they don't vote or govern their principles which makes them liars and fakes if you want to admit to being a part of that you do so at your own discredit and ignorance.

It is a common refrain for democrats maybe, most people with a fucking brain can think for themselves, first off last election I wrote in my candidates, and I have ZERO party affiliation. I don't need you to answer anything your answers so far have pretty much implicated that you are exactly what I said you are, and you haven't said anything yet that disputes my claims so I will make it again you are ignorant and I hope no one relies on you for their well being but yourself because they will be very disappointed when SHTF. Second, I believe in God so homosexuality is out for me, though I hear it is a commonly accepted practice where you come from.

It is always funny to see you bitchez resort to name calling and telling people to participate in vulgar acts when you have no argument to speak of. I am very sure, like every other sheep in the "democrat good tea party bad, though I don't know why I believe that" paradigm you voted straight down the ticket democrap last election because you didn't think for yourself. As I said, I wrote in my candidates, and usually always do, no party affiliation required, that is if I even vote, it is much easier to call the system corrupt (because it is), and pontificate about how our problems will not be solved at the ballot box, but with the ammo box (that moment is coming in short order).

"So you voted Republican/Tea Party this last election?"

It is always funny to see you libs assume those of us who want to end the welfare industrial complex (something you have purposely ignored, which validates my assumption you benefit heavily from its existence for your subsistence) always vote republican or tea party? Have you ever thought just for once, that others outside the extreme lib wing of the democrats want to end the welfare state? It is incomprehensible for you to imagine that anyone would not want free money (free as long as there is a gun at my head taking it, then it is free for someone) and would vote against the welfare state except those mean ole tea partiers. I am an anarcho-capitalist (yes I know it is a big word for someone with such a limited intelligence as yourself), and I despise the state in general. Many if not most would gladly get rid of the welfare state in order to get the state out of our business. We just wanna be left alone! You libtards will never understand that you are the minority, you are the only ones who want the welfare state to continue. Most fair minded folk know it cannot continue, because of the fact we are broke and it does not benefit anyone but is a waste of valuable resources that could be used much more efficiently had the gubmint gun not reallocated them. You have spent so long in that democrap box you have lost touch with any sense of reality and any ability at reasoning except for those that agree with you. Which again, makes you ignorant.

When you parasites realize that the social programs are no more because we the productive will not pay for them ever again, you will eventually have to accept that and plan accordingly for some other line of work that may even be beneficial to our society in someway, or even add value, if you can get your mind around that concept, as oppose to what you do now.  I do not consider my response a manifesto, but rather a considered response to a very ignorant person who believes very strongly in something that they have no clue or idea what it really represents. It is a shame you are so limited in your sight because you don't even see the wreck approaching you which is why I hope no one else relies on you.

As far as my 'verbose' attempt at taking you down despite my bellicosity towards your very weak position, I fear I haven't taken you down, you have taken yourself down through your own ignorance. I am sorry that thoughtful response is considered a manifesto, whereas a short blow me, or some other fairly thoughtless remark would suffice in clearly laying out my position in such a concise way you may be able to wrap your feeble, uneducated mind around it, and not have to use dictionaries to understand where I am coming from. Please spare me your childish one liners and other name calling responses to my 'verbose' manifesto, as I do not want you to have to work too hard on a sunday on something that has only taken me minutes to prepare. Of course just in case what I have just laid out is over your head (which judging fir our conversation so far, it is), I will leave you with this last link that will sum up my overall opinion of your understanding of anything at all...(and it is shameless self promotion).

Sun, 08/07/2011 - 11:25 | 1532546 slewie the pi-rat
slewie the pi-rat's picture



timmah is doing his job
S&P is doing its job 
neither one of them wrote the styoooopid law
neither one of them runs the CB0

we are always operating under our assumptions
tyler might add to that:  + 1 agenda
so maybe:
                   forecast = assumptions + agenda
fight club!

Sun, 08/07/2011 - 11:33 | 1532547 Hansel
Hansel's picture

Why is it acceptable to ignore intragovernmental debt in debt to GDP calculations?  To pay the intragovernmental debt, the Treasury has to issue new debt.  Using the full $14.56 trillion debt, the U.S. is already at 97%.

