General discussion

S&P downgrades US debt

Well, it appears that the current 'solution' for the debt crisis did not impress bond holders. First, China downgrades the debt. Now a more-or-less credible rating agency downgrades the debt with a warning about future downgrade possibilities:
United States loses prized AAA credit rating from S&P | Reuters
S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficit and rising debt burden. The action is likely to eventually raise borrowing costs for the American government, companies and consumers."The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement.The outlook on the new U.S. credit rating is "negative," S&P said in a statement, indicating another downgrade was possible in the next 12 to 18 months.

My suspicion is that each end of the political spectrum will blame the other, but IMO both sides have acted recklessly and this downgrading of US debt is probably past due based on the long term deficit with no end to deficit spending in sight regardless of who is in charge of the government.

Discussion is locked
Reply to: S&P downgrades US debt
PLEASE NOTE: Do not post advertisements, offensive materials, profanity, or personal attacks. Please remember to be considerate of other members. If you are new to the CNET Forums, please read our CNET Forums FAQ. All submitted content is subject to our Terms of Use.
Reporting: S&P downgrades US debt
This post has been flagged and will be reviewed by our staff. Thank you for helping us maintain CNET's great community.
Sorry, there was a problem flagging this post. Please try again now or at a later time.
If you believe this post is offensive or violates the CNET Forums' Usage policies, you can report it below (this will not automatically remove the post). Once reported, our moderators will be notified and the post will be reviewed.
- Collapse -
It's difficult to believe

...that one side or both won't try to use this politically against the other, but I think it would be foolish and counter productive for whichever side does. As little credit for common sense I'm willing to give any of them at this point, I think it's possible one thing they just might find bipartisan agreement on is trying not to make politics out of the S&P rating. I suspect the move will be for a bipartisan attack on the S&P rating.

- Collapse -
One thing is certain

but BO won't see it...he has to stop talking about (and doing it) 'investing' in the various programs he has been pushing during his campaign, such as 'research, education, and infrastructure' because most of those jobs are union types that help his buddies and not the majority of the people who are out of work. He needs to get rid of Geithner, privatize Fannie and Freddie, use the document that has already been made up since January about all of the wasted/duplicated departments that can be merged or closed down completely (which literally are in the hundreds of billions of dollars that could be saved immediately), and not wait until November for the 'committee' to find other cuts. This is not something that can wait any longer.

- Collapse -
RE: such as 'research, education, and infrastructure'

such as 'research, education, and infrastructure' because most of those jobs are union types.

You're against it because they might be union jobs? That's the only reason? Union people aren't taxpayers?..When they're not working aren't they also unemployed/out of work?

You consider a "union" a special interest group? How bout these special interest groups? Private businesses that use money to influence government.

How about these cuts?

The U.S. military's budget has ballooned with spending that "doesn't
defend our troops" and should be slashed, Obama said in a town hall
meeting with students at a Virginia community college.
"Well-connected special interests get these programs stuffed into the
budget even though the Pentagon says, 'We don't need these systems,' "
Obama said.
He said Defence Secretary Robert Gates has already found $400 billion in savings, and more can be found.
Savings can also be found in the federal government's health-care
outlays, Obama said, "through some common-sense reforms that will get
rid of wasteful subsidies to insurance companies."

- Collapse -
It's hard for me to understand

how anybody can believe anything that BO has to say...he's lost all credibility regarding financial 'statements/comments' he makes on the campaign trail. However, if Gates found $400B in savings, why hasn't it already been cut? If BO was serious about that much that could be cut, he would have already done it to make himself look better if nothing else.

As for Pentagon cuts...did you know, or even care, that we haven't had any serious upgrades in military equipment in over ten years? Don't you think it would be a good thing to have our military equipment be as up-to-date as possible instead of using out-of-date technology? How much of our planes, ships, helicopters, etc. do you feel should be scrapped or just stop building because you don't believe our military should still be the most powerful on the planet?

