This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Uncle Sam's 'F' Rated Bonds

NEW YORK ( TheStreet) -- Were the U. S. any other country, its bonds would have long ago been downgraded to junk.

The national debt is careening out of control and the underlying economy appears unable to support the taxes necessary to stabilize the amount owed. The political class has sunk into tragic dysfunction, incapable of civil discourse or creative thinking to address these problems.

In 2007, the last full year before the financial crisis, the federal deficit was only $161 billion but since, spending on health care, Social Security and other entitlements have exploded -- the annual budget gap has exceeded $1 trillion for five years.

Raising everyone's taxes by 25% would not slice the budget gap in half and prove self-defeating. As in Greece and Spain, recession and unemployment would follow, significantly shrinking the economy and new revenue raised.

Policies to improve access to health care, reduce energy dependence and environmental emissions, and protect Americans from reckless oil rigs, bankers and the like, though noble in the eyes of President Obama, have taken a heavy toll on growth.

In the wake of a terrible recession, the economy should be rebounding at a 4% or 5% annual pace, but instead, slogs along at about half that rate. Unemployment remains painfully high and that's the root cause of the nation's budget woes -- too few Americans working and paying taxes to support their government.

Faced with these realities, President Obama pretends they don't exist. In budget talks with Speaker Boehner he declared the country does not have a spending problem -- as if the federal government could indefinitely spend 50% more than it collects in taxes.

When industry leaders complain about burdensome regulations impeding investment and growth, his lieutenants exclaim those are necessary and can be managed.

American businesses do cope -- by shipping jobs to China.

Now, the president wants to raise the debt ceiling without negotiating a plan with Congressional Republicans to bring federal deficits under control.

Past GOP efforts to curb spending by shutting down the government have ended badly, and the president will likely get his way. Then Fitch and Moody's will join Standard and Poor's in stripping U.S. bonds of their triple-A rating, but don't expect any more than an indignant response from President Obama.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $125.42 0.72%
FB $85.76 -0.04%
GOOG $520.60 -0.18%
TSLA $268.36 2.40%
YHOO $39.29 0.98%

Markets

DOW 17,619.51 +23.16 0.13%
S&P 500 2,063.12 +5.48 0.27%
NASDAQ 4,986.8670 +28.3990 0.57%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs