New Tone/Civility, Check!

I haven’t read it all to see if he said “hostage-takers” anywhere.

Is the U.S. Credit Rating a Victim of GOP Sabotage?

…It has long been obvious to all observers — to economists, to politicians, to anti-deficit groups, to the ratings agencies — that closing fiscal gaps will require tax increases, or the closure of big tax loopholes, or significant tax reform that will raise significantly larger sums of tax revenue than the system does now. Today, taxes as a percentage of GDP are at historic lows. Marginal rates on income and investments are at historic lows. Corporate tax receipts as a percentage of GDP are at historic lows. Perhaps taxes don’t need to rise this year or next, but they do need to go up in the future.

Otherwise, the math of deficit reduction simply doesn’t work. And that’s how the deficit reduction deals signed off on by Republican presidents like Ronald Reagan and George H.W. Bush came about.

Yet the action in Washington in the past year has all gone in the opposite direction. President Obama deserves some of the blame. Several months ago, he struck a deal with Congress to make the fiscal situation worse — extending the Bush tax cuts for two more years and enacting a temporary cut in the payroll tax.

But Congressional Republicans deserve much more of the blame. For this calamity was entirely man-made — even intentional…

3 Responses to “New Tone/Civility, Check!”

1. aelfheld says:

   August 6, 2011 at 1:57 pm

   Today, taxes as a percentage of GDP are at historic lows. Marginal rates on income and investments are at historic lows. Corporate tax receipts as a percentage of GDP are at historic lows.

   What I find particularly disgusting about the above ‘analysis’ is the conflation of tax rates and tax receipts – a verbal sleight of hand employed by idiots and mountebanks. Higher tax rates most often result in, at best, a short increase in tax receipts and often a long term decrease in tax receipts.

   The problem is not a lack of revenue to government but an unwillingness by same to keep expenditures within the compass of revenue.

2. Ave says:

   August 7, 2011 at 3:26 am

   Granted the Republicans didn’t help much, and neither did the Democrats, but it’s S&P who has played the most questionable role here. Not so long ago they were busy polishing up the mortgage turds for promotion to the world, and now they think they’re fit to judge the creditworthiness of the U.S. government? Ha. S&P, you’ve finally done it to yourself. Your times they are a’changin.

3. Mr. Bingley says:

   August 7, 2011 at 8:01 am

   Our credit rating deserved to be lowered, given that our leadership has shown they are completely unwilling to even begin to address our excessive spending.

   Yes, S&P, Moody’s et al deserve a very very thorough rogering for their role in the US housing market collapse (do read The Big Short if you haven’t yet) but there’s simply no way the US with it’s current “leadership” and entitlement mindset warrants a AAA.

   As Ed at HotAir wrote yesterday:

   If you had to rate a potential investment that had an income of, say, $22,000 a year but had costs of $37,000 per year, a standing debt of $143,000, and contracted future debt that exceeded $1 million, would you give that investment a gold-plated AAA rating and buy their bonds at the lowest interest rate possible, or at all? Of course not, but that’s exactly the fiscal situation of the US, at a 100,000,000:1 scale.