You don't think that duplicated departments and services should be merged or eliminated in order to save hundreds of billions and that waste should be the first cuts made? If BO wanted to use 'common sense reforms' he should be perfectly willing to do away with another health care program that is already detrimental to the USA and costing over a trillion (not to mention it cuts $500B from one of the VERY programs he proclaims to want to save). Common sense would be to put the thousands of people back to work in the Gulf that he deliberately shut down....not to mention the thousands he's putting out of work conveniently through the use of the EPA. He's a selfish pig with a green agenda that ISN'T working regarding creating jobs like he said...instead it is killing the economy in a huge way, but he refuses to stop it because he honestly doesn't care about the economy of the USA enough to sacrifice any of his own personal agenda.

- Collapse -
I'll just focus on one point
Don't you think it would be a good thing to have our military equipment
be as up-to-date as possible instead of using out-of-date technology?
How much of our planes, ships, helicopters, etc. do you feel should be
scrapped or just stop building because you don't believe our military
should still be the most powerful on the planet?

IF you can't be the "most powerful on the planet", and you're spending this kind of money compared to "the Evil Empire", it's time to rethink your strategy/pack it in/give up the ghost/say uncle.

List of countries by military expenditures

From Wikipedia, the free encyclopedia

You can have your cake OR you can eat it.

IF you want to spend billions on military (which also requires research, education and infrastructure) which YOU want to forego, I'd be interested in how you think that would work.
- Collapse -
BO's idea

of research is stuff like stem cell research, his idea of education is to make sure liberals keep rewriting the books to change history and include gay education, and his idea of infrastructure is mainly for state highways (let the states take care of them) so he can keep the interstate commerce control, not military bases. The military has most of the equipment and manpower to maintain their own. The money I want to see spent on the military is in actual new equipment...ships, planes, tanks, technological advances, which, unfortunately have all been sliding backwards rather than going forward. The jobs BO wants to 'create' are all payback types for the unions and not the common worker. Unions only represent 1% of the workforce in the USA, and BO is focused entirely on those types of jobs in order to keep that campaign money coming...and it doesn't matter to him who picks up the tabs for those benefit packages and high wages. He is trying to become FDR with all the programs he put into place and it's not going to work...the government cannot create jobs except for within itself by creating new departments...and BO has gotten real good at that.

- Collapse -
We are fighting all new wars

This is not a WWII war (any of them). Tanks and ships cannot get into the hills of Afganistan or the deserts of Iraq; it takes boots on the ground and soldiers working with the locals and commanders understanding that you can't just come into a village and say burn the village like they did in Viet Nam (we saw how well that worked out). We have to give them something to lose so they will fight our enemies that want to destroy them. We have to have drones that keep an eye on things and find out where the enemy is going and is holed up. We have to have the equipment that keeps soldiers safe since we have a limited amount of them.

We were caught with our pants down on 9/11 and we still don't have all the intelligence we need. One of the problems has always been that the President needs a devil's advocate that will take the opposite side of what the President wants. I don't know if Obama has one but I know that Bush didn't. Disagreeing with Bush was a career-ender.

You talk about eliminating funding of research, education, and infrastructure because they are union jobs. Whether they are union jobs or not is immaterial to me. Who do you think is going to fund these things.

Research, esp. for orphan diseases, needs to happen. I do believe that drug companies should have to pay a percentage of their profits for research that is paid for by the government instead of getting it for free.

Education is important to everyone. I know that, if I had to pay tuition to a state university, I probably would not have gotten a college degree. I do believe that student loans has been to the detriment of students. The schools feel that they can just keep raising tuition and the student can get more loans rather than trying to make it more affordable.

As for infrastructure, who do you think built the interstate highways? It was a Republican President. Are you going to refuse to drive on them because they used Federal funds? Are you going to refuse to have anything to do with basic research or schools because the Fed has had something to do with it?

I agree with you that there is too much duplication in the government bureaucracy at all levels. Of course, if they eliminate them and put all those people out of work and throw them on unemployment, are you going to blame Obama for the unemployment numbers going up?


- Collapse -
Those people shouldn't have been

hired in the first place when other departments were already in place that did the identical jobs...

