The White House Plan to Confront the S&P Downgrade
[Guest post by Aaron Worthing; if you have tips, please send them here. Or by Twitter @AaronWorthing.]
Patrick highlighted it yesterday, but apparently Standand & Poor’s was less impressed with Obama’s speech on the debt and downgraded our credit rating:
The timing of S&P’s announcement was unwelcome for the White House, coming just as President Obama tried to regain the initiative on the deficit debate in Washington.
Last week Obama laid out his plan to reduce the budget deficit by $4 trillion over 12 years, trying to give markets confidence that he was serious about tackling U.S. fiscal woes.
Standard & Poor’s downgraded the outlook for the United States to negative, saying it believes there is a risk U.S. policymakers would not reach agreement on how to address the country’s long-term fiscal pressures by 2013.
This of course led to soul-searching by the White House, recognizing that we are endangering the future of this country and leading them to come up with a more serious approach to the debt.
Ah, who am I kidding? They went into damage control mode:
The White House strategy:
1) Pan S&P.
“I don’t think that we should make too much out of that,” top White House economist Austan Goolsbee said on MSNBC, referring to the S&P downgrade.
“What the S&P is doing is making a political judgment and it is one that we don’t agree with,” he said on CNBC.
2) Praise Moody’s.
The rival ratings agency said it viewed the direction of U.S. fiscal policy as “credit positive.”
“It appears to me that Moody’s and some others did not agree with that judgment,” Goolsbee said.
3) Express optimism.
White House and U.S. Treasury officials said they believed lawmakers would be able to come up with an agreement to reduce the U.S. deficit. S&P’s skepticism of that influenced its decision on the downgrade.
“We think that there has never been more momentum to try to get to fiscal consolidation, so we think that we should give that process its due,” a Treasury official said.
4) Buy time.
Obama administration officials said it would take some time to get a solution, and S&P should have waited to allow that to happen.
“I think their timing is off,” the Treasury official said.
“I think they should allow the process to work its course here. We have got a lot going on between the White House, Congress, the fiscal commission. I think there are some very serious proposals on the table so I think they should take some time to see what happens.”
That from an unusually scathing Reuters piece. Yeah, Reuters. I am surprised, too.
Personally I am waiting for someone to explain to me why we shouldn’t just vote against raising the debt limit and force the government to get things done without going deeper into debt. That doesn’t quite solve the problem, but it would be a great first step.
[Posted and authored by Aaron Worthing.]
Moody’s, have they no self awareness:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ax3vfya_Vtdo
narciso (79ddc3) — 4/19/2011 @ 6:49 amRight on about not raising the debt ceiling. Better to confront the debt problem now than wait until the crisis is forced upon us.
Brother Bradley J. Fikes, C.O.R. (c30fbb) — 4/19/2011 @ 6:52 amWhy does everyone keep insisting he laid out a plan? He gave a f@cking speech, he read from TOTUS. A plan could be reviewed, scored by the CBO, etc … I love how the MFM says he is going out trying to sell his debt plan this week. Complete BS, he is selling his campaign, nothing more.
JD (b98cae) — 4/19/2011 @ 6:58 amtax cheat timmah and bumble don’t inspire confidence
this should prompt hapless team R to contemplate the low-hanging fruit to be had by nominating somewhat what does
happyfeet (760ba3) — 4/19/2011 @ 7:01 amFirst of all, S&P didn’t downgrade the U.S. credit rating, just the outlook. There’s a difference.
Secondly, you don’t have to guess why S&P did that. The S&P explained why, and it had nothing to do with Obama’s speech. Rather, it was because S&P doubted the ability of the two sides to come together:
But don’t let easily-obtainable facts get in the way of a good, albeit incorrect, spin.
Unfortunately, if you don’t raise the debt limit, the U.S. Treasury will be in default — unable to meet its obligations. U.S. bonds, normally considered the safest investment there is in the world, will suddenly become risky, and people will start to dump them. The financial markets will plummet. If we want to get out of debt, the worst thing we could do right now is set off a worse recession than the one we’re in.
Kman (5576bf) — 4/19/2011 @ 7:09 amJD
i think it is fair to call it a “loose plan.” obviously with alot of details to be filled in. i mean karl is right to say he has to say more, but as usual he is voting present on the details. but i don’t think its unfair to call it a plan.
Aaron Worthing (e7d72e) — 4/19/2011 @ 7:10 am“Unfortunately, if you don’t raise the debt limit, the U.S. Treasury will be in default”
Kman – Wrong. Another false choice put out there by Democrats. Why not cut spending, use previously appropriated but unspent funds, etc., etc. Plenty of alternatives to ponder in the time left.
daleyrocks (bf33e9) — 4/19/2011 @ 7:18 amRatings agencies love it when you publicly criticize them for getting something wrong. Right out of the box that was a bad choice of approach by the Administration.
daleyrocks (bf33e9) — 4/19/2011 @ 7:21 amAs to your first point, I want the President to take exception to anyone claiming the US is in trouble. I don’t want pessimism from my President, I want optimism that things are not as dire as some would claim. As bad as the market was yesterday, it would have been far worse had Obama said ‘yeah, the country is in the crapper, those holding US debt are basically screwed’.
As to your second point, not even the Paul Ryans are in favor of not going further in debt, no one (of sound mind) is arguing that the budget should be and can be balanced today. Doing so would make the recession of 2009 pale in comparison to the upheaval that would result from going cold turkey.
steve (369bc6) — 4/19/2011 @ 7:22 amThey have a habit of spotting the iceberg, right when the first compartment has been breached,
http://www.nationalreview.com/exchequer/265018/enron-writ-large
narciso (79ddc3) — 4/19/2011 @ 7:23 amKmart comes along armed with a pile of BS canards. Not raising the debt limit will not put the Treasury into default. Period. It simply does not allow them to borrow more. They would have to make actual spending cuts. Spend your way out of bankruptcy! Yippee!!!!!!
JD (85b089) — 4/19/2011 @ 7:23 amDoes unspent money count against the debt limit? Does not spending unspent money free up room under the debt limit?
steve (369bc6) — 4/19/2011 @ 7:25 amIsn’t the debt comprised on money actually spent, and isn’t based on how much money the government would like to spend?
Kman
> Secondly, you don’t have to guess why S&P did that. The S&P explained why, and it had nothing to do with Obama’s speech. Rather, it was because S&P doubted the ability of the two sides to come together:
Lol and that assessment had nothing to do with what he actually said? Just words?
> Unfortunately, if you don’t raise the debt limit, the U.S. Treasury will be in default
So basically it is impossible to spend less money?
I find that implausible.
Aaron Worthing (e7d72e) — 4/19/2011 @ 7:28 amIt’s isn’t impossible to spend less money, but if you don’t approve an increase in the debt limit, you have to balance the budget… this year.
