US interest rates on domestic loans

Post by **spot** » Fri Aug 05, 2011 5:59 pm

Golly. Standard & Poor's has downgraded the United States' long-term US credit rating, citing concerns about growing budget deficits. The knock-on from that for consumers will be noticeable, I reckon. In which case consumption might even drop. In which case the recession's back.

Ahso! · Post by **Ahso!** » Fri Aug 05, 2011 6:10 pm

Amusing! I guess congressional republicans cut it too close after all. At least S&P waited for the Dow to close for the weekend to give everyone a few days to cool off.

Scrat · Post by **Scrat** » Sat Aug 06, 2011 9:33 am

Why should they have waited? I think they were showing a little too much kindness in that respect. We should be doing everything we can to beat common sense into those fools heads. Get a realistic budget out of that zoo in Washington. What a stinky situation.

Post by **spot** » Sat Aug 06, 2011 10:39 am

I've followed, at least to some extent, the Tea Party platform and (speaking as a European) I'd much prefer to see their policies followed than those of the mainstream Republicans or the Democrats. Anything which will reduce Federal expenditure is a benefit to me. The Tea Party seems quite capable of becoming isolationist. It may be the one force in US political circles capable of curtailing expenditure on the US military. Admittedly the US will become even more divided between haves and have-nots but as I said, I'm not speaking as an American.

The downgrade on the US credit rating will cost around $200 a year from the pocket of each US citizen, man woman and child to service public debt. If they happen to have any personal debt then repayments on that will go up too but who knows, there might be Americans without. The $200 a year surcharge is unavoidable though.

Post by **spot** » Sat Aug 06, 2011 11:14 am

spot;1364117 wrote: Admittedly the US will become even more divided between haves and have-nots but as I said, I'm not speaking as an American.

To expand slightly on that last post of mine, and just in case there's a US reader still capable of feeling shame after the outrages perpetrated by his country's administrations, here's the starkest three figures I'm aware of to describe the escalating inequality.

The US has three main categories in its population:

The descendants of aboriginals, most of whom now speak the language of their conqueror (Spanish) and called Hispanics. There's obviously been interbreeding between the conquistadors and the conquered but on balance most Hispanics are predominantly descended from conquered pre-Conquest aboriginals, and most descendants of pre-Conquest aboriginals in the US speak Spanish.

The descendants of African slaves, most of whom now speak the language of their owners (English) and called (by me in this post, anyway) Blacks.

Immigrants and the descendants of immigrants, most of whom now speak English and called (by me in this post, anyway) Whites.

I note that the bloodlines longest present in the USA are the Hispanics, followed by the Blacks. The most recent arrivals, on average, are the immigrants and the descendants of immigrants.

Here's the source of my three 2009 figures: BBC News - Downturn widens racial wealth gap

A quick reminder: a median shows the divide at which half the sample has less and half has more.
- Half of all Hispanic households in the USA have less than $6,325 in wealth.
  
  Half of all Black households in the USA have less than $5,677 in wealth.
  
  Half of all White households in the USA have less than $113,149 in wealth.
  
  Those are my three figures. Nothing else I have seen screams disparity more than these three figures. It is an unmitigated outrage and a direct consequence of Capitalism. It needs curing. Socialism is the cure. Socialism, for those who don't know the word, means the redistribution of wealth through taxation and the establishment of minimum living standards for all.
  
  Who holds the wealth in the USA? Descendants of the oppressors who conquered the aboriginals and imported the Blacks as a commodity, and those who followed them.
  
  Why does the gap still exist and why is it widening? Because the Hispanics and Blacks have been and still are disadvantaged within US society when compared to the voluntary immigrants and their descendants.
  
  Were I Hispanic or Black would I tolerate it? I hope not. I'm glad I'm not American though.

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 1:30 pm

This may be the original research you cite.

