CNN: Boehner plan would "probably" result in S&P ratings downgrade

[DMX7]

Washington (CNN) - Erin Burnett's source says that Speaker of the House John Boehner's plan would probably result in a downgrade of the US economy by Standard and Poor’s, which could raise interest rates, while Senate Majority Leader Harry Reid’s plan could prevent a downgrade because the higher amount of cuts up front.

http://cnnpressroom.blogs.cnn.com/2011/07/25/erin-burnett-boehner-plan-wouldn%E2%80%99t-prevent-downgrade-of-u-s-economy/

[Sec24Row7]

http://cnnpressroom.blogs.cnn.com/2011/07/25/erin-burnett-boehner-plan-wouldn%E2%80%99t-prevent-downgrade-of-u-s-economy/

The actual text not good enough for you so you have to lie?

Erin Burnett: Boehner plan might not prevent downgrade of U.S. economy

New CNN anchor Erin Burnett makes her debut on the network during a special hour leading up to President Obama’s address to the nation on the debt limit impasse and the potential default of the full faith and credit of the United States if an agreement in Congress isn't made.

Burnett's source says that Speaker of the House John Boehner's plan might result in a downgrade of the US economy by Standard and Poor’s, which could raise interest rates, while Senate Majority Leader Harry Reid’s plan could prevent a downgrade because the higher amount of cuts up front.

Burnett’s show premieres in the Fall at 7p ET on CNN.

[DarrinS]

Fear the downgrade

[SnakeBoy]

She also thinks we should not complain about chinese toys with lead in them or toxic food from china. We should just be grateful they are cheap.

We will be downgraded regardless of the plan. Your choice who you want to blame for it.

[ducks]

yeah require a balance budget would downgrade
unreal

[CosmicCowboy]

Reid's "higher" number is totally bogus since it includes 1 trillion of "savings" from getting out of Iraq when we were going to do it anyway.

[boutons_deux]

"getting out of Iraq when we were going to do it anyway"

no, we're "never" getting out of Iraq.

That $1B US Imperial embassy disfiguring the center of Bagdad will have 1000s of employees and 1000s of high-paid mercenaries defending it, for decades. US/UK oilcos gotta get their oil that the US military died for and US taxpayers paid for.

[Sec24Row7]

Does no one care that the OP actually went in to the quote and changed "might" to "probably" for the sake of the title AND his quote?

Regardless of what side you are on... that's dishonest and despicable.

[RandomGuy]

The actual text not good enough for you so you have to lie?

Erin Burnett: Boehner plan might not prevent downgrade of U.S. economy

New CNN anchor Erin Burnett makes her debut on the network during a special hour leading up to President Obama’s address to the nation on the debt limit impasse and the potential default of the full faith and credit of the United States if an agreement in Congress isn't made.

Burnett's source says that Speaker of the House John Boehner's plan might result in a downgrade of the US economy by Standard and Poor’s, which could raise interest rates, while Senate Majority Leader Harry Reid’s plan could prevent a downgrade because the higher amount of cuts up front.

Burnett’s show premieres in the Fall at 7p ET on CNN.

Very clever, you changed the "would probably" to "might".

Let's try a new word: "inevitable"

http://news.yahoo.com/u-credit-downgrade-inevitable-032700785.html

Cut only, with no revenues, will not be sufficient to convince steely-eyed analysts that the US political system can produce a solution that will substantially reduce our debt.

The ultimate irony is that the tea party fucktards who wave their hands and cry the most about taxes are taking actions that will likely *increase* taxes in the long run.

A downgrade will increase borrowing costs, and that will require either more debt, or more taxes, or even more cuts, probably a combination of all three.

Our choices are raise taxes a little now, or raise them a lot later.

We have what amounts to a temper tantrum from the right-wing extremists in the GOP because they don't want to take their medicine and it is costing us all. A spoiled child who will cry and scream until he gets what he wants.

"my way or the highway". wah.

:bang

[coyotes_geek]

"getting out of Iraq when we were going to do it anyway"

no, we're "never" getting out of Iraq.

That $1B US Imperial embassy disfiguring the center of Bagdad will have 1000s of employees and 1000s of high-paid mercenaries defending it, for decades. US/UK oilcos gotta get their oil that the US military died for and US taxpayers paid for.

So in other words, you agree with CC that Reid's plan is fiction.

[Sec24Row7]

Very clever, you changed the "would probably" to "might".

Let's try a new word: "inevitable"

http://news.yahoo.com/u-credit-downgrade-inevitable-032700785.html

Cut only, with no revenues, will not be sufficient to convince steely-eyed analysts that the US political system can produce a solution that will substantially reduce our debt.

The ultimate irony is that the tea party fucktards who wave their hands and cry the most about taxes are taking actions that will likely *increase* taxes in the long run.

A downgrade will increase borrowing costs, and that will require either more debt, or more taxes, or even more cuts, probably a combination of all three.

Our choices are raise taxes a little now, or raise them a lot later.

We have what amounts to a temper tantrum from the right-wing extremists in the GOP because they don't want to take their medicine and it is costing us all. A spoiled child who will cry and scream until he gets what he wants.

"my way or the highway". wah.

:bang


I didn't change anything... that is the ACTUAL text of the link...
I don't underestimate the seriousness of the situation... but that video isn't specifically blaming the boehner plan (from some anonymous investor source :sleep) is it?

[RandomGuy]

Does no one care that the OP actually went in to the quote and changed "might" to "probably" for the sake of the title AND his quote?

Regardless of what side you are on... that's dishonest and despicable.

You are assuming, of course, that the blog was NOT edited or changed in the time span between when the thread was started and the time you clicked on it.

[Wild Cobra]

Does no one care that the OP actually went in to the quote and changed "might" to "probably" for the sake of the title AND his quote?

Regardless of what side you are on... that's dishonest and despicable.
Funny how I find it both ways on CNN!

[Sec24Row7]

You are assuming, of course, that the blog was NOT edited or changed in the time span between when the thread was started and the time you clicked on it.

of course he has that out.

[RandomGuy]

I didn't change anything... that is the ACTUAL text of the link.

I was under the mistaken impression that it was you who did the changing. My bad, sorry about that. The rest of it stands.

Either way, the real word is closer "inevitable" unless something more drastic than what has been proposed so far by the Republicans is enacted. That is the general consensus in the financial/economic analysis I have seen. Not unanimous, but I would generally concur.

[coyotes_geek]

Does no one care that the OP actually went in to the quote and changed "might" to "probably" for the sake of the title AND his quote?

Regardless of what side you are on... that's dishonest and despicable.

On the one hand, it's definitely a dewshy move.

On the other, if I got fired up every time someone did something dewshy on the internet I'd have a heart attack.

