Zippidy Doo Da

I'm not stupid, I'm from Texas!

Tuesday, August 09, 2011



Well, last week’s Teaparty Downgrade became the Teaparty Crash. After hearing parts of Standard and Poors’ Research Update, I thought I’d put some of it up here. It may seem like pretty dry stuff until you consider the fact that all that drama is costing us money. I know that my retirement accounts are down over 5%, which really stings after I was anticipating good returns after seeing the DJIA back up over 12,500 just over a week ago. How exasperating!

The GOP has shown that they’ll go to any extreme trying to take back the White House. Well, election year starts in a few months, and I hope this coup attempt blows up in their faces. If the voting public can see who the real culprits are here, and not lose focus over the next fifteen months, maybe they’ll re-elect the president and throw those baggy-assed freshman out of the House. That’s a big ‘if,’ and there are tough times ahead between now and then. For all the talk about jobs, you know the only job measures to come out of this congress will be in the form of corporate give-aways and tax breaks for “job creators.” –I don’t believe in that type of creationism either. If we want to see a new Works Progress Administration, Civilian Conservation Corps, or Rural Electrification Administration type agenda to address unemployment while improving public health, education and infrastructure, we’re going to have to hang in there and vote for it.

Meanwhile; a word from Standard and Poors:

United States of America Long-Term Rating
Lowered To 'AA+' On Political Risks And
Rising Debt Burden; Outlook Negative

The political brinksmanship of recent months highlights what we see as
America's governance and policymaking becoming less stable, less effective,
and less predictable than what we previously believed. The statutory debt
ceiling and the threat of default have become political bargaining chips in
the debate over fiscal policy. 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 in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to
manage public finances and diverts attention from the debate over how to
achieve more balanced and dynamic economic growth in an era of fiscal
stringency and private-sector deleveraging (ibid). A new political consensus
might (or might not) emerge after the 2012 elections, but we believe that by
then, the government debt burden will likely be higher, the needed medium-term
fiscal adjustment potentially greater, and the inflection point on the U.S.
population's demographics and other age-related spending drivers closer at
hand.

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