Another US downgrade within weeks?
Some Wall Street economists say a congressional deficit committee is headed for failure, making a rating cut more likely.
That's what economists at Bank of America Merrill Lynch say in a recent report. And political squabbling will be very much to blame.
The problem lies with the congressional supercommittee charged with coming up with ways to reduce the deficit. The committee is turning out to be anything but super. Members spent most of September in a standoff, The New York Times reports.
"Basically we are going in circles," one member told the newspaper. "Everybody is sitting around sucking their thumb until they get some guidance on what to do."
The committee is trying to find $1.2 trillion in deficit cuts over the next 10 years, and it has until Nov. 23 to do it. Analysts are growing increasingly skeptical that the group can pull it off.
The following video discusses what the committee needs to do.
Post continues below.
"The 'not-so-super' deficit commission is very unlikely to come up with a credible deficit-reduction plan," wrote Ethan Harris, one of the economists at Bank of America Merrill Lynch. "The committee is more divided than the overall Congress."
Credit ratings agencies are all but demanding a decent long-term plan for reducing the deficit. If no plan comes forward, the U.S. could see another downgrade. In August, Standard & Poor's cut its U.S. rating by one notch to AA+ from AAA, sending markets around the world into turmoil. The Dow Jones Industrial Average fell 5.6% the next trading day.
"The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan," Harris added. "Hence, we expect at least one credit downgrade in late November or early December when the supercommittee crashes."
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish the Constitution for the United States of America.
United States Constitution, Article 1, Section 8, Clause 1 .. the Powers of Congress to Tax and Spend clause .. along with the Sixteenth Amendment .. appears to be poorly understood by the Ladies and Gentlemen, We the People have employed as our elected officials of this dysfunctional Congress.
Down grading of the credit rating of the United States of America? More likely that this Congress has failed in their diligence to serve We the People of the United States. It is therefore Our right and duty to remove every member of the House and Senate of this Congress, that can not demonstrate their individual effort to uphold their Constitutional powers to tax and spend with the fiduciary duty to We the People of the United States.
If you try to replace the idiots in congress they will only be replace by the same idiots. The machines control who your choices are for congress. Who is your man? This guy or this guy? They are the same guy. Brought to you by the same people that believe a corporation is a person, and small business is not how many employees you have but how many owners there are.
Some definition of terms used in this article ......
Lobbyist .... big business better word for bribery ....
Politician ..... big business code word for 'scratch my back and I will scratch yours'
Economy ..... big business word for the 99% of the people who whine because they are not rich.
Deficit ..... big business word for their bank balance sitting in offshore accounts paying no taxes.
Surplus .... amount of money big business have in their on shore account which they will get their Lobbyist to suck out of Economy....
Bank of American has just moved (10/22) $75 TRILLION in risky derivatives from it’s investment side to it’s FDIC insured commercial side (savings & deposits). US taxpayers will be forced to pay instead of Bank of America. This “deal” was done with the approval of theFederal Reserve. The FDIC is in a state of shock, awe, and outrage … and you should be too. The potential loss of $75 trillion, insured by government money, dwarfs budget deficit "austerity" talks.
First of all, we are to trust the judgment of Bank of America economists . NOT. We should get the list of each individual on the congressional super committee (which is not hard to do) and we all should send them emails advising them that if they do not come up with a solution recommendation at least one week before the deadline that they are fired. All voters, regardless of dems or reps vote against them at their reelection so they will never be heard from again. If you agree, join me because that is exactly what I am going to propose to each and every person I know and I am going to follow up throughout November issuing statements by email to all email addresses I can and requesting email forwardings as well as email all those individuals everyday. I am retired and I have the time to do this. JOIN ME
RS
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