[RandomGuy]

I didn't change anything... that is the ACTUAL text of the link...
I don't underestimate the seriousness of the situation... but that video isn't specifically blaming the boehner plan (from some anonymous investor source :sleep) is it?

S & P has been talking about it since april:
S&P threatens to cut U.S. credit rating on deficit (sorry lost the link, but the article was from april 18)


Then they were saying one in three, now it is one in two.
http://www.washingtonpost.com/business/economy/us-stocks-rise-begin-rising-after-early-morning-drop/2011/07/25/gIQA6xnuYI_story.html

Her source may be anomymous, but the source is not alone in his/her judgment.

[Sec24Row7]

On the one hand, it's definitely a dewshy move.

On the other, if I got fired up every time someone did something dewshy on the internet I'd have a heart attack.

Thats why I'm such a huge daily poster here right? :rollin

[Sec24Row7]

S & P has been talking about it since april:
S&P threatens to cut U.S. credit rating on deficit (sorry lost the link, but the article was from april 18)


Then they were saying one in three, now it is one in two.
http://www.washingtonpost.com/business/economy/us-stocks-rise-begin-rising-after-early-morning-drop/2011/07/25/gIQA6xnuYI_story.html

Her source may be anomymous, but the source is not alone in his/her judgment.


S&P specifically talked about how boehner's plan would precipitate a downgrade and Reid's would not... And this started in April?

Don't convolute the statement made by the OP by bringing in an unrelated logical premise.

[RandomGuy]

S&P specifically talked about how boehner's plan would precipitate a downgrade and Reid's would not... And this started in April?

Don't convolute the statement made by the OP by bringing in an unrelated logical premise.


I didn't change anything... that is the ACTUAL text of the link...
I don't underestimate the seriousness of the situation... but that video isn't specifically blaming the boehner plan (from some anonymous investor source :sleep) is it?

*You* brought up the credibility of the "anonymous source", dumbass.

I was merely pointing out that the idea was not created by the journalist. Regurgitated, maybe, but not created.

(edit)

also FWIW ad hominem doesn't really discredit the idea of the OP in and of itself, created idea, anonymous, or not.

[George Gervin's Afro]

Does no one care that the OP actually went in to the quote and changed "might" to "probably" for the sake of the title AND his quote?

Regardless of what side you are on... that's dishonest and despicable.

we see alot of despicable, dishonest stories on cable news..

[ManuBalboa]

Fear rising interest rates we can not even pay in the first place!!!! oh noes

[Th'Pusher]

Somebody is betting big on a ratings downgrade.

http://moneymorning.com/2011/07/25/the-1-billion-armageddon-trade-placed-against-the-united-states/#post-id-53058


The $1 Billion Armageddon Trade Placed Against the United States

BY JACK BARNES, Contributing Writer, Money Morning
Someone dropped a bomb on the bond market Thursday - a $1 billion Armageddon trade betting the United States will lose its AAA credit rating.
In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world.

The massive trade wasn't placed in bonds themselves; it was placed in the futures market.

The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03 and 3,100 Treasury bond futures executed at 125-01.
The value of the trade was about $850 million dollars. In simple terms, if that was a direct bond buy, no one would be talking about it.
However, with the use of futures, you have to have margin capacity behind the trade. That means with a single push of a button someone was willing to commit more than $1 billion of real capital to this trade with expectations of a 10-to-1 return ratio.

You only do this if you see an edge.

This means someone is confident that the United States is either going to default or is going to lose its AAA rating. That someone is willing to bet the proverbial farm that U.S. interest rates will be going up.
I believe what happened is a debt-ceiling deal was done in Washington and leaked to a major proprietary trader. Everyone knows the debt negotiations in Washington have been an extreme game of brinksmanship between political parties, but now someone knows how that game played out.
This had the hallmarks of one of the largest bond shops in the world knowing something the rest of the market didn't.

The number of shops or even central banks that can take on this level of market risk is extremely small. Some that come to mind are hedge fund manager John Paulson, Bill Gross's PIMCO, and the U.S. and Chinese central banks.

Paulson already scored big - about $6 billion big - on a similar trade years ago when he bet against subprime mortgages, the investments that helped bring down Lehman Bros. and many other investors.

Whoever was behind it wanted a trade on ASAP, and didn't care about the ripples they would cause.

You can see how this trade caused fear to be unleashed in the market once it got out and the implications hit by looking at U.S. Treasuries. People who were long 30-year Treasuries panicked as they saw the huge short put on the futures market, and started to unwind their long exposure.

What you, as investors, should do now is look at the bond exchange-traded funds (ETFs) that provide a positive rate of return when U.S. Treasuries drop in value. Yields are going up sooner rather than later, if the person behind this Armageddon trade is correct.

[Sec24Row7]

*You* brought up the credibility of the "anonymous source", dumbass.

I was merely pointing out that the idea was not created by the journalist. Regurgitated, maybe, but not created.

(edit)

also FWIW ad hominem doesn't really discredit the idea of the OP in and of itself, created idea, anonymous, or not.

You're the one that has been wrong once admittedly... ON THIS THREAD... I didn't call you a dumbass...

When I corrected you the other day on a math problem (about painted cubes) you solved to show how smart you were on your job interview thread... I didn't call you a dumbass...

And you are still arguing about the wrong part of my statement... what does me arguing about the credibility of a source that mentions boehner and reid's plans by name and says one is better than the other have to do with the S&P saying that the US is in danger of a downgrade IN GENERAL?!?!?!?

[Th'Pusher]

You're the one that has been wrong once admittedly... ON THIS THREAD... I didn't call you a dumbass...

When I corrected you the other day on a math problem (about painted cubes) you solved to show how smart you were on your job interview thread... I didn't call you a dumbass...

And you are still arguing about the wrong part of my statement... what does me arguing about the credibility of a source that mentions boehner and reid's plans by name and says one is better than the other have to do with the S&P saying that the US is in danger of a downgrade IN GENERAL?!?!?!?

Who gives a fuck? The bottom line is S&P thinks Boehner's plan is shit.

[Sec24Row7]

Who gives a fuck? The bottom line is S&P thinks Boehner's plan is shit.

Pretty sorry attempt at a troll.

[ElNono]

I don't think Barry's plan is much better, tbh...

[RandomGuy]

You're the one that has been wrong once admittedly... ON THIS THREAD... I didn't call you a dumbass...

When I corrected you the other day on a math problem (about painted cubes) you solved to show how smart you were on your job interview thread... I didn't call you a dumbass...

And you are still arguing about the wrong part of my statement... what does me arguing about the credibility of a source that mentions boehner and reid's plans by name and says one is better than the other have to do with the S&P saying that the US is in danger of a downgrade IN GENERAL?!?!?!?

There you go again, taking the high road. :p:

(sighs)

Sorry. This topic gets me a tad worked up.

m7mIy97_rlo

[coyotes_geek]

I don't think Barry's plan is much better, tbh...

