Good job duopoly. You finally did it to America.

[EconGuy]

That at makes no sense.

Not to beat a dead horse from your perspective, but everything I said makes sense, if you don't want to discuss, just ignore me, but don't tell me I don't make sense and expect me not to respond. If you'd like to understand what you can't make sense of, tell me what you don't understand and I'll gladly explain.

-Cheers

 

[Revoltingest]

Not to beat a dead horse....

That always precedes....

 

[EconGuy]

That always precedes....

...from your perspective...

 

[Revoltingest]

...from your perspective...

Everyone has their perspective.
I'm no different.
Same with you.

 

[EconGuy]

That makes no sense.

Yes, it does.

 

[Revoltingest]

Yes, it does.

Nyuh uh!

 

[Twilight Hue]

I'm not sure what the "duopoly" is that is referred to in the OP, so can someone explain that to me? It isn't referenced in the article that is cited in the OP.

Regarding that article, Fitch gave as its excuse for dropping the credit rating essentially two reasons:

1) The huge debt and record deficits
2) The toxic politics of periodic threats to shut down the government over the question of whether to pay its debts.

The first reason is what most of the discussion has been about in the thread, because most of the debaters seem to be fiscal conservatives who always believe that that is our main problem. There has been some Democrat-bashing, because conservatives think that excessive spending on social programs is wasteful, although conservatives have their own spending priorities--primarily tax cuts for the wealthy and corporate subsidies. So one can blame the spending on Democrats and Republicans alike. However, complaints over government spending have existed forever, and the US economy seems to be in good shape at the moment. We have relatively high employment, inflation has come down, and we don't seem headed for the long-predicted recession. So I think that excuse #1 by Fitch is completely bogus.

The second excuse strikes me as the actual reason. The toxic politics in Washington has led to

Government shutdowns in the United States​

and it is likely to continue to do so. The problem is the law that requires Congress to continually raise the debt ceiling on debt that it has itself already accrued. The country keeps threatening to stiff its creditors. That is, it keeps threatening to become a deadbeat on the debt. So it does make sense, in light of those persistent threats, to lower the credit rating. And this action by Fitch came after yet another crisis brought on by the use of the debt ceiling to shut down the government.

If the US Congress were to repeal the debt ceiling limit and behave like the vast majority of other nations in the world, then its credit rating would go right back up again. Because the US economy, even with its huge debt, is still the largest economy in the world, and it still has one of the healthiest economies--except for the stupid debt ceiling law.

The duopoly is essentially one entrenched power base exclusively for the benefit of Democrats and Republicans and purposefully rigged to prevent any third-party from ever becoming established that would interfere with the stranglehold the two parties hold at present.

I think most would agree its now largely about self interest, career building, and the acquisition of personal wealth and power that fuels most of it as the spending is largely for the appeasement of the parties special interests and political backing and monetary support that drives the never ending spending. Not to mention supporting the accusatory environment that exists now with the never ending litigation and investigations that play out as a poorly written political themed soap opera.

I just don't see how the elimination of the debt ceiling could act as the brakes that is desperately needed considering we live in a runaway fiat economy where there is essentially a blank check with no end to it.

All I see is a complete economic disaster for the foreseeable future and the devastating effects it will bring when money now means absolutely nothing in the quest for complete political dominance.

 

[Copernicus]

The duopoly is essentially one entrenched power base exclusively for the benefit of Democrats and Republicans and purposefully rigged to prevent any third-party from ever becoming established that would interfere with the stranglehold the two parties hold at present.

The two-party system is primarily a natural outcome of our winner-take-all system of voting, not any special rigging by politicians. See Duverger's Law. Even in multi-party elections like those in the UK, two parties tend to emerge as dominant. The US has always had a two-party system, so that is not something that has suddenly caused a destabilization of our economy.

I think most would agree its now largely about self interest, career building, and the acquisition of personal wealth and power that fuels most of it as the spending is largely for the appeasement of the parties special interests and political backing and monetary support that drives the never ending spending. Not to mention supporting the accusatory environment that exists now with the never ending litigation and investigations that play out as a poorly written political themed soap opera.

I just don't see how the elimination of the debt ceiling could act as the brakes that is desperately needed considering we live in a runaway fiat economy where there is essentially a blank check with no end to it.

