New York Stock Exchange

Stocks have fallen at the New York Stock Exchange as a result of S&P's downgrade of federal debt. Photo: Flickr/Gerardo Diego Ontiveros

Over the weekend, the United States lost its “best in class” AAA credit rating. Reacting to the inadequate debt reduction measures in last week’s debt deal, ratings agency Standard & Poor’s downgraded America’s debt to AA+.

What does this mean? The Heritage Foundation’s JD Foster explains:

A credit rating downgrade will eventually mean higher interest rates on U.S. government debt. This may be hard to imagine given the recent drop in Treasury bond rates in response to events overseas. But higher future rates are certain, and that means that even more federal tax dollars must be dedicated to paying the interest on past government excesses. Higher interest rates and interest cost means greater deficit pressures, which can mean more debt, which can lead to higher interest rates. This is why it is termed a debt spiral.

Foster explains how it came to this:

While not solely to blame, President Obama and his allies are most certainly preeminently to blame. Facing a rapidly growing budget deficit in 2009, President Obama pushed through a massive fiscal stimulus program followed by a succession of lesser efforts. As the anemic state of the economy attests quite clearly, those programs failed miserably—except in raising federal spending and national debt.

Then the President pushed through his disastrous and highly unpopular health care reform. On paper, these reforms give the appearance of improving the fiscal picture modestly. But as the Medicare trustees’ report has reminded us every year after Obamacare’s passage, this happy picture is an illusion. Aside from the damage it has done and will do to health care costs and services, from a fiscal perspective Obamacare ultimately is just yet another unaffordable entitlement piled on top of those already on the books.

There is hope for the future, but we must not delay. Given our present standing, the U.S. needs a fundamental change of course.

We must drive down spending—including and especially on entitlement programs—toward a balanced budget while protecting America and without raising taxes. Properly done, this would lead to economic growth, more jobs, less government, and a restoration of the nation’s credit rating. The Heritage Foundation’s Saving the American Dream plan would accomplish all these goals and more.

Comments (68)

Anthony - August 10, 2011

While this is a step in the right direction it is far from accurate or perfect. First of all if you look at the first 150 years of our republic federal spending was no where near 18.5%. Also a consumption tax is far better than any type income tax.

B Davy - August 10, 2011

It is no Surprise that our credit rating plumited to AA+ because of all of The Deficit Spending that has been going on during the current administration. No one, or a company, or a country can survive by spending more than one has on hand…… Not for long.

Tom Sheahen - August 10, 2011

A lot of Americans just glaze over at the concept of million, billion and trillion. They do not have “numerical literacy.” Consequently, they cannot grasp the magnitude of the debt problem, and recite slogans like “tax the rich.”
How to overcome this deficiency? If junior high schools would start teaching “scientific notation” in math class, the kids would go home and embarrass their parents into learning the difference among big numbers.

Laurence of Louisiana - August 10, 2011

This is a clear picture of Obama’s “chickens come home to roost” as his lifelong but denied preacher has said so famously. I have been aware for a long time of what a dangerous–not stupid at all–man his president is. It is all part of his master plan and I know what that is too. If only I had any true faith in the American electoral process anymore. I am reading and re-reading and memorizing again the Declaration of Independence; the blueprint of what to do when a government becomes a tyrant, as the people in Washington DC that have been elected have become. It worked on George III and it will work again on Capitol Hill.

Marc - August 10, 2011

It means that Bush’s Recession was better the Obama’s Recovery.

Marc - August 10, 2011

It means that Bush’s Recession was better then Obama’s Recovery.

Dave Haskins - August 10, 2011

The failure to return to and adhere to the constitutional principles that led to the trust bestowed upon us as a nation is the chief cause. Lenders only lend to borrower’s who have a track record of repayment. The rest are called deadbeats and moral degenerates.

“Do not separate text from historical background. If you do, you will have perverted and subverted the Constitution, which can only end in a distorted, bastardized form of illegitimate government.”

James Madison

John Dilworth - August 10, 2011

Congress and the President have increased spending beyond our ability to repay the principle. The debt debate resulted in greater credit limit in the short run and promises to lower future spending long-term. The promise of the future does not lower the level of spending overall it just reduces the increase in spending. The fact that we will not lower overall spending and do not plan to pay down any debt is why our credit rating was lowered. Unless and until Congress reduces overall spending and makes an effort to pay back some debt there will be a need to increase credit and therefore lower our overall rating(s).
Tell Congress to support cut, cap and balance.

Jeff Yetter - August 10, 2011

It defies description, the “double indemnity ” aspect of this administration’s effort to further guild the train as it careens off the tracks. To cultivate a debt, the foundation of which is abandonment of sound, sane, fiduciary policy, and then, to attempt to cure same through the application of additional amounts of self-created, unsupported, debased dollars. While I heartily endorse Heritage’s efforts, I fear the only true recourse is for all to Pray for America.

