Egan-Jones Downgrades U.S. Debt

[ThisTooShallPass]

Egan-Jones has downgraded U.S. debt from AAA to AA+, with more to come if the debt situation is not gotten under control:

http://www.youtube.com/watch?v=sti35XmZkDE

E-J is not one of the big, respected agencies like Moody's and S&P, but it is one of the best out there, in part because it's funded by institutional investors, not issuers, so it has no incentive to bias the ratings positively. Surely a sign of bad things to come.

 

[ProudLefty]

Egan-Jones has downgraded U.S. debt from AAA to AA+, with more to come if the debt situation is not gotten under control:

http://www.youtube.com/watch?v=sti35XmZkDE

E-J is not one of the big, respected agencies like Moody's and S&P, but it is one of the best out there, in part because it's funded by institutional investors, not issuers, so it has no incentive to bias the ratings positively. Surely a sign of bad things to come.

Why do you say "Surely a sign of bad things to come"? Are Republicans determined to destroy America? Is getting Obama out of office that important to Republicans that they would destroy America's credit rating and crash our economy? Do Republicans believe American voters are too stupid to notice what is going on? Do Republicans believe voters will reward them in 2012? The plain fact is that if voters do anything, it will be to vote out the incumbents, just like they did in 2010, and that says bye-bye to the Republicans in the House, too. not just Democrats.

 

[ThisTooShallPass]

Why do you say "Surely a sign of bad things to come"?

Because a debt downgrade is objectively a sign of bad things to come.

Lower ratings lead to higher interest rates, which leads to higher debt service costs, which increases the deficit, which accelerates the growth of the debt:GDP ratio, which lowers ratings... This continues until the interest rates become effective recovery rates, people wash their hands of Treasury debt completely, demand for the dollar collapses, and capital flight ensues.

This is true regardless of where your political sympathies lie.

 

[ProudLefty]

Because a debt downgrade is objectively a sign of bad things to come.

Lower ratings lead to higher interest rates, which leads to higher debt service costs, which increases the deficit, which accelerates the growth of the debt:GDP ratio, which lowers ratings... This continues until the interest rates become effective recovery rates, people wash their hands of Treasury debt completely, demand for the dollar collapses, and capital flight ensues.

This is true regardless of where your political sympathies lie.

No. The downgrade is simple: It is a reaction to the fact that the US refuses to deal with the debt ceiling. Serious people look at non-serious remarks from people like Michelle Bachman and realize America has lost its ability to govern.

(Please don't respond with a lecture about all America has to do is listen to the rants of inexperienced politicians such as Paul Ryan, Rand Paul, Sarah Palin, and Michelle Bachman.)

 

[ThisTooShallPass]

No. The downgrade is simple: It is a reaction to the fact that the US refuses to deal with the debt ceiling. Serious people look at non-serious remarks from people like Michelle Bachman and realize America has lost its ability to govern.

(Please don't respond with a lecture about all America has to do is listen to the rants of inexperienced politicians such as Paul Ryan, Rand Paul, Sarah Palin, and Michelle Bachman.)

Sean Egan said explicitly in the video the issue was not the debt ceiling but the debt-to-GDP ratio. All America has to do is get its financial situation under control.

And I'm not some GOP hack. I'm not even registered to vote.

 

[Little-Acorn]

Sean Egan said explicitly in the video the issue was not the debt ceiling but the debt-to-GDP ratio. All America has to do is get its financial situation under control.

Sounds like the first crack in the dam.

We'd better relieve the pressure pronto.

And I'm not some GOP hack. I'm not even registered to vote.

Pay no attention to PL's constant stream of false info, denigration, and attempts to control what you can say here. He has nothing else. Concentrate on the real problem: The government is borrowing too much and spending too much.

 

[Openmind]

Sounds like the first crack in the dam.

We'd better relieve the pressure pronto.


Pay no attention to PL's constant stream of false info, attacks, and namecalling. He has nothing else. Concentrate on the real problem: We are borrowing too much and spending too much.

I must have missed that! Didn't see any attacks or name calling from PL!

Can you show facts, please?

 

[pocketfullofshells]

I must have missed that! Didn't see any attacks or name calling from PL!

Can you show facts, please?

fact from little accorn? good luck!

 

[pocketfullofshells]

this can't be true, Bachmann already told us nothing will happen if we don't raise the debt ceiling...so I mean it must be true right?

