nemo_wistar: (Foamy High Finger)
... or, alternatively, this is where I'll go when LJ is being DDoS'd by the Russians again.

Hi[personal profile] aubkabob !!  It's been what, two years?

So S&P downgraded our credit rating from AAA to AA+.  For more, I'm just going to quote the actual text:

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

And then there's this from Wikipedia (with citation): 

According to the CBO, the U.S. last had a surplus during fiscal year (FY) 2001. From FY2001 to FY2009, spending increased by 6.5% of GDP (from 18.2% of GDP to 24.7%) while taxes declined by 4.7% of GDP (from 19.5% of GDP to 14.8%).

The drivers of the expense increases (expressed as % of GDP) are:
Medicare & Medicaid (1.7%),
Defense (1.6%),

Income Security (unemployment benefits, food stamps (1.4%))
Social Security (0.6%), and
Other categories (1.2%).

The drivers of tax reductions are:
Individual income taxes (−3.3%),
payroll taxes (−0.5%),
corporate income taxes (−0.5%) and
other (−0.4%).

The 2009 spending level is the highest relative to GDP in 40 years, while the tax receipts are the lowest relative to GDP in 40 years. The next highest spending year was 1985 (22.8%) while the next lowest tax year was 2004 (16.1%).[63]

Sounds like S&P came to the same conclusion pretty much every sane, rational person reached as well:  decrease spending (which we all knew), and raise the goddamned taxes.  Since the tax rates are the lowest they've been in 40 years, we can afford to bump them back up to pre-2001 levels.  Hell, we'd be halfway to our goal if we did that.  Scrap two carrier groups and shit-can some pet projects in the defense world, and I'm sure we can drop the 1.6% increase in defense; it's not as if we'd fall behind without it.  Combine this with a concerted effort to reduce health care costs (which will lower the price of Medicare among other things) and we should actually begin to get somewhere.  Let's say another 1%. 

I've only narrowed the gap ... I haven't closed it or created a surplus.  Point is, we need to close it from both ends.  The American public knew this.  Democrats knew this.  S&P knows this.  Only the GOP appears to be in the constant state of denial over what's needed to get the job done.  But they're too busy pandering to the batshit crazies in their own party to care.

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