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Obama Hoped To Keep S&P From Going ‘Negative’

May 11, 2011 by  

Obama hoped to keep S&P from going 'negative'President Barack Obama’s administration privately attempted to dissuade Standard and Poor’s from downgrading the United States’ debt outlook in recent weeks, according to a report from The Washington Post.

However, the financial agency went ahead and changed America’s status from “stable” to “negative” on April 18, which is an indication that the U.S. may lose its AAA credit rating in the coming years. Officials who are familiar with the matter told the media outlet that Treasury Department officials attempted to convince S&P analysts that they were underestimating Federal lawmakers’ abilities to curb deficits.

The “negative” outlook puts renewed pressure on Obama and legislators to tackle the government’s current $1.5 trillion budget deficit, which is equivalent to about 9.8 percent of U.S. economic output, according to The Huffington Post. Furthermore, the Treasury estimates that the nation will surpass its $14.3 trillion debt ceiling by May 16.

Last week, the President proposed a plan that would eliminate $4 trillion from the budget deficit over the next 12 years through spending cuts and tax increases on wealthy Americans. On April 15, the GOP-led House of Representatives approved a measure that would trim $4 trillion over the next decade.

The Republican-backed plan includes a repeal of Obama’s healthcare law and an extension of former President George W. Bush’s tax cuts for all Americans.

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  • s c

    So what do you have to hide THIS time, Herr Obummer? Are you cooking the books? Is reality not comfy? Is someone trying to reinvent your sorry persona?
    If you had any integrity or a sense of responsibility, you could RESIGN, and flee to another country. Think of it as the universal Plan B for incompetents, neer-do-wells and political trash. Savor your re-education process. You’ve earned it.

    • http://burkecomputers.blogspot.com/ DanB

      I suspect what the administration is “covering” is the necessary path to prevent the US credit from actually failing…. They are campaigning for the debt ceiling to go up without real deficit reduction. Even the Repub plan falls short. But if the recent history across the globe is any indication, perhaps raising the debt ceiling IS the wrong move. I could be wrong, but if I was at the S&P with my current view of politics and world economy I would make the following two predictions.

      1. The politicians will raise the debt ceiling without taking effective measures to curb spending. History shows this clearly. I would have held back this a view a bit for the Tea Party injection into politics but it looks like not enough and a little too late.

      2. America cannot control its spending and WILL follow those other countries with a similar spending problem into default. The only question is how soon. I would not expect this year, and perhaps not in the next decade. But if I wanted to remain a respected credit rating service, then I must at some point begin adjusting my ratings to predict the future.

      Of course, I am not really studied in these matters. I am just a man with an opinion.

      • Lastmanstanding

        Dan B…only a few politicians have shown any restraint in spending.

        The savior of our country, (outside God) is small business. We are under relentless attack from day to day. i won’t bore you with the details. If they break us, it will be all out kayos…exactly what they want.

        To all of you business owners out there…Please don’t give up! We run our companies with spending restraint. Stand tall and firm against those trying to enslave the USA…God help us.

      • http://Illinois'17th Old Henry

        DanB:

        You have very succinctly stated the crux of the issue, as most of us “unwashed” do so frequently. Most of those “experts” are simply educated idiots who get all involved with themselves.

        We can be glad, however, that the good folks at S&P stuck to their guns.

