By Moodys. Here is the key to rating downgrades. Moodys Expects To Cut US Rating Without Deal To Lower Debt/GDP Ratio. Democrats think the only way to do that is to increase taxes putting more strain on a faltering economy and increased government spending (investments in dem speak). Republicans think the only way is to cut taxes, or at least not increase them to spur the economy and reduce spending. The way I see it is that the tax increases that the Dems want, even if fair, will not come close to tackling the problem of debt/GDP ratio. Military spending can be reduced without wars, but not by as much as people think. The elephant in the room is the "third rail" in politics, entitlement spending. The unfunded liability tops 80 trillion or in other words, the government projects that it has 80 trillion in spending that revenue projections will not cover. Of course most of this could be gotten rid of instantly if Congress changed the terms of SS or Medicare or got rid of them entirely but since no one thinks that will happen and progressives want more, it will only increase.
Cut taxes and then increase the DOD and DHS budgets...this makes what kind of sense again? Maybe...just maybe...people might take Republicans seriously if they slashed every budget extensively and then also cut taxes. Just a thought.
This is inevitable under Obamanomics. But Obama will play the victim, blame it on republican obstructionists and the media will follow through with pointed accusations directed at Rep's, not dem's, in Congress. Obama will get a pass and continue his campaign without ever having to seriously address the issue. Unless, of course, you count those hard hitting questions posed by Vanity Fair.
more like republicans blockonomics, if you want to blame Obama you have to let Obama call the shots, if your party blocks Obama, then it's all on your party
I agree, time to cut social spending on the RICH, time for them to pay the same tax per dollar as the working class
Another stimulus will not really benefit the debt/GDP ratio considering it will be 1/<1 without any direct tax revenue associated.
Actually, it would be pretty (*)(*)(*)(*) easy to knock down our debt if we start cutting military spending (not sure why you think it can't be reduced too much besides the military industrial complex's hold over the Administration's defense budget), and increasing the marginal tax rates back to Clinton levels. Or even Reagan-esque levels.
Because doing both of those do not dent the coming spending on entitlements. That is the real problem.
The problem is more complex and a number of neccessary steps includiing deleting proping of too big to fail is outlined in a Romney-Rayan proposal.
It will happen on Obama's watch and he doesn't know what to do about it. I guess he will blame it on Bush or Romney. A downgrade will just grease the skids on the downhill slide we are on.
How awful. For God's sake, let's elect a bunch of rigid ideolouges who will not compromise one inch on what they want. It's our only hope.
If the Govt were to collect the same % of GDP in revenues as it did in 2000, when the economy was enjoying the longest boom in post WWII history, revenue collections would be about $750-800 billion higher. That comes pretty close in my view.