Artie - August 10, 2011

It’s the SPENDING, Stupid!!!!!

bruce - August 10, 2011

This should serve as a wakeup call to cut spending, but I’m sure it won’t. On the other hand, I wouldn’t mind seeing interest rates go up to the point that the return on my savings is non-negative.

Bob Fregeau - August 10, 2011

I am so sick and tired hearing who pays taxes and who doesn’t pay taxes. If you are an American, out of work and unable to pay your taxes, you should be put on a fast track to employment in order to pay taxes. Finally, America should have a flat tax baseline where everyone pays their fair share, In good times, the tax rate is lowered and in bad times the tax rate is raised. What the hell is wrong with that? We have a Constitution…let’s use it, not abuse it.

Nancy Suter - August 10, 2011

I believe it has been Obama’s agenda/intent from the day he took office to do everything in his power to destroy America and take her to Socialism control. Everything he does is the opposite of our Constitutional values this county was founded upon. I believe he is a Muslim Socialist, and I hope and pray he is voted out of office in 2012. I am totally disgusted AND ANGRY with politicians in general who have lost the true meaning of working for the voters rather than for themselves.

Dale R - August 10, 2011

How about not cutting checks for members of The House and Senate until we have a balanced budget.

Maybe they should be disqualified to run for reelection.

Frank C. Kolda - August 10, 2011

Expenditures exceed income. Increased taxes appears to be an unacceptable solution and could restrict job growth.. Many Current policies restrict job growth with the desired increase in income. Overspending is obvious with no move to reduce spending. The President and Democratic Senate must wake up.

Charles Dewald - August 10, 2011

Well, I suspect that we’ll see another downgrade pretty soon because Obama isn’t worried about that. He is hell bent on buying votes for the 2012 election, e.g. continuing his spending binge, that is the highest priority right now.

Bob Johnson - August 10, 2011

There are several Departments and agencies whose functions are not appropriate to the Federal Gov;t. Their payrolls must be a trillion. Why is there no talk of getting rid of them? (By attrition, of course.)

Frank Serpico - August 10, 2011

This debacle started with the election of FDR. Congress, since that time, has not performed the functions that The Constitution authorized or inferred. They have shirked their responsibilites. The people signaled their disgust with the Congress, by electing an unqualifed man as President. The shift in GOP strength must continue. I do not agree with the position of promoting a civil society The time for erudite position papers is over. You must reach THE PEOPLE. They vote.

Doris Chapman - August 10, 2011

I agree with all that you say except when I see the word entitlements, I see people on Social Security and Medicare being the victims. I don’t like that. I agree there needs to be some changes, but it is naive to say no new taxes. I personally would like to see a small national sales tax to bring in more revenue along with a cap on spending. We all have to pay for the mess we are in, because we all voted and we got what we asked for. I don’t like trying to tax the rich, but I am very unhappy at the 50% in America who pay Nothing into the tax system. All of those people buy stuff, and if the tax was not on food and drugs, most people could manage it. Otherwise state taxes are going to go up and that is worse.

Nick Meligakes - August 10, 2011

We ALL want to get in the right attitude, not letting our- selves slip into a angle that we will not be able to get back out of, that we are a great nation, and we will create a action that we will need to keep on the loyal side, and keep prosparity where it should be!

Palm Desert Writer - August 10, 2011

Decades of a Congress not kept in proper check by informed and engaged American voters has finally caught up with us.

Shame on this and previous Congresses and Presidents, for sure.

But after all the red faces and arm waving, the ultimate responsibility for this debt/deficit mess lies squarely at the feet of the American electorate who allowed the foxes take over the chicken coop. Shame on us.

Robert Fay - August 10, 2011

Congress and the President are wholly responsible for the condition of the country. They alone make decisions regarding how much money to extract from the taxpayer and how they will spend it. Yet, we are expected to shoulder the burden as if voting them into office relieves them of all responsibility. When will they be forced to pay and even suffer for their mistakes, as we suffer from them? Have any of them taken a pay cut, relinquished their lifetime benefit package, lost their home or lost their job? Therein lies the problem. This is more than bad judgement – it is perpetual treasonous behavior. Is a revolution the only way to bring back a Constitutional government and rid ourselves of the cancer that has infected nearly every area of government?
Who can be trusted to do what is right for American citizens? Very few that I know of. Yes – it is a sad scenario. Observations of a 65 year old business man.

