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It's All Coming Apart
The American Thinker ^ | April 19, 2011 | Monty Pelerin

Posted on 04/19/2011 3:42:44 AM PDT by Scanian

Despite Government propaganda and manipulated statistics to the contrary, our economy continues to deteriorate. For every "green shoot" highlighted by the Government and its lackey media, multiple contra-examples are cited by independent analysts.

To continue to deny reality risks credibility. Perhaps that is why S&P, arguably a sock-puppet of Wall Street, on Monday made its announcement regarding the financial condition of the US. As reported by the Wall Street Journal:

"Standard & Poor's Ratings Services Inc. cut its outlook on the U.S. to negative, increasing the likelihood of a potential downgrade from its triple-A rating, as the path from large budget deficits and rising government debt remains unclear."

Fitch and Moody's have not yet seen fit to change their ratings. Preservation of the little credibility the ratings agencies have left will force them to follow in the course of time.

The S&P judgment was as unexpected as a terminally-diagnosed patient finally reaching his final destination. Reaction by the political class to the "death" is likely to be characterized by the Claude Rains gambit: "I'm shocked, shocked!" How could anyone have seen this coming? Actually, the only surprise is why S&P waited so long to report on the obvious and why it didn't also remove the Triple A credit-rating of US debt. That downgrade of debt will follow eventually. Apparently S&P doesn't want to pronounce a corpse dead until it is put into the ground.

Some believe the timing of the S&P announcement was related to the upcoming political battle over the US debt ceiling. Monday's Dow was crashing, at one point down over 240 points. If markets are so easily rattled, the thought is one must raise the debt ceiling.

(Excerpt) Read more at americanthinker.com ...


TOPICS: Business/Economy; Editorial; Government; News/Current Events; Politics/Elections
KEYWORDS: deathspiral; debt; europeanbailouts; left; negativeoutlook; politicalclass; sp
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1 posted on 04/19/2011 3:42:50 AM PDT by Scanian
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To: Scanian

Impeach obama.


2 posted on 04/19/2011 3:51:37 AM PDT by GlockThe Vote (F U B O ! ! !)
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To: Scanian; GlockThe Vote
The S&P move yesterday was Wall Street telling Congress and Obama, "Stop the out of control borrowing NOW!"

Republicrats everywhere should listen. But they won't.

Ryan proposes to take what? Over 25 years to balance the budget? That's not good enough.

Pres__ent Obama calls that extreme and wants to spend more and jack up tax rates (most likely collecting less actual revenue). His plan(s) will never balance the budget. That's even worse!

Meanwhile, S&P is saying, "Stop the borrowing NOW! Your triple A rating is on the line."

The Republicans need to bring forth a better solution (more cuts) than the Ryan plan. They need to bring the budget into balance within 5 years at the outside.

On the debt ceiling increase, Boehner and the Republicans need to realize that, if they don't hold to the current debt ceiling, they won't get another chance to raise it in the future. If the Ryan plan is the best they can do from a budgeting perspective, they need to raise the ceiling enough to cover the 25 or more years of borrowing that their budget plan will require. Any Republican that voted for the Ryan budget and then votes for a lower debt ceiling is a LIAR and should be voted out of office in 2012.

Any Republican who actually votes to increase the debt ceiling to cover 25 more years of borrowing should be voted out of office for their fiscal irresponsibility. They clearly don't understand the biggest issue of the day.

The best scenario for the country would be to reopen the budget debate, pass a plan that will bring things in balance within ~5 years. Rand Paul, Mike Lee and Jim DeMint have a plan that meets that goal. I believe there is a House group that also has a similar plan.

Then, after passing a real plan (5 years or shorter to balance the budget) as our roadmap for budget reform, raise the debt ceiling to cover only the borrowing for that budget.

Then, both the House and the Senate should also pass a "balanced budget amendment" which requires spending cuts (not "revenue increases") to balance the budget if revenues fall short of budget projections. The best language would also require a super majority (2/3rds) in both houses to increase tax rates or create new taxation plans.

The budget won't balance without significant economic growth. We have a spending problem. We have reached the point where we can't tax our way to a balanced budget. It's time to face the facts and admit that we can't spend more than we earn. The debt will never come down until we face that fact.

