The New Debt Deal May Cost Up To 1.8 Million Jobs!

Submitted by Lawrence Rafferty-Guest Blogger

Weren’t we told that if the Debt Ceiling was not raised that the Triple A credit rating of the United States would suffer?  I guess the credit agencies don’t care if 1.8 Million jobs are lost in the process!  “The Economic Policy Institute, a top nonpartisan think tank, estimates that the deal struck this weekend to raise the nation’s debt limit will end up costing the economy 1.8 million jobs by 2012. Today the Senate is expected to approve the package passed yesterday by the House and send it to President Obama. But while the unemployment rate remains above 9 percent, the deal does nothing to address chronic joblessness.

The agreement would reduce spending by at least $1 trillion over 10 years, but even the near-term cuts could shrink already sluggish GDP growth by 0.3% in 2012. According to EPI, the plan “not only erodes funding for public investments and safety-net spending, but also misses an important opportunity to address the lack of jobs.” In particular, the immediate spending cuts and the “failure to continue two key supports to the economy (the payroll tax holiday and emergency unemployment benefits for the long term unemployed) could lead to roughly 1.8 million fewer jobs in 2012.” Think Progress

Let me get this straight.  We allegedly saved our credit rating by agreeing to slash government spending without any increase in revenues, but we put almost 2 million jobs at risk at the same time.  That sounds like a perfect storm for Main Street.  Even the President of the bond investment firm Pimco thinks that the debt deal will weaken the economy.  “But left out of the equation thus far is what impact those sorts of cuts will have on an economy struggling to recover from the Great Recession. Mohamed El-Erian, CEO of the bond investment firm Pimco, said yesterday that the deal will weaken the already fragile economy:  The potential budget agreement “does nothing to restore household and corporate confidence. So unemployment will be higher than it would have been otherwise, growth will be lower than it would be otherwise, and inequality will be worse than it would be otherwise.” […] “We have a very weak economy, so withdrawing more spending at this stage will make it even weaker,” El-Erian said.”  Pimco

There are experts making the argument now that the special Congressional Committee established by this debt ceiling agreement must be used to include revenue enhancements and job creation measures in order to help the struggling economy. “The deal pending before Congress today just starts the process. The next steps, including who is appointed to the committee, are crucial in determining the consequences unleashed. While the committee is charged with finding a net decrease in the deficit of $1.5 trillion, there are better pathways to that result. The committee could find more revenue and spending cuts and include proposals that help foster job creation.

Indeed, job creation and boosting the economy should be an important litmus test for the work of the committee and progressives should hold the committee, its members, and the resulting product to that standard. If the committee’s proposal doesn’t accomplish this in its recommendations, then it’s hard to imagine how those recommendations will be any better than a stalemate that produces the automatic cuts to both domestic and defense spending—and potentially the expiration of all the Bush tax cuts.”  American Progress

When will Congress actually do something to help create jobs?  The Stimulus helped, but it was not enough. People need jobs increased, not increased cuts.  Can jobs be saved or is it too late?  Does Congress really care about everyday Americans or do the wealthy and corporate interests rule the day?  I am open for suggestions!

Submitted by Lawrence Rafferty-Guest Blogger


80 thoughts on “The New Debt Deal May Cost Up To 1.8 Million Jobs!

  1. “When will Congress actually do something to help create jobs?”

    When the corporatists Congress really works for have succeeded in turning the American job market into a third world market they can exploit to their greedy heart’s content.

    “Can jobs be saved or is it too late?”

    That is the question.

    “Does Congress really care about everyday Americans or do the wealthy and corporate interests rule the day?”

    Not a bit and for now. The wheel always turns. It’s just a matter of how many people will be crushed in the process.

    Great article, Larry.

  2. “The early days of the recession were characterized by massive layoffs across industries, and while economists caution that the labor market isn’t there yet, a surge of private sector layoffs in July may indicate that the American recovery is stalling out.