JON DONALDSON - August 10, 2011

Obviously the Federal debt spiral surely draws the states and cities into it’s vortex as well, sucking up all of our energies into the lenders coffers. So why does everyone pretend that Obama doesn’t know this; that it’s an unintended consequence of their designs for us?

Beverly - August 10, 2011

Were the US a private citizen, it wouldn’t warrant any rating above “deadbeat”. It is my understanding that immediately after Obama signed the bill to raise the debt ceiling (it should have been frozen) Dept of the Treasury quietly borrowed more than one half a trillion dollars. This was just another taxpayer horror.

There is so much fraud and abuse in our Social Security program, and others as well, as to be unconscionable! Seniors, and I am one, really resent that money paid by myself and everyone who is, or has ever been, employed is being shoveled at illegal aliens and others who have never contributed a thin dime.

What we really want is for our government to SERVE us, and to do so in a manner which will allow us to believe that there is anyone in Washington who really cares. As it is, why should they , they don’t have to live on Social Security…………ever.

I offer a disclaimer here, my husband and I will be fine, we paid off our home mortgage 20 years ago and the mortgage on our triplex, income property 15 years ago. We both have IRAs and my husband has a 401K. By the time Obama finishes scaring and angering people in the stock market every time he opens his mouth, those may be in a shambles. We resent that we may have little to show for all our hard work (and sacrifice) to provide for our “golden years” (which are fast turning to BRASS).

swamptiger - August 10, 2011

Wealth is the creation of inovation, investment and labor working together in productive enterprise. Long ago the Spanish learned that the gold and silver gained through conquest would not make them wealthy. They traded their stolen riches for productive labor and goods from other nations to become a model for the fectless wards of socialism who think that wealth is derived from government and unions by taxing the rich. Those who allow socialism to rule will loose their freedom to pursue happiness because it smothers imagination, ambition and the will to work for the fruits of labor.

Big government and big unions are furiously aquiring power through stealthy legislation and thousands of new pages of code in the Federal Register. Obama added at least 200,000 new employees to the executive branch. No one knows how many now are in the executive. They are all dragging their feet except in such as the IRS, and the EPA.

ROBERT WALKER - August 10, 2011

i inflated the tires on my car to solve our energy problem
like obama said but it didnt,work so how about this
open up anwar,open up all gulf drilling including the east
coast, complete the oil line from canada to texas.
send all nuclearwasrte to yuca flats,sign free trade with
columbia,south korea and panama.

Harold - August 10, 2011

I do not have a collage degree and am a disabled retiree who has lost most of my hard earned saved U.S. dollars in a bankrupted company of which I gave 36 years of labor and savings. I took an economics course in high school and it gave me the basics as to how to devise a working budget for my family. The basic knowledge I gained from this course is actually all one needs to understand the total insanity the members of Congress have shown in their reckless spending. I have worked from the age of 14 and paid into the Social Security System all these years. I knew my paid in money was at risk when L.B.J. and Congress in all their infinite wisdom decided to start raiding the system to pay their bills and after that Congress went spending crazy.

James V. Burnette - August 10, 2011

The only real and lasting solution is to shift all the entitlement programs back to the people and to the communities, towns, cities, counties and States. Too many of our people have forgotten that to have our freedoms we must be responsible for taking care of ourselves. For every handout we get from the government it takes away one more freedom that our Constitution gives us.

Joan - August 10, 2011

This country is currently and plans to spend way more money that we are worth. I would not loan our government a single dollar with our current spending problem so why should anyone else.

W. Jones - August 10, 2011

In all of this economic mess, there can only be one answer. Prayer. I feel we need to pray for a solution.

Ruth Earhart - August 10, 2011

I think it’s about time the United Sstates citizens began to realize that they need to speak up and make themselves heard. The illegals did it and got EVERYTHING they wanted. The gays did it and got EVERTYTHING they wanted. When are the citizens of this country going to wake up and decide that they can’t be the SILENT MAJORITY any more? We, who WORK for a living know how to balance a budget!!!! We could teach those dummies in DC how to do it — but they think they are smarter than anyone else. It’s about time they realized they don’t know ANYTHING!!!!

Tom Moxley - August 10, 2011

I commend S&P for their courage to make the rating call they think appropriate. The US Senate’s announced intention to investigate S&P is intimidation, and should be condemed.

Norm Katz - August 10, 2011

It occurred to me while reading your presentation that our economy today is a result of a 100 year trend from republican government to democratic government. It started with the passage of the 16th Amendment in 1913 that allowed taxation of income from whatever source derived. This gave the Federal Government the power to expand without limit. Shortly thereafter came the 17th Amendment that stripped the States of their sovereign power by taking away the State legislatures’ right to appoint U. S. Senators. What are the chances of these two Amendments being repealed? 0 to none is my guess. Likewise the possibility of changing our propensity to spend at the Federal level is slim to none.

