Are You Freaking Out About a U.S. Downgrade Yet?

While traveling over the weekend, I was asked on a few occasions whether I was concerned about the debt-ceiling talks. The short answer was "yes." I have been aghast at the idiocy and posturing in Washington over what should essentially be a procedural vote. Yes, we've been here before, but that doesn't make the boneheadedness any less jaw-dropping.

With that in mind, it was with a little surprise that I read a couple of articles featured on Yahoo! Finance this morning essentially arguing that a U.S. downgrade from the major bond-rating firms wouldn't be all that big of a deal. My first reaction: "Insanity." But there may be some truth to that; after all, the bond markets are massive beasts that often seem to do whatever the heck they want to do.

A look at the yields on bonds for some of the top- and second-tier sovereigns shows that there's no law that says a Moody's (NYSE: MCO  ) Aa1 has to yield x%.

Top Tier Borrower

Moody's Rating

S&P Rating

10-Year Bond Yield

Australia

Aaa

AAA

4.98%

Canada

Aaa

AAA

2.89%

France

Aaa

AAA

3.20%

Germany

Aaa

AAA

2.65%

Netherlands

Aaa

AAA

3.17%

Singapore

Aaa

AAA

2.18%

Switzerland

Aaa

AAA

1.53%

United Kingdom

Aaa

AAA

2.99%

United States

Aaa

AAA

2.97%

Sources: Moody's, Standard & Poor's, Bloomberg, The Wall Street Journal, Trading Economics, The Financial Post.

Second Tier Borrower

Moody's Rating

S&P Rating

10-Year Bond Yield

Belgium

Aa1

AA+

4.27%

China

Aa3

AA-

4.11%

Hong Kong

Aa1

AAA

2.29%

Italy

Aa2

A+

5.41%

Japan

Aa2

AA-

1.09%

Spain

Aa2

AA

5.77%

Sources: Moody's, Standard & Poor's, Trading Economics.

On the whole, the second-tier group is saddled with higher rates than the top tier. But this hardly tells the entire story. Belgium and, more so, Italy and Spain are under the storm clouds of the euro region's fiscal woes. In fact, if we look to the top-tier group, both France and The Netherlands (same storm clouds) are among the highest yields. And surely Japan and Hong Kong make a strong case that you don't need perfect ratings to maintain low bond yields.

Directionally, a sovereign downgrade would almost certainly push U.S. yields up
(meaning bond prices fall), but "skyrocket" seems to be a very Chicken Little choice of words when talking about a one-notch ratings downgrade.

So, am I still worried? Of course. Moody's and S&P may downgrade the U.S. regardless of whether we get the debt ceiling raised. But if this inane dithering takes us past Aug. 2 and there's even a sniff of default, we're talking a very different matter. Countries that default don't get Aa1 ratings. Want to see what it looks like when the bond market loses confidence in you? Check out the yields on Greek or Brazilian bonds.

What really keeps me up at night, though, is that I don't think many of those gumming up the Washington gears right now understand any of this. Maybe this shouldn't surprise me -- my fellow Fool Morgan Housel has pointed out that nearly half of all American's don't have a basic understanding of interest rates -- but it sure as heck scares the pants off me for now and the future.

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  • Report this Comment On July 27, 2011, at 5:18 PM, David369 wrote:

    Of course half of us don't have a basic understanding of interest rates! Most of us don't understand rocket science or brain surgery either. Don't want to. That's why you get paid the big bucks, to explain to us the results and implications of various market events. It is your decisive insight into the socio-economic factors of the world market that give us hints of possible ways to find the proper paths to prosperity.

    Besides, we just don't want to be bothered with all that work of figuring it out for ourselves....

  • Report this Comment On July 27, 2011, at 5:41 PM, dbtheonly wrote:

    Not panicing, but it's cost me three fingernails so far.

    Remember there are any number of organizations, banks etc., that are required to keep their assets in AAA bonds. They often use Treasuries. But if Treasuries aren't AAA...

