News Item: Opening Day for the US Fiscal Crisis
Today, the United States passed an important mile marker along the road to economic collapse as Standard & Poors downgraded the outlook on US sovereign debt from "stable" to "negative."
The outlook means that there is a one-in-three likelihood that it could lower the long-term rating on the United States within two years, S&P said.
"The outlook reflects our view of the increased risk that the political negotiations over when and how to address both the medium- and long-term fiscal challenges will persist until at least after national elections in 2012," said S&P credit analyst Nikola Swann.
The next looming legislative battle is what to do about the $14.25 trillion federal debt ceiling before the limit is reached sometime in the next couple of months. Senator Rand Paul is promising to support an increase only in exchange for spending controls and Rep. Eric Cantor calls today's downgrade a "wake-up call" in favor of the Republican position. Meanwhile, Rep. Chris Van Hollen neatly sums up the sentiment on the other side of the aisle with his charge that linking spending and the debt limit amounts to "Russian roulette with, like, the fully loaded revolver."
If we are bound to have a fiscal crisis--and how can we avoid one with President Obama in office?--I think we should force the issue right now, not another $5 or $10 trillion down the road. But what should be our walkaway position: a balanced budget amendment, enactment of the Ryan plan, or another $352 million in spending cuts? A lot is riding on this next move, and even more on the 2012 election. How should House Republicans play their cards this time?
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Jul '10
Re: News Item: Opening Day for the US Fiscal Crisis
Frankly, S&P should have done this years ago, during the Bush administration.
Those of us who have been accumulating precious metals saw it coming circa 2005. Commodity prices are a leading indicator of currency collapse. In the past 12 months, silver has risen by 153% - while the value of the dollar has declined by 20%.
Protect yourselves, folks - your political leaders sure won't.
May '10
Re: News Item: Opening Day for the US Fiscal Crisis
Anyone who finds this a "wake up call" must have been very deeply asleep. (I suspect that Cantor was just doing some political posturing, so we'll give him a pass)
This situation was widely discussed in the Reagan and Bush (the First) eras, but I guess folks just figured that someone would eventually deal with it. Well... month by month the unthinkable becomes not only thinkable but plausible. We are not going to turn up the trillions we need by magic. We are going to drive this bus right off the cliff.
Fasten your seat belts.
Jun '10
Re: News Item: Opening Day for the US Fiscal Crisis
The American Experiment is designed to survive every economic condition, except for suicidal stupidity. Just our luck, huh?
Dec '10
Re: News Item: Opening Day for the US Fiscal Crisis
I honestly don't think a Balanced Budget Amendment will get out of D.C. and out to the states, but I can hope. I think the states would act quickly and positively, should that transpire. That's the only thing I can see that could be happening, prior to 2012, that might tilt the fiscal arrow up.
Dec '10
Re: News Item: Opening Day for the US Fiscal Crisis
The fools in charge don't need wakeup calls, 'cause they all already know what they're doing.
At this point, I think they're all just trying to stave off the collapse until after they've retired.
They're not going to make it, but that looks like their plan at this point.
I reiterate: We are completely, totally, unavoidably, and irredeemably hosed.
Food, water, clothes, guns, and ammo. STAT!
Jul '10
Re: News Item: Opening Day for the US Fiscal Crisis
But, whatever we do, let's not shut the federal government down just for the sake of fiscal survival. That would be extreme, wouldn't it Speaker Boehner?
Jun '10
Re: News Item: Opening Day for the US Fiscal Crisis
G.A. Dean:
This situation was widely discussed in the Reagan and Bush (the First) eras, but I guess folks just figured that someone would eventually deal with it. · Apr 18 at 2:25pm
That's precisely the problem: we've been hearing about the pending bankruptcy of the entitlement programs for so long now that many voters write it off as Chicken Little or the Boy Who Cried Wolf. In fact GoyoMarquez posted just a few days ago that people were predicting collapse back in the '90s. I take it from his statement that "bankruptcy is to politics what Armageddon is to Jehovah's Witnesses" that he thinks this discredits rather than strengthens the case for the current crisis.
Aug '10
Re: News Item: Opening Day for the US Fiscal Crisis
Mark Steyn understands that we are in a high stakes fight. He gets it.
Why is his warrior spirit so rare on the right?
Jun '10
Re: News Item: Opening Day for the US Fiscal Crisis
Is it possibly true that Obama/Geithner and company don't understand the implications of this? Could they possibly be that stupid? Apparently so.
