Debt Wish: Debt Level Midnight

Debt Wish: Debt Level Midnight

Debt Wish: Debt Level Midnight

After threatening another downgrade of the U.S. credit rating before the fiscal cliff deal, agencies like Moody’s and S&P both essentially say nothing’s changed.  Washington’s failure to address our long-term debt continues to put Americans at risk of higher interest rates and undermine our standing in the global economy.  With today’s jobs report showing hiring is still well-below the typical rate needed for this stage of a recovery, the question is whether Washington will finally wake up to its overspending … or if America will continue to sink into “an abyss [we] can never come out of.” 

CREDIT RATING AGENCIES SEE NO “MEANINGFUL IMPROVEMENT,” CITE FAILURE TO ADDRESS DEBT 

CNN’s Felicia Taylor: “As one analyst said, we only got half a loaf out of Washington. We didn’t get the full thing yet. We’re still waiting to find out if those spending cuts are actually going to happen. … The deal just wasn’t enough.” (CNN Newsroom, 1/3/13)

Moody’s: Fiscal Cliff Deal Not Enough To Avoid Risk Of A Downgrade. “Moody’s Investors Service warned Wednesday that the ‘fiscal cliff’ tax deal was not enough to remove the risk of a downgrade of the U.S. credit rating. … [T]he package, which averted income tax increases on most Americans, did not produce ‘meaningful improvement’ in the ratio of the federal government’s debt to its economic output.”(Jim Puzzanghera, “Moody’s says fiscal cliff deal doesn’t end credit downgrade risk,” Los Angeles Times, 1/2/12)

“The nation’s debt outlook after those negotiations will determine whether Moody’s downgrades the U.S. rating a notch to Aa1.”(Jim Puzzanghera, “Moody’s says fiscal cliff deal doesn’t end credit downgrade risk,” Los Angeles Times, 1/2/12)

Standard & Poor’s: “[T]he compromise doesn’t affect our [S&P] view of the country’s credit outlook, given that we believe yesterday’s agreement does little to place the U.S.’s medium-term public finances on a more sustainable footing.” (Standard and Poor’s, “”Fiscal Cliff Deal Will Not Affect U.S. Outlook,” Reuters, 1/2/13)

GLOBAL INFLUENCE CONTINUES TO DECLINE

Military Leaders Worried U.S. Is Squandering Its Global Influence. “Most pointedly, military and diplomatic experts wonder whether the United States is at risk of squandering its global influence.” (David E. Sanger, “Fiscal Cliff Deal Fails To Allay Doubts On U.S. Global Power,” The New York Times, 1/4/13)

State-Run Chinese Xinhua Newspaper: “‘The politicians have chosen to kick the can down the road,’ [China’s] state-run Xinhua news agency said in a commentary on Wednesday. ‘The can will never disappear,’ it continued, warning that the United States was falling ‘into an abyss you can never come out of.’” (David E. Sanger, “Fiscal Cliff Deal Fails To Allay Doubts On U.S. Global Power,” The New York Times, 1/4/13)

Iranian President Mahmoud Ahmadinejad:  “Iranian President Mahmoud Ahmadinejad predicted the impending downfall of the ‘US empire,’ blaming the collapse on a combination of the country’s massive debt and its loss of legitimacy within the international community, Iran’s official news agency IRNA reported Thursday. ‘How long can a government with a $16,000 trillion foreign debt remain a world power? … The Americans have injected their paper wealth into the world economy and today the aftermaths and negative effects of their pseudo-wealth have plagued them.'” (“Iran: How Long Can Debt-Laden U.S. Remain World Power?,” Jerusalem Post, 10/18/12)

German Finance Minister Wolfgang Schaeuble: “In an unsatirizable display of chutzpah, Mr. Obama reproved Europeans for not wrestling their debt problems under control. … ‘People are always very quick at giving others advice,’ an irritated German Finance Minister Wolfgang Schaeuble said on Sunday. ‘Mr. Obama should first of all take care of reducing the American deficit, which is higher than in the eurozone.'” (Brett Decker, “Obama’s German Tutorial,” Washington Times, 6/25/12)

EXPLODING DEBT UNDERMINING U.S. NATIONAL SECURITY

Long-Term Debt A Growing Concern For National Security. “Now that Congress and President Obama have slipped past the latest budget deadline with a bill that does little to address the country’s long-term debt issues — and by some measures might worsen them — the worries of the national security establishment have been reignited.” (David E. Sanger, “Fiscal Cliff Deal Fails To Allay Doubts On U.S. Global Power,” The New York Times, 1/4/13)

Secretary of State Hillary Clinton:  “Secretary of State Hillary Clinton waded into the nation’s fiscal debate Wednesday, calling the expected $1.3 trillion U.S. deficit a ‘message of weakness internationally.’ ‘It poses a national security threat in two ways: it undermines our capacity to act in our own interest, and it does constrain us where constraint may be undesirable…'” (“Clinton Says deficit is a national security threat,” The Hill, 9/8/10)

Debt Could Limit U.S. Leverage With Foreign Powers. “If the debt continues to grow unbridled, the U.S. government will be constrained in its ability to pay for what it wants to do militarily and diplomatically. And it could limit the country’s leverage with foreign powers.” (Jeanne Sahadi, “Why debt is a threat to national security,” CNN Money, 10/22/12)

WHILE THE AMERICAN ECONOMY CONTINUES TO SPUTTER

Hiring Well Below Typical Pace. “Other employment indicators suggest the U.S. continues to add jobs at a modest pace. While hiring is taking place fast enough to slowly reduce the unemployment rate, it’s well below the typical pace of job creation at this stage of a current economy recovery.” (Jeffry Bartash, “U.S. Gains 155,000 Jobs in December,” MarketWatch, 1/4/13)

‘Least Anticipated Jobs Report of All Time.’ “There was no political angle or economic angle that anyone was excited to see … And the meh number justifies the lack of hype. It’s a fine, nothing special number that won’t move the needle on anything.” (Joe Weisenthal, “The Least Anticipated Jobs Report of All Time Comes in Exactly as Expected,” Business Insider, 1/4/13)

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