Why are Americans so in love with big government?

[The Mad Monk]

How do you feel about the colloquial phrase, "printing money"?

[Darius871]

How do you feel about the colloquial phrase, "printing money"?

[Drake Tungsten]

We are so ****ed...

Treasury Secretary Timothy Geithner committed to cutting the budget deficit as concern about deteriorating U.S. creditworthiness deepened, and ascribed a sell-off in Treasuries to prospects for an economic recovery.

“It’s very important that this Congress and this president put in place policies that will bring those deficits down to a sustainable level over the medium term,” Geithner said in an interview with Bloomberg Television yesterday. He added that the target is reducing the gap to about 3 percent of gross domestic product, from a projected 12.9 percent this year.

The dollar extended declines today after Treasuries and American stocks slumped on concern the U.S. government’s debt rating may at some point be lowered. Bill Gross, the co-chief investment officer of Pacific Investment Management Co., said the U.S. “eventually” will lose its AAA grade.

http://www.bloomberg.com/apps/news?pid=20601087&sid=au5M0WphL81g&refer=worldwide

[KrazyHorse]

The good news is that we climbed back from AA+, so it is possible. The bad news is that it took a lot of sacrifices to do it.

[Drake Tungsten]

What happens to the holdings of pension funds that are required to invest in AAA bonds if U.S. Treasuries lose their AAA rating?

[KrazyHorse]

Any pension fund invested in Treasuries is ****ing retarded.

Pension funds are tax-advantaged. No need to buy something which already has a tax advantage priced in.

[Kuciwalker]

Any pension fund invested in Treasuries is ****ing retarded.

Social security

[Drake Tungsten]

Pension funds are tax-advantaged. No need to buy something which already has a tax advantage priced in.

True. Forgot about that.

Another question. Doesn't AA+ become the limit for American corporate bonds if the U.S. sovereign credit rating drops to AA+? Wouldn't that **** up pension funds?

edit: Of course, I'm not sure America's sovereign credit rating would necessarily be lowered along with the rating on U.S. Treasuries.

edit 2: Apparently they are the same rating.

[KrazyHorse]

Any pension fund invested in Treasuries is ****ing retarded.

Social security

Social security is a ponzi scheme, not a pension fund.