Prosperity By President

[source]

An Unreliable Messenger

S&P lower outlook for U.S., sending stocks down.

Let's remember this is one of the same agencies that was rating mortgage backed securities and other special investment vehicles as class A bonds, which then led to our economic collapse.

Are they really concerned about American debt and quality of life?

For Further Reading:

The False Debate on U.S. Debt

Questions for the S&P on Its Downgrade

Why Listen to the S&P on U.S. Debt

Nowhere Else To Go

Peter Schiff (as evidenced in the video below) is leading the "treasuries doomsday" scenario. [The idea that the Chinese and other nations will suddenly dump U.S. Treasuries, lowering the dollar, spiking interest rates, and causing stock prices to fall.] Reality isn't quite following his preconceived economic paradigm, so he's manufacturing his own delusional storyline to make his world right again. And, he's hoping you believe it.

The Fast Money host directly discredits Schiff. But Peter wouldn't hear it. Peter's world is what he wants it to be.

We can't make good policy or get it passed when one side of the argument won't even deal with reality. The U.S. isn't flooding the world with money. (An oft repeated claim in the echo chamber is that the U.S. is printing boatloads of money. Thereby, devaluing the dollar.) The Chinese don't actually own that much of our debt. We don't need the Chinese for low interest rates.

Following the initial Fast Money segment, Paul Krugman and Peter Barbera then, also, dismiss Schiff and his unsupported tales.

Economics

Real Lesson From The Great Depression: Fiscal Policy Works

The Slump Goes On: Why?

When Will The Bond Auctions Begin To Fail?

Holiday Reading

America Without A Middle Class
Federalism and Its Discontents
Jobless Need Government to Create Jobs
Sarah Palin's War on Taxes - and History
State of Pay
That '70s Crisis

Equity Illusion

From The Equity Culture Loses It's Bloom:

• In the 1970s investors...held conservative portfolios that were heavy on bonds...The advent of individual retirement accounts and other defined contribution plans would change that in the coming decade. In 1985 individuals held $750 billion in IRA and DC plans; by the market peak in 2007, that number had rocketed to $9.2 trillion.
• The Standard and Poor's 500 index soared from 131.05 to 1,565.153, or 1,194 percent.
• As of September 30, long-term Treasury bonds had beaten U.S. stocks over the past 28 years.
• "Equities depend on capital gains, but income-producing assets, such as infrastructure, are pretty reliable through different economic cycles," notes David Richardson.