Why S&P Really Downgraded US Credit Rating (vanity but linked to their report)

S&P PDF Official Document ^ | 6 Aug 2011 | S&P and SkyPilot

[SkyPilot]

As I was watching the "spin" on MSNBC, CNN, and almost every other cable show last night regarding S&Ps decision to downgrade the soverign US credit rating for the first time in our nation's history, it was amazing to me that every liberal commentator and every Democrat appearing on the shows avoided the monster in the room at all costs:

ENTITLEMENTS

Entitlements are breaking the back of this nation. During the debt deal and its aftermath, Democrats made it clear they would not budge (or even address) the crippling effects of Medicare, Medicaid, or Social Security.

S&P's report did - right up front. In fact, it mentions Entitlements as the biggest problem.

Funny how the Lamestream Media missed that language, considering it is on the front page of the PDF document that S&P released on Friday night.

_____________________________________________________________________

Rationale

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. ...Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability. Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden.

[MontaniSemperLiberi]

One of my favorite websites. I really like the feature that allows the user to create a specific graph.

[Terry Mross]

The WH says S&P made a $2 trillion error. If that’s true then this is S&P’s fault and no one elses.

[firebrand]

And if they’re still working, they’re still paying into Social Security while they’re collecting it. Go figure.

[Fresh Wind]

How come there are ‘INDEPENDANTS’, but no ‘Independent PARTY’????????????

If there was an "Independent Party", the members wouldn't be independent any more, would they?

Of course, most "Democrats" aren't democratic, most "Republicans" aren't republican, and there isn't single "Green Party" member who is green.

If the Tea Party people formed a party, it would have to be the "Tea Party Party".

[MontaniSemperLiberi]

Good post.

Right now, there are 50 million elderly and 60 million people total living off the taxes paid by 131 million Americans.

It should be no mystery what the problem is with SS and Medicare.

[MontaniSemperLiberi]

Collect what? The money I’m paying in and more thereby bankrupting this country? No thanks.

There money is spent. Why do think they should get my money and more?

[algernonpj]

Here’s the elephantt in the room, no one seems to mention.
Anchor babies, illegals, new immigrants, and their respective families have been sucking up hundreds of billion of dollars in freebies for years.

[SF_Redux]

you have some college, don’t you

[RockinRight]

Yes, entitlements need to be cut, but how? Once you create that dependence cycle, it’s like taking away a crackhead’s crack - he’ll do ANYTHING to get it back.

Considering that a disproportionate percentage of people outside the 65+ SS recipient class are of a mindset that is more statistically likely to commit violent crimes, what are we going to do with 20 million hungry people who have a lower-than-average resistance to robbing, stealing, and shooting their way to prosperity?

[TexasFreeper2009]

It would certainly hurt... but sometimes in order to save the patient you have to do something dramatic like cut off a leg.

Make no mistake, if things are left as they are we are going to go bankrupt anyway. The welfare state has to be dismantled and eliminated. It's just a matter of how do we do that without our cities burning.

[SkyPilot]

skypilot, I am surprised you can even tie your shoes I guess you can tie your shoes

Well, if that's they way you want to be - fine. A childish response for a childish sense of "entitlement."

Hope you feel better.

P.S. Our country is still heading towards financial Armageddon after your silly comment.

[SF_Redux]

count on use of bodybags to rise as economy goes down, and especially for the jackasses that say people who paid in for 50 years need to just forget it

[Uncle Sham]

END social security entirely within 25 years by doing a few things to encourage baby boomers to drop out of the system while at the same time lessening it's financial burden on those who have to pay the taxes to support it. It's going to take this long to ease everyone out of the present failed scheme and into their own individual retirement plans that they would own.

1. FREEZE current benefits for those currently receiving them. This also means no more increases.

2. Entice as many of those within ten years of receiving benefits as possible into dropping out of the plan. I would suggest that some type of one-time buyout amount along with never having to pay social security taxes ever again would do the trick.

3. Those who are within twenty years of receiving benefits will still be eligible to receive them, but at whatever level they exist after legislation has re-defined what they might be. They will have anywhere from ten to twenty years to prepare privately to make up the difference.

4. If you are not within twenty years of receiving benefits, your reward will be a slow decline in the amount of social security taxes taken from your paycheck as those receiving benefits die off. This means that over a period of twenty to thirty years your paycheck would see a tax reduction of fifteen percent. As it goes down, your ability to invest into a private plan goes up.

I think this approach would sell politically as well as spread the sacrifice enough to encourage wide-spread acceptance across generational lines. No one is left out in the cold and there is a silver lining for all.

