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"S&P: U.S. Debt Could Reach ‘Junk’ Rating by 2030, Absent Entitlement Reform"

Okay, but first things first: howsabout the Senate Democrats offer up a budget, and we’ll go from there.

37 Replies to “"S&P: U.S. Debt Could Reach ‘Junk’ Rating by 2030, Absent Entitlement Reform"”

proudvastrightwingconspirator says:

July 14, 2011 at 11:52 am

How about Senate Democrats come up with a 2010 budget?
They NEVER did.

I wonder if the REAL reason we don’t have a budget deal is that Obama has no idea how to actually sit down, bargain, compromise and cut a deal.
He has no business experience, and being a “constitutional lecturers” and community organizer isn’t exactly the place to learn negotiating skills.

In fact, probably the only “deal” Obama’s ever cut was the one with Bill Ayers over how much Bill would be paid to write Obama’s autobiography for him.
Squid says:

July 14, 2011 at 11:55 am

I’m pretty sure the real reason is that Harry Reid was running for re-election, and the last thing he wanted was a set of numbers for people to see.
happyfeet says:

July 14, 2011 at 11:57 am

2030? Bumblefuck is behind schedule.
Joe says:

July 14, 2011 at 11:57 am

Weeeeeeeeee. I can see Ireland, Greece and Portugal from my backyard.
Joe says:

July 14, 2011 at 12:01 pm

http://www.washingtontimes.com/news/2011/jul/12/obamas-waterloo/

Waterloo.
Squid says:

July 14, 2011 at 12:47 pm

No link from the article to the S&P study, but I wonder if S&P take into account the rapid disintegration of our federal finances on the day that the U.S. loses its AAA grade. From that moment on, our projected interest payments skyrocket, not to mention all the chaos that will occur as various pension funds flee to safer investments.

Any realistic analysis should project the U.S. going from AAA to B in no more than 90 days.
Squid says:

July 14, 2011 at 12:48 pm

I suppose I should have written “AAA to smoking crater” in 90 days.
happyfeet says:

July 14, 2011 at 1:45 pm

oh. The problem is just in the general fund. Who knew? It’s just a general fund thing. We just have to patch up the general fund is all.

Charles Krauthammer has done a superb job of fudging some crucial facts about the Social Security fund’s surpluses [Your View, March 11, “Obama’s Social Security Fraud”].

Social Security benefits are financed by dedicated taxes on earnings paid by workers and employers, and by interest earned on accumulated trust fund reserves. According to the 2010 trustees report, the current surplus of $2.5 trillion held by the Social Security trust fund is invested in special U.S. Treasury bonds. The surpluses are projected to continue for the next 15 years, and reserves are projected to grow until the end of 2024.

The current federal budget deficit is due to a severe imbalance in the general fund, not in Social Security funds.

Unlike the early 1980s, and despite the current deep recession, Social Security is continuing to build reserves for the future through interest on its reserves. Social Security is not broke and is not going broke anytime soon.

Dami Rambhia, Glastonbury

and someone should tell President Bumblefuck that of course social security checks will go out forever and ever – they just have to cash in their government bonds! Done and done!

Charles Krauthammer writes that “the Social Security trust fund contains — nothing.” If that were true, it would come as a great shock to the millions of American workers who for many years have earned and contributed payroll taxes to that fund in excess of benefits paid.

Mr. Krauthammer admits that it contains countless pieces of paper, “special issue” bonds that he calls IOUs from the Treasury. However, he says “they are worthless.” In fact, the Social Security trust fund contains about $2.5 trillion in U.S. Treasury bonds backed by the government’s full faith and credit. The bonds are earning interest and are recognized by Congress as part of the national debt.

Mr. Krauthammer rationalizes his use of the word “worthless” by enumerating the various options employed by Treasury to manage the cash flow requirements for the ongoing redemption of maturing U.S. Treasury bonds. By his twisted logic, even the many U.S. Treasury bonds held by the Chinese government should be considered “worthless.” I hope Mr. Krauthammer’s column isn’t printed in Beijing.

Ed Dalton, Glastonbury
cranky-d says:

July 14, 2011 at 1:51 pm

Wow are people stupid. The bonds in the social security fund represent money the government owes itself. In other words, they are worthless, because to pay the bonds off the money has to come from somewhere else. The have as much worth as an IOU.

If a private individual tried a trick like this they would never get out of prison.
Ernst Schreiber says:

July 14, 2011 at 2:01 pm

So, is that guy’s reak name Ed or Dami? Something else perhaps?
Ernst Schreiber says:

July 14, 2011 at 2:26 pm

This is relative:

[T]he [Social Security] lock box is full of debt the government owes itself. But in event of reaching the debt limit the lock box debt can be converted into negotiable Treasury debt (it’s a special class of debt now – intragovermental holdings) and sold if the proceeds are used to meet Social Security obligations.

