US credit rating

[thatsbaseball]

By acknowledging up front that no single person or party is to blame, is there anyway to get some of our more sophisticated investors to comment (IE tell us what this means to Joe public) on the recent down grading of our credit rating without it being turned into a political, finger pointing CF ? If you mods don't think so just lock it now....please.

 

[greenbean.sixpack]

prepare for locketh!

 

[GloryDawg]

This happened during Obama's administration, but it came back up. With 32 trillion dollars in debt, it was bound to happen. The interest payment each year alone is probably higher than most other nations GDP.

 

[SteelCurtain74]

By acknowledging up front that no single person or party is to blame, is there anyway to get some of our more sophisticated investors to comment (IE tell us what this means to Joe public) on the recent down grading of our credit rating without it being turned into a political, finger pointing CF ? If you mods don't think so just lock it now....please.

 

[dorndawg]

I'm not sure it has any bearing at all on Joe Public; it's guidance for institutional investors.

There isn't an explanation that isn't political; if you don't want to talk about that I'm not sure why you made this post? The fact is, the fundamentals of our economy and ability to pay back debt are very sound. However, we are in a situation where somewhere around1/3 of Congress is willing to default on US debt via the debt ceiling. Hence, we have 1 of the 3 credit raters getting a little squeamish.

It's honestly not a big deal, but it's not great either.

 

[GloryDawg]

I'm not sure it has any bearing at all on Joe Public; it's guidance for institutional investors.

There isn't an explanation that isn't political; if you don't want to talk about that I'm not sure why you made this post? The fact is, the fundamentals of our economy and ability to pay back debt are very sound. However, we are in a situation where somewhere around1/3 of Congress is willing to default on US debt via the debt ceiling.

There is enough tax revenue coming in to pay the interest on the national debt without doing anything. If they default it is on the Secretary of the Treasury. They decide what bills get paid and which one's don't. What bills have to paid by law is Military and SS. If the US government got to a point, it could not borrow money it is up to him or her to make that decision. Seems to me both parties spend money unwisely on Bull ****. That's what needs to not be paid for.

 

[Boom Boom]

By acknowledging up front that no single person or party is to blame, is there anyway to get some of our more sophisticated investors to comment (IE tell us what this means to Joe public) on the recent down grading of our credit rating without it being turned into a political, finger pointing CF ? If you mods don't think so just lock it now....please.

Their basic explanation is that they are losing hope that our political system will be able to continue to properly function.

Can't say I blame them.

To Joe Public, it doesn't mean squat. Institutional investors don't make decisions based on one analyst's grading. The stock market is high, bonds are cheap, that aint changing soon, and when it does change it will do so based on economic fundamentals, not political crystal ball gazing.

 

[thatsbaseball]

I'm not sure it has any bearing at all on Joe Public; it's guidance for institutional investors.

There isn't an explanation that isn't political; if you don't want to talk about that I'm not sure why you made this post? The fact is, the fundamentals of our economy and ability to pay back debt are very sound. However, we are in a situation where somewhere around1/3 of Congress is willing to default on US debt via the debt ceiling.

I can't do a thing about how we got here I just want to know where we going and what I should be prepared to do to protect myself going forward.

 

[dorndawg]

I can't do a thing about how we got here I just want to know where we going and what I should be prepared to do to protect myself going forward.

This news has literally zero effect on what ever it is that you do to be prepared to do to protect yourself going forward.

As is the case for 99% of news.

 

[ChE1997]

There is enough tax revenue coming in to pay the interest on the national debt without doing anything. If they default it is on the Secretary of the Treasury. They decide what bills get paid and which one's don't. What bills have to paid by law is Military and SSN. If the US government got to a point, it could not borrow money it is up to him or her to make that decision. Seems to me both parties spend money unwisely on Bull ****. That's what needs to not be paid for.

If we didn't keep cutting taxes on the Rich on the off chance they might drop some pennies when they get out their wallets so the government can put more into it, we could pay down the Debt and update our infrastructure to the 21st century.

We used to invest in infrastructure.

But now Companies can make horrible stupid business decisions, and get a federal bailout.

Meanwhile, the common family can have a kid get cancer and be ruined trying to pay for it.

