You have a habit of lapsing into vague terms when pressed on things Ethan. What precisely do you mean by 'the underlying economy' when you say cutting VAT and generating a green economy will destroy it?

Are you serious? You are always quick to have a go at people for their suggestions but this is positively barking. If High Street banks had been allowed to fail, millions of people would have been left unable to access their own money for months while the compensation scheme was sorted out. Are you really saying that people should be punished for failing to spot that some of the most senior people at their chosen bank were dickheads?

 

The amount that people would lose from allowing banks to fail is exponentially less than they amount every single man, woman and child has to bear due to continually bailing out banks.... I've actually done some research into this, so, no, I dont consider it barking mad in principle, I consider allowing this situation with banks that are "too big to fail" and potentially future endless bail-outs, which the tax-payer is burdened with, to be utterly f**king barking mad, and so did Obama, until he sold out every single good principle he ever had and allowed Wall Street and The Republicans to dictate his policies..... In fact, a certain George Osborne was going to do something about it as well, until his chums in the City tapped him on the shoulder.....

 

There's actually a hell of a lot of economists out there that agree with me....

CUTS need to include bailouts for banks and corporations, foreign aid, non-essential defence spending; not just government cuts on the thin side of the wedge: departments and services. GROWTH needs to come from the private sector in this country.

 

Growth isn't going to come if you cut and make hundreds of thousands of people redundant though, is it....? You, the Tories and the Republicans fail to understand the first rule of Keynsian economics - in a recession, when people stop spending, the government needs to continue spending in order to create the jobs, get people paying taxes and get them contributing to the economy... THAT is the only way Growth happens in a recession/depression state that we have now.... The State must do what appears to be counter-intuitive.... Of course, in the 1930s, you didn't have this bullshit ECB nonsense or the IMF breathing down your neck in order to basically destroy the ability of sovereign nations to determine their own fiscal policy.... I've always been Pro-European, but this form of European integration is a sick joke, because it's basically French and German banks in cahoots with the IMF and the ECB to destroy sovereign nations like the PIIGS...... Of course they tried their tricks on Iceland, but Iceland told them where to stick it, because they're not beholden to the Eurozone... Good for Iceland.....

 

America had better get ready to clench its butt-cheeks.....

 

US loses AAA credit rating after S&P downgrade

Source BBC

 

One of the top credit rating agencies, Standard & Poor's, has downgraded the United States' top-notch AAA rating for the first time ever.

 

S&P cut the long-term US rating by one notch to AA+ with a negative outlook, citing concerns about budget deficits.

 

The agency said the deficit reduction plan passed by the US Congress on Tuesday did not go far enough.

 

Washington was locked in months of acrimonious partisan bickering over a bill to raise the US debt ceiling.

 

A US treasury department spokesman said of the S&P analysis: "A judgment flawed by a $2 trillion [£1.2 trillion] error speaks for itself." He did not offer any immediate explanation.

 

But earlier, as rumours swirled about the downgrade on Friday evening, officials in Washington were telling US media that S&P's sums were deeply flawed.

 

The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened”

 

The unnamed sources were quoted as saying that a treasury official had spotted a $2tn mistake in the agency's report.

 

John Chambers, chairman of S&P's sovereign ratings committee, told CNN that the US could have averted a downgrade if it had resolved its congressional stalemate earlier.

 

"The first thing it could have done is raise the debt ceiling in a timely matter so the debate would have been avoided to begin with," he said.

 

The other two major credit rating agencies, Moody's and Fitch, said on Friday night they had no immediate plans to follow S&P in taking the US off their lists of risk-free borrowers.

 

The S&P announcement comes after a week of turmoil on global stock markets not seen since the days of the 2008 economic crisis.

 

Correspondents say the downgrade could erode global investors' confidence in the world's largest economy, which is already struggling with huge debts, unemployment of 9.1%, and beset by fears of a possible double-dip recession.