There are almost no other countries with a system where a country can incur debt but then vote later on whether to pay off the debt. The law was intended to force Congress to keep spending down, but it has never worked. Instead, raising the debt limit has become a routine exercise, largely because of the devastating effect it would have on the economy to renege on debt payments. The debt limit bill is not about future spending decisions. It is about paying the bills for past spending decisions.

However, Republicans have lately decided that it is a good blackmail tool that can be used to force the other party to draw down spending on Democratic spending priorities, albeit not Republican spending priorities. Republicans can't force their unpopular policies through Congress, but they can use other means to achieve that end. The resulting brinkmanship behavior has destabilized confidence in the resolve of the US government to pay off its debts, and that is what has led to the recent downgrades in our credit rating. Not a "runaway economy". In fact, our economy is currently doing better than that in most other countries. Inflation did spin up wildly last year thanks to post-COVID issues and the Russian invasion of Ukraine, but it is now largely under control. The predicted recession has not happened and does not appear likely, unless Republicans once again decide to hold the debt limit increase hostage and they don't manage to reach a compromise before default. In fact, a default by the US on its debt would likely cause real damage to the world economy, given how much international commerce depends on the reliability of US debt.

All I see is a complete economic disaster for the foreseeable future and the devastating effects it will bring when money now means absolutely nothing in the quest for complete political dominance.

This has nothing to do with our two-party system, which has existed since the beginning of the Republic. Nor is the economy in bad shape. The only real threat in the immediate future is another showdown between Republicans and Democrats because of political squabbling over the cockamamie debt limit law. A real economic disaster isn't about to happen unless we deliberately refuse to pay off existing debt.

 

[lewisnotmiller]

Does anyone have any suggestions on how to pay down the debt? The republicans wanted to cut spending during the debt ceiling crisis, but they really couldn’t find much to cut. So maybe RF members are smarter.

Reduce military spending to the point where you are only outspending the next 3 largest spenders on the planet.

 

[Twilight Hue]

The two-party system is primarily a natural outcome of our winner-take-all system of voting, not any special rigging by politicians. See Duverger's Law. Even in multi-party elections like those in the UK, two parties tend to emerge as dominant. The US has always had a two-party system, so that is not something that has suddenly caused a destabilization of our economy.



There are almost no other countries with a system where a country can incur debt but then vote later on whether to pay off the debt. The law was intended to force Congress to keep spending down, but it has never worked. Instead, raising the debt limit has become a routine exercise, largely because of the devastating effect it would have on the economy to renege on debt payments. The debt limit bill is not about future spending decisions. It is about paying the bills for past spending decisions.

However, Republicans have lately decided that it is a good blackmail tool that can be used to force the other party to draw down spending on Democratic spending priorities, albeit not Republican spending priorities. Republicans can't force their unpopular policies through Congress, but they can use other means to achieve that end. The resulting brinkmanship behavior has destabilized confidence in the resolve of the US government to pay off its debts, and that is what has led to the recent downgrades in our credit rating. Not a "runaway economy". In fact, our economy is currently doing better than that in most other countries. Inflation did spin up wildly last year thanks to post-COVID issues and the Russian invasion of Ukraine, but it is now largely under control. The predicted recession has not happened and does not appear likely, unless Republicans once again decide to hold the debt limit increase hostage and they don't manage to reach a compromise before default. In fact, a default by the US on its debt would likely cause real damage to the world economy, given how much international commerce depends on the reliability of US debt.



This has nothing to do with our two-party system, which has existed since the beginning of the Republic. Nor is the economy in bad shape. The only real threat in the immediate future is another showdown between Republicans and Democrats because of political squabbling over the cockamamie debt limit law. A real economic disaster isn't about to happen unless we deliberately refuse to pay off existing debt.

Well already this country's credit rating has been downgraded. That already sends a statement about the direction this is headed in.

 

[Copernicus]

Well already this country's credit rating has been downgraded. That already sends a statement about the direction this is headed in.

The downgrade is not an indication of economic instability. It is an indication of political instability and lack of predictability. Buying US debt has become more of a gamble than it ever was in the past, or ought to be now. Fitch admitted that politics was a major reason for the downgrade.

 

[Twilight Hue]

The downgrade is not an indication of economic instability. It is an indication of political instability and lack of predictability. Buying US debt has become more of a gamble than it ever was in the past, or ought to be now. Fitch admitted that politics was a major reason for the downgrade.

And clearly the downgrade has economic consequences.

