Category Archives: World
Article discusses the thought that Economics is a cumulative science and learning the history of economics is unnecessary, however, there are 3 main reasons why it should be taught and understood.
The S&P showed some inefficiencies in their analysis and ratings in the past. Now, their ratings are likely based on political actions, therefore, punishing the government with a downgrade because of a lack of ability to agree on fiscal and monetary policy.
“But Congressional Republicans deserve much more of the blame. For this calamity was entirely man-made — even intentional. The contemporary Republican Party is fixated on taxes. It possesses an iron-clad belief that the existing tax rates should never go up, that loopholes shouldn’t be closed unless they’re offset by other tax reductions, that the fact that hedge fund managers pay lower tax rates than school teachers makes complete sense, that a reversion to the tax rates of the prosperous 1990’s or 1980’s would be unacceptable.”
This just shows that the government system, with a ruling party and an opposition, makes financial decisions more difficult when individuals have different beliefs on economic policies. Is taxes are so bad, then fiscal expenditure should be increased to allow job creation and growth.
If other credit rating agencies do not have plans of downgrading the US ratings in the near future, then it is likely that their calculations are different from that of the S&P’s.
Again, in this economy with struggling unemployment rates, the government dropped the ball on an early and constructive debt deal, and the S&P took an early and exaggerated stance in downgrading the US, now making it slightly more difficult for the economy to fully recover.
Although the government made a debt deal before deadline, S&P still downgraded the US ratings. I think that this is more a political result than an actual rating based on the capability of the US to perform and maintain a high rating.
The S&P calculation of $4 trillion in savings required to maintain good finances is likely an exaggerated value. Although decreasing the debt by $4 trillion will be great for the economy, in this recovery time, it is not possible.
Downgrading the US will only make recovery more difficult, and will probably result in a further loss of jobs.
An interactive chart showing the US debt and its holders.
IPO bubbles…. interesting concept. Then again, economic bubbles can be formed from anything that has increased demand.
As with any technological development, this will likely be outdated 6-12 months after completion! lol
Imagine how Call of Duty and Gran Turrismo would run on a system like this!