From Bloomberg News, we get the news that S&P might cut the US ratings again. Do you think that this will get the attention of the President and Congress? Doubtful, in our not-so-humble opinion. These people (we call them leaders but they only follow) do not have the guts to do anything but spend money so they can get re-elected. To make cuts means they would have to make someone or some group unhappy with them, that could ruin their chances at the ballot box.
We are deftly following the lead of Greece. Our "leaders" will not do anything until there is an emergency. It will be at that time they will start making changes. It will hurt you and us, but not them. They are insulated from the changes.
The agreement in Greece has not been released at this time, however, we hear from various sources that there are things like a 25% cut in minimum wages and retirement, a 50% cut in bond value, a significant cut in the social safety net, and who knows what else. It all translates to a dramatic cut in the standard of living for the average Greek. Do we want these type of draconian changes being forced onto us?
It will happen if we don't take major action now and not sometime in the future. Are you willing to suffer a short term itch to prevent a major pain? We are.
Where do we go from here when our "leaders" are not listening? Good question and for that we would like some input. What should we be doing?
Conservative Tom
We are deftly following the lead of Greece. Our "leaders" will not do anything until there is an emergency. It will be at that time they will start making changes. It will hurt you and us, but not them. They are insulated from the changes.
The agreement in Greece has not been released at this time, however, we hear from various sources that there are things like a 25% cut in minimum wages and retirement, a 50% cut in bond value, a significant cut in the social safety net, and who knows what else. It all translates to a dramatic cut in the standard of living for the average Greek. Do we want these type of draconian changes being forced onto us?
It will happen if we don't take major action now and not sometime in the future. Are you willing to suffer a short term itch to prevent a major pain? We are.
Where do we go from here when our "leaders" are not listening? Good question and for that we would like some input. What should we be doing?
Conservative Tom
America has had an AA+ rating with a negative outlook since Aug. 5 when the New York-based unit of McGraw-Hill Cos. stripped the nation of its AAA ranking for the first time, citing the government's failure to agree on a path to reduce deficits. The U.S. has a one-in-three chance of another downgrade, Chamber said today during an S&P sponsored Webcast.
“What the U.S. needs is not so much a short-term fiscal tightening, but it has to have a credible medium-term fiscal plan,” said Chambers, managing director of sovereign ratings. “That is going to have to say something about entitlements, and that is probably going to have to say something about revenues.”
Bond investors ignored the downgrade, driving Treasury yields to the lowest levels in history, amid concern the U.S. economy was stalling and as Europe's debt crisis intensified. Treasuries have returned 3.9 percent since the rating cut and gained 9.8 percent last year, the debt's best performance since 2008, according to Bank of America Merrill Lynch index data.
“I don't think anything is going to happen between now and the election in November,” Chambers said.
S&P said in August that political brinkmanship over increasing the government's debt ceiling year showed the U.S. is becoming “less stable, less effective and less predictable” as the Treasury almost reached its borrowing limit before the government reached a compromise.
The “political brinkmanship hasn't gone away,” Chambers said today. “That simply doesn't happen in other AAA economies.”
--Bloomberg News--
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