S&P Downgrades the United States to AA+

Standards and Poor just downgraded the United States from AAA to AA+.
All Hail the Creator

All Hail the credit ratings agencies. Some of S&P's reasons for downgrade are American politicians are whacked out nutso and play political games of chicken to the point of putting the entire nation at risk. Today's legislators are unpredictable and unreliable for future governing.

 

From their press release:

  • We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.
  • We have also removed both the short- and long-term ratings from CreditWatch negative.
  • 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.
  • More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
  • Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.
  • The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

Supposedly the U.S. Treasury has said there are major mathematical errors in S&P's analysis:

A mathematical error discovered late Friday by Treasury Department officials threw into limbo, at least temporarily, plans by ratings firm Standard & Poor's to downgrade the top-notch AAA credit rating the U.S. has held for 70 years.

S&P earlier demanded the United States reduce the debt by $4 trillion....or else. Seems S&P was bound and determined to carry out or else after the United States didn't enact their draconian budget cuts.

None of the other two credit rating agencies downgraded the United States.

From the S&P press release:

We lowered our long-term rating on the U.S. because we believe that the
prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

It appears S&P is demanding the United States screw the U.S. middle class out of their meager social security, which is solvent, as well as Medicaid and Medicare. That is what they mean by entitlements.

Yet another press release paragraph, again, calls out our Congressional crazies. Seems on this point S&P is expressing the outrage of the entire nation. Too bad it's gonna cost us for them to say somethin':

The political brinksmanship of recent months highlights what we see as
America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.

Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

There is no doubt costs of health care are outrageous and there is no doubt the #1 reason we are in this fiscal mess are the Bush tax cuts and the GOP refusal to even block a few common sense tax loopholes.

That said, S&P has much power and now interest on the debt will cost much more. At this point, it might be useful to see exactly what S&P is demanding, beyond $4 trillion in budget cuts.

Many financial and economics writers have already concluded S&P has a political agenda from their previous threat to downgrade the United States.

Bear in mind S&P, along with Moody's and Fitch, slapped AAA ratings on pure, toxic junk. Bundles of mortgage based derivatives were pure fiction, but that didn't stop the credit ratings agencies.

Were the ratings agencies reformed by any legislation after that? Nope. Not a damn thing happened to them. Seems credit ratings agencies have more power these days than nation states. Except for Italy. They seized S&P documents, along with Moody's, as they have their own downgrade disasters.

Earlier a China adviser said they should float their yuan so China did not have to buy more U.S. treasuries.

Subject Meta: 

Forum Categories: 

What Is Happening?

Things are taking on a nightmarish quality.

I have no faith that either President Obama or any of the Republican contenders for the 2012 Presidential election can lead us away from the mess that we made -- in other words, stop us from doing the stupid things we're doing -- much less take us in a new direction.

I ask myself often these day how on earth, with no computers and limited communications, did we manage to produce the armaments and organize and direct the civilian and military forces that won WWII? The more I think what was done then, with much less technical and communication resourcse, and what we are unable to do for ourselves today, I am both humbled by what the Greatest Generation managed to do and overwhelmed with distress and a sense of my own inadequacy as well as the general inadequacy of Americans today.

We are a nation of hard workers with a history of success on many fronts. That makes our current inability to tackle and succeed at solving our problems that much more puzzling and awful. I feel grateful that I am old enough to remember when everybody thought that America was a great nation with a great future. I also remember when the differences between many Republicans and Democrats were small and that each party had liberals, moderates and conservatives.

I believe it were tapped and directed that we have the strength and ability to pull ourselves out of this tailspin. But when I think of the current state of political paralysis that has taken over the electorate, as well as the lack of leadership that puts the interests of the American people as a whole first -- not campaign contributors, not multinational businesses, not special interest groups -- I don't know what will happen to us.

It is hard for me to imagine anything besides further stagnation in the form of continued diminishment of the lower 95% and continued enrichment of the upper 5%.

You must have Javascript enabled to use this form.

This site was founded because the spin was so thick!

The fact that politicians cannot add, and literally I was watching Senate Judiciary Committee members on CSPAN, literally could not add the number of guest worker Visas they were putting into a bill, never mind the effect that would have on U.S. workers....just random, arbitrary numbers, seemingly dictated by some corporate lobbyist standing in the wings handing them notes...

