Credible observers have begun to question the strength of the U.S. government's AAA bond rating. Listen to David Walker, former controller general, writing in the Financial Times:For too long, the US has delayed making the tough but necessary choices needed to reverse its deteriorating financial condition. One could even argue that our government does not deserve a triple A credit rating based on our current financial condition, structural fiscal imbalances and political stalemate. The credit rating agencies have been wildly wrong before, not least with mortgage-backed securities.
How can one justify bestowing a triple A rating on an entity with an accumulated negative net worth of more than $11,000bn ... and additional off-balance sheet obligations of $45,000bn? An entity that is set to run a $1,800bn-plus deficit for the current year and trillion dollar-plus deficits for years to come?
If you're in the same camp as Salon.com columnist Michael Lind, you might not deem Walker, a prominent figure in the "Fiscal Wake-Up Tour," a credible source. Perhaps you think he's part of the right-wing scare machine or the "anti-Social Security" lobby. OK, then, how about Moody's? Back in January, the debt-rating company proclaimed that the US was at risk of losing its top-notch triple-A credit rating within a decade unless it curtailed soaring healthcare and social security spending. (Read the report in Financial Times.)
In a more recent story, Reuters quotes Peter Morici, a professor of international business at the University of Maryland: "The triple-A rating is undeserved. Because the U.S. can print its own money, it won't formally lose its AAA, but in reality, the bonds are as risky as bonds that are below AAA. ... If Washington were a state capital, we would have lost the AAA with the current budget."
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here's the key for me: ..."..losing its top-notch triple-A credit rating within a decade unless it curtailed soaring healthcare and social security spending."
ReplyDeletethis is not new. This is not a "Obama is killing us" moment.
Clinton and both Bush's were given this same wake-up call as well as the last 4 or 5 Congresses...
right?
Okay.. so something as to be done.. I'll grant it.. and yes it's on Obama's watch but jesushkeerist... the man has been in office for 3 freakin months...
If after 4 (or 8) years we end up in even more terrible condition and lose our AAA because he did not act then yes.. let's consign him and his administration to the dustbin of history...
and yes.. he may end up being perceived as the Jimmy Carter of the 21st century but I just don't understand all the "the sky is falling.. RIGHT NOW THIS MINUTE Because we have a NON-Republican in office"
... snaps my socks....
what bugs me is that we are combing the "the stimulus is bad" ... with " disaster is downstream if we don't deal with the entitlement problem" to yield - " disaster is coming because of the Stimulus/Deficit".
Why are the two combined?
If the problem is entitlements - are we not willing to give Obama a chance to deal with it... since we gave the previous Presidents their entire terms?
I just can't figure this out....
Larry, you've got to get over the Obama thing. There's plenty of blame to go around. The Bush administration was a fiscal disaster. The Obama administration is a fiscal catastrophe. Congress, whether controlled by Republicans or Democrats, has been a big part of the problem. And the American people have been too busy running up their own debts to pay any attention to what Uncle Sam is doing. Ultimately, the problem is our system of governance run by special interests and craven politicians.
ReplyDeleteAlas, if half the population of the U.S. perceives any mention of unsustainable fiscal policies as a partisan attack on Obama and a Democratic Congress, then we don't have a prayer. Seven more budgets like the current one, and we're all doomed.
Let's talk facts, figures and economic theory. Obama's defict is 4 time the size of the Bush deficit. FOUR TIMES AS LARGE. And Obama's plan to cut the deficit in half rings pretty hollow when that cut in half only happens after the deficit has been quadrupled.
ReplyDeleteHere are some facts:
http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/
Sorry LarryG but this quadrupling of the deficit is absolutely, positively Barack Obama's fault. A continuation of the Bush deficit could be blamed on Bush. Maybe even a 20% or 30% or 40% increase in the deficit. But quadrupling the deficit? That's on Obama.
And here's the kicker - Obama has no plan to return the US to economic health other than a broad based government takeover of many formerlly private industries. Which, in review, was exactly his plan all along. And it's his plan because that's the best way to redistribute wealth from those Obama deosn't like to those he does.
