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Post by duwayne on Aug 2, 2023 16:37:47 GMT
In line with your link above…..
“On Tuesday, Fitch became the second major rating agency to downgrade the US government’s top credit rating from AAA to AA+.
Fitch said the downgrade reflected the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers.
Fitch expected the general government (GG) deficit to rise to 6.3 percent of GDP in 2023, from 3.7 percent in 2022, reflecting cyclically weaker federal revenues, new spending initiatives and a higher interest burden. It also expected state and local governments to run an overall deficit of 0.6 percent of GDP this year after running a small surplus of 0.2 percent of GDP in 2022.
Fitch forecasts a GG deficit of 6.6 percent of GDP in 2024 and a further widening to 6.9 percent of GDP in 2025. The larger deficits will be driven by weak 2024 GDP growth. The interest-to-revenue ratio is expected to reach 10 percent by 2025 (compared to 2.8 percent for the ‘AA’ median and 1% for the ‘AAA’ median) due to the higher debt level as well as sustained higher interest rates compared with pre-pandemic levels.
Fitch also projected that tighter credit conditions, weakening business investment, and a slowdown in consumption will push the US economy into a mild recession in 4Q23 and 1Q24. The agency sees US annual real GDP growth slowing to 1.2 percent this year from 2.1 percent in 2022.”
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Post by duwayne on Aug 2, 2023 17:12:35 GMT
The Democrats and some Republicans are fiscally irresponsible. The credit agencies are reducing the US debt ratings for good reason.
Imagine what would have happened if Biden had prevailed and the $3.5 Trillion stimulus passed. 10%+ inflation? Debt levels even more out of control? B Credit rating?
I suggested a Republican slogan of "Prosperity, not bankruptcy". So far I've seen no focus by the Republicans on what should be a sure winner in their quest for office. Instead they are mired in the issues which are pushed by the Democrats.
I believe there is an underlying wish for the US to prosper in nearly all its citizenry even though some might not admit it. Half of the population now wishes to see Biden defeated. Is it possible to get the race focused on the Republicans saving the country from fiscal suicide which may be of interest to much more than half of the country?
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Post by walnut on Aug 2, 2023 23:07:51 GMT
In line with your link above…..
“On Tuesday, Fitch became the second major rating agency to downgrade the US government’s top credit rating from AAA to AA+.
Fitch said the downgrade reflected the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers.
Fitch expected the general government (GG) deficit to rise to 6.3 percent of GDP in 2023, from 3.7 percent in 2022, reflecting cyclically weaker federal revenues, new spending initiatives and a higher interest burden. It also expected state and local governments to run an overall deficit of 0.6 percent of GDP this year after running a small surplus of 0.2 percent of GDP in 2022.
Fitch forecasts a GG deficit of 6.6 percent of GDP in 2024 and a further widening to 6.9 percent of GDP in 2025. The larger deficits will be driven by weak 2024 GDP growth. The interest-to-revenue ratio is expected to reach 10 percent by 2025 (compared to 2.8 percent for the ‘AA’ median and 1% for the ‘AAA’ median) due to the higher debt level as well as sustained higher interest rates compared with pre-pandemic levels.
Fitch also projected that tighter credit conditions, weakening business investment, and a slowdown in consumption will push the US economy into a mild recession in 4Q23 and 1Q24. The agency sees US annual real GDP growth slowing to 1.2 percent this year from 2.1 percent in 2022.”
Government competition for bond capital crowds out private enterprise and causes higher interest rates. This is how major problems look in the beginning. |
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Post by glennkoks on Aug 2, 2023 23:28:03 GMT
Higher interest rates don't just affect the average Joe. The cost of servicing the US debt has doubled. Nobody in Washington cares because they are not going to be around to pay the tab...
If the US was a corporation Fitch would give us the lowest rating...
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Post by gridley on Aug 3, 2023 11:21:12 GMT
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Post by gridley on Aug 3, 2023 11:51:57 GMT
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Post by phydeaux2363 on Aug 3, 2023 15:28:52 GMT
Neither the Dems nor the Repubs are willing to even talk about entitlement reform. The GOP won't ever consider tax increases. Both of those things must be addressed if we are to tackle the debt issue. There will be pain if we do, and much more pain, I'm afraid, if we don't.
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Post by blustnmtn on Aug 3, 2023 17:43:48 GMT
Neither the Dems nor the Repubs are willing to even talk about entitlement reform. The GOP won't ever consider tax increases. Both of those things must be addressed if we are to tackle the debt issue. There will be pain if we do, and much more pain, I'm afraid, if we don't. Their prime directive is re-election and that can be difficult if you don’t continue to give the store away. |
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Post by duwayne on Aug 8, 2023 2:14:34 GMT
There was some discussion here a year or so ago about the opportunity to buy IBonds with high yields. If you bought, that's worked out to your benefit. But now things have changed and it probably makes sense to cash in as described below.