  • Report this Comment On July 27, 2011, at 5:46 PM, xetn wrote:

    It seems to me the banks are keeping their investments in the .02% yield the Fed is paying them for their excess reserves.

    As for whether or not there will be a downgrade, I believe the value of the Dollar is showing us the way.

  • Report this Comment On July 27, 2011, at 5:59 PM, bretco wrote:

    Where is Ross Perot when we really need him to sweep out the barn ?

    If it weren't for all the stupid politicians it wouldn't make any difference if half of America doesn't understand interest rates.

    But when halfassed politicians don't understand interest rates we are really on a quick route to second-rate status.

  • Report this Comment On July 27, 2011, at 6:39 PM, n8larson wrote:

    I disagree with the previous comment. I think the estimation of politicians who don't understand interest rates as "halfassed" is LOW by a factor of at least 2.

  • Report this Comment On July 27, 2011, at 8:36 PM, cccisback wrote:

    This crisis is caused by our political system and the anger between the parties. Our congress is ineffective and we can't continue this way. It is time to think about how to change the system.

  • Report this Comment On July 27, 2011, at 8:43 PM, mountain8 wrote:

    This is the problem with electing politicians. Those who studied Sociology, Law, Poli-Sci. They only know how to "attempt to take care of everybody", how to a find a different meaning for a law every hour, and how to get elected and get your piece of the pie.

    We need to elect people who studied economics, business, ethics, and basketweaving.

    How do we possibly expect rich children who only know what the good old boys tell them to know, to be able to fix an econonic problem of this size.

    WE are the stupid ones. Not the politicians. They know just what buttons to push and what words to use. Ask the media. How 'bout the stock market goes down 1% and everybody is talking about the crash. 1%. If you lost a penny out of a dollar worth of change, would your dollar have "crashed"? Would you even notice it? ... We elect these liars.

  • Report this Comment On July 27, 2011, at 9:35 PM, TrojanFan wrote:

    Wow, I have so much to say on this topic and not a lot of time or space to say it in right now.

    First of all, the immediate financial impact of a downgrade probably wouldn't be huge but with an issue as complex as this and the role that the US dollar and US government bonds play worldwide as the super sovereign reserve currency and financial instruments of choice, it's really impossible to know until you run the experiment and that is an experiment that simply isn't worth running.

    The unknowables are too far reaching, too immense and too interconnected by a web of modern financial complexity to quantify in advance in any meaningful or reliable way. It kind of makes the bankruptcy of Lehman Brothers and the resultant worldwide simultaneous credit freeze look like kid stuff. There isn't a single person on Earth, including the smartest bond market investors (let alone the policy makers whom we entrust these sorts of decisions to) that knows enough about the totality of the global financial system to ferret out in advance all the pockets this will touch. Just like with Lehman Brothers, there will be surprises that no one thought of in advance. I look back on that and think, "Geez guys, Lehman's role in the commercial paper markets...REALLY? How could you have missed that?" But the fact of the matter was that with the litany of complex issues at hand and the limited time they had to address them, nobody thought of that one. Oops.

    Though I dislike the guy in many respects and for many reasons, I can't dispute that Hank Paulson was and is an extremely intelligent and immensely market savvy guy. He's probably about as savvy as they come and he totally missed that one. All the accounts I've read of the people who were there indicate that. With all the issues they were haggling over, that one got completely lost in the shuffle. That's what happens in times of crisis. Things get missed. Now we're dealing with politicians who are nowhere near as experienced (and we the voters need to look inward on that point because we are largely responsible for the current lack of experience in the Congress by virtue of the justifiable temper tantrum we collectively threw against incumbents last November), intelligent or market savvy and we're entrusting them with the privilege of making such important decisions as this? The issues they are dealing with now of a downgrade and possible default are frankly orders of magnitude more complex than that was? Trust me, they have not thought this through any further then their own reelection calculus. This is scary stuff. The amount and scope of unknown quantities and touchpoints within the system that could bubble up to the surface as a result of this are mindboggling to try and get your hands around. Add to that the fact that because of the current climate in the country, these freshmen lawmakers view the market experts and advisers that have been issuing them stern warnings about this for months with complete contempt and mistrust and think they are speaking in exaggeration and hyperbole. Do you really want to find out? I don't. This ISN'T what we put them there to do.

