Rock bottom...U.S. Loses AAA Credit Rating

For the first time in history the United States has lost its sterling credit rating.

Winning the future?

Although the Democrats have been in control of Congress up  until Nov 2010, and still in control of the White House and Senate today. It will again be time to redirect the blame elsewhere.

"The action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners," Reid said.

The walls come tumbling down and he still doesn't get it.

Credit rating agency Standard & Poor's on Friday lowered the nation's AAA rating for the first time since granting it in 1917. The move came less than a week after a gridlocked Congress finally agreed to spending cuts that would reduce the debt by more than $2 trillion -- a tumultuous process that contributed to convulsions in financial markets. The promised cuts were not enough to satisfy S&P.

The drop in the rating by one notch to AA-plus was telegraphed as a possibility back in April. The three main credit agencies, which also include Moody's Investor Service and Fitch, had warned during the budget fight that if Congress did not cut spending far enough, the country faced a downgrade. Moody's said it was keeping its AAA rating on the nation's debt, but that it might still lower it.

Speaker John Boehner issued a statement saying that the downgrade is "the latest consequence of overspending by Washington."

One of the biggest questions after the downgrade was what impact it would have on already nervous investors. While the downgrade was not a surprise, some selling is expected when stock trading resumes Monday morning. The Dow Jones industrial average fell 699 points this week, the biggest weekly point drop since October 2008.

"I think we will have a knee-jerk reaction on Monday," said Jack Ablin, chief investment officer at Harris Private Bank.

But any losses might be short-lived. The threat of a downgrade is likely already reflected in the plunge in stocks this week, said Harvey Neiman, a portfolio manager of the Neiman Large Cap Value Fund.

"The market's already been shaken out," Neiman said. "It knew it was coming."

One fear in the market has been that a downgrade would scare buyers away from U.S. debt. If that were to happen, the interest rate paid on U.S. bonds, notes and bills would have to rise to attract buyers. And that could lead to higher borrowing rates for consumers, since the rates on mortgages and other loans are pegged to the yield on Treasury securities.

However, even without an AAA rating from S&P, U.S. debt is seen as one of the safest investments in the world. And investors clearly weren't scared away this week. While stocks were plunging, investors were buying Treasurys and driving up their prices. The yield on the 10-year Treasury note, which falls when the price rises, fell to a low of 2.39 percent on Thursday from 2.75 percent Monday.

A study by JPMorgan Chase found that there has been a slight rise in rates when countries lost an AAA rating. In 1998, S&P lowered ratings for Belgium, Italy and Spain. A week later, their 10-year rates had barely moved.

The government fought the downgrade. Administration sources familiar with the discussions said the S&P analysis was fundamentally flawed. They spoke on condition of anonymity because they weren't authorized to discuss the matter publicly. S&P had sent the administration a draft document in the early afternoon Friday and the administration, after examining the numbers, challenged the analysis.

S&P said that in addition to the downgrade, it is issuing a negative outlook, meaning that there was a chance it will lower the rating further within the next two years. It said such a downgrade, to AA, would occur if the agency sees smaller reductions in spending than Congress and the administration have agreed to make, higher interest rates or new fiscal pressures during this period.

In its statement, S&P said that it had changed its view "of the difficulties of bridging the gulf between the political parties" over a credible deficit reduction plan.

S&P said it was now "pessimistic about the capacity of Congress and the administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics anytime soon."

Senate Democratic Leader Harry Reid said the credit downgrade showed the need for a "balanced approach to deficit reduction that combines spending cuts with revenue-raising measures."

GOP Rep. Jack Kingston has called on Congress to reconvene to fix the debt crisis, saying the downgrade "confirms my belief that the debt ceiling increase signed into law this week does not go far enough to change the nation's fiscal trajectory."

The Federal Reserve and other U.S. regulators said in a joint statement that S&P's action should not have any impact on how banks and other financial institutions assess the riskiness of Treasurys or other securities guaranteed by the U.S. government. The statement was issued to make sure banks did not feel that the downgrade would affect the amount of capital that regulators require the banks to hold against possible losses.

Before leaving for a weekend at Camp David, President Barack Obama met with Treasury Secretary Timothy Geithner in the Oval Office late Friday afternoon.

The downgrade is likely to have little to no impact on how the United States finances its borrowing, through the sale of Treasury bonds, bills and notes. This week's buying proves that.

