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The debt ceiling deal is merely a "band aid... certainly not a game-changing breakthrough," and...

The debt ceiling deal is merely a "band aid... certainly not a game-changing breakthrough," and keeps alive the possibility of a rating downgrade, Barclays chief European economist Julian Callow says. "S&P’s credibility is at stake here... it will prove hard not to follow through and downgrade U.S. debt,” Danske Bank's Allan von Mehren adds.
Comments (13)
  • Lint
    , contributor
    Comments (391) | Send Message
     
    If the US doesn't deserve a downgrading, there's no reason to have rating agencies. As if we need another reason to label this farce as a Laurel and Hardy movie...you have to laugh to keep from crying.
    1 Aug 2011, 10:54 AM Reply Like
  • detto
    , contributor
    Comments (76) | Send Message
     
    "S&P’s credibility is at stake here... "

     

    They were the same group that gave AAA ratings to worthless backed securities....

     

    They already lost their credibility.
    1 Aug 2011, 10:55 AM Reply Like
  • Dana Blankenhorn
    , contributor
    Comments (5676) | Send Message
     
    Nothing in the present deal is binding beyond December of 2012. The vast majority of cuts are in the "out years."

     

    This makes economic sense, since the economy is not yet growing well on its own and actually requires more stimulus. But it will anger the Tea Party.

     

    As to S&P's credibility, I think the White House needs to echo Detto in its remarks on this.
    1 Aug 2011, 11:00 AM Reply Like
  • Lint
    , contributor
    Comments (391) | Send Message
     
    Requires more stimulus, eh? Good lord...You don't happen to work for GS, do you?

     

    Unreal.
    1 Aug 2011, 11:06 AM Reply Like
  • Dana Blankenhorn
    , contributor
    Comments (5676) | Send Message
     
    Your interest rates are near zero. So borrowing costs are not a problem. There's almost zero inflation. And growth has slowed to 1.5%.

     

    Meanwhile Great Britain, which went to austerity six months ago, is getting absolutely no growth.

     

    You don't get growth by waiting for the magic growth fairy. Someone has to step up. Will that be the private sector, the mountain of cash we know is in corporate hands? If not then, who?
    1 Aug 2011, 11:38 AM Reply Like
  • wyostocks
    , contributor
    Comments (7411) | Send Message
     
    With product demand growth next to zero, why should corporate management spend or hire?
    1 Aug 2011, 11:54 AM Reply Like
  • Dana Blankenhorn
    , contributor
    Comments (5676) | Send Message
     
    And product demand growth comes from where? You just upended your whole argument against stimulus.

     

    Someone has to step up and buy for the economy to grow. We need demand. If consumers can't do it, and business won't do it, that leaves the government.

     

    Or the magic demand fairy. Which only the Tea Party and Andrew Mellon can see.
    1 Aug 2011, 12:16 PM Reply Like
  • wyostocks
    , contributor
    Comments (7411) | Send Message
     
    The government is broke so they can't do it.
    1 Aug 2011, 12:21 PM Reply Like
  • Dana Blankenhorn
    , contributor
    Comments (5676) | Send Message
     
    No, they're not. This problem solves itself with the expiration of the Bush tax cuts. The whole idea behind this little game is giving all sides a view of the alternative to those tax cuts expiring.

     

    Telling the military no more bombs for you. Telling grandma no more Medicare or Social Security for you. Etc.

     

    This is the fight the Tea Party wanted, it's the one they're getting. Careful what you wish for.
    1 Aug 2011, 12:23 PM Reply Like
  • wyostocks
    , contributor
    Comments (7411) | Send Message
     
    The rating agencies and the American government, a marriage made in heaven. Reminds me of dumb and dumber. At least the Laurel and Hardy movies were funny on purpose.
    1 Aug 2011, 11:00 AM Reply Like
  • Duude
    , contributor
    Comments (3339) | Send Message
     
    This is an insult to band-aids. A band-aid will help ward off infection and aid the body in clotting. This debt deal doesn't end the free flow of government spending, and it won't ward off the disastrous consequences of building up debt levels for future generations.
    Even their 'cuts' are only a reduction in their future increase. How does this deserve anything less than a downgrade? Personally, I would hate to see a downgrade but it may be the only thing that might end the tendency to kick the can down the road.
    1 Aug 2011, 11:08 AM Reply Like
  • Dana Blankenhorn
    , contributor
    Comments (5676) | Send Message
     
    Andrew Mellon will only break you. The experiment was run in the late 1920s and early 1930s. Austerity leads to more of the same, because no one steps up to buy.

     

    Someone has to step up and buy for the economy to grow. I personally think there is great money to be made in energy efficiency right now. Enormous sums are being wasted there, and can be recaptured with minimum investment.

     

    But who will make the investment? The magic growth fairy?
    1 Aug 2011, 11:39 AM Reply Like
  • Hendershott
    , contributor
    Comments (1473) | Send Message
     
    So, it's a band aid. What is anyone expecting, a solution? We all know what an actual solution looks like and nobody likes it. A hoped for solution, global growth, is fading quickly from view.
    1 Aug 2011, 12:06 PM Reply Like
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