Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

United States loses AAA credit rating from S&P

reuters.com

Post reply on HN
Print view View original

181–190 of 518 posts

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

#181

Post by philwelch »

cperciva wrote: post #170
philwelch wrote: post #151

Earlier quoted context omitted.

Also, remember that the United States is bound by treaty to defend more than two dozen nations. That includes keeping bases in some of those nations. Those treaties will have to be renegotiated. Those nations will have to increase their own defense spending. Not having read the North Atlantic Treaty, I don't know that the US has any special obligation above and beyond the rest of the NATO members. Yes, the US is obli…

the US is obligated by treaty to defend Latvia, but by the same token Latvia is obligated by treaty to defend the US And, in fact, the only time that Article 5 of the NATO treaty -- the mutual self-defence article -- has been invoked was after 9/11, when the US used it to drag the rest of NATO into Afghanistan.

Not just into Afghanistan. A good chunk of the post-9/11 air patrols in North America were flown by allied aircraft.

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

#182

Post by veyron »

pauldino wrote: post #82
quandrum wrote: post #63

Earlier quoted context omitted.

Why would you cut Social Security? It's in no danger. And frankly, medicare wouldn't be if we killed the payroll tax cap. I never understood why it's ok for payroll taxes to be regressive.

The Medicare portion of FICA isn't capped, only social security is.

Why aren't capital gains assessed medicare tax?

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

#183

Post by bubbleRefuge »

This is a non-issue and further proof of the incompetency and worthlessness of Wall Street. The ratings agencies are out of macro-economic paradigm. The US federal government can meet any and all financial USD obligations because it is an issuer of currency as opposed to a user of currency such as Euro-zone states or US states. Of coarse it is possible that politicians refuse to pass the necessary legislation to meet these obligations ( not raising or eliminating the debut ceiling). Read more at www.moslereconomics.com

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

#184

Post by winestock »

jlmendezbonini wrote: post #172
winestock wrote: post #111

Earlier quoted context omitted.

That is an excellent question. I'm too lazy to search for the answer, but, with our luck, I'd say that the Defense budget is about evenly split betwixt personnel and hardware. Therefore, cuts to defense spending will cause unemployment for both defense contractor engineers as well as veteran grunts.

Taking over your laziness I found the 2010 budget. It doesn't really provide an accurate personnel versus hardware comparison but it looks like this: Maintenance and operations 41.35% Military personnel 22.5% Procurement 20.45% Research, Development, Testing & Evaluation 11.54% Military Construction 3.49% Family Housing 0.145% Total 99.45% (I'm lazy too and rounded too much. Hey it's just 359.6775 millions that are m…

Upvoted for doing my homework for me.

So keeping the lights on and the water running is 42% (there was a link that the Pentagon spends more on air-conditioning in Iraq and Afghanistan per year than NASA's entire annual budget). Much of that cost must be due to maintaining offshore bases.

22.5% pays for the salaries of everyone from grunts to Joint Chiefs. I'll say that getting snazzy new hardware comes under Procurement, R&D, and Test & Eval. So, let's say 32%. That makes 22.5% versus 32% for personnel versus hardware. It's not parity, but it's in the same ballpark.

The biggest bite comes from maintenance & ops, of course. That figure has to include the cost keeping Navy boats afloat. No way to chop that down without also cutting down personnel. After all, if you cut the number of facilities by half, there will a lot less space for the personnel to stay in and fight from. Doing that has to have non-trivial effects on military readiness and the perception of potential enemies.

None of this is easy.

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

#185

Post by trevelyan »

winestock wrote: post #72
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…

You're more liberal than conservative. I'm more conservative than liberal. Bless your heart, I agree with all of your points. At the end of the Cold War, other conservatives were making the same noises that you're making now. For their pains, their careers were destroyed by the people who run the current mainstream conservative movement. Let's take a look at those points of yours. Points 1 & 2. Cut defense spending a…

Why do you - as a conservative - consider it rational to cut social security? The program is popular and self-sustaining. and if you read the trustees' reports you'll see it has been in surplus and perfectly solvent since 1985. In a few years it will stop generating surplus revenue for a few decades as the baby boomers move through the system, but it isn't threatened with insolvency.

There is an ethical problem with using surplus social security revenues to fund tax cuts to non-contributors and then claim there isn't money left to pay back the workers who contributed in good faith. But this isn't a problem with bureaucracy so much as a problem with the Republican Party.

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

#186

Post by eazolan »

mdkess wrote: post #97
georgieporgie wrote: post #85

Earlier quoted context omitted.

There's a lot that doesn't make any sense. As you say, interest rates are low. Plenty of people are out of work. To me, that says, "perfect time to build and repair infrastructure!" Whether you believe FDR's New Deal helped or hindered recovery from the Great Depression, the simple, business-oriented financials of it would seem to indicate that right now is the time to be building roads, trains, dams, nuclear plants,…

That's exactly what I thought the response would have been. Cheap money, low employment - hire lots of people to do stuff. But it seems like the public opinion is that this debt is bad, and I'm don't understand why entirely. I mean, I see a lot of comparisons to credit card debt, so is it just lack of education/understanding?

Why do you think borrowed money is "cheap"?

We're not paying it back. Any of it. At best we can cover the interest payments.

Why do you think this won't blow up in our faces?

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

#187

Post by [deleted] »

logjam wrote: post #159

One minor elephant in the room that only a few seem to be mentioning is the 500+ point selloff on Thursday. On Thursday evening, the economist talking-heads expressed some confusion about what was driving that sell-off on that particular day. There was vague talk of problems in Europe, although there has been worse news out of the Eurozone for months without that kind of drop. On Friday, we get the S & P announcement…

[deleted]

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

#188

Post by jad »

cperciva wrote: post #170
philwelch wrote: post #151

Earlier quoted context omitted.

Also, remember that the United States is bound by treaty to defend more than two dozen nations. That includes keeping bases in some of those nations. Those treaties will have to be renegotiated. Those nations will have to increase their own defense spending. Not having read the North Atlantic Treaty, I don't know that the US has any special obligation above and beyond the rest of the NATO members. Yes, the US is obli…

the US is obligated by treaty to defend Latvia, but by the same token Latvia is obligated by treaty to defend the US And, in fact, the only time that Article 5 of the NATO treaty -- the mutual self-defence article -- has been invoked was after 9/11, when the US used it to drag the rest of NATO into Afghanistan.

On the contrary, our NATO allies offered to help, but the Bush Administration famously replied, "thanks but no thanks, we'll do this ourselves."

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

#190

Post by chailatte »

logjam wrote: post #159

One minor elephant in the room that only a few seem to be mentioning is the 500+ point selloff on Thursday. On Thursday evening, the economist talking-heads expressed some confusion about what was driving that sell-off on that particular day. There was vague talk of problems in Europe, although there has been worse news out of the Eurozone for months without that kind of drop. On Friday, we get the S & P announcement…

The potential implosion of EU, caused by Italy

or

The rich is alerted the downgrade first, naturally.

Post reply on HN