S&P verdict… Tea Party found innocent, Obama and both Congressional parties guilty

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Late yesterday, the judge (the S&P) issued a verdict on the status of the case involving the US economy, and exonerating the accused defendants (the Tea Party) of all charges leveled by the plaintiffs (the WH, both parties of Congress, and the media). Said accusations? That any repercussions of the debt ceilings debate – aka national credit ratings, general Armageddon, and all ensuing fallout – were primarily the responsibility … aka *blame*… of the grassroots, unorganized and unofficial movement referred to, generically, as the “Tea Party”. These accusations, without founding in any logical other than political demonization, were based on supposed influence on Congressional members, attempting to use the need for a debt ceiling increase, as the correct moment for also negotiating a path to fiscal responsibility.

Needless to say, fiscally minded tea party types were not rewarded with any action by Congress to control spending… gifted with only a patchwork promise to spend $2 trillion less than the projected $9 trillion over the next decade. So it becomes the height of irony that anyone can suggest the tea party had any significant effect on the negotiations. Instead, it came down to the age old party battles… the Dems wanting to raise taxes and ignore Medicare and Social Security reform, and the GOP wanting to cut spending, not raise taxes, and also ignore Medicare and Social Security reform.

Neither of these positions accurately reflect the Tea Party’s insistence that we can no longer ignore the entitlements, that no amount of tax increases will muster up to snuff for continued Congressional spending, and that attempting to draw more blood from the taxpayer turnips in this recession is foolhardy. Additionally, fiscal conservatives are fully aware that the size of government… hopefully worthless and effectual thousands of federal agencies and not our Constitutionally mandated military… needed to be reduced in size, streamlined in efficiency, or just outright eliminated.

Were any of these points even acknowledged, let alone addressed, in the political farce that played out before our eyes these past weeks? Of course not. And perhaps the one plan that may have had a shot at achieving what was necessary – the Connie Mack “Penny Plan” – has received little press or attention from the bigwigs who hold the nation’s fate in their less than adept hands. A plan that even liberal Lanny Davis said was worthy of a another look.

Unlike our current debt ceiling system, it’s very responsible in the process to consider budget when raising the national credit card limit. And the US debt ceiling process is unusual compared to other developed countries, “…since the U.S. debt ceiling process moves independently of the general budgeting process.”

That the authority to borrow remains so disconnected to budgetary constraints and considerations, as well as economic growth, in America is, IMHO, seriously flawed in and of itself. Other countries address their debt ceilings in ways that draw more attention to out of control fiscal spending. But the American way is, in some ways, backwards. First Congress spends, then ups the debt ceiling to pay for their spending….

As a Feb 2011 GAO study on the US debt ceiling, as compared to other nations process, notes:

The United States is unusual among the countries we reviewed in using the authorization of additional borrowing authority as an occasion to draw attention to past fiscal policy decisions. Other countries that we reviewed generally use fiscal rules or targets to increase attention to or control over fiscal policy decisions that lead to an increase in debt. Fiscal rules generally refer to permanent or multiyear constraints on fiscal policy through simple numerical limits on budgetary aggregates. For example, Switzerland has adopted a constitutional “debt brake” that places a limit on expenditures that is equal to the expected revenue for the year adjusted to reflect the country’s place in the current business cycle. Differences between estimated and actual numbers are recorded in a separate account that must by law be reduced if it reaches a certain level. Germany has adopted a “golden rule” limiting net borrowing to the amount of investment spending. Germany also approved a constitutional amendment in 2009 requiring that structural deficits not exceed 0.35 percent of gross domestic product (GDP)—or very close to balance.

~~~

The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay bills incurred. The decisions that create the need to borrow are made separately from—and generally earlier than—the decision about the debt limit. Debates surrounding the debt limit may raise awareness about the federal government’s current debt trajectory and also provide Congress with an opportunity to debate the fiscal policy decisions driving that trajectory. However, since this debate generally occurs after tax and spending decisions have been enacted into law, Congress has a narrower range of options to effect an immediate change to fiscal policy decisions and hence to federal debt.

Aside from this disconnect between spending first, then increasing the national credit card limit, it was also disingenuous of any of the negotiating parties… Obama, or either party leaders in Congress… to assume confidence that raising the debt ceiling, without considering the out of control spending, would be sufficient to maintain a good credit rating by the global agencies.

As I had mentioned in my July 14th rant against this political farce the WH and both political parties were subjecting us to, our national credit ratings were never based just on whether a debt ceiling was raised, but what measures the elected ones were going to take to get the out of control spending and debt under control down line.

Even Moody’s had warned the WH and Congress that the credit ratings outlook did not rest solely on simply raising the debt ceiling. Therefore it was no surprise to anyone paying attention that the Standard & Poor rating agency, as predicted, lowered the US credit rating from AAA to AA+ on Friday. Apparently, the only ones *not* paying attention were those with the power to negotiate.

What was the most telling point was S&P specifically noted that the guilt lies with the WH, and both political parties of Congress… the only authorities that had the power to:

1: address entitlements reform, but didn’t… and
2: fell way short of reining in spending and debt with the minimal S&P felt necessary.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process.

We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Standard & Poor (S&P)… …. is one of the most widely followed indices of large-cap American stocks when monitoring the markets, and one of the quintessential organizations known for their global credit rating prowess. They had delayed their opinion following the debt ceiling lackluster finale. But what is most interesting is that they felt it was fruitless to even wait to see what the so called “super” committee would come up with for additional remedies to reign in spending, and attempt to extract yet more revenue to support their spending habits from a private sector mired in stagnant economic growth.

Needless to say, all the guilty parties – Congress, both parties – are using the predictable event of credit deterioration to escalate the fingerpointing for political purposes. For the Democrats, Senate Leader Harry Reid insists the S&P was proof positive they were right in insisting for higher taxes. Not to be outdone, House Speaker returns fire, saying it was the fault of the Democrats, refusing to halt the spending binge.

Of course, it didn’t bode well for Boehner that it was only days before where he claimed he got 98% of what he wanted out of the deal… Obviously what Boehner “wanted” was never going to be enough to maintain the US credit rating, despite multiple warnings from sundry agents.

