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Downdrain, Er, Downgrade

06 August 2011 @ 16:58

Standard & Poors has downgraded the credit rating of The United States Of America and now our standard of living will be poorer…

…And neither Obama nor Reid nor Pelosi had the Goddamn common courtesy to give us a reach around!

No surprise here.  How does one expect responsible adults to react when our elected officials are blatant about the fact that they are not serious about solving the financial mess in this country?  The Establishment Elites still think this is a big game and that, no matter the score of the dodgeball game today, they’ll be another round tomorrow in the DC schoolyard.

Many are calling for Treasury Secretary Timmy Geitner to resign. 

He damn well should [and I’ll buy the Luger].

But so should the leaders of both parties in the Congress and so should the Anti-President and his trusted advisors — anyone who had a hand in the Debt Deal To End All Debt.

A pox on all of our houses [and Houses].

It has come to this: from Andrew Malcolm, we learn:

Following Friday’s unprecedented credit downgrade of the federal government by Standard & Poor’s (from AAA to AA+ with a negative outlook), China’s official voice, the New China News Agency, demanded Saturday that America “learn to live within its means.” And it suggested the U.S. might want to reduce its military defense spending further to make timely payments.

The agency’s official commentary added:

China, the largest creditor of the world’s sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China’s dollar assets.

Merit aside, Americans are unaccustomed to such demands by other countries….

Perhaps not surprisingly for China, which maintains a running, if sometime unspoken military competition with the United States, the commentary suggested that the giant Asian, loan-holding nation might be right to expect even further major reductions in U.S. defense spending to help pay off its existing debts to China.

The article warned:

If no substantial cuts were made to the U.S. gigantic military expenditure and bloated social welfare costs, the downgrade would prove to be only a prelude to more devastating credit rating cuts, which will further roil the global financial markets.

A Communist country demands that The United States get it’s financial house in order — a Goddamn dripping-blood Red, Marxist state!

And you know what: the murderous bastards are right.

And they have every right to boss us around now — they own us: we are Red China’s bitches.

That we have come to this is something I never thought we would see before November of 2008, but, since then, I’ve been waiting, hoping against Hope And Change™, that enough of the dullards in DC would awaken to Reality and take the bold actions necessary to prevent this catastrophe — and make no mistake, this is a sucking chest wound.

Mark Steyn from late last evening over at The Corner:

…The frivolousness of the political theater in Washington this last month and its mostly fraudulent media coverage did huge damage to the United States. It confirmed to the world, as S&P’s analysis suggests, that Washington is institutionally incapable of genuine reform. This was one of those it’s-the-music-not-the-lyrics moments: As damaging as the specifics of the ”deal” were, the broader sub-text of a political class pretending that it was meaningful was even more so.

We don’t have till 2021. As I say in my column tomorrow, we have till mid-decade to turn this thing around, or it’s over. That’s where the politico-media Beltway myopia failed the nation. It never occurred to any of the parties or the play-by-play commentators that their dramatically negotiated plans for – what was it now? – $7-12 billion of cuts in FY2012 would not be taken seriously by the world. That’s the heart of the S&P critique – its remarks about ”the effectiveness, stability, and predictability of American policymaking and political institutions”. In other words, the “deal” only confirmed the nature of the problem.

Now that it’s happened, it’s hard to argue that there was anything very obviously triple-A about America in 2011. So ask yourself this: If in 2013 we’re still talking in the terms of this week’s deal, you want to bet we’ll still be AA+?

From his column published today:

Like America’s political class, I have also been thinking about America circa 2020. Indeed, I’ve written a book on the subject. My prognosis is not as rosy as the Boehner-Obama deal, as attentive readers might just be able to deduce from the subtle clues in the title: After America: Get Ready For Armageddon. Oh, don’t worry, I’m not one of these “declinists.” I’m way beyond that, and in the express lane to total societal collapse. The fecklessness of Washington is an existential threat not only to the solvency of the republic but to the entire global order. If Ireland goes under, it’s lights out on Galway Bay. When America goes under, it drags the rest of the developed world down with it. When I go around the country saying stuff like this, a lot of folks agree. Somewhere or other, they’ve a vague memory of having seen a newspaper story accompanied by a Congressional Budget Office graph with the line disappearing off the top of the page and running up the wall and into the rafters circa mid-century. So they usually say, “Well, fortunately I won’t live to see it.” And I always reply that, unless you’re a centenarian with priority boarding for the ObamaCare death panel, you will live to see it. Forget about mid-century. We’ve got until mid-decade to turn this thing around.

Otherwise, by 2020 just the interest payments on the debt will be larger than the U.S. military budget. That’s not paying down the debt, but merely staying current on the servicing — like when you get your MasterCard statement and you can’t afford to pay off any of what you borrowed but you can just about cover the monthly interest charge. Except in this case the interest charge for U.S. taxpayers will be greater than the military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel combined.

When interest payments consume about 20 percent of federal revenues, that means a fifth of your taxes are entirely wasted. Pious celebrities often simper that they’d be willing to pay more in taxes for better government services. But a fifth of what you pay won’t be going to government services at all, unless by “government services” you mean the People’s Liberation Army of China, which will be entirely funded by U.S. taxpayers by about 2015. When the Visigoths laid siege to Rome in 408, the imperial Senate hastily bought off the barbarian king Alaric with 5,000 pounds of gold and 30,000 pounds of silver. But they didn’t budget for Roman taxpayers picking up the tab for the entire Visigoth military as a permanent feature of life.

And even those numbers pre-suppose interest rates will remain at their present historic low. Last week, the firm of Macroeconomic Advisors, one of the Obama administration’s favorite economic analysts, predicted that interest rates on ten-year U.S. Treasury notes would be just shy of nine percent by 2021. If that number is right, there are two possibilities: The Chinese will be able to quintuple the size of their armed forces and stick us with the tab. Or we’ll be living in a Mad Max theme park. I’d bet on the latter myself.

-Good stuff from Joy and from Bruce over at The Conservatory.

I Can Feel The Fear In The Western World.

5 Comments
  1. M. Thompson permalink
    06 August 2011 @ 18:42 18:42

    Well, you can kiss the America we knew good-bye now boys and girls. For so long, we thought our society would end in blasts of atomic fire, now, it’s going to be from the government spending too damn much.

  2. 06 August 2011 @ 19:48 19:48

    Like Stalin once said…”We will you the rope with which you will hang yourselves.” It’s definitely a scary scenario.

    Mike G.

  3. Adobe Walls permalink
    06 August 2011 @ 22:57 22:57

    China needs us much more than we need them. Read somewhere a few weeks ago that their consumer spending is falling as a percentage of GDP. If our economy and Europe’s tanks at the same time they got nobody to buy the stuff we design and they make. The ChiComs military build up is much more concerning than them owning our debt.

  4. bobbelvedere permalink*
    08 August 2011 @ 19:02 19:02

    MT: This is the way the world ends / Not with a bang…

    Mike: The Roman Republic fell because of the rot within.

    Adobe: Agreed, but the extortion possibilities are expanding for them with this.

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