No one has a plan worth a damn.

The plan we need is somewhere in between the republicans stance on real spending cuts and the democrats stance on increased tax revenue. Unfortunately for all of us, both camps are more interested in pointing fingers on TV and on planning for default damage control than on avoiding the default.

[Sec24Row7]

There you go again, taking the high road. :p:

(sighs)

Sorry. This topic gets me a tad worked up.

m7mIy97_rlo

NP dude...

If this stuff didn't get people worked up... the billions of dollars in news network and media that their passion supports would go out of business...

You are saving jobs.

[Th'Pusher]

No one has a plan worth a damn.

The plan we need is somewhere in between the republicans stance on real spending cuts and the democrats stance on increased tax revenue. Unfortunately for all of us, both camps are more interested in pointing fingers on TV and on planning for default damage control than on avoiding the default.

In your opinion, who has taken a more rational, reasonable position in the negotiations? BHO or the Republicans?

[ElNono]

No one has a plan worth a damn.

The plan we need is somewhere in between the republicans stance on real spending cuts and the democrats stance on increased tax revenue. Unfortunately for all of us, both camps are more interested in pointing fingers on TV and on planning for default damage control than on avoiding the default.

It's either that or both sides are intentionally misleading, and see a default and some kind of credit/market crash as something they feel they can use, either politically or economically (or both). Or it simply isn't as 'catastrophic' as they've been trying to paint to to be.

[CosmicCowboy]

There won't be any default. Boehner and Reid will finally agree on something and BHO will sign it, all the while whining about the nasty heartless Republicans.

[RandomGuy]

"I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection."

~ Warren Buffett 7/8/11

Adding that one to the siggy.

[coyotes_geek]

In your opinion, who has taken a more rational, reasonable position in the negotiations? BHO or the Republicans?

Obama's got the right approach, but doesn't seem to have a plan. At least not one he's willing to share with us.

Republicans OTOH have no problem telling us what their plan is, but it's not the right approach, at least not IMO........


It's either that or both sides are intentionally misleading, and see a default and some kind of credit/market crash as something they feel they can use, either politically or economically (or both). Or it simply isn't as 'catastrophic' as they've been trying to paint to to be.

Both sides seem to think that the other side will receive more of the blame in a default. That's not good.

[TeyshaBlue]

Does no one care that the OP actually went in to the quote and changed "might" to "probably" for the sake of the title AND his quote?

Regardless of what side you are on... that's dishonest and despicable.

DMX7...really wouldn't expect anything else. He liked to pull a DarrinS...post a bullshit OP and then you never see him in the thread again.:lol

[TeyshaBlue]

Obama's got the right approach, but doesn't seem to have a plan. At least not one he's willing to share with us.

Republicans OTOH have no problem telling us what their plan is, but it's not the right approach, at least not IMO........



Both sides seem to think that the other side will receive more of the blame in a default. That's not good.

It's like thinking you can win a global nuclear war.:depressed

[MannyIsGod]

The more this goes on the more I think they'll just ignore the debt ceiling if it comes to it.

[boutons_deux]

"ignore the debt ceiling if it comes to it."

Don't know if that's legal. I go for the 14th, but apparently Barry and Const. lawyers are not sure it applies. If it went to SCOTUS, you know The Filthy Five block would say the 14th no longer applies after the Civil War period.

[CosmicCowboy]

Going to be interesting to see if Boehner can twist enough arms to get 218...some of the nutters just don't get it that this plan is as good as it's gonna get...

[MannyIsGod]

Government can default in a couple of years when I can take my skills overseas if need be. Not quite yet though.

[Winehole23]

There won't be any default. Boehner and Reid will finally agree on something and BHO will sign it...No default, but a downgrade may be unavoidable.

[CosmicCowboy]

No default, but a downgrade may be unavoidable.

If the ratings agencies were rational we would already be downgraded no matter which "plan" passed. There is simply no political will to cut spending enough to make a significant difference.

[coyotes_geek]

I'm sticking with my prediction that one of them pulls the trigger on a downgrade by friday.

[boutons_deux]

Boehner Plan Faces G.O.P. Resistance and Veto Threat

The White House threatened on Tuesday to veto emergency House legislation that aims to avert a threatened national default, a pre-emptive strike issued as Republican Speaker John Boehner labored to line up enough votes in his own party to pass the measure.

Boehner faced criticism from some conservatives in advance of an expected vote on Wednesday.

The bill would raise the debt limit by $1 trillion while making cuts to federal spending of $1.2 trillion — reductions that conservatives say aren't enough.

The measure also would establish a committee of lawmakers to recommend additional budget savings of $1.8 trillion, which would trigger an additional $1.6 trillion increase in the debt limit.

The White House objects to the requirement for a second vote before the 2012 elections.

Majority Leader Harry Reid said the measure stood no chance of passing the Senate even if it cleared the House. He pronounced it "dead on arrival."

http://www.nytimes.com/aponline/2011/07/26/business/AP-US-Debt-Showdown.html?_r=1&partner=rss&emc=rss

=========

The Repugs have really fucked up forcing this bogus debt limit issue.

[Sec24Row7]

If he vetoes a bill that would give us a chance not to default it would be political suicide...

he would sign something that prevented us defaulting on a bar napkin.

[Winehole23]

If he vetoes a bill that would give us a chance not to default it would be political suicide... Hot potato. If the Senate forces through a bill more amenable to Obama, why wouldn't he take that instead?

[CosmicCowboy]

If he vetoes a bill that would give us a chance not to default it would be political suicide...

he would sign something that prevented us defaulting on a bar napkin.

His hope is that he can keep the Reid and the Senate in line and not HAVE to veto anything.

[ElNono]

If he vetoes a bill that would give us a chance not to default it would be political suicide...

he would sign something that prevented us defaulting on a bar napkin.

I don't know that the Senate is passing anything Barry doesn't agree with, tbh...

[DMX7]

The actual text not good enough for you so you have to lie?

Erin Burnett: Boehner plan might not prevent downgrade of U.S. economy

New CNN anchor Erin Burnett makes her debut on the network during a special hour leading up to President Obama’s address to the nation on the debt limit impasse and the potential default of the full faith and credit of the United States if an agreement in Congress isn't made.

Burnett's source says that Speaker of the House John Boehner's plan might result in a downgrade of the US economy by Standard and Poor’s, which could raise interest rates, while Senate Majority Leader Harry Reid’s plan could prevent a downgrade because the higher amount of cuts up front.

Burnett’s show premieres in the Fall at 7p ET on CNN.

They revised it. It said probably when I looked at it.

[SnakeBoy]

If the ratings agencies were rational we would already be downgraded no matter which "plan" passed. There is simply no political will to cut spending enough to make a significant difference.

