Obama and the tax cut issue

[Glenn]

Yep AJ; Then hardcore nationalism and then complete industrialization for the purpose of war...I don't think it will be as bad as Germany, but the focus will be more on waging war.

[Toughy]

http://www.randirhodes.com/pages/rrn...rticle=8909602

and

http://www.randirhodes.com/pages/rrn...rticle=8914378

Very interesting pieces about how Obama fucked over the Republicans with the Debt Ceiling Bill that he negotiated and signed.....it seems the Tea Party crazy fucks lost big time in this deal.....

[atomiczombie]

Originally Posted by Toughy

http://www.randirhodes.com/pages/rrn...rticle=8909602

and

http://www.randirhodes.com/pages/rrn...rticle=8914378

Very interesting pieces about how Obama fucked over the Republicans with the Debt Ceiling Bill that he negotiated and signed.....it seems the Tea Party crazy fucks lost big time in this deal.....

I think everyone lost big time in this deal. It's a shit sandwich if you ask me. This bill is going to slow the economic recovery and result in even higher unemployment.

[Toughy]

Did you read the articles?

I don't really think it will truly affect the economy all that much....good or bad.

Congress now MUST deal with jobs. We need another much bigger stimulus to continue re-building the infrastructure of this country. I'm thinking Tennessee Valley Authority or Hoover Dam or all the Army Corps of Engineer projects kind of things. It will create tens of thousands jobs and the economy will take off again.

We also need to create new revenue besides the Bush tax cuts which sunset out at the end of 2012. Close the checkbook on corporate welfare, raise taxes on those making more than a million bucks a year. Leave the frigging middle and working class alone.

[Corkey]

Originally Posted by Toughy

Did you read the articles?

I don't really think it will truly affect the economy all that much....good or bad.

Congress now MUST deal with jobs. We need another much bigger stimulus to continue re-building the infrastructure of this country. I'm thinking Tennessee Valley Authority or Hoover Dam or all the Army Corps of Engineer projects kind of things. It will create tens of thousands jobs and the economy will take off again.

We also need to create new revenue besides the Bush tax cuts which sunset out at the end of 2012. Close the checkbook on corporate welfare, raise taxes on those making more than a million bucks a year. Leave the frigging middle and working class alone.

The roads and bridges could use an overhaul, some of them are a hundred years old, and older. Wonders on the lifespan of a steel bridge in humidity.(sarcasm) Yea we need to put people back to work.

[JustJo]

Originally Posted by Corkey

The roads and bridges could use an overhaul, some of them are a hundred years old, and older. Wonders on the lifespan of a steel bridge in humidity.(sarcasm) Yea we need to put people back to work.

Some major work on the infrastructure would be good all the way around...creates jobs, enhances safety, speeds transit....and how about upgrading some schools and libraries and rural hospitals while we're at it? These are things that I would support my tax dollars going for...and would do a lot of good for all of us for years to come.

[Kobi]

I need a new car. Can we do another cash for clunkers thing?

[dreadgeek]

Originally Posted by popcorninthesofa

Yep AJ; Then hardcore nationalism and then complete industrialization for the purpose of war...I don't think it will be as bad as Germany, but the focus will be more on waging war.

Hmmmm...see, my reading of Germany is that the focus was on waging war. This might just be an artifact of the material I've read focusing on how the entire German economy and culture was pointed toward war but it seems to me that from January 1933 onward the entire nation was gearing up for war in Europe. I think what will be different is that Germany under National Socialism was far less theocratic than what I think is barreling towards us. My concern is that we are just this side of a theocratic takeover. Now, this theocracy won't look like Saudi Arabia but rather more a mash-up of Iran after the Islamic revolution and John Calvin's Geneva with a little of late-19th century Utah (Under Brigham Young) thrown in for good measure.

Cheers
Aj

[girl_dee]

As sad as this may sound I am so happy to be going to work Canada right now, I am so tired of worrying about what the government will or will not do with our future, I understand I am still affected but being away from all of it sure is a nice break.

[atomiczombie]

This from Bloomberg News website:

