S&P Blames Republicans for Credit Downgrade. No mainstream media reports...

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Before I post a site that anyone wants to claim is left-biased, Here is the link to Standard&Poor's own website, which provides a link to the report in PDF form

http://www.standardandpoors.com/home/en/us

Here is the link to the actual PDF report.

http://www.standardandpoors.com/serv...ervalue3=UTF-8

[Browning151]

The only place I see in that report that the Republicans are specifically cited is not wanting to let the tax cuts expire, aside from that it looks to me like they blame politicians in general for basically being a bunch of idiots, but it's pretty late and maybe I'm missing something.

[ek forever]

The only place I see in that report that the Republicans are specifically cited is not wanting to let the tax cuts expire, aside from that it looks to me like they blame politicians in general for basically being a bunch of idiots, but it's pretty late and maybe I'm missing something.

That's exactly what Standard&Poors representatives have been saying. The debt and spending is a 100% bi-partisan. Period.

The only problem is that "tax revenues" are a misnomer. Hard to squeeze blood from an onion. Income tax revenues have never exceeded 21% of GDP, and it's normally around 19% of GDP over the last 100 years. Tax rates have been all over the place in the last century, you can only suck so much from the economy.

Spending is the problem. Revenues go up every year.

[ahabion]

Standards & Poors is simply saying that America won't be able to pay its debtors. Nothing complicated about it. Politicians regardless of what side they're on are the ones who are throwing us into this hole. Of course, we're to blame as well since we elected them in... I've always been a Hermain Cain supporter because we don't need any other politician, we need a mechanic to fix this broken economic engine.

[BanginJimmy]

Before I post a site that anyone wants to claim is left-biased, Here is the link to Standard&Poor's own website, which provides a link to the report in PDF form

http://www.standardandpoors.com/home/en/us

Here is the link to the actual PDF report.

http://www.standardandpoors.com/serv...ervalue3=UTF-8

OK, so I also read that whole thing and found nothing that says GOP is responsible. I did find several occurrences where it said that neither party is willing to make anything more than token 'cuts' and that neither party is willing to get off their soapbox long enough to actually look at what is really going on.


Would you mind quoting the article where it says GOP is responsible?

[2turbo4u]

Taken from page 4.
Compared with previous projections, our revised base case scenario now
assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012,
remain in place. We have changed our assumption on this because the majority
of Republicans in Congress continue to resist any measure that would raise
revenues, a position we believe Congress reinforced by passing the act. Key
macroeconomic assumptions in the base case scenario include trend real GDP

[BanginJimmy]

Taken from page 4.
Compared with previous projections, our revised base case scenario now
assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012,
remain in place. We have changed our assumption on this because the majority
of Republicans in Congress continue to resist any measure that would raise
revenues, a position we believe Congress reinforced by passing the act. Key
macroeconomic assumptions in the base case scenario include trend real GDP

You just posted that the GOP is resisting tax hikes. This makes me believe you think our entire debt problem could be solved by higher taxes. If that is correct then you really have no clue how bad the debt/deficit problem is. You could tax every penny of wages over 200k earned in the US and still not balance this years budget.

Sent from my DROIDX using Tapatalk

[ek forever]

lolrevenues

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lol ambiguous graph is ambiguous

[ek forever]

lol ambiguous graph is ambiguous

I'm sorry, I must have missed where you posted any economic data or facts.

Here's one source:

http://www.usgovernmentrevenue.com/revenue_history

Just put your own line where the top marginal tax rates were over history. You'll see that regardless of the rates revenues were flat as a % of GDP over the last century.

Here's a good read from Reason Magazine on the issue: http://reason.com/archives/2011/02/1...rcent-solution

Tax revenues are almost always hovering around 19%, peaking at 21% only twice in the past 100 years. 1948 and 2001. Both times the economy was in extreme bull conditions and jobs/wealth were being produced like no other.

My point here is that my graph is correct, call it what you want.

Edit: here's a few more sources:

http://www.hoover.org/publications/h...t/article/5728

http://online.wsj.com/article/SB1000...209741952.html

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^ Bottom line: You can only suck a finite amount of wealth out of the economy. Regardless of the rates, etc. Having more job creating, wealth earning, etc goes a lot further to increasing revenues than increase the rates on job creators.