"Investors have voted and are saying the U.S. is going to pay them," said Mark Zandi, chief economist of Moody's Analytics. "U.S. Treasurys are still the gold standard." He noted that neither his parent organization, Moody's, nor Fitch, the other of the three major rating agencies, have downgraded U.S. debt.

Japan had its ratings cut a decade ago to AA, and it didn't have much lasting impact. The credit ratings of both Canada and Australia have also been downgraded over time, without much lasting damage.

"I don't think it's going to amount to a lot," said Peter Morici, a University of Maryland business economist.

Still, he said, "The United States deserves to have this happen," because of its clumsy handling of fiscal policy.

The Associated Press contributed to this report.

Rock bottom...U.S. Loses AAA Credit Rating

The Audacity of Birthdays

Friday, August 5, 2011 by T.J. O'Hara

RANCHO SANTA FE, Ca., August 4, 2011—President Obama celebrated his 50th birthday in style: flying to Chicago on Air Force One and being welcomed by Jennifer Hudson's obligatory reprise of Marilyn Monroe's "Happy Birthday, Mr. President."

Marine One takes off from the White House lawn whisking the President away from the drudgery of Debt Ceilings and on to the joy of fund raising in Chicago on his 50th Birthday

Then, he attended a fund-raising concert with several thousand supporters before dining with approximately 100 major donors. To cap off the festivities, he still found time to blame someone for something.

President Obama wrote a book called The Audacity of Hope. The title expressed what many of us saw in him: a fresh, new face in American politics; a tall, athletic-looking man with a supportive wife and two beautiful children; and a spirited voice of optimism. He offered the promise of "hope and change."

Unfortunately, his presidency has delivered "more of the same" in the form of traditional politics. If he ever considers writing a sequel, it might well be titled "The Audacity of Blame."

On July 21st, this column predicted that the debt ceiling crisis would be resolved on August 2nd because traditional politics demanded it; not because of the Hill's commitment to doing what's best for the country … but because August 4th was the President's 50th birthday and major fund-raisers had already been scheduled for August 3rd. Serious money was at risk … campaign money.

The rough estimates are in and the "take" from the shindig in Chicago was approximately $3.65 million (not counting the seven other fund-raising events and 1000 or so additional organizational parties that were hosted in his honor around the country).

Now, we can't be sure how much the President raised last year when he dined alone with Oprah Winfrey before attending birthday fund-raisers the next day (his family was vacationing in Spain), but we do know that the price of the tickets went up. Last year's top-end party, hosted by Chicago billionaire and real estate mogul Neil Bluhm, cost $30,400 to attend. This year's event tipped the scales at $35,800 for the political cognoscenti who could afford to attend. If you do the math, that's a 17.76% increase year-over-year.

One explanation might be found within the regulations of the Federal Election Commission. The FEC permits campaign donation limits to be adjusted each year by the rate of inflation.

However, that can't be the answer since we're officially told that we are experiencing a minimum level of inflation (assuming that you agree with the Administration's position that the price of food, clothing and fuel shouldn't enter into the calculation of inflation because they're "too volatile"). Perhaps the increase of 17.76 percent was just a subliminal manifestation of patriotism at its finest.

However, let's not quibble over price. After all, what's $35,800 to the average middle-class American? So, let's delve into the celebration itself.

In the spirit of the evening and before the private part of the gala began, President Obama took the opportunity to rally his minions. "I hope we can avoid another self-inflicted wound like we just saw over the last couple of weeks. Because we don't have time to play these partisan games. We've got too much work to do ... It is going to continue to be challenging every step of the way," the President said.

Notice his sleeves are rolled up like he actually did something

It's interesting that he is distancing himself from the debt ceiling debacle as if he didn't play a role … or as if it didn't constitute "work" just because it wasn't directly related to campaigning. Some might argue that the President failed to demonstrate appropriate leadership when he chose to wait until the last moment to engage Congress on the potentially cataclysmic problem of which everyone had been aware for more than a year.

Then again, any earlier engagement might have interfered with the 36 prior fund-raising events he attended in recent months. As it was, he had to cancel planned appearances at about a half-dozen fund-raising events just over the three weeks that he chose to become personally involved in resolving the issue.

It is also interesting to note that, while they remain his primary target, President Obama is no longer restricting his reprimands to the Republican Party and its splintered TEA Party associates. He has subtly begun to allude to the more radical elements of his own Party when he comments about partisan politics.  The question remains as to whether the more extreme faction of the Democratic Party will tolerate his thinly-veiled version of a public rebuke.