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Post by code on Aug 8, 2023 15:46:22 GMT
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Post by duwayne on Aug 16, 2023 17:53:47 GMT
Yesterday, I met with Dave Joyce who is a Republican member of the US House of Representatives from my district in a private meeting with he and some of his staff.
I gave him a graph of the Federal government debt as a percent of the GDP which, of course, didn't surprise him, and suggested congress needed to stop the accelerating growth which didn't surprise him either, nor did he disagree.
He told me how tough it was to get things under control, and that, of course, didn't surprise me.
I then asked him whether there was any desire or plan to correct the problem. I reminded him that we were piling debt on our children at a rate which was unreasonable, unfair and unethical. His staff members who were with him included 2 young people who adamantly nodded in agreement.
After we talked for a while, he said his committee (Appropriations, etc) needed to have a presentation by people like me to attempt to push them toward an agreement amongst the Republicans/Democrats on the committee to get a commitment to work together to stop the out of control growth. This was, of course, exactly why I was there.
When I got home and told my wife that the government's out of control spending problem is now being taken care of, she suggested I sit down and have a drink and not bother her while she was cooking dinner.
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Post by walnut on Aug 17, 2023 2:51:52 GMT
U.S. states Every U.S. state other than Vermont has some form of balanced budget provision that applies to its operating budget.[citation needed] The precise form of this provision varies from state to state. Indiana has a state debt prohibition with an exception for "temporary and casual deficits," but no balanced budget requirement. The governor is not legally required to submit a balanced budget, the legislature is not required to approve appropriations that are within available revenue, and the state is not required to end the year in balance.[26] An unusual variant is the Oregon kicker, which bans surpluses of more than 2% of revenue by refunding the money to the taxpayers. State balanced budget requirements do not apply to state capital budgets, which generally allow states to use their debt capacity to finance long-term expenditures such as transportation and other infrastructure.[27] U.S. federal government There is no balanced budget provision in the U.S. Constitution, so the federal government is not required to have a balanced budget and Congress usually does not pass one. Several proposed amendments to the U.S. Constitution would require a balanced budget, but none have been enacted. Most of these proposed amendments allow a supermajority to waive the requirement of a balanced budget in times of war, national emergency, or recession. en.wikipedia.org/wiki/Balanced_budget_amendment#:~:text=A%20balanced%20budget%20amendment%20is,and%20expenditures%20of%20the%20government. |
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Post by blustnmtn on Aug 17, 2023 13:08:57 GMT
Career (Almost ALL) Politicians have an existential conflict of interest with regards to enacting budgetary restraint of any type since the free flow of fiat money is the preferred and proven method for buying votes. The lack of TERM LIMITS for all of these scoundrels is a glaring flaw to the Constitution. I give the founders some slack though because they couldn't possibly have envisioned the low life scum that have clawed their way into office in every level of government in this nation.
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Post by justme on Aug 17, 2023 19:50:11 GMT
Higher interest rates don't just affect the average Joe. The cost of servicing the US debt has doubled. Nobody in Washington cares because they are not going to be around to pay the tab... If the US was a corporation Fitch would give us the lowest rating... Mortgage rates now the highest in 21 years: www.cnn.com/2023/08/17/homes/mortgage-rates-august-17/index.html?utm_medium=social&utm_source=twcnnbrk&utm_content=2023-08-17T16%3A07%3A06&utm_term=linkHere is an example of a monthly payment for a $382,500 mortgage just 2 years ago, VS. Today:   Your monthly mortgage payment principal and interest would be double what it would have been just 2 years ago for the same mortgage amount. Keep in mind due to inflation and less homes available, mortgages with the same $382,500 would be for a smaller less desirable home, then just 2 years prior. Additionally, car payments and any product you buy where you borrow money, your interest rate will be higher. As a function of landlords paying more mortgage interest, rental lease rates also increase. |
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Post by glennkoks on Aug 17, 2023 20:30:14 GMT
Higher interest rates don't just affect the average Joe. The cost of servicing the US debt has doubled. Nobody in Washington cares because they are not going to be around to pay the tab... If the US was a corporation Fitch would give us the lowest rating... Mortgage rates now the highest in 21 years: www.cnn.com/2023/08/17/homes/mortgage-rates-august-17/index.html?utm_medium=social&utm_source=twcnnbrk&utm_content=2023-08-17T16%3A07%3A06&utm_term=linkHere is an example of a monthly payment for a $382,500 mortgage just 2 years ago, VS. Today: Your monthly mortgage payment principal and interest would be double what it would have been just 2 years ago for the same mortgage amount. Keep in mind due to inflation and less homes available, mortgages with the same $382,500 would be for a smaller less desirable home, then just 2 years prior. Additionally, car payments and any product you buy where you borrow money, your interest rate will be higher. As a function of landlords paying more mortgage interest, rental lease rates also increase. For probably the first time ever I agree with you. Higher interest rates mean fewer homes built and sold, fewer cars sold. Just about everything that feeds the economy. The only plus is now savers are actually being paid without having to be in the market. 5% money market returns are now common. I am totally OK with a guaranteed 5% vs being in an overpriced market... |
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