    This week has been a worrisome one for economists who monitor the health of the U.S. economy, with mounting signs all pointing in the same direction: For the average American worker, a rebound will not be soon forthcoming. In fact, things seem to be moving in the other direction.

    GDP growth is weak; new hiring is not keeping pace with populations growth, according to fresh data; and growth in manufacturing — which once lead the recovery — has practically ground to a halt. But most worrisome of all the signs, perhaps, is the return of mass layoffs.”

  3. The winners and losers in the debt ceiling deal
    When the cuts come, expect the military-industrial complex to fend off the worst. So what lobby will protect social services?
    By Amy Goodman

    President Barack Obama touted his debt ceiling deal Tuesday, saying, “We can’t balance the budget on the backs of the very people who have borne the biggest brunt of this recession.” Yet that is what he and his coterie of Wall Street advisers have done.

    In the affairs of nations, Alexander Hamilton wrote in January 1790, “loans in times of public danger, especially from foreign war, are found an indispensable resource.” It was his first report as secretary of the treasury to the new Congress of the United States. The country had borrowed to fight the revolutionary war, and Hamilton proposed a system of public debt to pay those loans.

    The history of the US national debt is inexorably tied to its many wars. The resolution this week of the so-called debt ceiling crisis is no different. Not only did a compliant Congress agree to fund President George W Bush’s wars in Iraq and Afghanistan with emergency appropriations; they did so with borrowed money, raising the debt ceiling 10 times since 2001 without quibbling.

    So how did the Pentagon fare in the current budget battle? It looks like it did fine. Not to be confused with the soldiers and veterans who have fought these wars.

    “This year is the 50th anniversary of [Dwight] Eisenhower’s military-industrial complex speech,” William Hartung of the Centre for International Policy told me while the Senate assembled to vote on the debt ceiling bill. Speaking of the late general turned Republican US president, Hartung said: “He talked about the need for a balanced economy, for a healthy population. Essentially, he’s to the left of Barack Obama on these issues.”

    Michael Hudson, president of the Institute for the Study of Long-Term Economic Trends, explained the history of the debt ceiling’s connection to war:

    “It was put in in 1917 during the first world war, and the idea was to prevent President Wilson from committing even more American troops and money to war. In every country of Europe – England, France – the parliamentary control over the budget was introduced to stop ambitious kings or rulers from waging wars. So the whole purpose was to limit a government’s ability to run into debt for war, because that was the only reason that governments ran into debt.”

    The Budget Control Act of 2011 assures drastic cuts to the US social safety net. Congress will appoint a committee of 12, dubbed the “Super Congress”, evenly split between Republicans and Democrats, to identify $1.2tn in cuts by Thanksgiving. If the committee fails to meet that goal, sweeping, mandatory, across-the-board cuts are mandated. Social services would get cut, but so would the Pentagon.

    Or would it? The Congressional Black Caucus and the Congressional Progressive Caucus opposed the bill. Congressional Black Caucus chair Emanuel Cleaver called it “a sugarcoated Satan sandwich”. For fiscal years 2012 and 2013, the discretionary funding approved is split between “security” and “nonsecurity” categories. “Nonsecurity” categories like food programmes, housing, Medicare and Medicaid (the basis of any genuine national security) will most likely be cut. But the “security” budget will get hit equally hard, which Democrats suggest would be an incentive for Republicans to cooperate with the process.

  4. “Withdrawing government spending literally “takes money out of the economy.” We have a crisis because of lack of demand. Republican solutions of giving the wealthy and corporations even more money and tax cuts obviously will not work because the rich don’t create jobs, we do. The rich are already richer than ever, with a greater share of the income and wealth than ever, and giant corporations are already sitting on tons of cash.

    So with the stimulus winding down, and state and local budget cuts causing layoffs of teachers, firefighters and other government employees, Republicans are demanding even more layoffs from federal budget cuts as a “cure.” But cutting government as a prescription for creating jobs sounds a lot like their claim that cutting taxes increases revenue. The problem is a lack of demand, and budget cuts taking hundreds of billions out of the economy only makes that worse.”