Please share with us your ‘instant-cure’, how will you balance the budget in one fell swoop? You’ve got a trillion plus dollar deficit to eliminate. Are you planning on cutting spending by a trillion? If so, what spending? You can’t do it just by cutting spending for Planned Parenthood and NPR. Or are you planning on making up some of the gap by raising taxes? If so, what taxes and on whom?
steve (369bc6) — 4/19/2011 @ 7:33 amYou have a little problem with timing. Obligations still become due, even while you are making spending cuts for the future. In the meantime, the financial markets and economy go into the crapper.
What you are proposing is akin to deciding to make a budget plan AFTER you discover you can’t pay the rent. I mean, budgeting is a good idea, but you still have to pay the rent.
Kman (5576bf) — 4/19/2011 @ 7:34 amsteve – If unspent appropriated cash has been hoarded away by bureaucrats, don’t know how much, it can be used for debt repayment, creating room under the debt ceiling.
daleyrocks (bf33e9) — 4/19/2011 @ 7:35 amCue, Vizzini, I was surprised that Fannie and Freddie and not the monetizing of our debt, re QE 2, was one of the factors in S&P’s decision
narciso (79ddc3) — 4/19/2011 @ 7:35 am“You have a little problem with timing.”
Republicans have been pointing that out to the Democrats for quite some time and just get the standard kick the can down the road response.
daleyrocks (bf33e9) — 4/19/2011 @ 7:37 amAgain, steve and kmart show that they are fundamentally unserious about this. Steve goes immediately to the woe is me you will have to cut a trillion + and kmart mocks the idea of living within your means. It means debt service would have to come first kmart, but you and yoiur ilk would demagogue this from now until the end of time. US default – women, children, minorities, and th elderly die first.
JD (d48c3b) — 4/19/2011 @ 7:40 amI mean I have my head so far up obamas butt that he can order my wifes execution for not being liberal enough and I would defend it.
/Kmanturd
DohBiden (15aa57) — 4/19/2011 @ 7:40 amOf course it’s possible but that isn’t the issue. If someone attempts to cash in a T-bill today, and the government can’t pay it because it’s at the debt ceiling…
…or it can’t pay federal workers because the Treasure has maxed out and we can’t raise the debt ceiling….
what good does it do NOW to make spending cuts in the budget that won’t come into effect for another year?
Do you want to tell some soldier, “Hey, we’ve reached the debt ceiling, so no salary this month. And next month. Or for the rest of the year. But don’t worry. We’re defunding NPR next year, so maybe you’ll see some cash then.”
Kman (5576bf) — 4/19/2011 @ 7:43 amKman
> You have a little problem with timing. Obligations still become due, even while you are making spending cuts for the future
Hey, why don’t we cut now. The president is given lots of money but generally he is not required to spend it. So let’s use some of that. Starting with the money that is not supposed to go to the czars.
For instance, remember all those non-essential personnel who were going to be sent home during the shutdown that didn’t happen? let’s start by firing some of them.
You see, I still agree with Senator Obama. 🙂
Aaron Worthing (e7d72e) — 4/19/2011 @ 7:45 amJD: I’m unserious? How about you stepping up to the plate and offering your specifics for eliminating the deficit this year? Let’s see how smart you come off when you do more than take shots in the abstract.
Do you want your taxes to go up so we can live within our means this year? Do you want to see Social Security and Medicare payments cut by 25% this year?
There’s a trillion dollar gap you need to make up… this year. C’mon, don’t be shy, tell us what you’d do. I have a calculator that can show 10 zeroes, I’ll keep track.
steve (369bc6) — 4/19/2011 @ 7:46 amDaleyrocks #16: I’m not saying you’re wrong, but are you sure that money that hasn’t been spent counts against the debt? I thought the debt was comprised of money that was borrowed and spent. And I don’t know that the Treasury borrows money in excess of what it needs to pay bills, I don’t think they’re borrowing money just to have it lying around.
It’s not the same thing, but when I list my obligations, I list what I owe on my credit card (nothing, as I like to live within my means), I don’t list as debt the credit limit.
steve (369bc6) — 4/19/2011 @ 7:50 amI don’t think that’s true. It would pay the T-bill by issuing one of a like amount. The debt would roll over, but not be increased, so the debt ceiling wouldn’t bet at issue.
Some chump (4c6c0c) — 4/19/2011 @ 7:52 amLOL. That’ll put a nick in the debt, and not buy you much time.
It’s clear you haven’t given this much thought.
Everybody knows the debt ceiling will HAVE to be raised again, as it was done (seven times) during the Bush administration. There’s just going to be some kabuki theater going on for a while (some) Republicans, who are catering to their less-evolved constituents, feign outrage. But in the end, it’ll be raised because the alternative would be devastating economically.
Kman (5576bf) — 4/19/2011 @ 7:54 amSteve – that is precisely the argument that i was referring to as unserious. Thank you for so clearly demonstrating how this issue is demagogued. Kmart adds another nice touch, the silly notion that if one cut does not make that big of a difference in the overall, it is unreasonable to consider it.
JD (9a3313) — 4/19/2011 @ 8:01 amLet us know when you stop doing parody of the liberal commenter, Kman. Maybe we could read your real views at your blog, vs. the character you play here?
carlitos (28bbc0) — 4/19/2011 @ 8:02 amKman
> That’ll put a nick in the debt, and not buy you much time.
Well, i am sure you can prove that, then. Because crazy me, but i think we can live within our means.
Aaron Worthing (e7d72e) — 4/19/2011 @ 8:02 amLess evolved? So Obama was less evolved when he took his prior positions? I agree with Obama 2006 and 2007 and 2008 on this issue.
Any increase should be inextricably tied to real spending cuts going forward. Real ones. Not millions. Billions. And not cheap accounting gimmicks.
JD (9a3313) — 4/19/2011 @ 8:04 amJD: you keep saying that I’m unserious, but you don’t offer an example of how someone less unserious (such as yourself?) would balance the budget fast enough to preclude the need for raising the debt limit.
As for Kman, once you filter out the shots he (she?) takes at the GOP, his basic point is valid, the debt limit will be raised and all that is going on right now is the dance each side takes before they sign off.
steve (369bc6) — 4/19/2011 @ 8:06 amIt’s a Timothy Leary level delusion, no wonder our money isn’t worth the paper it’s printed on,
narciso (79ddc3) — 4/19/2011 @ 8:07 amWe can add evolution to the list of subjects Kman pretends not to understand in pursuit of parody. And racism, prolly.
carlitos (28bbc0) — 4/19/2011 @ 8:10 amThere is no reason on earth to even have a debt limit if congress’ only possible option/solution when ever we come up to it is to automatically raise it. Even casual observers of life and economics can see this is absolutely crazy.
I think the American people are actually watching this situation evolve with more interest than one might have supposed only a few months ago. The Dems attempts to paint this as a political game rather than leading or handling the debt and deficit crisis as a priority of national survival is backfiring on them with the voting public.
