Judge for yourself.  This is the actual language.
Standard And Poors Report.

Some highlights.  That I think represent the tone and bring out the points the media as usual is missing.

My take, S&P reduced the rating because:

1) Recent events in Washington have left S&P doubtful congress can act effectively to deal with the financial problems facing the country.

2) The recent agreement is not adequate.

3) The timing of the next election makes it unlikely a significant agreement will be reached, the debt issue will be worse and require tougher measures.

4) Political  leaders have shown no intention of tackling Medicare and Medicate or

other entitlements programs.

5) S&P takes no position of what mixture of revenue raising or spending cuts is appropriate.

From the report.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective,
and less predictable than what we previously believed.

The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.

Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures.

It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal  sustainability. Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers.

In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.  The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

Source: ShadowStats.com

* 6 percent said no, all the tax cuts should be allowed to expire,
* 24 percent said yes, but only for those making less than $250,000 a year,
* 70 percent said that all the tax cuts should be extended.

Despite the continued challenging conditions, 30 out of 48 economists who answered the question said the economy didn’t need any more fiscal or monetary stimulus. Six economists said more fiscal stimulus was necessary, while five want more monetary stimulus from the Federal Reserve and seven said that the economy could use both.

The economists, though, generally didn’t support the idea of ending Bush-era tax cuts, which will expire at the end of this year unless Congress acts. Just three respondents said that the tax cuts on individual income should be allowed to expire for everyone. Thirty-two economists said they should all be extended, while 11 said they should be extended for people making less than $250,000 a year—the policy option backed by the Obama administration.

LA School

LOS ANGELES – Next month’s opening of the Robert F. Kennedy Community Schools will be auspicious for a reason other than its both storied and infamous history as the former Ambassador Hotel, where the Democratic presidential contender was assassinated in 1968.

With an eye-popping price tag of $578 million, it will mark the inauguration of the nation’s most expensive public school ever.

The K-12 complex to house 4,200 students has raised eyebrows across the country as the creme de la creme of “Taj Mahal” schools, $100 million-plus campuses boasting both architectural panache and deluxe amenities.

“There’s no more of the old, windowless cinderblock schools of the ’70s where kids felt, ‘Oh, back to jail,’” said Joe Agron, editor-in-chief of American School & University, a school construction journal. “Districts want a showpiece for the community, a really impressive environment for learning.”

Cost of Government

Every year, the Americans for Tax Reform Foundation and the Center for Fiscal Accountability calculate Cost of Government Day. This is the day on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government at the federal, state, and local levels.

In 2010, Cost of Government Day fell yesterday, on August 19. Today is the first day you stopped working for Uncle Sam and began working for yourself. Americans must labor 231 days out of the year just to meet all costs imposed by government – 8 days later than last year and a full 34 days longer than 2008.

In other words, in 2010 the cost of government consumes 63.41 percent of national income.

The Cost of Government Day also details how the states fared – Alaska has the earliest Cost of Government Day this year, falling on July 28, while Connecticut taxpayers will labor until September 17 to pay for the cost of their government.


Cost of Government Day serves as a tangible reminder of the growing burden government places on taxpayers. Click here to read the entire report, which includes case studies on the various policies that have contributed to pushing this year’s Cost of Government day to August 19, 2010.

Onward,
Grover Norquist

PS- Do you have Facebook and/or Twitter? Please consider helping us promote Cost of Government Day by linking to www.costofgovernmentday.com and using the hashtag #cogd10 if you’re on Twitter!

Ct Surplus Deficit, Click For Larger Image

Connecticut has the 5th biggest deficit nationally as a percentage of General Fund for 2009-2010
o NV – 30%
o AZ – 29.8%
o CA – 25.6%
o NY – 24.3%
o CT – 23.1%

Connecticut already has the highest tax burden in the country.

Connecticut’s young leave their home state at the highest rate in the country.


Connecticut is the ONLY state in the country to have fewer businesses now than 20 years ago.

Don’t you think this has to stop? If not now, when? If not by us, who?

Oh by the way, this graph is from the Ct Democrats.

The total negative equity is $771 billion.

There are 4.1 million homeowners with more than 50% negative equity (they owe 50%+ more than their homes are worth).

