A couple of years ago I ventured in this blog that a financial day of reckoning for this country was approaching. Well, it may not be a single day occurence, but it may indeed have just arrived.
S&P's decision to downgrade the US debt rating from AAA to AA+, in spite of the 'bipartisan' deal to expand the debt ceiling, has shocked the Obama Administration, and is shaking world financial markets to their foundations. Economists all across the globe are now seriously concerned about another recession, perhaps depression. If you listen to them, the message is clear - the United States government has to cut spending. This is the first time in history that US debt is not held the top rating available.
Obama's gang has accused S&P of misrepresenting Obama's debt projections in reaching their decision. What S&P did was not fall for the smoke and mirrors bullshit that Obama has been feeding to the country.
All we hear about in the mainstream media about the debt ceiling deal is how Republicans shafted
Democrats and the people by cutting spending drastically. Republicans raped the country, and is was only through Obama's bipartisan super-heroics that a deal was made. We are being led to believe that Democrats across the country are pissed at Obama for caving in. This is crap, formulated to win over independent voters by convincing them Obama is the voice of reason.
What the deal did was this: raise the debt ceiling by 2.4 trillion dollars. This is money Obama can spend immediately, and without control. Indeed, almost half of that money was spent THE VERY NEXT DAY!
It also gives the illusion of meaningful spending reductions. 1.2 trillion cut over the next 10 years, none of which is guaranteed to happen - since all of those cuts must be enacted by future versions of Congress. Even if fully enacted, this amounts to considerably less than a 10% cut.
The overall effect of the 'spending cuts' and raised debt limit reached in this deal is to add 7.4 trillion in debt to this country over the next 10 years, according to the CBO.
It also drops the spending cut ball into the lap of 12 Senators and Representatives, the Super Committee, which is charged with finding 1.5 trillion dollars in additional spending cuts by this coming Thanksgiving. Given that Dems and Republicans will stack this committee with folks who will be inflexible in their beliefs, guaranteeing that the committee will deadlock and not get anything done. If that happens, if the committee does not come up with the full amount of cuts, then an automatic cuts will occur. The automatic cuts will cut an immediate 500,000,000,000 from the Pentagon budget (not quite half of the Pentagon's entire budget), and cut Medicare reimbursement payments to providers by almost that much. (These automatics were inserted into the deal by Democrats). Dems are salivating over this - there is nothing more they could ask for than having Defense eviscerated in order to fund their social programs. Dems also love the idea of sticking it to doctors and hospitals by cutting medicare reimbursements (again), while keeping coverage requirements the same.
The whole world, even Vladimir Putin, is now telling Obama that what he is doing is insane and needs to be reveresed immediately. His Higness won't listen. His ego won't let him. His liberal indoctrination won't let him. His economic advisors, made up of academic eggheads with no real world experience, refuse to admit that their brand of economics has never worked, and can never work.
There is no question that serious adjustments to how this country operates must be made. The only question is how much longer will we leave these a*holes in power, where they will continue to block any serious attempt to turn us around.
Update - Amid GOP demands for Tim Geithner's resignation in the wake of this downgrade, Obama has come out with a strong endorsement of his Secretary of the Treasury. Unbelievable. Geithner is inept, pretending he has the knowledge and wisdom to control this country's economy. He is way out of his league. He couldn't even keep track of his own taxes, and now he's running our economy? We'd do better with no leadership rather than this 'leadership'.
Update II - Noted economic wizard Sen. John Kerry (D-MA) came out over the weekend and blamed the S&P downgrade on Tea Party extremism. Wow ... just what the hell is this idiot smoking? Actually, he's like all Democrats - complete denial that their policies are the cause of the problem. This is a perfect indicator of why there will be no meaningful attempt to correct this mess as long as they are in power.
S&P is predicting that the US national debt will reach $21 trillion in less than 10 years, if spending continues at the current pace. That does not factor in Obamacare or any additional spending Congress comes up with in the next decade. If S&P does not see significant effort by the US government to cut spending, further reductions in credit ratings are assured. One very nice byproduct of a lowered rating is that the US government will have to pay more in higher interest on the money that it continues to borrow - thereby increasing the debt even further.
Update - On a day that saw the Dow drop 633 points, Democrats, led by the Obama Administration, are putting up a united front. The S&P downgrade and all the results are completely due to the Tea Party. They don't for a minute believe that, they just will not admit they are wrong. There is nothing in their makeup or ego that will allow them to admit they are wrong. So, they blame the folks who actually are trying to do something about it.
Listen to what the S&P folks stated as to their reasoning for the downgrade. It is because of out of control spending by our government. They didn't put the Tea Party's insistence on spending cuts to be part of the debt ceiling negotiation anywhere on the list of reasons. They didn't list the debt ceiling limt as a factor at all - it is simply because Obama is completely out of control.
John Boehner and the Republicans in the House should immediately start impeachment proceedings in order to stop this lunatic.
Update - Obama's word has come down from his throne. The Tea Party is completely and totally to blame for this. Every Democrat and left wing politician, political hack, talking head, and kook in the country has been told to blame the Tea Party, and they are doing it. Hell, even world economic authority Al Sharpton led off his MSNBC program today with the headline 'It's the Tea Party's Fault, and we have to stop them'. (Yes, Al Sharpton has a show on MSNBC - you are forgiven if you did not know that - no one knows it except for the MSNBC viewing audience, which was under a half dozen people nationwide as reported during the last ratings period).