August 22, 2011
Allan Sloan on the S&P Downgrade
From Allan Sloan at Fortune comes: American Idiots: How Washington is destroying the economy. This is an interesting review/rant, and some parts are especially compelling. It's worth the read. Sloan explains:
Now, a few facts. The S&P downgrade is not -- as some hate-filled knuckleheads inside the Beltway and in the hinterlands keep repeating -- from fear that the U.S. is "broke" or lacks the financial ability to meet its obligations. S&P's primary worry is that the U.S. may not summon up the political will to pay its debts.
. . . .
The root of our current problem is that there are no grownups in positions of serious power in Washington. I've never felt this way before -- and I've written business stories for more than 40 years, and about national finances for more than 20. Look, I certainly don't worship Washington institutions. I called former Federal Reserve chairman Alan Greenspan the "Wizard of Oz" when he was known as the "Maestro." I've said for more than a decade that the Social Security trust fund had no economic value and would be useless when the system's cash flow turned negative -- which I also predicted. But despite being an irreverent professional skeptic, I never felt there was a total absence of adult supervision in our nation's capital. Now I do.
I fear he's right. The question is, what are we going to do about it?
"A crucial thing that people forget, is that at the last FOMC meeting, the Fed governors had said they had discussed a wide range of actions they could take if the economy weakened. So if economic data continues to stay weak that could be the 'trigger on September 20 to take action'. "
Posted by: Intrinsic Value | Aug 25, 2011 6:50:32 PM