S&P Has Brought Out The Bazooka To Get A Debt Ceiling Deal Done

http://www.businessinsider.com/sp-has-brought-out-the-bazooka-to-get-a-debt-ceilng-deal-done-2011-7 ^ | 7/16 | Weisenthal

[Matchett-PI]

"...Read about S&P's statement elsewhere. Even the Washington Post says that this warning is less about the debt ceiling than it is about the continuing deficits. Sure, none of these ratings agencies wants to see a short-term default, but neither do they really believe it will happen. What they are warning about is there is no sign of any serious interest in cutting spending and reducing the deficits. If that continues, they must downgrade our debt."

Exactly. bttt

What Moody’s Really Told Boehner and Obama about the Debt Ceiling

[newzjunkey]

Like it or not, the U.S. is shackled by California and Illinois. One nation. At some point the situation in Illinois and California will reach a point of collapse

Blah, blah, blah. More ignorance.

Illinois and CA each have around a 19% debt to GDP ratio. CA has $377 billion in debt and $2 trillion in GDP. That's right $2 trillion. Even in this economy.

Illinois GDP is $652 billion with $121 billion debt.

Oh yeah, TX debt to GDP ratio is also about 19%. $1.2 trillion GDP with $217 billion debt.

If they were nations, all three would fall around 110th among nations in terms of debt to GDP, just ahead of China.

NY is over 25% debt to GDP ratio as is Taxachusetts putting them around New Zealand at 97th.

The United States, however, is at 36th among all nations with 59% debt to GDP ration according to that list.

[bert]

.....If they were nations, all three would fall around 110th among nations in terms of debt to GDP,.....

That’s what I have looking for. The situation is not as dire as I thought but now I wonder about cash flow.

At what point will expenditures and debt service exceed revenue inflow and interest on tax anticipation notes be prohibitive? I understand Illinois is having cash flow problems

[Texas Fossil]

How do you define debt.

How about including unfunded liabilities?

[Texas Fossil]

CA vs TX 2011 Government Spending

California, State & Local Gov. Spending					Texas, State & Local Gov. Spending
Fiscal Year 2011					Fiscal Year 2011
GDP: $1,994.5 billion					GDP: $1,176.6 billion
Amounts in $ billion					Amounts in $ billion
	State	Local	Total			State	Local	Total
Pensions	21.2	8.3	29.5		Pensions	9.4	1.2	10.6
Health Care	39.3	21.8	61.1		Health Care	25.8	9.4	35.2
Education	23.5	76.4	99.8		Education	17.1	43.8	60.9
Defense	0	0	0		Defense	0.7	0	0.7
Welfare	21.4	24.8	46.3		Welfare	6.8	2.4	9.2
Protection	16.7	31.7	48.4		Protection	5.2	10.7	15.9
Transportation	7.5	19.6	27.1		Transportation	7.1	8.4	15.5
General Government	4.5	7.3	11.8		General Government	0.9	2.8	3.7
Other Spending	16.3	51.2	67.5		Other Spending	3.5	20.6	24.1
Interest	5.7	7.8	13.6		Interest	1.1	6.6	7.8
Balance	−0.8	0	−0.8		Balance	0	0	0
Total Spending	155.3	248.9	404.3		Total Spending	77.7	105.9	183.5
Gross Public Debt	131.6	239.6	371.2		Gross Public Debt	26	184.6	210.6
Source: usgovernmentspending.com

[Texas Fossil]

And as far as state government is concerned the ratio of GSP (GDP) to debt is not the issue. The issue is State Revenue and the ability to service State Debt.

CA is a long way from a balanced State budget and if you look at the entries comparing CA to TX as far as expenditures on State and Local benefit costs you get the picture.

[Big Giant Head]

Am I missing something?

Nope. You've got it.