That said...the Federal government has no business being in the student loan business. They had no business going into the car business and then lose over $1.4B when they sold off the stock early. They had no business spending billions on Cash for Clunkers, Cash for Caulkers, house buying credits, they had no business using the EPA to deliberately shut down fossil fuel companies in the Gulf, WVA, Tenn, and Texas to name a few and forcing so many out of work and keep extending unemployment benefits for people they put out of work in the first place, they had no business giving a blank check to Fannie and Freddie, they had no business giving a trillion dollars in stimulus money to specific targeted companies that were on BO's green agenda and watch those very companies fold within a year or less, they had no business forcing a healthcare program on the USA when they knew it would cause insurance rates to skyrocket and that they were cutting Medicare by $500B to help pay for it and that they increased the IRS by 1600 employees to police it, they have no business now insisting that because of S&P 'entitlements' such as Medicare, Medicaid, and Social Security has to be reformed quickly and NEVER ONCE mention all the entitlements that Federal employees are getting with their union benefits and pensions as something else that needs to be reformed.

Education IS important to everyone...however, the TYPE of education our children gets shouldn't be left to liberals alone to decide te type they get. The schools also keep raising tuition because instead of the State supplying that tuition thru grants and scholarships, the Federal Government has gotten involved and when you have a guarantee for something, you increase the rates because you CAN and you can get away with it easily since the State (which is a more local monitor) isn't involved as much anymore. The mentality of everybody anymore is that if somebody is going to GIVE you something, TAKE it and run.

The only reason the Federal Government got involved with the interstate highway system was because it gave them a reason to create Interstate Commerce rules and revenue.

Medical research, in my opinion, shouldn't be funded by the Federal Government. If a company does research and ends up with a product that they can make a profit on, that product is patented at a high cost in order for them to recoup their investment.

One of the ways that the Feds can get revenue quickly is to make a deal with the huge corporations that have their money overseas and pays no taxes on it that if they bring the money back to the USA, they will get a very reduced tax break on it for a specific amount of time with the understanding/guarantee that every dime of revenue in taxes that gets collected on it will be used to pay down our national debt.

- Collapse -
Toni, about "liberals" and education...

Liberals do not determine what kind of education our kids get.

- Collapse -
Grim, not everybody can afford...

Grim, not everybody can afford the freedom to chose colleges. Many people have to chose an in-state and/or local school. living at home is cheaper than living in a dorm.
On classes when in school, they might find with a class required for their degree, the choice of professors teaching it is limited.
I can't help but remember the person who taught the required 1st year English class in college. He was the Faculty Adviser to the SDS. If you didn't agree with his political views, your essay and therefore your final grade suffered. Fortunately in my case, I went to the Dean of Men and my grade was changed. What changed it? I told the Dean of Men some of his essay assignments were out of line, mentioning one in particular. The SDS teacher denied doing it. I gave the Dean of Men my of one copy of the essay subject lists. The Dean said in a very harsh voice, "Did you do this!?". The teacher's face turned white, and he started stammering. After one further question, my grade was raised to a "B". Oh, BTW, I didn't chose that teacher. As in the case of some Freshman required classes, there were many of those classes running at the same time, and when you showed up for the 1st time in the class you got, you got the teacher who was assigned to that particular class.
There were other classes taught by just one professor. You didn't have a choice, and if they had a strong view of something, and not agreeing with it could have a bad effect on your final grade.

- Collapse -
but those issues are not "liberal" issues

Look, everyone has a run in with an *** of a teacher.

- Collapse -
Grim, do you think...

Grim, do you think that at Berkeley, the students are exposed to any near as many conservative professors as they are liberal ones? I could ask that about many other universities in California and other places.
Your school situation might be like mine, although in my 1st one there was a basically equal balance. But I refer to the idea that in the first school you had to take many courses about things in which you had no interest, but in the second one you concentrated on a subject in which you had an interest.
That's what I found, #1 was O.K., but #2 was a great time, even if my diet was not all that good. Thank heaven for scrambled egg sandwiches and Kraft "Blue Box" Macaroni and cheese (grin).

- Collapse -
canned tuna and mac n cheese.

Call it what you want to... Tuna Noodle Casserole, Tuna Surprise, or "Oh, That Sh*t Again".

- Collapse -
One point
............ since the State (which is a more local monitor) isn't involved as much anymore. The mentality of everybody anymore is that if somebody is going to GIVE you something, TAKE it and run.

The state governments are the same as individuals when it comes to federal money. They all want more of it.
- Collapse -
Diana, let's not forget...

Diana, let's not forget Syria and Obama's war (or whatever you call it) there.

- Collapse -
please give some proof to substantiate your comment

how is Obama involved in Syria?

- Collapse -
My error, Grim...