Socialisms is here, but you have to be a billionaire to get it.

 

[dorndawg]

Socialisms is here, but you have to be a billionaire to get it.

 

[LOTRGOTDAWGFAN]

Some interesting stats to look at:
National debts by country
GDP by country
China Population trends between now and 2060
Russia Population trends since 1989.
US Foreign Assistance by Country since 2002.

Since nutcases are now clinging towards Russia and China, i think we can start cutting foreign assistance by 2/3 in many of these cases and use it to improve our infrastructure.

 

[johnson86-1]

By acknowledging up front that no single person or party is to blame, is there anyway to get some of our more sophisticated investors to comment (IE tell us what this means to Joe public) on the recent down grading of our credit rating without it being turned into a political, finger pointing CF ? If you mods don't think so just lock it now....please.

It just means we're one very small step closer to **** hitting the fan. Barring some productivity explosion, we're not going to be able to pay social security as "promised", maintain the current medicare/medicaid system, and pay back our debt. Nobody has been worried about it because of a combination of it being way in the future and/or a belief that we'd eventually make adjustments. After all, it would have only taken small adjustments to kick the can well beyond anybody's life expectancy. As we have moved further away from a time when small adjustments would move the needle a lot, we have also ramped up the crazy spending. And our politics seem more dysfunctional than they have been in the past (I'm not sure how true this is; certainly we are more dysfunctional than when we could just use pork and extra deficit spending to paper over differences).
So we are starting to have people that are paid to watch such things think that maybe the **** hitting the fan isn't so far in the future as everybody has assumed. Still not imminent or anything, but definitely close enough that even completely selfish people not worried about what happens after they die should start to have a little concern over it.

 

[johnson86-1]

If we didn't keep cutting taxes on the Rich on the off chance they might drop some pennies when they get out their wallets so the government can put more into it, we could pay down the Debt and update our infrastructure to the 21st century.

We used to invest in infrastructure.

We still spend a **** ton on infrastructure. We just pay a lot more of that amount towards grift.

But now Companies can make horrible stupid business decisions, and get a federal bailout.

Meanwhile, the common family can have a kid get cancer and be ruined trying to pay for it.

Our healthcare finance is screwed up, and we have screwed up insurance and healthcare by trying to make insurance a prepay plan instead of real insurance and by putting artificial constraints on supply, but the average out of pocket maximum for an individual on an employer plan is under $4,500 and maxed at just over $9k for an ACA plan. Completely bassackwards structure but not exactly the norm to be financially ruined by healthcare costs.

Socialisms is here, but you have to be a billionaire to get it.

Or just old. Or able to successfully BS your way through a disability claim.

 

[Boom Boom]

It just means we're one very small step closer to **** hitting the fan. Barring some productivity explosion, we're not going to be able to pay social security as "promised", maintain the current medicare/medicaid system, and pay back our debt.

Of course, we could just bring taxation back to 2000 levels (+$500B), 1980 levels (+$1T?), or European levels (+$2B), or just not waste so much money on Healthcare with a massively subsidized private system.

Nobody has been worried about it because of a combination of it being way in the future and/or a belief that we'd eventually make adjustments. After all, it would have only taken small adjustments to kick the can well beyond anybody's life expectancy.

Agreed.

As we have moved further away from a time when small adjustments would move the needle a lot, we have also ramped up the crazy spending.

agreed, spending on defense and healthcare and subsidization of private business is more and more insane every year.

And our politics seem more dysfunctional than they have been in the past (I'm not sure how true this is; certainly we are more dysfunctional than when we could just use pork and extra deficit spending to paper over differences).

They specifically cited the debt ceiling crap and called for eliminating it. A huge chunk of the risk is that we will default in the short term for no reason other than idiot politics.

So we are starting to have people that are paid to watch such things think that maybe the **** hitting the fan isn't so far in the future as everybody has assumed. Still not imminent or anything, but definitely close enough that even completely selfish people not worried about what happens after they die should start to have a little concern over it.

The Boomers will die and take their horrible politics with them, then the rest of us will start cleaning up their messes. It will be fine.