  5. raff:

    From what I understand this deal is taking away the governments ability to put money into the economy when it so desperately needs it.

    This is beyond cutting off your nose to spite your face,Its cutting off your head because you don’t like a certain tie.

  6. “Mike WRONA-Huff Post-Super user
    5 minutes ago (2:01 PM)
    McConnell screws America and gets praised. Will he arrange a Fed taxpayer bailout for KY’s unemployme­nt crisis?:

    KY Businesses Could Lose $640 Million in Federal Tax Credits (Source: Natl Fed Ind. Businesses­)


    FRANKFORT, Aug. 1, 2011 – The past several years, Kentucky has borrowed about $900 million from the federal government for unemployme­nt benefits.

    It has to make a $28.5 million interest payment by Sept. 30, but officials say it’s about $20 million short.

    It’s unclear whether state law allows the governor to simply take the money from Kentucky’s “rainy day fund.” Statutes say state government can’t raise unemployme­nt taxes to make up the difference without the consent of the General Assembly.

    If the state misses the deadline, Kentucky businesses could lose $640 million in federal tax credits.

    NFIB/Kentu­cky has met with senior administra­tion officials to craft alternativ­es for averting the economic damage that this situation could cause. All options for ensuring that Kentucky businesses are not crushed by the weight of a FUTA tax increase are being explored, both on the federal and state levels. NFIB/Kentu­cky will continue to represent the small business perspectiv­e and interests as the situation develops.

    NFIB/Kentu­cky is following the situation closely. If you have any questions about this or any other issue affecting your small business, contact NFIB/Kentu­cky State Director Tom Underwood by email or call 502-223-53­22.

    The Rep-Cons have the gloves off and the mommy’s boys will do as they are told.”

  7. Did somebody say something about the TSA job and expenses not being paid…hold back in the bill…was the GOP did not want to subsidize smaller airports….of course the DEMs did….all is well….

  8. eniobob,
    the jobs crisis caused by this debt ceiling agreement has hit home in Sen. McConnell’s state. What is good for the goose is good for the gander, isn’t it?

  9. None of these equations balance:

    Mitch McConnell 100% = Barack Obama 0%

    John Boehner 100% = Barack Obama 0%

    Tea Party 100% = Barack Obama 0%

    Corporations, Billionaires, Fascists 100% = American People 0%

  10. I know some of you here are old enough to remember when Japan was an economic super power. When they hit a small bump in the road & there was a demand for austerity the government jumped in the boat big time. They have been in the austerity boat for 2 decades now & have slow/no growth, unemployment and no end in sight.

    But Krugman is a hippy to be punched for saying austerity is not the way out of this mess. I’ll be dead but my children will still be looking at double digit unemployment and wondering how America could ever have been a first world nation.

  11. I heard El-Erian on NPR a week or two ago going on & on about how the debt needed to be controlled & implying that cuts were the only solution.

    These guys come off the same as the pundits before a big election. You will notice that they will make several, often wildly different, predictions on the outcome in various places. Then, after the actual results are in they will trumpet the one closest to the results. Back when I watched The McLaughlin Group I caught Johnny doing that several times.

  12. “We allegedly saved our credit rating by agreeing to slash government spending without any increase in revenues,…”

    By what percent will government spending be cut? This is the first time I’ve seen the cuts characterized as “slashing” spending.

  13. While just an Illinois state senator with little chance of advancement, Barack Obama announced his opposition to the Iraq War. That single act seperated him from Hillary Clinton and won him the 2008 nomination. Since then he has either compromised, or found ways to lose, on every issue to come along. The truth is Obama was far more ready to campaign for president than to lead the nation.

  14. Lrobby99,
    Obama has brought thousands of troops home from Iraq and ended our combat missions there. Now, Afghanistan is a different matter, but he did not run for President on ending Afghanistan.