    Politicians showed the same skepticism and apprehension regarding the gravity of the warnings ahead of the first TARP vote, too. As soon as the very same enraged voters who only the day before were flooding the phone lines and airwaves saying politicians better not vote in favor of TARP... OR ELSE saw their own personal 401(k) balances begin careening out of control AND TANKING only THEN did everyone immediately backpedal and those very same voters were turning around flooding the phone lines saying the legislation needed to be passed immediately and on an emergency basis.

    Here's the thing. Once the damage is done, you can't take it back. It takes years and years, maybe even a decade or more to restore that credibility and unconditional trust that so many have worked so hard for, fought and risked their lives to create. What takes a lifetime or more to build can be lost in a moment of stupidity.

    Furthermore, don't allow yourselves to be deluded into thinking that an across the board 300 basis point increase in interest rates (50 bps or so for downgrade and another 250 bps or so for slow paying workers government contractors and the like - stopping just short of a default) in the span of say a month or two that becomes permanently embedded would be a trivial thing or easily and inexpensively reversed by an emergency QE3 purchasing program by the FED. We have neared the end of the road of what that mechanism is capable of accomplishing. We're kind of on our own from here on out. That size of rate increase would be more than sufficient to throw the entire economy back into recession again with the housing market and job market as fragile and anemic as they both are already and this time the "trigger event" is totally avoidable and self-inflicted which makes the current behavior utterly irresponsible and unforgiveable.

    One of the problems with a capitalist system, though, is that there is a rather large pocket of participants (and I work with many of them) who actually pine for crises such as this one because it gives them the opportunity to take advantage of and exploit the suffering of others for their own personal gain and consolidate their own financial might and power. Do you wonder if some of the constituents standing behind the obstructionists in Congress are rooting for that for that reason? I sure do. That only amplifies the already glaring class divide in this country.

    Ask yourselves if you haven't seen on these very same boards people rooting for the failure of their own financially stretched neighbors in the hopes that they'll be able to gobble up their properties on the cheap or that root for a market crash because they are sitting on more un-invested cash than they know what to do with at anemic prospective rates of return.

    Even the revered Oracle of Omaha himself has made a career out of exploiting corporate desperation at moments like this one (Salomon Brothers, GE and Goldman Sachs immediately come to mind, but there have been many others over the years I'm sure) and his legions of followers on this site all seek nothing more than to emulate him.

    That kind of vulture mentality is actually a big part of the dysfunctionalism that is at the core of the problem, though. The virtues of capitalism presuppose as an unmentioned assumption that you are dealing with an otherwise stable society that isn't totally disenfranchised and sitting on the brink of massive worldwide uprisings and rioting as retribution for decades of systemic social injustices. Just look to the Middle East and North Africa if you doubt this. The countries of the developed world are not immune from this dynamic. It just hasn't reached them yet, but if the root causes go unaddressed it will. Left unchecked, egregious and systemic economic imbalances ultimately culminate in violent uprisings like that. Occasionally a collective resource rebalancing becomes necessary for the sake of the long term viability of the system and it's the role of the government to carry that out because the private sector can't be relied upon to act in anything other than its own self-interest. The middle classes' carcass has already been picked to the bone and there's not much left for the upper 2% to take so the collective system grinds to a halt. That's where we're at and that's what the classic Keynesian liquidity trap is all about in a nutshell. That's why we have the slack demand nationally that we do in spite of overwhelming policy and fiscal stimulus. If the truly wealthy just accepted that they need to give something back for the long-term sake of the system and "took one for the team" we could get back to growing again and it would all come back to them tenfold in a decade or less. If, on the other hand, they insist on not paying an additional dime and letting government workers get laid off in droves at a time when there is no substitute employment available, what do they expect will happen? Incomes will drop, asset prices will drop, wages will drop, corporate earnings will drop and the businesses of the wealthy will be less patronized then they would have been and their incomes will drop and we start the same vicious cycle again. This is just like the fiscal tightening policy errors of the late 1930s all over again and those ended with disasterous consequences for the US and the rest of the world. We really are setting the stage for some dictatorial menace to take the stage somewhere in the world and mount a military campaign on the back of some misguided nationalist rhetoric to usher in a renewed period of prosperity. Seriously, we need to take a lesson from history folks. WE'RE BETTER THEN THIS!!