When their only economic policy appears to be to spend like maniacs and then hope a miracle happens, we're in deep, deep trouble.
Re: News Item: Opening Day for the US Fiscal Crisis
Exactly right, Joseph. And while we can survive deficits of 2 or 3% of GDP pretty much forever--with normal economic growth, the debt-to-GDP ratio remains constant--we cannot long sustain red ink to the tune of 10 or 11% of GDP.
Social Security and Medicare were always going to hit a demographically-driven financial wall. President Obama's wild spending just moved our national day of reckoning up by a few decades. I hope we are ready for our moment.
Jun '10
Re: News Item: Opening Day for the US Fiscal Crisis
Today's outlook downgrade reminds me of Christopher Dawson's description of the fall of great civilizations: "Again and again Dawson saw how civilizations and empires forget the clay that made them. Bloated and heavy, they topple into dust. . . . The building grows too high for its foundations." [Dermot Quinn, Introduction to Christopher Dawson's Dynamics of World History, xvi]
Doesn't that sound like the America of the early 21st century? The house of cards falls unless we do something about it. The tragic view of life is alive and well in me again.
Edited on Apr 18, 2011 at 5:40pmDec '10
Re: News Item: Opening Day for the US Fiscal Crisis
Geithner and Bernanke tell us that failure to raise the debt ceiling will result in default on the debt. Correct me if I'm wrong, but isn't the payment of interest on the debt just one of many items that must be paid? If the government is prohibited from borrowing, then what is paid to which entity is then a matter of fiscal choice.
If, in fact default on the national debt were truly a disaster, would payment then logically place it at the top of the priority list requiring economies elsewhere? Or could we count on Obama preferring default to cutting any other budget items creating a crisis never to be wasted?
Jul '10
Re: News Item: Opening Day for the US Fiscal Crisis
George Savage: Today, the United States passed an important mile marker along the road to economic collapse as Standard & Poors downgraded the outlook on US sovereign debt from "stable" to "negative."
How should House Republicans play their cards this time? ·
Well, for openers they should quit playing Go-Fish against opponents who are playing High Stakes Poker.
Unless and until they can stand for (STAND as in Take A Stnad) the elimination of federal funding of unnecessary and duplicitous programs then it's time to just say Better Luck Next Time looking at the 2012 elections.
CPB is still funded.
NPR sis still funded.
Americorps is still funded.
If Democrats want to die on the Planned Parenthood Hill why, Why, WHY, did Boehner and company deny them that option?
The house needs to quit playing to Not Loose and start Playing To WIN!
Right Now, the Tea Party feel like William Wallace (in the movie Braveheart) when the battle was going their way and he turned to see the Republicans, Er Um, the Nobles walking away from the fight and allowing the other side to win the day.
The Best asset Democrats have is the Republican Party
Edited on Apr 18, 2011 at 6:56pmMay '10
Re: News Item: Opening Day for the US Fiscal Crisis
Pass a balanced budget amendment out of the House and forcing the Senate to call a vote on it.
Force a Senate vote on Ryan's budget.
Develop a coherent message and get all the Republican reps and senators on it (at least the tractable ones who want to accomplish something besides self-aggrandizement) and start pushing back hard on the media like Walsh did with Amanpour and Ryan did with Scheiffer last weekend.
Re: News Item: Opening Day for the US Fiscal Crisis
Nick Stuart: Pass a balanced budget amendment out of the House and forcing the Senate to call a vote on it.
Force a Senate vote on Ryan's budget.
Develop a coherent message and get all the Republican reps and senators on it (at least the tractable ones who want to accomplish something besides self-aggrandizement) and start pushing back hard on the media like Walsh did with Amanpour and Ryan did with Scheiffer last weekend. · Apr 19 at 12:43am
I'm with you, Nick. I don't think we can get it done this time around, but we darn sure need to set the stage for 2012. And you do that by putting the big spenders on the record on specifics.
May '10
Re: News Item: Opening Day for the US Fiscal Crisis
Maybe we're looking at this all wrong. The total debt of all levels of government including entitlements in nearly 140 trillion. We are not going to pay that off. Maybe we should borrow as much as we can, WHILE WE CAN and spend it on real inprovements like highways, ports, airports, rail, oil production high tech military systems etc etc etc, so that when the crash comes, we have something to show for all the spending besides a large cohort of public union employees and herds of greyheads in retirement. At least the kids will have something to work with in trying to recover......