Fitch credit agency warns about possible US credit downgrade.....

[Matt1970]

Obama entered office January of 2009 and started his 2nd term in January of 2013 correct? I distinctly remember there being an election in November of 2008 and then again in November of 2012.

When he entered office the deficit was $1.4T. It is now $759B and projected to be less.

Spin it some more.

When Bush Jr. entered office the SURPLUS WAS $127B. When he left there was a deficit of $459B approaching $1.4T.

There is no spin. The deficit was not cut in half January of 2013. But Buuuuuuush.

 

[Darwin333]

OP clearly doesn't have any idea what he is talking about since reaching the debt ceiling and defaulting are different. If the payments on the interest are made then there isn't a problem.

Fox News is right and the OP is wrong.

While I agree that the interest on the debt can be paid as well as rolling over existing debt, simply having enough revenue to make your interest payments is not the only thing that goes into a credit rating for any entity.

I have the income to pay the interest on well over a million dollars in loans. However that wouldn't leave me with nearly enough money for even bare necessities. You see, creditors are well aware that given the choice between paying your interest payments and eating you will choose to eat. Its no different from other necessities, so just because we have the money to pay the interest payments doesn't mean that we wouldn't eventually cave to public demand and spend the money on something other than interest on the debt.

 

[Darwin333]

I think the consensus is that IF the US defaults it will mark the end of US power globally. Nobody will take the US seriously anymore. End of an empire type talk although they are surprised that it could happen so fast.

If the US defaults the "end of an empire" would be the very last thing that the world would be thinking or concerned with.

 

[Darwin333]

Obama entered office January of 2009 and started his 2nd term in January of 2013 correct? I distinctly remember there being an election in November of 2008 and then again in November of 2012.

When he entered office the deficit was $1.4T. It is now $759B and projected to be less.

Spin it some more.

When Bush Jr. entered office the SURPLUS WAS $127B. When he left there was a deficit of $459B approaching $1.4T.

$495 approaching $1.4T???? I find it rather hard to follow that any number is "approaching" another when the other is triple of the first.

It does remind me of the rather ironic point that I thought the Bush deficits were reckless but damn do I miss "only" having a $400ishB deficit.

 

[Matt1970]

$495 approaching $1.4T???? I find it rather hard to follow that any number is "approaching" another when the other is triple of the first.

It does remind me of the rather ironic point that I thought the Bush deficits were reckless but damn do I miss "only" having a $400ishB deficit.

Yep, those $400 Billion deficits were unpatriotic, anAmerican.

 

[Incorruptible]

Yep, those $400 Billion deficits were unpatriotic, anAmerican.

Gotta love the hypocrisy of obama. He criticizes it when it was bush but it's alright for him to do it.

 

[Fern]

Deficit in 2009: $1.4 trillion (Congress and Bush had already authorized nearly 1.2 trillion of it before BO ever took office).

Projected deficit in 2013: $642 billlion (http://www.cbo.gov/sites/default/files/cbofiles/attachments/Table_1-revised_GDP_projections.pdf)

That's about a 55% reduction..........

Really?

You going to compare 2009 to 2013, or any year for that matter? Where there any one-time massive expenses in 2009 that you can remember? If 2009 had a massive one-time expenditure doesn't that make it an absurd year to use as a comparison?

Fern

 

[Bowfinger]

Really?

You going to compare 2009 to 2013, or any year for that matter? Where there any one-time massive expenses in 2009 that you can remember? If 2009 had a massive one-time expenditure doesn't that make it an absurd year to use as a comparison?

Fern

As I pointed out the last time you made this claim, that purported "one-time" expenditure was almost matched in both 2010 and 2011. Both years were about $1.2B vs. the $1.4B in 2009. Last time I checked, 1 != 3.

Further, this whole tactic of claiming certain expenses don't count because they're "one-time" is nonsense. The Bush administration used that dodge repeatedly to hide his war expenses, but that didn't keep the debt from doubling. It's results that matter, not rationalizations about why it's OK to ignore data you don't like.

 

[Fern]

As I pointed out the last time you made this claim, that purported "one-time" expenditure was almost matched in both 2010 and 2011. Both years were about $1.2B vs. the $1.4B in 2009. Last time I checked, 1 != 3.

Further, this whole tactic of claiming certain expenses don't count because they're "one-time" is nonsense. The Bush administration used that dodge repeatedly to hide his war expenses, but that didn't keep the debt from doubling. It's results that matter, not rationalizations about why it's OK to ignore data you don't like.

Yes, large one-time expenditures most certainly do count in any comparison. That is a financial fact. You'll note that financials for large corporation must be prepared segregating such large one-time events (either revenue or expenses) precisely for comparative purposes.

Moreover, the large one-time TARP bailout in the 2009 fiscal year was basically a loan yet those are accounted for as expenses. Further as the loan was repaid it later years it is accounted for as a negative expenses (reduces other expenses).

We have no large one-time expenditure in 2013 while we did in 2009. Thus it's a very very poor choice for comparison unless you adjust for the one-time difference in the year of spending and any amounts paid back in a later relevant year.