Number of Underwater Homeowners

This graph shows the percent of homeowners with mortgages in negative equity for 33 states and D.C.


This is shown in three categories: >50%, 20% to 50%, and 0 to 20%.

If you look at Nevada, 17.0% of homeowners (with mortgages) are more than 50% underwater, and another 35.2% are 20% to 50% underwater. These are the homeowners most at risk for foreclosure.

Homeowners Underwater by State

CalculatedRisk.com

Something Gotta Give, And It's Going To Be You

#1: Because the government needs it to get out of the debt they have incurred. (A Billion $ A Day in Interest and climbing.)

#2: Inflation is a natural economic outcome of creating money that has no basis in real goods or services. (I.E. the “Stimulus Plan, 1 Trillion $ worth of no-basis in real goods or services.)

This tome from the CBO explains this in detail and from a factual basis.

From the Congressional Budget Office on dealing with the debt.

An alternative approach is to increase the supply of money in the economy. But as governments create money to finance their activities or pay creditors during fiscal crises, they raise inflation.

Higher inflation has negative consequences for the economy, especially if inflation moves above the moderate rates seen in most developed countries in recent years.

Higher inflation might appear to benefit the U.S. government financially because the value of the outstanding debt (which is mostly fixed in dollar terms) would be lowered relative to the size of the economy (which would increase when measured in dollar terms).

However, higher inflation would also increase the size of future budget deficits. Specifically, if inflation was 1 percentage point higher over the next decade than the rate CBO has projected, budget deficits during those years would be roughly $700 billion larger.

Several factors contribute to that estimate. Investors, after having their investments devalued by the rise in prices in the economy, would demand higher interest rates in the future, even if inflation was eventually reduced; thus, as debt matured, it would be refinanced at higher rates. Indeed, even raising the perceived likelihood of higher inflation during a fiscal crisis would trigger immediate further increases in interest rates.

Moreover, the amounts of many government benefits rise when prices rise, and much of the income tax system is indexed to inflation.

On balance, the increase in tax revenues resulting from higher inflation would be more than offset by higher payments for benefit programs and higher interest payments as the outstanding debt rolled over and ongoing deficits required the issuance of more debt.

Jokes on us

If the President’s Deficit Reduction Commission uses “baseline” or “current services” budgeting as a benchmark for determining spending “cuts” and tax increases, that’s a good sign that the crowd in Washington wants to pull a fast one on the American people.

Baseline budgeting. This is the clever Washington practice of assuming that all previously planned spending increases should go into effect and categorizing any budget that increases spending by a lower amount as a spending cut. In other words, if the hypothetical “baseline” budget increases by 7 percent, and a budget is proposed that increases spending by 4 percent, that 4 percent spending increase magically gets transformed into a 3 percent spending cut.

Only in Washington, an increase is a cut.

While tax increases get the full force of law and an the entire governmental structure to enforce those increases, tax cuts whether real or baseline have essentially no constituency.

In 1982, congressional Democrats promised President Ronald Reagan $3 in spending cuts for every dollar in tax increases. Reagan went to his grave waiting for those spending cuts. Then there was the budget deal in 1990, when President George H.W. Bush agreed to violate his famous campaign pledge — “Read my lips, no new taxes,” he had said in 1988 — in pursuit of a balanced budget. But after the deal, the deficit increased substantially: to $290 billion in 1992 from $221 billion in 1990.

The Conservative and Reagan strategy of strangling the Federal Government’s ability to affect our lives by cutting off the revenue source, taxes has not worked because the government just prints or borrows (same thing actually) more money and then puts us on the hook for the increased spending.

The Federal government has become one huge political racket machine. More on that in a future post.

President Obama’s so-called Deficit Reduction Commission supposedly is considering a deal featuring $3 of spending cuts for every $1 of tax increases (disturbingly reminiscent of what was promised — but never delivered — as part of the infamous 1982 TEFRA budget scam).

There are few new tricks in Washington. The culture of deception is ingrained in Washington and has many entitled enablers in positions of power and regulatory bodies. Our best hope is to elect who we can in November then let them know we are watching.

More on that in a future post.