[SF_Redux]

have you give any credit for this debt of entitlements to the little socialists saying we have to take care of all the illegals that smuggle their ass’s in this country?

all these pet, vote buying programs liberals have added is the major problem

[Keb]

Erase your blackboard, and try again.

The Government has not embezzled any moeny from the social security system. From the first day the system operated, the Social Security Administration has been forbidden, by law, to save up any money, or invest in anything the Government could ever possibly collect on.

Here’s the only way it has ever worked: Social security taxes are paid into the Social Security Administration. They pay out Social Security checks. If they have any money left over, they send it to the Treasury, which immediately spends it on current Government operations. If they don’t have enough money, the send a message to the Treasury that says “Send us 100 million.” (or whatever amount). The treasury sends them the money, and they immediately mail it out. In no case is anything ever saved.

When Social Security sends money to the Treasury, the Treasury sends them a government bond, which they, figuratively speaking, put on a stack in the back room. When they get money from the Treasury, they take a bond off the stack, and send it back to the Treasury. When people speak of Social Security going bankrupt, they are referring to the projected date when that stack of bonds will run out.

The kicker is that the total value of those bonds is zero.

You can invest in US Government bonds. You can invest in General Electric corporate bonds. You can invest in IOUs from Joe, who lives down the street. If I gave you a check for $1,000, you would be $1,000 richer. But if I write myself a check for $1,000, it will not make me any richer. If Joe writes himself an IOU for 5 billion dollars, that will not make him a billionare. General Electric cannot invest in General Electric corporate bonds. And the US Government cannot invest in US Government bonds.

When someone else owes you money, you have an asset. When you owe someone else money, you have a liability. When you owe yourself money, you have nothing. The Social Security Administration has nothing. It has never had any assets. It has always been forbidden by law from having any assets.

Social security checks have always come from a combination of three place: Current Government revenues, current Government borrowings (from other people, not from itself), and newly printed money. That’s all you’ve ever gotten. The money you sent it was all spent right away; it was all gone before you got anything.

When the politicians were taxing you, they promised that they would save up that money. They lied. They spent it all right away. Social Security has never been a savings program, it has only ever been an entitlement program.

Plans to pay everyone back what they put in founder on the same rock. There’s no money to pay those checks. There are no assetts in the system. There never were.

On the plus side, if you’re worrying about the Social Security Trust Fund running out of Government bonds, you’re worrying about almost nothing. Congress could pass a law tomorrow, directing it’s Treasury to print up five trillion dollars worth of bonds, and hand them to the Social Security Administration, to add to the stack. This would not make the government any poorer (except for printing and administrative costs). Congress decreeing that its Treasury owes its Social Security Trust Fund five trillion dollars, is like me decreeeing that my bank account owes my wallet a hundred bucks. So what?

[SkyPilot]

These people's largess should not be robbed from Social Security/medicare funds. GET IT?

Sorry, but you are sadly mistaken.

There is no "trust fund" or "lock box" for Social Security or Medicaid. The Govt took the money, and spent it.

If I took a piece of candy away from a 5 year old, and gave them a plastic token in return, and then ate the candy, even the 5 year old would know the candy was gone.

The government took all taxes (and they were taxes) from Social Security, replaced them with IOUs, and now we are $14.5 Trillion in debt.

Moreover, those who screamed "I paid" have no moral argument as to being "deserving" when veterans who had their legs blown off are now facing real cuts - to the VA, to TRICARE, and to their military retirements.

Under debt deal, military pay, veterans programs in play for cuts

If these heroes are subject to this, then so is your Social Security and Medicaid. In fact, if it were not for the fact that Obama, Reid, and Pelosi are protecting entitlements like a mafia boss protects his loot, then veterans programs (those who really served this nation) and active duty salaries for those who are sacrificing now for our nation would not even be in consideration.

So much for a "grateful" nation. You stand where you sit. All the talk about "supporting our troops" goes right out the window if the balance of scales means our heroes, or your check.

[SF_Redux]

encourage baby boomers ILLEGALS AND WELFARE RECIPIENTS to drop out of the system

[SkyPilot]

count on use of bodybags to rise as economy goes down, and especially for the jackasses that say people who paid in for 50 years need to just forget it

Body bags?

Oh, good heavens, take your violent rhetoric somewhere else.

[SF_Redux]

” Oh, good heavens, take your violent rhetoric somewhere else.”

what happen?... soil your Depends?

[SF_Redux]

you know, I thought liberals had been run off this place, reckon a few diehards need more encouragement