That is just outright embarrassing. Macro economics, large economies, especially international economics is really super complex enough and to have these jack asses completely ignore every stupid statistic, number, fact and theory per their corporate lobbyist master demands and insane philosophies and impractical agendas.....

well, it's no surprise to me the chicken would come home to roost.

You even have economists spinning facts and numbers to reach some conclusion they desire these days. It's obscene! A complete violation of Academia, Scientific methods.

This site was founded so regular people, just us working stiffs, could crank the numbers, look at the statistics, the actual bills, talk about cause, effect and push up some common sense, fact based reasons, as best we could....

because nobody was doing it! You go to the "right" sites and they write miles and miles of economic fiction. Go to the "left" sites and they too have economic fiction.

It's like all of America who is busy throwing their power and weight around can't do 4th grade math.

Frankly, I wish S&P had called out the Tea Party crazies by name and point out the many methods, namely reduce health care costs like every other industrialized nation does and additional called out this insane bad trade policy, the lack of an industrial policy, the absurd corporate tax code which enables tax havens, offshore outsourcing, and not hiring Americans...

The attack on SS makes no sense to me, beyond corporate lobbyists and this privatization demand....Al Gore was right, it's a promise and should never been touched...

but Medicare/Medicaid, absolutely, it's a mammoth expense coming at us and this is why single payer universal health care should have been on the table. It's plain cheaper. But even the Swiss, they have private health care and their system does address costs extensively and why they pay way less and their system works.

I don't think anyone should spin S&P's comments on the state of Washington D.C. to blame Obama or one party, beyond the Tea party. I think, like most Americans think...
these people refuse to have any common sense and literally will put the entire nation at risk all for a few political points.

You must have Javascript enabled to use this form.

Diappointment about Leahy

When I read Senate Judiciary Committee, I think Senator Leahy. So, I have checked his press releases for August 4 and August 5.

Leahy is a big supporter of the EB-5 thing, whereby investors can enter the U.S. and claim citizenship in return for a paltry investment, maybe $15.000 or so. This is a farce. They come here and "create" jobs for themselves and their friends and family, not jobs for working Americans who are now jobless. How much of an investment is required? I think something like $15,000, yet we have always prided ourselves on that U.S. citizenship is not for sale at any price. I think Canada allows investors in too, but for something like ten times that the U.S. requires. Finally, the idea that this will generate capital inflow into the U.S.  is ridiculous. Obviously, these immigrants will be shipping their profits offshore from the day they arrive. Very sad to see Leahy participating in this farce.

The other legislation that Leahy supports is okay, but it fails to address any economic problems.

“In 2004, Congress enacted the Anti-Atrocity Alien Deportation Act, which I fought for years to pass.  That law bars from the United States those who have committed torture, extrajudicial killing or serious violations of religious freedom.  Today’s announcement expands that authority to a wider array of human rights violations, building on the foundation of the Anti-Atrocity law and solidifying the United States’ commitment to prevent those abuses from occurring.”

Okay. We are actually going to draw the line at letting torturers and terrorists into the country, even if they are willing to buy distressed U.S. businesses for pennies on the dollar. How noble of us!

Sen. Leahy's comments

 

You must have Javascript enabled to use this form.

You are so right about potential

We need to remove two groups from governance. First, this Congess must go, every single one of the irresponsible male hysterics who voted for this budget. Out now. Second, Wall Street needs to be sent packing. They do nothing for the economy except through manipulation. They are non productive and paracitic in the extreme. Move them to Dubai, persona non grata.

You must have Javascript enabled to use this form.

More left wing bashing of the Tea Party

Guess the name calling over the Tea Party can be found here too.

But what were they ever really, except a group of American citizens concerned that our government was plunging us head first into national insolvency, and taking more and more money from the pockets of the people in the process.

What were they ever really but a group of concerned citizens who noted that reckless money printing has brought down many nations, and that we have an unconstitutional cabal of private bankers recklessly printing the American people's money.

That's all they ever were. And in the truest spirit of what this country is all about they have a right to state their case, and to support candidates and get involved in our political system.

Their is no craziness in what they seek. And they have every right to participate in our process.

