Home > Fande = Fact & Evidence, The Economy > Stop Voting for Republicans: Their corruption and obstructionism took us from AAA to AA+

Stop Voting for Republicans: Their corruption and obstructionism took us from AAA to AA+

Last night I watched CNN’s Anderson Cooper conduct a live interview of John Chambers, the head of sovereign ratings at Standard & Poor’s. Mr. Chambers specifically talked about “Revenues.” Revenues is the key word. Revenues. You know what that means. Mr. Chambers talked about the unwillingness of Republicans to cooperate, the unwillingness of Republicans even to consider raising revenues, and the unnecessary time-crunch in raising the debt limit due to Republican intransigence. Republicans Are The Problem. We need to raise revenues. We need to raise taxes on the rich. Read the report for yourself and do a keyword search for “revenue”:

source: http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3DUS_Downgraded_AA%2B.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1243942957443&blobheadervalue3=UTF-8

EXCERPT:

“Compared with previous projections, our revised base case scenario now

assumes that the 2001 and 2003 tax cuts, due to expire by the end of

2012, remain in place. We have changed our assumption on this

because the majority of Republicans in Congress continue to resist 

any measure that would raise revenues….

Outlook

The outlook on the long-term rating is negative. As our downside alternate

fiscal scenario illustrates, a higher public debt trajectory than we currently

assume could lead us to lower the long-term rating again. On the other hand,

as our upside scenario highlights, if the recommendations of the Congressional

Joint Select Committee on Deficit Reduction–independently or coupled with

other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for

high earners–lead to fiscal consolidation measures beyond the minimum

mandated, and we believe they are likely to slow the deterioration of the

government’s debt dynamics, the long-term rating could stabilize at ‘AA+’.”

_______________________________________________________________________________________________________________________

Read more: http://www.nytimes.com/2011/08/07/opinion/sunday/the-truth-about-taxes.html?ref=opinion

_________________________________________________________________________________________________________________________

George W. Bush took us on a wild ride, and he lost us our AAA rating.  Mr. Bush, you are an oblivious version of Godzilla if you do not realize that you – as the President of the United States during the Subprime Mortgage Meltdown fostered by your party’s false ideology of little-to-no regulation – shoulder the blame for the fallout. If you planned to steal Trillions of dollars for the benefit of military contractors and Tax-Cut fiends, then you accomplished your goals. My God, your dangerous leadership destroyed our economy. It’s official: we’re slipping. The reasons for the downgrade from AAA to AA+ did not happen overnight; the economic machinations that led to the Great Recession happened during the 8 years that George W. Bush lived in the White House. We are still cleaning up the messes (plural) left behind by Bush, Cheney & Co.

We need to raise taxes on the rich in order to raise revenues. It’s time to readjust tax levels to the Clinton years. Roughly ninety-five percent of Americans make less than $250,000 per year. Anybody making over $250k per year is rich, and they should not get tax breaks they don’t need when the majority of Americans are struggling to survive the fallout from this Rich Man’s game of destructive finances, known as Wall Street derivatives tied to people’s home loans around the country turned into the Great Recession.

Mr. Bush, you let us down. You did not protect us from the greed and corruption. Instead, you encouraged it by making Goldman Sachs’ CEO the United States Treasury Secretary in 2006. But not just any CEO from Goldman Sachs. Hank Paulson was instrumental in making the Subprime Crisis worse when he was in charge of the biggest bank on Wall Street, before he upgraded to the place where they actually print the money.

And keep in mind, Standard & Poor’s (along with the other ratings agencies) got everything wrong during the Subprime-Mortgage Securities and Derivatives heyday.

_________________________________________________________________________________________________________________________

source: http://www.nytimes.com/2011/08/06/business/us-debt-downgraded-by-sp.html?_r=1&hp

EXCERPTS:

“The federal government makes about $250 billion in interest payments a year, so even a small increase in the rates demanded by investors in United States debt could add tens of billions of dollars to those payments.