 

S&P had threatened the downgrade if the US could not agree to cut its federal debt by at least $4 trillion over the next decade.

 

Instead, the bill passed by Congress on Tuesday envisages $2.1tn in savings over 10 years.

 

S&P said the Republicans and Democrats had only been able to agree "relatively modest savings", which fell "well short" of what had been envisaged.

 

The agency also noted that the legislation delegates the lion's share of savings to a bipartisan committee, which must report back to Congress in November on where the axe should fall.

 

The bill - which also raises the federal debt limit by up to $2.4tn, from $14.3tn, over a decade - was passed on Tuesday just hours before the expiry of a deadline to raise the US borrowing limit .

 

S&P said in its report issued late on Friday: "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics.

 

"More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges."

 

The agency said it might lower the US long-term rating another notch to AA within the next two years if its deficit reduction measures were deemed inadequate.

 

S&P noted that the bill passed by Congress this week did not include new revenues - Republicans had staunchly opposed President Barack Obama's calls for tax rises to help pay off America's deficit.

 

The credit agency also noted that the legislation contained only minor policy changes to Medicare, an entitlement programme dear to Democrats.

 

"The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed," it added.

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Oh dear..... Oh dear oh dear oh dear......... :mellow:

The amount that people would lose from allowing banks to fail is exponentially less than they amount every single man, woman and child has to bear due to continually bailing out banks.... I've actually done some research into this, so, no, I dont consider it barking mad in principle, I consider allowing this situation with banks that are "too big to fail" and potentially future endless bail-outs, which the tax-payer is burdened with, to be utterly f**king barking mad, and so did Obama, until he sold out every single good principle he ever had and allowed Wall Street and The Republicans to dictate his policies..... In fact, a certain George Osborne was going to do something about it as well, until his chums in the City tapped him on the shoulder.....

 

There's actually a hell of a lot of economists out there that agree with me....

That doesn't address the fact that people will have been left with no access to their own money for months. Nor does it address what would have happened to the remaining banks as their customers lost confidence.

 

Of course allowing banks to become too big to fail was a huge mistake. The deregulation of the banks under that dreadful woman was always a massive risk and we are now living with the consequences. Yes, Labour could have reversed that. However, it would have take up a lot of time (far longer than it took to scrap the regulations) and they would have taken a lot of flak. It is understandable why they didn't do it. That isn't to say they made the right decision. I'm just saying that I can understand why they didn't do it. Of course Blair probably wouldn't have been too keen on the idea anyway but, even if John Smith had lived, I'm sure they would have made the same decision.

Of course allowing banks to become too big to fail was a huge mistake. The deregulation of the banks under that dreadful woman was always a massive risk and we are now living with the consequences. Yes, Labour could have reversed that. However, it would have take up a lot of time (far longer than it took to scrap the regulations) and they would have taken a lot of flak. It is understandable why they didn't do it. That isn't to say they made the right decision. I'm just saying that I can understand why they didn't do it. Of course Blair probably wouldn't have been too keen on the idea anyway but, even if John Smith had lived, I'm sure they would have made the same decision.

 

It may be "understandable", but Labour should have taken the flak, they had a massive majority in '97 and likely could've just about forced any bill through that they wanted to.... TBH, I think it was cowardice, and they just did what Wall Street told them... New Labour allowed the problem to get worse, and the unforgiveable mistakes that Brown made compounded it , taking away regulartory powers from the Bank of England and forming the terminally hopeless FSA, and then selling our gold reserves.... Both were beyond stupid.... Do you think FDR cared how much flak he took when he reformed the banks...? No, he didn't, he got on with it because he was a real leader, not a shiny suit full of piss and hot air like B-Liar and Sca-Moron....