I predict the debt limit will be raised in a month or two, but with some accompanying caps, conditions and restrictions. It’s a start.
Oh, and Jay Carney may not be as smirky or snarky or as personally unappealing as his predecessor was, but he is an even less convincing press secretary.
elissa (4cc08f) — 4/19/2011 @ 8:16 amZOMFGWTFBBQ!!! Steve is serious about this, would never dream of demagoguing this issue. When exactly, would you be willing to make cuts without whining and moaning and gnashing your teeth and rending your garments, steve?
JD (9a3313) — 4/19/2011 @ 8:18 amAmen, Elissa. This is Congress voting to increase the limit on their own Visa, that someone else has to pay the bill for. again. And the White House’s plan is to read from TOTUS and tout a plan that is anything but.
JD (9a3313) — 4/19/2011 @ 8:20 amJD: as I believe you once accused me of doing (sorry if it wasn’t you), you’re doing a fine job of not answering the question: just how do you, being such a serious person, propose to eliminate the deficit all in one pass?
As for me, I’m all in favor of cuts. Social Security, Medicare, education spending, defense, social welfare are all programs I would cut. On the tax side, I’d eliminate the mortgage interest deduction, accelerated depreciation, and the lower rate for capital gains (to me, income is income, it all gets taxed at the same rate.)
So how about it, when are you going to step up?
steve (369bc6) — 4/19/2011 @ 8:25 amI do not think it can be done in one pass, there is no political will to do so. I never advocated same, that is a position you ascribed to me, not one I held. So, you can kindly bugger off. If you give a heroin addict just one more hit, they will get help. They promise.
JD (9a3313) — 4/19/2011 @ 8:28 amYou still going to leave that uncorrected, A.W.?
Kman (5576bf) — 4/19/2011 @ 8:30 am“I don’t think they’re borrowing money just to have it lying around.”
steve – Yes, the debt ceiling is based on borrowings. Clues for you:
a) Not all government money is borrowed
b) Not all government borrowing are spent
Our government is just not that efficient. How much money this amounts to, I don’t know at the moment, but it is the type of thing that knocks announced budget savings of $38 billion down to $352 million.
daleyrocks (bf33e9) — 4/19/2011 @ 8:30 amKman – When did you wake up to the fact that we could not pay our rent and why did it take you so long?
daleyrocks (bf33e9) — 4/19/2011 @ 8:31 amNow who’s engaging in delusion, Ryan’s probably the most politically realistic option, and Obama has
narciso (79ddc3) — 4/19/2011 @ 8:32 ampainted him like Herod.
Kman – Why doesn’t Obama issue a signing statement with some bill crossing his desk announcing a major tax increase. Problem solved!
daleyrocks (bf33e9) — 4/19/2011 @ 8:33 amdaley: Don’t give him any ideas.
navyvet (db5856) — 4/19/2011 @ 8:35 amS&P is racist.
JD (9a3313) — 4/19/2011 @ 8:36 amWTF, Daley. He already wants to make tax increases permanent, so Congress can overspend at will.
JD (9a3313) — 4/19/2011 @ 8:37 amI was saying as far back as 2002 and 2003 that engaging in two wars — neither of which were in any federal budget, and thus unfunded — while at the same time giving huge across-the-board tax cuts, was fiscally irresponsible and would increase the debt dramatically.
But it was “unpatriotic” for me to say that.
Kman (5576bf) — 4/19/2011 @ 8:41 amEngaging in 2 wars caused the current problem. Really?! If they were unfunded, where did they get their funding? There were no huge tax cuts, and blaming Obama’s spending on Bush is so fundamentally dishonest as to make me laugh in your face. HAHAHAHAHAHAHAHAHA
JD (9a3313) — 4/19/2011 @ 8:43 amKman and steve – FDR and Congress deliberately defaulted on U.S. Treasury obligations in 1933 and repudiated the express obligation of the government to repay holders of the obligation in gold. It was an outrageous confiscation of private property right and arrogation of honest dealing, so Obama has a good example to follow. The Supreme Court upheld the move 5-4.
daleyrocks (bf33e9) — 4/19/2011 @ 8:44 amWhen you are spinning like this, do you ever get dizzy?
JD (9a3313) — 4/19/2011 @ 8:44 am“I was saying as far back as 2002 and 2003 that engaging in two wars — neither of which were in any federal budget, and thus unfunded — while at the same time giving huge across-the-board tax cuts, was fiscally irresponsible and would increase the debt dramatically.”
Kman – Pitiful debunked talking point. Cumulatively those wars have cost less than one year of Obama’s deficits. Next.
daleyrocks (bf33e9) — 4/19/2011 @ 8:47 amKman – And what do you mean by the wars were unfunded? That talking point keeps coming up. Appropriations for both wars went through Congress.
daleyrocks (bf33e9) — 4/19/2011 @ 8:49 amMoney was appropriated, and counted against the deficit and added to the debt. Kmart is just making shlt up, Daley.
JD (9a3313) — 4/19/2011 @ 8:51 amI never said that Obama’s deficits haven’t contributed to the debt. I was asked when I began to notice/care. And unlike many if not most Republicans, I started caring about the debt back in 2002/2003.
Kman (5576bf) — 4/19/2011 @ 8:56 amIf you cared about deficits and the debt, honestly, you would be incapable of supporting Obarcky’s policies.
JD (9a3313) — 4/19/2011 @ 8:59 amKman – Back to your point, how were those wars unfunded?
daleyrocks (bf33e9) — 4/19/2011 @ 9:02 am“I don’t think they’re borrowing money just to have it lying around” steve, weren’t we told Obama had a stash? Sounds like he’s got plenty laying around. And he’s off to VA today to gather up some more.
kman: where have you been? You sure you didn’t change your name to Big Median the last few days? If not, he certainly gave a good imitation of you.
PatAZ (81cf34) — 4/19/2011 @ 9:06 amThe nazis on the far-left would be happy at Kman’s goebbelesque spinning.
DohBiden (15aa57) — 4/19/2011 @ 9:08 am/Godwin
Well I cared about the debt back in the late 80’s, so neener neener neener. I think it was an economics teacher who basically did the long division debt / population and we all freaked out. IIRC, it was $10,000 per person at that time.
As a % of GDP, we’re back to Truman-era debt, on our way to WWII levels. Yikes.
carlitos (28bbc0) — 4/19/2011 @ 9:13 amthat is not a godwin’s law violation idiot. He spins everything to be good just like goebbels. and do not call for my banning ok.
DohBiden (15aa57) — 4/19/2011 @ 9:17 amBill Gross at PIMCO (a $240B mutual fund) was asked about reports that he is buying U.S. debt again.
His response: NO WAY!
The Chinese are winnowing down their exposure, the ME Sovereign Wealth Funds are selling Bonds and buying Gold (Hell, everybody in the world is buying Gold – closed at $1493? yesterday), and the Bozo Admin can’t read the handwriting on the wall?
