Back in April Timmy Geithner said there was no chance that the US credit rating would take a hit.
Treasury Secretary Tim Geithner said Tuesday there is “no risk” the U.S. will lose its top credit rating amid a new analysis that revised its outlook on American debt to “negative.”
Geithner took to the airwaves of financial news networks to push back against a report Monday by Standard & Poor’s that lowered its outlook on U.S. debt to “negative,” reflecting political uncertainty over whether lawmakers will reach an agreement to address long-term debt.
There is no chance that the U.S. will lose its top credit rating, Geithner said, forcefully disputing the notion that S&P or other ratings services might downgrade U.S. bonds from their current AAA rating.
“No risk of that, no risk,” Geithner said on the Fox Business Network.
Oops.
While Obama was partying hearty at his $35,000 a plate bash, S&P was lowering the the US credit rating.
Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.
Lowering the nation’s rating to one notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bipartisan agreement reached this week to find at least $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would not be likely to achieve more savings in the future.
Obama’s only budget offering was laughed out of the Senate 97-0.
democrats went more than 800 days with no budget.
These are not serious people.
I do agree with Obama about something.
“The future is going to be determined by this (the 2012) election,”
Darn tootin’ it is. If Barack Obama is re-elected we are, in the words of Rahm Emanuel,
“Dead! Dead! Dead!”
Obama promised us he’d fundamentally change the United States. Reagan brought the Soviet Union to its knees but it took Barack Obama to bring the United States to its knees.
In 2012, without a change there will be no hope.
DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education.
DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed.
Except for liberals being foolish.
The Soviet Union has always said it will destroy the U.S. from within, well they are doing a pretty good job.
On October 30th, 2008 Obama told a crowd that “five days from now we will fundamentally change America”.
See it here.
He wasn’t kidding.
In a January 2008 talk with the San Francisco Chronicle, Obama said, ”…under my plan of a cap and trade system, electricity rates would necessarily skyrocket…”
See it here.
Obama wasn’t kidding.
My electric bill shows the same usage over the years as ever.
It is the PRICE per kilowatt that has risen, not my number of kilowatts!
Our gasoline price per fill-up has more than doubled.
The ”trickle-down” effect has raised the price of foods so much that I invested in a bread making machine and I make my own bread for less than 1/2 the cost of buying it.
I had to give a larger total amount of cash toward my food budget because everything is higher.
Don’t even concern yourselves about the lack of a Democrat Senate budget.
The debt ceiling bill, sighed by Obama, DEEMS the next two budgets as if they were created and passed!
PS, S&P just downgraded Fannie and Freddie one more notch!
Moody’s may downgrade us anytime soon, too.
@Nan G: As far as electricity rates go, Nan, you ain’t seen nothin’ yet. And there is a $1 trillion tax bomb set to go off in 2013.
Gee, let me borrow some debt to pay off my debts.
Dumbasses.
There is a new logo over at the Smithsonian.
Note that the three gears are locked and will not turn.
Also enjoy the comments (starting at #10) from those who noticed that.
A perfect logo for our government as long as Obama leads one branch and Republicans lead any part of another.
Obama’s desire to bring America to her knees is still coming about, however.
He got so much destructive waste passed while he had an all-Dem Legislature.
Great post Dr. John and all true!
One should not be surprised in the least as to the downfall of this once great nation. It has been a work in progress hastened by Comrade Obama and company! Debt, cowtowing to radicals of all persuasions. it doesn’t matter. This is what unfortunately the people of this country, too many of who truly seem to believe in the welfare state. Thanks to Comrade Obama, our country has for all practical purposes been handed to his handlers in Communist Red China and the hard Soviet Style Socialists like Putin and others!
Let’s not leave out the entrenched politicians on both sides as far as the disdain I hold for their dereliction of duty. Entrenched Rhinos as they are called are very bit to blame for the coming downfall of our country as are those on the far left!
I hope one can at least sense what I’m trying to get at here! Our country is in deep danger of falling not only into third world status as folks like Obama and Al Gore would like, but is in fact on the precipice of becoming a dictatorship! This isn’t Chicken Little yelling the sky is falling! This is fact. We the People have to get our heads out of our asses and return to the values and ideals that made our country great. The current leadership is not the answer! Good Grief kids! The people are the government, not the leaders. When did we lose sight of that? When did we become a nation with its hands out, only taking and refusing to take even a bit of responsibility for our own actions? When did we as a nation decide failures of past nations and systems are better than the liberties and opportunities afforded us under our Constitution, a document that appears to be reviled by the very people who are sworn to defend it and abide by its guiding principles! Why are we slipping into Soviet (By Soviet, I mean the dictatorship that was the Soviet Unino1 for those idiots out there who worship that form of government, ask someone who lived under it how great it was!) style Socialism and why are We the People allowing it? Why don’t we adhere to what made us who we are?