After we get downgraded they will take some real actions to seriously address the problem. As I've said before this is just a political show by both sides to set up who gets the blame in the next election.

From what little details I've heard the "Gang of 6" seem to be taking the issue seriously (spending cuts, entitlement reform, tax reform) but such an approach has no chance until after we are downgraded and everyone in Washington is in crisis mode.

[boutons_deux]

" "Gang of 6" seem to be taking the issue seriously"

bullshit. The Peterson commission was nothing but another battle in Wall St Banker Peterson's decades long attack to destroy SS, leaving Wall St as primary pensions manager(destroyer).

[boutons_deux]

Quelle Surprise! Banks Don’t Want to be in IRA Business if They Can’t Treat Customers as Stuffees

This object lesson is IRAs. Bloomberg reports that if brokerage firms who manage IRAs were required to act as a fiduciary, as in put their customers’ interests first, many would exit the business.

The dirty secret of the retail asset management business at brokerage firms is that their profits depend on treating you badly. Unless you are a big enough customer that they would not like to lose you, you are going to be abused (well, take it back, even being a billionaire is not rich enough to be safe from bank predation). The one check on this, ironically, is that salesmen are de facto small businessmen in a bigger corporate umbrella, and their clients are their book of business. They thus have incentives to make sure the customer thinks he is being treated well (whether he is actually treated well is another matter).

The big firms have generally if not completely inferior in-house fund management products they push (inferior by virtue of higher fees and/or not so hot performance). Your “investment advisor” also has an incentive to encourage you to trade if you are in a commission-paying account. The alternative, a wrap fee account, has annual charges that make a serious dent in your principal over time.

http://www.nakedcapitalism.com/2011/07/quelle-surprise-banks-dont-want-to-be-in-ira-business-if-they-cant-treat-customers-as-stuffees.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

=============

Moving SS $Ts, in mostly small amounts from naive, trusting customers, to IRAs and other private investment accounts is what Wall St is drooling over.

[RandomGuy]

(one big caveat: read Benoit Mandelbrot’s The Misbehavior of Markets. Everyone needs to recognize that the tenets of financial economics underestimate the risk of markets and as a result, encourage too much risk-taking. Any standard advice on what level of stock holdings are desirable needs to be dialed down. Rule number one of investing is preservation of capital, and that too often is ignored

Anybody who assumes that the financial markets are fair and not predatory on your average small investor, has probably never worked in the financial sector, or read much on the mechanics of said markets.

I would note that at some larger corporations it is entirely possible to buy stock directly, and that dividend reinvestment plans for companies like Coca Cola incur zero transaction fees.

[MannyIsGod]

Not quite sure why anyone thinks a downgrade will create a crisis. It will cause our securities to generate more interest and considering the state of Europe and other currencies around the world you can bet that it won't change much other than the amount of interest we'll pay. Thats why a downgrade is so bad.

The US bonds don't get weaker the instant the rating is lowered. However, that will effect interest rates. In other words, investors will make more money at the cost of the US tax payer will no real increase in risk what so ever. Sounds just dandy huh?

[boutons_deux]

"investors will make more money"

and 40%+ of US debt holder are American.

I think it's Issa who actually placed an short bet on it happening. His oath of office requires him to bet against the country he helps run (into a ditch)

[CosmicCowboy]

Not quite sure why anyone thinks a downgrade will create a crisis. It will cause our securities to generate more interest and considering the state of Europe and other currencies around the world you can bet that it won't change much other than the amount of interest we'll pay. Thats why a downgrade is so bad.

The US bonds don't get weaker the instant the rating is lowered. However, that will effect interest rates. In other words, investors will make more money at the cost of the US tax payer will no real increase in risk what so ever. Sounds just dandy huh?

Actually Manny, bond values work inversely from interest rates. When interest rates go up the value of the current bondholders investment goes down.

[MannyIsGod]

Thats because it doesn't make sense to buy bonds with lower interest rates. That is because new bonds would be more profitable. Since the US sells new bonds in order to raise money thats what is worth considering here.

[boutons_deux]

The US could always implement the right-wing strategy defaulting only on bonds (respectfully known as worthless IOUs, unless wealthy people own them) that the Feds sold to SSA. Cool way of reducing the debt, screwing 10Ms of old people.

[CosmicCowboy]

Thats because it doesn't make sense to buy bonds with lower interest rates. That is because new bonds would be more profitable. Since the US sells new bonds in order to raise money thats what is worth considering here.

"Low" interest rate is a relative term. The Fed is already talking about QE3. The higher rates of next year may look really low in 5 years.

[MannyIsGod]

Well anything could happen in 5 years. My point is that the rating getting lowered in no way will be a catalyst for financial reform in this country. I'm not sure at all why people are thinking thats the case.

[ElNono]

Not quite sure why anyone thinks a downgrade will create a crisis. It will cause our securities to generate more interest and considering the state of Europe and other currencies around the world you can bet that it won't change much other than the amount of interest we'll pay. Thats why a downgrade is so bad.

The problem is that an increase in 0.1 in interest rate increase means our interest payments on the debt raise by a few billions per year. Meaning the budget needs to reflect this and removes that kind of money to be allocated somewhere else.

[MannyIsGod]

The problem is that an increase in 0.1 in interest rate increase means our interest payments on the debt raise by a few billions per year. Meaning the budget needs to reflect this and removes that kind of money to be allocated somewhere else.

Don't misunderstand - I obviously don't want interest to go up. I just don't see how an extra 100 billion per year is going to be some huge catalyst for financial change. Do you?

[Drachen]

Anybody who assumes that the financial markets are fair and not predatory on your average small investor, has probably never worked in the financial sector, or read much on the mechanics of said markets.

I would note that at some larger corporations it is entirely possible to buy stock directly, and that dividend reinvestment plans for companies like Coca Cola incur zero transaction fees.

For a true novice the "little book of big dividend investing " is a good way to oriented yourself on this stuff.

[Drachen]

Don't misunderstand - I obviously don't want interest to go up. I just don't see how an extra 100 billion per year is going to be some huge catalyst for financial change. Do you?

I will try to give a few examples without rambling:

Say an investor (institutional, personal, pension, etc) holds a lot of bonds and has a loan secured by those bonds (or has invested on margin with their equity position being represented by those bonds). The moment the credit rating of the US goes down the prevailing interest rates will go up which will decrease the value the bonds being held by the aforementioned investor. This decrease in value can mean that it is no longer sufficient to secure the margin, or loan (essentially the same thing) which can result in a margin call. If the investor doesn't have enough in cash to cover the call, then they will have to start selling other assets (stock in companies, cars, houses, etc) in order to cover the cost of the margin call. If this happens the value of the assets in question begins to decline due to an increase in supply. This sparks a panic wherein investors decide to move back out of the stock market, but will likely not want to move into bonds because as this spiral continues there could be another increase in interest rates which will devalue their bond holdings again... So what do they invest in? Commodities. So now gold is shooting through the roof, Glen Beck looks like a genius (a catastrophe all by itself), but another more important commodity is skyrocketing too... Oil. So now EVERYTHING is more expensive right at the time that real household income is falling precipitously. I am sure I can go on, and I am sure that there are different branches in the preceding steps that I could have explored, but I am going to stop now. There is also the possibility that nothing happens because the markets have faith that even after a default the US govt will fix itself resulting in no changes in market rates at all (I doubt it), but you asked why people are panicing, and the scenario above seems real enough (and possible enough) to panic about.