BTW, Greek Bonds are at 19.7%!
AD-RtR/OS! (b8ab92) — 4/19/2011 @ 9:41 amOh, and to kman and steve…
AD-RtR/OS! (b8ab92) — 4/19/2011 @ 9:44 amIf the govt CONFISCATED 100% of income over $250K, they would still fall at least $400B short of covering the FY2011 DEFICIT.
We must raise taxes, AD. It is an article of faith for them.
JD (9a3313) — 4/19/2011 @ 9:49 amNo ktard you said it was fiscally irresponsible to raise the taxes of Michael Moore.
And the pakistani muslim league is a pro-jihadist group so it is not conservative.
DohBiden (15aa57) — 4/19/2011 @ 9:55 amIt’s an article of faith but also they’re not taking any chances so they spend spend spend so bumble can point to his obscene bloated throbbing debt and say hahaha how you gonna pay it, bitches?
happyfeet (a55ba0) — 4/19/2011 @ 9:57 amWhy am I not surprised.
DohBiden (15aa57) — 4/19/2011 @ 10:02 amWhy is ahmadinejad called far-right when he is a regressive islamolefturd?
DohBiden (15aa57) — 4/19/2011 @ 10:03 amComment by JD — 4/19/2011 @ 9:49 am
If it’s an “article of faith”, isn’t that an unconstitutional impingement of religion into government?
AD-RtR/OS! (b8ab92) — 4/19/2011 @ 10:05 amComment by DohBiden — 4/19/2011 @ 10:03 am
Because in LibSpeak, all Fundies are RW knuckledraggers.
AD-RtR/OS! (b8ab92) — 4/19/2011 @ 10:09 amIt’s the division between the Eloi and the Morlocks; and, of course, the Progs see themselves as the Eloi bringing beauty and peace to the world, but being preyed upon by the evil Morlock.
yup. It really makes no difference to them if that’s bad for the economy. The tax cuts from years ago were ‘unfair’, even though they are still quite progressive. There is absolutely no reasoning these yahoos out of their view that taxes must be increased on people who make ‘too much’.
Since so much our economy is devoted to entitlements that are cost of living adjusted, Obama knows that the more destabilized the rest of our economy gets, and the more inflated our currency gets, the more wealth is automatically transferred to the public sector. Honestly, it still amazes me that his political party is going along with it, but I think that’s more possible because they lost so much representation from moderate regions lately.
Dustin (c16eca) — 4/19/2011 @ 10:14 amIn other news, James O’Keefe broke the Internet.
This is why we can’t have nice things.
Kman (5576bf) — 4/19/2011 @ 10:30 amAnd the democrat country broke our country’s economy. No need for distractions. We realize o’keefe ticks off radical liberals.
Dustin (c16eca) — 4/19/2011 @ 10:39 amdemocrat party, rather.
Dustin (c16eca) — 4/19/2011 @ 10:39 amThat was a pathetic Look, something shiny! BUNNIES!! moment for you, kmart.
JD (306f5d) — 4/19/2011 @ 10:46 amIn other news kman hasn’t gotten laid ever since the last supper.
We can’t have civility with Kman being sexually frustrated.
And yes liberals of today don’t believe in liberal.
DohBiden (15aa57) — 4/19/2011 @ 10:46 amSteve
Yes I am on board with cutting entitlements 25% or more
EricPWJohnson (4da0be) — 4/19/2011 @ 10:47 amKmart and big media liar are beyond parody. This is like a parody of a caricature, written in a satirical manner.
JD (29e1cd) — 4/19/2011 @ 10:48 amAnd the left like to call islam far-right because they oppose communism.
DohBiden (15aa57) — 4/19/2011 @ 10:48 amBTW, Aaron, Congrats on making BOTW!
AD-RtR/OS! (b8ab92) — 4/19/2011 @ 10:49 amliberalism*
Jeesh.
DohBiden (15aa57) — 4/19/2011 @ 10:51 am‘A travesty of two mockeries of a sham’ Woody Allen
narciso (79ddc3) — 4/19/2011 @ 10:53 amsaid it, but it fits
How did the bond markets react to the “downgrade”?
sameso (280b35) — 4/19/2011 @ 10:58 amAs usual you are wrong again.
Who’s Afraid of Standard & Poor’s?
— By Kevin Drum
| Tue Apr. 19, 2011 10:47 AM PDT
It’s not like Paul Krugman needs my help in spreading his opinions, but people really ought to be paying a little more attention to the fact that right after S&P’s warning yesterday morning about U.S. debt, interest rates on U.S. debt…..fell. Why? Because demand for U.S. securities rose and their price went up, as the chart below of a typical treasury index fund shows.
In other words, actual bond traders not only ignored S&P, they decided that U.S. debt was even safer than they thought before.
jharp (f8a6a3) — 4/19/2011 @ 10:58 amI really should just wait for JD to point out efforts to change the topic.
Anyhow, it’s such a serious problem our nation has. A lot of factors are coming to together rapidly, and this will impact all of our lives. It’s going to impact liberal goals for entitlements, and it’s going to impact conservatives who want to be able to independently support themselves with a diminished currency.
So what possesses Kman to change the subject? Politics. there is no defense for democrat leadership other than changing the subject. I can just see the GOP nominee trying to make a sober criticism, and being bashed because ‘he’s probably a Koch conspirator! And he’s racist!’.
It’s not like I can blame Kman. It’s America’s fault for letting such cynical politics work. Meanwhile, the bright red flags are coming out, and I think the democrats have gone too far.
Dustin (c16eca) — 4/19/2011 @ 10:59 am“How did the bond markets react to the “downgrade”?”
sameso – They cratered, as you would expect.
daleyrocks (bf33e9) — 4/19/2011 @ 11:05 amDaley – I suspect you just gave “sameso” way more credit than it deserves.
JD (318f81) — 4/19/2011 @ 11:11 am“sameso – They cratered, as you would expect.”
Do you have a source for that? Because perusing headlines, it appears that bond markets finished up. With headlines like “TREASURIES-Bonds gain as investors take U.S. outlook in stride”
sameso (8c81b1) — 4/19/2011 @ 11:17 amGold flirted with $1500 this morning at 1499.50, before dropping to $1496!
Yeah, we’re living “In the Best of Times”.
AD-RtR/OS! (b8ab92) — 4/19/2011 @ 11:17 amI rely on HEAdLINES to make investment decisions.
JD (6e25b4) — 4/19/2011 @ 11:25 am“I rely on HEAdLINES to make investment decisions.”
Certainly not. Besides headlines, I’m also asking a random on the Internet! You’d think that when one guy describes them as “cratered” we wouldn’t be seeing headlines like “gain.” It leads me to wonder where he got the idea for “cratered.” So I asked.