Of course, Washington is totally deaf about this issue. The result will be our bond rating falling to junk status. The Federal Reserve will be basically forced to buy up our debt when the rest of the world won't. This will bring on horrible inflation. The US Dollar will no longer be the world's reserve currency. And we'll all hold $1 million (or larger) Federal Reserve Notes, which will buy a quart of milk or use a $10 million note to buy a gallon or two of fuel for your car.

Also Boehner and the House Republicans MUST pass ALL of the appropriations bills through the House. It would be best if this happened before September 1, 2011. That's THEIR JOB! We fired Pelosi and the Democrats because they refused to do that for the period they were in charge.

GlockThe Vote wrote:
Impeach obama.
While that might be popular with hard core Republicans, it won't solve any of the fiscal problems.

The House especially needs to address this. And it needs to pass by big enough margins that Pres__ent Obama wouldn't try to veto it (or the veto will be overridden).

This is serious. It will require serious action.

If the House can pass something that will actually resolve the debt crisis within 5 years or less, and either the Senate refuses to act, or the Pres__ent vetoes it, then we have a huge issue for 2012, and we can fix it at the polls at that time. Hopefully, S&P will hold off on a downgrade until we can get some serious adults into power.

3 posted on 04/19/2011 4:17:29 AM PDT by cc2k ( If having an "R" makes you conservative, does walking into a barn make you a horse's (_*_)?)
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To: cc2k

Borrowing like crazy at 1% long term interest. So what happens when inflation takes the new interest to 6%?
The Obama spin this week is to attack S&P and try to kill the messenger.
But if I could borrow all I want right now at 1% I would get all I could.


4 posted on 04/19/2011 4:28:06 AM PDT by screaminsunshine (Shut up and eat your Beans!)
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To: Scanian

Either Democrats are psychotic adolescent punks, intent on expropriating as much wealth as they can, or they have an agenda that calls for the downfall of the American economy.

Are there any other choices?

IMHO


5 posted on 04/19/2011 4:39:41 AM PDT by ripley
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To: Scanian

When you’re out of money, stop spending. Period.


6 posted on 04/19/2011 4:43:09 AM PDT by Rocky (REPEAL IT!)
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To: ripley

(C) All of the above


7 posted on 04/19/2011 4:44:17 AM PDT by newfreep (Palin/West 2012 - Bolton: Secy of State)
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To: ripley

“Either Democrats are psychotic adolescent punks, intent on expropriating as much wealth as they can, or they have an agenda that calls for the downfall of the American economy.”

Depending on which Democrat, you are correct on both counts.


8 posted on 04/19/2011 4:47:30 AM PDT by pieceofthepuzzle
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To: Scanian

Guess we’d better get busy rearranging the deck chairs.


9 posted on 04/19/2011 4:48:10 AM PDT by McGruff
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To: Scanian

The “ratings” agencies, Moody’s and S&P, should have downgraded the US government 2 years ago. It is obvious to anybody that’s ever had to balance a checkbook, that our government and the so-called “leadership” is out to bankrupt and destroy the US. They WANT to crash the system.


10 posted on 04/19/2011 4:54:05 AM PDT by meyer (We will not sit down and shut up.)
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To: meyer

Unfortunately, this is not a one party problem...both parties are guilty, perhaps one more guilty but being guilty of 99 counts out of 100 does not make the GOP any less culpable. Think back to the “Medicare Drug entitlement” brought up by GWB without any mention during an election...just decided it was the right thing to do. Wrong George, one does not make the hole in the bottom of a leaking boat larger to lower the water level.

The American Thinker had a great column today on how this will end: badly. It makes no difference whether it is by hyperinflation or a depression, the end is the same. The bad news, there is no way out sans extreme government seizure of everything. Of course, we could form a new government or form of government, reputdiate out debts and start over but how do you do that against the combined force of the military and a bunch of self dealing representatives? You don’t till the wheels fully come off this debt machine.

Best advice: Stockpile provisions and keep your powder dry.


