Aug 6, 2011

Republican Con Job Deluxe


Republican Con Job Deluxe
Edited on Sat Aug-06-11 06:50 PM by vonarrow
Republican Con Job Deluxe

"It's the 'new normal' we all have to deal with." - CNN's Wolf Blitzer.

Today's political narrative on CNN is the 'new normal" the precious TV pundits are going to CONtinue shove down our throats each and every day: If big cuts aren't made soon, there could be further downgrading of America's credit rating.

Today's narrative, repeated via different "experts" ad nauseaum, infers we must make big cuts to Social Security and Medicare or face further downgrading of America's credit. Since when does the Republican Party and Standard & Poor hold the American economy hostage? Since the Republican Party begrudgingly realized the fact Obama is very most likely going to trounce any Republican Party candidate, that's when.

These are some of the most harmful lies ever disseminated to the general public. These so-called "experts" are nothing more than mouthpieces for their corporate and political masters and financial self-interest. The MSM is working overtime manufacturing so-called, "conventional wisdom" that says Social Security and Medicare must be cut, or face further downgrading of America's credit and the worsening of our economy. Wolf Blitzer actually asked one so-called CNN "expert" if there was anything the U.S. could have done to avoid yesterday's S&P downgrading of America's credit, and the guy said yes, the cuts to Social Security and Medicare should have already been made, and if the cuts would have already been made, S&P wouldn't have downgraded U.S. credit. Blitzer further "helped out" by saying yes, the tough decisions have to be made. (inappropriately mischaracterizing Social Security as what ails America's economy)

Since when does a shady corporation named Standard & Poor (a questionable organization at best, criminal at worst) dictate U.S. economic policy to America's political system and parties? This is the SAME CORPORATION that issued BOGUS credit ratings for bogus mortgage securities. Since when does Standard and Poor possess the GALL AND MORAL IMPERATIVE to publicly WARN politicians and voters that if they don't leave the Bush tax cuts intact, S&P will possibly downgrade America's credit even further? Since this morning, when top S&P executives appeared on CNN and MSNBC specifically warning Americans that if they don't cut Social Security and Medicare, there will be further downgrading of America's credit rating.

When S&P calculated America's debt ratio, etc., they counted the Bush tax cuts as permanent beyond 2012, when they are set to expire. This accounts for the $2 trillion discrepancy between the U.S. Treasury Dept. and Standard & Poor. Even Warren Buffet said S&P erred in downgrading America's AAA rating: S&P Erred in Cutting U.S. Rating: Buffett

I personally believe S&P's downgrading of America's credit rating is a direct result of President Obama refusing to endorse the permanent renewal of the Bush tax cuts. The Bush tax cuts were and remain a gross tax loophole which caused a big part of the financial mess America is suffering from right now.

(Why S&P Has No Business Downgrading the U.S.)
Robert Reich

Standard & Poor's downgrade of America's debt couldn't come at a worse time. The result is likely to be higher borrowing costs for the government at all levels, and higher interest on your variable-rate mortgage, your auto loan, your credit card loans, and every other penny you borrow.

Why did S&P do it?

Not because America failed to pay its creditors on time. As you may have noticed, we avoided a default.

And not because we might fail to pay our bills at the end of 2012 if tea-party Republicans again hold the nation hostage when their votes will next be needed to raise the debt ceiling. This is a legitimate worry and might have been grounds for a downgrade, but it's not S&P's rationale.

S&P has downgraded the U.S. because it doesn't think we're on track to reduce the nation's debt enough to satisfy S&P — and we're not doing it in a way S&P prefers.

Here's what S&P said: "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics." S&P also blames what it considers to be weakened "effectiveness, stability, and predictability" of U.S. policy making and political institutions.

Pardon me for asking, but who gave Standard & Poor's the authority to tell America how much debt it has to shed, and how?

If we pay our bills, we're a good credit risk. If we don't, or aren't likely to, we're a bad credit risk. When, how, and by how much we bring down the long term debt — or, more accurately, the ratio of debt to GDP — is none of S&P's business.

S&P's intrusion into American politics is also ironic because, as I pointed out recently, much of our current debt is directly or indirectly due to S&P's failures (along with the failures of the two other major credit-rating agencies — Fitch and Moody's) to do their jobs before the financial meltdown. Until the eve of the collapse S&P gave triple-A ratings to some of the Street's riskiest packages of mortgage-backed securities and collateralized debt obligations.

Had S&P done its job and warned investors how much risk Wall Street was taking on, the housing and debt bubbles wouldn't have become so large – and their bursts wouldn't have brought down much of the economy. You and I and other taxpayers wouldn't have had to bail out Wall Street; millions of Americans would now be working now instead of collecting unemployment insurance; the government wouldn't have had to inject the economy with a massive stimulus to save millions of other jobs; and far more tax revenue would now be pouring into the Treasury from individuals and businesses doing better than they are now.

In other words, had Standard & Poor's done its job over the last decade, today's budget deficit would be far smaller and the nation's future debt wouldn't look so menacing.

We'd all be better off had S&P done the job it was supposed to do, then. We've paid a hefty price for its nonfeasance.

A pity S&P is not even doing its job now. We'll be paying another hefty price for its malfeasance today.

Robert Reich: S&P Debt Warning is 'Height of Hubris'

WASHINGTON) -- It's the "height of hubris" for ratings agency Standard & Poor's to suggest it may cut the credit rating of the U.S. even if the debt crisis is solved, says Robert Reich, former labor secretary in the Clinton administration.

"No credit rating agency has gone as far as S&P," he told ABC News on Wednesday. "That's a highly political move. I'm surprised they are doing it."

Reich, who is a professor of public policy at the University of California, Berkeley and has also worked under Presidents Carter and Obama, called the credit rating agency's latest reports "irresponsible."

With just days to go until the Treasury estimates the U.S. could default on its sovereign debt, Reich said S&P has no business sharing its political opinions about U.S. economic policy. The U.S. currently has the highest AAA rating on its debt, which tops $14 trillion. A lower debt rating would mean higher borrowing costs for the U.S., adding billions more to the debt.

While ratings agencies testified Wednesday at a House financial services committee hearing on their role in the subprime mortgage market, Reich pointed out that Standard & Poor's contributed to the financial meltdown by giving AAA ratings to some of Wall Street's riskiest packages of mortgage-backed securities and collateralized debt obligations.

S&P's threat of a downgrade to the nation's credit rating goes one step further than Moody's and Fitch, the other two major credit rating agencies, by declaring even if Congress agrees to lift the $14.3 trillion debt limit, they and President Obama must also reduce the deficit by $4 trillion over 10 years.

In April, Standard & Poor's cut the U.S. ratings outlook to negative from stable and warned that its AAA rating is at risk unless lawmakers agree on a plan by 2013 to reduce the budget deficit and nation's debt.

Robert Reich: You Can Officially Blame The Double Dip On The Republicans

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