But storm clouds gather on the horizon of the New Messiah - Today, he got his head shoved up his butt by the Democratically controlled Senate over the Gitmo shutdown. He lost 90 - 6. 90 - 6? So much for the finely tuned political ear of BH Obama. And remember the dishonest and illegal bullying of Chrysler creditors to force more money into Obama's union friends. Well, not so fast ... now the Indiana teachers' union is contesting the restructuring plan:
http://www.ft.com/cms/s/0/b3c8beb8-4564-11de-b6c8-00144feabdc0.html
His schedule on bringing the Americans out of Iraq has slipped. And now he's facing a dilemma like Bush once faced, this time in Pakistan. The Taliban are running amok in Pakistan. Pakistan has an estimated 35 nukes. Will Obama invade a soverign country - without a declaration of war and without consent of the United Nations? Count on it. And he'll do it within a month. I wonder if he will declare his own actions unwarranted, illegal and wrong-minded.
Longer term, most Americans now oppose abortion in some circumstances. Will the Republicans get a chance to point out BHO's own "abortion at any time" philosophy as the new Supreme Court justice seat is filled? And will the GOP keep showing those sonograms that have convinced a majority of the American public that "there really is a baby in there"?
The Honeymoon is over Mr. President. And that cold wind you feel every time you give a speech or hold a press conference? That's Dick Cheney. He's going to keep people focused on just what you are saying and doing vs. what you said you'd do during the campaign. Cheney is smart, tough and he's got nothing to lose. The Republican plan is getting clear - Cheney is portrayed as the voice of sense from the Bush Administration who will now keep the crooked political machine from Chicago honest. And Newt will do the same for Mrs. Pelosi. Joe Biden is self-mocking and doesn't need a shadow. Will this work? Maybe, maybe not. But it proves the Republicans are starting to get re-organized after 4 years of utter chaos.
Finally, I believe that both VA and NJ will elect Republican governors this fall (I don't necessarily support these candidates but I predict they will win). Those are the only 2 gubenatorial races in 2009. Will the Dems really go 0-2?
The Times They Are A Changin'....
"Sorry LarryG but this quadrupling of the deficit is absolutely, positively Barack Obama's fault."
ReplyDeleteI AGREE guys but as bad as this sounds, it pales in comparison to the REAL problem which is entitlements - Medicare and Social Security.
I just heard an interesting perspective.
It goes like this.
The so-called surplus that Clinton claimed was not a surplus at all - because it counted the Social Security trust fund as an available asset for general fund spending.
When in reality.. if you treated the SS trust fund as "off budget" like it should have been.. there was no surplus but instead a deficit.
We can blame all those involved.. yes... but truth is.. we did not... we forgave the Bushies because we got a great big "oweee" from the terrorists so he decided that spending money on the war on terror was not real money..
So yes.. Obama has quadrupled the deficit and what do the economists say about this?
Don't they say that it was necessary for the stimulus to take the economy out of a death spiral?
Give me the names of the economists who say otherwise.
And Groveton.. I'm surprised at you.. I mean even I knew what Obama was going to do ... if he was elected.
how were you so easily fooled?
and you've gone from Obama to Cheney?
Holy Moly..... Groveton...
If that guy was in charge, we'd have 5 wars going on instead of 2....
and you say the Republicans are getting "organized"...
what are you drinking (or smoking) boy?
pray tell.. what should we expect from the Republicans?
errr... I forgot.. they're no longer a single party but several.. who can't even agree among themselves on what they do agree on...
these are the guys that are going to run Virginia?
Bill Howell's GA and McDonnell are going to do what for Va?
what is their Agenda? What are they advocating that Virginia do for ...transportation.. energy policy, etc?
I heard that McDonnell is George Allen-Lite
wrong?
Groveton - Have you seen McDonnells website....especially the button that says "Issues"?
ReplyDeletehttp://www.bobmcdonnell.com/index.php/issues/
You know - this is proof positive that the Republicans believe that its all about the message and not the substance.
You might be correct - that McDonnell will win - but if he wins based on what he has proffered as his stances on the issues - then Virginians will deserve what they get.
I just cannot believe that we'd vote a guy into the top post in Va based on " will spend 2009 rolling out exciting new policy proposals that are innovative and solve the problems facing Virginia citizens. From transportation to education to health care,"
gawdomighty - it dang near June... half-way through 2009.. where are his "proposals"?
Is he waiting until the dust clears from the Dem Primary?
If that's the deal... it sounds like his "exciting" policy proposals are ...."configurable" so he's not running on his own vision but rather what he'll put up after he knows who his opponent is?
this is leadership?
Virginia deserves better.
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/22/AR2009022202003.html
ReplyDelete