If you want, you can go to treasury.gov and see the yields down for 4/18, indicating increased demand for those Treasuries.
sameso (6fa251) — 4/19/2011 @ 11:30 amPerhaps Congress should pass laws criminalizing accounting fraud in federal budgets.
You’d think this kind of thing was already illegal.
S&P didn’t say anything we didn’t already know.
And that’s probably why sameso researched this, quoted a cherry picked point, and then didn’t link .
Anyway, AD’s right that the prices cratered upon hearing this news to “the lowest point in three weeks.” [BTW, this is the first line in the article Sameso references… gee, I wonder why he didn’t use a hyperlink?] Sameso just wants to pick the point where prices went up from that crater slightly from lowest to almost lowest.
This recovery Sameso is reporting is a radical interpretation. This is similar to any other bad news. you hear the news, the impact occurs, and then the market adjusts away from the impact.
The fact of the matter is the USA’s credit rating has suffered because of how democrats have mismanaged our country.
Dustin (c16eca) — 4/19/2011 @ 11:33 amHello, dimwit.
JD (0d2ffc) — 4/19/2011 @ 11:33 amUnfortunately, if you don’t raise the debt limit, the U.S. Treasury will be in default — unable to meet its obligations. U.S. bonds, normally considered the safest investment there is in the world, will suddenly become risky, and people will start to dump them. The financial markets will plummet. If we want to get out of debt, the worst thing we could do right now is set off a worse recession than the one we’re in.
Comment by Kman
I skimmed the comments and did not see the obvious rebuttal to this which has been around for years. The US doesn’t default on its bonds, it just stops spending on other things. People deeply in debt will almost always pay the mortgage first. The failure to raise the debt ceiling would require laying off about 50,000 bureaucrats while we paid the interest and the principal on matured bonds. Obviously, calling the bluff of Obama would be a painful step but they are trying to make it seem that the world will end.
The interest rate on Ireland’s sovereign debt is now 19.7%. That is what the alternative is. We are looking more and more like Argentina and it is a shame.
Mike K (8f3f19) — 4/19/2011 @ 11:37 amSameso is taking a very ignorant approach to the bond market.
Bond prices have been falling steadily since… February or January. When this rating changed, they fell even farther. And of course, they go up and down constantly. So Sameso ignores the entire trend, and ignores the crater that his own headline immediately led to describing, because he found an ‘up’ at the end of one day. This up being a low price anyway, just up from the day before slightly.
This is how he analyzes the market? It sounds to me like he hasn’t been paying attention to this issue until he saw Obama attacked over it.
Calling us ‘random’ makes no sense. Sameso, you’re random. Where the hell did you come from? You just appeared out of nowhere to shill.
Dustin (c16eca) — 4/19/2011 @ 11:38 amSameso is one of jharp’s henchmen.
DohBiden (15aa57) — 4/19/2011 @ 11:38 amAnd if we reach the raised debt ceiling can you please touch yourself Kman.
DohBiden (15aa57) — 4/19/2011 @ 11:39 am> It’s not like Paul Krugman needs my help in spreading his opinions
Given their new paywall, I suspect he does.
Aaron Worthing (e7d72e) — 4/19/2011 @ 11:42 amDustin posted “Anyway, AD’s right that the prices cratered upon hearing this news to “the lowest point in three weeks.”
The bond markets went up jackass.
“Interest rates on U.S. debt…..fell.
Demand for U.S. securities rose and their price went up, as the chart below of a typical treasury index fund shows.http://motherjones.com/kevin-drum/2011/04/whos-afraid-standard-poors
In other words, actual bond traders not only ignored S&P, they decided that U.S. debt was even safer than they thought before.”
Reality has a well known liberal bias.
jharp (f8a6a3) — 4/19/2011 @ 11:44 amMike is right. Kman is wrong. We could pay our debt without raising the debt ceiling. It makes absolutely no sense to call and get your credit limit increased when you’re trying to pay off your credit cards.
Obama actually explained this quite well when he adamantly refused to raise the debt ceiling, even though the consequences then were similar to what they are now (granted, we’re in far, far more debt now, thanks to democrats).
We have a failure of leadership. Going further into debt is the wrong thing to do, so we must not give Washington the power to go farther into debt. There is some fear that Obama would exploit this problem to mismanage paying back the debt, hoping that by ruining the country he could blame Republicans like Kman does.
But either way, we can’t borrow our way out of debt. We have to start paying for it today. The budget must be balanced. Obama’s plan is to leave this problem to the next administration, noting he never raised income taxes on the middle class, even though that’s probably going to have to happen thanks to his spending.
Mike’s right… this would be painful. A lot of career government employees would lose their livlihoods, and that’s sad. But we’re out of money. They should have voted for Mccain if they liked their jobs. I suppose I should forgive them because Obama did promise to cut the deficit, and he was on record opposing a debt ceiling increase. People trusted him, and now they will lose their jobs.
Dustin (c16eca) — 4/19/2011 @ 11:45 amJD #38: I ascribed that position to you as a result of your mocking my claim that it wasn’t realistic to eliminate the deficit right now. Since you now claim the same position, just what was the basis for your mockery? Mockery for the sake of mockery?
JD #48: I know you get great sport in going after Kman, but are you seriously arguing that there weren’t huge tax cuts back in Bush’s term? If there weren’t, just what did Congress extend last December?
Eric #76: I agree, thanks for actually offering up something other than personal attacks.
steve (369bc6) — 4/19/2011 @ 11:45 amWe are looking more and more like Argentina and it is a shame.
yes it is a shame but here is the new song what is all of a sudden everywhere here in the los angeles – from the googles what I have learned is that apparently this is musics from a “band” of attractive white kids what are actually home grown los angeles peoples … they played at coachella this year here is an interview from there
ok so now you know about the new musics
happyfeet (a55ba0) — 4/19/2011 @ 11:46 am“Anyway, AD’s right that the prices cratered upon hearing this news to “the lowest point in three weeks.” ”
You’re going to have to show which numbers you’re looking at. I looked at CPMKTS and treasuries and both show them being up for Monday.
The article starts with:
“U.S. Treasury debt prices rose modestly on Tuesday, with benchmark yields touching the lowest in over three weeks as stocks cut gains and bond investors took S&P’s credit outlook warning in stride.”
The “lowest point in three weeks” is referring to yields, not prices. I told you yields were down. That means treasury prices were up. Until you understand the difference between yields and prices, we’re not going to be able to discuss this topic.
sameso (a9197b) — 4/19/2011 @ 11:49 am“Do you have a source for that?”
sameso – Yes, the Wall Street Journal. Today’s issue has a small squib in the current market update about yesterday’s action:
“Treasurys were able to enjoy the relative calm after Standard & Poor’s caught the market off guard on Monday with its decision to put U.S. credit on “negative” watch. The announcement initially sent investors out of long-dated Treasurys, though the market more than recovered by the end of the day.”
http://online.wsj.com/article/SB10001424052748703922504576272670492509208.html?mod=WSJ_Markets_MIDDLTopStories
daleyrocks (bf33e9) — 4/19/2011 @ 11:53 amMike and Dustin: you’re both right, to the extent that we can roll over old debt by issuing a like amount of new debt, a bit like using one credit card to pay off the debt on an older card.
