What role has China had in the economic mess that we are now experiencing? Everyone is fighting. No one is acting like adults over this downgrade. S&P could be in some deep you know what if there are some additional bailout requests from Fannie Mae & Freddie Mac. They seriously screwed the US a few years ago by not calling the problems we were in.
But – there is more here than meets the eye. The problem is that the political infighting is so great and the losertarians at FOX are making so much mischief that we are in very very deep do. Scroll down, and check out what Hugh Hewitt has uncovered.
The Pink Flamingo knows next to nothing about economics. I do know a political set up when I see one. If S&P were not heavily involved with Democrat politics I would take them more seriously. As it is, I smell a rat.
“…Though the report does vaguely ask for reforms to various entitlements, it mentions Republican intransigence on raising taxes multiple times. Unlike earlier reports, this new one, with its projections for an accelerating amount of federal debt, assumes the extension of all Bush tax cuts “because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.”…”
Late last night, The Pink Flamingo emailed someone telling them something stinks. Why was the “world” concentrated on trashing the economies of the US and Europe, while allowing China, Mexico, etc. not to be touched? Is it possible someone is up to something?
The problem with the information presented is that the Daily Kos does not provide a proper link to their information.
I hate agreeing with Robert Reich, but I think he’s right on this one.
“...S&P’s intrusion into American politics is also ironic because, as I pointed out recently, much of our current debt is directly or indirectly due to S&P’s failures (along with the failures of the two other major credit-rating agencies — Fitch and Moody’s) to do their jobs before the financial meltdown. Until the eve of the collapse S&P gave triple-A ratings to some of the Street’s riskiest packages of mortgage-backed securities and collateralized debt obligations.
Had S&P done its job and warned investors how much risk Wall Street was taking on, the housing and debt bubbles wouldn’t have become so large – and their bursts wouldn’t have brought down much of the economy. You and I and other taxpayers wouldn’t have had to bail out Wall Street; millions of Americans would now be working now instead of collecting unemployment insurance; the government wouldn’t have had to inject the economy with a massive stimulus to save millions of other jobs; and far more tax revenue would now be pouring into the Treasury from individuals and businesses doing better than they are now.
In other words, had Standard & Poor’s done its job over the last decade, today’s budget deficit would be far smaller and the nation’s future debt wouldn’t look so menacing….”
“...It has long been obvious to all observers — to economists, to politicians, to anti-deficit groups, to the ratings agencies — that closing fiscal gaps will require tax increases, or the closure of big tax loopholes, or significant tax reform that will raise significantly larger sums of tax revenue than the system does now. Today, taxes as a percentage of GDP are at historic lows. Marginal rates on income and investments are at historic lows. Corporate tax receipts as a percentage of GDP are at historic lows. Perhaps taxes don’t need to rise this year or next, but they do need to go up in the future.
Otherwise, the math of deficit reduction simply doesn’t work. And that’s how the deficit reduction deals signed off on by Republican presidents like Ronald Reagan and George H.W. Bush came about.
Yet the action in Washington in the past year has all gone in the opposite direction. President Obama deserves some of the blame. Several months ago, he struck a deal with Congress to make the fiscal situation worse — extending the Bush tax cuts for two more years and enacting a temporary cut in the payroll tax.
But Congressional Republicans deserve much more of the blame. For this calamity was entirely man-made — even intentional. The contemporary Republican Party is fixated on taxes. It possesses an iron-clad belief that the existing tax rates should never go up, that loopholes shouldn’t be closed unless they’re offset by other tax reductions, that the fact that hedge fund managers pay lower tax rates than school teachers makes complete sense, that a reversion to the tax rates of the prosperous 1990′s or 1980′s would be unacceptable….”
Are the Dems trying to kill the messenger to protect themselves, or are they correct? The Pink Flamingo suspects S&P of being political, in order to hurt the GOP and protect Obama. The problem here is our political system is so shattered by what can only be described as an uncivil war between the two parties that everyone is putting their own feelings and ideas into what has happened, instead of looking beyond their political inclinations and trying to see a broader picture.
Hugh Hewitt has the most interesting take on this entire mess. Durn if The Pink Flamingo does not agree with him! The Pink Flamingo is wondering if this isn’t part of a Chinese war on the US?
“…The US still has its AAA from Fitch and Moody’s (though in the case of Moody’s, there’s a negative outlook). And the US Federal Reserve and bank regulators said that the downgrade won’t affect the risk-weighting attached to US sovereign debt for banks – which means that US banks should not be deterred from lending to their government to any great extent.
More important, perhaps, is the attitude of China, America’s single largest creditor, which holds at least $1.3 trillion of US government debt and probably rather more, based on official figures.
If today’s remarks from the official Chinese news agency Xinhua are any kind of a guide, the Chinese government is rather anxious to protect the value of its apparently wasting dollar assets.
Xinhua said: “China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets…
“International supervision over the issue of US dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.”
In theory there will be a financial cost for the US government and US citizens, whose debt is priced off the interest rate paid by the government. Perhaps an additional half of a percentage point on interest rates, over time, according to some analysts? Perhaps an additional $100bn of interest costs for the US economy, according to the US bank JP Morgan?…”
Is it possible something nasty is going on against the West? These questions are not being asked because the right is fighting with the left, the Dems are fighting with the GOP, and no one is acting like a grown-up.