Reflections From a Murky Pond

Standard & Poor’s rating agency has downgraded the US credit rating to AA+ from its top rank of AAA, reflecting concerns over the US federal government’s inability or unwillingness to curb its deficit spending.

This was an expected course of action and S & P, along with Moody’s, Fitch, the IMF, and even Italy, had warned that this would likely happen.

Well, the Obama presidency was supposed to be historic and this is historic.  Friday, August 5, 2011 marked S & P’s first ever downgrade rating for the US Government’s credit since S & P first granted it in 94 years ago in 1917.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

— Nikola G Swann, CFA, FRM
Primary Credit Analyst, Standard & Poor

As bad as that sounds, it actually gets worse. Standard & Poor – It’s also a safe bet that Moody’s and Fitch will concur – has, rightly I believe, not only downgraded America’s government’s credit score but predicts at negative outlook indicating the likelihood of an even further worsening credit rating in the near-term future.

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.

This means that it’s unlikely that any of us alive today will see America’s credit rating restored to AAA and that we’ll almost assuredly live to see it downgraded further to AA and likely see it downgraded even further unless we can force the federal government to live within our means.

How Embarrassing

And it will take force – ballots, bullets, bombs, or some combination thereof – for Americans to correct the federal government’s addiction to raping our nation’s economy. Obama and his coterie of Liberals, while the most profligate of the wastrels, are just the latest downward step in the degeneration of America’s federal government. Hoover, FDR, Carter, and yes Bush Jr., along with their respective Congresses built and expanded the entitlement society and the nation’s deficit.

With so much inertia built up within it and so much bloated weight behind it, there’s no gentle way enact true change upon this system or its proponents before our nation is completely beggared and bankrupt. We, the People are left with only “short lever” means at our disposal – maximum force applied at the point of change. Sadly I suppose, this is inefficient and will be extremely painful, both for Americans and for the Liberals and their minority tenants.

Then again, it’s been Americans’ long-running misapplied compassion, complacency, and stupidity that has allowed them to bring our nation to this point and, “Stupid should be painful.”

~*~

Keep your eyes open. Travel light but load heavy, and always put another round in the enemy after they’re down.  When faced with extremity, extremism in the cause of America is no vice; it is a virtue and holy duty.

Tags: 2012 Elections | America | Debt | Debt Ceiling | Economics | Economy | Entitlement Society | Fitch | IMF | Moody's | Obama | Politics | Poverty | Spending | Standard and Poor | Wealth

This entry was posted on Saturday, August 6th, 2011 at 9:10 am and is filed under Politics. You can skip to the end and leave a response. Pinging is currently not allowed.

The very fact that America is in its current “Debt Crisis” and seeking to, once again, raise it’s own debt ceiling is an example of a willful and utter failure of leadership. Rather than behave responsibly, the politicians in Washington D.C. have chosen to continue to make America reliant upon foreign financial aid and to burden our children and our children’s children with crushing debt owed to foreign powers.

The above was Obama’s stridently voiced opinion when President Bush Jr. was POTUS:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” he said. “It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.

— Sen. Barack Obama (D-IL), March 20, 2006

Then-Senator Obama then voted, along with 47 other Senators, against the proposed debt ceiling increase. The joint resolution ended up narrowly passing 52 – 48.

Since then, of course, Obama’s public opinion has rather dramatically reversed. Now he and his coterie seem to feel that not raising the debt ceiling would be a failure of leadership.

In January, 2011 the White House was questioned on this turnabout of position. The response from Obama’s mouthpiece, Robert Gibbs revealed quite a lot about Obama’s “character” and his “positions” on issues.

Asked about that quote – and vote — today, White House press secretary Robert Gibbs said that it was important that “based on the outcome of that vote…the full faith and credit was not in doubt.”

Then-Sen. Obama used the vote “to make a point about needing to get serious about fiscal discipline….His vote was not necessarily needed on that.”

So Obama was against the debt ceiling increase when being so would have no near-term consequences that might affect his chances of keeping his job in the US Senate. One must presume that he is for it now for similar reasons since failing to raise the debt ceiling would definitely have near-term consequences – or so his cabal keep telling us – that would negatively impact his continued employment.

Unsurprisingly, this being an election year, Obama has further “clarified” his position on the matter and no longer believes that even token speeches of dissent or unneeded votes of conscience against raising the debt ceiling are appropriate.

Press secretary Jay Carney said that “the president, as David Plouffe said yesterday, regrets that vote and thinks it was a mistake. He realizes now that raising the debt ceiling is so important to the health of this economy and the global economy that it is not a vote that, even when you are protesting an administration’s policies, you can play around with, and you need to take very seriously the need to raise the debt limit so that the full faith and credit of the United States government is maintained around the globe.”

Don’t mistake either my point or Obama’s position. He was not “against it before he was for it.” His position has always been the same, to be elected and reelected. Obama, the Campaigner-in-Chief has no firmly held positions or agendas beyond that or, at least, none that supersede that self-centered and narcissistic core goal.

Like most Liberals Obama’s ideology falls by the wayside whenever pursuing it would force him to make sacrifices or put his personal circumstances at risk. Sacrifices are things that other people should be forced to make for the “greater good.”

~*~

Keep your eyes open. Travel light but load heavy, and always put another round in the enemy after they’re down. 😉

Tags: 2012 Elections | America | Debt | Debt Ceiling | Deficit | Foreign Aid | History | Lies | Obama | Politics | Spending | US Senate

This entry was posted on Monday, July 11th, 2011 at 2:18 pm and is filed under 2012 Election, Politics. You can skip to the end and leave a response. Pinging is currently not allowed.

It is probable that even the Tibetan Lamas strapped into contorted meditative postures in remote caves in the Himalayas know that the US is suffering from a “debt crisis” and that the abject fear of the GOP managing to block a raise to the country’s debt ceiling is rife within both the halls of power and in the hearts of Liberals on the street.

What is much less probable is that the average person really understands what the crisis is about or what the debt ceiling really is and why so many are afraid it won’t be raised in August.

Spend Today For A Brighter Future – For Some Other Country

It’s really quite simple – so simple, in fact, that many normal people don’t get it. The government of the United States of America has maxed out its credit cards again, just like so many Americans had done before the 2008 market contraction. Unlike the citizenry – or the individual state governments – they can raise their own credit limit, which is what the politicians seek to do.

That’s all there really is to it, though politicians and pundits will try to confuse and complicate the matter. The federal government has been living well beyond its means for years, making the “minimum monthly payments” on its debt, and borrowing more and more to maintain itself at the level it has been accustomed to.

And the major real fear is that, if they don’t keep raising their own credit limit, America’s credit score might be hurt and we might have to pay higher – sub-prime – interest rates on future loans.

Sadly for us, there’s no such thing as credit counseling services for sovereign nations.

Tags: America | Budget | Congress | Debt | Debt Ceiling | Deficit | Economics | Economy | Politics | Spending

This entry was posted on Monday, July 11th, 2011 at 11:52 am and is filed under Humor, Politics. You can skip to the end and leave a response. Pinging is currently not allowed.