“Vermont is a AAA rated state,” former State Treasurer and current Secretary of Administration Jeb Spaulding said yesterday.
The AAA Diamond Rating system “is North Americas premier rating program. Whether you seek simple roadside accommodations or a destination resort experience, trust AAA’s reliable Diamond ratings to guide your decisions. Some 32,000 hotels in North America and the Caribbean have achieved AAA rated;” many are right here in Vermont.
Being pathologically parsimonious, I stay exclusively in Motel 5s. (OK, there was that Motel 4-1/2 in South Carolina and my personal favorite, the 16 $CDN/night Bumblebee just over the border in New Brunswick.) No AAA surveyor worth his salt has ever stayed in a Motel 5 even with a broken down car.
I stayed in a jail once when my car broke down in central Jersey but that was free. Pretty nice cops in that town to take in a college kid in the pouring rain.
“When an accident is waiting to happen, it eventually does.” Economists Kenneth S. Rogoff and Carmen M. Reinhart wrote in This Time Is Different.
The Outstanding Public Debt as of noon on Monday, July 25, 2011:
$ 1 4 , 3 5 7 , 3 1 7 , 9 8 3 , 8 9 2 . 0 4
Three months and a week ago, Standard & Poor’s lowered its outlook for America’s long-term credit rating from stable to negative. At that time there was a one-in-three chance that S&P would downgrade the nation’s AAA credit rating. Fitch, Moody’s, and S&P rate the likelihood that businesses and sovereign nations will repay their debts.
Three months and a week ago, President Obama called for a bipartisan group in Congress to “begin negotiating” a $4 trillion debt-reduction package, the parties have not even agreed to its membership
Three months and a week ago, the Gang of Six — three Democrat and three Republican Senators — said they would deliver their own bi-partisan plan when Congress returned from its May recess.
The Wall Street Journal reported this morning that congressional leaders have trotted out yet another new set of “competing debt-crisis solutions.” This is so serious that President Obama “canceled fund-raising appearances” today. But the two parties still have no agreement about what to do before the August 2 default deadline.
Am I the only observer to notice that banks want interest rates to go up so the United States government wants interest rates to go up?
About $5 billion of municipal bonds are in default today. Yawn. Nobody cares.
Countries “can default on stunningly small amounts of debt,” Dr. Rogoff wrote.
I predict another week of Lindsay Lohan and Roger Clemens in the news.
Kenneth S. Rogoff is an economics professor at Harvard and a former research director of the International Monetary Fund. Carmen M. Reinhart is the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics. She directed the Center for International Economics at the University of Maryland and was Chief Economist at Bear Stearns.
Stunningly large amounts of debt notwithstanding, the U.S. has plenty of cash flowing in to service the debt, so the country won’t default to its creditors. Nope. No chance. Won’t happen. Instead, President Obama announced that he won’t send Anne her Social Security check.
And we let these people who can’t figure out how to run the medical system and who stole General Motors from us use our credit cards to stay in the Five Diamond motels.
Talk about a train wreck.
“I hope we gave a little lesson to the people in Washington, because the debt crisis is a lot easier to fix than this deal was.” N.E. Patriots owner Bob Kraft said today when players accepted the football contract.
Its pretty clear at the most basic level, the debt debacle is a television crisis, meant to be played out for political advantage in prime time. Treasury revenues have always been enough to service the debt and, unlike a business or a family, the government can always raise taxes if it doesnt have enough income.
So. Since there was never any risk of default, whatever they do today has no real effect on the economy, because its meaningless. In the short term, though, raising the debt limit again today will convince consumers and business leaders alike that everyone in Washington is an airhead; people will continue not spending because they dont trust Washington ever to turn the task of fixing the economy and getting Americans back to work.
And as long as we know that to be true, the economy will founder.
“people will continue not spending because they dont trust Washington ”
And the morning report shows that is already true. Consumer spending is flat and dropping.
An unexpected side benefit of reduced U.S. borrowing is that there will be a lot of available cash in the credit markets looking for a home. As in hundreds of billions of dollars. Supply and demand says the interest rates go down when there are more lenders than borrowers.
Interesting times.