Sun, 08/07/2011 - 11:25 | 1532549 At120
At120's picture

At least the S&P has the courage to downgrade.  Moody's is owned by Obama's A-Number-One Wall St Boy Warren Buffett and Fitch is in bed with the government. 

Sun, 08/07/2011 - 11:36 | 1532603 WestVillageIdiot
WestVillageIdiot's picture

Am I the only one that thinks this makes Moody's look like a collection of royal, Grade-A, douche bags.  If this were the 50s newspaper business we would say, "they've been scooped".  They really fucked up by letting S&P do this first.  While Moody's was out taking a piss S&P decided to pull back the curtain. 

Sun, 08/07/2011 - 11:26 | 1532551 I am a Man I am...
I am a Man I am Forty's picture

geithner:  i can't believe these assholes won't let us kick the can down the road longer than 2015!

Sun, 08/07/2011 - 11:38 | 1532609 WestVillageIdiot
WestVillageIdiot's picture

More like, "I can't believe that guy came in my hair last night.  Now I can't get it to lie down."  He then pulls up the Net and sees that S&P downgraded the U.S. 

Sun, 08/07/2011 - 11:28 | 1532562 g
g's picture

All the important numbers are spun and twisted bullsit. What is the status of that MIT price project? There are so many distortions to the market. manipulation by powerful parties, movement that is noy based on fundamentals, whats the point? The argument for PM's is strong and seemingly correct, , what else is there.

Sun, 08/07/2011 - 11:32 | 1532576 thunderchief
thunderchief's picture

If the markets sell off then where does the money go?  USD, Money Markets, Treasuries?  Seems self defeating.  Gold did well, and silver took another drive by shooting this week.  Me thinks this is another way of washing out more money from the small guy.  We will all become poorer human beings when this is done.

Sun, 08/07/2011 - 11:37 | 1532608 snowball777
snowball777's picture

C'mon S&P...we really really promise to do something about it eventually....can't you see our super-duper-uber-congress?!

Sun, 08/07/2011 - 11:38 | 1532611 Downtoolong
Downtoolong's picture

Any economic forecast for 2021 is laughable these days by its mere existence when the so-called best of the best Wall Street economists radically change their outlooks every three weeks.

I’m fairly certain that somewhere on a distant planet there is a pile of gold the size of the Empire State building. But, I’m not going to plan my retirement spending on the assumption that I can find a way to get there and bring it back.

Sun, 08/07/2011 - 11:39 | 1532614 Ying-Yang
Ying-Yang's picture

Lucy was holding the can. I was heading straight for it. The crowd was on their feet and damn if she didn't pull the can away right as I kicked.... (groan)

------Charlie Brown

Sun, 08/07/2011 - 11:40 | 1532621 I am Jobe
Sun, 08/07/2011 - 11:40 | 1532623 gwar5
gwar5's picture



"The King has no fucking clothes." -- Standars and Poor's


No big surprise all the numbers coming out of the government are fake. The magical accounting is the facade.  

But the S&P kerfuffle is about somebody willing to say that the numbers don't make any sense.  WH excuses are fig leafs. 


"Show us the numbers! ...Ha! ha! ha!....  Show us the numbers!"  -- Spring 2009, Chinese economic students literally laugh Geithner's US economic projections off the stage at the University of Beijing.




Sun, 08/07/2011 - 11:42 | 1532628 mailll
mailll's picture

I remember during the 2000 election campaign, Bush and Gore were arguing over what to do with the projected 10 trillion dollars in surplus over the next 10 years. Today, we are arguing over how to salvage a 10 trillion or so deficit over the next 10 years.  So many smoke screens, I am having trouble reading the writing on the wall. Can anyone read it?

Sun, 08/07/2011 - 12:21 | 1532796 gwar5
gwar5's picture



"Abandon all hope,  ye who enter here."  -- unknown victim's last words, written on the wall in front of open portal

Sun, 08/07/2011 - 11:50 | 1532666 Die Weiße Rose
Die Weiße Rose's picture

America's interest on $14.5 trillion USD national Debt @ 3% is going to be: $435 billion per year !