The best we can do is adopt a balanced budget Amendment. Being a CPA, my concern is accounting standards for measuring the budget. Should the Amendment have wording like “balanced in accordance with generally accepted accounting principals”? Without measuring standard, a balanced budget amendment will not work.

Dennis &Vickie Cates - August 10, 2011

Republican House and Senate members must come together and unite the effort to draft a bill to kill Obamacare.They need to be smart enough to show voters how much this would save the tax payers and not have to cut Medicare and Medicare.They need to get a list of the members that would vote for the bill , including Democrats, and do this before the elections coming up so the tax paying voters can hold these members to the fire , and scare the living daylights out of those members so they would not dare vote against repeal.Conservatives are waiting on someone to take this and run with it. Show real facts , and lay them out so people can see and make it to where people understand the facts. I’m in sales , and I always explained the facts of my products so a two year old can understand it. Please help us get this going, Please.

Fred Perian - August 10, 2011

What needs to be done to change the status co in the Congress?? Almost all in the Congress (or so it seems) is more focussed on re-election than the basic spending and increased power of the Federal Government. What ar e you going to do to reduce the power of the Federal Government???

Phil Durham - August 10, 2011

It is hard believe that we would finally see this day when the United States is broke. I blame the American people who elected the series of Presidents, Congressmen, and Senators who have brought us to the brink of economic collapse. I blame the educational system that taught young people that the government is here to provide for you. I blame the news media and their biased reporting. I blame the large corporations and the financial system, for their own benefit, influence the bad decisions that the government has made. And, I blame myself for not being more active and involved in these matters.

Margaret Paddock - August 10, 2011

If the truth be spoken….and it is here unless we drive down spending the credit rating will be lowered again and even higher rates will be assessed.
You can not spend you way out of debt, but it seems the administration is deaf to the truth.
Americans need to keep badgering everyone in Congress and the Senate until our message is clearly heard: WE EXPECT YOU To STOP SPENDING and cut useless government jobs and entitlements to foreign countries that hate us, stop repairing mosques in foreign countries, and a host of other programs that do not do anything to rebuild America.

Randall Lair - August 10, 2011

Politicians seek power over service to their constituents. I also believe politicians do not fully understand and believe in our constitutional principles. Lastly, our President is not qualified to lead our country and does not seem to see this weekness in himself. He is narcissistic and is unable to admit he can not handle this important position. He would do the country a favor to resign immediately!

patrick stanley - August 10, 2011

Everyone seems to agree with this. The problem is that everyone wants someone else’s budget to be cut. And this magnified by the media in bed with the Democrat party.

Edna - August 10, 2011

Our Republicans wouldn’t stand their ground and made that debt deal. How will they stand their ground for the “Saving the American Dream plan”?
If anything makes me cry, it’s how they compromise and compromise and compromise. I knew this would happen when John Bohner didn’t back Barton’s comment about BP. I want John Bohner to get a backbone and depend on his freshmen congressmen (‘men’ in its generic plural meaning ‘people’) and his conservative Republicans. Perhaps even follow the “Saving the American Dream” plan! Wow, now that would be something.

Betty Sakai - August 11, 2011

The Fed begs to be audited by a skilled public auditors, their findings published. The Fed thereafter should be governed by an oversight committee comprised of citizens whose only job it is to oversee the Fed and report to a Congressional Oversight Committee the status of funds, interest rates, loans, and the federal budget, etc. Only Congress should have the right to permit the printing of more dollars and only if the value of the dollar can be maintained. The subject of money should be kept out of the political arena. Politicians should be prevented from requiring banks to lend such as what happened with sub-prime, no-doc lending, and politicians should be required to spend within the money that is available (budgeted). The need is to stabilize the capital markets to create confidence again.

Hans ten Boom - August 11, 2011

I concur. I could not have said it any better.
Spending beyond ones means is always a sign of trouble. The federal government is hooked on spending like a drug addict is hooked on drugs. It requires intervention and rehabilitation. Hopefully people are waking up to this fact.
The election next year is going to be critical in this process. Fiscally conservatives need to be elected to right a sinking ship. The cure is fairly simple ,but the will do it has been lacking.


James Brennan - August 11, 2011

The budget could be balanced in two years if Republicans had courage and politicle savey. see following letter to the RNC,
Rience Priebus August 4, 2011
Chairman Republican National Committee
310 First Street SE
Washington DC 20003

Stop with the letters proclaiming Republican victory. I will not give one more cent or one moment of my time to Republicans. You are worse than the Democrats because you promised to cut spending and reduce the size of government. You have not cut one dime of actual spending and the government is expanding at jet speed! ( Even Ryan’s budget is a joke! It never balances the budget.) Republicans have used the same lies and scams as the Democrats to divert the public’s attention away from the real problem. Spending caps, debt limits, ten year budgets and yes, a balanced budget amendment are all scams that accomplish nothing! They are words and numbers that appear on worthless paper to be endlessly massaged and changed. History shows that both Democrats and Republicans blow thru spending caps and debt limits as though they never existed!