[ElNono]

Don't misunderstand - I obviously don't want interest to go up. I just don't see how an extra 100 billion per year is going to be some huge catalyst for financial change. Do you?

It's more than that. Those extra 100 billion could go into propping up the economy, paying unemployment checks, etc. With the economy the way it is, it's certainly bad timing to have less resources.

[SnakeBoy]

Th only consistent message from Obama since he was elected has been that economic armegeddon is just around the corner unless he gets what he wants. Seems to work well on some of you. If the terrists don't getcha the economy will getcha...be afraid be very afraid.

[coyotes_geek]

Th only consistent message from Obama since he was elected has been that economic armegeddon is just around the corner unless he gets what he wants. Seems to work well on some of you. If the terrists don't getcha the economy will getcha...be afraid be very afraid.

That's been the republicans message too. Hence the gridlock we're now seeing.

[Drachen]

Th only consistent message from Obama since he was elected has been that economic armegeddon is just around the corner unless he gets what he wants. Seems to work well on some of you. If the terrists don't getcha the economy will getcha...be afraid be very afraid.

This is a pretty measurable phenomenon. Especially since the "risk free" rate is tied into EVERY SINGLE financial, project valuation, or investment decision. It is easy to see how far reaching of an effect that this kind of shift would have.

[cheguevara]

so is "the plan" ready yet?

[cheguevara]

Th only consistent message from Obama since he was elected has been that economic armegeddon is just around the corner unless he gets what he wants. Seems to work well on some of you. If the terrists don't getcha the economy will getcha...be afraid be very afraid.

the armageddon was coming Obama or not. Wake up

[MannyIsGod]

I will try to give a few examples without rambling:

Say an investor (institutional, personal, pension, etc) holds a lot of bonds and has a loan secured by those bonds (or has invested on margin with their equity position being represented by those bonds). The moment the credit rating of the US goes down the prevailing interest rates will go up which will decrease the value the bonds being held by the aforementioned investor. This decrease in value can mean that it is no longer sufficient to secure the margin, or loan (essentially the same thing) which can result in a margin call. If the investor doesn't have enough in cash to cover the call, then they will have to start selling other assets (stock in companies, cars, houses, etc) in order to cover the cost of the margin call. If this happens the value of the assets in question begins to decline due to an increase in supply. This sparks a panic wherein investors decide to move back out of the stock market, but will likely not want to move into bonds because as this spiral continues there could be another increase in interest rates which will devalue their bond holdings again... So what do they invest in? Commodities. So now gold is shooting through the roof, Glen Beck looks like a genius (a catastrophe all by itself), but another more important commodity is skyrocketing too... Oil. So now EVERYTHING is more expensive right at the time that real household income is falling precipitously. I am sure I can go on, and I am sure that there are different branches in the preceding steps that I could have explored, but I am going to stop now. There is also the possibility that nothing happens because the markets have faith that even after a default the US govt will fix itself resulting in no changes in market rates at all (I doubt it), but you asked why people are panicing, and the scenario above seems real enough (and possible enough) to panic about.

I definitely see the potential for economic hard. Anytime the economy tanks you see commodities such as oil and gold rise. Thats pretty basic. That being said, if the 2007-08 financial crisis didn't generate financial reform then you'd have to imagine that the bond market would have to have an effect greater than the previous crisis to generate such reform. I don't think thats really going to happen because even now those bonds are selling very well. So even now, at midnight before the debt crisis with no apparently solution with a looming rate hike these bonds are selling well. I just find it hard to believe that all of a sudden they're going to flip based on a ratings agency given the relative weakness of other bonds.

[MannyIsGod]

It's more than that. Those extra 100 billion could go into propping up the economy, paying unemployment checks, etc. With the economy the way it is, it's certainly bad timing to have less resources.


Missing my point again. I'm not arguing against that. I'm arguing against it being enough of a catalyst for real legislative change. Especially when you consider the way the word trillion is tossed around now. 100 billion is simply not a game changer, IMO. I'm not arguing its insignificant in the least.

[Wild Cobra]

the armageddon was coming Obama or not. Wake up
But Obamageddon has come!

[MannyIsGod]

Th only consistent message from Obama since he was elected has been that economic armegeddon is just around the corner unless he gets what he wants. Seems to work well on some of you. If the terrists don't getcha the economy will getcha...be afraid be very afraid.

I hate it when you guys force me into defending Obama, but given the level of the economic crisis that unfolded prior to his taking office and the level of the the current situation your statement is out of context bullshit.

9/11 can't hold a candle to the depth of the financial crisis.

[Drachen]

I definitely see the potential for economic hard. Anytime the economy tanks you see commodities such as oil and gold rise. Thats pretty basic. That being said, if the 2007-08 financial crisis didn't generate financial reform then you'd have to imagine that the bond market would have to have an effect greater than the previous crisis to generate such reform. I don't think thats really going to happen because even now those bonds are selling very well. So even now, at midnight before the debt crisis with no apparently solution with a looming rate hike these bonds are selling well. I just find it hard to believe that all of a sudden they're going to flip based on a ratings agency given the relative weakness of other bonds.

well at that time the Fed was able to cut rates which increased the value of all of the bondholders' assets so the situation which I described did not happen. The other difference is that people were pulling their money out of the stock market and putting it in the bond market as well as commodities. This could be a rare situation where both bonds and stocks are not attractive investments and therefore the only game in town would be commodities. The other big difference between 2008 and now is that in 2008, 2008 hadn't happened 3 years earlier.

[cheguevara]

But Obamageddon has come!

hide your daughters! Obama is raping everyone out here!

[MannyIsGod]

well at that time the Fed was able to cut rates which increased the value of all of the bondholders' assets so the situation which I described did not happen. The other difference is that people were pulling their money out of the stock market and putting it in the bond market as well as commodities. This could be a rare situation where both bonds and stocks are not attractive investments and therefore the only game in town would be commodities. The other big difference between 2008 and now is that in 2008, 2008 hadn't happened 3 years earlier.

I'm trying to tell you that there is little evidence that bonds aren't attractive investments right now as this situation is unfolding even as most people expect a downgrade. I'm arguing that a downgrade has already been factored in by the bond market. Where's the panic?