As for the 2015 GDP ? - that is anyones guess....

in a Recession the Growth reverses and this will become more obvious as the Debt-Clock ticks on !

The Pimp was right : America is Debt Man walking

Sun, 08/07/2011 - 12:06 | 1532683 Miles Kendig
Miles Kendig's picture

The folks at S & P are about to find out how blind that chick that sits atop the courthouse really is....

Welcome to off South Main Street where we all know the dirtiest, most low down organized crime syndicate is the feds

Note to S & P - Now you need to issue an amended report (after consultations with the treasury and international monetary authorities) calling for 8% growth in economic, equity and real estate and 5% in wages each year that reassesses the US fiscal situation to surplus in 10 years.  Then everyone can really laugh at what a joke projections are while poking fun at government and the "independent" monetary authorities in various OECD nations.

Sun, 08/07/2011 - 11:57 | 1532686 Jason_1sandal
Jason_1sandal's picture

Would S&P downgrade the U.S. on fears of what the Italians may find ? Their offices were raided in Italy were they not.... and now the U.S. downgrade ?? Just sayin'

Sun, 08/07/2011 - 12:07 | 1532725 blunderdog
blunderdog's picture

In a real sense, I'd say a $2 trillion error is irrelevant.  Even if it were a $10 trillion error it'd be irrelevant.

The international financial system is hopelessly broken.

It's not a question of a few trillion here or there being critical to the "recovery."  It cannot recover.  It doesn't matter if it's a $2T or $4T or $50T error.

Sun, 08/07/2011 - 12:08 | 1532730 gwar5
gwar5's picture




White House

S&P: "You're pretty darned fucked."

Obama: fuck you

S&P: fuck who?

Obama: fuck you

S&P: No, fuck you

Obama: fuck who?

S&P: fuck you.

Obama: No, fuck you....



Christine Romer: "Uh....yeah, well, we're pretty darned fucked."

Bill Maher: "Fuck you! Obama fucked up. He's not your boyfriend, stop protecting him."

Romer: fuck who?

Maher: fuck you!

Romer: I wish.





Sun, 08/07/2011 - 12:35 | 1532842 Die Weiße Rose
Die Weiße Rose's picture

I don't really care about all this crap anymore...

I's just like watching Roadkill get run over and over again -

and then Frankenstein trying to resurrect the gruesome remains....


Sun, 08/07/2011 - 13:14 | 1532994 glenlloyd
glenlloyd's picture

The real issue at the heart of it is that we've come to this point to begin with.

All the other posturing and flailing about is just the reaction to a scoring by S&P that has long been overdue; the result of the bad decisions of the past and present.

At the end of the day if you don't want these kinds of consequences then you shouldn't take the path that leads to them. To do so and not expect these results is to believe that the US can defy the laws of physics.

Sun, 08/07/2011 - 13:30 | 1533060 Hohum
Hohum's picture

When the Federal Reserve announced a six month QE2 of $600 billion and the US Government was projected to have about a $600 billion deficit (or a little more) during those six months, it was pretty obvious AAA was history.

Sun, 08/07/2011 - 13:51 | 1533163 zerozulu
zerozulu's picture

I'm not accountant, but if you check Israeli books you may find missing 2 Trillions there.

Sun, 08/07/2011 - 14:09 | 1533242 A Nanny Moose
A Nanny Moose's picture


Sun, 08/07/2011 - 17:56 | 1534049 diesheepledie
diesheepledie's picture

The SP downgrade is irrelevant, and already priced into the market. The Fed just announced that US bonds would still be counted as AAA-rated under risk management regulations. And as long as the Fed prints the reserve currency it makes the rules. Not until we get the much sought after (by some) alternative reserve currency, will 3rd party rating downgrades mean anything to the US.  

Mon, 08/08/2011 - 00:11 | 1535568 oa92000
oa92000's picture

what rating S&P gave it to Bank of America before everything collapse??

Wed, 09/14/2011 - 05:02 | 1667490 chinawholesaler
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