Do you really believe that future governments run by progressive, socialist people like Obama, Reid and Pelosi give a rats-behind about a balanced budget amendment? They openly proclaim their contempt for the Constitution and are systematically destroying it! We no longer have First Amendment rights. Freedom of Speech? People today lose their jobs and reputations for uttering political incorrect words. Freedom of Religion? Yes if you are a Muslim, but Christian, not so, now the government is editing prayers at crematories for veterans! Freedom of the Press? The government is openly attacking Fox News and conservative talk radio. They are constantly trying to destroy our Second Amendment rights! Obama and Clinton want to turn over this right to the United Nations. Our Fourth Amendment protection against unreasonable search and seizures has been seriously weakened by a progressive State Supreme Court that ruled we have no right to resist law enforcement officers from search and seizure even if they do not have a warrant. The Tenth Amendment has been rendered almost useless. And now we have a former Tennessee “conservative” Republican Senator leading the fight to eliminate the Electoral College. If this is done “fly over” states might as well forget about voting for President! Republicans have done nothing to stop this!

There is only one way to cut spending and shrink government. We must have people that believe in the Constitution and have the courage to cut today’s actual spending NOW! Republicans lack the courage! The most aggravating part of this is that the Democrats have given the Republicans the tool to make the cuts and they refuse to use it! The Democrats have not passed a Budget. Therefore, Obama and the Democrats have no authority to spend a dime. They are operating on CONTINUING RESOLUTIONS! Spending bills must originate in the House! Republicans control the House! Tell me why then are they continuing programs, departments and people they claim they want to eliminate! If Obama can increase spending trillions in two years, why can’t House Republicans cut trillions in two years?

When the next Continuing Resolution is drafted the Republicans should get out their erasers, go over every item and erase “cut” everything they do not want. Start with the 700 plus billion uncommitted funds from prior years in the various departments. This is easy pickens and should have been cut out a year ago! Then go to Obama’s Budget. Cut out all czars, all new positions added by Obama, the massive raises he has given and the entire budget for Air Force One except for emergency. It is time Republicans stopped this King George wanna- be from partying on our dollars while we suffer his economy. Then start with the departments. Eliminate the department of Education. Education continues to deteriorate every year since the inception of this department. We no longer have to worry about student cheating; the teachers do it for them! Encourage all States to allow school vouchers. If parents have a choice, in less than five years the union goons would be gone and replaced by professional teachers. Proceed thru every department eliminate every new position or at least forty percent whichever is highest. Above all, eliminate all of the nasty, socialist, over paid, under worked, unelected, boards and commissions that are writing all of the economy killing, job killing, freedom and liberty destroying regulations, and forty percent of their employees. i.e.: NLRB Card Check, Communications, Fairness Doctrine, EPA and others that are stopping us from drilling for our own oil and gas, preventing use of coal, stopping the construction of new nuclear power plants and oil refineries. Cut everything that has anything to do with ObamaCare! There are too many to list here but you get the picture. Stop giving money to nations that swear to wipe us out. Stop supporting nations that vote against our best interests. Stop giving away money period! Eliminate at least forty percent of all subsidies. When this is finished the Republicans will have prioritized spending. No default possible. Then they should pack their bags go back to their districts and explain what they have done and why. They will be treated as heroes. The Senate has two choices, accept the cuts or reject the bill and close down the entire government. Obama has the same choices. He can veto something out of existence but he cannot veto something into existence. He cannot restore a cut with a veto. Game over, we win! The budget could be balanced in two years! If Republicans get these beasts off our backs the economy will shoot for the stars.

In addition to being gutless, Republicans are incredibly stupid. Ever since FDR created Social Security the Democrat attack on anyone touching it has been exactly the same! Republicans want to kill seniors, make them eat cat food etc. And yet, Republicans immediately direct the focus on entitlements and blame old people for the deficit! Example of Republican double speak: We should privatize social Security, so people will get a decent return on their investments. Next breath, seniors are greedy because they are taking out of social Security more than they are putting in. No wonder seniors are angry with you! And you are saying this at a time when government policy has given us negative returns on our life savings, reduced the value of our 401k, eliminated our home equity, took away our cost of living and destroyed our confidence in our ability to care for ourselves. Well, you say that’s where the money is. No IT IS Not! That is tomorrow’s money! Today’s money is in the departments and programs. (See above). As I said you get the government monkey off our backs and begin the restoration of our economy then address tomorrow’s money. Be honest tell the seniors that their money was stolen and used for other give away programs. Ask that they accept changes for the good of their Country, their children and grandchildren. You will be surprised. Seniors are still the most Constitution supporting, American loving God loving people in the country.