It is one thing for the President to position the entire conservative movement as wicked and obstinate, but it is far more tenuous for him to throw his major fund-raising constituency under the bus. Will those members of his base accept this tactic as a necessary evil that will allow him to retain support among moderates, or will they rebel against his self-serving abandonment of their position? Only time will tell.

In one of the more intellectually amusing moments of the evening, President Obama shared his thinking with respect to the issue of taxes. "What they want to know is our campaign stands for a fair, just approach to the tax code that says everybody has to chip in. And it's not right if a hedge fund manager is being taxed at a lower rate than his or her secretary. That's a values issue," the President said … with a straight-face … to a room full of hedge fund managers and others of similar wealth.

He also probably didn't mean to insinuate that "everybody has to chip in." Otherwise, the 47 percent of American households that presently do not pay taxes might be in for a rude awakening. It almost certainly was just a figure of speech.

During the private dinner that followed the concert, President Obama went on to say, "I think this episode was just a severe example of what's been going on for quite some time and it's part of what led me to run for President. It's part of the reason why, hopefully, all of you are here tonight, because you recognize we still got some more work to do."

Accordingly, why haven't we seen more of the "change" we were promised? Why is it still "business as usual" in Washington, D.C.?

Where is the transparency we were promised? Where is the accountability? Where is the bipartisan accord?

Of course, it's difficult to establish the latter when "blame" seems to be the central premise of the current Administration.

For the first two years, the failed Bush Administration was blamed for virtually everything (many times, deservingly so). However, this strategy disregarded the fact that the both the House and the Senate were Democratically-controlled during the final two years of President Bush's second term (the 110th Congress) and that both chambers continued to be ruled by an overwhelming Democratic majority during President Obama's first two years (the 111th Congress). Could there be some joint culpability involved in our nation's challenges or should we simply ignore the obvious?

Luckily, just as Bush-bashing was beginning to lose steam, the Democratic Party lost control of the House. This allowed the President to shift the blame to House Republicans and their cohorts in crime, the TEA Party. Again, just ignore the fact that the Democratically-controlled Senate has effectively become a legislative black hole into which almost everything disappears … usually without debate. There is no such thing as joint liability on the Hill.

The same proverbial coat of Teflon should be applied to the President. Of course, if he really wants to be the "adult in the room," he needs to accept responsibility and demonstrate more leadership.

Whose to blame? When you take over a company, you take over the problems of that company. Isn't that what winning an election is? A take over? (Image: Associated Press)

In that regard, let's review an excerpt from The National Platform of Common Sense that addresses leadership.

"In keeping with the current direction of our country and out of respect for the amount of debt we owe to China, I thought I would quote Lao Tse (in Tao Te Ching):

"'The superior leader gets things done with very little motion. He imparts instruction not through many words but through a few deeds. He keeps informed about everything but interferes hardly at all. He is a catalyst, and though things would not get done well if he weren't there, when they succeed he takes no credit. And because he takes no credit, credit never leaves him.'

"All kidding aside, that's a pretty profound description of leadership and one from which the "leaders" in our Executive and Legislative Branches would greatly benefit if they took heed. Compare and contrast that to their more predominant tendencies toward chest-thumping, credit-stealing, blame-shirking, and behavior-shifting. Am I the only one who's troubled by the "star" status that appears to be so desperately sought by our "leaders?"

"I'd be more comfortable calling most of the members of the Executive and Legislative Branches of our government "celebrities" rather than "leaders." I think that would help the general public see them more clearly. After all, while we may misguidedly idolize "celebrities" for the roles or games they might play, we intuitively recognize that their importance is somewhat in­flated and that their contribution to the world is one of entertainment."

Think about that. Leadership isn't about taking credit. It also isn't about assigning blame. It's about taking responsibility and taking action. There isn't a "celebrity" status associated with it.

Having worked primarily in the world of corporate turnarounds for 30 years, there was one recurring theme: when you agreed to take over, all of the problems became yours.

You needed to demonstrate leadership by assuming responsibility for the facts as they existed when you took control. It did not matter how those circumstances came into effect or who contributed to their creation. It only mattered that you provided the leadership necessary to recover from the past and to establish an environment that fostered the opportunity for a better future.

Leadership isn't about "winning;" it isn't about taking credit; and it isn't about raising money. It's about getting the job done. May the President have success in that regard during the remainder of his term, and may "the audacity of blame" fade away as quickly as "the audacity of hope" apparently did.