  15. The more comments I read from ‘real people’ about this fraud that the uber-wealthy and the tax evading multi-national corporations and war profiteers have foisted upon the American people the angrier I get, and then I am overcome with a feeling of impotence when I realize that I am unable to do anything about this. I spent almost forty years as a lawyer, a sole practitioner who bore proudly the name of street lawyer. I think back to the years when I was in university and in law school and warmed and guided by the then struggles of our people over Civil Rights for all of us not just the descendants of slave owners but for all of us. I remember our outrage as young americans over the fact that our government was carpet bombing great areas of Asia in the name of the great fiction of the time the Domino Theory of international politcs and other baldfaced lies. I like to think that though I was never in the military (though I was drafted) that I am a Viet Nam veteran also, having fought that awful war on the streets of Los Angeles and San Francisco. Over my career I represented only people most of whom were poor or close thereto. The only corporations I ever represented were vanity entities for individuals. I fought for civil rights for all of us including and perhaps most importantly those of gay people in a county that is not known for giving a rat’s ass about anything other than the accumulation of wealth. Finally I had had a enough of the bullshit (pardon my french but I dont know the english word for that) and went home to lick my wounds and listen to the birds sing. Now I am sitting here in my dotage, not quite in a rocker yet, listening to christianist politicians bash anyone who is different from them, crazy people wanting to amend the Constitution for all sorts of nefarious purposes. I listen to people tell me it is good for America to send jobs overseas to protect the economic interests of those multinationals that dont even pay taxes! I watch Obama whom I championed as our best hope for a return to our grand experiment with the Jeffersonian promise of liberty and equality for all surrender everything to the forces of mendacity that own and operate the Congress. I watch a SCOTUS that is packed with justices who beiieve fervently that our Constitution has a meaning that is unchanging and fixed as of 1789. All of us are trapped again by the bullshit (there’s that word again) we are fed by entities and interests that are at best artificial and merely legal fictions but which are very wealthy.
    I apologize for the rant for using up some Professor Turley’s bandwidth to post it. Have a nice day.

  16. Frank wrote

    I know some of you here are old enough to remember when Japan was an economic super power. When they hit a small bump in the road & there was a demand for austerity the government jumped in the boat big time. They have been in the austerity boat for 2 decades now & have slow/no growth, unemployment and no end in sight.

    That’s incorrect. Far from austerity measures, Japan spent trillions on Keynesian-style stimulus and has nothing to show for it except mountains of public debt. I wrote about it in 2010 here when I said “Japan spent $2T on infrastructure spending after their collapsed real estate bubble. They now have public debt about 180% of GDP to show for it, and an economy structured on public works spending in which interests are beholden to government in Tokyo for the next job handout.”

    In the private sector Japan produces may of the worlds highest quality, advanced goods and in that regard has it far better than the US. We have massive trade deficits, diminishing manufacturing capability, and huge empire spending on top of mounting debt. I expect additional trillions spent on politically-directed stimulus in the coming few years, none of which will “reignite” the economy. Even if we spent $10T and failed, Krugman and many politicians would simply say the stimulus was not large enough.

  17. Mahtso you asked By what percent will government spending be cut? This is the first time I’ve seen the cuts characterized as “slashing” spending.

    Spending is not being cut. The only cut is to the rate of future spending increases.

  18. puzzling:

    I think it time to move to some small country which still pays lip service to free markets.

    You are right and we are done. We wont recover from this unless there is a drastict change in the ideology of Washington social welfare planners.

  19. puzzling,
    this is not the time that any spending should be cut. The proposed cuts could cost the economy 1.8 million jobs. When demand is down the government spending is needed to prop up the economy until the demand is sufficient to create jobs or until corporations are not given incentives to move jobs overseas.

  20. John Michael:

    You are not alone.

    “and then I am overcome with a feeling of impotence when I realize that I am unable to do anything about this.”

    And unless I’m misunderstanding, the President seems to feel that the next round coming in November the opposition will be more reasonable.WHAT!!!

  21. James Pence over at the Hillbilly Report is very good at summing things up with great economy of words.

    A James Pence Quote:

    “Never before have so few with so much promised to take away so much from so many and then laugh their asses off as the so many with so little vote for the so few with so much.”