    The goals of true democracy and capitalism at their core are at diametric odds with one another and it is that competing and self-correcting tension that has made our system so great and so sustainable and has made this nation so stable and a beacon of excellence for so long. If we allow capitalism to trump democracy at a time of such widespread need and desperation you end up with something closer to a fascist oligarchy where connections and privilege rather than sacrifice and hard work become the key determinants to success and once you cross that line all hope of future vibrancy and prosperity is lost.

    Come one, guys. Let's not cross that line.

  • Report this Comment On July 27, 2011, at 10:28 PM, joyrider wrote:

    TrojanFan,

    Please bring it down to my level.

    Thanks

  • Report this Comment On July 27, 2011, at 11:18 PM, TexasChris wrote:

    Funny thing is that this reminds me of Y2K.

  • Report this Comment On July 27, 2011, at 11:28 PM, TrojanFan wrote:

    In the immediate future, it's not the downgrade you have to worry about, though that could carry with it lots of unforeseeable outcomes.

    The more immediate concern is the delaying of payments that will happen next month if an agreement isn't reached very soon.

    I'm hearing rumors in the market that the Treasury Department probably actually has about an additional week's worth of liquidity then what they've been saying publicly, but that's not a lot of breathing room and it's not terribly comforting. That's just enough time for the Legislature to rush to actually implement something if they take this all the way to the stated deadline of Aug. 1st.

    Assuming that the deadlock in the Congress can't be broken and that the President refuses to take the political risk of relying on the 14th amendment to unilaterally issue an executive order to Treasury to go ahead and ignore the debt ceiling altogether by taking the position that the debt ceiling concept itself is unconstitutional, then government payments will begin to get prioritized starting probably sometime in the middle of August just as happened here in California when our State legislature faced similar difficulty passing a budget recently. Absolutely critical payments (debt service, defense and most, but not all entitlement payments) will be made first and IOUs issued for the rest. In California's case, those payments were delayed by several months in some cases. They were ultimately honored, but in many cases were severely delayed. We here in California have already had a taste for how this works and it's not pleasant experience.

    If you filed for a federal extension this year because your tax situation is complex and you are due a refund its payment may well be delayed. Payments to some government contractors may be delayed. The recipients of medicare assignments from social security (health insurance companies) will likely face delayed payment. Government workers will face furlows and some social security checks will probably get paid late.

    All the payments will eventually get made, they just won't be made on time, and I'm estimating that depending on the category of payment, the delays will range from weeks to months. The economic ripple effect of even a few weeks of payment delay are real and they are significant. In fact, the damage to consumer and business confidence from that would likely be more then sufficient to throw us back into rececession which is precisely what the game of political sabotage is all about. The name of that game is to undermine the Country in the short-term in the hopes of laying the blame on the current leadership so that achieve a change in political power in the medium-term. It's completely transparent and it is insidious and needs to stop.

