USA credit rating drops

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06 Aug 2011, 10:31 pm

psychohist wrote:

Artros wrote:

Taxes need to be raised at some point. Cutting spending is important but there's no reason why revenues shouldn't be allowed to increase. The negative effects of raising taxes are overestimated.

While I'd be happy with removing tax credits and many deductions, raising taxes is not the only way to raise revenue. Right now, the biggest thing holding federal revenues back is not the tax rate, but the weakness of the economy. Reversing some of the policies that keep the economy weak should be the first order of business.

That said, we should also keep in mind that AA+ is still a pretty darn good credit rating.

I read on verizion news that 1500 millionares dont pay ANY income taxes, However I have to pay 545.oo in a combination of state and federal and I make less that 25,000 a year. that's just f**ked up. I pay more in taxes than 1500 millionares combined. Thats part of the reason we are in this mess is because of tax cuts and tax exemptions for the rich...I mean really how much money do they really need that they are willing to contribute to such debt. ALthough, the best use of tax dollars in the long run is getting people back to work and taxing them at a reasonable, not too much or too less, rate ALso ending these wars which we are never going to win because that region is born into war for thousands of years and we just got caught up in it when the US and the UN took land from neighboring middle eastern countries and squeezed Israel in there after WWII. Our leaders contrubted to this mess. The stimulus package and bank bailouts were really stupid and only further funded the rich when they did stupid things and rewarded them for nearly driving us into a depression.

The trickle down theory made alot of people homeless in the 80's. In theory, the money goes to job creation, but the theory does not factor in coorperate greed...so in practice, they just lined their pockets and actually cut jobs and replaced people with machines. I remember, I was there.

Jojo

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06 Aug 2011, 11:11 pm

jojobean wrote:

Largely true.

Quote:

The trickle down theory made alot of people homeless in the 80's. In theory, the money goes to job creation, but the theory does not factor in coorperate greed...so in practice, they just lined their pockets and actually cut jobs and replaced people with machines. I remember, I was there.

Largely false. I was working during the 1980s, and there were lots of new jobs created, real income went up, and the foundations were laid for growth through the 1990s as well. The 1980s were also a huge improvement on the 1970s, which I was there for as well.

The way Reagan did it, however, was to simplify the tax system and remove loopholes. A lot of loopholes have since crept back in, and we need another round of simplification.

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07 Aug 2011, 12:46 am

psychohist wrote:

jojobean wrote:

Largely true.

Quote:

However I remeber protests and such when large companies laid of a great many of people in favor of machines. It seems that many companies were doing that not just one or two. It was all over the news for 2-3 years off and on after the trickle down.
I agree that the loopholes need to be closed, all of them to keep it fair.

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07 Aug 2011, 12:52 am

psychohist wrote:

The way Reagan did it, however, was to simplify the tax system and remove loopholes. A lot of loopholes have since crept back in, and we need another round of simplification.

The way Reagan did it was to cut taxes for the rich, and raise taxes on the middle class.

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07 Aug 2011, 4:14 am

techstepgenr8tion wrote:

S&P was pretty clear - at least in one article - that their lowering was because they believed that the current budget cuts were too shallow to correct the problem and that the republicans were to blame for not allowing taxes to be raised. Two ways to look at that - it could be the republican's fault for not conceding to a halfway point, it could be the democrats fault for the republicans having a plan that works in whole but not in pieces and only letting them have the whole thing.

I take that as them saying "you were both a bunch of immature children about this issue and this is the only logical conclusion to that."

psychohist wrote:

Artros wrote:

Taxes need to be raised at some point. Cutting spending is important but there's no reason why revenues shouldn't be allowed to increase. The negative effects of raising taxes are overestimated.

Here's the issue, though: nothing the American government can do is going to magically get the economy back on track. It will take time. A hit like this means it's going to take even more time. If the government had magically balanced the budget (impossible, but interesting as an example), then suddenly the prospects look a lot better. If the measures aren't good enough, it simply means that there will be more problems in the future, and people will anticipate this.

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07 Aug 2011, 10:31 am

Artros wrote:

techstepgenr8tion wrote:

I take that as them saying "you were both a bunch of immature children about this issue and this is the only logical conclusion to that."

IMO the situation its considerably worse than that - ie. there are irreconcilable differences of belief on reality between both parties, in a lot of ways these are 180 opposite ideologies.

I'm starting to wonder if Canada wasn't on to something. I could see a third democrat/centrist party being a great idea.

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07 Aug 2011, 11:19 am

techstepgenr8tion wrote:

Artros wrote:

techstepgenr8tion wrote:

I take that as them saying "you were both a bunch of immature children about this issue and this is the only logical conclusion to that."

Well, there are some problems with multiparty systems as well: whereas a two-party system stimulates the two parties moving towards each other, a multi-party system stimulates parties to become extreme. I honestly don't believe the ideologies are that irreconcilable. Compromise has been a part of politics for hundreds of years. Why should it suddenly change now?