    • Void1972

      “IT WAS INCREDIBLY OBVIOUS”
      by Sharon Rondeau

      Image released by the White House which Obama claims is his birth certificate
      (May 9, 2011) — The Post & Email was able to reach Mr. James Colby, who recently performed an analysis aired on a Colorado television station of the image released on April 27, 2011 by the White House purported to be a certified copy of Obama’s long-form birth certificate from Hawaii. Mr. Colby stated during that interview that the image contained as many as 50 layers.
      MRS. RONDEAU: How did you determine that there were as many as 50 layers in this image?
      MR. COLBY: It started when you open the birth certificate in your browser, in Adobe Acrobat. It was a friend of mine who noticed that the text on the birth certificate would flash to white in and out. The reason it was doing that was that there were different layers in the document that caused the layers to flash as it rebuilt the preview layer by layer. So those layers would flash over the top and rebuild that image in that way. From there, you can open it in Adobe Illustrator and see those layers first-hand.
      MRS. RONDEAU: If the image had come from a paper document and then been scanned in and put on a computer screen, what would have happened when you opened it?
      MR. COLBY: Almost all scanned images would be a single layer, so zooming in and out, there would have been nothing noticeable. Additionally, if you zoom in using Acrobat with your browser on a lot of the text, you’ll notice that it appears jagged and a single color. That’s not original. A pen doesn’t write in a single color; as you write lighter, the color is lighter; as you press harder, it’s darker than everything else. So writing in pen is not a single solid color, and when it scanned, anti-aliased, which means that the square pixels on the edges fade to make it appear smooth. Most of the text in the document including a large portion of the signatures is just a single blotch of color. The likely explanation is that someone just drew them in using a tool similar to “pencil” in Adobe Photoshop.
      MRS. RONDEAU: Do you think that this came from any kind of a paper document originally?
      MR. COLBY: There’s definitely a component of it that came from a paper document originally and was then edited after the fact. I can’t tell you how much of it was taken from a paper document unless the entire thing was connected. Another aspect to this is that in Illustrator, you can examine what’s called the “Clipboard.” Let’s say if you’re editing a paper document and you add another document and you are cutting fragments of other documents to paste over them to produce a final copy. The Clipboard on a computer is like all those cutouts, if you will, a kind of storage place. The clipboard for this document is still intact in its original form. It reflects the objects that have been “cut” from somewhere else and “pasted” into this document. By the way, all the things in the clipboard are rotated at 90 degrees without any explanation. Basically, there’s no computer-based explanation for that.
      There are things in the clipboard that are notable; for instance, the “type of occupation outside home during pregnancy;” the “Non” in “none.” That’s in the clipboard…both the dates, “20″ and “22,” are on the clipboard. The signature of the state registrar and the April 25th date are both foreign objects.
      There are explanations that people have proposed. Some have proposed OCR, which is Optical Character Recognition, and that’s when scanners are giving computers the ability to read text. But that doesn’t apply here because OCR converts things into text, not images of text. All of the information in this document is stored as an image.
      MRS. RONDEAU: How long have you been involved in work with documents?
      MR. COLBY: I’ve been doing graphic arts since 2004 using Version 5 of Adobe Creative Suite, but I’m also a programmer. I’m a LAMP developer with a specialty in dynamic graphics. I’ve developed quite a few notable online graphics programs myself, from scratch, including a GD image editor, a 3D dynamic graphing generator, a system to develop the entire graphic profile of a site dynamically. I’m a little bit more than a graphic artist; I’m an internet engineer.
      MRS. RONDEAU: What is your work background?
      MR. COLBY: I incorporated my first IT company in 2004 and have been self employed since. I’ve been self-employed since 2004. I started our current business back in 2007, and I got started in the technology field early through an internship when I was about 15 or 16. I have not stopped working since.

      Image which circulated on the internet in October 2009 and again last week following the release of an image from the White House purported to be Obama’s long-form birth certificate
      MRS. RONDEAU: Would you say that analyzing this particular image was difficult? Did you have to look closely to find the 50 layers?
      MR. COLBY: It was incredibly obvious.
      The Post & Email then asked Mr. Colby if he was familiar with the “Blaine document” which had appeared on the internet as early as October 2009 but resurfaced last week following the release from the White House. We mentioned that to the untrained eye, the formatting of the two images appeared similar. Mr. Colby responded that he had not seen the Blaine image, so we sent it to him. We asked him to comment on whether or not he believed that the White House long-form image was assembled from the Blaine image, as some have suggested. Mr. Colby responded:
      “I can’t find a high enough resolution sample to make any actual image based determinations. I will say the parent and attendant signatures have some appearance of being signed from the same hand, with attempt to create variation. Only one background mark seems to coincide between the two documents, while the rest are independent between – so the certificate released by the white house is not based on the “Blaine” document. Information like name, address, etc. obviously correlate but are publicly available so there is no significance.”
      Mr. Colby’s final comments to us were, “One thing about documents is that it is possible to make flawless forgeries, especially with the resources of the Executive office. That’s what brings this into question; there’s no question that they have the ability to make a flawless forgery if they desire. So the question is, ‘Why was this released?’”
      The Post & Email then asked him, “If you had a flawless forgery on the screen in front of you, could you detect that it was forged?” and he said, “No. If the proper resources research was were put into it, it’s would be impossible to detect it without having access to external information like original records from the issuer of the given document.”
      Mr. Colby left some instructions whereby readers can discover for themselves the information he has presented about the White House image release:
      Verify yourself:
      In your browser (acrobat):
      Visit the original certificate at whitehouse.gov. Zoom in rapidly, in and out. The text flashing is your computer revealing the upper layers with a slight delay to process the preview of each.
      In Adobe Illustrator:
      Visit the original certificate at whitehouse.gov. Go to File – “Save Page As” in your respective browser. Save the page somewhere where you may easily access it. Then, either open it by browsing to it, right clicking on it, and selecting “open with”; finally selecting Adobe Illustrator (you might have to browse to find the program), or open Adobe Illustrator, select open, and browse to the file (make sure to select *.* “Any Type” in the bottom dropdown). Once open, you may navigate the individual layers yourself and hide their visibility; additionally, if you go to Windows-Actions and select the “Links” tab, you may view the clipboard associated with the original birth certificate.