If we don't pass something soon...we are all F-ed major...this could be the big one that kills the company I work with...the banks failing before tried...as we where not able to get the short term loans needed to buy the needed product to have ready to go...And sad just as out company was starting to pull out of a bad few years and paid off alot of debt...At least unless the whole company, or at least my market goes down, I pretty much have a job...though I could end up making min wage if sales drop off the face of the earth..

The tea party thinks its all fun and games it seems...I wounder if they will think it was so great when its there job thats gone.

 

[ThisTooShallPass]

this can't be true, Bachmann already told us nothing will happen if we don't raise the debt ceiling...so I mean it must be true right?

If we don't pass something soon...we are all F-ed major...this could be the big one that kills the company I work with...the banks failing before tried...as we where not able to get the short term loans needed to buy the needed product to have ready to go...And sad just as out company was starting to pull out of a bad few years and paid off alot of debt...At least unless the whole company, or at least my market goes down, I pretty much have a job...though I could end up making min wage if sales drop off the face of the earth..

The tea party thinks its all fun and games it seems...I wounder if they will think it was so great when its there job thats gone.

Again, the downgrade was made because of America's debt-to-GDP ratio, not because of the debt ceiling.

Hitting the debt ceiling will do precisely nothing to impact our credit (it will, in fact, boost it, as debt will begin to be paid off), and raising it does not address the underlying issue: we're spending more money than we have.

 

[clarkatticus]

without job creation revenue will continue to dwindle until cuts cannot stem the loss. The middle class has been running in place since Reagan with no real gains while the top 5% continues to prosper. What we need is demand for product, only then will jobs recoup. The debt limit is BS arguement right now, we need to refocus on what is really needed, jobs, infrastructure, and demand. Laying off more gov employees will only make it worse. this is just social engineering by the radical GOP. Pass the debt ceiling extension, make the big deal that is offered, it will never be better for the GOP than now, then pass a jobs bill.

 

[pocketfullofshells]

Again, the downgrade was made because of America's debt-to-GDP ratio, not because of the debt ceiling.

Hitting the debt ceiling will do precisely nothing to impact our credit (it will, in fact, boost it, as debt will begin to be paid off), and raising it does not address the underlying issue: we're spending more money than we have.

you seem to miss what hitting the debt ceiling would mean...it would not mean we start paying down debt...it means we stop paying bills owed...Not paying your Min payment on the Credit card does not increase your Credit rating...

And the closer we get the more chance others will decrease our score as they don't think we will pay those debts....once me start missing payments...down we go...

 

[pocketfullofshells]

without job creation revenue will continue to dwindle until cuts cannot stem the loss. The middle class has been running in place since Reagan with no real gains while the top 5% continues to prosper. What we need is demand for product, only then will jobs recoup. The debt limit is BS arguement right now, we need to refocus on what is really needed, jobs, infrastructure, and demand. Laying off more gov employees will only make it worse. this is just social engineering by the radical GOP. Pass the debt ceiling extension, make the big deal that is offered, it will never be better for the GOP than now, then pass a jobs bill.

Republicans will never pass a jobs bill...they have not in 2 years and they will not in the next 2...better to talk about abortion and watch the econ stay in the pits...better chance for them in 2014...I hate to say a party wants the nation to fail, for its own gain...but I can't see any other reason they have done nothing on jobs..after thats all they talked about to get elected.

 

[BigRob]

you seem to miss what hitting the debt ceiling would mean...it would not mean we start paying down debt...it means we stop paying bills owed...Not paying your Min payment on the Credit card does not increase your Credit rating...

What credit card company would raise limit when you owe them $14 trillion?

And the closer we get the more chance others will decrease our score as they don't think we will pay those debts....once me start missing payments...down we go...

$14 trillion in debt and counting, no plan in place to curb spending, let alone balance the budget. If we keep doing what we are doing, we will just default anyway.

 

[BigRob]

Republicans will never pass a jobs bill...they have not in 2 years and they will not in the next 2...better to talk about abortion and watch the econ stay in the pits...better chance for them in 2014...I hate to say a party wants the nation to fail, for its own gain...but I can't see any other reason they have done nothing on jobs..after thats all they talked about to get elected.

House Republicans have passed numerous pieces of legislation focused on jobs...that legislation is sitting in the Senate...you might think about who controls the Senate schedule and what bills come to the floor before you place all of this blame at the feet of the Republicans.