[RandomGuy]

I'm trying to tell you that there is little evidence that bonds aren't attractive investments right now as this situation is unfolding even as most people expect a downgrade. I'm arguing that a downgrade has already been factored in by the bond market. Where's the panic?

I don't think the bond market has fully factored in a downgrade yet.

Yields haven't risen enough to compensate for the rise in interest rates that a downgrade would entail.

It seems the consensus has been "no way they (congress) would be that stupid".

Not saying its a good assumption, just the working assumption. :lol

It would seem the tea party really is that stupid. SURPRISE!!!!

Down is down 1.5% today, BTW, with bond yields on the 10 year notes up.

It would seem that they are factoring it in now.

[Drachen]

I'm trying to tell you that there is little evidence that bonds aren't attractive investments right now as this situation is unfolding even as most people expect a downgrade. I'm arguing that a downgrade has already been factored in by the bond market. Where's the panic?

I think that everyone is still holding onto hope that it will get done. I don't think that it has been factored in yet. The dow was increasing until a week ago and is now falling. I think we are seeing the process of it getting priced in. Also, the ratings agencies have said that there is a 50-50 chance of a downgrade so even if you are correct, the pricing in of a 50 % chance of a downgrade would happen over time. In the event of a default, though, that other 50% gets priced in all in one day. Pretty catastrophic.

[SnakeBoy]

I hate it when you guys force me into defending Obama, but given the level of the economic crisis that unfolded prior to his taking office and the level of the the current situation your statement is out of context bullshit.


Yeah we had to take all the actions taken in order to "prevent the crisis on wall street from becoming a crisis on main street". How's it worked out for main street? In case you haven't noticed economic armegeddon has been occuring for millions since we "had" to save the TBTF's from themselves. Look at Drachen's dire predictions of what will happen Aug 2nd...the wealthy will shift investments and continue to be wealthy and the non wealthy will struggle. That's not armegeddon, that's business as usual.

And I wasn't comparing 9/11 to the financial crisis. I was comparing the politics of fear mongering. Works for every situation it seems.

[ElNono]

Missing my point again. I'm not arguing against that. I'm arguing against it being enough of a catalyst for real legislative change. Especially when you consider the way the word trillion is tossed around now. 100 billion is simply not a game changer, IMO. I'm not arguing its insignificant in the least.

ok

[Th'Pusher]

Kind of funny in retrospect. LOL @ $51B

http://abcnews.go.com/Archives/video/2001-us-govt-surplus-shrinking-14171073

[Th'Pusher]

I mean BHO really did a number to the economy in his 2.5 years in office...

[ChumpDumper]

In case you haven't noticed economic armegeddon has been occuring for millionslol using hyperbole to criticize hyperbole

[MannyIsGod]

I think that everyone is still holding onto hope that it will get done. I don't think that it has been factored in yet. The dow was increasing until a week ago and is now falling. I think we are seeing the process of it getting priced in. Also, the ratings agencies have said that there is a 50-50 chance of a downgrade so even if you are correct, the pricing in of a 50 % chance of a downgrade would happen over time. In the event of a default, though, that other 50% gets priced in all in one day. Pretty catastrophic.

Downgrade and default are two different things. I'd agree things get FAR worse with a default.

[MannyIsGod]

Yeah we had to take all the actions taken in order to "prevent the crisis on wall street from becoming a crisis on main street". How's it worked out for main street? In case you haven't noticed economic armegeddon has been occuring for millions since we "had" to save the TBTF's from themselves. Look at Drachen's dire predictions of what will happen Aug 2nd...the wealthy will shift investments and continue to be wealthy and the non wealthy will struggle. That's not armegeddon, that's business as usual.


:lol Thats pretty funny considering what you're complaining about. But not, millions have not seen "armegeddon" and considering how Obama's plan has been to help those people I don't think you can be critical of his stance on that.

Yes its bad. That doesn't mean it wouldn't have been far far worse.

You think Aron Ralston complains about missing part of his arm when contemplating the alternative? Not acknowledging that the system would have completely collapsed - and our way of life with it - had they acted when they did is some really poor revisionist history.

Also, Obama didn't pass TARP.



And I wasn't comparing 9/11 to the financial crisis. I was comparing the politics of fear mongering. Works for every situation it seems.Fear mongering isn't fear mongering when there's an actual reason to be scared. THAT is the point.

[SnakeBoy]

Fear mongering isn't fear mongering when there's an actual reason to be scared. THAT is the point.

So you must be terrified of next week. What do you think is going to happen to you?

[SnakeBoy]

lol using hyperbole to criticize hyperbole

It's not hyperbole when you're describing something that has actually happened.

[RandomGuy]

Yeah we had to take all the actions taken in order to "prevent the crisis on wall street from becoming a crisis on main street". How's it worked out for main street? In case you haven't noticed economic armegeddon has been occuring for millions since we "had" to save the TBTF's from themselves. Look at Drachen's dire predictions of what will happen Aug 2nd...the wealthy will shift investments and continue to be wealthy and the non wealthy will struggle. That's not armegeddon, that's business as usual.

And I wasn't comparing 9/11 to the financial crisis. I was comparing the politics of fear mongering. Works for every situation it seems.

Not saving the TBTF banks would have had the following effect:

Bank 1
Assets 100, liabilities 90, equity 10 (A-L = E)

Bank 2
Assets 100, liabilities 90, equity 10

Bank 3
Assets 150, liabilities 130, equity 20


Economic crisis hits. All banks have a small amount of asset loss.
Step 1
Bank 1
Assets 98, liabilities 90, equity 8

Bank 2
Assets 98, liabilities 90, equity 8

Bank 3
Assets 145, liabilities 130, equity 15

So far so good. All three are solvent.
Did I mention that all three banks, as part of their assets, hold each other's bonds? No? Keep that in mind, it gets important.

Step 2
Bank 1 had a bit more exposure to a certain sector than they realized, and one of their counter party deals comes due early.
Assets 90, liabilities 92, equity -2

Whoops.

Bank 1 can no longer pay on all of its obligations. i.e its bonds. This is where the write downs suddenly come into play. Bank 2 and 3 have to write down the values of Bank 1's bonds, and sustain ongoing losses.

Step 3, write down on Bank 1
Bank 1
Assets 90, liabilities 92, equity -2
Bank 2
Assets 93, liabilities 91, equity 2
Bank 3
Assets 137, liabilities 138, equity -1

What do you think will happen to Bank 3 bonds? You know, the ones that Bank 2 is holding? Bank 2, already under stress, has a capital cushion of 2, before that write down.

This is how interlinking causes cascading failures.
Bank 1's over exposure to the housing market ripples through the other two at the same time they are under stress.

If you don't stop the "first domino", you WILL end up with the Great Depression all over again.

