The Downgrade President

Posted by: Barthélemy Barbancourt

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Let me start with the liberal response to this story "Standard and Poor's is Racist!"

Now that we have that bit of inanity out of the way. Here is how you become the Downgrade President.

They boosted federal spending to 25% of GDP in 2009, 23.8% in 2010 (as TARP repayments provided a temporary reduction in overall spending), and back nearly to 25% this fiscal year. Meanwhile, debt to GDP climbed to 53.5% in 2009, 62.2% in 2010, and is estimated to hit 72% this year—and to keep rising. These are all figures from Mr. Obama's own budget office.

Rather than change direction this year, Mr. Obama's main political focus has been to preserve those spending levels by raising taxes. His initial budget in February for fiscal 2012 proposed higher spending. He then resisted the modest spending cuts that the GOP proposed for the rest of fiscal 2011.

He responded to Paul Ryan's proposal to reform Medicare and Medicaid by calling it un-American and unworthy of debate. In the most recent budget talks, he would only consider small entitlement reforms (cuts in payments to providers) if Republicans agreed to raise taxes. He has refused even to discuss ObamaCare or serious reforms in Medicare and Social Security. Meanwhile, federal payments to individuals continue to grow as a share of all spending, as the nearby chart shows.

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Woody
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written by Woody , August 08, 2011

I had not heard that claim yet Bart that S & P is racist. Where did you hear this or was this "projection". Did S & P coin the phrase "Hip Hop Birthday last week or was that someone else??


Barthélemy Barbancourt
It's a joke Woody.
written by Barthélemy Barbancourt , August 08, 2011

The fact that you thought I might have heard that somewhere is funny.

NEW YORK – In a Harlem press conference this morning, civil rights leader Al Sharpton spoke on behalf of several community leaders, calling the recent S&P downgrade of the United States’ credit rating “racist.”

“Let’s look at the facts,” Sharpton said. “Here you have the first African-American president, and they choose this particular moment in history to decide that all of the sudden America has bad credit.”

http://blackline.tv/?p=1870

Yes, it is a parody site, but the day isn't done yet.



Barthélemy Barbancourt
...
written by Barthélemy Barbancourt , August 08, 2011

"Standard & Poor’s downgrade of America’s credit rating is a crushing political blow to President Obama​. It reinforces, perhaps like nothing else has, the impression Obama is overseeing, and in some respects engineering, the decline of the American republic."

http://www.commentarymagazine.com/2011/08/08/obama-standard-and-poo/

Here is an example of where people wonder if Obama is intentionally destroying our country. I still stick to the idea that he is just incompetent, but the other side does have some valid points.

So now that S&P has formally recognized that the Pelosi-Reid-Obama troika has steered our country towards insolvency, how can the left argue that we need to spend even more?



Woody
Pelosi-Reid-Obama troika
written by Woody , August 08, 2011

That old fallback Bart? I believe they referred more to the Obama-Congress-Senate troica Bart as indicated by their mention of the inability of the current government structure to come to solutions on the debt issue. Your charicatures don't quite fit here.


Barthélemy Barbancourt
You have been asking
written by Barthélemy Barbancourt , August 08, 2011

Obama has presented budgets with trillion dollar deficits every year forever, he didn't even attempt to reduce the deficits, his most recent budget asked for higher deficits. You should also note that Obama did not propose any meaningful tax hikes and admitted when he extended the Bush Tax cuts that now is not the time to raise taxes.

Given that 2/3's of the government opposes tax hikes (Obama and the House) the answer would seem to be cuts in government. Sadly, the Senate isn't interested in solutions, nor is Obama.



jk noreen
If the caricatures fit, you musn't acquit
written by jokin , August 08, 2011

Obama-Congress-Senate troika

is equivalent to:

Obama-Reid-Pelosi troika


This is the troika that has wrought the ridiculous overspending for '09, '10 and '11. Obama wanted to take it one step farther with his own budget proposal for '12- which was defeated in the Senate by a 97-0 vote. Harry Reid may have had the political sense, but he didn't have the guts to even propose his own 2012 budget. Obama acknowledged the "shellacking" the troika took at the polls last November, but instead of reading the political tea leaves like Clinton did after his own shellacking in 1994 ("The Era of Big Government is Over!"), Obama has taken every opportunity to vacation and wallow in "De-Nile".

