Greenspan said he expected more turmoil on Wall Street.
“Considering the momentum in which the market went down over the last week, it's very unlikely — if history is any guide — that this isn't going to take a while to bottom out. So the initial reaction, in my judgment, is going to be negative,” Greenspan said of S&P’s downgrade.
Treasury Secretary Timothy Geithner tried to reassure investors in a Sunday night interview but conceded he could not predict the reaction.
“It’s hard to know what’ll happen in this context,” Geithner said on CNBC. “But, again, I think that everyone can be confident, both here and around the world, that treasuries are the most — these days — the most liquid — the strongest place to put your money at a time like this.”
He said S&P “has shown really terrible judgment” and “a stunning lack of knowledge about basic U.S. fiscal budget math.”
Actually, Mr. Secretary, I think the S&P has this just right. After all, it's a temporary arrangement that will have to be revisited sooner than you expect, since the Federal tax on gasoline expires next month and budget projections included that in the debt ceiling agreement. It is very likely that tax will be at least scaled back if not eliminated, thanks to the Teabaggers. You can't say this. S&P can.
We get the government we deserve. We are officially a banana republic.
A lot of fingerpointing went on this weekend, but ultimately, the blame rests in two places: The Bush administration and the Teabaggers.
After all, the only significant spending the Obama administration passed was the $787 billion stimulus package, a thickly-wrongheaded attempt to shore up the banking system when that banking system was responsible for the mess we found ourselves in AND will suffer now from the debt ceiling debacle, as interest rates will ratchet up.
Better he should have spent the money here, at home, on works projects designed to get people permanent jobs. There's so much we can use idle labor for, from replacing the national grid to upgrading bridges and tunnels, to just cleaning the damned streets. Jobs = income = spending = more jobs. It's not a hard calculation to make, and given how the banks rebounded better than expected...
How the Bush administration fits into all this? Well, the national debt in 2001 was somewhere around $6 trillion. It's now $14 trillion. Obama can rightly be blamed for $1 trillion or so (let's credit-- debit?-- him with the unnecessary extension of the Bush tax cuts, too,) leaving...carry the one...$7 trillion dollars that Bush spent without the income to show for it.
Republicans: they do spend big.
The Teabagger mantra with respect to the debt ceiling was basically nihilist from the get-go: burn it down, let God sort it out.
All we have ever had to do was to roll back the Bush tax cuts, restore the Clinton tax rates (proven job creator, that) and history would have been happy and marked this as a remarkable time when the US yet again ducked a bullet. The idea of minimalist government is so ludicrous, so stupid, so moronic, that I seriously believe the "libertarians" who propose this ought to be locked away in a cage and put on display in the Coney Island freak show.
Posts