The Audacity of Birthdays

Obama: ‘Everyone Is Going to Have to Chip In’

Moments after the Senate passed the largest debt ceiling increase in history, up to $2.4 trillion, President Barack Obama said tax increases should accompany any future spending cuts, adding that “everyone is going to have to chip in.”

On the surface that seems fair. But is what he said true?

It really does not matter who you are. A movie star, a CEO of a major corporation, or you're just trying to maintain a family household. All of us have to live within are means. If you are a Democrat or a Republican we all have to live on a budget. How can anyone in Congress be against a balanced budget amendment? If you're against it then you must be for reckless spending. Congress's mantra is... we want to spend our way into oblivion. An example is the convenient way our government looks after its own interest. If you or I print money in our basement its called counterfeiting. When the government does it its called "Quantitative Easing".

 If I hear another Democrat talk about the "rich paying their fair share" or "shared sacrifice" I'm going to puke. How many times have you heard Obama, Reid, Pelosi etc, chastise "millionaires and billionaires"? 


Oh...lets not forget those evil "corporate jet owners" like they are the reason we are $14 trillion in debt. If the Demorats can establish class welfare, shift the onus elsewhere, there is no end to the things they can do. Or so they think.

The latest data shows that a big portion of the federal income tax burden is shoul­dered by a small group of the very richest Americans while 47% of Americans pay no income tax whatsoever. Shouldn't every American have some skin in the game?  The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare.

The government takes in about $200 billion dollars a month in tax revenue. That's $2.4 trillion a year! This is what they take in. This is what they should work with. We can't figure out how to live on $2.4 trillion a year without deficit spending? 

Biden (among others) went as far as to call the Teapartiers "terrorists". In other words they're just like the animals that flew planes into the twin towers. He later apologized but the die had been cast. Liberals  use their influence to deflect the blame for the debt crisis on the Teapartiers. But they didn't spend the money; the government did.

Let me ask you something. Do you know anyone, personally, who got a job because of Obama's 1 trillion dollar stimulus plan?

And so it goes...

The president signed a bill Tuesday to raise the U.S. debt ceiling. The measure provides an immediate $400 billion increase in the $14.3 trillion U.S. borrowing cap, with $500 billion more assured this fall....

I once read a story where a young woman was addicted to cocaine. She was in a public bathroom stall doing it when she spilled some on the toilet seat. She got down on her hands and knees and licked it off. Only then did she realize she hit rock bottom and began to seek help.

Maybe we need to lose our triple- A credit rating in order to get better?

Obama: ‘Everyone Is Going to Have to Chip In’

Two down 48 to go

 The government is more concerned about what kind of light bulb we have in our home then they are about illegals invading the country.

I guess it would be safe to say the Messiah will not be carrying Arizona and Alabama in the next election. Now if Obama and Holder sue the other 48 states this scenario may play out in the White House.

Justice Department Sues Alabama Over Controversial Immigration Law

Imbecilious

The Justice Department has filed a lawsuit against Alabama's new controversial immigration law, essentially fighting Alabama on grounds similar to its legal battle with Arizona over that state's controversial law.

Delirious

In both cases, the Justice Department argues that the states are overstepping their authority by wading into something that is a strictly federal responsibility: immigration enforcement.

Gov. Robert Bentley signed the Alabama law in June, but it's not set to take effect until Sept. 1. The law makes it a crime to be an undocumented immigrant in Alabama and allows law enforcement to detain individuals they have a "reasonable suspicion" of being in the country illegally.

 The law also makes it illegal to give undocumented immigrants rides and requires school districts to check on the immigration status of students who enroll.

The law is modeled on Arizona's immigration law, parts of which have been blocked by federal court. It's said to be the strictest state-level immigration law in the country.

Two down 48 to go

Biden Charges Secret Service to Rent Cottage Next to His Home

In between keeping Vice President Biden and his family safe, the Secret Service is also cutting him a rent check every month. 

The Secret Service pays the vice president $2,200 per month to rent a cottage next to his waterfront home outside Wilmington, Del., FoxNews.com has confirmed.

The Washington Times first reported that Biden has raked in more than $13,000 since April from the agency tasked with protecting him, and under the terms of their contract could make up to $66,000 by the end of 2013. 

Biden Charges Secret Service to Rent Cottage Next to His Home