You must have Javascript enabled to use this form.

stupid is as stupid does

When people were railing on the bank bail outs as well as ineffectual stimulus that didn't have Hire America, buy American clauses, that was fine..

but I'm sorry, we'll bash any group that cannot add. The Tea party is just another version of the same agenda to destroy social safety nets and frankly, is an agenda pushed by the Banks as well as the Koch brothers.

Bottom line, they cannot add and differentiate between deficit spending that is actually useful and stimulate and waste or corporate welfare.

This site has bashed pretty much any policy or agenda that's economic fiction to date. No one and no group is exempt.

You must have Javascript enabled to use this form.

What were they?

"What were they ever really but a group of concerned citizens ... "

Originally, the modern Tea Party was a group of concerned citizens promoting protectionism. Then they were co-opted by the RNC to become a group of Republican ditto-heads who oppose everything about Obama except his 'free' trade agreements.

What are they now? A group of corrupted internationalist anti-American Republican politicians in Washington, D.C.!

You must have Javascript enabled to use this form.

Buy a vowel

The Tea Party is the creation of right wing lobbying groups like FreedomWorks. They make no sense calling for cutting any and all taxes at a time when revenues are desperately needed. Their rhetorical style, pure hysteria, makes their ignorance all the more pronounced. They are anathema to reason and good governance, as they are the tools of billionaires who use them to make more money.

You must have Javascript enabled to use this form.

What Happened to Their Independence?

The local paper in the town I grew up in covered the early days of the Tea Party there.

I recall the many quotes of folks were thrilled to be participating in politics for the first time in their lives. They had never spoken up for themselves and they were proud of themselves and I was proud of them too. Good for them, I thought, even though most of their issues were not my issues. They said over and over back then that the Tea Party had people from different parties and that anyone could join.

Well, of course the majority if not most of them were Republican or Republican-leaning and they ended up being more or less grabbed and incorporated into the Republican Party. That's what usually happens to anything like a successful third party group in America.

But once they got into the Republican politics, they wanted to make sure they weren't just along for the ride. They were very demanding.

They made the Republican Party move to the right on many issues and made many Republican Party politicians move significanty to the right too.

You can't blame the people who aren't conservative for being upset that the Tea Party has moved the whole country in a direction that most of us didn't want to go. I just saw last week someting about only about 1/2 the people now identify themselves as aligned with Tea Party as did last fall.

So with half the supporters we're still being pushed around by Tea Party? Hope that doesn't last much longer.

You must have Javascript enabled to use this form.

Who defines the issues?

Back when the 'Tea Party' was a populist grass-roots phenomenon, it was written up in the 'National Review' as dangerous and something to be watched carefully because it was expressing protectionist sentiment of working-class Americans. From the first, the Tea Party was watched carefully by big RNC money who decided the last thing they wanted was another Reform Party such as was brought to us by Ross Perot in the 1990s (when, by the way, the budget was balanced thanks to the continuing activism of Mr. Perot working quietly -- as an ordinary citizen and not as a paid lobbyist -- on both sides of the aisle in Congress).

After the entrance of paid professional organizers on the Tea Party scene, the name 'Ross Perot' went down the Orwellian Memory Hole for fear that the Tea Party might actually lead to the resurrection of a viable third party alternative. Nothing was said of the George W. Bush administration's trashing of the Social Security lock-box or of the budgetary farce of putting wars "off-budget" while preventing any investigation of war profiteering fraud, or, of the profoundly inane policy of announcing a buying spree in 2001 as the appropriate way to approach a war ... paid professional organizers made certain those topics were never discussed. More importantly, paid professional organizers of the so-called 'Tea Party' made certain that protectionism was never discussed, at least not in a positive light.

Meanwhile, the corporate media played up the new 'Tea Party' -- sanitized of all protectionist tendencies -- while what was left of a true independent Tea Party was starved to death for the sake of a FAUX Tea Party that was never and would never be anything but a tool and a branch of the Republican Party. More specifically, the 'Tea Party' leadership has been seen to be a group of Republican internationalist anti-American paid professional liars, including not only those in Congress but also those working at the 'think tanks' and for corporate media. They are all paid professional politicians, whether they ever stand for an election or not.