The Treasury Secretary knows this. The President knows this. The executive has the authority and resources to continue to meet SS obligations even if we’re at the debt limit [emphasis added].

Note this is a separate calculation from the Monthly Receipts minus Priority Spending that we’ve been seeing lately. SS doesn’t need to be prioritized, and conversion of intragovernmental holdings to negotiable debt does NOT affect the debt ceiling.

The President’s scaremongering about SS checks is extremely dishonest and demagogic.

So I guess this means that we don’t need to raise the debt ceiling to keep the ~~Spice~~ Social Secuirty checks flowing after all.

How come nobody’s suggested bundling all these intragovernmental holdings and selling thet? I mean, look how great that worked for Freddie and Fanny?
JD says:

July 14, 2011 at 3:41 pm

Did anything happen with the petulant child pezzydent today? Did he default all on his own?
geoffb says:

July 14, 2011 at 4:19 pm

In fact, the Social Security trust fund contains about $2.5 trillion in U.S. Treasury bonds backed by the government’s full faith and credit.

Unless they have changed something since I last knew that last part is not true. The “special” part of these “special” bonds was that they were designed so that they could be defaulted on without damaging the credit of the normal bonds which are backed by the “full faith and credit”. Otherwise why make up a “special” bond.
JD says:

July 14, 2011 at 4:21 pm

When Boehner, Mitch, Eric, etal are sitting there across from Teh One, how do they keep from screaming “ZOMFG what the fuck is wrong with you, you pathetic mendoucheous lying crapweasel?!?!”
JD says:

July 14, 2011 at 4:41 pm

If you don’t pass a budget, you can’t have a deficit, right?
Pablo says:

July 14, 2011 at 7:48 pm

How about Senate Democrats come up with a 2010 budget?
They NEVER did.

We’re over 800 days since Congress has passed a budget. It ain’t because the House hasn’t done it.
happyfeet says:

July 14, 2011 at 8:00 pm

the house has only passed 4 of however many appropriations bills
newrouter says:

July 14, 2011 at 8:02 pm

my baracky question: what alinsky tactic is your favorite?
motionview says:

July 14, 2011 at 8:58 pm

How come nobody’s suggested bundling all these intragovernmental holdings and selling thet? I mean, look how great that worked for Freddie and Fanny?
Some things, Ernst, not even in jest.
Ernst Schreiber says:

July 14, 2011 at 9:11 pm

Afraid I’ll give the Senate ideas motionview?
Pablo says:

July 14, 2011 at 10:03 pm

the house has only passed 4 of however many appropriations bills

And that Roadmap for America’s Future thingy from that blue-eyed dreamboat.
sdferr says:

July 14, 2011 at 10:05 pm

And that Roadmap for America’s Future thingy from that blue-eyed dreamboat.

About that.
sdferr says:

July 14, 2011 at 10:09 pm

I was mulling over the McConnell backup plan thing, wondering how — now that McConnell has already introduced the idea — the R’s could keep from having to vote on it, supposing for instance that even if McConnell could be persuaded not to bring it forward that Harry Reid would just do it for him. But it occurs to me — and here’s where I need a bit of help fleshing out the legislative particulars, procedurally and all — nothing says Boehner has to bring it to the floor of the House, does it? So essentially, if Boehner wanted to block it, he could do. Or do I have that right? That is, that the House wouldn’t have to vote on it if they chose not to?
Jeff G. says:

July 14, 2011 at 10:48 pm

The Democrats are adopting the McConnell plan as their plan B.

Yay!

Also, according to John Kyle, the Democrats are proposing over $100 billion in new spending. And they’ve taken cuts in waste, fraud, and abuse off the table — but have agreed to allow the Republicans to “buy them back” with tax increases. So: at the “debt ceiling” negotiations, the Democrats are offering spending plans and are holding up the American tax payer by insisting that it will cost him money to cut government waste, fraud, and abuse. And if they don’t get their way, they’ll simply push the McConnell plan — which I’m sure they’ll point out was a Republican plan — that essentially allows the President a $2.5 trillion blank check.

He gets new spending. There are no cuts. And the President can point out that this was McConnell’s plan.

So politically savvy our our GOP leaders! Not only that, but Lindsay Graham and others are out there bashing the Tea Party conservatives for wanting to hold the line!

