Michael Moore, the “documentary” film maker who has pushed various liberal causes with extraordinarily slanted films, has called on President Obama to “show some guts” and arrest the head of Standard & Poors.
“Pres Obama, show some guts & arrest the CEO of Standard & Poors. These criminals brought down the economy in 2008& now they will do it again,” Mr. Moore wrote.
Yes, it’s all S&P’s fault. Somehow the 100% of GDP debt, 4 trillion of which was heaped on the pile within the last 3 years, was an S&P plot. Apparently Moore is of the opinion that credit rating agencies ought to align themselves politically and if they don’t, or won’t, well they’re open to arrest. S&P obviously should have just kept to itself and supported the outrageous spending this administration has committed itself too.
It seems in Moore’s world the rating agency’s job is to turn a blind eye to actions and activities which, for any other country, would have earned a downgrade quite a while ago.
It it is telling that on the liberal side of things, the first inclination is to attack the messenger. And that inclination is driven by one primary thing – politics. Specifically the politics of personal destruction. The downgrade obviously hurts Obama politically. And all the spinning in the world doesn’t change that.
Because they see this as a desperate situation, the mask slips a bit and you see the true face of "liberalism". Imagine, in a Moore approved regime, how dissent would be handled if he’s now calling for the arrest of the CEO of S&P.
Mr. Moore went on to note that the “owners of S&P are old Bush family friends,” continuing a theme he has developed through several films about capitalism as essentially a crony system for the rich and Wall Street, especially the Bush family.
He went on to link approvingly to an article last week in the Guardian, a left-wing British newspaper, about a police raid in Milan against the offices of S&P and fellow ratings agency Moody’s. Italian police were searching for evidence on whether the rating agencies, in the words of a local prosecutor, “respect regulations as they carry out their work”.
Two more interesting points – somehow it is “Bush’s fault” (there’s a surprise). Additionally it is “important to respect regulations” when these agencies carry out their work. Of course Italy was downgraded by Moody’s and the reaction there by government has been much the same as here – “what us? How dare you”. Fallback? Government regulations, of course.
Naturally Moore doesn’t bother to point out that the government of Italy is run by a right-wing Prime Minister who, at any other time, he’d now be calling a “fascist” for doing that.
Vintage Moore. Vintage liberalism. Liberalism in very deep trouble. And that’s always when its inner totalitarian usually begins to show.
While all the angst and hang-wringing continue over the Giffords shooting and the false flag of “vitriolic rhetoric”, Moody’s and Standard & Poor’s Corp have again warned the US it’s credit rating is in jeopardy:
Moody’s Investors Service said in a report that the U.S. will need to reverse an upward trajectory in the debt ratios to support its triple-A rating.
"We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the U.S., the likelihood of a negative outlook over the next two years will increase," said Sarah Carlson, senior analyst at Moody’s.
Standard & Poor’s Corp. also didn’t rule out changing the outlook for its U.S. sovereign-debt rating because of the recent deterioration of the country’s fiscal situation. The U.S. has a triple-A rating with a stable outlook at both raters.
"The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the U.S. dollar" to fund its deficits, Carol Sirou, head of S&P France, said at a conference in Paris on Thursday. "But that may change. We can’t rule out changing the outlook" on the U.S. sovereign debt rating in the future, she warned. She added the jobless nature of the U.S. recovery was one of the biggest threats to the U.S. economy. "No triple-A rating is forever," she said.
Note the line I emphasized. That is the primary reason it hasn’t happened yet. The dollar is the true benchmark currency of the world. Or perhaps a better way of saying that is it is the benchmark currency of the world at least for the time being. But busting through 14 trillion dollar debt ceilings and continuing uncontrolled spending is a very quick way to have other countries consider other currencies or perhaps a market basket of currencies to replace the dollar.
If that happens, our triple-A rating will disappear faster than a pizza at a Weight Watchers convention. But even if it doesn’t, we’re well on the way to a downgrade anyway:
The most recent official figures show the ratio of federal debt to revenue averaging 397% of gross domestic product in the period to 2020, while the ratio of interest to revenue will rise to 17.6% by 2020, from 8.6% in the last fiscal year. "These figures are "quite high for an Aaa-rated country," Moody’s said.
Debt affordability is "very important to the rating process," Ms. Carlson said. U.S. general government debt affordability, including states and municipalities, is "rising over time to a high level for an Aaa-rated country," the report said.
Or said more succinctly, the only thing keeping us at the Aaa level is the fact that we are the home of the dollar. Otherwise the ratios above would most likely have seen us downgraded already.
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I’m not sure how much more of a blatant warning than this can be sounded over the financial path the Obama administration plans on taking us:
Moody’s Investor Service, the credit rating agency, will fire a warning shot at the US on Monday, saying that unless the country gets public finances into better shape than the Obama administration projects there would be “downward pressure” on its triple A credit rating.
Examining the administration’s outlook for the federal budget deficit, the agency said: “If such a trajectory were to materialise, there would at some point be downward pressure on the triple A rating of the federal government.”
That’s a very civilized way of saying “cut spending and cut borrowing or we’ll cut your credit rating so you can’t borrow and can’t spend”. The budget deficits projected by the Obama administration would eventually see 15% of the government’s future revenue committed to debt service – about the same as in 1983. However:
This time the servicing burden would be harder to reverse, however, because it would not be caused by high interest rates but by high debt levels.
Moody’s says it doubts the political will to raise taxes significantly from their present 14.8% of national income level or to cut spending from 25.4% of national income. That, of course, means an ever increasing gap between revenue and spending and jeopardizes the nation’s credit rating.
Moody’s isn’t the first rating firm to issue this type warning:
The report follows concerns recently expressed about the US public finances from the other large rating agencies. Standard & Poor’s warned last week the triple A status of the US was at risk unless the country adopted a credible medium-term plan to rein in fiscal spending. Fitch Ratings issued a critical report on the US in January.
Fitch said: “In the absence of measures to reduce the budget deficit over the next three to five years, government indebtedness will start to approach levels by the latter half of the decade that will bring pressure to bear on the triple A status.”
Or, we’re headed toward a financial cliff and right now our leadership is hitting the accelerator. If you think we have financial problems now, watch what happens of we suffer through the downgrading of our national credit rating.
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