With conservative leaders like this, what’s a taxpayer to do? How can it be that we mere, dumb citizens knew that the deal was never enough, and these high paid elected ones did not? It was also disconcerting that GOP hopefuls, for the most part, either hid in the closet or headed for the hills… afraid to take a leadership position of any note.

Then comes along Obama, livid with S&P at daring to lower the US credit rating at such a delicate time in his political career. It didn’t take long before he sent out his mouthpieces to challenge S&P’s analysis itself… and obviously happened upon an Obama supporter who claims the agency’s analysis was flawed, but was sticking to it’s guns….

…. All off the record, of course. How extremely convenient. Just enough to float a rumor, and hope for public scrutiny and humiliation for S&P. What Alinsky Rules for Radicals number was that again?

S&P’s John Chambers made the talking heads rounds, pointing out that the WH indignation and attempts made not an iota of difference because it still came down to the very same facts….that the GDP to debt ratio will rise over the next decade because Congress… all parties… refuse to address what is needed.

John Chambers, head of sovereign ratings for S&P, skirted the criticism in a CNN interview Friday night.
“It doesn’t make a material difference — it doesn’t change the fact that your debt-to-GDP ratio … will continue to rise over the next decade,” he told “AC360.”

In July, S&P placed the United States’ rating on “CreditWatch with negative implications” as the debt ceiling debate devolved into partisan bickering.

To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a “credible” plan to tackle the nation’s long-term debt. Chambers said the slowness at raising the debt ceiling and the political infighting led to the move.

“That is what put things over the brink,” he said.

In announcing the downgrade, S&P cited “political risks, rising debt burden; outlook negative.”

“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,” the agency said.

Every word spoken exonerates the Tea Party and fiscal conservatives demand that Congress address the national spending and debt problem… all of which revolves primarily around entitlements that are taking the nation over the fiscal cliff. It turns out the grassroots movement was correct, and the elected ones were those who thought they could pull a fast one.

Now they can only shoot political bullets at each other for their folly. Small consolation for the real losers, as I originally predicted in mid July…. the American taxpayers of all political affiliations.

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Dang – and just when the Nobel committee was getting ready to award the president the prize for Economics. (Shhh – he’s trying to collect the whole set!)

Receipts and outlays for the last 5 years (in trillions):

Year- Spending- Taxes
2007- 2.782- 2.568
2008- 2.982- 2.524
2009- 3.5- 2.105
2010- 3.8- 2.162
2011- 3.8- 2.173

It’s pretty obvious what the main problem is. A good place to start to fix the problem would be to return government spending to its 2008 levels (the last budget passed before BHO). That would trim approximately almost 900 billion per year from the projected annual deficits. If, and it’s a big if, the economy ever gets back on its feet and generates the level of tax receipts it did in 2008, that will further reduce those deficits by approximately another 450 billion per year. That will take a big chunk out of the deficits perhaps even balance the budget and we haven’t even talked about cutting the size of the government yet. Just an idea.

http://www.usgovernmentspending.com/

Mata, I will make an EASY prediction right now. At the time of the next debt ceiling debate, in less than two years from now, S&P and Moody’s will once again threaten credit downgrades if significant action is not taken to repair the U.S.’s mid to long term credit outlook. Meaning, if we don’t address the deficit spending issues now, including the effects of Medicare and SS on spending, our credit rating will drop again.

It is well past time that the country actually took responsibility for itself in the here and now and stopped kicking the can down the road to our children, children’s children, and so on. I am disgusted by DC, and specifically, Congress, although I expected it out of the Democratic Party.

What can I say Mata….perfect!

Greg will be along to say if we had only allowed tax increases on the wealthy and corporate jets, none of this would have happened; in 3….2…..1

I’m sorry, I read that HALF the tea party members in the House voted for the bill which passed the Senate and was signed by Obama earlier in the week.

Just keeping you guys honest!

Every word spoken exonerates the Tea Party and fiscal conservatives demand that Congress address the national spending and debt problem…

Quite funny given how many TP house members voted to raise the debt ceiling.

Let’s face it, shall we? The TP is nothing more than a creation of the Republican Party to give the illusion of dissent. Controlled oppposition at it’s finest!

We have nothing to show for the 30+% increase in federal spending since 2008. No economic stimulation, no nothing. I would not count the TARP funds in the increase because they have largely been repaid. (It’s worth mentioning though, that TARP was never spent on the announced purpose, troubled assets. The funds were simply transferred to large institutions.)

But this is bad: Very little of the ‘stimulus funds’ were spent on the announced purpose, infrastructure. Instead much of the money was largely used to bail out unsustainable state employee pension funds, allowing the fund managers to continue pretending for a couple of more years that the pensions won’t go bankrupt. Other funds went to (temporarily) hiring more state employees.

I don’t remember starving dogs wandering the streets scavengning from emaciated human corpses back in 2007, back when the Federal government spent 30% less. Life went on just fine.

The Wall Street Journal reported on a study that concluded that historically, each new dollar in taxes has led to an avarage of $1.17 in new spending.

http://online.wsj.com/article/SB10001424052748704648604575620502560925156.html

If taxes are raised again, we can expect the revenue to be treated, once again, as found money that fell out of the sky. If they get another $500 billion in taxes, they’ll justify $600 billion in new spending. And the new spending will be used to buy more big-government gravy-train voters. I believe history, not promises of future behavior from this crew.

Cut spending to 2007 levels and keep it there. Discontinue all ‘economic stimulus.’ Cut discretionary spending. Lay off Federal workers. The guide to where to cut is: everything that is new since 2007.

In other words, now that everything else has failed, do the one thing that has not been tried.

Far too many people have this religious faith in Keynsian stimulus, and just assume that cutting government spending will tank the economy even further. They treat it as a fact of life and never question it. Thr original Keynsian idea was to store up a surplus in good times and run a deficit in bad times, not run deficits all the time. So what has been done is not really the Keynsian idea anyway.