[ek forever]

From Hauser himself:

Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19% regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92% (1952-53) and as low as 28% (1988-90). This observation was first reported in an op-ed I wrote for this newspaper in March 1993. A wit later dubbed this "Hauser's Law."

Over this period there have been more than 30 major changes in the tax code including personal income tax rates, corporate tax rates, capital gains taxes, dividend taxes, investment tax credits, depreciation schedules, Social Security taxes, and the number of tax brackets among others. Yet during this period, federal government tax collections as a share of GDP have moved within a narrow band of just under 19% of GDP.

[bu villain]

From Hauser himself:

So it is your position that personal income tax rates, corporate tax rates, capital gains taxes, dividend taxes, investment tax credits, depreciation schedules, Social Security taxes, etc are all irrelevant to the amount of revenue the government brings in?

[ek forever]

So it is your position that personal income tax rates, corporate tax rates, capital gains taxes, dividend taxes, investment tax credits, depreciation schedules, Social Security taxes, etc are all irrelevant to the amount of revenue the government brings in?

Not at all. Just that revenues are heavily more dependent on a functioning and healthy economy more than the rates at which all of those are taxed. The rates play a role, but, data included, with what I said it's clear that having a healthy, growing economy is going to do a lot more for tax revnues than the tax rates. I.e. 1948 and 2001 being the biggest revenue/gdp years in income were also ridiculously good years in the economy.

Not to mention the data I'm arguing about doesn't mention corporate taxes, which have been on the decline for 50 years. They're slowly and slowly loop-holing themselves out of existence. Remember, business don't pay taxes. They simply write Uncle Sam a check with your money.

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So is it your position that you can take one point from the multitude of points and facts I've presented and dismiss everything you want and make the case that you're right and I'm wrong? Hyperbole doesn't make good argument.

[ahabion]

Not at all. Just that revenues are heavily more dependent on a functioning and healthy economy more than the rates at which all of those are taxed. The rates play a role, but, data included, with what I said it's clear that having a healthy, growing economy is going to do a lot more for tax revnues than the tax rates. I.e. 1948 and 2001 being the biggest revenue/gdp years in income were also ridiculously good years in the economy.

Not to mention the data I'm arguing about doesn't mention corporate taxes, which have been on the decline for 50 years. They're slowly and slowly loop-holing themselves out of existence. Remember, business don't pay taxes. They simply write Uncle Sam a check with your money.

Doesn't the government write everyone else a check with my money? What's the difference other than a business can't take my money... I have to give it to them.

Flat tax or fair tax... then you'd never have loop holes to jump through. Simple. Easy. Taxation FIXED.

[ek forever]

Correct, no tax write-offs, but tax people at 10-15% less. Same effective tax rate just a lot more efficient and no games for businesses and people. The relief from the paperwork burden plus the efficiency increase would increase revenues and promote business growth.

Rand Paul's plan cuts personal and business tax rates by a large amount buy removes the mortgage deduction, child deduction, etc. Corporate taxes are far too high here in the U.S., the rest of the world keeps lowering their corporate rates and ours remains the highest in the world. In spite of that, corporate tax revenues have been spiraling down for at least 50 years.

[bu villain]

Not at all. Just that revenues are heavily more dependent on a functioning and healthy economy...

Ok, just wanted be sure I understood what conclusion you were drawing from that graph.

So is it your position that you can take one point from the multitude of points and facts I've presented and dismiss everything you want and make the case that you're right and I'm wrong? Hyperbole doesn't make good argument.

No that's not my position. I never said you were wrong and never made a statement for me to be right about. I don't think every discussion needs to be about someone being right and others being wrong.

[ek forever]

No that's not my position. I never said you were wrong and never made a statement for me to be right about. I don't think every discussion needs to be about someone being right and others being wrong.

[BanginJimmy]

Clark Howard laid out a great flat tax proposal. First there are only 2 tax rates. 10% of all earned income, including capital gains and dividends, for anyone making under 200K a year. Over 200K a year is a 25% tax rate. No more exemptions. No mortgage interest deductions, no child tax credits, no nothing. If you made 85K in gross pay this year, Uncle Sam got $8500. No deducting 4500 for mortgage interest or 1500 child tax credit.