In this war of ideas, where the survival of our country, our Constitution, our Judaic Christian values, our freedom and liberty are at stake, the people cry out to Republicans to “Fix Bayonets” and as usual and predictable Republicans pull out their white surrender flags and claim victory! Thanks for nothing. From here on I will support Tea Party Candidates.

James M Brennan
126 Noya Place
Loudon, TN 37774
Cross County Patriots

L.Claudia Hanlon - August 11, 2011

I am totally amazed that everyone in leadership positions with access to knowledge of the United Nations Agenda 21 rarely if even even mention the relationship with what has been, what is currently happening the the goals of Angenda 21. Our Constitution and freedoms are being destroyed, our sovereingty is being given away, while those we trusted to protect us are complicit by their lack of sounding the alarm to inform the American public that they have been deceived, miss-led by propaganda about what is really taking place throughout this country in millions of local communities by the efforts of ICLEI. The American people know that something is terribly wrong but do not understand the specifics because these policies of control have come about through stealth by design to keep the public ignorant. Where are the “Paul Reveres” to let the public know that we as a nation are in peril? Where are the defenders to lead the fight against this creeping usurper of our nation’s power? Without leadership, in time this Republic will morph into a society under the control of pure communism…..trying for another chance to rule the world.

R D Nicholson - August 11, 2011

I don’t think Congress can do fundamental arithmetic. Spending is the problem, why borrow money so we can give it away or waste it, then have to pay interest on it. I am completely disgusted with the corruption in Wash DC. The working people are being robbed blind and now 50% doesn’t pay income taxes? We need to change that as well. A flat tax of 10%, eliminate the death taxes, reduce corporate taxes by 60%,, eliminate all Fed subsidies on crops, tobacco, forests,and let the free market level itself would clear up our budget issues. Eliminate baseline budgeting and pass a constitutional amendment to balance the budget w/ exceptions for war or national emergencies.

John Mutchler - August 11, 2011

Don’t ever expect to see a plan for spending constraints or debt reduction from Obama. Reid and Pelosi, et al. We all have ideas about what the preferred method for meandering towards a path to fiscal sanity should be, but for the group of commisars mentioned above, there is only one true indicator: For any governmental issue, fiscal or otherwise, ask yourself, “What would a communist do?” The answer to that question will show you what to expect from the Obama administration. It works EVERY time.

John C. (Jay) Adams - August 11, 2011

Only an idiot, and there are apparently a lot of then could conclude anything other than the fact that we have a spending problem. We need to get back to 18% of the GDP and get off this suicide mission the progressive have us on. The debt increase was a big mistake and there will be few real spending cuts. They ignore all of the work of debt commissions, studies et al. It’s got to change if our children and grand children are going to have a chance @ the American Dream. We owe it to them.

John Tyreman - August 11, 2011

The first step should be to initiate massive cuts in spending.
A 10-15% cut across the board on non-critical spending that could be done by the House immediately would be the first step. Future considerations of a consumption tax which would be an excellent next step will take time. However,
many items presently in the government budget could be eliminated…other could be cut drastically…such as the State Department…a 50% and total revamping of our foreign policy I believe is in order. What have we achieved in foreign policy in the past fifty years???NOT MUCH! Cut foreign aid programs that consistently have fed dictators pockets.

Charles Dobbs - August 11, 2011

“It” came to this as a result of a group of private bankers/power mongers who are in control and who are synchronized with a very few men in the highest positions of government. There is a name for this group but the name, by design, makes itself sound like it is part of the Government when in fact it is private and far more in control of the government than it is part of the government. This group cannot and will not be truthful about their inner workings because if a free people ever knew what this group was up to, they would have them disbanded and jailed.This group, the NOT federal, Federal Reserve, has an undetected persuation over the lesser pawns of government (congress), folks with no integrity and no character and no love for this country. Our elected officials in congress have one concern in life…..stay in congress, no matter what the consequences to the free people of the USA or any other country for that matter. And these congess people exempt themselves from the rules they make for the rest of us. These bankers make loans to the Congress so the congressmen can then spend money they did not earn, money that will have to be extracted from the taxpayers and their offspring, in the ongoing effort to remain “congressmen”. It gets worse. This group of bankers does not actually have the money they “loan” to the congress. They just make it look like they have it. The name for this type of transaction is “fiat” money, meaning it does not actually exist. So, these bankers write a fraudulent check for a trillion dollars to the congress. Congress spends all this fiat money (and more) and then forces the people of the country to pay the bankers the principal and the interest on the “loaned” fiat money. So, the bankers are given real dollars in repayment (principal and interest!) for fake dollars that they, the bankers, “loaned” the congress. This so called “federal reserve” has a vested interest in the never ending cycle of boom and bust as they profit from both ends of the cycle at the expense of us peons.