Money entrusted in the hands of politicians will always be spent to gain power. That’s what happened to the so-called Social Security Trust Fund. The surplus meant to deal with the coming demographic bubble of Baby Boomer retirement was spent years ago on other things. The cash was replaced with T-bills; IOUs in other words. Looted, empty, gone. The more money they are given, the more they will spend and the more the spending will be used to corrupt the public into looking to the government for everything.

Stop scaring the crap out of businesses with new regulations and harassment and mandates. Just get off their backs and get out of their way. They will invest the trillion dollars in cash they are sitting on once they feel it’s safe to proceed. That’s the real stimulus and it won’t cost the government a dime.

If we want to actually stimulate the economy, why do no more than cut federal spending.
Note that EVERY state has an EPA thus the federal EPA is redundant and we can not afford same.
Cut the EPA and their regulations from the Federal Government and just watch the economy start to recover.

S&P Named the Republicans: http://on.wsj.com/oHyvKm

“Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this 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. ”

The Tea Party is guilty since this has not happened before.

@Carl:
The Federal EPA does not do anything in states with compliant EPA organizations except give them the funds to exist. There is not any overlap.

@nobiggovduh:

Because this is your very first post at FA, I would like to make you aware that cherry-picking one carefully chosen paragraph from a lengthy press release, while ignoring the remainder because it doesn’t agree with your position won’t work here.

In fact, here’s a paragraph from the press release which flies directly in the face of what you’re trying to shovel:

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.

Furthermore, you should be aware that S&P previously warned that there was a 50/50 chance of a downgrade if legislation containing less than $4T in deficit reductions was put into place:

Chambers adds: “But $4 trillion would be a good down payment. We thought that..if policy makers could deliver the goods on that, then that would be a strong sign on our political scores and eventually on our projections on the fiscal side.”

S&P has already said it may slash the Triple-A rating if a debt ceiling deal is not accompanied by what it deems is a credible plan to cut the $14.3 trillion federal [debt] by $4 trillion. The plan has “to have bipartisan support,” Chambers said. “If you have a plan that is only backed by one side or the other, even if you got it through, you would be faced with the prospect of it being unwound.”

So, S&P’s Chambers is saying the ratings agency wants to see at least a $4 trillion deal, one that would come with bipartisan support, too, because the ratings agency fears without that support, Congress will upend any debt-cutting plan.

So, who put forth the only $4T plan?

Oh, that’s right. House Republicans, with the backing of the Tea Party.

Who else supported that plan?

Oh, that’s right. House Democrats voted for that plan too.

Now, this is where it gets tricky for you and your myopic thinking…. Who killed the $4T plan that would have signaled a level of seriousness to S&P and the other ratings firms?

Oh, that’s right… that plan was killed in the Dimocrat controlled Senate.

So, to sum up what we have here…. we have S&P clearly stating that they were looking for a sign of seriousness and that they considered a $4T with bipartisan support to be the bellwether in that regard. We have a $4T plan passed by the House with partisan support which was then killed in the Dim controlled Senate.

Your analysis fails the laugh test even upon a very cursory examination.

The Federal EPA does not do anything in states with compliant EPA organizations except give them the funds to exist. There is not any overlap.

Wow. Really?

Cite some sources for that one please.

Fully HALF the members of the TEA PARTY in the HOUSE voted for the US to raise the debt-ceiling by $2.4 TRILLION.

Your flacid attempts to explain away the failure of the “Tea Party” to abide by their pledge of “Smaller Government” is duely noted.

@MataHarley:

“Tea Party” is not an official party but a movement comprised of those non-elected taxpayers who are fiscally conservative in reining in goverment spending.

If this is true, why did you write your title as if the Tea Party was in fact an official party?

Be consistent.

The Standard & Poors explanation mainly blames the Congress, not so much the President. It criticizes both parties, but criticizes the GOP to a greater extent, for being so obstinate about not increasing taxes, for digging in to preserve the Bush tax cuts, and for ending up with an inadequate plan.

Taxes need to go up. The “Greatest Generation” not only won WWII, they taxed themselves sufficiently to steadily pay down the debt/GDP ratio, while funding the Marshall Plan, GI Bill, Interstate Highway system, the Great Society, Vietnam War, and everything else.

This debt pay down ended when we embraced the fanciful if appealing notion that massive tax cuts would pay for themselves by generating so much extra economic activity that they would pay for the lost revenue engendered by the tax cuts. This is now one of the most discredited economic concepts in history.

Yes, we do have a spending problem, but we need to spend more on infrastructure, not less. We need more basic R&D (inadequately supported by industry), not less. We need more education, not less. We need to pay doctors for obtaining favorable outcomes, and not for performing procedures, per se. We need common sense reforms to entitlements.

But we also need higher taxes. We need to not simply control our spending; we need to pay our bills. The rating downgrade will raise business and consumer interest rates, as well as T bill rates. Pay me now or pay me later, went the tag line.

@Aye (#12): When you refer to the $4 trillion in “cuts” wanted by S&P, you should make it clear that they are talking about $4T in deficit cuts, which does not imply $4T in spending cuts. That quote about S&P not taking any specific position on how this deficit is to be reduced simply means that they are not going to propose, much less mandate, any specific combination in spending cuts and tax increases But they specifically stated that the failure of the GOP to allow the sunsetting of the Bush tax cuts in the S&P statement was a contributing factor in their downgraded projections of deficit control. They did not so criticize Democratic obstinancy with regard to entitlement reform.

Mata’s original blog post is very misleading, in that it implies that the S&P downgrade explanation exonerates the Tea Party and blames Obama. At least, that’s what her headlne screams. But a specific explanation of the downgrade included a statement about the failure to raise taxes as being contributory. There can be little doubt that Tea Party pressures did not allow the GOP leadership to even consider any tax increases. Absent the Tea Party, I think it’s very clear that the gang of 6 would have come up with a so called “balanced” solution that would have been acceptable to bipartisan majorities and to the President.

– Larry Weisenthal/Huntington Beach, CA

@mata (#19): What’s the point in this statement? If I said something wrong, then tell me what I said that was wrong.

Comments like #19 were nicely satirized by Bill Maher, on his August 5 show.