My country is going to hell! I am afraid my grandchildren are going to be living under the yoke of a Soviet style tyranny, courtesy of our leftist President, a person who if anyone had bothered to really check it openly expressed his admiration for and his adherence this gross failure of an ideology!
Note: Part of the above is from my blog, something I did a while ago which in my mind foretold what is indeed transpiring now!
“Geithner took to the airwaves of financial news networks to push back against a report Monday by Standard & Poor’s that lowered its outlook on U.S. debt to “negative,” reflecting political uncertainty over whether lawmakers will reach an agreement to address long-term debt.
“There is no chance that the U.S. will lose its top credit rating, Geithner said, forcefully disputing the notion that S&P or other ratings services might downgrade U.S. bonds from their current AAA rating.”
Poor Tim underestimated the republican right. Who ever would have believed they were willing to crash the stock market just to win an election?
@Wilson:
Ummmmmm wilson, just because it’s what leftists like you would do to regain power doesn’t mean we would. Like the S&P we want our govt to stay within it’s financial means. Socialist scum like you do not. So who is the terrorist?
Wilson-
There was enough money coming into the Treasury every month (without further borrowing) to pay for debt service, Social Security, military pay, and plenty more.
When the Obama Administration talked about not servicing the debt, or sending out SS checks, and about not paying the military, it was lies and grandstanding.
The Federal budget has shot up 30% since 2008. They are currently borrowing 42% of their budget. There is a study which concludes that historically, each new dollar in tax revenue leads to $1.17 in new government spending.
http://online.wsj.com/article/SB10001424052748704648604575620502560925156.html
Tax increases will not go for debt reduction; the funds will be treated as found money and spent faster than they come in.
One could be forgiven for seeing this ruinous state of affairs as a spending problem, not a revenue problem.
Would??? Your republican buddies have ALREADY DONE IT. Don’t you watch the news? The crash began last week. All hell may break loose by the end of the week.
Wilson, should the Federal government be borrowing 42% of its budget? Standard and Poors does not think so.
Everybody knows that the stock market is declining, possible crashing. Some people realize that the artifical threat of default ginned up by the White House contributed to this, some people remember that the Democrats quite recently had both houses of Congress and the Presidency all to themselves for two years and never passed a budget in that time. And, some people (like you) choose not to see any of that.
We have a spending problem. The solution was intensely debated. That’s normal. No branch of the government can go too far without the consent of the other branches. This is the government functioning as designed by the Founding Fathers:
http://www.telegraph.co.uk/comment/columnists/janetdaley/8685945/If-we-are-to-survive-the-looming-catastrophe-we-need-to-face-the-truth.html
You gotta’ laugh — even if it’s through tears for what’s happening to America and the cause of freedom. Good post, Dr. John. Sharing on FB and Vital Signs Blog with appropriate link back to this post.
“Some people realize that the artifical threat of default ginned up by the White House contributed to this, some people remember that the Democrats quite recently had both houses of Congress and the Presidency all to themselves for two years and never passed a budget in that time.”
Artificial threats? That was a clear warning. Now we’re seeing the first results of ignoring it.
Some people were happy that their 401K account bounced back after the 2008 crash. Some were glad the economy was improving. Some weren’t. Enter the new republican majority, on their self-proclaimed Mission from God, and in only 7 months the recovery is tanking, we have the debt ceiling cluster f—k as an example of how the U.S. government now works, and we’re headed for the edge again with the pedal on the floorboards.
What does it take to prove these people are dangerous?
@Wm T Sherman, #6:
Have we somehow forgotten that deliberately misleading Standard & Poors ratings were one of the main contributing factors behind the subprime mortgage collapse and the subsequent financial industry disaster than nearly brought down the entire United States economy?
Where do these people get off, lecturing the federal government about responsible fiscal policy, running an economy, and responding to a recession that they helped to create?