But that isn’t really the point that is being argued: how much additional debt (i.e., deficit spending) should Congress authorize? If no new debt is allowed, then (other than digging up unused cash, as Daleyrocks says) then the budget has to be balanced right now… no more deficit spending.
My position is that going from a trillion plus negative to zero in one year would screw the economy far worse than a more gradual (but still significant) decrease in the deficit. I would do it in five years, which makes me even more aggressive than Ryan. I’ve invited some of the smart people who comment here to offer up their suggestions on how they would do it any faster, but other than a bit here and there, they’d rather just take shots at others.
steve (369bc6) — 4/19/2011 @ 11:55 amsameso – Please show evidence that prices did not go down on the announcement if you dispute those accounts. Go.
daleyrocks (bf33e9) — 4/19/2011 @ 11:55 amThat article says “treasuries turn higher.” Still doesn’t look like a “crater.” Seems like the white house’s plan to confront the downgrade is in tune with how bond markets are reacting.
sameso (a9197b) — 4/19/2011 @ 11:58 amActually, it was the STOCK market that took a big hit upon the release of S&P’s warning, with the market for the day having the largest drop in quite some time.
We’re really going to enjoy those double digit interest rates we’ll have to pay to others to get them to finance our deficits.
Let’s see, we’ll be buying oil at $150-200/bbl, and then the OPEC countries will lend that money back to us at (Greece is paying 19.7%, the rest of the PIIGS are not too far behind) four to five times (or more) than we’re paying now.
AD-RtR/OS! (b8ab92) — 4/19/2011 @ 12:01 pmWhat could go wrong?
steve, I think your five year plan is imminently reasonable, except for the fact that it’s not realistic at all. Obama will not agree to even current spending levels. They must go up, or he fights like the world is about to end.
Balancing the budget in five years? Great idea, except it just won’t happen. Obama has already explained that he has granted himself the power to modify legislation. Even if you pass a debt ceiling tied to Ryan’s plan (or yours) he will just scribble out the part he doesn’t like.
You’ve accomplished something politically, that’s all.
Yes, it will be very painful if we refuse to increase the debt ceiling. The sooner we do it, the less painful it will be. We’ve seen this can kicked down the road on the same threat, over and over and over.
We should have refused to raise the debt ceiling in 2006. Imagine how much better that would have been! We’d have emerged from the crisis with a balanced budget. Many aspects of spending would have to be radically fixed. Entitlements would have to be reformed, but this common sense approach to getting our finances in order would have worked just as it would work in your own life. If you’re trying to pay off your debt, step one is to stop borrowing and spending.
So my worry with your plan (which again, seems really reasonable to me) would be that we would wind up with much more debt and much more spending in 5 years than we have now, and repeat this same debate, with the same fears about cutting up the credit cards, and the same promises that future leadership will actually get things right if we just let them borrow a little more money.
No, this debt ceiling really is the only card we have. I’m tired of pretending we don’t remember the last 50 times the democrats played hardball once they got their concession. We just can’t trust them with another concession this serious. If we do pass the higher debt ceiling, it needs to be linked to a long list of very severe concessions to the GOP, all they way from petty things like the space shuttle to serious things like to entitlement reform. We can’t compromise even slightly. It’s the only card we’ve got.
Dustin (c16eca) — 4/19/2011 @ 12:07 pmSameso, your own article notes that prices fell to three week lows as soon as the news dropped. You’re wrong, and you know it. It actually looks exactly like a crater.
Dustin (c16eca) — 4/19/2011 @ 12:08 pmLooks like they got a photo of that Austan Goolsbee guy while asking him for further comment: http://www.ostrichheadinsand.com/images/ostrich-head-in-sand.jpg
MSE (05f8d0) — 4/19/2011 @ 12:08 pm“Even if you pass a debt ceiling tied to Ryan’s plan (or yours) he will just scribble out the part he doesn’t like.”
Ryan’s plan doesn’t balance the budget for 30 years.
“Sameso, your own article notes that prices fell to three week lows as soon as the news dropped.”
It said yields hit 3 week lows, not prices. Those are in an inverse relationship. I quote myself:
“Until you understand the difference between yields and prices, we’re not going to be able to discuss this topic.”
sameso (1a5ab7) — 4/19/2011 @ 12:11 pmUntil you kiss my butt and worship obama we will not discuss this topic.
FIFY
BTW what is so bad about private prisons?
DohBiden (15aa57) — 4/19/2011 @ 12:12 pmOh I forgot the prisoners who commit crimes deserve liberty.
DohBiden (15aa57) — 4/19/2011 @ 12:13 pmWell, if yields are dropping, that should signal forthcoming decreases in home mortgage rates, and a reignition of the housing boom.
But, let’s be clear, the swift “market” reaction to S&P’s forewarning, was a reaction of the STOCK market, not the Bond Market.
As long as the Fed is into their QE-II program, they will set bond rates by buying up whatever they can get their hands on.
But, be warned, at some point no one else will be willing to bid on Treasury’s without a marked increase in yield, and at that point, it all comes crashing down.
Guns, Ammo, & Canned Goods…
AD-RtR/OS! (b8ab92) — 4/19/2011 @ 12:20 pmKeep your powder dry, and close at hand!
Steve – your idea of huge and mine must differ. Your holier than thou crap never gets tiresome though. Brava.
Jharpy and iamadimwit in the same thread, how cute.
JD (6e25b4) — 4/19/2011 @ 12:22 pmDustin: you didn’t take into account that implementing my plan also includes me being President, eliminating Congress and the courts and ruling as a benevolent dictatorship. Worked well for Mubarak.
steve (369bc6) — 4/19/2011 @ 12:23 pmEat shat.
DohBiden (15aa57) — 4/19/2011 @ 12:24 pmEat not the shat.
happyfeet (a55ba0) — 4/19/2011 @ 12:25 pmHAHAHA… Well, that’s more realistic than any other plan I’ve heard. I’m not really even kidding. There is no trusting democrats to abide by any deal relating to spending cuts. The alternative is simply not to deal, or to dominate the political process to where democrats lack the ability to doublecross America again.
Of course I understand the difference. This is extremely basic, and I probably understood this when I was ten years old. Stop congratulating yourself for your expertise in very basic stuff.
However, you’re right that the article noted the yields went down, which is the opposite of what I said. I made a factual error, so I’ll admit I was wrong.
Regardless, prices went down, and then recovered. Your own article explains that this news is obviously harmful to equities. It’s just not much of a surprise.