    Companies that do business with the government in any sort of meaningful way are already anticipating this. Corporate credit lines began getting drawn heavily today (I personally observed this effect this morning) in anticipation of this and I'm aware of various participants within the system (money market funds among others) that are stockpiling cash because they are seeking to prepare themselves for what could be a severe and sustained shock to the liquidity in the system if this happens.

    If you're a small cap business with an undrawn credit line and not a lot of cash and you do most of your business with the government, you are going to be living off your credit line for the next couple of weeks or months while these backlogs get resolved just to make payroll.

    But guess what? The banks that issue these credit lines generally collateralize the undrawn portion with short term government Treasury bills. If lots and lots of companies and households simultaneously start drawing on credit lines fill the hole created by the delayed payments then that will create a pretty significant disturbance in short term funding markets. These are the very same T bills that nobody wants to hold right now because many money market funds who would normally be the logical buyers view them as toxic. The 8/4 and 8/11 T bills, in particular, nobody wants right now because they are seen as vulnerable to possible default. As this progresses, if no solution is reached you will see those short term rates continue to rise in order to find replacement buyers who will demand escalating levels of compensation for holding these bills and assuming that risk.

    Today was a significant threshold because most trades take 3 business days to settle, meaning that if you're worried you might not have money on August 2nd, today was the last day you had to enter a trade and ensure that it would settle and that you would have cash in your account by August 1st.

    I fully expect this dynamic to intensify tomorrow if a credible solution isn't reached before the open of business tomorrow. If you see the market averages start to peel downward toward the end of tomorrows trading session, that is what will be behind it. If that happens, that is a sign that individuals and institutions are trying to make sure that they have cash in their accounts by August 2nd (T+3).

    If people and institutions aren't able or willing to go into debt to finance the governments payment delays to them then they are going to sell assets to fill the hole if they aren't adequately saved. Once this starts, then speculators join the party and start selling long positions or openning short positions with the expectation that people will continue needing cash and that prices will continue to fall and they'll be able to buy back their positions cheaper in the near future.

    There is a potent mix brewing of technical selling pressure combined with the fundamental damage to the economy in the form of severely diminished business, consumer and investor confidence. The collective psychological to all levels of the system if this is allowed to happen will be significant and long lasting.

    Another second recession becomes a virtual slam dunk if the government is allowed to beginning delaying payments and that's precisely what the opposition party is playing for to all our collective detriment.

    Nice, huh?

  • Report this Comment On July 28, 2011, at 7:43 AM, David369 wrote:

    Dang Trojanfan. All doom and gloom. Look at the bright side, Congress has probably anticipated this and they will find a way to make lots of money off of the economic misfortune they caused.

    We should not elect career politicians to Congress or the WhiteHouse. Only problem is it seems those are the only ones we can vote for.

  • Report this Comment On July 28, 2011, at 7:44 AM, haywool wrote:

    "Freaking out"? ... NO

    Concerned? ... NOT MUCH

    Investing? ... YES - where no one else is.

    Rich (haywool)

  • Report this Comment On July 28, 2011, at 9:33 AM, wward35634 wrote:

    Storm coming today. Bring your 'short' umbrellas.

  • Report this Comment On July 28, 2011, at 9:40 AM, EricTMF wrote:

    Condemning "politicians in Washington" elides the fact that it's only one party in Washington that is responsible for this mess. The Republicans decided to make the usually routine raising of the debt ceiling into an artificial crisis. And only the Republicans are refusing to negotiate. The President and Democrats in both houses of Congress have bent over backwards to reach compromises (the Reid bill includes three times the cuts of the Boehner bill), and the left wing of the party is very unhappy about it. So let's call a spade a spade, and learn our lessons from it. If we keep sending a bunch of know-nothing tea party crazies to Washington, this is what we'll keep getting. Refusing to recognize the reality and even-handedly blaming "Washington" only contributes to the problem.