Wealth Gaps Rise to Record Highs Between Whites, Blacks and Hispanics - Pew Research Center

theia · Post by **theia** » Sat Aug 06, 2011 2:06 pm

Okay, I've tried my best to understand this credit rating thing but I'm still lost. Who/what is this organisation that has downgraded the US credit rating? Is it not a part of the economic system? Or does it stand above it? Can someone explain more to me, in simple terms, please?

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 2:17 pm

theia;1364133 wrote: Okay, I've tried my best to understand this credit rating thing but I'm still lost. Who/what is this organisation that has downgraded the US credit rating? Is it not a part of the economic system? Or does it stand above it? Can someone explain more to me, in simple terms, please?I assume you have personal credit rating companies in the UK. We have three major companies: Transunion, Equafax, and Experian. When a person applies for a loan the lender will make a judgment to 1) loan you the money and 2) if they decide to loan the money your credit rating will determine the interest rate the lender will charge you for the money - the better the rating the lower the interest and longer the term of the loan if requested. Well, the S&P is the credit rating company for governments.

Post by **spot** » Sat Aug 06, 2011 2:18 pm

It's a private entity.

For free it issues a category rating on anything which trades, as an opinion on the risk involved in lending the trader money or buying a share in it. Banks use the rating when deciding what interest to charge on a loan.

If you pay the rating agency they'll give you a more in-depth analysis of the trader. That's how the agency generates income.

Lon · Post by **Lon** » Sat Aug 06, 2011 2:36 pm

spot;1364120 wrote: To expand slightly on that last post of mine, and just in case there's a US reader still capable of feeling shame after the outrages perpetrated by his country's administrations, here's the starkest three figures I'm aware of to describe the escalating inequality.

The US has three main categories in its population:

The descendants of aboriginals, most of whom now speak the language of their conqueror (Spanish) and called Hispanics. There's obviously been interbreeding between the conquistadors and the conquered but on balance most Hispanics are predominantly descended from conquered pre-Conquest aboriginals, and most descendants of pre-Conquest aboriginals in the US speak Spanish.

The descendants of African slaves, most of whom now speak the language of their owners (English) and called (by me in this post, anyway) Blacks.

Immigrants and the descendants of immigrants, most of whom now speak English and called (by me in this post, anyway) Whites.

I note that the bloodlines longest present in the USA are the Hispanics, followed by the Blacks. The most recent arrivals, on average, are the immigrants and the descendants of immigrants.

Here's the source of my three 2009 figures: BBC News - Downturn widens racial wealth gap

A quick reminder: a median shows the divide at which half the sample has less and half has more.
- Half of all Hispanic households in the USA have less than $6,325 in wealth.
  
  Half of all Black households in the USA have less than $5,677 in wealth.
  
  Half of all White households in the USA have less than $113,149 in wealth.
  
  Those are my three figures. Nothing else I have seen screams disparity more than these three figures. It is an unmitigated outrage and a direct consequence of Capitalism. It needs curing. Socialism is the cure. Socialism, for those who don't know the word, means the redistribution of wealth through taxation and the establishment of minimum living standards for all.
  
  Who holds the wealth in the USA? Descendants of the oppressors who conquered the aboriginals and imported the Blacks as a commodity, and those who followed them.
  
  Why does the gap still exist and why is it widening? Because the Hispanics and Blacks have been and still are disadvantaged within US society when compared to the voluntary immigrants and their descendants.
  
  Were I Hispanic or Black would I tolerate it? I hope not. I'm glad I'm not American though.
  
  I disagree that the gap in wealth between HISPANICS/BLACKS & WHITES is a direct result of Capitalism, but is rather a direct result of lack of education on the part of both the BLACK & HISPANIC community. With the massive influx of poorly educated HISPANICS into the U.S. in recent years and their being limited to lower paying jobs because of limited education it's inevitable that they will show a disparity of wealth against the WHITES.
  
