Live data from Hacker News

United States loses AAA credit rating from S&P

reuters.com

421–430 of 518 posts

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

#421
post #279

Earlier quoted context omitted.

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…

The program is popular and self-sustaining. Social Security was never self-sustaining. It's doomed by demographics and has been since the day it was enacted.

You an accomplish italics/quotes using asterisks, like so

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

#422

Perfect. Obama and Boehner are doing an excellent job of what they are paid to do: transferring the wealth of the USA to Wall Street plutocrats. They've given the sleazeball so-called "rating" agencies the cover they need to demand higher interest rates. No new taxes. No new jobs. I can't believe that folks who are in their 20s and 30s aren't throwing rocks at people my age (late 50s) for our generational greediness.…

It's no use to throw rocks at you people. I guess it's not so much the fact you 50 and 60-somethings are relatively very well off by profiting from the situation until now that makes people angry (hey, a lot of you worked hard as well for it), it's the fact a lot of you are so cavalier and casual about it, and like to dangle that fact in front of our noses all the time.

In any case, I do hope you enjoy the fact you're rich, at the expense of your own children. Well played I guess.

If you haven't got any children, perhaps you need to be kind to that girl changing your shit-filled diaper in the elderly home.

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

#423

Earlier quoted context omitted.

The Hayekian view here seems patently false according to Moody's research firm, which determined in 2008 that the most cost effective stimulus was food stamps and the least effective was business incentives such as tax breaks for buying new equipment. http://money.cnn.com/2008/01/29/news/economy/stimulus_analys...

Oh yeah, reference Moody's, they did such an awesome job rating mortgage securities a few years ago. My own wholly unfounded reasoning goes as this: give a broke guy some food stamps, he'll spend it on food. So the government is essentially buying this guy food. Food and groceries happen to be some of the the lowest-margin sectors of the economy - Safeway's operating margin hovers a little under 3%. So yeah, the guy…

What does margin have to do with it? Why is using the money efficiently important? What is your definition of efficiency?

Lets assume he is dirt poor, rather than broke. Everyone needs food and groceries. If he spends the food-stamps on food, he will likely spend the money that he would have spent on groceries on something else. By giving food stamps, you've given him a surplus of money, so he'll buy something that he needs but can do without, or a luxury good that he wants.

Lets assume now he is rich. We give him a tax break equivalent to the food-stamps (or even the same food stamps). He's already buying everything he wants and putting some in the bank. With the food stamps, he is able to put more in the bank. If the money is in the bank, it can be loaned to the poor guy, but it is actually (eventually) taking money out of the economy when it is loaned... the poor guy has to eventually pay it back to the bank with a few % interest.... it isn't actually getting 'spent' on anything.

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

#424

Earlier quoted context omitted.

Citation, something, anything to back up such a stupendous claim.

Please see the CNN link posted by smallblacksun.

He said, "A good chunk of the post-9/11 air patrols in North America were flown by allied aircraft."

The article says:

" Five NATO planes have arrived at Tinker Air Force Base in Oklahoma City, Oklahoma"

and:

"Most of the United States' 30 AWACS, based at Tinker, have been flying around-the-clock surveillance of U.S. airspace..."

In my opinion, the phrase, "a good chunk of" is dubious. In a few minutes of Googling, I could find no indication of how many missions (if any) those NATO planes flew.

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

#425

Earlier quoted context omitted.

I think it will take more than rolling back the Bush tax cuts. If no entitlements changes are made, it would take roughly twice the GDP of the entire world: "Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percen…

I agree that Americans pay far more for health care than they should. I agree that Bush's medicare giveaway to industrial pharma was grossly irresponsible and that it has contributed a massive amount to the crater that currently is US fiscal policy. And I do not honestly know how people who consider themselves conservatives could support either that or the tax cuts, especially when the United States was on course to…

I quite agree with you (and Fisher) that the Social Security system's problems are solvable (you might have confused me with winestock). My point was that SS is a distraction–Medicare dwarfs the other entitlement liabilities–and it will take more than rolling back the Bush tax cuts to bring about budget surpluses.

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

#426

Earlier quoted context omitted.

I strongly disagree that retirement accounts should be mandated by the government. If people won't save for retirement, they should understand that the government can't help them. This philosophy that the peon is too stupid and/or undisciplined to manage his own accounts and that the government must protect him from himself is what gets us into huge messes like this in the first place.