– Larry Weisenthal/Huntington Beach, CA

@openid.aol.com/runnswim:

Taxes need to go up.

Wait a minute. Aren’t you the one who said something about the current economic problems being one of consumption? Oh, yes, you were;

The economic problem is a consumption problem and everything which has happened during this particular cat fight has done nothing, save to scare would be consumers.

Debt Bill To Be Voted On This Afternoon….Likely To Pass; Update: Republicans “Proud” of Boehner; Update: Bill Passes House 269-161

And, your answer to that is to…………………..take more money away from consumers so that they have even less to spend on consumption of goods and services. Does that make any sense to you? ‘Cause it sure doesn’t to me.

@openid.aol.com/runnswim:

Maher is an incessant bore who regards women as second-class citizens, and who cannot complete a coherent sentence without filthy language. Not to mention that he is an idiot. Please tell me you don’t watch his show.

@john:

I made it clear that we have two problems and that these problems are not related to each other.

Problem number one is the current economic stall. This is clearly a problem with consumption. Corporations are sitting on a record amount of cash. People on this blog have said that this is because of “economic uncertainty.” I agree with that. But it’s not uncertainty regarding regulation or tax policy. It’s uncertainty regarding future consumption. If corporations felt there was going to be a near term demand for their products, they’d do whatever hiring was necessary to meet this demand, regardless of whether their taxes were going to be raised (and the proposed raises are trifling) or whether there would be some new environmental regulation. The problem is that consumer demand is soft, not even primarily because of the unemployed, but because of the lack of consumer confidence in what is going to happen tomorrow.

Will they be able to afford exploding college tuitions for their children? Will the value of their investments, including homes, continue to fall? Will they ever be able to retire? Will they be able to continue to afford to have health insurance? These are the “uncertainties” which are most constricting to the economy, not “uncertainties” relating to tax policy or government regulation.

It’s a consumer economy. Give average people the confidence to consume, and the economy will repair itself, no matter what the tax rates, within the range currently being proposed, considered, debated.

This is the biggest problem, with regard to the present economy.

http://alloveralbany.com/archive/2011/08/03/the-confidence-is-crumbling

This is what the EMERGENCY is. What is NOT an EMERGENCY is long term debt. The USA is not Greece. We need a long term plan to pay down the debt to GDP ratio, as we paid it down from a post-War level of 1.25 to 0.32, despite Marshall Plan, GI Bill (including free tuition to any college in America, including Harvard), Interstate Highway System, Great Society, Apollo moon landing program, Vietnam War.

What did all that Tea Party scaremongering about the national debt accomplish?

1. It scared consumers, further squashing consumer confidence.

2. It scared the GOP leadership and rank and file; preventing a Gang of Six-style grand compromise on a $4 trillion program with true bipartisan support. GOP insistence on no tax increases was specifically cited by Standard & Poors as lowering investor confidence in US fiscal policy, leading to the downgrade, which is projected to raise interest rates, for both government and consumers.

It’s abundantly clear that both GOP and Dems deserve blame. And I never said that Obama should be above criticism. But Mata’s screaming headline is a gross misrepresentation of the explanation given in the S&P statement.

With regard to Maher, he’s only what he claims to be. A comic. Humor is a personal matter. What some people find hysterically funny, others find distasteful. This goes for Monty Python and Chris Rock and Dennis Miller and Evan Sayet, as well as for Bill Maher.

As far as satire which stings because it tells the truth, however, his take on the “debate” in internet comment sections was a real bull’s-eye.

– Larry Weisenthal/Huntington Beach, CA

I thought Nazi Pelosi ended the debate as to the legitimacy of the Tea Party by designating them ‘astroturf’? The left couldn’t wait to chime in with vociferous agreement, insisting that it would fade away into the annals of time. In fact, I can’t recall a kind or honest word spoken by the left, of the Tea Party. And, of course, we are terrorists, racists, extremists, right-wing nut-jobs, gun-toting, Bible-thumping, delusional psychopaths.
But now, all of a sudden, we have the power to effect and affect gov’t policy?? Who wants to talk about consistency? Are we powerless or powerful? Make up your damn minds.
Gov’t doesn’t listen to the people unless it is election season or they need some filler on their resume. There are 535 selfish a-holes in office who can attest to that. Until we stop voting in ‘experienced’ politicians, we will continue to have this argument, remain violently divided and be forever saddled with exact replicas of the ones who have brought the most harm to this great country. What benefit is there in ‘experience’ anyway? I’m 100% certain a nobody from Idaho couldn’t do any worse.

Just remember this:

1. Obama administration officials have been meeting with the guys on Wall Street

2. Tiny Tim is good friends with all of them

What say come next summer the S&P folks raise us back to AAA. How would that look going into the election.

Never put it past the Dem politicians to do something crooked like that!

@ Larry

mainly blames the Congress, not so much the President. It criticizes both parties, but criticizes the GOP to a greater extent, for being so obstinate about not increasing taxes, for digging in to preserve the Bush tax cuts, and for ending up with an inadequate plan.

Where does it say that? This is the main point I got from reading their opinion:

We lowered our long-term rating on the U.S. because we believe that the
prolonged controversy over raising the statutory debt ceiling and the related
fiscal policy debate indicate that further near-term progress containing the
growth in public spending, especially on entitlements, or on reaching an
agreement on raising revenues is less likely than we previously assumed and
will remain a contentious and fitful process.

Greg won’t answer me, I’ll ask you. Where is the democrat budget? When was the last time the democrats proposed a budget? The Presidents budget was so ludicrous that it was voted down 97 – 0. If you raise everyone’s taxes, including the freeloaders that pay zero income tax, by 50%, will that lower the deficit? Let’s say we go back to the Clinton tax rates since that is what democrats believe to be the saving grace of the 90’s economy. What then? Will it lower the deficit?
Here is your answer Larry…no. The American people have no faith in our economy right now. Obama is the problem. His administration is enacting regulation by fiat. Corporations are holding onto money because they are afraid to spend it. NLRB is enacting card check by fiat, ERA enacting cap and trade by fiat, HHS giving out Obamacare waivers to all their friends that swore it was the greatest thing since sliced bread. And by the way, where is the democrat budget?