It’s incredibly ignorant to base your analysis of such major long term trends on reactions within hours of ratings changes. Or headlines you don’t even link. It’s clear you’re just a shill, much like jharp.
Dustin (c16eca) — 4/19/2011 @ 12:41 pmbtw, sameso, we all know this. Ryan’s plan is extremely mild and moderate in its effort to recover from democrat and republican spending mistakes.
Thanks for admitting it. Republicans are very moderate on this issue, and the reason is that the problem is tremendous. Ryan can’t honestly be described as extreme when he tries so hard to make a real plan we all can live with.
Dustin (c16eca) — 4/19/2011 @ 12:44 pmNot to pick on Ryan, but can we really live with a plan that doesn’t balance the budget for that long?
steve (369bc6) — 4/19/2011 @ 12:48 pmNot to pick on steve but why does he want certain people[Read right wingers] to have their taxes raised?
DohBiden (15aa57) — 4/19/2011 @ 12:49 pmAlso, part of the catch 22 here is that the bond news is one of many indications that the economy is weak. What do you do when the economy is weak? A lot of people try to invest is stable instruments, while leaving less stable ones.
For example, some will sell stocks while buying bonds. Bonds are weak because of the US debt problem, but in a very weak economy, they still have a relative stability advantage. The USA has never missed a payment, after all. They are more reliable than any stock out there, in a fundamental way.
So, this bad news about the bonds is actually bad news for the entire country (and world) leading to a more complicated result. As people become more conservative in their outlook, some move from bonds to gold, and some move from stocks to bonds.
That’s what AD’s explaining. This S&P rating is major news, and a stunning indictment of democrats screwing up this country, but sameso taking a same day reflection on bond prices is fundamentally ignorant of what’s happening.
Dustin (c16eca) — 4/19/2011 @ 12:51 pmIt’s just another version of your own argument, that we need time to make this happen. Ryan isn’t just trying to lead us to the right path… he’s trying to make this a reality, politically. That means he has to present something that is realistic in two ways, not one.
If Ryan were our benevolent dictator, this probably wouldn’t be his approach. There are other major problems with Ryan’s budget. It’s too optimistic. But then, it leaves a major avenue for further reform (social security).
It’s sad that this is the best we can do, politically, but I’m not hearing any better proposals. Anyway, yes, at the end of the day, I’m prepared to live with Ryan’s plan. I think it would greatly repair this country from a crisis level problem, so I don’t mind that it’s imperfect.
Dustin (c16eca) — 4/19/2011 @ 12:54 pmCEPR, Kevin Drum, jHarp and now an imbecile named sameso.
A true moronic convergence in this thread. Too much fun for one person.
daleyrocks (bf33e9) — 4/19/2011 @ 12:56 pm“Regardless, prices went down”
Dustin – Correct. sameso asked for the reaction to the announcement. It did not asked where bond prices closed or what happened after the Administration started jawboning S&P and more information entered the market. Prices cratering is a correct answer. Bond prices closing the day up is also a correct answer.
It is just trying to be an ankle-biting twat-waffle.
daleyrocks (bf33e9) — 4/19/2011 @ 1:00 pmThis is why I asked where you got the term “cratered.” Now I know that you meant the instantaneous reaction, despite the fact that Treasuries seem better than before this announcement, and that the white house reaction seems in line with the bond markets. Turns out that it was actually a good idea to have bought treasuries on this announcement!
sameso (280b35) — 4/19/2011 @ 1:52 pmCEPR, Kevin Drum, jHarp and now an imbecile named sameso.
A true moronic convergence in this thread. Too much fun for one person.
Comment by daleyrocks — 4/19/2011 @ 12:56 pm
Yeah right. I’m such a moron that my posts pointing out your stupidity and wrong headed buffonery get taken down.
Can’t say I blame you though. Sucks being made to look like a fool for the whole world to see.
One more chance.
Care to explain to me why demand for U.S. backed securities went up after this “devastating” news from S&P?
I didn’t think so.
jharp (f8a6a3) — 4/19/2011 @ 1:56 pm“…apparently Standand & Poor’s was less impressed with Obama’s speech on the debt and downgraded our credit rating“
Not quite.
“NEW YORK: Standard & Poor’s on Monday downgraded its credit outlook for the United States, citing a risk that policymakers may not reach agreement on a plan to slash the huge federal budget deficit. While the credit rating agency maintained the country’s top AAA credit rating, it said authorities have not made clear how they will tackle long-term fiscal pressures.”- source, huffpo/AP/S&P/etc.,.
Per Limbaugh, “The words we use really do matter…” On the other hand, per Cheney, “Reagan proved deficits don’t matter.” Ah, the sweet smell of Reaganomics. Wrong again, Dick.
@#2- A bit reactionary.
The cascading damage to the financial landscape would be harsh. ‘Trickle down economics’ for real. A downgrade/default will wreak havoc w/interest rates, securing loans and make restructuring debts that much more costly.
http://www.bloomberg.com/news/2011-04-05/geithner-sees-severe-hardships-if-debt-limit-isn-t-raised.html
For example, firms restructuring debt, including the corporate owners of the NCT BTW [Lee Enterprises,] may have no alternative other than to further reduce employee benefits across the chain, initiate layoffs or simply shutter under performing papers in order to survive. But then, the move to the web is relentlessly inevitable.
http://thegazette.com/2011/04/12/iowa-based-newspaper-publisher-to-restructure-1-billion-in-debt/
http://www.nctimes.com/business/article_84adaf41-f20d-58d7-be71-d8be707350dc.html
DCSCA (9d1bb3) — 4/19/2011 @ 1:59 pmThe potential downgrading of the US credit rating is a good thing. Brilliant.
JD (0d2ffc) — 4/19/2011 @ 1:59 pmThis thread has become an absolute Moronic Convergence for leftists.
JD (0d2ffc) — 4/19/2011 @ 2:01 pmDCSCA, is that some kind of joke?
Oh well. The punchline comes in 2012.
Dustin (c16eca) — 4/19/2011 @ 2:06 pmAh wrong again dick.
Why are you obsessed with maobama’s nether regions.
DohBiden (15aa57) — 4/19/2011 @ 2:14 pmMy comment up around 93 was not a suggestion that we refuse to raise the debt limit permanently but that, if Obama bluffs and won’t agree to spending cuts, life as we know it won’t end when we reach the debt ceiling.
Ryan’s plan doesn’t balance the budget for 30 years because he hasn’t yet touched Social Security and he is trying to present something that reasonable people could vote for. What it does is to lower and reduce the slope of the debt curve. Obama’s becomes asymptotic pretty close in the future.
Here is the difference.
Mike K (8f3f19) — 4/19/2011 @ 2:48 pmWell, I think we actually cannot raise the debt limit unless some major event changes the fact that we can’t trust any deal made with Obama.
One compromise in the recent budget deal was that a few czars can’t be funded. A relatively minor thing, but to Obama, worth a constitutional crisis.
