When the credit rating agency Moody’s announced recently that the United States had moved “substantially” closer to losing its AAA bond rating, it largely ran as a wire brief, buried in newspaper business sections.Do you see the leadership out there to prevent this?
But this obscure announcement may one day be regarded as the beginning of the end of American prosperity.
...
Today, the United States has an unblemished AAA credit rating and a reputation as the most reliable borrower in the world. So investors lend us money at low rates. Washington is paying about 3.3 percent interest on $12.5 trillion in outstanding loans.
The good news is that, at current rates, that’s relatively affordable.
Now for the bad news. (You knew it was coming, right?) On a debt as colossal as America's, even a modest rise in rates would be hugely expensive.
If, for example, Washington had to pay the same rate as, say, Australia, it would be shelling out an additional billion dollars in interest. Every day.
Consider this: if everything goes according to plan, in 2020 we will be spending “only” $916 billion on interest. But if, as Moody’s is warning, the United States were to lose its AAA rating, rates would rise and payments could double.
Proactively “From the Sea”; an agent of change leveraging the littoral best practices for a paradigm breaking six-sigma best business case to synergize a consistent design in the global commons, rightsizing the core values supporting our mission statement via the 5-vector model through cultural diversity.
Wednesday, April 07, 2010
Where Obamabudgets will bring us...
Something to cheer you along today.
Unreal, yet expected. How many more land mines are coming in this administration. I guess the US gets what it paid (elected) for. I only pray, with thin expectations, that the US people, especially the press corp, remembers come next election time.
ReplyDeleteI also think there is a great bridge for sale in New York, only used a few billion times, honest!
Sal:
ReplyDeleteThanks for posting this - and......I didn't vote for it.
I'm not sure how anybody with a credit card could miss the implications.
ReplyDeleteI also noticed the story and how it was buried. Seems these days instead of, 'no news is good news', it has been magically transformed into, 'bad news is no news'.
Seems like the response may be a VAT tax (reported Tuesday).
Now how do you not pay a VAT tax if you make less than $250,000...
"Full faith and credit of the US Government" sure doesn't mean what it used to mean. Maybe Howard Ruff was right after all, just a few decades too early.
ReplyDeletein march the treasury issued 333 billion of new debt - in 1 month! We will soon have marginal tax rates as high as in the late 50's (think 90%). When Volker states campaigning for a VAT we know we are doomed. But we are heading to a socialist state so why not bankroll the cost like a socialist tax. A VAT isn't really a "tax" since everyone would pay. Well that won't do for the poor, so we will have to creat a VAT refund for those that a VAT affects disproportionately. But think 10% on EVERY transaction - including a home sale.
ReplyDeleteMaybe we can build 15 billion CVNs and sell them to China for 20 billion.
PeeBO is leading us ruination - one trash-ury bill at a time
This has to end. Now.
ReplyDeleteBTW. I am debt free.
ReplyDeleteYou can send a message RIGHT NOW by voting at the Milbloggies (see top post today)!
ReplyDeleteAll I see the current leadership doing, is making it worse.
ReplyDeleteYNSN,
ReplyDeleteNot hardly. What is one three-hundred millionth of $12.9 trillion?
I am not worried.. Sen Nelson from Florida is on the case!
ReplyDeleteGetting the budget balanced was done not so long ago, but it took (oh so maligned on the right) Bill Clinton and (oh so maligned on the left) Newt Gingrich working together in a display of bipartizanship...
ReplyDeleteHere is address to the US politicians:
Cut the spending, raise the taxes if needed, forget the re-election dreams but do it!
Otherwise history will judge you as the ones who bankrupted the unsinkable AAA rating.
The first problem is, the situation in the early 1990s was quite different. And the second problem is, you don´t quadruple the deficit by accident. You don´t double the national debt by mistake. What is happening now is policy.
ReplyDeleteClinton was a liberal, but also a conventional and experienced politician. Being a two-term governor, he was used to compromise. He didn´t set out to "fundamentally change America". Clinton actually enjoyed governance. Obama does not. Obama is an extreme left wing academic who has never held a job. He is like an anthropologist experimenting on a People. Either the real world consequences don´t even enter his mind, in which case we are facing a display of staggering incompetence - or they do, in which case we are dealing with malicious intent.
Everything we know about Obama tells us that he has no respect for boundaries of any kind, no humility, no doubts, no ability to learn and no love for the country as it was before him. That´s my opinion based on his own words, which I always listen to carefully. Nothing gets through to this guy. He does have a few sensible advisors but where are they? He still gets mad every time someone disagrees with him. He never did anything but single out and demonize individual dissenters.
How can such a man be capable of working constructively with a Republican Congress? You can be sure that he would try to blame them for his own mistakes. Expect him to discover the problem of debt and the importance of fiscal responsibility - but only to attack Republicans. That´s the pattern and it won´t change.
I would add there is an enept congress backing him lead by the lead idiot Pelosi. There are a host of other idiots in congress as the is too long to mention.
ReplyDeleteCalifornia... are you listening? Do the deed come next election and send Pelosi selling pencils.
