S&P downgrade was a "MISTAKE" says Treasury

Treasury Takes Exception at S&P's Math, Saying Downgrade Doesn't Add Up
The U.S. Treasury Department said there is "no justifiable rationale" for Standard & Poor's move to downgrade the nation's credit rating as global finance ministry officials prepared responses to the historic announcement.
Standard & Poor's officials stood by their decision announced Aug. 5 and laid blame on a political system that failed to adequately address deficit reduction in the compromise law that President Barack Obama signed Aug. 2 to avert a U.S. default on its debt.

The Treasury Department issued a statement saying S&P had acknowledged an "error" in its calculations and that the rating company made a $2 trillion mistake.

Euro-region central bank governors will hold emergency talks today aimed at limiting the market fallout from the U.S. downgrade and stopping Spain and Italy from becoming the next victims of the sovereign-debt crisis. The central bank heads will hold a conference call at 6 p.m. Paris time, said a central bank official, who declined to be identified because the talks are confidential.


I find it amusing that NO WHERE in the article does the name of the Treasury Secretary show up.
He doesn't seem very good at math.
And he looks to be out of bullets.

Edited by Rogerdodger, 07 August 2011 - 01:54 PM.

This is odd. The gubbermint never called them out on their $2 trillion mistakes before.

Edited by spielchekr, 07 August 2011 - 01:39 PM.

My answer is very simple: RAISE THE TAXES ON THE TOP 2% AND REDUCE THE DEFICIT SERIOUSLY... The corporations and banks have been bailed out, it is time for them to pay back, this is very obvious. The govt has the deficits because the govt bailed them all out. Pimco's El-Erian says you have to tax people like me making the top dollars more, what more to say?

How's about demanding the money back from Wall Street Bankers? Bernie had to return the money he stole. A guy can dream can't he?

My answer is very simple:

RAISE THE TAXES ON THE TOP 2% AND REDUCE THE DEFICIT SERIOUSLY...

The corporations and banks have been bailed out, it is time for them to pay back, this is very obvious. The govt has the deficits because the govt bailed them all out. Pimco's El-Erian says you have to tax people like me making the top dollars more, what more to say?

El-Erian is intelligent. There is no way America can raise money except taxing the top rich. If we don't tax them, El-Erian knows he will not be a top earner in future. On the other hand, GOP is like killing the golden goose. They want the top rich to continue to earn money and not pay taxes as well.

My biggest gripe is that they could have come up with a more pleasing slogan than "too big to fail".

How's about demanding the money back from Wall Street Bankers?
Bernie had to return the money he stole.

A guy can dream can't he?

That's only 1T of agency (Fannie and Freddy) and MBS debt in total. The agency debt is about $120B as I remember and $880B in MBS from banks...

Certainly it would reduce the deficit by 10%, but the banks would all go kaput.

Edited by arbman, 07 August 2011 - 02:12 PM.

My answer is very simple:

RAISE THE TAXES ON THE TOP 2% AND REDUCE THE DEFICIT SERIOUSLY...

The corporations and banks have been bailed out, it is time for them to pay back, this is very obvious. The govt has the deficits because the govt bailed them all out. Pimco's El-Erian says you have to tax people like me making the top dollars more, what more to say?

Raising taxes is the easy way out....do you really trust the boys in Washington to spend the money they collect in a prudent fasion. If you are happy with them spending "your" tax dollars on bridges to nowwhere, grand juries for steriods in baseball, inqiuries on bad behavior for Charlie Rangel, Anthony "dick" Wiener....a million bucks a day in Libya, etc...etc.

How about a pay cut for Congress and the Senate, a reduction in their perks and pensions....but hey if you think they are doing a good job then by all means, support a tax increase.

My answer is very simple:

RAISE THE TAXES ON THE TOP 2% AND REDUCE THE DEFICIT SERIOUSLY...

The corporations and banks have been bailed out, it is time for them to pay back, this is very obvious. The govt has the deficits because the govt bailed them all out. Pimco's El-Erian says you have to tax people like me making the top dollars more, what more to say?

El-Erian is intelligent. There is no way America can raise money except taxing the top rich. If we don't tax them, El-Erian knows he will not be a top earner in future. On the other hand, GOP is like killing the golden goose. They want the top rich to continue to earn money and not pay taxes as well.

Why do bond guys like this shove for the high ground to argue that risk adjustments should be done now with taxation instead of then with interest rates? Once they explain that, I'll listen to them.

Reducing the interest rate would only contribute to deficit since it means the demand for Treasuries is rising. Well, it will probably happen anyway since the stock market will take a crapper from here, for short term at least. The point is there is no way to sustain this debt and yet there is no way to reverse the course immediately either. The ones who benefited the most over the past decade are the top 2% earners, the rest basically lost against the inflation game. In fact, increasing the deficit will further squeeze the lower income brackets due to inflation and benefit the top 2% earners even more. I guess you get the point. You have to tax the top 2% even if the govt has to continue to create more deficit until the economy creates more jobs and income to generate more tax revenue. I never suggested taxing across the board, it would only punish everyone. But the ones who benefited from the debt ballooning from $5T to $15T over the past 4 years are all the top 2% earners...

The Right Look, I understand what you are saying, but the majority of the taxes are used for the military --which comes straight back to US economy-- and social security and healthcare so on...

Edited by arbman, 07 August 2011 - 02:27 PM.