What All Countries With AAA Rating Have In Common

For 8 years the conservatives told those who didn't support the President of the United States that they were un-American and should leave, now they are telling supporters of the President of the United States to leave. I guess the truth is that anyone who doesn't think like them, act like them, vote like them....should leave the country because they cannot, or will not, share this great nation with anyone other than their own kind.

Can you spell arrogance?

Oops...

chickaree wrote: The main thing they share is an absolute commitment to paying their bills, just as we did at one point. I find it humiliating that this was put on the table. You pay your obligations people.

Yes

Austerity measures in Europe are reductions in obligations, not paying them.

I think the AAA downgrade is necessary, we needed a wake up call and some outside pressure on Washington to take some action and stop this can kicking.

Its time to take your medicine America. The coming decade is going to feel like a bad hangover.

Joe wrote: I think the AAA downgrade is necessary, we needed a wake up call and some outside pressure on Washington to take some action and stop this can kicking.

Its time to take your medicine America. The coming decade is going to feel like a bad hangover.

The wisdom of stopping the "can kicking" and "taking your medicine" is predicated on the assumption that if we do, things will eventually improve. But is that necessarily so?

The viability of capitalism itself seems to be coming into question here. The paradigm is based on the idea that there can be infinite growth into infinity. But is that true in a finite world? Could it be that our leaders are kicking the can down the road because the only other option is complete breakdown of our economic system with no good replacement for it in sight?

chickaree wrote: The main thing they share is an absolute commitment to paying their bills, just as we did at one point. I find it humiliating that this was put on the table. You pay your obligations people.

Individual welfare spending, including Social Security and Medicare, are not obligations in the same manner as notes of debt are chickaree. There was never a question regarding our ability to pay the interest or the principle that we have borrowed from others, or our willingness to do so. The credit downgrade is the result of the spending versus the revenue and the implicit message sent by DC that this would not be changing anytime in the near future.

Britain has reduced their spending by lowering pensions and decreasing the amount of money for university tuition. Germany is cutting welfare benefits, shedding public sector jobs and increasing consumption taxes, not income or corporate taxes. What is it that we are doing here?

We are not cutting back our spending to any appreciable degree or giving any indications that we are going to be doing so anytime in the near future. We have a scheduled income tax hike coming in 2013 along with an increase in taxes to fund ObamaCare - both of which are income based taxes on individuals and businesses, not consumption based taxes. Put that all together and you get an economically ignorant way of addressing the issue at hand, which puts us at a higher risk than those that have taken economically intelligent approaches of significantly reducing the spending of their government.

Germany is planning on a 11% reduction in their spending (40 Billion reduction resulting in 320 Billion spent). Know what such a percentage equates to here? $423 Billion a year. Know what their 3% of GDP limit on deficit spending would equate to here? A federal budget of not $3.8 Trillion on $2.2 Trillion in revenue, but a federal budget of $2.7 Trillion on that amount of revenue. The German GDP is roughly $3.3 Trillion and their government budget is $458 Billion - roughly 14% of their GDP, including the 3% of GDP in deficit spending. Not 25% of their GDP, not even 18% of their GDP, 14% of their GDP. If the folks in DC would limit their take of the annual production of this nation to 14%, we'd have no problem to solve. Even in this economy our current tax structure is sending nearly 15% of GDP to DC to spend. If our government spent only 14% of our GDP we'd have a 1% of GDP surplus instead of a 11% of GDP deficit this year.

Spending by DC is the problem, not revenue contributed by the citizens. No matter how you slice it, the problem is the obscene out of control spending happening in DC. We would not have lost our AAA rating if we were spending 14% of our annual GDP, inclusive of the deficit spending, instead of 25% of our annual GDP at the DC level.

Don't forget that European fuel taxes are double that of the US funding healthcare, mass transit and as a source of revenue

gmule wrote: Don't forget that European healthcare is largely funded by high fuel taxes.

Which are part of the 14% of GDP that Germany is spending every year.

The point is that they have plan in place to pay for it. we don't

Joe wrote: Austerity measures in Europe are reductions in obligations, not paying them.

I think the AAA downgrade is necessary, we needed a wake up call and some outside pressure on Washington to take some action and stop this can kicking.

Its time to take your medicine America. The coming decade is going to feel like a bad hangover.

We have trusted our elected officials to protect the Country and all they have done is squander our money and tell us it is our fault. We need to pay more in taxes and let them spend more.
I for one am tired of sending them more and wondering how we are going to pay our bills.
If I don't balance my budget I have a problem! If they don't balance the government budget they print more money.
WTH is that kind of bookkeeping.
I guess I have a problem with the people with their head in the sand that think it will be alright.

We need new people in the government