  • Report this Comment On July 28, 2011, at 9:42 AM, mikecart1 wrote:

    Why freak out? It would only make us closer to reality. The stock market as it is is a complete joke. DOW 12000? LOL. It should be more like DOW 8000. This country is going down quicker than a rain drop. There is nothing positive in a country where obesity is 70% and rising, education levels are declining, everyone and their mother is having babies, unemployment is near 20%, and we officially have the worst President in the history of the universe. If I were to wake up from a rock today and watch Obama speak, I'd swear he was still running for President. Jesus Christ almighty we are not free at last!

  • Report this Comment On July 28, 2011, at 9:58 AM, David369 wrote:

    @EricTMF

    That's the story you hear but never ever trust what you hear coming out of DC. I blame both sides equally as all of them are more concerned with politics and their party line that doing something, anything that might resolve the situation. Like they didn't see this coming 4-5 months ago?

  • Report this Comment On July 28, 2011, at 10:15 AM, mugda wrote:

    its quite basic.. both Demo's and repub's want to take credit for resolving the issue. They will take it to the wire..even if this is not solved in this round nothing to panic. it will be resolved very soon. then the markets will back soon. So no need to exit. May be look for buying in the low..

  • Report this Comment On July 28, 2011, at 10:33 AM, bussermk wrote:

    I agree with David369. This is all being treated as some big surprise crisis. This was known and should have been planned for years ago. Our elected leaders are collectively a bunch of idiots. Both sides will blink, the debt ceiling will be raised on a temporary basis so they can have more time to implement some half-ass plan that will carry them through the next election and we will have to listen to everyone talk about how their party saved the country and the other party nearly caused its demise. Eventually, this thing will rear its ugly head again and we will go down the same path all over. Until we cut our spending this problem will not be solved. You can raise taxes, but the problem is that you can only tap a well so often before it runs dry. What will Congress do when the tax rate is a 70% and they still can't cover costs? Eventually the people will revolt. The other problem with raising taxes is we know that Congress will NEVER lower them back and we know as soon as they see signs of a recovery, they will go back to their evil ways.

  • Report this Comment On July 28, 2011, at 10:49 AM, EricTMF wrote:

    @bussermk: Taxes as a percentage of GDP are at their lowest since the Truman administration.

  • Report this Comment On July 28, 2011, at 10:56 AM, EricTMF wrote:

    @ David369:

    President Obama and Congressional Democrats did see this coming months ago. He has progressively moved closer to the Republican position ever since. The Republicans won't take "yes" for an answer, and now we have a crisis. They are solely to blame for this.

    From NBC News:

    "But when you take a step back from the hour-by-hour movements in this debate, it’s obvious how much ground the White House and Democrats have conceded. First, they retreated on their push for a clean debt-ceiling raise. Then they retreated on the size of the spending cuts (now both sides say the cuts must equal or exceed the eventual debt-limit hike). Then they backed away from insisting that tax revenues be included in the final package (both the Boehner and Reid plans exclude them). And now it seems that their final line in the sand is insisting that the debt ceiling must -- in one step -- be raised beyond 2012, versus Boehner’s two-step approach, which would guarantee another debt showdown early next year."

  • Report this Comment On July 28, 2011, at 2:30 PM, matthew2219 wrote:

    If you want to blame anyone, blame George W. Obama is 1/2 right when he was inheriting 2 wars, unfunded liabilities, etc.

    What Obama is wrong about is continuing the blasted wars. Bring all our troops home; close bases world wide, end foreign aid, and force feed Medicare reform to a worried public. We need to tackle economic rot, not the ghost of Bin Laden.

    The ultimate solution to our multiple problems lies in reforming our government. Why does Wyoming and California have the same # of senators? Why do we have 2 branches of legislature? Why is it that we hear the whining about throwing the bums out and then go ahead and re-elect them. Term limits, curbs on the power of the supreme court (notice I did not glorify those 5 fascists with a capital S) are good beginnings. Keep the Bill of Rights and re-imagin and act upon a new version of our Constitution.

    We don't have "forever" to accomplish change.