Mark MacKinney - August 11, 2011

It isn’t just the congress, it isn’t just the president, it isn’t just the courts, it’s all three plus a significant portion of
“the people”. My question is what do I, as a single member of “the people” do? I have and continue to live within my means. Started out with a portfolio that consisted of what was in my wallet at the time. Worked hard, raised a family, paid for the house, saved money and now wonder what can be done to save it. I agree with the three amendments but how do we get it done?

John Hazeltine - August 11, 2011

Get specific and graphic with the not so educated American middle-of-the-road voter that does not understand economics. Plainly state outcomes for workers, those on assistance to the poor and retirees. Estimate:
1. How much each class of voter will have her or his standard of living slashed if the status quo continues. For pensioners how pension benefits will crumble because securities lose value. For those on food stamps, medicaid, aid to dependent children, how entitlement benefits will collapse. For workers how their paychecks will lose value
and the probability a worker losing his or her own job.
3. Why raising taxes on income will make matters worse.
4. Specifically what can be done to minimize loss of standard of living and jobs.

FELI REYES - August 11, 2011

I can not understand why this administration continues to insist in increasing debt ceiling. Is’nt it only sensible that if you do not have money you do not spend but save? And, if
you owed a lot of money that you should eliminate unnecessary expenses to pay your bills? This administration does not care, after all, they can increase the tax rate – it’s the citizens to shoulder it. President Obama has difficulty displaying an attitude for fiscal responsibility. There’s an underlying motivation why he is not interested. I hope people will be wise enough to vote him out of office this coming 2012.

R. Joe Dunnam - August 11, 2011

I do agree and certainly the “Obama-Reid-Pelosi” spending juggernaught opened a lot of eyes as to our un-sustainable debt. However, until we get term limits or a strong 3rd party congress will play ‘little kick the ball’ and remain in their Ivory Towers and play politics.

John Hazeltine - August 11, 2011

In the above comment I forgot to add that you must soon state how your policy recommendations will lead to creation of jobs and estimate how many jobs will be created as a result of your recommended actions.

Milton Scholl - August 11, 2011

President Obama is the only one that don’t know what is happening to this country.

Roland H Garbs - August 11, 2011

Why do we need another debt commission? The recommendations of the last one were totally ignored…and the cuts they are now talking about now are miniscule compared to what really needs to be done to get back to a balanced buget. Both parties in Congress need to face realty and tell the American people the truth.

Keith - August 11, 2011

First thing that needs to happen is to get away from baseline budgeting so the people aren’t confused by the purposeful obfuscation. Most people don’t realize a DC “cut” is only a reduction in the growth of spending.

Scott Lowden - August 11, 2011

My thoughts approaching the 2012 election:
1. We should not shy away from using the words “socialist” and “communist” to describe the president and the leaders of the Democrat party. That is who they are.
2. We should not pretend we are too sophisicated to appreciate the enormous contributions conservative radio talk show hosts and Fox News have given to the national political dialogue. Mainstream media, unionized public school teachers and leftist crackpots in our elite academic institutions have dominated the dialogue for half a century. The disappointment registered on these pages with voter ignorance is the direct result of this domination.
3. Challenge some of the cultural untouchables:
(a) How poor are “the poor”?
(b) Do African Americans require infinite “affirmative action”?
(c) Who is “Hispanic”? Do we give a DNA test? Do Hispanics require affirmative action?
(d) Are homosexual men and women “special”? Do they require extra protection under our laws not available to other citizens?
(e) Do we really have to pretend to appreciate “modern art”?
(f) Does anyone believe modern music will become ageless classics that can compete with Bach and Beethoven?
(g) Has our public language and sexual behavior become brutish?
If you find that these subjects are out of bounds in polite dialogue with your friends, consider whether you are really free to express your beliefs or whether you are cuturally intimidated by the folks that President Obama has advised to “get in [your] face”.

As for me, I’m still recovering from Wesleyan and Harvard Law School.

Pam Agather - August 11, 2011

Regarding all of the people reciting the lame answer to our debt problem as “tax the rich” you could refer them to a great commentary done by Bill Whittle called Eat the Rich. He really puts the argument in perspective and explains why this simply does not work. You can access this at

Casey Carlton - August 11, 2011

It’s really very similar to one’s family credit card, isn’t it? You can only spend so much, and then you are maxed out. If you want to spend more, it will cost you more, especially if you have neglected to keep up the monthly payments. A gradual solution to our national debt seems out of the question. The gradual approach would take a long time. We don’t have a long time–not any more.