My error, Grim. I meant to say Libya. I have been back and forth reading and visiting the Forum and slipped in my typing haste. Grim, have you seen much mention of Libya lately when the cost of Iraq and Afghanistan are mentioned? It seems to me that lately that is left out.

- Collapse -
well, it is left out, but that is partly...

... because of the fact that many European and Canadian resources are being brought into action there.

- Collapse -
TV shows too

We liked "warehouse 13", but recently they messed it up by adding a gay theme with a new character, so it's off our list of viewing materials.

- Collapse -
Bhuddism ?

So it's pro gay and anti christian ? Did you notice how they have some female lead characters on that show too? Just shocking...

- Collapse -
Obama is a TV writer now?

A gay story line on a TV show is somehow his "fault?"


And you really stopped watching a show you liked just because they introduced a gay character?

Double wow.

- Collapse -
That's funny

I enjoy Warehouse 13 and will continue watching it. PS I also like Eureka and I don't really care what the characters are in terms of religion, sexual orientation, race, or anything else. These are works of fiction.


- Collapse -
As an Air Force brat, I've heard all my life

about Congress critters bargaining and voting for military hardware that the military doesn't need and doesn't want because it's made in that Congress critter's district. Then it's put in the military budget so the President can't veto it without vetoing the whole military budget.

We always go into a war unprepared and gear up afterwards. That's why the troop carriers were not armored then and are now. That's why we went into WWII without enough of anything. You get the idea.

Unfortunately, the Congress critters are more concentrated on what's good for their district instead of what's good for the country. Until that happens we are going to continually have problems like now.

The Tea Party concentrates on cuts without even letting the tax breaks go away while the big banks and corporations that are getting the breaks are sitting on tons of cash because they don't know what the government is going to do from one day to the next.


- Collapse -
I wonder what will happen...

I wonder what will happen with investment funds that require that bonds held be rated AAA. Will they be required to dump, and if so, what will happen to the markets if they do? When the markets open on Monday, things might get somewhat wild for a while. All we can do is to wait and see what happens.

- Collapse -
What will happen

They will rewrite their governance to keep holding what they have.

- Collapse -
Since both sides caused it.....

....each side would be half right to blame the other. We didn't even have to default; just the fact that we were (apparently) willing to in order to make some kind of political point was enough to scare our creditors. Imagine if you had a loan and you went into the bank and told them you were thinking about skipping or reducing a few payments. Even if you ultimately decided not to do it, the bank would put a note into your file that would likely impact the next loan you applied for.

If Obama deserves any blame, it's for not jumping on this issue last year when he probably could have forced a deal way ahead of this deadline. But the back-and-forth we saw over the last few weeks showed our Congress (both sides) at their worst. They should all be summarily tossed out for this.

- Collapse -
creditors vs raters

<i>"just the fact that we were (apparently) willing to in order to make some
kind of political point was enough to scare our creditors.</i>"

S&P is a rating agency. They are not our "creditors". So far our creditors are still holding our debt and some are buying more, supporting it as a safe haven during this world wide economic situation.

- Collapse -
I admit. I was wrong. I gave too much credit.

I thought maybe the Democrats had a few scruples and common sense left. I now realize they are devoid of both. Looks like the Democrats in particular are going to try and make political hay out of this situation which they were entirely complicit in themselves as much as anyone else. Some would say more.

Vice President Biden met last week with House Democrats who described Tea Party lawmakers as "terrorists."

"The fact of the matter is that this is essentially a Tea Party downgrade," Obama campaign adviser David Axelrod

I think they've been smoking some of that tea, not just drinking it," former Democratic presidential candidate and Democratic National Committee Chairman Howard Dean said.

Harry Reid and others have been hammering the Tea Party throughout and since the debt-ceiling debate, casting the movement as public enemy No. 1

Sen. Tom Harkin condemned what he described as an effort to "appease the hostage-takers," saying most Americans "have no use for the Tea Party extremists."

Sen. John Kerry, D-Mass., also said the Standard & Poor's decision was "without question the Tea Party downgrade"

Rep. Steve Israel, blaming the downgrade on the "Roadblock Republicans" who "forced" Boehner to abandon a bigger deal with the president.

- Collapse -
listen to yourselves...

There is little difference between social entitlements and military entitlements.

CNET Forums