We're about to get downgraded by Moody's

#1
NEO

NEO

Eat at Joe's
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#1
I want all the liberals on here who are going to blame the GOP and the deal not being done sooner on the downgrade which is headed our way to understand you are wrong.

Moody's has made it clear that just getting the bill passed is not enough. They want to see serious cuts to around the tune of 4 trillion dollars.

This will impact our country in the exact same way an actual default will. Times are about to get really rough people.

We the Tea Party tried our best to fight it. If we get downgraded it wasn't because those of us fought hard against the LG's of the world--it just means there are more of them than us and we got out voted again but a bounch of loons.

This may be America's waterloo. It was good while it lasted, though.

S&P, Moody's Await Debt Plan Details - FoxBusiness.com
 
#3
#3
utvolpj said:
somehow I don't think it's the exact same
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Interest rates are going to go up big time.

It will be almost impossible for banks to get loans and for the US to secure future debt. It will also change our exchange rates.

Defaulting is killing the baby now.

Downgrading is just watching the baby not be able to get food.
 
#4
#4
This has been brewing since the Dem spending binge began in 07. The ratings agencies will try to be apolitical but they recognize that reckless spending became insane over the past 4 years.
 
#6
#6
NEOCON said:
Interest rates are going to go up big time.

It will be almost impossible for banks to get loans and for the US to secure future debt. It will also change our exchange rates.

Defaulting is killing the baby now.

Downgrading is just watching the baby not be able to get food.
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We'll see but there's another possibility. It could turn investors away from gov't issues and to private sector stocks and bonds.

The big problem will likely be an inflation of our currency. Commodity prices will go up even more. Again I always worry about the left wing propaganda machine (aka MSM) but that should crush Obama's reelection hopes.
 
#7
#7
NEOCON said:
Interest rates are going to go up big time.

It will be almost impossible for banks to get loans and for the US to secure future debt. It will also change our exchange rates.

Defaulting is killing the baby now.

Downgrading is just watching the baby not be able to get food.
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Interest rates are not going to go up materially because of a debt downgrade.
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#8
#8
droski said:
Interest rates are not going to go up materially because of a debt downgrade.
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Speculators are stating that due to the downgrade the banks will not be able purchase as the same rates and the trickle down (end game) will be a raise in rates.

By it self, I would agree. but with everything else going on I believe it will be the final trigger.

It will atleast change the rate the us borrows at.
 
#9
#9
The interest rate on bonds will go up but this won't be as bad as if we defaulted.

And praise the tea party all you like, I'm glad they brought the deficit discussion to the forefront (i mean that sincerely) but as many have said, you don't tie the deficit to the debt limit.
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#12
#12
sjt18 said:
This has been brewing since the Dem spending binge began in 07. The ratings agencies will try to be apolitical but they recognize that reckless spending became insane over the past 4 years.
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It's not like spending was under control during the Bush years.
 
#13
#13
milohimself said:
The interest rate on bonds will go up but this won't be as bad as if we defaulted.

And praise the tea party all you like, I'm glad they brought the deficit discussion to the forefront (i mean that sincerely) but as many have said, you don't tie the deficit to the debt limit.
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why don't you tie the deficit to the debt limit? One begets the other, no?
 
#14
#14
What's alarming is nobody seems to care what interest rates "should be", they only care that they stay low. Manipulation of interest rates helped get us into this mess, and manipulating interest rates to ease the pain only means that we'll bear the burden of the pain down the road.

The natural rate of interest tells the truth about the availability of resources. The market-determined interest rate strikes a balance between current consumption and future consumption. In short the natural rate of interest is the rate that avoids booms and busts.
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http://mises.org/daily/2513
 
#15
#15
BigPapaVol said:
why don't you tie the deficit to the debt limit? One begets the other, no?
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It does, but I thought it was different in that one is a cumulation of the past, whereas the other is a one year look into the future. While related, I thought raising the debt limit was an independent issue from deficit control.
 