I have no problem with segregating normal govt operating budgets and funds for war. While the war funds were not limited to any one year they are "unusual expenses" and should be segregated for comparison purposes of op budgets. And unlike govt programs in the op budget, wars eventually end.

Fern

 

[Ryan]

Yes, large one-time expenditures most certainly do count in any comparison. That is a financial fact. You'll note that financials for large corporation must be prepared segregating such large one-time events (either revenue or expenses) precisely for comparative purposes.

Moreover, the large one-time TARP bailout in the 2009 fiscal year was basically a loan yet those are accounted for as expenses. Further as the loan was repaid it later years it is accounted for as a negative expenses (reduces other expenses).

We have no large one-time expenditure in 2013 while we did in 2009. Thus it's a very very poor choice for comparison unless you adjust for the one-time difference in the year of spending and any amounts paid back in a later relevant year.

I have no problem with segregating normal govt operating budgets and funds for war. While the war funds were not limited to any one year they are "unusual expenses" and should be segregated for comparison purposes of op budgets. And unlike govt programs in the op budget, wars eventually end.

Fern

Go back and look at what I quoted. I wasn't the one who made the comparison, I just simply pointed out a flawed talking point the Eagle keeper was using......

 

[Mr. Pedantic]

Hitting the debt ceiling has nothing to do with our ability to service the debt. These people are just doing this for attention and a reaction.

What does reality have to do with it? Debt is all about perception.

 

[Bowfinger]

Yes, large one-time expenditures most certainly do count in any comparison. That is a financial fact. You'll note that financials for large corporation must be prepared segregating such large one-time events (either revenue or expenses) precisely for comparative purposes.

Moreover, the large one-time TARP bailout in the 2009 fiscal year was basically a loan yet those are accounted for as expenses. Further as the loan was repaid it later years it is accounted for as a negative expenses (reduces other expenses).

We have no large one-time expenditure in 2013 while we did in 2009. Thus it's a very very poor choice for comparison unless you adjust for the one-time difference in the year of spending and any amounts paid back in a later relevant year.

I have no problem with segregating normal govt operating budgets and funds for war. While the war funds were not limited to any one year they are "unusual expenses" and should be segregated for comparison purposes of op budgets. And unlike govt programs in the op budget, wars eventually end.

Fern

Ah. So then you're OK with adjusting "Obama's" deficits to account for his one-time [sic] expenses like Iraq and Afghanistan, true? Libya? Stimulus, extended unemployment, and all the similar "one-time" expenses related to our still-struggling economy? Etc.? Let's see, subtract that and that, carry the four, drop that, and let's see what's left.

Nice! Great news everybody. When we ignore all the one-time [sic] federal expenses, we're actually running a surplus! Go Obama! Never mind that the debt is increasing. Those continuing years of debt increases are due to one-time expenses, so they don't count.


By the way, I note you completely dodged my primary point (again), that your purported "one-time" 2009 expense was largely duplicated in both 2010 and 2011. That doesn't sound like one-time to me, but math has always been one of my strengths.

 

[oynaz]

I have no problem with segregating normal govt operating budgets and funds for war. While the war funds were not limited to any one year they are "unusual expenses" and should be segregated for comparison purposes of op budgets. And unlike govt programs in the op budget, wars eventually end.

Fern

War expenses are hardly unusual for the USA. How many years have you had without being engaged in a war since WWII. 10?

 

[AViking]

Yes, large one-time expenditures most certainly do count in any comparison. That is a financial fact. You'll note that financials for large corporation must be prepared segregating such large one-time events (either revenue or expenses) precisely for comparative purposes.

Moreover, the large one-time TARP bailout in the 2009 fiscal year was basically a loan yet those are accounted for as expenses. Further as the loan was repaid it later years it is accounted for as a negative expenses (reduces other expenses).

We have no large one-time expenditure in 2013 while we did in 2009. Thus it's a very very poor choice for comparison unless you adjust for the one-time difference in the year of spending and any amounts paid back in a later relevant year.

I have no problem with segregating normal govt operating budgets and funds for war. While the war funds were not limited to any one year they are "unusual expenses" and should be segregated for comparison purposes of op budgets. And unlike govt programs in the op budget, wars eventually end.

Fern

You're going full retard. Stop it. The bottom line really does matter since this entire discussion is about balancing the budget and the debt.

 

[Fern]

Ah. So then you're OK with adjusting "Obama's" deficits to account for his one-time [sic] expenses like Iraq and Afghanistan, true? Libya? Stimulus, extended unemployment, and all the similar "one-time" expenses related to our still-struggling economy?

Yeah. Wars and other unusual non-recurring expenses should be separated so we can see what actually happening in the normal operating area. In that way we can see who is expanding govt and by how much.

So, yes I would separate Afghanistan and Iraq.

Libya? I'm hearing it wasn't even a billion $'s. Don't care.

The one-time stimulus? Yes, I'd separate it out. It's unusual and non-recurring.

Unemployment? Nope, that's a normal operating expense IMO.

Nice! Great news everybody. When we ignore all the one-time [sic] federal expenses, we're actually running a surplus! Go Obama! Never mind that the debt is increasing. Those continuing years of debt increases are due to one-time expenses, so they don't count.