So what do we do with people at the end of their working years, who, through bad luck or bad design, ended up with nothing. Do we stand by and let them suffer and die?

And do we realize that some may, at that point, turn to crime?

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

#427
post #188

Earlier quoted context omitted.

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

Not true. NATO staff discussed Article 5, decided that it was appropriate, spoke to Colin Powell, who supported it, and by the time the NATO council met to approve the draft statement concerning Article 5 George Bush had also signalled his support for it. http://www.nato.int/docu/review/2006/issue2/english/art2.htm...

I wasn't denying that NATO passed Article 5 for the first and only time in its history after the 9/11 attacks, and I wasn't denying that the US supported it. I was referring to the arm's length at which the Bush Administration held our NATO allies during the early stages of the Afghan war. The resulting hard feelings made it more difficult for Bush to get cooperation from those same allies during the run up to the Iraq War. This is a fact and was a common talking point at the time among liberals and others critical of Bush's foreign policy.

Fred Kaplan:

"Aside from letting a handful of NATO's AWACS radar planes come help patrol American skies, Bush's response was a shockingly terse: Thanks, but no thanks; we'll handle it by ourselves. Marc Grossman, the undersecretary of state for political affairs, later admitted to the Washington Times that the United States initially 'blew off' the allies. Douglas Feith, the undersecretary of defense for policy, said that the United States, in the Times' words, 'was so busy developing its [Afghanistan] war plans that it did not have time to focus on coordinating Europe's military role.'

"The effect, of course, was to alienate the allies just as they were rediscovering their affections. As London's conservative Financial Times later put it, 'A disdainful refusal even to respond to a genuine offer of support from close allies, at the time of America's most serious crisis in decades, spoke volumes about its attitude to the alliance.'"

http://www.slate.com/id/2088113/pagenum/all/

(The similarity between the "thanks but no thanks" phrase used by Kaplan and the one used by me is a complete coincidence. I found this article this afternoon when googling for something to support a rebuttal.)

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

#428

Earlier quoted context omitted.

First, both parties have raided Social Security, not just Republicans. In fact, both parties have been complicit in the government's financial misfeasance for a long time. Second, you mention the money "to pay back the workers who contributed." There was never any money to pay back. Social Security was always a pay-as-you-go system. Current revenue pays for current appropriations. There was never any "trust fund," an…

You do realize that most Treasury IOU's are also called bonds, right? There are also two trust funds that comprise social security: the old-age fund and the disability fund. They each buy special issue securities from the government, but have also bought public bonds in the past. The securities have always been paid back with interest. If the Federal gov't ever didn't pay one of these securities, it would be a defaul…

The bonds will be paid, but future Congresses can decide at any time to cut benefits to recipients. That's the conflict. Perhaps analogous to lending your boss a large amount of money-- he now has the incentive to cut your wages so that he can more easily pay back the loan.

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

#429
THere is a simple solution to the Social Security "crisis". Right now only income up to 100,000 is subject to social security taxes. Anything over 100,000 is not taxed for social security. If we raised taxable income to 150,000 or 200,000 even we'd have plenty of money.

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

#430
post #78

Earlier quoted context omitted.

> Again this is based on the same logic that people will treat the U.S. Government the same way they'd treat any other person and that's just not going to happen. It's not a matter of how "people" treat it. Many funds are prohibited from holding anything other than AAA. Those folks will now be selling bonds. For those that haven't looked at the math of bonds: When the price of a bond goes down (as it does when there…

It's a little more complicated than that. Treasury bonds are actively traded on secondary markets. The 'price goes down, yield goes up' generally refers to secondary markets. The concern for the U.S. govt isn't the secondary market. It is the primary market where they auction off bonds to raise money to fund operations. In the primary market, the U.S. treasury issues a certain number of bonds in order to raise a spec…

> The 'price goes down, yield goes up' generally refers to secondary markets.

No. It also refers to the bidding process when the US Govt goes to initiate the sale of bonds.

Regarding the rest: Yes, that is why I included "more or less" in my original post. The bidding for new bonds and the pricing of old bonds is quite close in most circumstances. (If they are not close, then there is usually trouble.)

> With a credit rating downgrade, there will be a lot fewer bidders, hence higher interest rates.

Regardless of the details above, we both get to the same place.

Post reply on HN