In addition, S.& P. may now move to downgrade other entities backed by the government, including Fannie Mae and Freddie Mac, the government-controlled mortgage companies, raising rates on home mortgage loans for borrowers.

However, because Treasury bonds have always been considered perfectly safe, many rules prohibiting institutions from investing in riskier securities are written as if there were no possibility that the credit rating of Treasuries would be less than stellar.

Banking regulations, for example, accord Treasuries a special status that is not contingent on their rating. The Fed affirmed that status in guidance issued to banks on Friday night. Some investment funds, too, often treat Treasuries as a separate asset category, so that there is no need to sell Treasuries simply because they are no longer rated AAA. In addition, downgrade of long-term Treasury bonds does not affect the short-term federal debt widely held by money market mutual funds.

In other words, almost no one would be precluded from investing in federal debt, and even the ratings agencies have concluded that few investors would walk away voluntarily.”

For Perspective:

More from Matt Taibbi...

EXCERPT:

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

http://broadcatching.wordpress.com/2009/04/06/matt-taiibi-the-big-takeover-rolling-stone-magazine/

“The situation worsened in 2004, in an extraordinary move toward deregulation that never even got to a vote. At the time, the European Union was threatening to more strictly regulate the foreign operations of America’s big investment banks if the U.S. didn’t strengthen its own oversight. So the top five investment banks got together on April 28th of that year and — with the helpful assistance of then-Goldman Sachs chief and future Treasury Secretary Hank Paulson — made a pitch to George Bush’s SEC chief at the time, William Donaldson, himself a former investment banker. The banks generously volunteered to submit to new rules restricting them from engaging in excessively risky activity. In exchange, they asked to be released from any lending restrictions. The discussion about the new rules lasted just 55 minutes, and there was not a single representative of a major media outlet there to record the fateful decision.

Donaldson OK’d the proposal, and the new rules were enough to get the EU to drop its threat to regulate the five firms. The only catch was, neither Donaldson nor his successor, Christopher Cox, actually did any regulating of the banks. They named a commission of seven people to oversee the five companies, whose combined assets came to total more than $4 trillion. But in the last year and a half of Cox’s tenure, the group had no director and did not complete a single inspection. Great deal for the banks, which originally complained about being regulated by both Europe and the SEC, and ended up being regulated by no one.

Once the capital requirements were gone, those top five banks went hog-wild, jumping ass-first into the then-raging housing bubble. One of those was Bear Stearns, which used its freedom to drown itself in bad mortgage loans. In the short period between the 2004 change and Bear’s collapse, the firm’s debt-to-equity ratio soared from 12-1 to an insane 33-1. Another culprit was Goldman Sachs, which also had the good fortune, around then, to see its CEO, a bald-headed Frankensteinian goon named Hank Paulson (who received an estimated $200 million tax deferral by joining the government), ascend to Treasury secretary.

And the Fed isn’t the only arm of the bailout that has closed ranks. The Treasury, too, has maintained incredible secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. To this date, no one knows exactly what criteria the Treasury Department used to determine which banks received bailout funds and which didn’t — particularly the first $350 billion given out under Bush appointee Hank Paulson.

The situation with the first TARP payments grew so absurd that when the Congressional Oversight Panel, charged with monitoring the bailout money, sent a query to Paulson asking how he decided whom to give money to, Treasury responded — and this isn’t a joke — by directing the panel to a copy of the TARP application form on its website. Elizabeth Warren, the chair of the Congressional Oversight Panel, was struck nearly speechless by the response.

‘Do you believe that?’ she says incredulously. ‘That’s not what we had in mind.’

Another member of Congress, who asked not to be named, offers his own theory about the TARP process. ‘I think basically if you knew Hank Paulson, you got the money,’ he says….

That’s the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers’ credit card.”

Read more: https://fandecande.wordpress.com/?s=taibbi

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