 

AAA-rmageddon..... :mellow:

It may be "understandable", but Labour should have taken the flak, they had a massive majority in '97 and likely could've just about forced any bill through that they wanted to.... TBH, I think it was cowardice, and they just did what Wall Street told them... New Labour allowed the problem to get worse, and the unforgiveable mistakes that Brown made compounded it , taking away regulartory powers from the Bank of England and forming the terminally hopeless FSA, and then selling our gold reserves.... Both were beyond stupid.... Do you think FDR cared how much flak he took when he reformed the banks...? No, he didn't, he got on with it because he was a real leader, not a shiny suit full of piss and hot air like B-Liar and Sca-Moron....

Did Roosevelt have 24 hour news channels to contend with? Did Roosevelt have the likes of the Daily Mail to worry about? An attempt to reimpose banking regulation would have united the Tories far more effectively than anything Labour actually did in their first term - including the hunting ban and abolition of most of the hereditary peers. Comparing the UK in the 1990s with the US in the 1930s is like chalk and cheese.

Did Roosevelt have 24 hour news channels to contend with? Did Roosevelt have the likes of the Daily Mail to worry about? An attempt to reimpose banking regulation would have united the Tories far more effectively than anything Labour actually did in their first term - including the hunting ban and abolition of most of the hereditary peers. Comparing the UK in the 1990s with the US in the 1930s is like chalk and cheese.

 

Roosevelt met with a LOT of hostility from the Left and Right political camps, and back then you had a guy called J Randolph Hearst who was basically the equivalent of Rupert Murdoch... Dont imagine just because it was the 1930s that there wouldn't have been lots of pressures brought to bear on him...

 

And, please, dont bleat to me how hard Nu Labor had it and how they wouldn't be able to do this or that.... What the fukk is Tony B-Liar doing these days...? I'll tell you what he's doing, he's on the board of J P Morgan, so let's not kid ourselves where his bread was really buttered.....

Anyway, I think now with the down-grade of the US, which has absolutely been caused by The Republicans and their power-plays in Washington, Obama now has to come out fighting and stop trying to appease these psychos..... At the end of the day, it's the Republicans' fault that this down-grade has happened.....

http://www.standardandpoors.com/servlet/Bl...dervalue3=UTF-8

 

Here's the link to the full text of the Standards and Poor adjustment.....

 

I have to wonder about the Ratings Agency credibility though, wasn't it this lot who were saying that the Sub-Prime mortgage/CDO market and the Icelandic banks were AAA investments....??

 

You'll have to forgive my skepticism that these "rating agencies" really have anyone's interests other than their own at heart.....

Surely if the US were "near a catostrophic default" then their rating should be MUCH lower anyway? :/ I don't understand how you can go from AAA to SD/D in a matter of hours, which people said would happen if Obama didn't reach a deal by last Tuesday. :lol:

 

I think the only way to solve this is for the Euro to be dismantled in phases. The first phase should be to let Greece default and leave the Euro. Next, Ireland should go back to the punt (and default) and shouldn't mint 1p or 2p coins because they're useless, and round prices off to the nearest punt or multiple of 5s or 10s (basically cutting out the stupid "only £54.99!!!" crap - but this is purely a selfish request on my part :P). Portugal should go back to the escudo and do the same. Then Spain, followed by Italy and Belgium. If that doesn't solve it then it's not our problem. But of course this won't happen. We'll just keep going along with it and eventually it'll collapse in spectacular fashion and we're all left to pick up the pieces (again). :(

http://www.standardandpoors.com/servlet/Bl...dervalue3=UTF-8

 

Here's the link to the full text of the Standards and Poor adjustment.....

 

I have to wonder about the Ratings Agency credibility though, wasn't it this lot who were saying that the Sub-Prime mortgage/CDO market and the Icelandic banks were AAA investments....??

 

You'll have to forgive my skepticism that these "rating agencies" really have anyone's interests other than their own at heart.....