 

[Boom Boom]

Our healthcare finance is screwed up, and we have screwed up insurance and healthcare by trying to make insurance a prepay plan instead of real insurance and by putting artificial constraints on supply, but the average out of pocket maximum for an individual on an employer plan is under $4,500 and maxed at just over $9k for an ACA plan. Completely bassackwards structure but not exactly the norm to be financially ruined by healthcare costs.

for the first year. Then you get to see if your policy got renewed (yes, Obama care is supposed to have fixed this, and it did make it better, but there's still gaps I believe). Not to mention losing your job and with it your coverage.

 

[T-TownDawgg]

Pew Poll shows public trust in government at its lowest since they started gathering data on it. Keep in mind that it’s currently lower than the Carter and Nixon administrations.

When 8.5 out of 10 citizens don’t trust government to do the right thing, debt interest payments and credit ratings are downstream of much bigger issues.

 

[ChE1997]

It just means we're one very small step closer to **** hitting the fan. Barring some productivity explosion, we're not going to be able to pay social security as "promised", maintain the current medicare/medicaid system, and pay back our debt. Nobody has been worried about it because of a combination of it being way in the future and/or a belief that we'd eventually make adjustments. After all, it would have only taken small adjustments to kick the can well beyond anybody's life expectancy. As we have moved further away from a time when small adjustments would move the needle a lot, we have also ramped up the crazy spending. And our politics seem more dysfunctional than they have been in the past (I'm not sure how true this is; certainly we are more dysfunctional than when we could just use pork and extra deficit spending to paper over differences).
So we are starting to have people that are paid to watch such things think that maybe the **** hitting the fan isn't so far in the future as everybody has assumed. Still not imminent or anything, but definitely close enough that even completely selfish people not worried about what happens after they die should start to have a little concern over it.

A tax on just the rich would pay for it...

And not even raise them to the rate they were when we last had a public debt to pay off that was over GDP...

We still spend a **** ton on infrastructure. We just pay a lot more of that amount towards grift.

Cool now do the defense budget "Grift" that we keep throwing $800 billion a year into. All you need is that Audit that they have NEVER been able to pass.

Also there are 500 bridges in Mississippi that beg to differ that the amount we current spend is enough.

Our healthcare finance is screwed up, and we have screwed up insurance and healthcare by trying to make insurance a prepay plan instead of real insurance and by putting artificial constraints on supply, but the average out of pocket maximum for an individual on an employer plan is under $4,500 and maxed at just over $9k for an ACA plan. Completely bassackwards structure but not exactly the norm to be financially ruined by healthcare costs.

Yeah Not the norm at all. At least come up with believable BS or don't say made up stuff.

Medical bills account for 40% of bankruptcies
326,441 bankruptcies last year were related to an illness or injury to the filer or a family member, and 267,575 other filers had substantial medical bills and gave no reason for their bankruptcies.

100 million people in America are saddled with medical debt​

LOL Now add the employer and employee paid premiums to that $4,000 average out of pocket max. I'm sure the $10,000 per US family that the insurance companies brought in last year will help your math. Oh and add the money paid in Medicare taxes to what we spend. It's on 2x every other OCED.
For profit healthcare only helps the billionaires, and if they do something dumb like leverage everything vs the housing market and fail. Well they use the lobbyist to get Unca Sam to bail them out, while they get extra stock options. Never mind they also plan a buyback when thos eoptions vest to boost the price..

Or just old. Or able to successfully BS your way through a disability claim.

The GOP plans to take care of that for the old people with cutting Medicare.

 

[mstateglfr]

Or just old. Or able to successfully BS your way through a disability claim.

Having been married to someone that oversaw countless SSI and SSDI claims for many years, I am continually amazed there are places in this country where people can successfully BS their way through disability claims.

In my state, the bar was so absurdly high to clear, and the backlog of cases was so absurdly long(due to the default position of 'deny' for almost every initial request), that it is tough for me to see how there is widespread fraud. It wasnt financially worth attorneys taking cases that were not legitimate due to the amount of work required to prep the cases for review hearings. And people representing themselves is like a 0.2% success rate.

 

[johnson86-1]

Of course, we could just bring taxation back to 2000 levels (+$500B), 1980 levels (+$1T?), or European levels (+$2B), or just not waste so much money on Healthcare with a massively subsidized private system.