  Social Welfare Benefits that are provided to SOME of the HISPANICS will obviously not be high enough to close the gap in this disparity. As long as there is more interest by a large segment of the BLACK COMMUNITY in hitting it big time in PROFESSIONAL SPORTS or be coming a high paid RAPPER or entertainer as opposed to getting some solid education or job skills they are doomed to the same wealth inequality as their HISPANIC brothers. There are many, many grants, scholarships etc. specifically geared toward both Black & Hispanics that
  
  have greatly increased the wealth level for many of them. Capitalism in my opinion has nothing to do with their lower economic status but education does.

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 2:38 pm

I'd argue that the S&P would not have lowered the rating if there had been some revenue as part of the negotiations. The idea that the U.S. is reducing (?) their future spending is not enough when the revenue is also being reduced.

As for the S&P itself, Paul Krugman doesn't think much of it.

S&P and the USA - NYTimes.com

theia · Post by **theia** » Sat Aug 06, 2011 2:40 pm

Thank you, Ahso and spot. That makes it clearer for me.

Sorry, still on absolute basics so please talk slowly and simply...

So what does this downgrading mean to the US? Will it find it harder to borrow money? From whom does it borrow money?

Thanks

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 2:42 pm

Lon;1364137 wrote: I disagree that the gap in wealth between HISPANICS/BLACKS & WHITES is a direct result of Capitalism, but is rather a direct result of lack of education on the part of both the BLACK & HISPANIC community. With the massive influx of poorly educated HISPANICS into the U.S. in recent years and their being limited to lower paying jobs because of limited education it's inevitable that they will show a disparity of wealth against the WHITES.

Social Welfare Benefits that are provided to SOME of the HISPANICS will obviously not be high enough to close the gap in this disparity. As long as there is more interest by a large segment of the BLACK COMMUNITY in hitting it big time in PROFESSIONAL SPORTS or be coming a high paid RAPPER or entertainer as opposed to getting some solid education or job skills they are doomed to the same wealth inequality as their HISPANIC brothers. There are many, many grants, scholarships etc. specifically geared toward both Black & Hispanics that

have greatly increased the wealth level for many of them. Capitalism in my opinion has nothing to do with their lower economic status but education does.Lon, are you of the opinion that if everyone had an equal education that there would be no shortage of jobs?

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 2:50 pm

theia;1364140 wrote: Thank you, Ahso and spot. That makes it clearer for me.

Sorry, still on absolute basics so please talk slowly and simply...

So what does this downgrading mean to the US? Will it find it harder to borrow money? From whom does it borrow money?

ThanksIt will make a difference on borrowing in that interest it pays on loans will increase and it will have a negative impact on U.S. treasury bonds. Investors buy bonds as a safe investment when the market is shaky because the country issuing those bonds is recognized as a good re-payer (:) ). Now, with a lower rating some investors may be less likely to purchase U.S. Bonds - more deduced revenue.

Post by **spot** » Sat Aug 06, 2011 2:53 pm

Lon;1364137 wrote: Capitalism in my opinion has nothing to do with their lower economic status but education does.
Thank you Lon.

I introduced the suggestion that Socialism stands in contrast to Capitalism, and wroteSocialism is the cure. Socialism, for those who don't know the word, means the redistribution of wealth through taxation and the establishment of minimum living standards for all.A major part of establishing minimum living standards for all is in raising educational attainments of all groups in society to parity, in order that a level start in the employment market becomes a possibility. If that includes incentives to counter a drag effect from the lack of education available to the previous generation then I'd say fine, if it's necessary then it's the way forward.

I would ask you what comparable incentive the Capitalist system has to provide this socially equitable level start in employment. Capitalism needs low grade workers as well as high grade better educated employees. Why should it care if each category is drawn more from one social group than another?

theia · Post by **theia** » Sat Aug 06, 2011 2:59 pm

Ahso!;1364142 wrote: It will make a difference on borrowing in that interest it pays on loans will increase and it will have a negative impact on U.S. treasury bonds. Investors buy bonds as a safe investment when the market is shaky because the country issuing those bonds is recognized as a good re-payer (:) ). Now, with a lower rating some investors may be less likely to purchase U.S. Bonds - more deduced revenue.

