Tea Leaf: Debt commission could provide political 'cover,' may be best road to follow

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  • DeltaFoxtrot West Valley, UT
    July 27, 2011 12:03 p.m.

    @ChuloDO & Rifleman: I guess you missed the 2nd part of my statement. There have been multiple columns by multiple economists covering exactly what will happen if the US loses its AAA credit rating. The consequences will be GLOBAL. World markets are already shaken over Greece and that is a drop in the bucket compared to the situation the US is in. We're on very very shaky ground here... one little push turns this recession into a global depression that will set us back 50 years economically.

    Think of it this way. The TARP program was used to bail out banks and automakers because they were too big to fail. I say the US is too big to fail and the people behind the scenes controlling the markets know it. Greece hasn't even defaulted and their credit rating is now the lowest of nations that are rated. I believe if any of the agencies were serious about lowering America's rating they would have already done so... just b/c of the risk of default.

  • Owl Salt Lake City, UT
    July 27, 2011 9:38 a.m.

    Obama ignored the recommendations of his own select committee. Why should we believe that another committee's recommendations will be honored?

  • Rifleman Salt Lake City, Utah
    July 27, 2011 7:41 a.m.

    Re: DeltaFoxtrot | 1:50 p.m. July 26, 2011

    Yes, they can and will reduce America's credit rating. What else can you expect when we are facing a crushing and ever increasing debt load? The comes a time when nations, just like private citizens and corporations, will go bankrupt if they continue to spend more than they make.

  • Hellooo Salt Lake City, UT
    July 27, 2011 1:01 a.m.

    Great suggestion Jeff and your points about calling reductions in increases cuts is right on. Focus has to be on real cuts because rate increases, and exemption modifications will not bring in the project revenue. They never do because people adjust rather than pay. Thanks again for a great article

  • ChuloDO Salt Lake City, UT
    July 26, 2011 3:53 p.m.

    "They won't reduce America's AAA credit rating. To do so would be economic suicide on a global scale, and the rating agencies know it. "

    Um, DeltaFox, not sure why you think that the rating agencies should make a special exception to spare the top credit rating for the U.S. if a downgrade is indicated. Even though the rating agencies biffed in properly rating mortgages prior to the implosion a few years ago, it doesn't mean they should deliberately give the U.S. a pass on its burgeoning debt.

    The appropriate solution is a combination of spending cuts and tax increases -- something that the Democrats might not understand/acknowledge and the Republicans (especially the Teabaggers) definitely don't.

  • DonO Draper, UT
    July 26, 2011 3:44 p.m.

    True enough, Jeff. I still maintain that if the members of Congress were forced to tie their own lucrative government funded salaries and benefits to the "pain" they expect the rest of us to suffer in the name of balancing the budget, we'd have a solution to the debt crisis in no time.

  • DN Subscriber Cottonwood Heights, UT
    July 26, 2011 3:13 p.m.

    No more "committees" or "commissions" to provide "political cover!" THeir recommendations are always ignored anyway.

    Our rating will be hurt if we just up our credit limit a few trillion more with no obvious intention of ever being able to cut the deficit to zero and at that point begin to pay off some of the $12-15 trillion accumulated debt.

    The politicians need to do the right thing and make huge, bold, permanent, programmatic changes in spending. And, do so from last year's (or a much earlier date would be even better!) numbers, not the bloated baseline projections for the future.

    Budget for 2012 should fund every department at no greater than FY 2008 level, preferably less. Period!

    We are out of money, out of options and out of time.

    Cut, cap and balance is the best we can do right now, so pass it, sign it and move on to serious cutting!

  • DeltaFoxtrot West Valley, UT
    July 26, 2011 1:50 p.m.

    They won't reduce America's AAA credit rating. To do so would be economic suicide on a global scale, and the rating agencies know it.

    So many companies and nations invest in American debt b/c it is seen as rock solid. ANY change in that would see markets crumpling, the dollar folding and commodities prices going through the roof. Investors would dump American debt like yesterday's garbage and the consequences would echo around the globe.

    Its an economic cold war, and the ratings agencies are sitting on the button. One press and its Armageddon. They all know it, and they won't do it.