I always marvel at "free market" fanatics who dont' seem to understand how exactly "free markets" work, and think that the bailout was some Democrat plot.

[ChumpDumper]

It's not hyperbole when you're describing something that has actually happened.Do you know what hyperbole means?

[SnakeBoy]

Not saving the TBTF banks would have had the following effect:

Bank 1
Assets 100, liabilities 90, equity 10 (A-L = E)

Bank 2
Assets 100, liabilities 90, equity 10

Bank 3
Assets 150, liabilities 130, equity 20


Economic crisis hits. All banks have a small amount of asset loss.
Step 1
Bank 1
Assets 98, liabilities 90, equity 8

Bank 2
Assets 98, liabilities 90, equity 8

Bank 3
Assets 145, liabilities 130, equity 15

So far so good. All three are solvent.
Did I mention that all three banks, as part of their assets, hold each other's bonds? No? Keep that in mind, it gets important.

Step 2
Bank 1 had a bit more exposure to a certain sector than they realized, and one of their counter party deals comes due early.
Assets 90, liabilities 92, equity -2

Whoops.

Bank 1 can no longer pay on all of its obligations. i.e its bonds. This is where the write downs suddenly come into play. Bank 2 and 3 have to write down the values of Bank 1's bonds, and sustain ongoing losses.

Step 3, write down on Bank 1
Bank 1
Assets 90, liabilities 92, equity -2
Bank 2
Assets 93, liabilities 91, equity 2
Bank 3
Assets 137, liabilities 138, equity -1

What do you think will happen to Bank 3 bonds? You know, the ones that Bank 2 is holding? Bank 2, already under stress, has a capital cushion of 2, before that write down.

This is how interlinking causes cascading failures.
Bank 1's over exposure to the housing market ripples through the other two at the same time they are under stress.

If you don't stop the "first domino", you WILL end up with the Great Depression all over again.

I always marvel at "free market" fanatics who dont' seem to understand how exactly "free markets" work, and think that the bailout was some Democrat plot.

I always marvel at those who think TARP or doing nothing were the only options.

[Drachen]

Downgrade and default are two different things. I'd agree things get FAR worse with a default.

the moment we can't borrow any more we default. If we can't pay defense contractors for their work: default. If we can't pay principal and interest on our debt: default. If we can't send out SSI checks: default. etc.

[Wild Cobra]

the moment we can't borrow any more we default. If we can't pay defense contractors for their work: default. If we can't pay principal and interest on our debt: default. If we can't send out SSI checks: default. etc.
So....

Should we borrow more to cover today's costs, almost insure default for my children?

Maybe we should find real solutions.

[ChumpDumper]

So....

Should we default now while we're saying we're looking for a real solution?

[MannyIsGod]

So you must be terrified of next week. What do you think is going to happen to you?

I am fairly scared of what might happen. I'm very close to finishing up my two degrees. Should there be a problem financing the system that is providing me those degrees then I'm not going to be very scared. If the government runs out of money then it obviously has huge effects.

I'm definitely not happy about the prospect of all of this going down when I can see the finish line.

[SnakeBoy]

So....

Should we borrow more to cover today's costs, almost insure default for my children?

Maybe we should find real solutions.

No No No! We must do whatever it takes to continue business as usual. Otherwise the average americans might lose their job, their home, have a lower standard of living...oh wait nevermind.

[MannyIsGod]

I'm a lot more scared of this than I ever have been of the prospect of being the target of some terrorist. Thats for damn sure.

[MannyIsGod]

No No No! We must do whatever it takes to continue business as usual. Otherwise the average americans might lose their job, their home, have a lower standard of living...oh wait nevermind.

Complete and utter strawman. Don't change your tune now. Stick to your guns that this isn't serious.

[SnakeBoy]

I am fairly scared of what might happen. I'm very close to finishing up my two degrees. Should there be a problem financing the system that is providing me those degrees then I'm not going to be very scared. If the government runs out of money then it obviously has huge effects.

I'm definitely not happy about the prospect of all of this going down when I can see the finish line.

So your only thinking short term. Take a long term look and you might be more scared.

[MannyIsGod]

I always marvel at those who think TARP or doing nothing were the only options.

More straw. Besides, Obama didn't pass TARP. He voted on it, but he wasn't in office when it was passed. You've talked about Obama's alleged fear mongering. You said nothing about whether or not something else should be passed.

[MannyIsGod]

So your only thinking short term. Take a long term look and you might be more scared.

Long term solution is really easy as shit. Forget the Bush tax cuts, cut some programs, and our country is fine. Completely fine. In the meantime, if we fuck this up the long term sure as hell doesn't get any better.

[MannyIsGod]

Not to mention that Obama is the only one coming to the plate with a long term solution. The person you're being critical of is the only one thinking long term.

[Drachen]

So....

Should we borrow more to cover today's costs, almost insure default for my children?

Maybe we should find real solutions.

You are absolutely right, we should find real solutions like cutting expenditures and increasing revenues. However we should also not exacerbate the problem by just walking right into default and downgrades. If we decide that this is the way we want to go, then we can expect to enjoy the necessity of even greater cuts, and the requirement of even greater revenues all at the time when Americans aren't buying as much stuff since it is so much more expensive to purchase and finance causing greater job losses which shrinks the tax base etc.

[boutons_deux]

GOP fault lines deepen as Boehner says tea party seeks ‘chaos’ in debt deal

The longer the nation's debt crisis goes unsolved, it seems, the deeper and uglier the fault lines within the Republican Party grow.

Paul Teller, the executive director of the Republican Study Committee, a large policy group made up of House Republicans, came under fire from a group of Republicans who support House Speaker John Boehner's plan for the debt ceiling. Teller and other RSC members had circulated emails speaking against Boehner's plan Tuesday.

In a closed-door meeting Wednesday, Teller stood silently while House Republicans chanted "fire him, fire him," Politico reported.

“It was an unbelievable moment," someone at the meeting told Politico. "I’ve never seen anything like it.”

At the same meeting, Boehner reportedly spoke bluntly to his fellow legislators, many of whom are undecided about his plan.

"Get your ass in line," ABC News reported him saying. "I can't do this job unless you are behind me."

Boehner said many who align themselves with the ultra-conservative tea party and oppose his plan are hoping to cause "enough chaos" to force a constitutional amendment that would require a balanced budget plan.

http://www.rawstory.com/rs/2011/07/27/gop-fault-lines-deepen-as-boehner-says-tea-party-seeks-chaos-in-debt-deal/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story% 29

[Wild Cobra]

Long term solution is really easy as shit. Forget the Bush tax cuts, cut some programs, and our country is fine. Completely fine. In the meantime, if we fuck this up the long term sure as hell doesn't get any better.
Bullshit.