@openid.aol.com/runnswim:

But it’s not uncertainty regarding regulation or tax policy. It’s uncertainty regarding future consumption.

No, Larry, it is uncertainty due to regulation and tax policy. The Democratic Party made very clear during the debt ceiling fight that they wished to increase taxes. And regulation of industries, such as the oil and gas industry, during Obama’s presidency, has caused prices to increase on nearly everything. Demand is low because prices are high, and so consumption is low. People are trying to save back a little because of what the trend has been.

This is what the EMERGENCY is. What is NOT an EMERGENCY is long term debt.

I beg to differ, Larry. From the S&P;

The credit rating agency’s managing director, John Chambers, tells ABC’s “This Week” that if the fiscal position of the U.S. deteriorates further, or if political gridlock tightens even more, a further downgrade is possible.

Chambers also said Sunday that it would take “stabilization and eventual decline” of the federal debt as a share of the economy as well as more consensus in Washington for the U.S. to win back a top rating.

http://hosted.ap.org/dynamic/stories/U/US_US_DEBT_RATING_CHAMBERS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-08-07-11-03-40

That bold portion of the article refers to the ‘long term debt’, Larry. Even average consumers understand that a further downgrading of the government’s credit rating will affect their own purchasing power via credit(which most people are not taking on more credit debt at this time).

What did all that Tea Party scaremongering about the national debt accomplish?

It accomplished none of what you claim it did, Larry. In fact, the TEA Party was advocating the same thing that the S&P wanted to see, namely, the addressing of the long-term debt problem of the government. You are placing blame on an entity you do not agree with for things that were already happening.

Not to mention that you are continuing to contradict yourself, and probably without even knowing it. You have claimed that severe cuts in spending will hamper any chance of economic recovery due to less consumption, yet, you continually push for the idea of higher taxation, which does the same thing, if one was to assume your line of reasoning on spending cuts was accurate.

I am going to hammer on this one more time, Larry. It’s not a revenue problem that the government has. It’s a spending problem.

The federal government went from deficits in the hundreds of Billions of $’s to deficits well north of $1 Trillion. The stimulus and even the pork-laden Omnibus bills added hundreds of Billions of $’s to the baseline federal budget. That being the case, and with the baseline budgeting method for figuring out future budgets, the next decade will have seen $9.5 Trillion in NEW spending over the course of the next ten years. With that stupid “deal” in place, that NEW spending has dropped to $8.5 Trillion, with additional cuts possibly down to $7.5 Trillion.

What does that mean? It means that in order to simply MAINTAIN deficits of $1.5 Trillion, on average, per year, that revenues would have to increase by $7.5 Trillion over that ten years. Even the most liberal of estimates on tax hikes, by taking all tax regulation back to Clinton-era tax rates, including removing the current “credits” that low income families enjoy, and, by removing the “loopholes” of the high income earners and doing nothing with the AMT, that would only bring in an estimated $4.2 Trillion over ten years, leaving over $3.3 Trillion in deficits. Not only are those estimates of revenue based on “best-case scenario” results, it assumes the economy grows by a higher than historical average for ten years as well. In other words, it’s apt to be quite a bit less than their estimate, particularly given that there aren’t any jobs being produced and the percentage of taxpayers to total population is steadily dwindling.

But, even in that best case scenario, it is still deficit spending of $330 Billion a year and doesn’t address the primary drivers of the huge deficits, which happen to be SS and Medicare. Nothing has been done with those, and no one wants to touch them for fear of negative political repercussions. So, if nothing is done, the sheer number of retirees that will be added to the doles of those two programs will raise that $330 Billion by quite a bit more than that amount. My guess is that we would still see a nearly $1 Trillion per year deficit, on average, over those ten years.

In short, the long-term debt issue won’t be a big deal because the mid-term(next ten years) debt issue will be the one that puts us into Greece-like conditions. And it will all be because of the lack of any substantial action on Federal spending.

And keep in mind that the Democrats rhetoric has all been about raising taxes on the higher income earners, which would bring in quite a bit less than that $4.2 Trillion over ten years, assuming their predictions based on the economy could even happen.

Neither the Democratic party, nor the GOP, are truly serious about this issue, and the one group that is serious, the TEA Party, is the one you are blaming for everything. That is disingenuous, to say the least, and intellectually dishonest, in my opinion.

As far as satire which stings because it tells the truth, however, his take on the “debate” in internet comment sections was a real bull’s-eye.

I have seen no evidence of his “take” on the debate happening here, nor would I assume that FA is unique in that, therefore, his “take” is not nearly as accurate as you claim.

And as for being a “comic”, his continuous attempts at demeaning conservatives, particularly the women, is disgusting. Anyone who thinks otherwise is just as small a person as he is.

@MataHarley:

Dare I point out that S&P and the rating agencies say differently? And so do most of American taxpayers.

As evidenced here;

S&P bond rater: It’s the debt, stupid; Update: S&P official: Another downgrade will come if we don’t reduce long-term debt

Beers called the U.S. Treasury Department’s criticism of the credit rating agency’s analysis a “complete misrepresentation.” Even with the debt limit agreement passed by Congress, he said, “the underlying debt burden of the U.S. is rising and will continue to rise over the next decade.”

http://hotair.com/archives/2011/08/07/sp-bond-rater-its-the-debt-stupid/

That sounds like the concern is the long-term debt issue. And credit rating agencies’ downgrades make the debt service amount a much larger portion of the budget, meaning that, even with a “cut” in spending increase rate because of this “deal”, that the budget will still increase by around the same amount as it would have if no action on spending “cuts” had taken place. Can you say stupid?

@MataHarley:

I have gone over the numbers, several times in a few different posts, about how this “deal” will take our debt to GDP ratio well above 1.0, and that is even if one includes a return to ALL Clinton-era tax rates. That ratio is what the ratings agencies are concerned about, as you pointed out, and why other countries that are in economic hard times are going to be better off than we will. Because they have at least attempted to address their spending issues while our “geniuses” in Congress and the WH haven’t done anything of significance regarding the US’s government spending.