Thank you, I'm still following it...

Is this rating agency a completely independent organisation that would show no bias at all in the information it offers?

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 3:06 pm

theia;1364144 wrote: Thank you, I'm still following it...

Is this rating agency a completely independent organisation that would show no bias at all in the information it offers?They're supposed to be independent and unbiased, that seems to be in question though if you read the link to Paul Krugman I provided earlier. Here it is again; S&P and the USA - NYTimes.com

theia · Post by **theia** » Sat Aug 06, 2011 3:15 pm

Ahso!;1364145 wrote: They're supposed to be independent and unbiased, that seems to be in question though if you read the link to Paul Krugman I provided earlier. Here it is again; S&P and the USA - NYTimes.com

Now that is very interesting, Ahso, sorry I missed it the first time but I was still at a loss as how to understand what was going on then.

I wonder why so many are placing credence on their authority then?

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 3:18 pm

Incidentally, when countries compete with bonds other than the credit rating of the country issuing those bonds, what also matters is the interest the issuers pays investors for buying the bonds. With a lower rating the U.S. will most likely need to pay a higher rate of interest on the bonds in order to lure buyers - more payments out. So you see it's a cycle of negativity for the U.S.. Combine that with reduced GDP and it all becomes a very bad situation. The thing is that it all could have been avoided if republicans had not decided to play roulette with the economy.

They're right in insisting to reduce expenditures, just not now.

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 3:20 pm

theia;1364146 wrote: Now that is very interesting, Ahso, sorry I missed it the first time but I was still at a loss as how to understand what was going on then.

I wonder why so many are placing credence on their authority then?That's a good observation and the answer, unfortunately is: that's how the game is played. There has to be an independent entity to look to for investment. If not them then someone else.

theia · Post by **theia** » Sat Aug 06, 2011 3:26 pm

Ahso!;1364148 wrote: That's a good observation and the answer, unfortunately is: that's how the game is played. There has to be an independent entity to look to for investment. If not them then someone else.

So these kind of companies are wielding mighty powers over the economy?

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 3:30 pm

theia;1364150 wrote: So these kind of companies are wielding mighty powers over the economy?Yes. That's the reason 1) the rating company needs to remain beyond reproach and 2) the economy is nothing to be playing around with.

Bruv · Post by **Bruv** » Sat Aug 06, 2011 3:32 pm

I would be interested to know if there are statistics relating to the earnings of British ethnic groups.

I wouldn't mind betting there is a disparity here too, and I don't think it has anything to do with simple education or socialism, much much more complex than that.

Post by **spot** » Sat Aug 06, 2011 3:33 pm

theia;1364150 wrote: So these kind of companies are wielding mighty powers over the economy?

They've spent over a hundred years building a reputation for unbiased honesty. Their opinion is testable, since they're making predictions on risk, and I'm sure their ratings have been historically checked against subsequent defaults. As was said earlier, if the market doesn't trust them for an honest assessment, where will it get an honest assessment? The market definitely needs a way to establish increasing risk.

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 3:36 pm

spot;1364153 wrote: They've spent over a hundred years building a reputation for unbiased honesty. Their opinion is testable, since they're making predictions on risk, and I'm sure their ratings have been historically checked against subsequent defaults. As was said earlier, if the market doesn't trust them for an honest assessment, where will it get an honest assessment? The market definitely needs a way to establish increasing risk.It will be interesting to see whether or not S&P pays any price for this maneuver.

Post by **spot** » Sat Aug 06, 2011 3:37 pm

Bruv;1364152 wrote: I would be interested to know if there are statistics relating to the earnings of British ethnic groups.I'm quite sure there's far more detailed statistics freely available to the public in that area in the UK than in the US.

I note that the figures I quoted relate to wealth, not earnings. I note also that the original article showed that 10% of US households hold 56% of private wealth. If you go looking up comparative UK statistics you might like to include that one as well.

theia · Post by **theia** » Sat Aug 06, 2011 3:40 pm

Ahso!;1364151 wrote: Yes. That's the reason 1) the rating company needs to remain beyond reproach and 2) the economy is nothing to be playing around with.