  22. Obamacare has completely trapped the Democrats on fiscal policy. In order to pay for Obamacare’s trillions of dollars in new spending, they had to raise taxes by $500 and raid Medicare by another $500 billion. As a result, all the low-hanging revenue and spending fruit are already gone. As even The Washington Post’s Ezra Klein admits, the Democrats must now argue for higher taxes, and not just on the wealthy. In order to pay for all their entitlement programs, the middle class is going to have to pay more, too. But Ezra can admit this because he doesn’t have to win elections; Democrats in public offices do. That is the reason you haven’t seen a Democratic budget since Obamacare became law and it is the reason you will not see another one till at least 2013.”

  23. Roco and Kderrhoid-

    When you find your free market utopia, let me know so I can send you a nice going-away (and never coming back) gift.

    To quote the noted philosopher, Pete, “don’t let the screen door hit ya in the ass”.

  24. The big guessing game in Washington is who will serve on the 12-member bicameral “supercommittee” to work out the next round of spending cuts outlined in the debt deal reached earlier this week. It’s interesting to us insiders. And it may matter around the edges. But let’s be serious. The supercommittee is about as likely to come to an agreement as Charlie Sheen is to become a spokesman for Focus on the Family. And not only that—the chances that there will be continuing fights over the budget for fiscal year 2012, which starts Oct. 1, are still strong.

  25. eniobob,
    unfortunately I agree that it doesn’t look good in the near future. The supercommittee is a scam to my mine and the Right has already stated that they will not nominate anyone to the committee who will agree with increasing revenues.

  26. eniobob-

    You may rest assured that the consensus seeking Democrats will not upset the friendly give and take and mutual respect that President Obama has achieved, by appointing any rude fellows like Bernie Sanders or Dennis Kucinich to the superbestfriends committee.

  27. Austerity policies produce, hear me out on this, austerity. And if the nation’s governors think federal austerity is going to be good for the states, we should ask them again in 2012.

  28. “Superbestfriends committee” sounds like a fundraising gig rather than a cost cutting deal … probably has levels … silver, gold, and the ever famous, platinum. Maybe Wally O’Dell will crawl out from under his rock and beg to be admitted.

  29. From the NY Times:

    “Breaking News Alert
    The New York Times
    Thursday, August 4, 2011 — 6:31 PM EDT

    Disapproval Rating of Congress at a Record 82 Percent, Poll Finds

    The debate over raising the debt ceiling, which brought the nation to the brink of default, has sent disapproval of Congress to its highest level on record and left most Americans saying that creating jobs should now take priority over cutting spending, according to the latest New York Times/CBS News poll.

    A record 82 percent of Americans now disapprove of the way Congress is handling its job — the most since The Times first began asking the question in 1977, and even more than after another political stalemate led to a shutdown of the federal government in 1995.

    More than four out of five people surveyed said that the recent debt ceiling debate was more about gaining political advantage than about doing what is best for the country. Nearly three-quarters said that the debate had harmed the image of the United States in the rest of the world. “

  30. Blouise
    Back lash time … big time

    I think you’re right about that. Six more days ’til the Wisconsin recalls, the 6 Republicans being recalled vote on the 9th and the 2 Dems on the 19th. These elections should be like reading tea leaves for the 2012 election. There’s a lot of anger in the country aimed rightly at the House and Senate.

  31. lottakatz and HenMan (I love putting those two names together),

    The republicans are going to have to do some serious rebranding of their Tea Party label … and fast … 2012 is just around the corner.

    The democrats are going to have to do some serious work too for nobody came out of this mess clean.

  32. Isn’t it amazing that the market crashes after the debt deal is done? Was it really due to the concerns of the global economy’s woes or over the possible loss of 1.8 million jobs? Or both? Or is there something else in play? Too many questions!

  33. HenMan,

    I hope it wasn’t the ankle on the same side as your backward arm … balance is very important when hopping.

