28 votes

Ron Paul issues statement on S&P credit downgrade

LAKE JACKSON, Texas--(BUSINESS WIRE)--Today, 2012 Republican presidential candidate Ron Paul issued a statement in response to the credit rating agency Standard and Poor’s decision to downgrade the United States’ credit rating from AAA for the first time in history. The ratings agency has removed the United States government from its list of risk-free borrowers, citing concern about the rising burden of long-term federal debt. See comments below.

“We have just learned that for the first time in our history, the United States’ top credit rating has been downgraded by credit rating agency S&P.

“We were told by proponents of increasing the debt ceiling that a credit downgrade would come if we didn’t raise the limit, but the opposite was true.

“The ratings agencies had been warning us for some time that it is imperative upon the U.S. government to get its fiscal house in order and tackle its debt and deficit problem by taking serious steps.

“Unfortunately, the game in Washington has been one of partisan blaming and bipartisan out-of-control spending.

“America has been dealing with this severe economic crisis for years because the Washington establishment failed to focus on the true issues at hand: a declining dollar and out-of-control spending.

“Last November, millions of frustrated Americans let it be known that they wanted our debt crisis solved and our spending problem to end. They sent a group of new lawmakers to Washington to end business as usual.

“But the old crowd of elites still refuses to budge on doing everything it takes to get us out of this hole they’ve dug. Instead of real substantial budget cuts, we get minor or ‘fake’ cuts and budget tricks that may or may not happen far off into the future. We get a Congress that abdicates its responsibility to an unconstitutional ‘Super Congress’ with the power to make things worse than they already are.

“The American people realize that our nation can no longer afford to stay on this same path of reckless spending and follow the status quo of Washington. They will not tolerate any further ineffective stimulus schemes that do nothing to help our economy and actually do the opposite to the tune of trillions of dollars in money being spent and printed, and millions of people remaining unemployed and without much economic stability or security.

“If Washington refuses to take heed, there is little cause for optimism.

“Growing inflation, rising gasoline and food prices, and trillion-dollar budget deficits will all soon seem like minor issues if our nation does not immediately change our monetary and spending policies.

“We must take bold actions to reduce out-of-control government spending, and get the federal government out of the way of small business and entrepreneurs so that they can start hiring again.

“If elected President, I pledge to veto any unbalanced budget and to balance the federal budget in the first year of my term. I will fight to reduce taxes and remove unconstitutional regulations so that businesses can hire, Americans can get back to work, and our economy can truly recover.”

Via BUSINESS WIRE

http://www.sunherald.com/2011/08/05/3329637/ron-paul-issues-...



Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

The latest from the markets..

Stock Exchanges in the Middle East have tumbled on Sunday following the news of US credit downgrade.

http://www.cnbc.com/id/44049661

I doubt S&P's credibility

But that doesn't mean they aren't right about our credit rating.

Ok, go to your nearest

@anothergreenbus
Ok, go to your nearest WalMart Super Center and ask the first 100 people (or even the first 1000) you see what they think of S&P downgrading the US credit rating. I think you will find that not one of them thinks S&P is a bogus organization!

Ron Paul has to talk to the common (idiot) man sometimes, if he only talked to the people in the know he would have a repeat of the 2008 farce.

Terrific Quote...

Apropos Benny’s lapse of concentration the other day when he told the good doctor that “gold wasn’t money,” I found this quote in Ron Power’s biography of Mark Twain – a Life (page 184).

As background, Rev. Henry Ward Beecher’s Plymouth Church was planning a five-month trip to the Holy Land and surrounding Mediterranean countries. Beecher was the brother of Harriet Beecher Stowe of Uncle Tom’s Cabin fame.

Mark Twain decided to join the pilgrims as a correspondent for the Alta California whose readers could not get enough of Twain’s stories, real or fictitious, even though sometimes he got fact and fiction mixed up.

The steam ship, Quaker City, a 1,428-ton side-wheeler with two masts, was to ferry its passengers across the ocean to the Promised Land.

Enough of that, here’s the quote: “Fare would be $1,250 in currency, with an additional $500 expense in gold, for land travel from various ports.”

For the record, the price of gold was $18.93 in 1867.

Plano TX

So Ron Paul takes S&P seriously?

Now I getting totally confused. Ron Paul seems to take the rating of the discredited rating agency--responsible for grossly over valuing the junk being produced by the banks and Wall Street--seriously. Seriously?

S&P and Moodys are corrupt. They are a big part of the problem. They are part of the NWO. Aren't you guys concerned? The falsification of ratings is not good for a "free market" where value needs to be ascertained by investors. Why is Ron Paul validating this company? A company that, I should add, has a direct interest in covering up its own role in creating the housing bubble.

Maybe it's just politically convenient?

First, you do not need to

First, you do not need to take its ratings seriously to take its influence seriously.

It is also important to recognize why S&P ratings are discredited. S&P is discredited because it has a history of overrating bad entities. S&P has not been discredited for downgrading entities that should be higher rated.

Reality is that despite their faults, these three are the agencies relied upon by the large investment houses, hedge fund managers, pension fund managers, retirement fund managers, institutional financial advisers and investment advisers and the like. These ratings agencies are the de facto and de jure standard of care. They are by law the agencies approved by the US government for ratings and fund management. If a fund manager disregards their ratings and is correct, fine their participants benefit. Yet if a fund manager disregards their ratings and only once in twenty times is wrong, the fund manager is now on the hook for negligence for violating the standard of care. These agencies provide cover for fund managers.

And as WildSatchmo insightfully pointed out, if a rating agency known for a history of overrating downgrades you, that is likely to mean you are in far worse shape than the downgrade reflects.

President Paul is absolutely correct in recognizing the serious influence a major ratings agency has and the meaning and effects of its downgrade. That is just a matter of reality. It is irrational not to recognize such reality.

Let it not be said that we did nothing.-Ron Paul
Stand up for what you believe in, even if you stand alone.-Sophia Magdalena Scholl

Yes

The credit rating agency which hyped Lehman, AIG, and credit default swaps right to the end is being taken seriously by Ron Paul?
Geithner was in "discussion" with S&P officials before this was announced. How can anyone take this phony downgrade by this corrupt agency seriously?

If you have a ratings

If you have a ratings organization that historically over glamorizes bad bets, its pretty serious when that same organization admits the US is in a financial mess.

- Grow Mushrooms at Home
http://subfarms.com

Bingo! Hit the Nail Right on the Head!

That seems to me to be correct in the broad view of things. The machinations of the bankers in the short term not withstanding

When They Glamorize Bad Bets

it means you don't take them seriously. It means they were corrupt, and they haven't shown that they've changed their ways.
I'm surprised at Ron Paul. He strikes me as a very astute individual, and his stance on this downgrade makes him look either foolish or politically unaware.

Oh please

This statement makes him look foolish? Are you nuts? He predicted that they'd lower the rating in the first place, and he's been proven right again.

A corrupt scam or not, S&P lowering the rating will have real consequences to people's wallets. Ignoring the issue, when it so beautifully proves Paul correct, would be the foolish choice.

Eric Hoffer

A history of glamorizing bad

A history of glamorizing bad debts simply means the agency is staffed by overoptimistic people. Which is the inevitable outcome of being paid by those whose debts they are rating. Any agency staffed by analysts less optimistic, would simply be gone for lack of business.

But now, despite that, even these starry eyed optimists obviously can no longer find anything to be optimistic about when it comes to US debt. Well, actually that is not true. They are still waazayyy too optimistic, just slightly less so than they were a few days ago. A more realistic assessment of at least long term US debt, would have it rated as little more than junk, not simply one grade below perfection

They also routinely underrate municipals.

But they have an agenda to privatize public wealth in the hands of the top 1%. So do you. So, S&P is a tool not a resource. If you are comfortable using them as a tool than go for it. But let's not lie to ourselves. S&P has an agenda and it is not what it appears--a neutral credit rating agency. The comment following my last comment makes my point by saying, "this is convenient." If it's a useful tool, it's a tool.

Both parties, (including Ron Paul) are hell bent on global corporate dominance. Goodbye to local independent business, entrepreneurs, meritocracy, and democracy. I hope Americans wake up before they are literally enslaved by the globalists. I'm afraid, you all and Mr. Paul may hasten that by handing us directly over to the Koch brothers, but we'll see.

You're a moron

You're a moron

RP has an agenda to privatize

RP has an agenda to privatize "public" wealth, since he is economically astute enough to realize there is no such thing as "public" control of wealth.

"Public" is simply progtard speak for the government. It is not you and me, but Tim Geithner, Ben Bernanke, Barack Obama, Dick Cheney and others of that ilk. And, just like I'm sure the Koch brothers use the wealth they control for their own interests, not yours and mine; so do the above quartet, and anybody else in government. The difference being that the government is infinitely better equipped at repressing you and me than the Koch Brothers can ever hope to be; with their army, police forces, laws giving them preferential access to weapons and money printing etc., etc.

