Entries Tagged as 'AAA rating'

A Recovery Menaced By Dysfunctional Politics

July 29th, 2011 at 11:28 am 79 Comments

In a time of fundamental uncertainty, case what do we know for certain?

No, order that’s not a Yogi Berra kind of question.

Timing of passage of an increase of some size in the national debt ceiling remains uncertain.

Which side will blink first remains uncertain.

Final form of the legislation remains uncertain.

Market reaction remains uncertain.

But we do know some things for certain.

Click here to read more

States Will Be Slammed by Default

July 27th, 2011 at 4:22 pm 40 Comments

A federal default could cascade through state governments, cialis sale forcing tax increases and budget cuts on local taxpayers. Medicaid budgets could be slashed. Federal money for unemployment benefits could halt. State colleges could lose federal grants.

The Pew Center on the States reports that the municipal market would get swept along in the wreckage, severely constricting state budgets.

Different states would experience different kinds of shock.

Click here to read more

Ratings Agencies Want to See Bush Tax Cuts Lapse

July 26th, 2011 at 11:58 pm 79 Comments

The suggestion that the US needs to cut $4 trillion in projected debt over the next ten years in order to avoid a downgrade in its debt rating, posed here in an S&P report, has gained significant traction among many on the right. Erick Erickson, when he’s not denying “absolution” to the falsely faithful in the GOP, has emphasized this cut of $4 trillion as crucial to avoid a downgrade.

However, digging into the S&P report reveals some details that might be more problematic for many seeming “deficit hawks.” Though this report does suggest that $4 trillion in cuts/increased revenue over the next ten years would be enough to keep an AAA rating, it also says that its baseline for savings assumes the expiration of the Bush tax cuts in 2012. Will many of these “deficit hawks” abandon those tax cuts in order to appease S&P and keep an AAA rating?

Click here to read more