Let's see, isn't calling the President by his given name racist, too? Describing a party that feted a hip-hop star, JZ, and also featured a group of kids dancing to hip-hop songs as a Hip-Hop Brithday was an editorial characterization that was far more accurate than Dan Rather's characterization of GWB's military record. In addition, Hip-Hop is a crossover music genre which I daresay has more white consumers than other minorities.



TomC
...
written by TomC , August 08, 2011

Taking the 7.5% annual increase and the current budget of $3.7T, we are projected to spend $60T in the next 10 years and add $10-24T to the debt--depending on GDP growth. It is no surprise that S&P would change our bond rating looking at these numbers.

Given the $1T "cuts" and the addtional $2.5T "cuts" that are to come from the Super Committee, it only surprising that only S&P and a minimal rating change have occurred.

Even $3.5T from the $60T is a rediculously small amount. It should be $1T annualized in the first 3-years and $1.5T annualized, thereafter.



Nobody
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written by Nobody , August 08, 2011

As a percent The 3.5T is .058% Sick. Freeze new empolies, do something.



Sequel
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written by Sequel , August 08, 2011

Woody seems to be in denial of the "solutions on the debt issue"
Regardless of how high tax rates are, the government only takes in about 20% historically.
Taxing the rich won't work. There isn't enough money there and they have the ability to move it, avoid it or go all Atlas Shrugged.
There are only 2 "solutions on the debt issue".
(1)The US effectively has an economic collapse.
(2)Stop spending more than we make.

I know people think this analogy is trite, but it's simplicity makes it powerfull:
The government makes 50K a year and spends 75K a year. The last debt battle was not about fixing the problem of overspending, it was just to raise the limit on the credit cards. Now they can keep spending more than they make. Is it any wonder that the countries credit score is going to hell?

Paul Ryan had a plan to bring the fiscal house into order. Folks like Woody demagogued him for having the temerity to suggest that tough choices must be made or collapse will come. But an actual budget was proposed, one that has a shot at solvency.
The democrat budget proposal on the other hand is... Oh wait. The democrats haven't proposed a budget in years.
But the Presidents budget proposal on the other hand... Oh wait. The last time Obama proposed a budget the democrat controlled senate shot the unserious crap sammich down 98-0

But the credit rating downgrade is apparently the fault of the only group wanting to limit the out of control spending. It's the tea party downgrade.






TomC
...
written by TomC , August 08, 2011

Nobody, That's 5.8%, but still not enough.

Sequel, I agree. A balanced budget is the only way out of this, and that means huge spending cuts.

Cut spending from defense, from restructured entitlements, from discretionary and non-, and from the elimination of Obamacare.

It also means revenue through growth, by lowering or eliminating tax rates on corporations along with eliminating deductions of any kind, lowering tax rates on individuals, and lowering the costs associated with employment. The primary way to do this is to get rid of the false notion of employer contributions to payroll taxes. It is little more than silly hand waving. In fact, get rid of the payroll taxes altogether. The false notion that these have not always gone into the general fund is ridiculous.

Along with eliminating payroll taxes institute a real minimum for income taxes. Everyone should have "skin in the game."

Eliminating payroll taxes will get rid of the false sense of security that Social Security currently saddles people with that it is a retirement program. It is not and was never intended to be. It is a safety net program that should take less of everyone's support to remain viable.

If significant changes do not take place with this 12 person commission, and I have little hope that they will, S&P, along with Moodys and others should continue to lower the US bond ratings. Without "change we can believe in" I see little hope that our depts might ever get paid.




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