So yes, I am sure RP would be delighted to shift control of much of "public" wealth to private citizens. Some of who may happen to be in the top 1% of whatever silly metric singled out as progtards' bogeyman du jour, some of whom may not.

if S&P reflects reality...

then why not validate them? In his opening statement he reflected what S&P said about giving a bad rating if the US government did not raise the debt limit. Clearly Ron Paul opposed that and now S$P is confirming what RP said all along. If anything, RP is showing his consistency and ready to forgive mistakes of others to move the US forward. A true Statesman!

Repeal the Federal Reserve Act of 1913 and the 16th amendment - sound money for our communities and out of Washington, DC.
--------------

It couldn't be simpler

George Bush and John McCain and Barrack Obama warned us that if the first terabuck stimulus packages didn't go through then we could see an 8% unemployment rate. Well, the stimuli went through and by summer 09 we'd blown past 8% to 10%.

Barrack Obama and John Boehner and Mitch McConnell warned us that if we didn't lift the debt ceiling the stock market could take a dive and our credit rating could be damaged.

What more do we need to know?

dynamite anthrax supreme court white house tea party jihad
======================================
West of 89
a novel of another america
https://www.smashwords.com/books/view/161155#longdescr

Fix the dang roof! It must be no simpler!

The White-Wash-House is flooded. Debt(aka: a mysterious liquid substance according to news reports) is at flood stage.

The Congressional House controls the Watergate... The flood gate. All appropriations (including all payments) must start in the House of Representatives. Each state sends its representatives to ensure only appropriations necessary to run the Federal Union more perfectly are approved. No more so.

    Things should be made as simply as possible. No more so.

    PS: Whitehouse (aka: Whitehorse according to DailyPaul Web spellcheck.) - Our rustic DailPaul Inn still has fond memory of the days General George Washington reigned his white horse. That was way before direct Whitehouse appropriations were a tinkle in Congressional eyes. May I suggest we reign in the Whitehouse appropriations to zero. They are all unconstitutional.

    If we reign in Whitehouse spending, I will be comfortable leaving the memory of Whitehorse as the proper spelling of what has become known as the Whitehouse. Leaving speellcheck as is until we reign in the Whitehouse might have merit. We must properly corral Whitehorse & give all appropriation initiations back to the House of Representatives.

    Perhaps then, we may decide whether or not to put Whitehorse out to pasture. For the rest of his days, let him not be confused with the Whitehouse.

    Meanwhile, we may wish to update spellcheck to tolerate "Whitehouse" & "speellcheck" in the world as we know it.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Markets

What will this mean for the markets next week?

I'm no economist but I think...

It ultimately means a quickening of inflationary pressures. The dollar will take a significant hit.

When Foxconn lost its blue chip status it was removed from the Hang Seng index and the stock price took a 10% hit. When netflix was added to the S&P 500 the price jumped up like 6%, New York Times was removed and dropped 3%.

When a new stock is added to an index like the s&p 500 for example, they receive a price boost - and the opposite is true when they are removed (for reasons other than a buyout or merger).

I draw this comparison because being listed in the S&P is a sign of a mature, safe stock. This is similar to a credit rating of a country. The credit rating is almost like saying "what index should this countries treasury bonds be listed in", only the indexes are called AAA, AA+ and so on.

If the dollar were to take a 10% hit though, that would be quite the shock if you ask me - I wouldn't expect it to be that drastic. The largest investors in US treasury bonds are countries who go by their own ratings agencies like China where they have already downgraded the US credit rating and have started dumping tbonds already.

Afterward there will of course be a number of people willing to look at that situation as a buying opportunity, but ultimately its forecasting a weaker dollar, and as a result higher commodity prices.

- Grow Mushrooms at Home
http://subfarms.com

As always, Dr. Paul is a class act

Romney took the opening to take a swipe at Obama, as opposed to Dr. Paul who points to our whole system as a problem.

In the short run, Romney will stir anger against the left, Dr. Paul on the other hand is adding independents and even dems everyday by making responsible statements like saying we need to look at the system as a whole.

RP just keeps building a wider base, he's going to be busy next week.

Fantastic statement. He has

Fantastic statement. He has MY vote! :)

AWESOME

response!! Hope this goes Viral. Ron should get a ton of AIR time next week on all networks...