Irrelevant, Greg. The other rating agencies are going to do the same thing at some point at the rate we’re going. Moody’s has so informed us. Maybe the quality of US debt is actually degrading and at some point it has to be said. You think S&P should have waited until the new debt ceiling is reached? When, exactly, would knocking down the rating deserved? Never?
Yes, the ratings agencies have not done their jobs in the past. Besides missing things like large financial institutions and corporations like Enron, there is this elephant in the room: Fannie Mae should have been downgraded in 2005. That would have helped prevent this mess.
Note that your argument undercuts Wilson’s argument. It the agency ratings are BS, then what does it matter what reason is cited for the downgrade? Although in fact, blame for the Tea Party Republicans is just not to be found in the S&P report. Some artful mis-interpretation to that effect has been attempted, but it’s false.
It is a spending problem. If the federal government would cut its spending and stop scaring the crap out of businesses with its harassment and mandates and obsession with ‘fairness,’ then businesses would start to expand and spend the cash they have been holding onto, in excess of a trillion dollars. That’s the real economic stimulus, not this Keynsian stuff. Government revenues will rise when a real recovery starts.
But even if an economic boom should somehow break out, the government still is spending way more than it would ever be able to afford. Cut, cut, cut. To balance the budget, they can cut back spending to 2006 levels and just wait. A couple of years of recovery would balance the budget.
As far as Social Security and Medicare – that’s another matter. Unlike paying its creditiors, the government is free to renege on its impossible promises to these programs. If the government screws its creditors, nobody will want to loan them money anymore. These giant entitlement programs are doomed as currently constituted and this has been known for decades. Anybody who tries to fix the problem and salavage something from these program is instantly demonized by Democrats. Status quo = an ugly ending. Raise the retirement age, inflate the currency, means-test– whatever combination of these things is done, the pledges will be broken and nobody will have any recourse. That’s just the way it is.
@Wm T Sherman, #15:
Their timing could have been far better–assuming their intention was only to offer the honest appraisal of creditworthiness that they’re supposed to provide, and not to actually exert influence on the credit market, interest rates, and the stock market. That sort of manipulation could make anyone in the know an enormous amount money in very short order, couldn’t it?
It’s interesting where investors fleeing the stock market are putting their money: U.S. Treasury bonds. Apparently they don’t think much of Standard & Poor’s prognosis. The sudden
flight to government securities has been so great that Treasury bond yields have taken a nosedive.
Some republicans seem to believe this. It will be interesting to see what happens if they actually try it.
Now now, drj… Obama couldn’t tie his shoelaces without help. And in this case, he had the help of both parties in the Congress, as well as a tanking global economy. BTW, if you watch the financial news, you will learn that the global stock falls are less due to the US’s particular woes, but the increasing woes for Euro multiple bailouts.
That is why they are buying US T-notes… because as serious as we are, Europe has more immediate problems. That flips sides when, in 2015, the GDP/debt ratios start going down in the Eurozone while they continue to rise in the US. So investors have a safe haven in the US Treasury for another 2-3 years.
Therefore, I think you give Obama far too much credit. He is neither that smart, nor powerful.
Greg, they are already changing the deal. Raising the retirement age is a change in the deal that existed back when millions of people had Social Security taxes extracted from their paychecks.
Social Security is a de facto welfare system. It is not run as a retirement program with earmarked funds for each person in the system. The government can change the terms at any time and there is no legal basis for preventing it.
Your assumption that only Republicans would consider changing the terms is absurd. Democrats are happy to do this, they just prefer to do it quietly and call it something else. ” And hopefully blame it on the Republicans. Which is what you are doing, come to think of it.
If you get Social Security statments, you will notice that on the statements there is always a disclaimer stating that the system is not fully funded. That is your notification not to expect to get back what you paid into it.
The money is not there. More was promised than can ever be delivered. The government will renege because the money is simply not there, and because they can. This is not a radical or fringe view, it is mainstream. It is reality. Discussing it in realistic terms about what actually can be done to salvage something out of the system is a thing Republicans do from time to time. Democrats consistently refuse to have the discussion and misrepresent the Republican position to make political hay.
Social Security and Medicare are doomed in their present forms. Doomed. That is a reality that can’t be changed. Admitting the truth is a first step in choosing a softer landing over a harder one.
@Wm T Sherman
Yep. Moodys is taking a “wait and see” attitude until they find out if the committee of 12 is going to get serious and make real cuts. Obama, the Democrats and some Republicans, are simply ignoring what the credit rating agencies statements have actually said, both at the beginning of the year and now.