[2turbo4u]

You just posted that the GOP is resisting tax hikes. This makes me believe you think our entire debt problem could be solved by higher taxes. If that is correct then you really have no clue how bad the debt/deficit problem is. You could tax every penny of wages over 200k earned in the US and still not balance this years budget.

Sent from my DROIDX using Tapatalk

We have changed our assumption on this because the majority
of Republicans in Congress continue to resist any measure that would raise
revenues, a position we believe Congress reinforced by passing the act.

[ek forever]

We have changed our assumption on this because the majority
of Republicans in Congress continue to resist any measure that would raise
revenues, a position we believe Congress reinforced by passing the act.

You also clearly have no idea of the best measure of raising revenues. Growing the economy means big revenues. Ask JFK, Clinton, Truman, Reagan, and Eisenhower.

Clark Howard laid out a great flat tax proposal. First there are only 2 tax rates. 10% of all earned income, including capital gains and dividends, for anyone making under 200K a year. Over 200K a year is a 25% tax rate. No more exemptions. No mortgage interest deductions, no child tax credits, no nothing. If you made 85K in gross pay this year, Uncle Sam got $8500. No deducting 4500 for mortgage interest or 1500 child tax credit.

I heard that the other day. I was very proud of Clark. Good explanation.

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That was quoted from the text of S&Ps report

[Vteckidd]

posting to hold my place so i can respond tomorrow at work

[ek forever]

The italicized is directly from the S&P report, here's a few points:

1) The left says the S&P downgrade had to do with the Tea Party and other freshmen Republicans not wanting to raise taxes. Leftists only hope you don’t read this part of the S&P report:

Standard & Poor’s takes no position on the mix of spending and revenue

measures that Congress and the Administration might conclude is appropriate

for putting the U.S.’s finances on a sustainable footing.

2) It’s not remotely all about taxes. S&P clearly criticizes the political impossibilities of containing growth in public spending and reforming entitlements. Is that the tea party’s fault?

We lowered our long-term rating on the U.S. because we believe that the

prolonged controversy over raising the statutory debt ceiling and the related

fiscal policy debate indicate that further near-term progress containing the

growth in public spending, especially on entitlements, or on reaching an

agreement on raising revenues is less likely than we previously assumed and

will remain a contentious and fitful process.

3) They note that the debt ceiling deal didn’t go far enough. You might recognize that as the Tea Party position considering the deal they supported cut $4 Trillion instead of $2.1. Democrats were arguing that the economy would crumble if they cut that much. The government is only expected to spend $46+ Trillion in the next 10 years. Even under the new debt deal we'll still borrow $12 Trillion It was really quite absurd. "If we cut government spending American jobs will be lost"

We also believe that the fiscal consolidation plan that Congress and the

Administration agreed to this week falls short of the amount that we believe is

necessary to stabilize the general government debt burden by the middle of the

decade.

4) Along with the deepness of the recession, the sluggishly terrible Obama “recovery” was another reason for their negative position. Who is responsible for Obama’s failed economic policies too? Remember that GDP includes government spending. I would imagine that our extremely anemic GDP would be negative, (shrinking) without government spending.

First, the revisions show that the recent recession was

deeper than previously assumed, so the GDP this year is lower than previously

thought in both nominal and real terms. Consequently, the debt burden is

slightly higher. Second, the revised data highlight the sub-par path of the

current economic recovery when compared with rebounds following

previous post-war recessions. We believe the sluggish pace of the current

economic recovery could be consistent with the experiences of countries that

have had financial crises in which the slow process of debt deleveraging in the private sector

leads to a persistent drag on demand. As a result, our downside case

scenario assumes relatively modest real trend GDP growth of 2.5% and inflation

of near 1.5% annually going forward.

5) They might downgrade us again if they see “less reduction in spending” than was agreed to. Are the republicans and the Tea party also responsible for not cutting spending enough? I was pretty sure they want to cut as much as possible. And considering that even in the debt deal there are no cuts in spending, merely cuts in growth in spending. A real cut would be to pass a budget that spent less than the previous years budget. Like Texas did this year.

The outlook on the long-term rating is negative. We could lower the

long-term rating to ‘AA’ within the next two years if we see that less

reduction in spending than agreed to, higher interest rates, or new

fiscal pressures during the period result in a higher general government

debt trajectory than we currently assume in our base case.