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

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

#161

Post by bigwally » Sat, Aug 06, 2011, 2:43 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…

A lot of your points seem to cover international issues/action.

The US needs to come to the realization that it is part of the world economy and not the ruler/leader.

A large percentage of the US economy was damaged in the events that occurred after September 2001. Trying to to do business, travel or get workers to the US requires so much paperwork that a lot of business has simply gone elsewhere. Even trying to do financial trade in the US these days ends up with so much taxes or the threat of your money being taken as it may be linked to some terrorist organization.

And your health insurance.... well I like collecting dividends. If you like I could go into the oil industry, I will say thank you to the American tax payer for electing to go to war and making me some money.

The US has managed to dig itself into a great big hole and gave people like me money. Congratulations on your sinking economy and thank you.

So keep watching that propaganda you call Fox News :)

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

#162

Post by noblethrasher » Sat, Aug 06, 2011, 2:46 AM UTC

geuis wrote: post #126

keyle wrote: post #86

Earlier quoted context omitted.

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 pa…

I'm tempted to extend the analogy by pointing out that we already have a unit testing framework: a constitution and judicial review. Test only work if you have an idea of how the system is supposed to run and assertions that respect that idea.

Another analogy that I like to use is one that relates governments to operating systems:

Federalism is a microkernel operating system. The states are user land processes where we can experiment with the code without taking down the entire system. When we discover something that is a universally good principle, we implement it at the kernel/federal level. After all, another name for the states is "Laboratories of Democracy".

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

#163

Post by usaar333 » Sat, Aug 06, 2011, 2:47 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.

Inflating your way out of debt is as bad to debt holders as a (partial) default.

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

#164

Post by philwelch » Sat, Aug 06, 2011, 2:47 AM UTC

marshray wrote: post #105

keyle wrote: post #86

Earlier quoted context omitted.

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…

Which is why the US was founded as a federal republic.

Specifically, a federal democratic republic. There's no contradiction between "republic" and "democracy". "Republic" refers to sovereignty (the people hold sovereignty rather than a monarch), while "democracy" refers to power (the people hold power rather than a dictator).

Some democracies are not republics--the UK is a constitutional monarchy. Some republics are not democracies--the Roman Republic was an oligarchy and to some extent the early United States was, too.

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

#165

Post by twoodfin » Sat, Aug 06, 2011, 2:48 AM UTC

i2o wrote: post #154

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…

On point #3, while I'm sure it can be better, it is worth noting out that historically medicare has done better at cost management than private healthcare ( http://krugman.blogs.nytimes.com/2009/07/29/medicare-versus-... ). I don't have the answer either, but health is one of those areas we know enough about yet to optimize using the same techniques you would in manufacturing, for instance. It is about investing in p…

It's fairly widely understood (though I guess not by Professor Krugman) that Medicare offloads some of its own costs onto the private sector by the below-market rates it pays providers.

He's also neglecting to make a real comparison of the services that private health care provides vs. Medicare. Sure, private insurance premiums may have risen faster than Medicare spending during the '90s, but Medicare wasn't even paying for prescription drugs (a huge cost driver) until Part D was implemented in 2006.

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

#166

Post by angus77 » Sat, Aug 06, 2011, 2:48 AM UTC

daemonize wrote: post #51

thematt wrote: post #23

Earlier quoted context omitted.

That's because Japanese debt (up to this point) has been primarily financed by its own citizens, life insurance and pension funds. These are more likely to accept sub-AAA rated bonds and support their own government than external investors are.

Japan has no defense investment. 'nuff said.

Japan spends 3% of its annual budget on defense.

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

#167

Post by cfaubell » Sat, Aug 06, 2011, 2:49 AM UTC

silverlight wrote: post #11

If the government that produces the reserve currency can't hold up a AAA rating, what can? The idea that anything else should have a AAA rating if the US gov't doesn't seems a little ridiculous to me on face value.

There are countries who don't use debt payments as political tools. A congressional stalemate that leads to a failure to pay bondholders is entirely possible.

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

#168

Post by noblethrasher » Sat, Aug 06, 2011, 2:49 AM UTC

keyle wrote: post #152

geuis wrote: post #126

Earlier quoted context omitted.

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 pa…

Look, I get it, you're pissed. But the real world isn't a framework, and that's all I'm saying.

The real world isn't a framework but we only understand it in terms of frameworks.

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

#169

Post by canadaduane » Sat, Aug 06, 2011, 2:53 AM UTC

chc wrote: post #143

jsz0 wrote: post #136

Earlier quoted context omitted.

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.

I'm not sure if the tragedy of the commons would apply in this case. The "mandatory" aspect of elevating discretionary spending into social spending via taxation seems to fundamentally alter the psychology of spending. "Well, if I absolutely must spend this money on other people, then I guess I'll spend it on ___" (education comes to mind as one area people in America might universally agree should get more dollars). The weakness in this system would be the lack of expertise within the "common wisdom" of the people. That might be solved by, say, providing a "template spending ballot" from respected people... a sort of proxy delegation but simplified so you just copy down the numbers they say. If that latter option were made simple enough that 90% of people could understand and do it, the expertise of a few would hold larger sway than the somewhat uninformed choices of the many.

BTW, a friend and I also thought of this idea independently; we called it "mandatory taxes, voluntary distribution" [1]

[1] http://canadaduane.posterous.com/mandatory-taxes-voluntary-d...

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

#170

Post by cperciva » Sat, Aug 06, 2011, 2:53 AM UTC

philwelch wrote: post #151

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…

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.