8/06/2011

Copy of Standard & Poor's explanation for Downgrading US Bonds

A copy of S&P's report is available here. The report warns of further possible downgrades. S&P is basically calling for tax hikes. I am not sure how they reach this conclusion as opposed to calling for more spending cuts. No real explanation is given on this point.

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posted by John Lott at 6:49 PM

3 Comments:

Blogger nedclark said...

"S&P is basically calling for tax hikes. I am not sure how they reach this conclusion as opposed to calling for more spending cuts."

I don't think the `raise taxes' conclusion is at all elusive... cutting, alone is insufficient to meet the challenge (and likely to make things worse).

When Gov't spending is serving as the equivalent of vital life support to keep the economy alive, you endanger the patient by toying with yanking their oxygen, hydration or nutrition...

...unless you really don't want the patient to survive & recover...

8/09/2011 3:25 PM  
Blogger John Lott said...

Dear NedClark: Government spending has soared by 28 percent from 2008 to 2011. When Obama was a candidate for the presidency he claimed that the government was already too large in 2008 and that government spending should be cut. Obama promised that the Stimulus was supposed to last just two years, but now we are told we can't touch it at all.

8/09/2011 7:06 PM  
Blogger Suburban said...

Nedclark

We're in this condition because of stuff like this.

http://www.cnsnews.com/news/article/47976

U.S. program to train Chinese prostitutes not to drink too much on the job. Cost us $2.6 million. There's many many many more examples, but that's just one that I could come up with off the top of my head.

If they could cut out all that kind of nonsense, along with the millions of dollars to renovate tiny puddle-jumper airports in Nowheresville Idaho, there would be no need to raise taxes.

8/10/2011 1:42 AM  

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