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

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

#141

Post by [deleted] » Sat, Aug 06, 2011, 2:20 AM UTC

ataranto wrote: post #132

winestock wrote: post #72

Earlier quoted context omitted.

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…

There's a huge gap between isolationism and, you know, not occupying TWO countries on the other side of the planet. I stopped reading your comment after that sentence with the assumption that all of your other points would be equally dumb.

[deleted]

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

#142

Post by darksaga » Sat, Aug 06, 2011, 2:21 AM UTC

ohyes wrote: post #73

latch wrote: post #46

For those who aren't sure why this matters there are two things to note. First, interest will go up. US Bonds are now considered riskier than they were before. This means investors in US Bonds will expect to collect more interest due to the greater risk they are taking. Instead of paying China and Japan 3% (for example) on $1 trilion (each), the US will now have to pay 3.5% (and climbing). Of course, the higher the i…

Don't think it this really matters. The US still has the strongest economy of pretty much anyone (even with recession). There isn't going to be a massive dumping of US bonds. The AAA credit rating is helpful, but is only used by certain investors, and those big enough to make a real difference have their own assessors of risk. I think the cutoff for the smaller guys to be legal to invest in is something like AA-. We…

Even if you tax the hell out of the rich, it still leaves this country TRILLIONS in debt.

It's a fact - you don't tax your way out of a recession and you sure as hell don't tax people to create jobs. It simply doesn't work.

And yeah, great idea. Let's cut military funding while we're fighting a war on terror in three countries. Apparently you don't remember Clinton's military cuts which removed almost 300,000 people from the federal payroll. When you make military cuts, you're not just removing tanks and guns. You're also sending a lot of people to the unemployment line.

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

#143

Post by chc » Sat, Aug 06, 2011, 2:22 AM UTC

jsz0 wrote: post #136

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…

I have an easy solution. Let's make your federal income taxes look less like a bill and more like an order form. So for example some portion of your income taxes are pre-allocated for essential services (say 50%) and everything else is your choice. You get 50 points to spend and a variety of categories to choose from: education, defense, infrastructure, green energy, science research, enhanced Medicare services, NASA…

The thought of how this would actually lead to a better allocation of money baffles me. It sounds like the first half of the tragedy of the commons.

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

#144

Post by veyron » Sat, Aug 06, 2011, 2:22 AM UTC

jsz0 wrote: post #136

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…

I have an easy solution. Let's make your federal income taxes look less like a bill and more like an order form. So for example some portion of your income taxes are pre-allocated for essential services (say 50%) and everything else is your choice. You get 50 points to spend and a variety of categories to choose from: education, defense, infrastructure, green energy, science research, enhanced Medicare services, NASA…

Problem is that most things you have described are public goods, for which you really can't allow people to attribute.

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

#145

Post by notatoad » Sat, Aug 06, 2011, 2:22 AM UTC

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…

the actual step 1: admit you have a problem. the US still spends with the attitude that it is a rich country. it needs to start spending with the attitude of a country that is rapidly going broke.

of course, this can't happen because any politician who doesn't parrot the "America is the greatest country in the world" message gets ousted.

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

#146

Post by Cushman » Sat, Aug 06, 2011, 2:23 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.

This economic crisis isn't about economics, it's about politics. When the GOP goes off on "cutting spending", they're not being fiscally responsible. Ideally, they would literally like to cut every dollar that isn't going to the Pentagon. "Spending cuts" is a dog whistle for the idea that the Federal government shouldn't exist at all.

It doesn't matter if borrowing and spending (some might call it "investing") money is good fiscal policy— "spending" is just wrong.

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

#147

Post by mark_l_watson » Sat, Aug 06, 2011, 2:23 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.

+1 for that. Expiring the tax cuts and reducing foreign military expenditures is our best option. We have an obligation to keep our current military personel employed but I would rather they be spending their salaries in local businesses here. Military cuts can occur by shutting down foreign bases and drastically reducing the recruitment of new military personel.

It would be funny, if it were not so serious: a lot of my conservative friends harp on the need to stay in the middle east, but refuse to pay for it with taxes.

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

#148

Post by johnny22 » Sat, Aug 06, 2011, 2:24 AM UTC

TomOfTTB wrote: post #47

thematt wrote: post #37

Earlier quoted context omitted.

They would do that without hesitation. The problem (at the moment) is they have nowhere else to put that much money.

Its really not. If what you say was true they wouldn't still be actively buying U.S. Debt. Their hesitation is they wouldn't get all their money back. If China pulled even 25% of its investments out of the U.S. the dollar would free fall. They wouldn't be able to cash out before most of the dollars value was inflated away. China continues to buy our debt because they don't want the value of their current investment t…

that's not the only reason, they also need to keep buying it for as long as we're a sizable portion of their export market. We still are, for now..

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

#149

Post by ubernostrum » Sat, Aug 06, 2011, 2:27 AM UTC

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…

The thing with Social Security is that it's such a huge, tempting cookie jar for Congress to reach into -- remember that this is a program that easily runs a surplus when we just leave it the hell alone. So instead of cutting it, how about we build a big damn electrified fence around it? ;)

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

#150

Post by usaar333 » Sat, Aug 06, 2011, 2:29 AM UTC

srl wrote: post #137

j_hightower wrote: post #80

Earlier quoted context omitted.

"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 will surpass the United States in soft and hard power eventually. This is demographically and economically inevitable. As far as I can tell, this conclusion can only be reached via naive interpolation of current trends. I can't come up with one plausible scenario in which this actually happens. Most of China, population-wise, lives in a state of abject poverty, about which the government has done very little.…

I don't think it is unreasonable to believe that in 40 years China will have per capita GDP half of the US (The Shanghai and Beijing areas are already close on a PPP basis) - indeed some GS research paper argues this. At that point its economy will be about double the size of the US...