United States loses AAA credit rating from S&P • Hacker News Board

Re: United States loses AAA credit rating from S&P

#121

Post by veyron » Sat, Aug 06, 2011, 2:06 AM UTC

prostoalex wrote: post #98

geuis wrote: post #52

(Reference: http://www.federalbudget.com/ ) Steps to recovery: 1) End all offensive military actions overseas. Finish winding down Iraq and abandon Afghanistan wholesale. These actions have cost several trillion dollars over the last 10 years. We can't get that money back, but we can stop spending more. 2) Defense spending is in the top 3 highest budget expenditures. Cut it by 1 third across the board. Maintain impor…

What constitutes defense spending nowadays? Is it largely salary payments to current troops? Wouldn't we have to deal with a large unemployment problem in case we laid off a bunch of military employees and told them to go find a job somewhere else? Or is it payment to defense contractors, such as Valley's own Lockheed Martin? Wouldn't this cause a large number of people to be unemployed, contributing to recession?

Problem is that, especially during the bush era, there were a lot of no-bid contracts to firms such as Halliburton. And we are obliged to make those payments.

Re: United States loses AAA credit rating from S&P

#122

Post by watchandwait » Sat, Aug 06, 2011, 2:06 AM UTC

wtallis wrote: post #35

chailatte wrote: post #30

Took those lazy rating agencies a while. - 1.6 Trillion budget deficit - 14 Trillion national debt - 55 Trillion US total debt - 115 Trillion Unfunded liabilities - 17% U6 unemployment - 45.8 Million Americans on Food Stamps - 52 Million Americans without health insurance - 1/2 of mortgages are underwater - 63% labor participation rate, lowest since early 80s - -5% in Real medium household income in the last 10 years…

The S&P rating is only an assessment of risk in the US Treasury bonds, not a general rating of entire US economy.

That's wrong, the GDP and expected GDP is a big part of the rating-- known as the "capacity to repay".

Re: United States loses AAA credit rating from S&P

#123

Post by illumin8 » Sat, Aug 06, 2011, 2:07 AM UTC

j_hightower wrote: post #80

geuis wrote: post #52

(Reference: http://www.federalbudget.com/ ) Steps to recovery: 1) End all offensive military actions overseas. Finish winding down Iraq and abandon Afghanistan wholesale. These actions have cost several trillion dollars over the last 10 years. We can't get that money back, but we can stop spending more. 2) Defense spending is in the top 3 highest budget expenditures. Cut it by 1 third across the board. Maintain impor…

"Given China's rise, its wise long-term to keep a presence in the region." Why? China will surpass the United States in soft and hard power eventually. This is demographically and economically inevitable. Even sooner, if not already, China will become an unshakable hegemon over all of Asia. So why fight it in the most expensive and futile ways possible, i.e., by maintaining the fiction that we will be able to exercis…

China's defense spending is less than half of the US. This is not an inevitability. Learn the facts before you go spouting off nonsense: http://en.wikipedia.org/wiki/List_of_countries_by_military_e...

Re: United States loses AAA credit rating from S&P

#124

Post by veyron » Sat, Aug 06, 2011, 2:07 AM UTC

pyoung wrote: post #118

miked wrote: post #27

Earlier quoted context omitted.

The downgrade is because the US Gov is spending far more than it's taking in. In other words, it's for the same reason that every other person / business / government gets downgraded. It's important to realize that there's no magic here.

You cannot compare 'person' and 'business' with government. The government has the ability to print money, whereas the other two do not. The only reason they don't print money to pay off all their debts is because it will result in massive inflation. The reason the European debt crises is so serious is because the adoption of the euro means that no individual contry can print their own money to avoid default.

"The reason the European debt crises is so serious is because the adoption of the euro means that no individual contry can print their own money to avoid default."

It's more because each individual country issues bonds. The ECB can't issue debt.

Re: United States loses AAA credit rating from S&P

#125

Post by nknight » Sat, Aug 06, 2011, 2:07 AM UTC

joezydeco wrote: post #92

cma wrote: post #74

Earlier quoted context omitted.

Yes, about 70% of it.