These paid professional 'leaders' of the 'Tea Party' define the issues for the meetings and for whatever activism they can hustle up. Under that paid professional leadership, the issues quickly became defined as (1) a Republican victory in 2010 and in 2012, (2) Obama and supporting opposition to Obama in Congress, EXCEPT (3) support for Obama's 'free' trade agreements and every 'free' trade agreement on the books.

You must have Javascript enabled to use this form.

Fury all out of proportion

But if this is the fury that is being unleashed on 40 or so House of Representative members, then 1,000 times the fury should be released on Barack Obama, and I just don't see it.

In fact what I do see so much of here is suggestion after suggestion that he is the only adult in the room.

Yet there are a huge number of Republicans, and even quite a few who identify with the Tea Party who really liked the idea of more revenues coming in, perhaps 800b to even 1T by lowering rates and closing loopholes. A lot of Republicans are warm to that idea.

So Simpson-Bowles does their work, and comes up with revenue producing tax simplification that has broad bipartisan support. I ask all the intellectually honest here to really think about whether this would be achievable under Clinton-Gingrich.

But it doesn't seem to be achievable now. And why not?

Obama got up there and gave a State of the Union, did you hear him advocate Simpson-Bowles? I didn't.

Obama put out a budget in February, did it contain any major planks of Simpson-Bowles? No, it did not.

Obama bashed Ryan all to hell in April, but did he use that occasion to embrace any planks of Simpson-Bowles? No, he did not.

The block we have here is the Junior Senator from Illinois, a man with 2 undistinguished years in the Senate before he started running for President. A man with the slenderest of qualifications to have that job, who in 2 1/2 years has purposely brought his nation to the doorstep of insolvency.

We have 1T on the tables just in doing basic tax reform that could pass on bipartisan basis. That is our problem, not 40 members of the House.

And all I was saying is that the bitterness and hatred and venom spewed at the Tea Party is toxic and unhelpful. When the real problem is up there giving a campaign speech disguised as a presser.

That is the guy who can't add. If he could, he would add up the young men losing their lives so he can maintain his smartassness in pursuing "the right war" just so he can hold his nose high over Bush, yet we know he's going to pull them out in July 2012 just so he doesn't have to campaign with the troops in. Can he add up the young men dying for his politics?

That is the guy who can't add, and he's killing us. Citizens getting involved because they see their government pursuing nation-ending policies is a good thing, not a national debacle. Barack Obama is the national debacle.

You must have Javascript enabled to use this form.

Tea Party = same ole song and dance

It's the same ole insanity, they want to control a woman's body, put here as a second class citizen, cut all social safety nets and have corporations able to run more amok.

There is nothing new here, it's the same old agenda that has been chipping away at the U.S.A. since the 1980's.

On this site, at least, pretty much anything that doesn't add up by the economic numbers and is detrimental economically to the national interest, a heavy focus on regular people, working people, U.S. middle class, citizens of the nation....

we do indeed, in with all of the blogger speak fire we can muster, blast it all to hell.

But we don't pick and choose agendas and are assuredly equal opportunity political slammers.

The fact these idiots want to destroy SS will be one of the biggest economic disasters in the history of the U.S.A.

Everyone hates "Obamacare" but the reasons are very different. This site hates it because it refused to take on the private health care industry and the for profit system which is ripping America off three times more than any other industrialized nation.

The reason Medicare is going to break the bank like all health care is the U.S. is getting ripped off.

Tea party people want to make the situation worse, not better. Screaming absurdities like "that's socialist" and "that's communist", are not only insane, they are dead ass wrong.

Obama isn't a "socialist", he's a bought and paid for corporatist, just like 98% of Congress, including the Tea party.

These people just rant empty rhetoric and behind that rhetoric is the same old agenda which will destroy the U.S.A. and is most assuredly not in the national interest.

I mean come on, I think recently I've posted a good 5 posts blasting Obama on G.E., trade deals analyzed to lose jobs and even economists who "cheer" outsourcing are finally starting to look at the statistics and saying "oopsy", this is imploding the U.S. middle class.

Duh. Anyone with basic calculus should see that was going to happen.

So, bottom line, we are non-partisan on the site. Speak economic fiction, regardless of who you are and you will be called out if we find it and crank the numbers to show it's B.S.

You must have Javascript enabled to use this form.