William - August 11, 2011

Until congress controls the moneys greed and corruption
will always be the norm end the fed take their assets and pay the debt we the people have been robbed for long enough

William - August 11, 2011

Who benefits the most from our debt the Fed

Dennis Sullivan - August 12, 2011

A fiscal mess! Can the American Empire (not really an empire in the traditional sense) be saved? I am not so sure. Way too many Americans are under informed and under involved and under motivated, but yet have overly high expectations. The fiscal problems must be resolved lest, as a Country, we continue to decline with dire consequences especially for future generations.

Phebe Adams - August 12, 2011

The advocates of a flat tax are correct in believing that it is a fairer, better, and more controllable (by the payor) tax. However, it is obvious such advocates have never been in the position of having to collect that tax and then remit it to the government (state, city, county, federal or whatever). It is a nightmare to try to decipher the government regulations and the labyrinthine splitting of hairs over what becomes taxable and when, and what does not. More importantly, it makes an unpaid tax collector out of every merchant and/or manufacturer in the country. This is grossly unfair, and is just another brick piled on the load businesses must carry. The costs and uncertainty of regulations and taxes are a major reason we have not been able to work our way out of this recession/depression.
Furthermore, there is no guarantee that a consumption tax will stay as low as it may start out to be. California is a good example. Their sales tax started out to be 1% on purchases of $1.00 or more. It is now 7-3/4% base, and is higher than that in some counties or districts.
In order to keep taxes low we must cut spending, and the only way to do that, in the long run, is to dismantle government–on every level. There are things government cannot do at all, and things they SHOULD NOT be trying to do ever. Eliminate these things, get back to what the constitution allows, and cost of government will fall dramatically. We need to become responsible for ourselves again and not expect government to take care of every little glitch that comes along. Have we become a nation of wimps? Old Great Auntie — August 12, 2011

PADDY O - August 12, 2011

Let’s see – Obamacare took five hundred billion from medicare. Barack Noshame Obama and friends accuse the Republicans of destroying medicare along with social security, but they will protect both programs.
How will they do it? Simple! Since these two programs are funded by payroll taxes the answer is to cut those taxes by a Third! Obamanomics at it’s best!

Don May - August 13, 2011

Obama says he is a progressive. Progressives seek social justice above all else. Obama says he believes in collective salvation. Social justice or economic egalitarianism is necessary for collective salvation. Obama says he wants to fundamentally change the United States. Into what? Into a form of government that is compatible with collective salvation. There are three; communism, socialism and progressive fascism. He has made a lot of progress.

Sheila Ford - August 14, 2011

It seems to me that the rating was DOWNGRADED due to the obvious intent to BORROW more as expressed by “RAISING THE DEBT ‘CEILING'”, while planning to “cut spending” (similar to asking Master Card to raise your limit IF you promise not to borrow any more!?!??)
Please explain how interest on existing debt (other than variable rate loans) would go up. Wouldn’t interest only on new debt be higher?
The solution is CUTTING SPENDING ONLY. Raising taxes – on ANYONE- stifles business, which decreases jobs.
Congress, pretending not to know what to cut, establishes an endless succession of committees to “find” what to cut; when it is only obvious that they should IMMEDIATELY ELIMINATE all programs and agencies recently created, going back until they’ve cut 42% of the budget. Then, they should cut another 10% or so to apply to paying OFF the debt. They also should substantially cut their own salaries (if not resign!), as anyone else would be FIRED for doing such a lousy job. Pensions for ALL elected federal employees should be immediately and completely ELIMINATED, as anyone receiving one has certainly contributed to the financial mess we’re in.
Dave Ramsey(financial adviser), reduced the federal debt to terms everyone can understand: A family earning $58,000/yr. spends $74,000/yr. and has a debt over $300,000. They decide to seriously cut spending, and cut their spending to ONLY $71,000/yr.!

Bill Jayne - August 16, 2011

Our great nation was built on the foundation of Christian principles. 3 score plus 10 those principles were shunted aside and in their place little by little brought us to the conditions we have today.
Our population was slowly dumb down until the average American hasn’t a clue of what really is happening to our great nation. The culmation came in 2008 when a community organizer became President of our country. Surrounding himself with socialist leftis radicals and an adgena that is bringing us to the brink of ruin with their big governent and socialist policies we face some grave times. It will take years to clean up the mess that has been created in their short tenure. I have faith in our constitution and our forefathers documents that w will survive these trying times.

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