Economy Biden Administration Furious After US Credit Rating Downgrade; US Debt Outlook Now Negative

[grimballer]

spending money you don't have is a bad thing? who would've thought?

i guess some people have to learn it the hard way... or they never learn and just double down on their nonsense

 

[HereticBD]

Well, they'll just have to print more money to get out of this mess.

 

[White Whale]

America has to give billions so countries like Israel and Ukraine so there citizens can have healthcare.

 

[Sinister]

This is not a good spot for Murica to be in. The deficit is constantly growing with debt ceiling being increased year over year. At the same time, these downgrades will make cost of borrowing higher for Murican government. Eventually you will go into a downward spiral where your tax revenues are just going to servicing existing debt obligations.

Sauce: Moody's turns negative on US credit rating, draws Washington ire | Reuters

If anyone actually reads what Moody's is saying, it has nothing to do with a lack of economic ability and everything to do with Governmental polarization, meaning more and more politicians using US debt as a political tool and refusing to pay bills. I wonder what politicians use US debt as a political tool and consistently shut down the Government rather than pay bills.

 

[ShadowRun]

@Jack V Savage - better get in here doing damage control. The credit agency must be wrong, or this is a good thing that only shows the underlying strength of the American economy, or we're misinterpreting it somehow. Go.

Who cares the DEI scores are all time highs. We are very diverse, and our inclusion is strong, not to mention equity is at an all-time high.

Biden will pass an anti-downgrade credit bill, and everything will be fixed.

 

[Jack V Savage]

If anyone actually reads what Moody's is saying, it has nothing to do with a lack of economic ability and everything to do with Governmental polarization, meaning more and more politicians using US debt as a political tool and refusing to pay bills. I wonder what politicians use US debt as a political tool and consistently shut down the Government rather than pay bills.

Yeah, there isn't any real interest in understanding fiscal policy or budgeting issues from rabid partisans. It's just about finding another turd to fling.

 

[Mr Holmes]

@Jack V Savage - better get in here doing damage control. The credit agency must be wrong, or this is a good thing that only shows the underlying strength of the American economy, or we're misinterpreting it somehow. Go.

Its just a problem with the math.

 

[Richmma80]

At least we don't have mean tweets

 

[Renard]

I guarantee you they're not upset, they're the ones who did it. They printed $4 trillion out of thin air, that lead to increased interest rates, and that lead to the current debt crisis.

One of the plans that the Federal Reserve was presented with to "deal" with this problem is to print $3 trillion a year and have the Federal Reserve buy new securities directly from the Treasury, which is totally insane. For context, the inflation from the pandemic was caused by printing $4 trillion. If the Fed follows this plan, they'll be printing $3 trillion... every year. This would completely destroy the value of the currency, which may be the point because they want to force people to use CBDCs.

Here's John Titus' explanation. I also recommend watching his other videos to get even more context on the larger picture.

 

[moreorless87]

Not sure were all the partisan talk is coming from, Republicans and Democrats have been almost identical on the economy for the last 30 years.

Low taxes on the wealthy, high military spending, lots of public money filtered into private hands.

 

[Jack V Savage]

Not sure were all the partisan talk is coming from, Republicans and Democrats have been almost identical on the economy for the last 30 years.

Low taxes on the wealthy, high military spending, lots of public money filtered into private hands.

In the early Aughts, Republicans inherited a solid fiscal trajectory and then passed a couple of huge tax cuts that required future fixes. Then during Obama's presidency, Democrats partially repealed the "Bush cuts" and also added new revenue with the ACA (while bending the long-term healthcare cost curve) that mostly fixed the long-term debt trajectory. Then in 2017, Republicans passed another giveaway to rich people that again required some addition action to get the long-term situation under control. Then Democrats passed the IRA, which the CBO estimates will cut deficits by $238B over 10 years.

You can prefer either party or be totally indifferent to U.S. gov't, but it's factually not true that they're identical on debt (which is not the same as the economy--but they're very different on that too). Republicans have shown a much greater preference for deficit-funding.

 

[sickc0d3r]

Not sure were all the partisan talk is coming from, Republicans and Democrats have been almost identical on the economy for the last 30 years.

Low taxes on the wealthy, high military spending, lots of public money filtered into private hands.

Yeah, we spend too much, refuse to increase revenue, and it’s all exacerbated by the fact that congress threatens to default every few months whenever a democrat is potus. Dysfunctional.

 

[Jack V Savage]

Yeah, we spend too much, refuse to increase revenue, and it’s all exacerbated by the fact that congress threatens to default every few months whenever a democrat is potus. Dysfunctional.

Here are outlays relative to GDP since 2001 (when W took office):

Doesn't seem that spending has much to do with it (spending was way too low from 2009 to 2015--after 2015, there was less need for higher spending). And U.S. spending is very low relative to other developed countries too.

 

[moreorless87]

In the early Aughts, Republicans inherited a solid fiscal trajectory and then passed a couple of huge tax cuts that required future fixes. Then during Obama's presidency, Democrats partially repealed the "Bush cuts" and also added new revenue with the ACA (while bending the long-term healthcare cost curve) that mostly fixed the long-term debt trajectory. Then in 2017, Republicans passed another giveaway to rich people that again required some addition action to get the long-term situation under control. Then Democrats passed the IRA, which the CBO estimates will cut deficits by $238B over 10 years.

You can prefer either party or be totally indifferent to U.S. gov't, but it's factually not true that they're identical on debt (which is not the same as the economy--but they're very different on that too). Republicans have shown a much greater preference for deficit-funding.

The mainstream democrats have never really shown the inclination to repeal Reagans massive tax cuts, hiked military spending and general shift towards privatisation and deregulation, from Clinton onwards thats been accepted as the status quo and the debt has carried on building across that time.

 

[Jack V Savage]

The mainstream democrats have never really shown the inclination to repeal Reagans massive tax cuts, hiked military spending and general shift towards privatisation and deregulation, from Clinton onwards thats been accepted as the status quo and the debt has carried on building across that time.

OK (not all true). Nevertheless, there is a big difference between the parties on the issue of whether they want to pay for spending, regardless of whether you like either or neither. Also note that privatization is debt-reducing.

 

[Gas121]

The debt problem is embarrassing. Time to get a grip. The handling of it is nothing short of pathetic by successive governments. They all kick the can and will not address the issue and it only gets worse. Weak politicians.

 

[Fox by the Sea]

The debt problem is embarrassing. Time to get a grip. The handling of it is nothing short of pathetic by successive governments. They all kick the can and will not address the issue and it only gets worse. Weak politicians.

people will say this exact same thing in 2050, when the debt will be 50 trillion, and in 2100 when it will be 200 trillion.

 

[Orgasmo]

people will say this exact same thing in 2050, when the debt will be 50 trillion, and in 2100 when it will be 200 trillion.

You won't. At some point your cost to just pay the interest on your debt will be so staggering that you cannot properly fund other government services.

 

[Rob Battisti]

You won't. At some point your cost to just pay the interest on your debt will be so staggering that you cannot properly fund other government services.

The cost to pay the interest is the same as our national defense budget. Pretty staggering already.

 

[Fox by the Sea]

You won't. At some point your cost to just pay the interest on your debt will be so staggering that you cannot properly fund other government services.

eh, you'll just invent some quadrillion dollar coin and print a quadrillion dollars having that coin as collateral. the old folks in 2050 will be thrilled their 2 bedroom house is now worth 12 billion dollars.