11 posted on 04/19/2011 5:06:07 AM PDT by Mouton (Voting is an opiate of the electorate. Nothing changes no matter who wins..)
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To: GlockThe Vote
Not sure how old you are but try this oldie (which insures Steve will be reelected):

Don't change dicks in the middle of a screw, vote for Nixon in 72.

12 posted on 04/19/2011 5:09:32 AM PDT by mad_as_he$$
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To: cc2k
Then, after passing a real plan (5 years or shorter to balance the budget) as our roadmap for budget reform, raise the debt ceiling to cover only the borrowing for that budget.

Why raise the debt ceiling at all? That's like giving a shopaholic who has maxed out all their credit cards a new credit card.

Debt should only be incurred for extraordinary expenses (e.g. a full-blown war). The problem is that the politicians are borrowing for day-to-day functions of the government. And they keep adding to their expenses. Various studies have shown that tax revenue to the government is fairly constant (at ~17% of GDP, IIRC) regardless of tax rates or tax policy. What we need are politicians who will look at predicted income and set the budget accordingly--like those of us who run households have to do. We also need politicians who realize that looking for new ways to tax us doesn't work; it really is up to them to live within their means.

13 posted on 04/19/2011 5:10:21 AM PDT by exDemMom (Now that I've finally accepted that I'm living a bad hair life, I'm more at peace with the world.)
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To: cc2k

Gotta start somewhere. Impeaching all the bastards is my preference.


14 posted on 04/19/2011 5:10:29 AM PDT by mad_as_he$$
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To: Scanian
Monday's Dow was crashing, at one point down over 240 points. If markets are so easily rattled,...

Rattled? The markets should have dropped one or two thousand points on that news. The party really is over, there are no more options except a couple more minor commodity booms (like the present) and busts (coming soon). There is no political will to cut, in fact it's the opposite. In the last "compromise", a few fake cuts far in the future were bought using real pork like $150M for new cars for DC's money pit subway. My hardly novel conclusion is that the markets are propped up to keep the charade going and thus ensure the final crash is that much worse.

15 posted on 04/19/2011 5:10:42 AM PDT by palmer (Cooperating with Obama = helping him extend the depression and implement socialism.)
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To: Scanian

It needs to come apart before we can rebuild. We are only prolonging the inevitable at this point.


16 posted on 04/19/2011 5:11:05 AM PDT by Dead Corpse (explosive bolts, ten thousand volts at a million miles an hour)
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To: Scanian

The stock market was not rattled. It dropped a mere 140 points on the Dow, less than several other cycles as it climbs a wall of worry.

Gold and Silver both climbed and the US$ actually strengthened a bit


17 posted on 04/19/2011 5:13:29 AM PDT by bert (K.E. N.P. N.C. D.E. +12 ....( History is a process, not an event ))
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To: GlockThe Vote
“Impeach obama.”

I have had an Impeach Obama bumper sticker on the car for a year All Freepers should wear their political orientation on their sleeves and bumper stickers.

A solicitor for the NRCC called yesterday. She asked what the prioities for John Boehner should be. I told here “Impeach the lying imposter” and “cut the federal government's expenditures to current revenues received NOW!!”

18 posted on 04/19/2011 5:14:07 AM PDT by texican01
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To: GlockThe Vote
“Impeach obama.”

I have had an Impeach Obama bumper sticker on the car for a year All Freepers should wear their political orientation on their sleeves and bumper stickers.

A solicitor for the NRCC called yesterday. She asked what the prioities for John Boehner should be. I told here “Impeach the lying imposter” and “cut the federal government's expenditures to current revenues received NOW!!”

19 posted on 04/19/2011 5:14:18 AM PDT by texican01
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To: cc2k

The only solution to the problem is to force every function of government, laws and dictates to immediately justify their existence and purpose by a reference of justification cited by our Constitution.

If justification is not proved, immediately suspend them and eliminate them.

Problem solved in just a few years. Nothing could be simpler.

As an added benefit, all of the government workers laid off could take the place of our illegal immigrants who are currently building houses and working in the fields.


20 posted on 04/19/2011 5:15:21 AM PDT by DH (48th TFW, A&E Lakenheath England, 67-70)
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