This is like giving an extra credit card to a spouse who just lied to you yesterday about the family budget. It just wouldn’t be responsible. The option of a compromise is a false choice. I wish it were a real option, but it isn’t.
Perhaps if we pass Ryan’s budget, and Obama signs it with no signing statement, and allows it to take effect, then we can raise the debt ceiling to accommodate. However we do this has to account for democrat ethics.
Dustin (c16eca) — 4/19/2011 @ 2:54 pmYou know, the trolls posting are like that “I don’t care; Obama is awesome” video.
And they don’t care. The funniest part is when they call the right “reactionary.”
Simon Jester (c8876d) — 4/19/2011 @ 3:25 pm“Ryan’s plan doesn’t balance the budget for 30 years because he hasn’t yet touched Social Security”
Comment by Mike K — 4/19/2011 @ 2:48 pm
Social security has run a surplus 25 out of the last 26 years. It has accumulated a $2.5 trillion surplus.
By law social security cannot add to the deficit and it NEVER has contributed one nickel to the deficit.
Ryan’s plan stunk in many ways. Leaving social security alone wasn’t one of them.
jharp (f8a6a3) — 4/19/2011 @ 3:34 pmbwahahahahaha
BY LAW!!!!!!!!
No it didn’t. Where’s that money? What really happened is that democrats and republicans spent a lot of money, and instead of overtly taxing the citizens and taking responsibility for that spending, they just used social security withholdings. Everyone knows that. Workers haven’t really been paying for social security, but rather that money was just part (A small part) of their fair share in income tax.
You’re parroting talking points you do not understand. The truth is that I do not owe baby boomers any social security, and the only reason to pay them any is pure charity. Which is a good idea… we should gift social security as a gift because without it, there will be too much suffering. They sure as hell haven’t earned it. We kept electing irresponsible spenders, so the voters need to take responsibility. Especially the boomers.
It’s time to cut entitlements to the bone, so that we do not steal any more from future generations than we already must.
Jharp’s claim that there’s no reason to touch social security is simply insane.
Dustin (c16eca) — 4/19/2011 @ 5:52 pm“Where’s that money?”
It is in the Social Security Trust fund.
Thanks for asking. Hopefully everyone can learn something.
The Social Security Trust Fund
The Social Security Administration of the United States oversees two separate funds that hold federal government debt obligations related to what are traditionally thought of as Social Security benefits. The larger of these funds is the Old-Age and Survivors Insurance (OASI) Trust Fund, which holds in trust those interest-bearing securities that the federal government intends to redeem to pay future benefits to retirees and their survivors.[3] The second, smaller fund is the Disability Insurance (DI) Trust Fund, which holds in trust those securities that the federal government intends to redeem to pay benefits to those who are judged by the federal government to be disabled and incapable of productive work, as well as to their spouses and dependents.[4]
The trust funds are “off-budget” and treated separately in certain ways from other Federal spending, and other trust funds of the Federal Government. From the U.S. Code:
EXCLUSION OF SOCIAL SECURITY FROM ALL BUDGETS Pub. L. 101-508, title XIII, Sec. 13301(a), Nov. 5, 1990, 104Stat. 1388-623, provided that: Notwithstanding any other provision of law, the receipts and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund shall not be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of – (1) the budget of the United States Government as submitted by the President, (2) the congressional budget, or (3) the Balanced Budget and Emergency Deficit Control Act of 1985.
The trust funds run surpluses in that the amount paid in by current workers is more than the amount paid out to current beneficiaries. These surpluses are given to the U.S. Treasury (and thus become part of the general federal budget) in exchange for special U.S. government securities, which are deposited into the trust funds. If the trust funds begin running deficits, meaning more in benefits are paid out than contributions paid in, the Social Security Administration is empowered to redeem the securities and use those funds to cover the deficit.
jharp (f8a6a3) — 4/19/2011 @ 6:01 pmAbout 85% of jharp’s comments end with something like: “God, you people are stupid.”
About 85% of jharp’s comments are getting sent straight to the trash.
Yes, there is a correlation. Rather a direct one, as it happens.
jharp will either realize that every comment he writes that calls someone names ends up in the trash . . . or he will continue wasting most of his time.
Should he choose the latter course — the one he is currently on — well, is that smart??
Patterico (c218bd) — 4/19/2011 @ 6:08 pmNo, I asked where the money is. I didn’t ask if someone kept track of how much money is owed.
There are no assets in this ‘fund’. There is no trust. The number described by this trust fund accounts for the money the US Government already spent. That money is gone.
We’re out of money, Jharp.
Dustin (c16eca) — 4/19/2011 @ 6:14 pmPatterico, 85% of Jharp’s comments are in the Jharp Comment Trust Fund. Which is to say, they aren’t comments anymore, but just a record no one can see that Jharp typed something.
It’s almost like an accounting fiction, as real as Mordor or Yoda.
But he can’t very well complain… his comments are right here in this trust fund box —-> []
Dustin (c16eca) — 4/19/2011 @ 6:17 pmSo, if I’m say $14,000 in debt, but I have $150 in a savings account, I’m still soluable?
Laws are good things, but they can’t pretend away reality as much as we wish.
Ag80 (6134b7) — 4/19/2011 @ 6:21 pmSo, if I’m say $14,000 in debt, but I have $150 in a savings account, I’m still soluable?
Laws are good things, but they can’t pretend away reality as much as we wish.
Comment by Ag80 — 4/19/2011 @ 6:21 pm
Not sure what you mean by soluble. I always thought soluble meant being capable of being dissolved in water. But I am by no means a scientist.
If you meant solvent you have not provided enough information to determine anything.
I like to use the example of student loans. There are a whole lotta folks who have no income and no assets other than their education and have a whole lotta debt.
Such as brain surgeons, radiologists, and others just finishing up their educations. Some owe maybe 250K, have no assets, and no income.
Are they insoluble? Or solvent? Or whatever the hell you are trying to say?
jharp (f8a6a3) — 4/19/2011 @ 7:14 pmBill Gross from PIMCO has a short piece up that might help people like jharp who are having a hard time understanding the topic of this post.
daleyrocks (bf33e9) — 4/20/2011 @ 8:46 amZOMFGWTFBBQ – jharpy is now following the Harry Redi school of thought, which is to make sure the whole world knows that you are a drooling vegetable.
JD (318f81) — 4/20/2011 @ 8:52 amThe typically reliable Keith Hennessey also delivers for low information commenters such as Kman, imdw and jharp.
daleyrocks (bf33e9) — 4/20/2011 @ 8:52 am“Personally I am waiting for someone to explain to me why we shouldn’t just vote against raising the debt limit and force the government to get things done without going deeper into debt.”
Then you aren’t very bright. We would be unable to meet fundamental obligations if we did so.
Mark C (c664f7) — 8/5/2011 @ 7:50 pm