You just ruined some of my finance love

I stopped reading this comment after that first sentence. That's the kind of election fodder that disgusts me re: both parties. Let's stick to economics, please, and leave morality to the states.

You must have Javascript enabled to use this form.

well, yes, EP is econ 24/7, ok then

Just saying it's the moral majority wrapped up in a new bow. They clearly are economically clueless wonders from the rhetoric to the proposals.

Ryan plan will decimate all older people plus give private health care sector even more carte blanche to make profits off disease and suffering.

You must have Javascript enabled to use this form.

"leave morality to the states"

I agree that social issues should be left "to the states or to the people" per the Tenth Amendment!

If we could somehow see a 'New Reform Party' that takes all the social issues out of its platform, so as to unite the people around necessary reforms -- that would be awesome!

You must have Javascript enabled to use this form.

500 pound gorilla on SS

Somehow it's the Tea Party that wants to destroy Social Security, the Republicans who want to destroy social security, and yet the #1 entity decimating those on fixed incomes is the Federal Reserve.

Every time someone on a fixed income goes shopping, he/she gets poked right in the eye by Ben Bernanke.

To bail out banks and keep bankers wallets fat and inflated, that little criminal is stealing right out of the pockets of poor folks on fixed incomes.

The Tea Party they hate with venomous vitriol, but a cabal of private bankers that has swindled the US public into thinking they're some kind of government agency looking out for them, as they shred the poor to pieces to prop up the rich, that they're A-OK with. Gotta love it.

You must have Javascript enabled to use this form.

Just because the Fed is trying to inflate/devalue the way out

Does not negate the pure economic insanity of the Tea party or their target on anything that is for the U.S. middle class, retirees, social safety nets and getting cheaper health care.

Sorry, one bad monkey does not make a 500 lb Gorilla. The 500 lb Gorilla is this glorified front group of economically disabled, moral majority, simply wrapped in a new bow.

Unfortunately there is a huge swath of people in the U.S. who can't get past 4th grade math and have brains of concrete who love these insane, empty, hollow, pieces of rhetoric coming from these groups.

They are so easily manipulated by the corporate puppet masters it's disgusting.

Grow up and contemplate cracking an undergraduate economics text.

All this insane agenda and people have done is make a very good case that America sucks at mathematics. I'm sorry but considering the corporate control and corruption of the U.S. political system, the last thing we need is a bunch of inane nimrods, very short on education and knowledge, long on vitriol.

You must have Javascript enabled to use this form.

If that came from an Anon it wouldn't get printed

Wow.

Any time challenged this wholesale flood about how smart you are dumb and uneducated the person who disagrees with you is.

Very disappointing.

Me, my name is Glenn Atias. I link to my blog with each post, but I don't really maintain that blog very much. I am 48 years old. I have a BS and MS in mathematical statistics from the Rochester Institute of Technology. I minored in economics which mostly is just a basic overview of macro and micro, but I haven't read any formal textbooks since back in college. These days I mostly read Mish Shedlock, Karl Denninger and sometimes Peter Schiff and EP. I am a registered Independent.

I disagree with a lot of your views. But now you won't have to tirade any more about my supposed 4th grade education. Peace.

You must have Javascript enabled to use this form.

not referring to "you" beyond your insane defense

I read Mish often as well. Regardless I am referring to the politicians and those who follow them. Last time I checked while I think Hayek, and from the statistics it looks pretty bad, is some serious fiction but regardless economics and those arguments are assuredly not the same as these various inane politicians and idiots with signs and demands I am referring to.

You must have Javascript enabled to use this form.

This is EP, so let's do the numbers

"There are a huge number of Republicans, and even quite a few who identify with the Tea Party who really liked the idea of more revenues coming in, perhaps 800b to even 1T by lowering rates and closing loopholes. A lot of Republicans are warm to that idea." -- Anon. Drive-by

Let's clarify a little: that "lowering rates" equates to "more revenues coming in" is exactly the kind of economic fiction that has no place here at EP (in my opinion). That fantasy is exactly what George H. W. Bush referred to as 'voodoo economics'. Yes, you might manage economic growth with tax cuts (although that's doubtful in a WTO world where your government is feckless at administering mercantilist trade policies, and capital investment on income from within to outside the U.S. is rewarded by the IRC), but you won't manage a balanced budget that way. Anyway, the phrase "lowering rates" refers to retaining rather than retiring tax cuts that were supposed to be temporary and were necessary because the economy needed a boost in the George W. Bush years -- okay, that spectacularly failed. End of story.