  • Report this Comment On July 28, 2011, at 2:32 PM, matthew2219 wrote:

    ...'blames" Bush

  • Report this Comment On July 29, 2011, at 12:47 PM, fishrswim wrote:

    What me worry? Nah, as a 100% combat disabled vet I depend on my VA check and Social Security. But if those great patriots in the T party and the republicans who never saw a war they didn't like, want to cut us off I guess that's how it's gonna be. I'm sure they have the best interests of the country at heart.

    Might be a little harder to recruit new troops tho if the word gets around.

  • Report this Comment On July 29, 2011, at 1:39 PM, David369 wrote:

    @EricTMF

    I have to admit Boehner's plan is rather dumb with the "lets argue about it now and again next year" 2 part provision. The Tea party...I just wonder what kind of tea they are drinking sometimes. They seem like they are almost fanatics but long range planning or even very deep thinking doesn't seem to be there. Funny thing about politicians, they all have good intentions and really most of their "proposals" are noble sounding and designed to cure an existing problem in the country or improve on something. Road to Hell is paved with...

    BTW, re taxes as a percent of GDP are the lowest ever. I don't care about the percentage of taxes relating to GDP. GDP doesn't pay my taxes or relate to the amount I make. Has the percentage of average taxes paid related to the average middle income person's income gone up or down in the last 20 years? That would be interesting to know

  • Report this Comment On July 29, 2011, at 3:59 PM, 123spot wrote:

    fishrswim, thank you for your service to our country. I have had in my thoughts,at the top of the list this week, the anxiety that is being caused to our old, our poor, our sick, our veterans and active duty. I am so sorry for it. This country is full of citizens who will support you no matter what. They are just not very loud right now. We are thoughtfully considering end run options and I think those will win the day. Hang in. This is a great country and this sideshow will not destroy it.

  • Report this Comment On July 29, 2011, at 10:42 PM, howkary wrote:

    I don't think the T-partiers are radical or crazy. I think they painted themselves into a corner by promising their constituents they would stand for a particular set of ideas and now they are "in a pickle", as my mom would say. The more savvy politicians from the other side of the isle now have found a way to make the T-party seem almost anti-American, since they are going to let the debt boat sink rather than break their word to their contituents. Most pols just throw their homefolks under the bus if they need to and then hit 'em with a smokescreen of blaming the other party for everything. Poor Ts. They're outta here next election. Meanwhile, I'm gonna be ready: "Attention, K-Mart shoppers!"

  • Report this Comment On July 30, 2011, at 8:36 AM, David369 wrote:

    Good one howkary!

  • Report this Comment On July 30, 2011, at 3:12 PM, vmoy wrote:

    How can you blame the tea party?

    Problem is caused by overspending.

    T party just wants to stop it.

    Can it get any more simple than that?

  • Report this Comment On August 08, 2011, at 3:52 AM, thidmark wrote:

    "Taxes as a percentage of GDP are at their lowest since the Truman administration."

    How are we doing on the spending side?

  • Report this Comment On August 08, 2011, at 4:48 AM, RagingBullish wrote:

    I'm freaking out, man!

    No, not really. I think this was pretty much to be expected, and in fact was probably just a matter of time. Whether the downgrade was justly deserved or not, the wording of it was surely a stinging indictment of our current partisan and gridlocked form of government which makes accomplishing anything of substance nearly an impossibility, and in that regard I am in absolute agreement with Standard and Poors negative analysis.

    So I'm not freaking out, just extremely disappointed that we've come to this and cannot seem to move beyond it, pointing fingers at each other while our country goes to hell. The real shame is that the true burden of these debts will not be borne by you or I or any of us, but rather by our children, and by their children, and by their children's children, and on and on and on, and meanwhile we sit and point fingers and argue the irrelevancies of politics.

    We're supposed to leave the world a better place for those who follow, and it's a terrible disappointment that we are going to leave it far, far worse.

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