Breaking: Moody's may downgrade U.S. triple-A rating!

Originally posted by Skerrako
reply to post by surrealist

 

Moodys? You mean the rating agencies that gave house debt AAA staus until (and even after) the housing market imploded?

They also rated Lehman Brothers as AAA just before they colapsed. Moody's is just slightly more reliable than Jim Cramer from Mad Money (though far less entertaining than Jim).

Not sure why I am sharing this.. but I have a very strange sense of deja vu about this thread and the posts in it... I think I may have spent too much time on ATS and my mind has turned to mush

Anyway.. my thoughts are that it would be difficult to justify all the other downgrades and what not without making some noises about the US otherwise, well perhaps people might think these agencies where slightly biased..

But I do feel that these are toothless noises.. and as much as it might be better in the long run not to raise the debt ceiling and deal with the problems now that won't happen as the horse trading will continue and the ceiling will be raised just so the can will be kicked down the road a little bit further..

Ill say this like I said in the other moodys thread.

The us does not need to borrow money if the US would just re-visit its destructive spending policies. 2 wars, (now 3 with Libya in the mix.) social programs like welfare and unemployment. we cant have these programs forever, not to mention that congress should have the ability to coin its own money instead of borrowing it from the central bank. Congress wouldn't need to pay any interest at all. we can find savings in that capacity. Also money is debt. the only thing that money is backed by is debt itself with interest rates that can never be paid back ever.

Example: I have 2 rocks. 2 rocks that are on of a kind and you want to borrow these two rocks from me. I say sure, as long as you pay me back 3 rocks of the same kind on time then you can borrow them. Since these two rocks are one of a kind, where would the 3rd rock come from if there are only 2 in existence? this is how our fed works. they loan the US money that it can never pay back. All our taxes do is pay the interest on the money borrowed. we can never pay it back. so until then, this whole debt ceiling and triple A rating crap is nothing but financial terrorism coming from all heads of state. so, let the debt bubble pop. perhaps something constructive will come of this if congress decides enough is enough and starts coining their own money.

This whole debt ceiling scare mongering fright fest is really getting annoying!

Originally posted by SpaDe_

The BPC study found that the United States is likely to hit the debt limit sometime between August 2 and August 9. “It’s a 44 percent overnight cut in federal spending” if Congress hits the debt limit, [BPC's Jay] Powell said. The BPC study projects there will be $172 billion in federal revenues in August and $307 billion in authorized expenditures.
That means there’s enough money to pay for, say, interest on the debt ($29 billion),
Social Security ($49.2 billion), Medicare and Medicaid ($50 billion), active duty troop pay ($2.9 billion),
veterans affairs programs ($2.9 billion).
That leaves you with about $39 billion to fund (or not fund) the following: Defense vendors ($31.7 billion) IRS refunds ($3.9 billion) Food stamps and welfare ($9.3 billion) Unemployment insurance benefits ($12.8 billion) Department of Education ($20.2 billion) Housing and Urban Development ($6.7 billion) Other spending, such as Departments of Justice, Labor, Commerce, EPA, HHS ($73.6 billion) The decision to prioritize payments would fall on the Treasury department, and Powell points out it would be chaotic picking and choosing who gets paid (in full or partially) and who doesn’t…

Source

So there is not enough to pay debts that have been approved by congress -- that is not paying debt of the United States and that is unconstitutional.

Originally posted by spyder550

Originally posted by SpaDe_

The BPC study found that the United States is likely to hit the debt limit sometime between August 2 and August 9. “It’s a 44 percent overnight cut in federal spending” if Congress hits the debt limit, [BPC's Jay] Powell said. The BPC study projects there will be $172 billion in federal revenues in August and $307 billion in authorized expenditures.
That means there’s enough money to pay for, say, interest on the debt ($29 billion),
Social Security ($49.2 billion), Medicare and Medicaid ($50 billion), active duty troop pay ($2.9 billion),
veterans affairs programs ($2.9 billion).
That leaves you with about $39 billion to fund (or not fund) the following: Defense vendors ($31.7 billion) IRS refunds ($3.9 billion) Food stamps and welfare ($9.3 billion) Unemployment insurance benefits ($12.8 billion) Department of Education ($20.2 billion) Housing and Urban Development ($6.7 billion) Other spending, such as Departments of Justice, Labor, Commerce, EPA, HHS ($73.6 billion) The decision to prioritize payments would fall on the Treasury department, and Powell points out it would be chaotic picking and choosing who gets paid (in full or partially) and who doesn’t…

Source

So there is not enough to pay debts that have been approved by congress -- that is not paying debt of the United States and that is unconstitutional.

Unconstitutional? Really? Did I miss an amendment that states that the government must pay into entitlement programs and pay for spending that it authorized? Sorry, but I don't think so. These are payments into things that congress has authorized, not incurred as debt is not a payment on a debt that is owed. Let me clarify. The US government can just as easily decrease the spending on say defense as it increased it without any further debt being incurred. The debt in the form of the interest on the money the government has borrowed however is a debt that will continue to be incurred until the debt is satisfied in full.