Skip to comments.Egan-Jones Downgrades US credit rating to AA
Posted on 07/27/2011 12:35:07 AM PDT by greeneyes
Egan-Jones downgrades U.S. rating to AA+ from AAA
-Small ratings agency unlikely to have market-moving implications, but comes amid possible downgrades from larger ratings agencies.
-Egan-Jones cites rising debt-to-GDP ratio for downgrade rather than delay in raising the debt ceiling.
By Andrew Ackerman and Mark Taylor
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Egan-Jones Ratings Co. over the weekend lowered its rating on U.S. debt, the ratings firm's president, Sean Egan, announced Monday.
(Excerpt) Read more at nasdaq.com ...
Is this an argument for keeping the debt low i.e. no increase in debt limit?
It's also an argument to imprision a dozen Dems starting with this jackwagon...
If substantial cuts are made, it will probably have a very negative impact on the economy. If no action is taken USA looses AAA rating and interest rates skyrocket almost overnight. Huge negative impact on the economy, and makes debt situation worse.
Catch 22 is finally here and now for Congress Critters. Increasing the debt limit and cutting spending might give some breathing room. The problem is bad enough that anyone supporting the necessary actions is unlikely to get reelected.
Another way to say it: We have been going 90 miles an hour down a dead-end road, and there's just a few hundred feet of road left. As Egan-Jones notes, the fed’s printing of money and subsequent devaluation is just defacto default.
Failure to raise the debt limit just means that chaos happens overnight. Buying some time by raising it could allow for a more orderly and logical transition to austerity measures.
Or are we too hell bent on self destruction to stop?
It will happen one day.
Better that we owe less when it happens.
That’s a good question. I say no more foreign aid. Might have to keep oil producers happy though. I say convert to natural gas ASAP.
No more studying methane gas produced by cow dung, or measuring penis either, and no more EPA etc. etc. you know the drill. Seems to me we need to cut spending by 50% to have any hope of getting out of this anytime soon.
We need to pay down the debt ASAP, not just cut deficit spending.
Comparison of nObama’s first year and current year
U.S. Federal Government Spending Comparison, 2008 and 2011
Figures given in billions of U.S. Dollars
Category_______ FY 2008 FY 2011 INC/(DEC) INC/(DEC) %
U.S. Federal Government Revenue Comparison, 2008 and 2011
Figures given in billions of U.S. Dollars
Category_______________ FY 2008 FY 2011 INC/(DEC) INC/(DEC) %
Ind. Inc. Tax___________1,145.8__956.0___-189.8_____-16.56%
Corp. Inc. Tax___________304.3____198.4___-105.9___-34.80%
Social Ins. Taxes________900.2____806.8____-93.4____-10.38%
Fees & Charges___________0.0________0.0_____0.0
Bus & Other Rev__________33.6_____79.5_____45.9___136.61%
My own little proposed spending cuts - a starting point - in 2011 spending levels, in Billions, without touching Social Security, Medicare or Defense...
Notice that it is ALL IN ONE YEAR, THROUGH REDUCTIONS AND MOSTLY COMPLETE ELIMINATIONS OF AGENCIES:
Education__________________ $129.8 billion
Transportation (I propose
a limit of $10 billion)_________ $84.5 billion
Basic research______________ $18.7 billion
, fishing and hunting _________ $32.8 billion
Fuel and energy_____________ $26.9 billion
Pollution abatement_________ $10.9 billion
Protection of biodiversity
and landscape_______________ $13.9 billion
Housing development_______ $35.5 billion
Community development_____ $25.7 billion
sporting services_____________ $4.1 billion
(I propose cutting the
current amount in half)_______ $16.6 billion
Welfare (eliminate)_________ $495.0 billion
Grants to States
for Medicaid________________ $276.2 billion
R & D Health
(includes NIH)______________ $36.1 billion
Total reduction to annual
spending_________________ $1,206.7 billion
After all that cutting - $1.2 TRILLION...
The Deficit would “only” be a few hundred BILLION if Revenue remains on the same track as the past few years.
Yeh, that’s why I say the Congress Critters have kicked the can down the road so often they have forced themselves into a catch 22, and screwed the American citizens worse than ever.
Well, one or the other or some of all four has to happen:
1) Federal employees and/or contractors get laid off by the boatload
2) SS checks get shrunk
3) Medicare starts cutting what they pay to the healthcare industry
4) We borrow more and kick the can a few months down the road
So which group or group of groups is going to win over a majority of Congresscritters and which ones will take the big hits ?
A) Federal employees and unions
B) Senior citizens (cut ss payments)
C) The healthcare industry (cut medicare)
D) Too afraid to start large, tough measures to put government back in it’s cage (raise the debt ceiling and borrow more)
What creditor in his right mind thinks that getting a higher limit on over-the-limit credit cards is better than cutting spending?
Stop SS payments to people who have never paid in, and raise the retirement age another year. Maybe raise the taxable wage ceiling. Transition to private system.
Medicare already only pays doctors 1/3 of the bill, the quickest thing to do would be to stop Obama care. Then, maybe look at Implementing a premium for part A and raise it for part B. Medicare only costs about $100.00 for part B, and part A is free.
Many possibilities. No doubt we will continue to take from the needy and give to the greedy. The working poor and middleclass should get prepared for BOHICA.
“What creditor in his right mind thinks that getting a higher limit on over-the-limit credit cards is better than cutting spending?”
It is not an either/or situation. They are downgrading due to the long term projections. They are ok with a short term raise, as long as the long term is addressed. If better policies are implemented, like Reagan did, then there will be more revenues due to more people working.
Kinda like when you have a temporary cash flow problem and unexpected expenses. The biggest issue from the charts I have reviewed in the incredible balloning of health care with Obama care and baby boomer Medicare.
In what way?
If no action is taken USA looses AAA rating and interest rates skyrocket almost overnight.
Skyrocket to what level?
Failure to raise the debt limit just means that chaos happens overnight.
How? What do you mean by chaos?
I don't believe any of your dire predictions. The only chaos I see is if there is rioting because the crack addicts - no, welfare addicts don't get their fix.
Ok. Believe what you want.
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