Posted on 08/05/2011 8:56:11 PM PDT by PAR35
Earlier today, Standard & Poor’s rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+. With regard to this action, the federal banking agencies are providing the following guidance to banks, savings associations, credit unions, and bank and savings and loan holding companies (collectively, banking organizations).
For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. The treatment of Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities under other federal banking agency regulations, including, for example, the Federal Reserve Board’s Regulation W, will also be unaffected.
What would they fear? Bank runs?
Actually, everything is not fine.
If nothing else, the damned S&P downgrade gives the dems ammo for raising taxes. The text of the downgrade mentions tax policy THREE times in a context that suggests they would view higher taxes in a favorable light.
They *do* say that they are not taking a stand on taxes vs. spending, but an astute reader can plainly read the subtext of their downgrade. They believe that reform cannot come through spending cuts alone - new taxes must be included in the mix.
Spending cuts?!
What Spending Cuts?
Do you see any Spending Cuts?
Spending WAS NOT CUT.
Only the rate of spending INCREASE was cut. (And even that is not guaranteed...)
The plan agreed to will continue to RAISE the National Debt by a Trillion or more EACH and EVERY YEAR, and that IS guaranteed.
The only surprise is that ALL of the rating agencies have not downgraded us yet. Our Debt now exceeds our GDP and it just got guaranteed to keep moving in the wrong direction.
I’m absolutely SICK that so many people, even here at FRee Republic, don’t seem to get this. Tax increases will not fix this. Our current representatives would STILL spend trillions beyond even 100% taxation. They closely resemble crack addicts, only it is spending and power that they are addicted to.
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Hey A$$hat - don’t lay into me for my analysis. I did not say at any point that I believe any *real* spending cuts were implemented. I simply pointed out that S&P’s statements mentions new taxes three times in a manner that suggests they want to see new taxes.
So you can take your...
“I’m absolutely SICK that so many people, even here at FRee Republic, don’t seem to get this”
...and shove it.
That wasn’t just for your benefit. (And you might have mentioned in your post that you knew there weren’t any actual spending cuts....)
There are still plenty here at FR that don’t get that, even if you aren’t one of them.
My apologies for seeming to single you out.
OK, apology accepted.
I’m steamed over this whole thing. I actually agree with coolhandluke that it would have been nice to let the debt limit be reached. It would have forced immediate changes in spending habits.
But I still think that even that is a bit of a temporary solution. We need to GUT government - and I even think that includes some defense spending. Namely, we need to ensure that our defense dollars are being spent wisely. No more $200 hammers and $1000 toilet seats.
I fully understand that no real cuts have been made. In fact, I’m amazed that we just don’t take Ron Paul’s advice and go back to 2004 levels of spending to eliminate the deficit. You remember 2004, right? Those *god awful* days when people were starving in the street, our military was a laughing stock, and schools were just burnt out husks of buildings due to the complete lack of government funding...? Oh, wait...
But real spending cuts are needed and - despite coolhandluke’s objection - I think we need a Balanced Budget Amendment so we can’t get back into this position.
Bank failures. If banks had to recognize the decline and write down core capital, it would probably make a difference for some of the small banks.
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