There can be no doubt that Franklin Roosevelt was an immensely impressive human being. His ability to bring an extremely divided nation through the depression years and through a devastating World War II is beyond the conceptual powers of most of us mortals. He was a great man whether you believed in some of his policies or not.
Many of his economic views were concerned with what human beings were "entitled" to. Entitlement had to be paid for. An elaborate system of taxation on almost every level of society was put into place. Medicare tax, Medicaid tax, Social Security Tax, Property Tax...TAX,TAX, TAX.
Along the way a lot of little things happened. One of those little things was the government approving three bond rating services, Standard and Poors, Moodys and Fitch.
Here is the point. Over the years, common sense would tell you that the agencies saw the eroding financial stability of many states, cities, etc. It became absolutely impossible for the agencies to lower the ratings. It was tacitly understood that the taxing power of municipalities would cover the revenue needs of these entities. It didn't matter if the quality of the revenue streams were eroding and that the demands of labor, supported by liberal politicians, was raising costs as the ability to tax was diminishing.
The agencies had to know that if they lowered ratings, in accordance with the financial flows of the municipal agencies, the interest cost of raising money would have been higher and higher. So the concept was created that it didn't matter if the financial stability of municipalities was eroding because in the end, the federal government would bail out the municipalities. Therefore, why lower the municipality ratings as they were as good as the federal government was conceptually. Arguably, even though municipalities were separate from the federal government for financing, that was really a mirage. The rating agencies understood it, the municipalities understood it, and the federal government understood it. Above all else, labor unions understood it so why not just unionize the government workforce and in the end the federal government will be responsible.
Along comes the housing crises of 2008 and the federal government starts to look for scape goats and finds that the rating agencies seem to have overrated lots of municipal securities.
Okay, so then some congressional committee starts to investigate the rating agencies for incompetence. This looks good to the public and guess what...the rating agencies say "Wait a minute...they are blaming us for helping them keep their interest costs down. We just did what they wanted us to do." Okay what to do. Guess what. The rating agencies decide to go honest. They reduce the credit rating of the federal government for the first time ever. In effect they were saying as in a famous Jack Nicholson movie, "You don't want to hear the truth. You can't take it."
The only saving grace is that as things stands today, the federal government can print money forever. Consequently, it can pay its bills in dollars that are worth something, be they municipal or federal obligations.
People in the government are always changing, no one has to take responsibility, and they can take all their time blaming everyone else when something goes wrong.
There is no doubt Roosevelt was a great man. But to this day the crash of colliding viewpoints hasn't figured out how to truly raise the standard of living.
More on this subject will follow...
Many of his economic views were concerned with what human beings were "entitled" to. Entitlement had to be paid for. An elaborate system of taxation on almost every level of society was put into place. Medicare tax, Medicaid tax, Social Security Tax, Property Tax...TAX,TAX, TAX.
Along the way a lot of little things happened. One of those little things was the government approving three bond rating services, Standard and Poors, Moodys and Fitch.
Here is the point. Over the years, common sense would tell you that the agencies saw the eroding financial stability of many states, cities, etc. It became absolutely impossible for the agencies to lower the ratings. It was tacitly understood that the taxing power of municipalities would cover the revenue needs of these entities. It didn't matter if the quality of the revenue streams were eroding and that the demands of labor, supported by liberal politicians, was raising costs as the ability to tax was diminishing.
The agencies had to know that if they lowered ratings, in accordance with the financial flows of the municipal agencies, the interest cost of raising money would have been higher and higher. So the concept was created that it didn't matter if the financial stability of municipalities was eroding because in the end, the federal government would bail out the municipalities. Therefore, why lower the municipality ratings as they were as good as the federal government was conceptually. Arguably, even though municipalities were separate from the federal government for financing, that was really a mirage. The rating agencies understood it, the municipalities understood it, and the federal government understood it. Above all else, labor unions understood it so why not just unionize the government workforce and in the end the federal government will be responsible.
Along comes the housing crises of 2008 and the federal government starts to look for scape goats and finds that the rating agencies seem to have overrated lots of municipal securities.
Okay, so then some congressional committee starts to investigate the rating agencies for incompetence. This looks good to the public and guess what...the rating agencies say "Wait a minute...they are blaming us for helping them keep their interest costs down. We just did what they wanted us to do." Okay what to do. Guess what. The rating agencies decide to go honest. They reduce the credit rating of the federal government for the first time ever. In effect they were saying as in a famous Jack Nicholson movie, "You don't want to hear the truth. You can't take it."
The only saving grace is that as things stands today, the federal government can print money forever. Consequently, it can pay its bills in dollars that are worth something, be they municipal or federal obligations.
People in the government are always changing, no one has to take responsibility, and they can take all their time blaming everyone else when something goes wrong.
There is no doubt Roosevelt was a great man. But to this day the crash of colliding viewpoints hasn't figured out how to truly raise the standard of living.
More on this subject will follow...
This is really hard to believe storyline
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