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07 Aug 2011, 8:10 pm

Artros wrote:

The debt ceiling bill was just such a compromise. It's to be noted that the extremes didn't vote for it - the most extreme progressive Democrats because it didn't raise taxes, and the most extreme Tea Party members because it did raise the debt ceiling. However, a compromise consisting of a combination of defense and domestic cuts did pass.

Of course, it remains to be seen whether any of the cuts actually happen.

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08 Aug 2011, 1:21 am

psychohist wrote:

Artros wrote:

I don't think there's a lot of reason to doubt it. If they don't, everything basically goes to hell.

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08 Aug 2011, 1:27 am

Artros wrote:

psychohist wrote:

Artros wrote:

I don't think there's a lot of reason to doubt it. If they don't, everything basically goes to hell.

Actually there is a good reason to doubt it, because the Democrats have a track record of not following through when it comes to promised spending cuts.

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08 Aug 2011, 3:48 am

Inuyasha wrote:

Artros wrote:

psychohist wrote:

Artros wrote:

I don't think there's a lot of reason to doubt it. If they don't, everything basically goes to hell.

Actually there is a good reason to doubt it, because the Democrats have a track record of not following through when it comes to promised spending cuts.

-Clinton is the last president with a balanced budget. Last time I checked, he was a Democrat.
-There is no choice. Cut spending or the economy goes to hell. Period. Everyone knows this. What needs to be done needs to be done, and this is not the time to be bringing in crap like this, as it will only undermine the trust that is absolutely necessary.

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08 Aug 2011, 8:11 am

Last time I checked, Clinton was kinda over a barrel since the House was lost to Republicans. But, it must of been a Dem. Pres. wanting a balanced budget, and had to fight tooth and nail to get elected and force through a balanced budget approach through a Republican House... :lol: Clinton was smart enough to move a little to the center, shelve the ClintonCare (now ObamaCare), not go wild with spending, ride the internet superhighway wave and get re-elected. The writing on the wall about the economy and our president's approach has been there for 2 years now!

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08 Aug 2011, 9:05 am

Artros wrote:

psychohist wrote:

Of course, it remains to be seen whether any of the cuts actually happen.

I don't think there's a lot of reason to doubt it. If they don't, everything basically goes to hell.

There is plenty of precedent for governments letting things go to hell in the Americas. Granted it happens more in Latin America than in North America, but nothing says it couldn't happen here.

Nil_Nil wrote:

Last time I checked, Clinton was kinda over a barrel since the House was lost to Republicans

Yes - both houses were held by Republicans, so as you say Clinton had to give up wild spending plans such as Hillarycare.

If the Republicans win a solid majority in the senate in 2012, and if the Tea Party maintains strong influence in the house, the same dynamic could exist, in which case I'd expect the cuts to be sustained and more. If Pelosi managed to win back the house, though, I'd expect the debt agreement to be ignored and the economy to collapse.

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08 Aug 2011, 2:40 pm

psychohist wrote:

Artros wrote:

psychohist wrote:

Of course, it remains to be seen whether any of the cuts actually happen.

I don't think there's a lot of reason to doubt it. If they don't, everything basically goes to hell.

There is plenty of precedent for governments letting things go to hell in the Americas. Granted it happens more in Latin America than in North America, but nothing says it couldn't happen here.

Are you seriously comparing the US to Argentina and Mexico?

No, nothing says it couldn't happen there. But given the fact that the US have survived a number of Democratic presidents (I have no idea how many and honestly do not care), I don't think there's any real reason to be afraid that you'll have to use million-dollar bills with Obama's face on it to buy bread any time soon.

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08 Aug 2011, 3:02 pm

Artros wrote:

Inuyasha wrote:

Artros wrote:

psychohist wrote:

Artros wrote:

I don't think there's a lot of reason to doubt it. If they don't, everything basically goes to hell.

Actually there is a good reason to doubt it, because the Democrats have a track record of not following through when it comes to promised spending cuts.

There was a Republican controlled congress while Clinton was President, Clinton was able to work with people in the other political party, something Obama seems unwilling to do.

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08 Aug 2011, 3:23 pm

Artros wrote:

-There is no choice. Cut spending or the economy goes to hell. Period. Everyone knows this. What needs to be done needs to be done, and this is not the time to be bringing in crap like this, as it will only undermine the trust that is absolutely necessary.

The only thing that I'm very skeptical of - higher government spending and bigger government, for those left of center, has been something like a religiously held belief. It cuts directly against the core of what economic liberals have been about, it goes right in the face of everything that's been taught in colleges and by the press, its like them taking a 180 turn on dna or a life long build up of beliefs, a bit like getting Evangelical conservatives to say "Ok, abortion isn't murder". This kind of shift in thinking can perhaps come with the generational replacement of people but typically once people have become adults and been fed a belief their entire lives there's no longer a logical thought process behind it anymore and changing that thought process is a bit like amputating an arm or leg.

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