#16
#16
rjd970 said:
It does, but I thought it was different in that one is a cumulation of the past, whereas the other is a one year look into the future. While related, I thought raising the debt limit was an independent issue from deficit control.
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Isn't future debt purely a function of the spending from this point forward, deficit or otherwise?
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#17
#17
BigPapaVol said:
It's not like spending was under control during the Bush years.
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No. It wasn't... especially toward the end when he had a likeminded Dem Congress to work with and after the 94 Revolution fizzled out completely. But we have moved from "not under control" under Bush to insanity under Obama.
 
#18
#18
sjt18 said:
No. It wasn't... especially toward the end when he had a likeminded Dem Congress to work with and after the 94 Revolution fizzled out completely. But we have moved from "not under control" under Bush to insanity under Obama.
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Insanity started under Bush. Single party control of Congress and Exec has proven disastrous, regardless of party.
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#19
#19
milohimself said:
And praise the tea party all you like, I'm glad they brought the deficit discussion to the forefront (i mean that sincerely) but as many have said, you don't tie the deficit to the debt limit.
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Why? The continuing deficits are the only thing that require increases in the debt limit, correct? They are already tied together. Further, what other real leverage do conservatives have against a Prez and Senate that would much rather still be on their spending binge? Do you honestly see any other way the TP and GOP could have forced Obama's hand on spending "cuts"/reductions?

FWIW, I appreciate the Honorable Mr Sessions from Alabama for consistently using correct language concerning "spending reductions" rather than "spending cuts".
 
#20
#20
BigPapaVol said:
Insanity started under Bush. Single party control of Congress and Exec has proven disastrous, regardless of party.
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Started earlier than that... but my purpose is certainly not to defend Bush's economic liberalism and Progressive policies.

I agree with the latter however both parties have become "Progressive" when given control. The GOP with Bush became Dem-lite with regard to spending with their version of "conservative big governmentism". They became convinced that they had to use tax payer $$$ to buy votes too. What they failed to calculate is that they could never out promise Dems without completely detaching from those who actually put them in office... and really meant it when they said they wanted smaller gov't.
 
#21
#21
BigPapaVol said:
Isn't future debt purely a function of the spending from this point forward, deficit or otherwise?
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Nobody says we are cutting the debt...they say we are cutting deficits or spending. Spending and deficits obviously affect the debt, but I think trying to tackle deficit spending by holding it hostage to the debt ceiling is pure politics. Deficits and spending should be handled in the budget, independent from raising the debt ceiling.

Just my opinion.
 
#22
#22
But the deficit is exactly what necessitates the increase. Seems to me that the point is: stop the future deficits so we don't have to do this again.

Of course it's politics, but there aren't many events that force legit effort to curtail spending. This was a crappy effort and poor result, but it made the issues apparent for the world outside the insulated cesspool that DC has become. Even morons like Putin are griping.

IMO, this is now THE issue in the upcoming elections and gives a smaller government conservative a chance.
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#23
#23
BigPapaVol said:
But the deficit is exactly what necessitates the increase. Seems to me that the point is: stop the future deficits so we don't have to do this again.

Of course it's politics, but there aren't many events that force legit effort to curtail spending. This was a crappy effort and poor result, but it made the issues apparent for the world outside the insulated cesspool that DC has become. Even morons like Putin are griping.
IMO, this is now THE issue in the upcoming elections and gives a smaller government conservative a chance.
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Agree 100% with this. Saying the debt ceiling shouldn't be tied to deficit reduction is one thing...saying it didnt help is another.
 
#24
#24
BigPapaVol said:
why don't you tie the deficit to the debt limit? One begets the other, no?
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One doesn't skip out on paying their credit card bill for a month or back up their debt spending and accrue interest because they decide they want to spend less... Ideally, they decide they want to spend less, plan on doing so and pay what they already owe.

rjd970 said:
Agree 100% with this. Saying the debt ceiling shouldn't be tied to deficit reduction is one thing...saying it didnt help is another.
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That's what I'm saying, the desired result was noble but the way it was acted about was silly and Washington-esque.
 
#25
#25
milohimself said:
One doesn't skip out on paying their credit card bill for a month or back up their debt spending and accrue interest because they decide they want to spend less... Ideally, they decide they want to spend less, plan on doing so and pay what they already owe.
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But it's crazy to assume that the credit limit isn't often the debt ceiling debate for people and I'd bet anything it curtails future spending as it arises.
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