THE DEMOCRATS send their goons to defend their mistakes,
they are in power now and has been in power since 2008,
and had the MAJORITY TO BLOCK BUSH by sneaking their OWN BILLS
underneath the piles of the PRESIDENT BUSH’S BILLS, chewing them
as they pass.
so they have started this mess with full intent to do the fail power play even then,
to continue to expand when they took power by luring the electorate with lies, and BUSH blaming,and racist shouts
promoting hate and divide
all which is negative to
sneak in power as they sneaked in the BILLS OF PRESIDENT BUSH,
and now still trying to shift the blame onto the other PARTY, they even blame the TEA PARTY MADE OF THE PEOPLE WHICH COME FROM ALL KINDS OF lives of AMERICANS WHICH ARE AWARE OF THEIR SNEAKY TACTICS and joined to protest
you cannot expect the AMERICANS to believe the one who are spending AMERICA till there’s no more as it is now, even the one depending on GOVERNMENT’S AID who where confident to get their check on time, have been threatened, are now getting the message that they will
go without their checks if they continue to believe them, IT’S TOO OBVIOUS NOW, ALL WALK OF LIFE IN AMERICA are not trusting THIS OBAMA SPEECH or any other DEMOCRATS SPEECH ANYMORE, even if they
blame the other party, it doesn’t pass anymore, they are desperatly trying to save the DEMOCRAT PARTY, TOO LATE
I’m looking at the different posts, especially the ones slamming S&P. First, I have to shake my head and wonder exactly what planet the libs replying come from. The facts are clear. The leftist Socialist experiments are and always will be failures. That is fact! Our debt is now 100% of the GDP and therefore unsustainable, especially with the built in $7 trillion in new debt. That is fact! We either take our medicine now or we cease to exist as the great country we once were! That is fact!
Finally as to S&P. Everyone here can agree they and the other rating agencies were dead wrong in their assessments and actions as to the mortgage bubble etc. That is fact! But does that make S&P wrong in this case. HELL NO! Did anyone stop to think tat after they were taken to the woodshed and slammed for their ineptness on the last go around that maybe someone there decided to do the right thing? Folks are calling it political, in our face or whatever! It doesn’t change one thing in this case. S&P is right! This country cannot continue to emulate the failed Soviet Marxist Leninist bull that is in fact being done! If we keep up on this path, we are doomed to fail! And what you are seeing in Europe and other failed leftist socialist countries will pale in comparison to what will happen here! And that is not a opinion! THAT IS FACT!
joetote, yes, It’s time to elect the right PARTY AND THE RIGHT LEADER,
FOR AMERICA ONLY AND FIRST, IT MUST BEGIN AT HOME TO SEE THE PEOPLE HAVING JOBS
and fill with hope for their children’s future,
this crumbling DEMOCRAT PARTY have destroyed all hope for the future,
and threaten the good AMERICANS EVEN THE WORKERS WhICH HAVE TO PAY THEIR UNIONS FEE, OR ELSE, THREATENED BY JOE BIDEN, WHEN HE WARNED THEM TO VOTE AND GIVE MONEY FOR THE ELECTION 2012, OR HE SAID, YOU ARE ON YOU’RE OWN,
WHAT DOES THAT MEANS, IT SOUND LIKE THE UNIONS ARE IN THE WHITE HOUSE RUNNING THE SHOW, WITH OBAMA , AND BIDEN AND THE REST OF THEM,
YOU READ the words terrorist they used for the good citizens who oppose their spending atrocious habits which they are addicted to, unless they are out of the WHITE HOUSE FOR EVER which they don’t deserve to be. AS THEY HAVE NOT SHOWN TO IMPROVE AMERICA IN ANY FIELD WE CAN TALK ABOUT.
bye
The longer you put off addressing debt issues, the worse and more expensive it will be. The progressives of both parties seem to be wholly ignorant of financial wisdom. If they are so foolish about well established fiscal mathematical truths, there is no reason to trust their judgment on any other issue.
Great image, above. It immediately brought to mind Ronald Reagan’s Westminster speech. There he is again….All finished with his rummaging through that “ash-heap of history.” To retrieve that Communism, which Ronald Reagan, Margaret Thatcher, and Pope John Paul, had filed there, almost 3 decades earlier.