How hard is it to understand that it is the spending that is the problem? I can see that. You can see that. Anyone with any sense who deals with a household budget on a regular basis can see that. Even people who use credit to pay their bills don’t continue to do it long term, and attempt to address their outgoing finances so that they do NOT have to take on any more burden due to credit than they possibly can get away with. The government, however, doesn’t seem to understand this, and it isn’t just limited to the Dems, but also includes the GOP. And it isn’t just limited to our Federal government, as many states have this same problem.

It reminds me of those unions who end up bankrupting a company, or forcing it to go out of business, because they cannot see that their long-term interests would be best served by allowing a cut in pay or benefits, in order to keep their jobs for a much longer time period. Instead, they want all they can get, as fast as they can get it, without worrying about where their “fix” will come from once they destroy a company.

Our government spending cheerleaders are the same way. They don’t wish to think about long-term. They only wish to spend what they can now, to get the votes they can now, and keep themselves in office. Meanwhile, the spending juggernaut cannot continue at the current pace, and pointing it out to them won’t faze them in the slightest. They are only concerned about the here and now.

@MataHarley:

On your #32; The numbers that I have seen are $3.4 Trillion over ten years, with the portion for those making more than $250k/$200k only $700 Billion over ten years. So, on average, that is $340 Billion per year, and $70 Billion per year, however, in reality, the starting year of that ten year period will see quite a bit less than those amounts. They are also based on “rosy” projections of economic growth that haven’t been the case. And most likely, they won’t be the case because a ten year period of 3.5% or so annual growth in GDP is unlikely, not to mention that it is unlikely the growth would be that high at any time due to the drop in available money in the public’s hands.

@MataHarley, #35:

In other words, if both parties don’t put their nose down to some serious debt reduction, it’s all downhill from here.

It’s not going to happen until republicans acknowledge that there are two variables in the simple arithmetic involved in balancing a budget.

@openid.aol.com/runnswim:

Larry your post is a good example of your dishonesty in debate and your man crush on obama. Mata is kind enough to say it’s a perception issue. I’m not so nice and will call it what it is- partisan dishonesty.
I’m also not surprised you like to watch a hate mongering, unhinged, bigot like Maher. You pretend to be so civil, but twice I’ve seen you express how you really feel about the right. In the end, you are just like Maher- an angry, hatefilled liberal.

@MataHarley:

Yes, that was my point. For example, let’s say that the first year of the high end tax hikes yield $40+ Billion. Figure out what growth statistics they are using and the figure goes up by that amount every year. The problem is that the growth number they wish to use will likely not be seen at all during that 10 year period. Couple that with a 3.5-4% annual budget growth and the deficits will quickly outdistance the current $1.5 Trillion we will see this year. Is it any wonder why the S&P sees this as a problem? Especially since they are assuming the majority, if not all, of the Bush tax cuts get extended. Our Congress and the President are STUPID.

@Greg:

Different day but same old partisan lines.

Greg, even if the GOP agreed immediately to rescind every last tax change that happened during the Bush years, all the way back to Clinton-era tax policy and rates, it will only yield $3.4 Trillion or so. That is an average of $340 Billion a year, less at the start and more at the end. The problem is that when Congress uses “Baseline Budgeting”, it increases the budget by a set amount, every year, regardless of the economy. And new programs only add to that amount. So, the new spending projected, before the “deal” was around $9.5 Trillion dollars. That $3.4 Trillion in revenue will account for $3.4 Trillion in new spending, assuming the growth is as good as projected, which is highly unlikely.

So, we have $6+ Trillion that we still have to account for. That amount, starting from the current estimated spending in 2011 of $3.8 Trillion, yields an annual growth in spending of just over 3%.

Let’s take away the max spending increases that the “deal” could possibly cut out. That still leaves the government with $3.5 Trillion in NEW spending over that ten years. And remember, these numbers are assuming an unlikely high amount of growth.

But, that $3.5 Trillion is not just the amount of deficits over that time. Remember, we are starting from a point of $1.5 Trillion in deficits for 2011. Even if we assume that high rate of growth, and that the current rates account for the NEW SPENDING amount over that ten years, we are still looking at around $1.5 Trillion in deficits, EACH YEAR, over the next ten years.

Did you follow all of that? We don’t have a revenue problem, Greg. We never did, otherwise the Bush deficits would have been much, much higher than what they were. No, we have a SPENDING problem, which the GOP leadership seems to not wish to tackle like they should, and that the Democrats have discounted at every turn.

When Jimmy Carter left office in 1981, the national debt was $900 billion.
When Ronald Reagan left office in 1989, the national debt was $2.6 trillion.
When George H.W. Bush left office in 1993, the national debt was $4 trillion.
When Bill Clinton left office in 2001, the national debt was $5 trillion.
When George W. Bush left office in 2009, the national debt was $11.6 trillion.
Since Barack Obama has been in office, he’s increased the debt by $3 trillion, 90% of which was to rescue us from the crash caused by 30 years of irresponsible spending.
Therefore, the recession is all Obama’s fault. The Blame Obama First Crowd… their motto: Party First, Country Last. Traitorous vermin, every stinking one of them.

@Larry

Forget it. You’re wasting your time here. It’s apparent they are willing to cherry-pick/manufacture ‘evidence’ to support whatever ideology they want to push, and ignore any contradicting data.

For example – MataHarley’s claim that the Tea Party faction doesn’t exist in Congress (which is laughable):
http://en.wikipedia.org/wiki/Tea_Party_Caucus

Read the section on their primary donors, so much for it being ‘grassroots’

As far as the John Chambers interviews which MataHarley cited often, he also said this (which she conveniently ignored):
‘John Chambers, managing director of S&P, told ABC’s “This Week” that President Obama’s fiscal commission last year “had plenty of sensible recommendations” for reducing U.S. debt. Those recommendations, which included cutting spending and increasing revenues on a 3-1 ratio, were ignored.

“It was a pity that those really weren’t followed through on,” Chambers said.’

Using MataHarley logic, looks like S&P exonerated Obama.