In 2000 federal receipts were 19.75% of GDP and we had a small surplus. In 2022 they were 19.23 % of GDP and we have a 1.35 trillion dollar deficit. Getting tax rates to 2000 would knock out about a tenth of that deficit. 1980 federal receipts were lower than 19%. We generally have a big spending problem, not a revenue problem.

Agreed.

agreed, spending on defense and healthcare and subsidization of private business is more and more insane every year.

They specifically cited the debt ceiling crap and called for eliminating it. A huge chunk of the risk is that we will default in the short term for no reason other than idiot politics.

In the short term, that reduces the risk of the treasury not paying debts. In the long term, it hastens the time at which we'll be insolvent. Not by much, but I'm all for kicking the can down the road as far as possible. And while there is a risk, I'd still like to think for all the bluffing by the treasury, at the end of the day they'd pay our bond payments. If we really have people in treasury that would recklessly default in order to put pressure on congress, we're so screwed it doesn't matter that much.

The Boomers will die and take their horrible politics with them, then the rest of us will start cleaning up their messes. It will be fine.

Boomers have created a lot of problems with promising themselves that future taxpayers would pay them more in social security and medicare than they'd be willing to support during their working age, but I don't think younger voters are going to be meaningfully better.

 

[Johnnie Come Lately]

I'm not sure it has any bearing at all on Joe Public; it's guidance for institutional investors.

There isn't an explanation that isn't political; if you don't want to talk about that I'm not sure why you made this post? The fact is, the fundamentals of our economy and ability to pay back debt are very sound. However, we are in a situation where somewhere around1/3 of Congress is willing to default on US debt via the debt ceiling. Hence, we have 1 of the 3 credit raters getting a little squeamish.

It's honestly not a big deal, but it's not great either.

Yes. It is driven entirely by the current political environment. If the debt ceiling game of chicken had not happened, we would not be talking about this.

 

[57stratdawg]

The GOP has weaponized the debt ceiling. Anytime we have a GOP House and Dem President, we run the risk of getting downgraded. S&P downgraded us in 2011 under Obama / Boerhner. No coincidence.

We raised the debt ceiling numerous times under Trump without issue. The incentives are different for Conservatives when there is a Republican in the White House. We’re just held captive otherwise.

 

[johnson86-1]

Having been married to someone that oversaw countless SSI and SSDI claims for many years, I am continually amazed there are places in this country where people can successfully BS their way through disability claims.

In my state, the bar was so absurdly high to clear, and the backlog of cases was so absurdly long(due to the default position of 'deny' for almost every initial request), that it is tough for me to see how there is widespread fraud. It wasnt financially worth attorneys taking cases that were not legitimate due to the amount of work required to prep the cases for review hearings. And people representing themselves is like a 0.2% success rate.

Very much location dependent, either because of administrators or particular ALJs or even district court judges. And while there is something like a 5 month waiting period to get disability, you ultimately get backpay to that date if you eventually win your appeal.

 

[ChE1997]

In 2000 federal receipts were 19.75% of GDP and we had a small surplus. In 2022 they were 19.23 % of GDP and we have a 1.35 trillion dollar deficit. Getting tax rates to 2000 would knock out about a tenth of that deficit. 1980 federal receipts were lower than 19%. We generally have a big spending problem, not a revenue problem.


In the short term, that reduces the risk of the treasury not paying debts. I'd still like to think for all the bluffing by the treasury, at the end of the day they'd pay our bond payments. But if we really have people in treasury that reckless, I'd rather find out in a technical default than when we're really in trouble.


Boomers have created a lot of problems with promising themselves that future taxpayers would pay them more in social security and medicare than they'd be willing to support during their working age, but I don't think younger voters are going to be meaningfully better.

It's a revenue problem. Because that's the easiest lever to pull to break the government. And that's the GOP goal. To get more private so the rich can get more money.

So they under fund, and they use the Debt Ceiling when they are not in power, and they cut taxes on only the rich when they are in power.

The other way they do it is they lie and say its "waste" and " corruption" and "overspending" so that normally smart people are so gaslit they think it's true too.