Now we are between a rock and a hardplace, so how about we think about a stand-alone measure to close loopholes? In May, 2009, Obama proclaimed support for such measures. and there's no way he would dare to veto such stand-alone legislation either in 2011 or in 2012.

Get it? We think about closing loopholes, not because it gains political advantage for this party or the other -- not at the price of this, that or the other legislation that otherwise wouldn't stand a chance -- but just because closing loopholes is a very good idea. If you can't follow me here, I suggest you read (as of yesterday) David Cay Johnston's book, Perfectly Legal.

Anon advances the premise that "Quite a few" TPers and "a lot of Republicans" want to increase revenues by closing egregious loopholes in the Internal Revenue Code. If you want to know which loopholes, get a copy of the book Perfectly Legal by David Cay Johnston, okay? But let's say that we are going specifcally after loopholes that favor income earned in the USA being invested oversears because of IRC preferences that make such investments more profitable than investments in the USA.

Let's test that assumption that loopholes weren't closed despite support for closing them by TPers in Congress.

The record shows 95 Democrats in the House (half of all Democrats) voted against the White House -- against the budget "deal" -- and all of them would certainly  support legislation to close loopholes in the IRC. Assuming that all 56 Tea Party Republican representatives also support closing loopholes, what is needed to enact IRC reform in this (112th) Congress? The math shows that what's needed is just 66 votes from the Tea Party's Republican bedfellows. Indeed, since some of the 95 Democrats supported the ''deal" only out of some perverse loyalty to Obama, the number of Democrats who would support IRC reform is probably well over 100. That means that if just one out of three, or one out of four, or one out of five non-Tea-Party Republican members of the House would vote for reform of IRC loopholes, reform will happen this year or next. (There are currently 433 members of the House -- 180 Democrats, 56 TP Republicans, and, 197 non-TP Republicans.)

 

Get it? 56 TPers (members of TP Caucus) + 95 progressive Dems + just 66 other Republicans or Dems (not even one out of four!) = REFORM OF EGREGIOUS INTERNAL REVENUE CODE LOOPHOLES IN THIS 112TH CONGRESS!

 

If that majority is there, then this will happen. Otherwise, why are any members of the TP remaining in the GOP? Why do pro-IRC reform Democrats remain in the Democratic Party? Well, at leas they can say that half of all the Democrats stood togeher with the necessary intestinal fortitude to stand up against their own president when the chips were down, defying their own leadership. All it would take would be a strong statement from the TPers in favor of closing IRC loopholes, and reform will happen.

Unfortunately, it appears that closing IRC loopholes isn't what TPers or other Republicans want. They like foreign interests. They support foreign interests over domestic producers. That's why the fury, and you ain't seen nothin' yet!

So why are TPers even in the Republican Party? What happened to the promise of a third party alternative? What's the point? Could it be the big RNC and related (secretly sourced) money? And if so, why don't they quit squawking about their principles? --because they wouldn't know a principle if it bit them on their petunias! Of course, I hope I will be proven wrong, and then I will register Republican.

 

You must have Javascript enabled to use this form.

A good President MAKES majorities happen

But with Obama so many are content lowering the bar to floor. Time and again it's up to Congress to send him bills "that he wouldn't dare veto."

How about remembering that Simpson-Bowles IS HIS COMMISSION!

He ignored HIS OWN commission!

Did he propose Simpson-Bowles tax reform at the State of the Union? No.

Did he propose it in his February budget? No.

When he shredded the Ryan plan? No.

The Tea Party is at very best a voting block. You know, voting blocks, like the Congressional Black Caucus. You want to talk about intractable, does it get more intractable than that block? Almost all of the CBC voted against welfare reform, yet we got it. The CBC is probably the most solid intractable voting block in modern times and yet the Right does not call them terrorists and crazies.

But this bitter hatred is all deflection. Deflection away from the fact that it is Obama that is not leading. IT IS OBAMA THAT DID NOT GET BEHIND **HIS OWN** COMMISSION.

