It's official: All of us are living in an America we've never lived in before...a downgraded one

Ryan Streeter
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I certainly can't say it any better than Caroline Baum at Bloomberg:

When George W. Bush took up residence in the White House in January 2001, total U.S. debt stood at $5.95 trillion. Last week it was $14.3 trillion, with $2.4 trillion freshly authorized by Congress Tuesday.

Ten years and $8.35 trillion later, what do we have to show for this decade of deficit spending? A glut of unoccupied homes, unemployment exceeding 9 percent, a stalled economy and a huge mountain of debt. Real gross domestic product growth averaged 1.6 percent from the first quarter of 2001 through the second quarter of 2011.

It doesn’t sound like a very good trade-off. And now Keynesians are whining about discretionary spending cuts of $21 billion next year?

And as a number of us were saying during the debt negotiations, any likely deal wouldn't save us from a downgrade. The debt load, especially given our weak economic fundamentals, was simply too big for this heralded deal to convince anyone we were serious about our fiscal condition.

Comments

[Hagen]

‎"Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues." - Standard & Poor

[Dual Citizen]

"what do we have to show for this decade of deficit spending?"

Well for the last 2 years how about massive traffic delays? Over here in Oregon, those Obama stimulus dollars have been spent digging up the roads. One year's construction on I-5 north, followed by one year digging up I-5 south. Now that's all complete, guess what? They're digging up I-5 north again!

But, no worries. As I struggle through the extra 20 minutes it takes me home from work, I pass those reassuring signs that say "Your Tax Dollars At Work".

Hellpp!

[Ross J Warren]

I do feel for you guys, economic decline is not pretty. Even so, for now it’s just Standard & Poor that has stuck the knife in. The US has so much that could be under writing its debt. I think we are going to have to creatively account our assets to turn this around.