The U.S. had its AAA credit rating downgraded for the first time by Standard & Poor’s on concern spending cuts agreed on by lawmakers to raise the nation’s borrowing limit won’t be enough to reduce record deficits.
S&P dropped the ranking one level to AA+, after warning on July 14 that it would reduce the rating in the absence of a “credible” plan to lower deficits even if the nation’s $14.3 trillion debt limit was lifted. The U.S. was awarded the top credit ranking by New York-based S&P in 1941. It kept the outlook at “negative.”
‘The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said in a statement today.
Demand for Treasuries has surged even with the specter of a downgrade as investors saw few alternatives to the traditional refuge during times of risk as concern increased global growth is slowing and Europe’s sovereign debt crisis is spreading. The action could still hurt the U.S. economy over time by increasing the cost of mortgages, auto loans and other types of lending tied to the interest rates paid on Treasuries. JPMorgan Chase & Co. estimated that a downgrade would raise the nation’s borrowing costs by $100 billion a year.
Moody’s, Fitch
“It’s a reflection of the fact that we haven’t done enough to get our fiscal house in the order,” Anthony Valeri, market strategist in San Diego at LPL Financial, which oversees $340 billion, said in an interview before the downgrade. “Sovereign credit quality is going to remain under pressure for years to come.”
Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings on Aug. 2, the day President Barack Obama signed a bill that ended the debt-ceiling impasse that pushed the Treasury to the edge of default. Moody’s and Fitch also said that downgrades were possible if lawmakers fail to enact debt reduction measures and the economy weakens.
The measure raised the nation’s debt ceiling until 2013 and threatens automatic spending cuts to enforce $2.4 trillion in spending reductions over the next 10 years.
S&P put the U.S. government on notice on April 18 that it risks losing its AAA rating unless lawmakers agree on a plan by 2013 to reduce budget deficits and the national debt. S&P indicated last month that anything less than $4 trillion in cuts would jeopardize the rating.
‘Grand Bargain’
“A grand bargain of that nature would signal the seriousness of policy makers to address the fiscal situation in the U.S.,” John Chambers, chairman of S&P’s sovereign rating committee, said in a video interview distributed by the ratings firm on July 28.
Obama has said a rating cut may hurt the broader economy by increasing consumer borrowing costs tied to Treasury rates. An increase in Treasury yields of 50 basis points would reduce U.S. economic growth by about 0.4 percentage points, JPMorgan said in a report, citing Federal Reserve research and data.
“The hope is that we could keep Treasuries pure, limited to interest rate risk,” Mohamed El-Erian, chief executive and co-chief investment officer at Pacific Investment Management Co., said in a Bloomberg Television interview before the announcement. “The minute you start downgrading away from AAA, you take small steps toward credit risk and that is something any country would like to avoid.”
Relative Yields
Treasury yields average about 0.70 percentage point less than the rest of the world’s sovereign debt markets, Bank of America Merrill Lynch indexes show. The difference has expanded from 0.15 percentage point in January.
Investors from China to the U.K. are lending money to the U.S. government for a decade at the lowest rates of the year. For many of them, there are few alternatives outside the U.S., no matter what its credit rating.
“Yields are low in the face of a downgrade because there is nowhere else for people to go if they don’t buy Treasuries because they want to be in safe dollar assets,” Carl Lantz, head of interest-rate strategy at Credit Suisse Group AG, one of 20 primary dealers that trade directly with the Federal Reserve, said before the announcement.
Ten-year Treasury yields fell to as low as 2.33 percent in New York, the least since October.
Bond Dealers
The committee of bond dealers and investors that advises the U.S. Treasury said the dollar’s status as the world’s reserve currency “appears to be slipping” in quarterly feedback presented to the government on Aug. 3. The U.S. currency’s portion of global currency reserves dropped to 60.7 percent in the period ended March 31, from a peak of 72.7 percent in 2001, International Monetary Fund data show.
“The idea of a reserve currency is that it is built on strength, not typically that it is ‘best among poor choices’,” page 35 of the presentation made by one member of the Treasury Borrowing Advisory Committee, which includes representatives from firms ranging from Goldman Sachs Group Inc. to Pimco. “The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate.”
Members of the TBAC, as the committee is known, which met Aug. 2 in Washington, also discussed the implications of a downgrade of the U.S. sovereign credit rating. “None of the members thought that a downgrade was imminent,” according to minutes of the meeting released by the Treasury.
A U.S. credit-rating cut would likely raise the nation’s borrowing costs by increasing Treasury yields by 60 basis points to 70 basis points over the “medium term,” JPMorgan’s Terry Belton said on a July 26 conference call hosted by the Securities Industry and Financial Markets Association. The U.S. spent $414 billion on interest expense in fiscal 2010, or 2.7 percent of gross domestic product, according to Treasury Department data.
“That impact on Treasury rates is significant,” Belton, global head of fixed-income strategy at JPMorgan, said during the call. “That $100 billion a year is money being used for higher interest rates and that’s money being taken away from other goods and services.”
To contact the reporter on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

As I said before, the bill is a shit sandwich. I can't believe our government created such a clusterfuck.

[Kobi]

Interesting article atomic. Thanks for sharing it.

To me, it points out so many flaws in how we have and are disregarding basic accounting principles and defying basic market logistics yet somehow the mess still functions. It astounds me. It also makes me wonder what dastardly deeds are keeping this titantic afloat and when the right iceberg will come along to seal its fate.

On the brighter side, mortgage rates dropped again. Am pleased to have locked in a nifty low rate for my refinancing today.

And, I always thank those who came before me who taught some very valuable lessons:

1. always pay yourself first - i.e. savings before bills, bills before play
2. always keep a stash of actual cash in a safety deposit box
3. at all times, live within your means
4. credit cards are for emergencies only
5. never fully trust bankers, politicians, or lawyers

[Corkey]

According to the Maddow show, the Administration is pushing back hard against S&P claiming their figures are off by trillions of dollars. In other words a math error. So the very people that we gave trillions of dollars to for a bail out and who created the problem, are now saying that we don't pay our bills.
There is a total lack of trust for any of the financial marketeers who received any monies in the TARP.

[Toughy]

S & P is the only rating agency of the 3 that downgraded the US.

just remember all this come Nov 2012 and vote for Obama and give him a majority in the House and 60 Senators so we can get on with the business of the people and restoring the economy.