@Hard Right

“Larry your post is a good example of your dishonesty in debate”

“You pretend to be so civil, but twice I’ve seen you express how you really feel about the right.”

I guess you miss the following from MataHarley:

“Now go find a dumber audience to play to.”

“Which half of your single brain cell…”

“Your ignorance and misinterpretations ”

“Ah, the smell of desperation.”

“Idiot”

“This, of course, makes Larry’s avow about long term debt not being the problem quite laughable.”

“We already know you’re math challenged”

Oh yes, much more civil and honest (see my comment above). People in glass houses… as they say.

Now it is Moody’s.

Ratings agency Moody’s repeated a warning on Monday it could downgrade the United States before 2013 if the fiscal or economic outlook weakens significantly, but said it saw the potential for a new debt agreement in Washington to cut the budget deficit before then.

——————-
@thamster:
Remind me when Obama agreed to cutting spending three times more than raising revenues.
Anyone?

‘John Chambers, managing director of S&P, told ABC’s “This Week” that President Obama’s fiscal commission last year “had plenty of sensible recommendations” for reducing U.S. debt. Those recommendations, which included cutting spending and increasing revenues on a 3-1 ratio, were ignored.

“It was a pity that those really weren’t followed through on,” Chambers said.’

Using MataHarley logic, looks like S&P exonerated Obama.

As I recall Obama ignored the fiscal commission’s conclusions for more than a YEAR ….. until the very last days of the crisis.
Then he was willing to go along with SOME of them……but not that one.

Didn’t think so.

@grampadave:

Buzzer sounds. Ohhh, sorry…..

Gramps, you need to double check your math, cite your sources, and show your work because you’re off over a trillion dollars in two places and nearly a trillion in another.

Then, once you’ve cleared up your arithmetic errors, you can explain to us how well Obie’s irresponsible spending spree on the supposed “rescue” is working out for us.

Tell me thamster the propagandist, where did I claim to be civil? Not to mention you pull the same dishonest behavior larry displayed. I guess that’s why you try to support him. Your reading comprehension is quite poor too. Let me help you:

“It was a pity that those really weren’t followed through on,” Chambers said.’

Is that your idea of exoneration?
Your next partisan lie is that the Tea Party isn’t grass roots because they have some big donors. Really? Grass roots movements can’t have big donors? Riiiiiiiight. I’m sure you have no problem calling the astroturf orgs on the left “grass roots.”
As for what Mata said, I’ll use small words for you: There is no Tea Party political party. There are democrats and Republicans. Again you lie and distort to push your partisan agenda.
One last thing thamster, you drop in on one thread and project your dishonesty onto us by cherry picking information and claiming we are picking on poor larry. Little hint, larry is hardly the angel you want to pretend he is just from looking at one thread. Go back to huffpo now, you don’t have the intellect to be here.

@thamster:

Help me understand your contorted logic here…

The Tea Party backed legislation that fit the parameters that S&P was looking for…that legislation was rejected by the Dim controlled Senate following a veto threat from Precedent Downgrade.

The fiscal commission put forward ideas that Mr. Chambers of S&P was apparently pleased with. Those ideas were rejected by Precedent Downgrade as well.

So…according to your logic…when sensible, workable ideas are put forth and then rejected, the responsibility for the rejection of those ideas lies with those who put them forward?

Uh, no. That’s not the way it works.

@Hard Right:
“Not to mention you pull the same dishonest behavior larry displayed.”
Uh, where? Unless you call rational arguments based on evidence ‘dishonest’, which seems to be case here.

“Is that your idea of exoneration?”
LOL yes, because he clearly said Obama’s ideas would have been good ones. BTW who rejected that plan? Republicans affiliated with the ‘Tea Party’ movement.

“Really? Grass roots movements can’t have big donors?”
You really should read the definition of ‘grass roots’ before you comment here.

“There is no Tea Party political party. ”
Never said they were a political party, neither did Larry. It’s funny to read that they were ‘exonerated’ by MataHarley’s blog post, and yet they don’t really exist as an organization. Either it exist or it doesn’t. I’m sure you guys will find a way to squirm out of that illogic. BTW, if there are no Tea Party pols, why are some Congressmen endorsed by the Tea Party, and those same pols invited to speak at TP events?

“you drop in on one thread and project your dishonesty onto us by cherry picking information and claiming we are picking on poor larry.”
Nice! Accusing me what you guys have been doing. Standard conservative argument tactics, turning the attacks against the attackers. No surprise there. I won’t comment further on it.

@Aye:

“Help me understand your contorted logic here…
The Tea Party backed legislation that fit the parameters that S&P was looking for…”
You can spin it all you want (as MataHarley has) but that’s not the reason S&P downgraded.

From MataHarley’s own post:
“To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a “credible” plan to tackle the nation’s long-term debt. Chambers said the slowness at raising the debt ceiling and the political infighting led to the move. ”
Who’s resisted increasing the debt ceiling since day 1? Hint: Not Obama, not the Democrats, and not even the more reasonable members of the Republican party.

Who held up an agreement until time almost ran out? Again, not Obama, not the Democrats, and not even the more reasonable members of the Republican party.

Who kept pushing a plan that Senate Democrats and the president said is not acceptable, thus contributing to the same UNCERTAINTY and INFIGHTING that S&P cited as the reasons for the downgrade? Once more, not Obama, not the Democrats, and not even the more reasonable members of the Republican party.

@thamster:

LOL yes, because he clearly said Obama’s ideas would have been good ones. BTW who rejected that plan? Republicans affiliated with the ‘Tea Party’ movement.

Really? Mr. Chambers said that Precedent Downgrade had some good ideas?

Really? Uh…no. He didn’t say that.

What Mr. Chambers said was that the “fiscal commission had plenty of sensible recommendations.”

Those ideas were rejected by…wait for it…Precedent Downgrade. The fiscal commission recommendations were never brought before either chamber of Congress for a vote.

Now, what were you saying again?

@Aye:
“Those ideas were rejected by…wait for it…Precedent Downgrade. ”
I love how when you guys don’t know what you’re talking about, you just make stuff up, especially if it makes Obama look bad. Who cares about what actually happened! Facts doesn’t matter!