And this is the party that wants my vote?
happyfeet says:

July 14, 2011 at 10:55 pm

aloha princess lindsey hey check this out it’s a blowhole! Here it’s really cool but it’s even cooler if you stand really really close.
sdferr says:

July 14, 2011 at 10:55 pm

Isn’t it the case that the McConnell plan has no path to the House floor that can’t be blocked by the House Republicans, who more or less dislike it altogether, i.e. not even a coalition of Republicans and Democrats could be put together in the House strong enough to force it to the floor? Leastwise, that’s the way it strikes me. Which in turn is more or less a reflection of the impossibility of any plan currently in view getting past whichever blocking mechanism may step forward.
happyfeet says:

July 14, 2011 at 11:11 pm

I was neutral on Bernanke until just this week when he started acting like a blatant fuckstick

“I think it would be a calamitous outcome, create a very severe financial shock,” Bernanke told the Senate Banking Committee during his second appearance before Congress this week. “Treasury securities are critical to the entire financial system… A default on those securities would throw the financial system … potentially into chaos.”

look penis-face there’s NO FUCKING DANGER – ZERO that even our SUPREMELY failshit loser little country is going to default on treasury securities. And you know that. You’re just lying cause you suck obamacock like you were going for Olympic gold.
geoffb says:

July 14, 2011 at 11:14 pm

I can’t seem to find the plan you mentioned Jeff. I did find this which has some signs of hope.

A plan to cut spending, put caps on future expenditures and pass a constitutional amendment to balance the budget is certain to come up, lawmakers said. Also on the unofficial agenda of lawmakers are several bills to force the president to prioritize payments if Congress doesn’t raise the debt ceiling.

In fact, the Cut, Cap and Balance Act is one that’s gaining steam on Capitol Hill. McConnell, who has become the subject of ire from the right in recent days, expressed support for the plan Thursday. His support could increase the likelihood that his legislation is coupled with the cut, cap and balance idea — or something like it — to attract enough support to avert an early-August catastrophe.
[…]
In fact, the plan that’s the subject of the most ire is McConnell’s proposal, which Boehner refused to rule out. The reactions of more than a dozen rank-and-file Republicans suggest Boehner would have a revolt on his hands if he brings it to the floor in anything resembling its current form. A few lawmakers said that they might give it a second look if it is part of a larger package of spending cuts and budget controls, but others said that won’t do the trick for them.
[…]
Florida Rep. Allen West, whose conservative credo on Capitol Hill brought more than $1 million to his campaign account in the second quarter of this year, put it more simply.

“Down South, we put it very simply: ‘That dog don’t hunt,’” West said, adding that if he were in negotiations with the president, he would be “a different kind of animal in there” than his leaders.
sdferr says:

July 14, 2011 at 11:16 pm

hf, seemed to me that Bernanke’s move to start a third round of money printing locks in his decision to be political, choosing to do whatever he can to get Obama re-elected. Worst though, it won’t even work, but merely contribute to crazy inflation down the road after Obama’s gone.
happyfeet says:

July 14, 2011 at 11:17 pm

I thought he walked QE3 back today. Not sure – but I have no doubt at all that if the market drops he’ll be on it like a whitefly on a tasty cucumber.
sdferr says:

July 14, 2011 at 11:19 pm

I hadn’t heard that. But then I haven’t looked either. Still, I’d welcome that as relatively good news in the morass of swirling shit in general.
happyfeet says:

July 14, 2011 at 11:21 pm

it was just a dirty socialist Associated Press report – but they usually print what they’re told

Stocks are closing lower after remarks from Federal Reserve Chairman Ben Bernanke dimmed hopes for a third round of bond-buying.

In a second day of testimony Thursday, Bernanke told lawmakers that the Fed expected the economy to improve. He said the central bank had no immediate plans to step in with more economic stimulus. Stocks turned immediately lower after he made the remarks and fell for much of the day.
newrouter says:

July 14, 2011 at 11:42 pm

“Let it show on the record that when the American people cried out for economic help, Jimmy Carter took refuge behind a dictionary. Well if it’s a definition — if it’s a definition he wants, I’ll give him one. A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his.”
geoffb says:

July 14, 2011 at 11:47 pm

Can’t resist.
guinsPen says:

July 15, 2011 at 3:52 am

what alinsky tactic is your favorite?

The slewfoot.
happyfeet says:

July 15, 2011 at 6:26 am

oh. This would be something new.

It seems S&P specifically wants to see $4 trillion in deficit reductions, and if this debt deal doesn’t produce that, then the US might still lose its AAA.

this is when the failshit hits the fan I guess
Slartibartfast says:

July 15, 2011 at 9:48 am

I thought he walked QE3 back today.

I thought QE2 was as far as things ever went.