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S & P: America Could Default Even if Debt Ceiling is Raised

Posted By admin On July 15, 2011 @ 4:03 am In Featured Stories | Comments Disabled

Washington’s Blog [1]
July 15, 2011

As I noted [2] yesterday, America could default even if the debt ceiling is raised.

One of the big, government-sponsored American rating agencies has just confirmed my post.

Specifically, Standard & Poor’s announced [3] today:

[We're putting U.S. debt on] CreditWatch with negative implications … owing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days ….

The political debate about the U.S.’ fiscal stance and the related issue of the U.S. government debt ceiling has, in our view, only become more entangled.


We may lower the long-term rating on the U.S. by one or more notches into the ‘AA’ category in the next three months, if we conclude that Congress and the Administration have not achieved a credible solution to the rising U.S. government debt burden and are not likely to achieve one in the foreseeable future.

The Washington Post adds [4]:

S&P managing director John Chambers said in an interview … even if the parties agree to raise the debt ceiling, it may not be enough to avert a downgrade. Chambers said the country must implement a plan to reduce the annual budget deficit by roughly $4 trillion over 10 years, which makes the debt manageable over the long term.

The White House and Congress have discussed a plan that big, but negotiations have more recently centered on a smaller deal, at $2 trillion or less.

“That could still lead to a downgrade,” Chambers said.

Stock up with Fresh Food that lasts with eFoodsDirect (AD) [5]

  • A d v e r t i s e m e n t

Knee-jerk conservatives may say, “yes, we have to slash all social support programs like unemployment benefits and food stamps”.

Knee-jerk liberals might say “raise taxes instead of cutting any spending”.

But the truth is that plugging the major holes in our economy is more important than either cutting spending or raising taxes [6].

And stopping bailouts and giveaways for the top .1% of the richest elite (which weaken rather than strengthen the economy, as shown here [7], here [8] and here [9]) and slashing spending on unnecessary imperial wars (which reduce rather than increase our national security, as demonstrated here [10] and here [11]) is what the budget really needs.

As I wrote [12] last year:

Why aren’t our government “leaders” talking about slashing the military-industrial complex, which is ruining our economy with unnecessary imperial adventures [10]?

And why aren’t any of our leaders talking about stopping the permanent bailouts [13] for the financial giants who got us into this mess? And see this [14].

And why aren’t they taking away the power to create credit from the private banking giants – which is costing our economy trillions of dollars [15] (and is leading to a decrease in loans [16] to the little guy) – and give it back to the states [17]?

If we did these things, we wouldn’t have to raise taxes or cut core services to the American people.

I pointed out [18] the next month:

If there’s any shortfall, all we have to do is claw back the ill-gotten gains from the fraudsters working for the too big to fails whose unlawful actions got us into this mess in the first place. See this [19], this [20], this [21], this [22] and this [23].

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URL to article: http://www.prisonplanet.com/s-p-america-could-default-even-if-debt-ceiling-is-raised.html

URLs in this post:

[1] Washington’s Blog: http://www.washingtonsblog.com/2011/07/s-p-america-could-default-even-if-debt.html

[2] noted: http://www.washingtonsblog.com/2011/07/will-us-default-on-its-debt-even-if-it.html

[3] announced: http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3DUnitedStatesofAmerica_AAAA_7_14_11.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1243932109521&blobheadervalue3=UTF-8

[4] adds: http://www.blogger.com/Chambers%20added%20in%20the%20interview%20that%20even%20if%20the%20parties%20agree%20to%20raise%20the%20debt%20ceiling,%20it%20may%20not%20be%20enough%20to%20avert%20a%20downgrade.%20Chambers%20said%20the%20country%20must%20implement%20a%20plan%20to%20reduce%20the%20annual%20budget%20deficit%20by%20roughly%20$4%20trillion%20over%2010%20years,%20which%20makes%20the%20debt%20manageable%20over%20the%20long%20term.

[5] Stock up with Fresh Food that lasts with eFoodsDirect (AD): http://www.efoodsdirect.com/

[6] plugging the major holes in our economy is more important than either cutting spending or raising taxes: http://www.washingtonsblog.com/2011/07/what-everyone-conservatives-and.html

[7] here: http://www.washingtonsblog.com/2008/12/central-banks-central-bank-says.html

[8] here: http://www.washingtonsblog.com/2011/07/if-we-dont-break-up-giant-banks-now.html

[9] here: http://www.washingtonsblog.com/2011/07/quantitative-easing-rounds-1-and-2-hurt.html

[10] here: http://www.washingtonsblog.com/2010/01/military-industrial-compex-is-ruining.html

[11] here: http://www.washingtonsblog.com/2010/09/united-states-joint-forces-command.html

[12] wrote: http://www.washingtonsblog.com/2010/03/raise-taxes-and-cut-spending-why-not.html

[13] permanent bailouts: http://www.washingtonsblog.com/2009/10/government-trying-to-create-permanent.html

[14] this: http://www.washingtonsblog.com/2009/12/giant-banks-and-their-congressional.html

[15] costing our economy trillions of dollars: http://www.washingtonsblog.com/2009/11/trillions-in-unnecessary-interest-to.html

[16] is leading to a decrease in loans: http://www.bloomberg.com/apps/news?pid=20601087&sid=aoYm3JlMWLkY

[17] give it back to the states: http://www.washingtonsblog.com/2009/07/fdr-chickened-out-of-real-economic.html

[18] pointed out: http://www.washingtonsblog.com/2010/04/bernanke-we-must-raise-taxes-and-cut.html

[19] this: http://www.washingtonsblog.com/2009/06/hit-corporate-big-wigs-who-commited.html

[20] this: http://www.washingtonsblog.com/2009/10/ongoing-cover-up-of-truth-behind.html

[21] this: http://www.washingtonsblog.com/2009/10/elizabeth-warren-suspects-fraud-as.html

[22] this: http://www.washingtonsblog.com/2009/10/janet-tavakoli-tells-truth-to-imf.html

[23] this: http://www.washingtonsblog.com/2009/12/former-managing-director-of-goldman.html

[24] Debt Ceiling Likely to be Raised Without Fanfare This Time: http://www.prisonplanet.com/debt-ceiling-likely-to-be-raised-without-fanfare-this-time.html

[25] Will the U.S. Default On Its Debt … Even If It Raises the Debt Ceiling?: http://www.prisonplanet.com/will-the-u-s-default-on-its-debt-even-if-it-raises-the-debt-ceiling.html

[26] Pelosi urges Obama to sidestep Congress, use 14th Amendment to raise debt ceiling: http://www.prisonplanet.com/pelosi-urges-obama-to-sidestep-congress-use-14th-amendment-to-raise-debt-ceiling.html

[27] White House Defends Obama’s Senate Vote against Raising Debt Ceiling But Warns of Catastrophe If GOP Doesn’t Raise Debt Ceiling: http://www.prisonplanet.com/white-house-defends-obama%e2%80%99s-senate-vote-against-raising-debt-ceiling-but-warns-of-catastrophe-if-gop-doesn%e2%80%99t-raise-debt-ceiling.html

[28] Experts Warn of al-Qaeda Attack If Debt Ceiling Not Raised: http://www.prisonplanet.com/experts-warn-of-al-qaeda-attack-if-debt-ceiling-not-raised.html

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