 

[wellwisher]

US government reaps what it sows.
It's financial irresponsibility, & consequent loss
of credibility isn't the fault or rating agencies.

The problem was Biden's and the Democrat Party's so called Inflation Reduction Act, which they now admit, had nothing to do with inflation reduction. Rather it led to the inflation. This scam was really about forwarding the Green agenda under a disguise, while harming the energy infrastructure, leading to inflation, and then the need to increase interest rates, which then created other problems in terms of investment. It is not a stable situation but more like bailing out a sinking boat and making little forward progress.

Luckily the boneheads did not get to spend the original $4 Trillion, they wanted for the same nonsense schemes, or the loss of rating would have happened last year. If the Democrats were not so selfish and partisan that would have taken some sound advice how to avoid this.

The Democrats had already set up the nation for this fall, during COVID. The Democrats run states shut down their economies and screw up their school systems, leading to supply chain problems, which is now a major part of the inflation. If you recall, COVID caused the most long term economic problems in Democrat run states, because of their sit back and do nothing but Lord Over, approach. When COVID was on the decline, the Republican States were bouncing back, first, under Trump, with gasoline at about $2.00/gallon due to a strong energy infrastructure. Once Biden and the Dems took over, the decline began due to partisan pet projects and mismanagement.

The economy under Obama was also not very bright. There was stagnation, so they needed to lower the interest rates to nearly zero percent to get people to invest. Both Trump and Biden inherited the low interest rates, but under Biden the interest rate keep going up, due to the opposite ignorance and bad choices. The Democrats are too, their own agenda driven, and do not know how to help the country in ways that benefit all. Trump was better at that, with women and minorities both at record employment before the COVID shut down by the Democrat run States.

 

[Nakosis]

Here is the national debt.

View attachment 80521

Here is the national wealth

View attachment 80522

By any measure that is a MASSIVE success. I mean when looking at the nation as a whole.

The problem is how that wealth is distributed.

Source

The way the government repays its debt is through taxes, right?
So ideally, the government invests into the economy in such a way that improves GDP which would increase tax revenue that would cover the debt. I mean if your tax revenue has increase to the point that you are covering your expenditures then you are doing a good job investing into the economy. If you are investing in such a way that the resulting tax revenue is not able to cover your debt then you haven't done such a great job at investing into the economy. The lower the debt or the closer you get to balancing it, then the better job you have done in your investing.

So high government debt, not really a success. You are investing into an economy in ways that aren't helping the economy to grow.

Yes initial government spending injects money into the economy but are you doing it smartly? If the economy is flourishing, then covering the national debt shouldn't be a problem. If you get excess then you are spending your money wisely. You can simply reinvest the surplus wisely and the economy can grow even more.

Yes government spending can help the economy. Excess debt at the end of the year means you spent it wrong.

 

[Revoltingest]

The problem was Biden's and the Democrat Party's so called Inflation Reduction Act, which they now admit, had nothing to do with inflation reduction. Rather it led to the inflation. This scam was really about forwarding the Green agenda under a disguise, while harming the energy infrastructure, leading to inflation, and then the need to increase interest rates, which then created other problems in terms of investment. It is not a stable situation but more like bailing out a sinking boat and making little forward progress.

Luckily the boneheads did not get to spend the original $4 Trillion, they wanted for the same nonsense schemes, or the loss of rating would have happened last year. If the Democrats were not so selfish and partisan that would have taken some sound advice how to avoid this.

The Democrats had already set up the nation for this fall, during COVID. The Democrats run states shut down their economies and screw up their school systems, leading to supply chain problems, which is now a major part of the inflation. If you recall, COVID caused the most long term economic problems in Democrat run states, because of their sit back and do nothing but Lord Over, approach. When COVID was on the decline, the Republican States were bouncing back, first, under Trump, with gasoline at about $2.00/gallon due to a strong energy infrastructure. Once Biden and the Dems took over, the decline began due to partisan pet projects and mismanagement.

The economy under Obama was also not very bright. There was stagnation, so they needed to lower the interest rates to nearly zero percent to get people to invest. Both Trump and Biden inherited the low interest rates, but under Biden the interest rate keep going up, due to the opposite ignorance and bad choices. The Democrats are too, their own agenda driven, and do not know how to help the country in ways that benefit all. Trump was better at that, with women and minorities both at record employment before the COVID shut down by the Democrat run States.

All the recent Presidents have harmed
the economy, both Pubs & Dems.