  34. Blouise-

    One of the fringe benefits of owning bobcats is the knowledge you gain of human anatomy and amateur emergency surgery. Fortunately, Treacherous Bob remembers how long he had to eat broccoli after he severed my jugular vein, so he hasn’t tried that again. He does love his Purina Bobcat Chow with homemade gravy. He also enjoys going birding with me, but he doesn’t carry the “Field Guide to North American Birds” with him, just a bottle of Heinz Ketchup.

  35. eniobob-

    I thank you for the link to the info on ALEC. I went from there to another website :

    It in turn had many links, including one on my home state called “ALEC & Wisconsin” at a website called This is a long article titled “ALEC Bills in Wisconsin”, but well worth reading to understand what a huge influence ALEC (American Legislative Exchange Council) has had in Wisconsin and what an amazing volume of toxic legislation has been passed in only 7 months. I knew that a lot of bad bills had passed in Madison under Republican control, but I had no idea of how bad it really is. This should serve as a warning to people whose states are now under Republican control or might be after the 2012 elections.

  36. now that i think about it, having a backward arm would come in handy when bandaging your ankle. you knee wouldn’t get in the way so much.

  37. pete-

    As I explained to Blouise the other day, the backward arm is highly useful when I’m fighting Bob The Ripper and his brother, Treacherous Bob attacks me from behind. I can hit The Ripper below the belt with my right hand while simultaneously throttling Treacherous Bob with my left.

  38. HenMan:

    It is really amazing,”ALEC” and it reach.Caught Senator Kerry this morning on Morning Joe which I glance at from time to time and today was the day for that glance.The Senator broke down the medias responsibility in this whole mess with the debt ceiling and the medias role in giving a 50/50 balance to a story that has the most absurd and extreme policies on one side and calls for moderation and thinking on the other.He said there is no balance and the media is being quiet about “ALEC” also.

    “ALEC” is in our statehouses folks.

  39. Case in point and how long its been going on,from HenMans link re:Wisconsin.

    “ALEC in Wisconsin

    Decades ago, ALEC targeted Wisconsin as a test case for their agenda. Tommy Thompson, who served as a state legislator from 1966-1987 and then as governor for a record 14 years, was an early ALEC member and supporter. “Myself, I always loved going to these meetings because I always found new ideas. Then I’d take them back to Wisconsin, disguise them a little bit, and declare that ‘It’s mine,'” he told an ALEC conference in 2002.

    It is now apparent that Thompson was the enthusiastic frontman for a slew of ALEC ideas and legislation — most famously “Welfare to Work” and “School Choice.” In 1990, Milwaukee’s school voucher program for low-income children was the first in the nation, the camel’s nose under the tent for a long-term agenda with the ultimate goal being the privatization of public schools.

    Wisconsin’s new governor, Scott Walker, has decided to follow in Thompson’s footsteps, pushing half dozen ALEC-inspired bills in his first weeks and months in office, yet remaining silent about the roots of these public policy “innovations.”

  40. eniobob-

    The volume of the bad legislation is astounding. With ALEC doing all the work for the legislators they can do an amazing amount of harm in just 7 months. Even if the Democrats can retake the Senate, all they can do is prevent additional damage. Without control of the Assembly, Senate, and Governorship, none of this can be undone. Also, we can’t seek help from the courts because the State Supreme Court is controlled by a Republican majority. The last three justices elected were Republicans, and all three have faced ethics charges which were dropped. A sorry situation in a state that pioneered progressive legislation in the past.

    Anyway, thanks again eniobob. I look forward to reading Elaine’s post- as always, it looks like her usual excellent research.

  41. Standard & Poors has downgraded the US to AA+.

    Link to financial news story is here:

    Here is the worst part:

    The outlook on the new U.S. credit rating is negative, S&P said in a statement, a sign that another downgrade is possible in the next 12 to 18 months.

  42. Blouise, no kidding. While I was driving today, I heard a story on the news that Wal-Mart was having some problems with their bottom line. Seems the high unemployment rate and low wages were causing their customers to have trouble affording their cheap shoddy merchandise that is mostly made with sweatshop labor overseas.