Really? http://cache.boston.com/bonzai-fba/Globe_Graphic/2011/07/31/... [EDIT] Sorry, read the original statement wrong. I was thinking the parent said 70% was held foreign, not vice-versa.

Yes, really. Did you actually add the numbers up? The non-foreign components are nearly 70%.

Re: United States loses AAA credit rating from S&P

#126

Post by geuis » Sat, Aug 06, 2011, 2:07 AM UTC

keyle wrote: post #86

geuis wrote: post #52

(Reference: http://www.federalbudget.com/ ) Steps to recovery: 1) End all offensive military actions overseas. Finish winding down Iraq and abandon Afghanistan wholesale. These actions have cost several trillion dollars over the last 10 years. We can't get that money back, but we can stop spending more. 2) Defense spending is in the top 3 highest budget expenditures. Cut it by 1 third across the board. Maintain impor…

This all makes good sense and would make a great political party's campaign. The problem is, it wouldn't work. The economy, as small as any small country, isn't a piece of programming. You don't audit and refactor, or rewrite parts and plug it all in. It's made of generations of flesh and bones, all of which have worked their guts out to get whatever it is you're trying to take from them. In a tyranny, maybe. In demo…

This is a completely bullshit way of thinking. Its also just another example of the defeatist attitude so many people in this country have. "Oh, the problem is too big to handle" or "Welp, that's just the way it is".

You ABSOLUTELY audit and refactor a society. Every time the country has gotten a bit more free with a new law or court decision, that's a refactor that improves the system.

Sometimes people have added parts to the system or revised bits that end up for the worse. Examples include Prohibition, Jim Crow laws, Defense of Marriage Act, software patents, etc.

One thing that would help society out a lot would be societal unit tests. Set baselines as to what works and doesn't, and if some new changes breaks the tests you go back and refactor again.

Re: United States loses AAA credit rating from S&P

#127

Post by veyron » Sat, Aug 06, 2011, 2:09 AM UTC

mdkess wrote: post #56

I am not American, and here's what I don't get: America can borrow money right now at 1.5% for five years. Why is there such a clamour to stop? I would hope that the government would be able to get better than 1.5% return with the money - if the CEO of any company chose not to take on debt at this rate they'd get fired. It seems like all of the media coverage is glossing over this.

The real problem is that the republicans are zealots of the church of voodoo economics.

The reality is that demand-side economics has stronger and more intelligent underpinnings (give money to individuals --> they spend --> increase demand --> hiring). Giving more cash to companies doesn't induce hiring; demand for products induces hiring.

Re: United States loses AAA credit rating from S&P

#128

Post by dennisgorelik » Sat, Aug 06, 2011, 2:10 AM UTC

That's a good news and a wake up call.

Re: United States loses AAA credit rating from S&P

#129

Post by onedognight » Sat, Aug 06, 2011, 2:10 AM UTC

aaronbrethorst wrote: post #69

winestock wrote: post #9

So it begins. A quote: "The outlook on the new U.S. credit rating is negative, S&P said in a statement, a sign that another downgrade is possible in the next 12 to 18 months." I.e., things are going to get a lot worse before they get worse. Time to bring this back to a hacker's perspective. Is there any way to "hack" the system so as to get government finances to within commuting distance of sanity? Or have recent ev…

Letting the Bush tax cuts expire next year, and winding down operations in Iraq and Afghanistan would go a long way to balancing the Federal budget. As far as reducing the deficit goes, I have less insight into this. Except that making the Federal government's budget revenue-neutral is a critical first step.

> would go a long way to balancing the Federal budget

> as reducing the deficit goes, I have less insight into this

Balancing the budget is exactly reducing the deficit. It's the debt I suspect you have less insight into.

Frankly it's an embarrassment that they could only agree lower the deficit by less than 10%. They are a long way from addressing the debt.

Re: United States loses AAA credit rating from S&P

#130

Post by marshray » Sat, Aug 06, 2011, 2:10 AM UTC

AgentConundrum wrote: post #99

S&P's report is here: http://www.standardandpoors.com/servlet/BlobServer?blobheade...

I love to hear them tell it like it is, all matter-of-fact like that. S&P ought to run as a 3rd-party presidential candidate in 2012.

It's about time somebody brought down the cluebat.