We need to bring back the jobs we have been exporting. We have no working solution without providing a solution that increases the number of tax payers here. Asking for more from those already paying taxes has the counter effect of reducing the economy. Smaller economy at a higher tax rate may yield a smaller revenue rather than larger, and what ever the yield is, you can not look at it with a static equation. $200 billion in tax increases will not yield $200 billion in revenue increases.

[MannyIsGod]

the moment we can't borrow any more we default. If we can't pay defense contractors for their work: default. If we can't pay principal and interest on our debt: default. If we can't send out SSI checks: default. etc.

Yeah I get what a default is. I'm not understanding your point with this post though? A rating is basically a way of measuring threat of default, so a downgrade is obviously not as bad as an actual default.

[MannyIsGod]

Bullshit.

We need to bring back the jobs we have been exporting. We have no working solution without providing a solution that increases the number of tax payers here. Asking for more from those already paying taxes has the counter effect of reducing the economy. Smaller economy at a higher tax rate may yield a smaller revenue rather than larger, and what ever the yield is, you can not look at it with a static equation. $200 billion in tax increases will not yield $200 billion in revenue increases.

Cutting taxes will bring more jobs to the US. Where have I heard that before? Nothing is bring back more jobs to the US that doesn't involve making the US more skilled compared to other nations or lowering the cost of the labor itself. Its either through efficiency or cost but its not because of taxes.

Taxes will have to go up if people really care about reducing the deficit.

[MannyIsGod]

Hey does anyone have links to economists who think that the debt ceiling isn't a big deal? This is an honest appeal for those economic view points.

[ElNono]

We have no working solution without providing a solution that increases the number of tax payers here.

scott already schooled you on this claim. That you keep repeating it won't make it true, tbh.

[MannyIsGod]

WC's never been one to let the facts get in the way of his arguments.

[Wild Cobra]

scott already schooled you on this claim. That you keep repeating it won't make it true, tbh.
Oh really... Refresh my mind. I'll bet it's not the same thing I'm talking about now.

WC's never been one to let the facts get in the way of his arguments.
Bullshit. We cannot tax our way into prosperity when we are already over extended. We need a larger tax base to collect taxes from rather than squeezing the productive harder. We need to bring good paying jobs back to America.

[baseline bum]

Why does every Wild Cobra post read like a Palin speech?

[RandomGuy]

Oh really... Refresh my mind. I'll bet it's not the same thing I'm talking about now.

Bullshit. We cannot tax our way into prosperity when we are already over extended. We need a larger tax base to collect taxes from rather than squeezing the productive harder. We need to bring good paying jobs back to America.

Empty cliches do not an economic policy make.

Thing is that taking money from richers makes economic sense, when they are the ones that can afford it, and have benefitted most from the economy in the last 20 years.

That is more than fair.

Governments have to spend money on the things private industry won't. It is where we pool our collective resources and do what we need to do.

Government has a definite function, and does some rather measurable, demonstrable good.

Total abscence of government, or really weak governments, may have been possible before the rise of huge multi-national corporations and mafias, but those days are long gone.

Large problems and large economies require large governments.

Suck it.

[angrydude]

Empty cliches do not an economic policy make.

Thing is that taking money from richers makes economic sense, when they are the ones that can afford it, and have benefitted most from the economy in the last 20 years.

That is more than fair.

Governments have to spend money on the things private industry won't. It is where we pool our collective resources and do what we need to do.

Government has a definite function, and does some rather measurable, demonstrable good.

Total abscence of government, or really weak governments, may have been possible before the rise of huge multi-national corporations and mafias, but those days are long gone.

Large problems and large economies require large governments.

Suck it.

I agree. When someone starts talking about taxing bankers instead of the professional middle class let me know.

[Wild Cobra]

I agree. When someone starts talking about taxing bankers instead of the professional middle class let me know.
No kidding.

Again for those who ignored this before. Not many people pay taxes under the marginal rates in our income tax system. The rich who end up paying little in taxes are not filing under the standard income tax tables.

[SnakeBoy]

Besides, Obama didn't pass TARP. He voted on it, but he wasn't in office when it was passed.

So you credit Bush with saving us from the "next great depression" not Obama.



Forget the Bush tax cuts

That doesn't seem so easy for Obama, he renewed them remember.


Not to mention that Obama is the only one coming to the plate with a long term solution.

"Shared sacrifice" and "balance" isn't much of a solution.


Don't change your tune now. Stick to your guns that this isn't serious.

Never said it wasn't serious. My guns are that we won't default on Aug. 2nd and we will be downgraded regardless of the plan that ends up getting passed. I'll stick to that.

[ElNono]

The TARP had nothing to do with saving us from a depression. It had to do with avoiding a bank run (or so the leadership at the time claimed).

[ElNono]

Oh really... Refresh my mind.

http://spurstalk.com/forums/showthread.php?t=182722&page=4

[Wild Cobra]

http://spurstalk.com/forums/showthread.php?t=182722&page=4
You think you're funny huh?

I'm not going to scour a whole page and psychically assume what your point is.

Make it or shut up asshole.

[ElNono]

You think you're funny huh?

No, I'm not. You and your 'flat tax' spanning from your contention that we need more tax payers met reality and it was only ugly if it was you. For the rest of us, it was comedic gold to see your ridiculous contention actually be presented in numbers (something you didn't even want to do) and crumble to pieces.

Your economic clichés are often wrong and stupid. No matter how many times you repeat them. Get over it.

[Winehole23]

I'm not going to scour a whole page and psychically assume what your point is.Reading, in common parlance.

You should try it sometime. This a discussion board. The main contributions are verbal in nature and it's allowed to read them. May even help you keep up with the flow of conversation from time to time.

...taptaptap

[Wild Cobra]

Well, since ElNono directed me to information overload, instead of a point... I see he has no valid point.

[boutons_deux]

PAUL: The Boehner plan is not going to be law so why lose your principles by voting for it?

http://thinkprogress.org/politics/2011/07/28/282620/boehner-rand-paul/

[Wild Cobra]

Sure, the senate will likely change in, but that's part of the process. Then the senate has to be accountable to the people.

[boutons_deux]

Repugs really exposing their blatant sociopathy

Conservatives angry over Pell Grant funding in Boehner debt bill

Legislation crafted by House Speaker John Boehner (R-Ohio) to raise the debt limit by $900 billion would directly appropriate $9 billion for Pell Grants in 2012 and another $8 billion in 2013.

"So you can go to college on Pell Grants — maybe I should not be telling anybody this because it’s turning out to be the welfare of the 21st century," Rehberg told Blog Talk Radio in April. "You can go to school, collect your Pell Grants, get food stamps, low-income energy assistance, Section 8 housing, and all of a sudden we find ourselves subsidizing people that don’t have to graduate from college.”

http://thehill.com/homenews/house/174253-house-conservatives-angry-over-pell-grant-funding-in-boehner-debt-bill