      • Jovianus

        LOL…the grasping at straws of the desperate. Get over it…he was born in the United States

        • Tom S

          “Jov”, obviously it’s time for your Librium and a nap.

    • Tom S

      “Cook the books”, it’s more like they’re burnt toast.

  • http://aol.com sean murrey

    he is always trying to hide something what a POS.

  • Colleen

    DanB: I think you really are on the right track. The political elites have absolutley NO idea how to run a business or even to balance a budget. If they could just step back and actually look at the budget process…our debt load….and the multiple duplicate government agencies doing the same thing three times over…………well, maybe, just maybe they might have a Eureka! moment. But I doubt it as the only thing these politicians seem to understand is to get re-elected…and they think we the voting public like what they are doing!
    NOT!

  • Richard Pawley

    “Treasury Department officials attempted to convince S&P analysts that they were underestimating Federal lawmakers’ abilities to curb deficits.” The Federal Government is addicted to debt! They are incapable to reigning in the spending! There is nothing to underestimate! Every time they raise taxes they spend more, year after year, decade after decade, generation after generation. Why do you think some 200,000 Americans a year leave the USA? At least that’s what six out of seven reported to me in 2005 and which I mentioned in my autobiography. The Liberal Progressives (mostly Democrats) never met a tax they didn’t like. They are thoroughly convinced that Americans are incapable of taking care of themselves. A far cry from the days of the pioneers or even the days of the founding fathers. Even “Ask not what your country can do for you, ask what you can do for your country” is now ancient history, and no Democrat today would ever say such a thing. Today it is all “take from any who have earned it and give to those who believe the world owes them a living”; take from the middle class and give to the unions; take from the rich and give to those who want ‘bread and circuses.’ The hard times that I have written about for 21 years are still coming. We may postpone it as we have the debt for years but as Abraham Lincoln once said, “You cannot escape the responsibility of tomorrow by evading it today.” Congress, of course, with the help of the Federal Reserve, has just about learned how to do this and it is a true disgrace. New York has lost a million citizens since the last census. Michigan, Wisconsin, Illinois, Ohio and New Jersey even more if you total them. The middle class can no longer afford the unions in those states. The Democrats started talking about ‘privatizing 401 K programs’ two years ago and they wonder why people aren’t contributing to them. All I know is that we stopped contributing, let’s see, when was it, oh yes, two years ago! They are trying to force us to use cars that only go a hundred miles that use electricity whose cost “will necessarily skyrocket” if candidate Obama has his way. And now the Republicans are saying they must go further into debt to keep Wall Street happy? When did Wall Street ever care about anything but their wallets? All this IS going to come to a shocking close, one of these days, and that is why millions of people all across the land are doing all they can to prepare for big inflation – prices at least triple in the years ahead (some say months?) with the possible exception of houses. Is it any wonder that more than 52% of Republicans think we need a third party that will use common sense and stop the squandering of all we can borrow and create out of the air? I almost called “The Last Days of the Late Great United States…” ‘The Death of the Dollar’ and that IS the headline on the back dust cover of the hardback. Get ready folks. I don’t know how much time we have left but it’s coming, “unless we have an alien invasion or a comet from space (hit the earth)” to quote a former member of the Obama Administration. Remember, one of the ancients said, “Politics is God’s punishment to mankind for sin!” and I find it hard to disagree! May God help us because no politician is going to do so.

