Monday, August 8, 2011

Face It: S&P Was Right

One thing I've learned about you folks is that I have a very erudite group that reads here regularly.  I think that anyone who stops by here often probably, like I did, expected the S&P downgrade of the US credit rating, so it wasn't really news to us.  As the famous Jim Rogers said on July 25 (H/T to JDA)
“Everyone already knows that the U.S. has lost its AAA status,” Rogers said. “Anyone who knows what is going on, already knows that the U.S. is now the biggest debtor nation in the history of the world. It’s only S&P and Moody’s that haven’t figured out what is going on. The investment world knows that the U.S. is not AAA.”
Because of that, I didn't think the markets would tank as badly as they did today.  I thought it was "priced in" already - exactly because I figure those clowns on Wall Street know what's going on.  Is this the beginning of the dreaded double dip?  My gut feeling, and I can't tell for sure without doing some actual math on data I don't have, is that there never was a recovery.  What the Bureau of Lies and 'Scuses Bureau of Labor Statistics claimed to be growth was simply inflation from destroying the dollar (QE1 and 2).  And speaking of the BLS, isn't it funny how growth always got adjusted downward after the press release, just as unemployment always got adjusted upward? What a coincidence! 

Despite missing the details of this drop, I prepared for it long ago.  My exposure to stocks is very low.  This thing has been coming for a long time, and anyone who thinks more than one move ahead could have seen it coming. 

The president, as King of the Evil party, keeps saying millionaires and billionaires "don't pay their fair share".  Probably most of you will recognize this graph that shows that the top 1% of incomes paid more than the bottom 95% put together. 
King Evil, sir, how much more is fair?  Should the top 1% pay more than the bottom 96% put together?  99%?  All of the rest?  With that sort of imbalance, there just isn't much room to change.  If you work in whole numbers there's just 4 steps where they pay more.  Unless you think 1% of the income distribution should pay 100% of all taxes.  If that's the case, I don't want to live in your world.  If you, dear reader, think the top 1% should pay everything, kindly leave and don't come back until you get your head out of your butt. 

More importantly, the fact that says things like this, hasn't recognized that their spending is what caused this, and has yet to do anything to fix the downgrade simply reveals S&P was right, and the collapse will continue.  As I've said many times, I'm not sure they're deliberately trying to destroy the country, but I am sure I can't think of anything they would be doing differently if it was deliberate. 


  1. The Evil Party(tm) act surprised if, after having put a bowl of milk out on the porch last night, they awake to a yard full of kitties.

    They act (and I'm convinced it is an act) surprised when, after punishing (or talking about punishing) wealth creation and capital accumulation, that there's less of it happening.

    Teh Evil Party(tm) aren't interested in a vibrant, healthy, strong private sector, because it renders them less necessary. It shrinks the ranks of their constituency.

    I won't attempt to address the similar folly of the Stupid Party(tm). Needless to say, I'm not all that impressed with them, either.

  2. Oh, and what's the source of that cool chart? Is there a link to an online article that goes with it? I'd like to forward it to some relatives (who seem to think those rich bastids just don't pay enough).

  3. BS - I didn't do a good job of saying where I got that. Took me some poking around to find it, but it's at the The Tax Foundation That site has a lot of good data, including spreadsheets ready to download and go full tilt geek over.

    I've often thought that lawmakers should take some classes in unintended consequences. They keep making laws assuming no one will change their behavior, and people keep reacting in ways that don't meet the expectations. Walter Williams has a good piece on this fact today.