The commission’s ideas were not rejected by Obama (he actually supported many of them and urged compromise). The commission didn’t get the 14 votes it needed to move forward, with 3 GOP House members voting no.

@thamster:

The commission’s ideas were not rejected by Obama (he actually supported many of them and urged compromise)

If that’s true then you’ll have no problem linking the proposals put forward in writing by Precedent Downgrade which reflect his support of those ideas.

@Aye:
“If that’s true then you’ll have no problem linking the proposals put forward in writing by Precedent Downgrade which reflect his support of those ideas. ”
Sure, after you post a link showing the proposals were rejected by Obama.

I see how the game works. After I disprove one claim, you just post another. You made the claim, not me. It’s up to your to prove them.

Thamster, liberals like you show a stunning lack of personal introspection. You come here and project your own actions and dishonesty onto us, then whine when we point it out.
You distort what Mata said, what I said, and what others have said because it’s clear you would rather “win” the debate than be honest. You’re just another liberal time waster.

Here’s an example:
“…MataHarley’s claim that the Tea Party faction doesn’t exist in Congress”

Umm, learn to read. That is not what she said, but you know that. It’s not being dishonest when YOU claim someone said something they didn’t (roll eyes).

@thamster:

Sure, after you post a link showing the proposals were rejected by Obama.

Since you asked so nicely:

The New York Times: “With the budget he is to unveil Monday, President Obama has not opted for the bold, comprehensive approach to reining in the fast-growing federal debt that his own fiscal commission has said is needed, now.” (Jackie Calmes, “A Cautious Approach Seeking Bipartisan Appeal,” The New York Times, 2/13/11)

CNN’s Jessica Yellin: “The president ordered a deficit commission forum. They recommended overhauling entitlements, and then the budget doesn’t touch it. What was the point having a debt commission then? (CNN’s “The Situation Room” 2/14/11)

“First of all, the President created the fiscal commission last year.”
Then Gregory interjected, noting that Obama didn’t accept any of the commission’s recommendations.

::snip::

The liberal campaign against the fiscal commission continued unabated for months, until Obama effectively rejected the proposal in his State of the Union Address and with the release of his 2012 budget.

Obama may be regretting having rejected the proposal now, but Daley cannot rewrite history to blame Republicans. The reality is he didn’t endorse the fiscal commission’s recommendations because he was afraid to stand up to his own party. (Philip Klein sfexaminer.com Monday, August 8, 2011)

“He rejected the dire warnings and recommendations of his own fiscal commission and not only kicked the can down the road but made the road more perilous by advocating deeper debt and ignoring bipartisan calls for entitlement reform and pro-growth policies, including tax reform and regulatory restraint,” Portman said. (Gabriella Schwartz cnn.com February 26, 2011)

@thamster:

I cited this interview in an earlier comment on this thread. I’ll repeat it here for you reference:

Because this is your very first post at FA, I would like to make you aware that cherry-picking one carefully chosen paragraph from a lengthy press release, while ignoring the remainder because it doesn’t agree with your position won’t work here.

In fact, here’s a paragraph from the press release which flies directly in the face of what you’re trying to shovel:

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.

Furthermore, you should be aware that S&P previously warned that there was a 50/50 chance of a downgrade if anything legislation with less than $4T in deficit reductions was put into place:

Chambers adds: “But $4 trillion would be a good down payment. We thought that..if policy makers could deliver the goods on that, then that would be a strong sign on our political scores and eventually on our projections on the fiscal side.”

S&P has already said it may slash the Triple-A rating if a debt ceiling deal is not accompanied by what it deems is a credible plan to cut the $14.3 trillion federal [debt] by $4 trillion. The plan has “to have bipartisan support,” Chambers said. “If you have a plan that is only backed by one side or the other, even if you got it through, you would be faced with the prospect of it being unwound.”

So, S&P’s Chambers is saying the ratings agency wants to see at least a $4 trillion deal, one that would come with bipartisan support, too, because the ratings agency fears without that support, Congress will upend any debt-cutting plan.

So, let’s analyze what S&P has said via Mr. Chambers shall we?

S&P was looking for a plan that reduced the federal debt by $4T and had bi-partisan support.

Who put forth the only proposal that accomplished that?

That’s right…the Republicans put forward that proposal. That proposal had backing from the Tea Party.

Unfortunately, after having been passed on a bi-partisan basis by the House, that bill was rejected by the Dim controlled Senate following a veto threat from Precedent Downgrade.

Now, let’s analyze what you quote from Mata’s post:

“To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a “credible” plan to tackle the nation’s long-term debt. Chambers said the slowness at raising the debt ceiling and the political infighting led to the move. ”

You see the part that I put in bold for you there?

Show me which plan would have actually accomplished the clearly stated S&P goal of $4T in debt reduction as well as raising the debt ceiling.

It’s obvious that the legislation that was eventually passed by Congress and signed by the Precedent failed to meet those criteria…thus Friday’s downgrade.

Who’s resisted increasing the debt ceiling since day 1? Hint: Not Obama, not the Democrats, and not even the more reasonable members of the Republican party.

As cited above, the increase of the debt ceiling was only one piece of the puzzle. Who resisted taking the necessary action needed to reduce the debt enough to get within the sought after S&P expectations?

Not the Republicans and not the Tea Party. They put forth a plan which passed the House with bi-partisan support and reduced the debt, thus meeting both of S&P’s criteria.

Which plan from the Dims fell within the expectations of S&P? Oh, that’s right. There weren’t any.

Who kept pushing a plan that Senate Democrats and the president said is not acceptable, thus contributing to the same UNCERTAINTY and INFIGHTING that S&P cited as the reasons for the downgrade? Once more, not Obama, not the Democrats, and not even the more reasonable members of the Republican party.

Yes, the Dims and Precedent Downgrade said that the only plan that met S&P’s expectations was not acceptable thus contributing to the uncertainty and infighting that S&P cited.

Had the Dims and the Precedent compromised and allowed the legislation to pass, then there likely would not have been a Friday downgrade.

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