  • Wild Bill

    No sitting Congress can mandate the actions of any future Congress. Therefore ALL projected budgets are worth less than used toiletpaper.

  • oldbill

    AAA is a very subjective rating. If my child wants to borrow money from me and cannot even tell me how much he already owes, why would I rate him AAA? The ratings are useless if you want any assurance of getting your money back. I don’t loan money to my children. If they have a need, I give what I can.

    I have grown to give the AAA rating to gold, silver, and debt free living. If I want to do a project, whether personal or business, I save the money up first. I may use a credit card, but the debt is paid at the end of the month. I don’t rollover my previous debt principal by applying for a new credit card (should I call that “refunding”?)

    I’m skeptical of the argument that debt must be generated and money borrowed, or nothing will ever get done. Over a lifetime, borrowing and spending, we have to earn three or four times as much to have the same things we buy, earning first and saving.

    If we get something for nothing, someone eventually has to pay for it.

  • Tim

    Whooee, the next 6 months is going to get bumpy. Many countries have reigned in spending averting disaster. Some are showing signs of recovery. Those who didn’t curb spending are in crisis and their economies have gone from bad to terrible. Tanking is the word that comes to mind. The abusive overspending comes around to bite.

    • Ellen

      Remember last year when the European countries started spending cuts and Obama went over and told them they should do the opposite – they should increase government spending? We must look like morons to the rest of the world. They’re cutting social programs and we’re expanding them even as we see the outcome. What will Obama do to retaliate against S&P? He’s a vindictive man who doesn’t like it when he doesn’t get his way.

      • Jovianus

        Ummmm…have you looked lately at which countries are leading the way proppong up a world recovery brought upon by Bush/Cheney’s mismanagement of our economy? Have you examined what occurred to Japan during the 90′s when they tightened up instead of pumping money into their system? Have you read any of Bernanke’s papers on dealing with a deep recession and comparing Japan to other approaches in recent history (written before he became Fed Chair)?

        Until you have….how can you compare Europe and their situation with ours? one can’t, unless you’re talking fom a strong base of ignorance…

        • Tom S

          You are a brain washed idiot………………go sit in the corner and shut up.

        • Allan Halbert

          If your business was failing and your debt couldn’t be serviced, why wouldn’t a bank “pump money” into your business? Answer, because they they understand it’s a bad risk and can’t just print more money. Get some real world business experience.

  • ONTIME

    By throwing in the towel on that HC scam and putting the energy sector back in the biz of producing and providing instead of stealing and strangling, this country would begin a major come back over night. Without energy that is plentiful and cheapwe are nothing.

    I would bet that if this administration could be removed and pushed aside the moral factor alone would be so strong that it would trigger all kinds of new legislation to ensure this never happens again and government would never again get the upper hand such as it has now.

  • Wyrdwolf

    Sorry everyone but just as you brought up the Monkey Experiment to explain our Congress it is also a big aspect in our daily world as well. CEOs of large companies run them into the dirt, then get a huge lump some of money, and then some Board of directors for another company hires them to run theirs. This is Insanity, or is there some club that you have to belong to that keeps the inept in power at that level.
    Don’t look for much change in the outlook until the Welfare Checks start bouncing, like what happened in New York back in the 70′s people went there for the benifits until it could no longer afford the cost. After that I watched as 5 to 10 people a day ( used to go to the 7-11 that was also our towns version of a bus stop for lunch )were coming home to Chadbourn after running New York broke.
    As long as there is apathy and the feeling that 1 person can’t change anyhting

  • http://com i41

    What did Onumnutt do for a barginning chip, promise that Geithner, Bernake, and He would all show up with their pants in the hand greased up like perverts they are. Maybe to get more time throw in Rahmbutt and Blarney, they don’t get round mouths eatiing 3 squares a day!

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