That's worrying isn't it? No 1) I mean. I can't imagine any company remaining beyond reproach in all areas.

What is the underlying aim of these credit rating companies?

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 3:52 pm

theia;1364156 wrote: That's worrying isn't it? No 1) I mean. I can't imagine any company remaining beyond reproach in all areas.One thing is for certain, I think, and that is if there are any skeletons in S&P's closet they'll come out now. Democrats and republicans may very well be motivated to join together in an effort to discredit S&P.

Clodhopper · Post by **Clodhopper** » Sat Aug 06, 2011 3:56 pm

theia;1364156 wrote: That's worrying isn't it? No 1) I mean. I can't imagine any company remaining beyond reproach in all areas.

They really only have to be beyond reproach in the analysis they do and the rating they produce as a result. Since this is what they make their money from, their self-interest works to keep them clean. They might have done horrible things in other business areas, but as long as their core business is trusted by their clients to be clean then no one really cares.

At least, that's how I understand it. spot and Ahso seem more likely to really know.

Post by **spot** » Sat Aug 06, 2011 3:58 pm

Lon;1364137 wrote: With the massive influx of poorly educated HISPANICS into the U.S. in recent years and their being limited to lower paying jobs because of limited education it's inevitable that they will show a disparity of wealth against the WHITES.On this specific point, Lon, you do seem to be cherry-picking the problem. The wealth per Black household is even lower than that of Hispanics and you're not going to tell me there's been a significant (much less "massive") influx of poorly educated Blacks into the U.S. in recent years. If comparative Black wealth has failed to improve despite their lack of significant immigration, Occam's Razor suggests you look for a common cause holding back both Black and Hispanic households and that immigration isn't the answer.

Lon · Post by **Lon** » Sat Aug 06, 2011 4:29 pm

Ahso!;1364141 wrote: Lon, are you of the opinion that if everyone had an equal education that there would be no shortage of jobs?

Absolutely not.

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 4:29 pm

White America should really rethink their strategy regarding the group selection process. What America had hoped is blacks would go back to Africa, and when that didn't work out we isolated them in ghettos and flooded them with drugs and guns in the hopes they would all get high and crazy and kill one another, but instead what they did was corner the U.S. market on drugs and guns (selling to white kids), and invent Jazz. We also tried locking them out of the employment and education market by trying to force them to be like white people, but they simply turned off (I don't blame them).

And what has all this group selection process caused? Exactly what we should have expected. Black people did what any member of any species would have done when backed into corners - they reproduced like mad. :wah:

Take that, Whitey!

Ahso! · Post by **Ahso!** » Sat Aug 06, 2011 4:35 pm

Lon;1364163 wrote: Absolutely not.I didn't think you did, only a moron would think that and you're certainly not a moron. I think my follow up can be found in my above post.

Lon · Post by **Lon** » Sat Aug 06, 2011 5:11 pm

spot;1364143 wrote: Thank you Lon.

I introduced the suggestion that Socialism stands in contrast to Capitalism, and wroteSocialism is the cure. Socialism, for those who don't know the word, means the redistribution of wealth through taxation and the establishment of minimum living standards for all.A major part of establishing minimum living standards for all is in raising educational attainments of all groups in society to parity, in order that a level start in the employment market becomes a possibility. If that includes incentives to counter a drag effect from the lack of education available to the previous generation then I'd say fine, if it's necessary then it's the way forward.

I would ask you what comparable incentive the Capitalist system has to provide this socially equitable level start in employment. Capitalism needs low grade workers as well as high grade better educated employees. Why should it care if each category is drawn more from one social group than another?