    I remember reading a story years ago about the head of the UAW being given a tour of a new highly automated General Motors plant. The plant manager was explaining how many jobs were eliminated due to automation. The UAW boss (I think it was Walter Reuther) replied, “Just how may Buick automobiles will those robots buy?”

  43. OS, I saw that earlier and had to ask myself ‘what’s in it for S&P?’ They were a big part of the problem with the run up to the housing bubble. The rating houses sold their favorable ratings like street corner ho’s so I can’t t trust them having a clean opinion. I’m not happy with the down-grade but I can’t help asking ‘who are they working for this time that benefits from this?’, ‘what’s in it for them?’

    “The Credit Rating Hoax”

    “Standard & Poor’s, the self-righteous credit-rating agency, has a damn lot of nerve. It provoked scary headlines by solemnly threatening to “short” America. That is, downgrade the credit-worthiness of US Treasury bonds unless Congress and the president oblige creditors by punishing the citizenry with severe budget cuts. What a load of crap.

    News coverage on S&P’s credit warning typically failed to mention that Standard & Poor’s itself is in utter disrepute. It was an unindicted co-conspirator in the Wall Street deceitfulness that brought the nation to financial ruin. During the bubble of inflated housing prices, S&P and other rating agencies blessed the fraud-based mortgage securities issued by Wall Street banks with AAA ratings—deceiving gullible investors around the world and assuring bloated profits (and executive bonuses) for the greedy bankers. S&P provided cover for the massive scam that led to the crisis that sank the national economy.”

  44. LK, I agree with your take on the S& P. The problem is they have a profound impact on the markets and the general economic mood of the country. For that matter the whole world. That is too freaking much power in the hands of too few.

    IMHO, the rest of the credit reporting industry is suspect as well. I have looked at my own credit report from time to time and have yet to get a copy where there was not at least one mistake. I recall one showed me to have a bunch of bank loans that were not mine. They are neither omniscient nor infallible, but the markets act as if they are.

  45. OS,
    You are correct that we may not like what S&P have done, but they will have a huge impact on the country’s credit costs and therefore, our costs. Maybe now Congress will get its act together and include serious additions on the revenue side of the ledger.

  46. Interesting article Gene. Thanks for the link. If the GOP wanted the credit rating to take a hit, they may have miscalculated the political fallout. Before the S&P downgrade, they could at least argue that they were bargaining in good faith. I don’t think they have that luxury anymore. The Dems can point to the S&P language about tax revenues and shout “I told you so!” It will make the the upcoming stock market opening on Monday, very interesting.

  47. Gene H, Excellent link, thank you.

    Rafflaw, The question is WILL the Dems make an issue of it? Will the MSM present the analysis?

  48. I have been thinking about this for the past day and did a bit of reading for background. Once again, and contrary to popular belief, it may be that Obama is the smartest guy in the room. The GOP has been maneuvered into assuming almost 100% ownership of the credit rating debacle and attendant fallout.

    There was a tea party rally in Wisconsin. Tens of people showed up. LMAO!

  49. LK:

    Heard a great discussion on my new medium (radio) the other night regarding this.

    “. It was an unindicted co-conspirator in the Wall Street deceitfulness that brought the nation to financial ruin. During the bubble of inflated housing prices, S&P and other rating agencies blessed the fraud-based mortgage” etc.

    That is what they were talking about.

    Oh hot off the “laugh” wire:

    Posted on August 6, 2011 at 8:17am by Madeleine Morgenstern Print »Email »

    Michele Bachmann called for President Barack Obama to demand Treasury Secretary Timothy Geithner’s resignation in response to S&P’s downgrade of the U.S. credit rating Friday.

  50. “August 5, 2011, 9:19 PM
    S&P and the USA
    OK, so Standard and Poors has gone ahead with the threatened downgrade. It’s a strange situation.

    On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency.”

  51. Lotta,
    I don’t think MSM will report the downgrade properly, but the language is very clear. The downgrade was caused by the lack of revenue in the agreement.

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