If he did get behind it, made the case to the American people, he could get that through. Demonizing a voting block with a particular point of view makes as much sense as pinning everything that does not happen on the Congressional Black Caucus. They have been the tightest knit most intractable voting block in all of Congress for decades now.

It is the president that puts together the coalitions to get things passed. Not "proclaim support" back in May 2009, but to stand behind his own commission and make the case. Not do nothing and leave us to hope Congress shoves it down his throat.

But this bar has been lowered completely to the floor. Because Obama represents the culmination of the hopes and dreams for so many they're getting shrill and desperate to demonize whatever they can to cover for him. And that's what the demonizing of just another ho hum voting block, the Tea Party is - it's one gigantic exercise in trying to cover Obama's bottom.

Granted, here on EP he is regularly taken to task as the corporatist, Banker and Chief that he is, and most of the regular posters do a great job mapping that out.

But the Tea Party does seem to be tweaking a few people the wrong way here, and what I'm saying is that the Tea Party is now just another voting block, a pimple on a flea compared to the president, if we had a president.

You must have Javascript enabled to use this form.

Simpson-Bowles was bullshit

I'm sorry but that was just yet another worn out rhetoric with the agenda to destroy social security.

Anything to attack social security and health care for the aged.

It's also fiction. If you want to wipe out the deficit, frankly you can do it in 5 minutes.

I did it by repealing the Bush tax cuts, enacting a VAT and putting a transaction tax on wall street automated flash trades.

Bam, entire thing wiped out.

We haven't even gotten to sane legislation. For example, we have a good 30 industrialized nations from which to model a health care system from. From the universal single payer system of the U.K. all the way to the private insurance but use of nation to negotiate system of Switzerland, one that one would think would appeal to conservatives...

pick a system, all of them are charges 66% less in costs per person, with better results, better longevity, than the United States.

That....is where the huge savings needs to come from and instead you can this same ole worn out agenda that doesn't add up by the numbers...

it's always the same, screw the U.S. middle class, the aged and the poor, give to the rich and not a practical common sense line of policy can be found.

I'm sorry but the "Tea party" is going from worse to worser. They are the moral majority wrapped up in a new bow, talk absolute nonsense and seem to not passed 4th grade math, never mind passed an undergraduate economics course.

It's completely possible to balance the budget, turn this economy around, grow the U.S. manufacturing sector, the U.S. middle class and save money at the same time.

Just like your comment, it's a false choice. The real answers are left off the multi-answer tab.

It's not "Tea party vs. Obama" the answers are what is not talked about, or only talked about by a few, a huge majority of economists and other people promptly ignored, I guess because they know what they are talking about.

You must have Javascript enabled to use this form.

Congressional Black Caucus, etc.

I appreciate Robert Oak's comment about false choices. However, Anonymous Drive-by presumably responds to my comment, so I want to try to respond with fact and reason to what amounts to a rant.

The problem with Anonymous Drive-by is that I have no way of knowing if this is the same Anon as before. It started with this:

"Anon advances the premise that "Quite a few" TPers and "a lot of Republicans" want to increase revenues by closing egregious loopholes in the Internal Revenue Code." -- 2OLD4OKEYDOKE

I have been trying to evaluate Anon's premise rationally. And here is what I get:

"You know, voting blocks, like the Congressional Black Caucus. You want to talk about intractable, does it get more intractable than that block? Almost all of the CBC voted against welfare reform, yet we got it. The CBC is probably the most solid intractable voting block in modern times and yet the Right does not call them terrorists and crazies." -- Anonymous Drive-by

Where do I begin?

FACT: Almost half of the Black Caucus voted against the 'budget deal' -- including Chair of the Black Caucus, Emanuel Cleaver. (Cleaver conducted a campaign against the deal, widely followed on Twitter, although little noted in mainstream corporate media.)

Roll call reference: thatsmycongress.com

REASON: It's one thing for a 'Tea Party' Republican from a majority White district in the South to vote against a deal with the seal of Obama, but another thing entirely for a Democrat from a Black district to risk the ire of the Obama machine and consequences to constituents of a government shutdown (or risking a shutdown).