What a crock Ewok, Bill Clinton fought against tax and spending cuts tooth and nail. They were forced on him by a congress that took maximum crap from the press for doing so, or have you forgotten the great hue and cry over "Government Shutdowns?"
ReplyDeleteNow, of course, the lying weasel Clinton takes credit for doing what he he opposed at every turn and the lapdog media and his fellow Democrats act as if he should get all the credit for it. Rather than listen to MSNBC spin for Obama, read the papers from 1995 about "The Gingrich that stole Christmas" and heartless Republican's letting children starve and old folks die.
As for raising taxes, do you actually think that will do anything except slow the economy and actually bring in less money while simultaneously giving the left an excuse to spend even more? We don't tax too little, we spend too much. The only way to increase tax revenues is to lower taxes on Capital Gains and other forms of investment income, cut or eliminate corporate income tax and stop strangling business with excessive regulation.
we had a surplus before GWB pissed it away.
ReplyDeleteas RWR said, 'facts are funny things, they get in the way of what we want to believe.'
the fact is we had a surplus before GWB pissed it away.
you can also research those old papers and find a story that details how Gingrich shut down the government because he was upset that Clinton gave him a crappy seat on Air Force One when they we coming back from some summit/meeting. No s**t!
And a budget surplus at the Federal level is good? It means the people were overtaxed and that money is not in the economy, but stagnant.
ReplyDeleteSo you are worried that GWB had a deficit? Why aren't you apoplectic that this guy increased that deficit nearly fourfold in 14 months?
Selective outrage.
budget syrplus means two things
ReplyDeletewe have reserve for a bad times
we can start repaying the debts
Come on, ewok.
ReplyDeleteA budget surplus means the citizens were overtaxed. There is no "rainy day fund" for the US Federal Government. What will be done, as Clinton did, is to increase spending commensurately to burn down the surplus.
It is not the Government's money. It is the taxpayers'.
Or budget surpluses can be used to attend to long-neglected things that desperately need to be replaced.
ReplyDeleteEWOK, condolences on Poland's tragedy. I'm sitting here in tears for what your country must be going through. Your leaders were good and trustworthy friends to us. WE will miss them also. :'(
We will manage... some are already joking we are only country to have backup copy of president (his twin brother that is)
ReplyDeleteReally though it is massacre, about 30 MPs, commanders of all military services and general staff chief, president of national bank, all gone
Some conspiracy theories are already circling but that was 30 years old Tu-154 on a foggy day over old Soviet-era airfield - I would use Occhams razor and exclude sabotage - Russians are not crazy to try something like that because of potential fallout, especially not now when they were trying to warm up diplomatic ties with Poland (the visit itself was part of that)
God bless the Polish people and their painfully wry sense of humor. I actually chuckled at that. I'm so sorry.
ReplyDeleteMy condolences also. Interesting comments on the conspiracy stuff. At first blush, it would indeed seem like the LAST thing Putin's Russia would want to happen.
ReplyDeleteSince His Majesty, Barack the First, has decided to order new AF Ones, perhaps we can give your country one of the current ones. The President of Poland deserves to be hauled in something better than a Tupelov. Give the man a Boeing. Poland is too important for anything else. They are one of the countries we can count on.
ReplyDeleteactualy I was pointing out your selective outrage! and rush's, and fox news and a lot of others. of all the people complaining daily about the deficit, i never heard any of them registering a complaint while gwb was pissing away the surplus and running up a huge deficit. we were actually starting to pay down the long term debt of the u.s. with that surplus before it was pissed away.
ReplyDeleteYou weren't within earshot, I suppose, to hear my complaints about the domestic spending habits of GWB. However, we were not paying down anything with the "surplus". If you remember, (and I bet you claim not to), Clinton was looking to have discretionary spending rules changed so he could funnel large sums of taxpayer money to pet social programs without Congressional approval.
ReplyDeleteYea, like he was really going to do that after coming within an RCH of getting impeached.
ReplyDeleteHe WAS impeached. He was not removed from office. And the bills submitted regarding rules changes to discretionary spending are public record.
ReplyDeleteBut they weren't passed were they? So its a moot point.
ReplyDeleteOf course we could talk about other shady financial gimmicks-like using supplementals to hide the true cost of war(s) that were also breaking the nation's piggy bank-and driving up the deficit.
The wars broke the bank? You gotta be kidding me. The deficit has quadrupled in 14 months. Either Obama has spent four times as much on the war(s) in a little over a year than GWB did in eight years, or you need to check your math.
ReplyDeletewars, economic recessions, all are risks for which there should be a reserve fund, made in times of peace and prosperity
ReplyDeleteplus, I see bipartisan spending spree, just on different targets
(imagine two prospective wives - one loves to buy clothes, other is into jewelry - and you don't have a third choice sadly)
The wars are in the budget now, unlike the sleight of hand accounting under GWB.
ReplyDeleteand I do recall starting to pay down the long-term debt of the u.s. under clinton and then treas sec rubin, and although it was a token payment at first, it was a start. just think if we had continued on that path and not started one unnecessary war, we would be so much better off today.
Obama's deficits in 14 months dwarf 8 years of GWB. So it really didn't matter if before 2009 we had paid down the debt or burned the paper money for heat.
ReplyDelete