Separating the unusual non-recurring in no way implies that it doesn't matter, that's your straw man. You own it.

By the way, I note you completely dodged my primary point (again), that your purported "one-time" 2009 expense was largely duplicated in both 2010 and 2011. That doesn't sound like one-time to me, but math has always been one of my strengths.

If you think there were one-time expenses like TARP etc in 2010 or 2011 link them up. I don't remember any. Might be that the war surge in Afghanistan was responsible? IDK.

But that illustrates my point. If you go from a deficit of (made up number) $500 B in '08 to $1.4 T in '09 because of a one-time non recurring expense you can expect the next year to go back to normal. If, OTOH, you you don't have an identifiable one-time non-recurring expense you've got big problems because it may well reoccur.

Accounting was created as a management tool. If the aberration creating negative financial results has been identified as an unusual and nonrecurring event management need not take action. If your results go South and there is no identifiable nonrecurring event you've got big problems and know you need to focus on them.

Lumping everything together is not done under GAAP for the very reason that it makes analysis much more difficult. It's also a way to hide stuff you don't want seen. I.e., it's difficult to see who's simply growing govt and passing it off as some temp measure , or if there was really a one-time event like TARP (that get paid back).

Fern

 

[Fern]

You're going full retard. Stop it. The bottom line really does matter since this entire discussion is about balancing the budget and the debt.

No. It is exactly on point.

If you're (govt) management, the one-time items require much different treatment than recurring problems when attempting to balance a budget. The one-time items require basically nothing since, by definition, they are one-time only. OTOH, recurring problems are a completely different thing and a whole 'nother challenge in balancing a budget.

Fern

 

[werepossum]

War expenses are hardly unusual for the USA. How many years have you had without being engaged in a war since WWII. 10?

So the one where we threw a conquering nation out of your nation was a good war but the ones that did not help you are bad wars?

We had Korea, where we successfully attempted to keep the Communist North Korea from taking over the free South Korea. We had Vietnam, where we unsuccessfully attempted to keep the Communist North Vietnam from taking over the free South Vietnam. We had the first Gulf War, where we successfully kicked a powerful invading dictatorship (Iraq) out of a tiny kingdom. (C'mon, that HAS to be something you can get behind!) That's the only wars we've had since we saved you guys until Iraq and Afghanistan. We've had a few police actions, true - sometimes Denmark also sent a few troops - but no other wars.

I know that probably sounds like a lot to Denmark, but you have to admit that allowing Nazi Germany to take Czechoslovakia and Poland didn't exactly work out well for you guys.

No. It is exactly on point.

If you're (govt) management, the one-time items require much different treatment than recurring problems when attempting to balance a budget. The one-time items require basically nothing since, by definition, they are one-time only. OTOH, recurring problems are a completely different thing and a whole 'nother challenge in balancing a budget.

Fern

That's turned into a huge problem as a one-time $600 billion outlay turned into a budget baseline $600 billion higher.

If I had my druthers all wars would have to be declared by Congress AND completely funded by a separate bill with a separate surtax on EVERY federal taxpayer and subsidy recipient. That way we wouldn't waste nearly as much money cancelling military projects AND every American would have skin in the game and need to decide not only if a war is non-objectionable but actually worth the money. If so, it's still cheap for us non-military types compared to those who risk their lives or have family members risking their lives.

 

[fskimospy]

No. It is exactly on point.

If you're (govt) management, the one-time items require much different treatment than recurring problems when attempting to balance a budget. The one-time items require basically nothing since, by definition, they are one-time only. OTOH, recurring problems are a completely different thing and a whole 'nother challenge in balancing a budget.

Fern

What you aren't realizing is that the one time items happened before a massive kick in of automatic stabilizers. Go look at the expenditures for food stamps, unemployment, welfare, medicaid, etc. These are laws that have long been on the books, and are there for precisely this sort of situation.

So sure you discount one time items, but then why do you act like laws that were long ago written to ebb and flow with economic troubles are some sort of new thing?

 

[xBiffx]

What does reality have to do with it? Debt is all about perception.

True, and in cases like these, perception is reality, unfortunately.

 

[Doc Savage Fan]

I cringed reading this. How old are you? I hope for your sake still a teen. The combo of blissfully uninformed + hate for evil republicans leads me to believe so.

If you haven't noticed, this place is chocked full of this particular breed of "intellectual"...many are in their 20s and 30s I'm afraid to say.

 

[piasabird]

It would help if we had a budget and started cutting costs. This is all the people of this country expect. We could at least slow down the overspending and appear to be attempting to lower our spending. The treasury is experiencing record revenues but we are still spending it too fast.

 

[Tom]

Gotta love the hypocrisy of obama. He criticizes it when it was bush but it's alright for him to do it.

There was no reason for the Bush tax cuts except to get Bush elected.

His tax cuts were unsound, they never could work.

That's why his deficits, and parts of Obama's, which come from the same tax cuts, are criticized as Bush's responsibility.

It took Obama a long time to get Republicans to end the worst of them. That isn't Obama's fault either.