FACT: Although Robert Oak may have called some of the Republican leadership, including the Tea Party, 'crazies', no one at EP has ever called them terrorists. It is true that I have suggested that the Tea Party appears to be just the same old internationalist -- therefore, anti-American -- RNC Republicans that we have known for a long time now, but I have not called them terrorists!

REASON: I am willing to give the Tea Party and the GOP one last chance -- that's what my post is all about (my post to which Anonymous has responded).

FACT: Democrats overall voted exactly 95 AYE, 95 NAY, with 3 NV, although anything but an AYE vote meant opposing the Obama machine.

REASON: If the Black Caucus is terrible since maybe a little more than half of them voted for the deal, what about the Republican Caucus (yes, that's what it's called) ... what about them? They voted 174 AYE and 66 NAY. That makes their vote 72.5% AYE. Now if the Black Caucus should be called "intractable," what can we say about the Republican Party overall?

FACT: What I have done in my analysis is to ask about where we are going from here. Having already asked "What did happen to IRC reform in 2009?' (and in 2010), I am now asking what is happening with IRC reform in 2011 and 2012? -- now that we have had our great "change" in November 2010.

REASON: I am not asking where we are going with Obama, but where is the country and the Congress going with or without Obama and with or without the Tea Party.

FACT: Although we could consider the 66 Republicans who voted NAY on the 'budget deal' to be the effective Tea Party faction in Congress, I have used, in my analysis, the minimal number of 56 who are officially in the Tea Party Caucus.

REASON: From roll calls on the recent 'budget deal' and other legislative history, we can make rational estimates of possible support in Congress for IRC reform, specifically regarding Limited Partnership, Foreign Tax Credit and Carry Trade provisions of the IRC. On this basis, we can count about a dozen or so Democrats in the Senate, including Independent Sen. Bernie Sanders, and about 100 Democrats in the House. Outside the Democrats, we can estimate maybe 66 or so Republicans in the Senate who are willing to take a populist stand, plus a precious few Republicans in the Senate, notably including Republican Senator Chuck Grassley of Iowa.

CONCLUSION: I am taking Anon seriously and suggesting that we look to see if it is true that that "Quite a few" TPers and "a lot of Republicans" want to increase revenues by closing egregious loopholes in the Internal Revenue Code. 

You must have Javascript enabled to use this form.

What about "closing loopholes"?

Anon has posted that "there are a huge number of Republicans, and even quite a few who identify with the Tea Party who really liked the idea of more revenues coming in, perhaps 800b to even 1T by lowering rates and closing loopholes. A lot of Republicans are warm to that idea."

So they have their lower rates now that the 'budget deal' has passed, what about closing loopholes? I am proposing a test for Anon's premise, rather than letting it pass as though untestable.

I am stating fact along with incontrovertible conclusion stated in numerical terms, and finally, proposing a test -- with a result based on observable reality -- of Anon's premise quoted above.

The record shows 95 Democrats in the House (half of all Democrats) voted against the White House, that is, against the recent 'budget deal'. Having shown their willingness to support fiscal sanity, with or without the White House, it's reasonable to project that all of those 95 would support legislation to close loopholes in the IRC, especially since Obama himself was on record in favor or those reforms as recently as May 2009.

Specifically, I am talking about Limited Partnership, Foreign Tax Credit and Carry Trade provisions of the IRC. Many loopholes have been studied and presented by David Cay Johnston, and they are well known to members of Congress.

Assuming that all 56 or 66 Tea Party Republicans in the House also support closing loopholes, what is needed to enact IRC reform in this (112th) Congress?

Based on the recent vote on the 'budget deal', the math shows that what's needed is from 60 to 66 votes from the Tea Party's Republican bedfellows. Indeed, since many of the 95 Democrats supported the 'budget deal' only out of some perverse loyalty to Obama, (especially members of the CBC), the number of Democrats who would support IRC reform is probably well over 100. That means that if just one out of three, or one out of four, or one out of five non-Tea-Party Republican members of the House support reform of existing IRC loopholes favoring international investors over U.S. producers, reform will happen this year or next.

It's like this: there are no bad questions, only bad answers.

Make whatever rhetoric you want out of it, I am stating facts, making rational conclusions, asking answerable questions! If you don't like it, write your congress crittur.

You must have Javascript enabled to use this form.