I would certainly agree that a MINIMUM LIVING STANDARD for all peoples is essential, and irrespective of what the experts deem a MINIMUM LIVING STANDARD to be, there are those that will harbor discontent and create societal problems living at that level. Further, it seems to me that under any and all political or social systems there are the HAVE & HAVE NOTS. I personally favor any system that provides incentives for economic assertiveness and rewards innovation, and CAPITALISM despite it's warts and pimples has provided and can still provide great opportunities for all. Having spent much time in New Zealand I have had the opportunity to compare it with the U.S. and frankly I have no problem with their form of government. It works well for them. I'm not sure how it would work here however. They are as I am sure you know a "CONSTITUTIONAL MONARCHY WITH A PARLIAMENTARY DEMOCRACY". As for redistribution of wealth, yes I think that those making big, big bucks should pay more in taxes. A a CEO should make more $$$$ than the guy that drives one of his trucks or is a clerk, but not more than 500 times the $35,000 the driver or clerk are making.

Post by **spot** » Sun Aug 07, 2011 12:12 am

Lon;1364171 wrote: A a CEO should make more $$$$ than the guy that drives one of his trucks or is a clerk, but not more than 500 times the $35,000 the driver or clerk are making.

That, it strikes me, is a peculiarly Capitalist notion - the idea that someone who generates more book-profit should take a percentage of it as his wage. It's why the bank traders speculated, you'll remember, with catastrophic results. What's wrong with, taking a random alternative, preferentially rewarding those whose empathic input to their occupation exceeds the average? Nurses and care workers, for instance? Or paying more to trash collectors, whose work is both unpleasant and physically demanding, than to desk managers who enjoy their occupation for the challenges and problem-solving?

It's all down to priorities. In a society where people work for the satisfaction of contributing, waitressing might finally stop being a minimum-wage affair with a demeaning reliance on tips.

Lon · Post by **Lon** » Sun Aug 07, 2011 10:15 am

spot;1364199 wrote: That, it strikes me, is a peculiarly Capitalist notion - the idea that someone who generates more book-profit should take a percentage of it as his wage. It's why the bank traders speculated, you'll remember, with catastrophic results. What's wrong with, taking a random alternative, preferentially rewarding those whose empathic input to their occupation exceeds the average? Nurses and care workers, for instance? Or paying more to trash collectors, whose work is both unpleasant and physically demanding, than to desk managers who enjoy their occupation for the challenges and problem-solving?

It's all down to priorities. In a society where people work for the satisfaction of contributing, waitressing might finally stop being a minimum-wage affair with a demeaning reliance on tips.

Given the large number of corporations there are thousands of CEO's, and while the the news focuses on the few that have abused their responsibilities and caused severe damage to the economy, such is not the case with the vast majority.

MISSION STATEMENTS are a standard for most all large public corporations and most CEO's will try to operate within the stated objectives of the MISSION STATEMENT.

It's not all about generating book profit.

My mother who worked most of her life as a WAITRESS never considered the TIPS that she received as demeaning and was very proud that she received more and larger tips than most of her co-workers because of her efforts to provide good service.

New Zealand (which does not tip) has horrible service by contrast.

After age 30 when I made a major career change 85% of my wage income came from COMMISSIONS (yes, dreaded commissions) up until the time I retired. So I was definitely a part of the CAPITALISTIC SYSTEM. I thrived on incentives and while commission income hardly fits most people it's suits many of us just fine. Through my and my associates marketing efforts we enhanced the financial stability and security of many individuals and businesses. I really doubt that such results could have come about in a different fashion unless a GOVERNMENT forced the same services upon the individual or business.

Ahso! · Post by **Ahso!** » Mon Aug 08, 2011 12:51 pm

Treasury Bonds are holding surprisingly strong. I wonder how long that will last with these politicians behaving as they have been. I guess since they're on vacation the thought is they can't screw anything up.

gmc · Post by **gmc** » Mon Aug 08, 2011 1:58 pm

posted by spot

Standard and Poors are based in the United staes with offices all around the world. Sadly for their reputation they were giving Lehmans triple aaa rating up until just shortly before they went down the toilet. More specifically they failed to warn invstors of the junk mortgages that lehmanns were repackaging and selling as part of structured investment portfolios. In fact none of the rating agencies did their jobs properly and it would be fair to say, as ahso has pointed out that their credibility as a reliable ratings agency is shot to bits. The same with the other two US based ratings agencies.

