Uncommon Sense

politics and society are, unfortunately, much the same thing

S&P mentions spending as cause of credit downgrade

S&P Lowers America’s Bond Rating, Will Media Mention Spending as a Cause?
August 5, 2011 by Matthew Sheffield

As has been expected, despite the recently reached debt deal, America’s debt got downgraded tonight by credit ratings agency Standard and Poor’s.

In an analysis posted on its website, S&P explicitly stated that it “takes no position on the mix of spending and revenue measures,” however that is a fact that will likely be glossed over by the self-described mainstream media.

There is much more in the analysis, but since you won’t likely see this info in the big media outlets, I am reproducing portions of the report which repeatedly mention excessive spending as a problem:

The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case. […]

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. […]

Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures.[…]

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. […]

Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow.

read full article here

So we have the S&P’s report showing that increasing government expenditures are the underlying problem in the current government fiscal crisis. But in progressive land the amount of spending is never the problem; only a lack of revenue can possibly be the problem.

Yahoo: ‘America’s Credit Rating Was Intentionally Sabotaged By Congressional Republicans’
August 6, 2011 by Noel Sheppard

“[I]t’s difficult to escape the conclusion that America’s credit rating was intentionally sabotaged by Congressional Republicans.”

So wrote Yahoo Finance economics editor Daniel Gross Friday evening:

In downgrading the U.S.’s credit rating, S&P points out what has long been obvious: Washington’s inability to come to an agreement on how to close the large fiscal gaps that have emerged since the recession began is troubling. Recent events have sapped the agency’s confidence that the government can and will do what is necessary to align revenues with spending commitments. And it’s difficult to escape the conclusion that America’s credit rating was intentionally sabotaged by Congressional Republicans.

And what’s Gross’s real beef with Republicans? If you guessed “No new taxes,” give yourself a cigar:

Since the Democrats took over Congress in 2007, spending has increased by $1.1 trillion or 41 percent.

If we went back to the exact same outlays called for in that last budget approved by a Republican Congress, we’d actually have a $200 billion surplus in fiscal 2012 based on OMB’s projected tax receipts for that year.

If we adjusted 2007’s spending for inflation, we’d only have a $43 billion deficit next year thereby totally avoiding S&P’s downgrade without raising taxes one cent.

How’s that for simple math, Mr. Economics Editor?

read full article here

bias, budget, congress, crisis, economics, economy, entitlements, funding, government, ideology, indoctrination, left wing, liberalism, news media, pandering, philosophy, political correctness, politics, propaganda, public policy, spending

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Filed under: bias, budget, congress, crisis, economics, economy, entitlements, funding, government, ideology, indoctrination, left wing, liberalism, news media, pandering, philosophy, political correctness, politics, propaganda, public policy, spending

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