These ratings agencies just cause problems. I understand the purpose they serve, but they have far too much power to basically bankrupt a firm if they don't like the direction it is heading in. The same with a country. If they'd have just left Portugal and Ireland some time to get their shit in order instead of downgrading them to junk status I don't think they'd be in half the mess they are currently.

 

These ratings agencies just cause problems. I understand the purpose they serve, but they have far too much power to basically bankrupt a firm if they don't like the direction it is heading in. The same with a country. If they'd have just left Portugal and Ireland some time to get their shit in order instead of downgrading them to junk status I don't think they'd be in half the mess they are currently.

 

I would tend to agree, their involvement in the 2008 banking crisis was incredibly dubious... They were being paid by the very financial institutions whose products they were rating.... Frankly, they sound plain crooked in a way.....

 

I would tend to agree, their involvement in the 2008 banking crisis was incredibly dubious... They were being paid by the very financial institutions whose products they were rating.... Frankly, they sound plain crooked in a way.....

They are. I had to learn about them on for one of my subjects in my final year and they financial institutions actually feed the ratings agencies information and regularly invite them to various pompous events in the hope of getting a good rating.

 

The system is completely corrupt.

The ratings agencies are just one of the unelected forces which can drive a country towards bankruptcy. Currency speculators can also exercise a lot of power. After all, the collapse of the pound in 1992 was helped on its way by George Soros who made hundreds of million pounds in the process.

 

If an individual or institution uses billions of pounds to bet on a currency falling, that will help to make it happen. They can do the same thing to a company by betting on their shares falling.

As alarmed as I am about what's about to happen, I have to admit inspite of myself I'm feeling quite smug. The Left was warning a year ago that austerity at this time was a recipe for disaster and would lead to a Depression, but the Right arrogantly ignored it. Unfortunately, they (the British government, the leading Eurozone governments and the Republicans in the US) are probably going to carry on ignoring it until they have absolutely no choice and will carry on insisting slashing spending is the answer until there's absolutely no alternative. And also unfortunately, thanks to Blairites, Labour in the UK have positioned themselves too timidly (by saying there should be some cuts, etcetc) that the public won't give them much credit when austerity is shown to be such a failure.

Really? The general Labour message I've seen is that cuts are inevitable but not for now - after all, we did fight an entire election campaign on the basis of putting them back a year and letting the economy recover first. I think it's pretty unquestionable that cuts (or tax rises) will be needed eventually to close the deficit, it's just a matter of when. Now is quite clearly not when they're needed...

 

Sadly I'm pretty resigned to the fact that the Right will win this meltdown again. The Left are in complete disarray across the world and most of the people supposed to be winning the argument for us haven't yet learned the techniques of framing - if the Right could find a way out of getting the blame for the last crisis, you can be certain they'll do it again for this. Deep down, at my most pessimistic, I actually think we'll need another crisis after this one before people start to get the message that the Right is simply wrong on the way out with this. There's only so many times you can preach austerity before people realise it isn't working, but I think the Right will find another roll of the dice by blaming this all on the Euro and taking down the EU as anything more than a free trade zone project with it...

Really? The general Labour message I've seen is that cuts are inevitable but not for now - after all, we did fight an entire election campaign on the basis of putting them back a year and letting the economy recover first. I think it's pretty unquestionable that cuts (or tax rises) will be needed eventually to close the deficit, it's just a matter of when. Now is quite clearly not when they're needed...

 

Tbh, I've found over the last year that most people (certainly people our age) just think there would be no difference if Labour was in government now because the assumption is that there HAS to be cuts - and that's because the Labour leadership have become completely terrified of making the argument that stimulus is the way out of recession, for fear of coming across as 'deficit deniers'.

I don't think they've been that terrified, at least from the Shadow Chancellor perspective. Ed Balls has mentioned the Darling Plan through gritted teeth at best over the last year but he's been very tough on the growth denier line and pretty much echoed in tone his Bloomberg speech from last year. The main issue is that Labour really haven't been getting a hearing at all from the public prior to Hackgate...