More importantly the chinese ratings agency have downgraded the US. Since they are the major holders of US debt that matters a whole lot more than standard and poors.

posted by ahso

One thing is for certain, I think, and that is if there are any skeletons in S&P's closet they'll come out now. Democrats and republicans may very well be motivated to join together in an effort to discredit S&P.

For all republicans might bleat about standard and poors they are not the ones that matter the most. The republic and democrats seemed not to have noticed he world has changed over the last thirty years or so. The economic clout the US used to have is ebbing away fast and they haven't noticed. It also seems likely that the status of the US dollar as the worlds reserve currency is about to go as well. That earns the US banks millions in handling foreign exchange.

posted by ahso

Incidentally, when countries compete with bonds other than the credit rating of the country issuing those bonds, what also matters is the interest the issuers pays investors for buying the bonds. With a lower rating the U.S. will most likely need to pay a higher rate of interest on the bonds in order to lure buyers - more payments out. So you see it's a cycle of negativity for the U.S.. Combine that with reduced GDP and it all becomes a very bad situation. The thing is that it all could have been avoided if republicans had not decided to play roulette with the economy.

They're right in insisting to reduce expenditures, just not now.

The one expenditure they could cut quickly they have ignored. They seem to be cutting the kinds of programmes that will help get them out of the mess.

If someone self employed and in debt but needs to replace a van in order to continue working is he better to buy the van and keep working to pay those debts off over time or use the money to pay off all debts and be unemployed and bankrupt? It's not the wealthy who will be losing their jobs and going bankrupt because of this financial crisis,

Post by **spot** » Wed Aug 10, 2011 2:36 pm

spot;1364117 wrote: I've followed, at least to some extent, the Tea Party platform and (speaking as a European) I'd much prefer to see their policies followed than those of the mainstream Republicans or the Democrats. Anything which will reduce Federal expenditure is a benefit to me. The Tea Party seems quite capable of becoming isolationist. It may be the one force in US political circles capable of curtailing expenditure on the US military. Admittedly the US will become even more divided between haves and have-nots but as I said, I'm not speaking as an American.
Here we are - I'm not the only one saying it..."The Tea Party people are anti-military spending to a greater extent than establishment Republicans and have a healthy dose of isolationism thanks to American intervention in Iraq and Afghanistan,'' says Representative Barney Frank of Massachusetts, who has long pushed to cut the defense budget. "On this issue, they were a positive force."

An opportunity to cut military spending - Opinion - Al Jazeera English

Ahso! · Post by **Ahso!** » Wed Aug 10, 2011 2:41 pm

Barney Frank is a mainstream Democrat. Some may be suspicious that the real reason you like the politics of the Tea Baggers is that they lead the way in wrecking the U.S. economy.

Post by **spot** » Wed Aug 10, 2011 2:44 pm

It's their desire to draw the US military back within the borders of the Homeland. That's the absolute starting point as far as I'm concerned. Without that, nothing else matters. If you find me another group proposing the same, then we can start looking at which benefits the US economy more.

Ahso! · Post by **Ahso!** » Wed Aug 10, 2011 2:53 pm

I'd not be fooled so easily. These same people most likely supported both wars and only turned against them when Bush betrayed them and then Obama became president. You won't find many if any decrying our support of Israel's occupation and the financial support thereof.

I don't think Ron Paul is a Tea Bagger and I doubt Tea Baggers would support him. Paul is the only one willing to speak up about the Israeli issue, AFAIK.

Post by **spot** » Wed Aug 10, 2011 3:02 pm

Decrying Israel's occupation of the West Bank and the Gaza Strip? Neither do I. I think Israel's borders should include the whole of the British Mandate in Palestine from the Mediterranean to the Jordan. My sole dispute is with the laws and constitution of Israel, not the territory it occupies or the residents who live there.