Moodys Warning on US Credit Rating

[zephyp]

Could it happen? Could the US Treasury instruments lose their AAA credit rating. Moodys says yes if the government keeps hiking the debt limit and spending. I wonder what would happen if the credit rating for US treasury instruments dropped to AA or A? Can you say "major disaster"

Little timmy tax cheat geithner says it will never happen. You keep on saying that little timmy tax cheat.

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http://www.foxnews.com/politics/2010/02 ... latestnews

Geithner: No Risk to U.S. Credit Rating

AP

Even after Moody's warned the U.S. could lose it's AAA rating for hiking its debt limit to $14.3 trillion, the treasury secretary says that's not going to happen.

FILE: Treasury Secretary Timothy Geithner testifies on Capitol Hill on Nov. 19 to the Joint Economic Committee hearing on financial regulatory reform. (AP)

Treasury Secretary Timothy Geithner says the U.S. government "will never" lose its sterling credit rating despite big budget deficits and a newly increased debt limit that now tops $14 trillion.

Geithner says in an interview broadcast Sunday that in times of economic crisis, international investors will continue to buy U.S. Treasury bonds because the bonds are a safe investment.

Moody's Investors Service recently issued a warning that the government's credit rating could eventually be in jeopardy if nation's finances don't improve. The cost of borrowing would increase significantly if the ratings service lowered the credit rating, also known as a bond rating, for U.S. Treasuries.

Geithner tells ABC's "This Week" that will never happen.

[OakRidgeStars]

Wasn't it Lil' Timmy that couldn't figure out how to use TurboTax?. I guess that makes me smarter than a Obama appointed czar

[zephyp]

A couple of years ago I owed a couple thousand dollars so I set up the payment plan for $500 per month. Well, I was 1 week late on the last payment. IRS promptly sent me a very nasty registered letter stating they were getting ready to (no kidding) seize all my assets, freeze my bank accounts, and garnish my wages unless I paid in full immediately.

Tax cheats like timmy get a pass and regular citizens like me trying to pay what I owe get threatened. Somethin aint right with that.

[gunderwood]

Wasn't it Lil' Timmy that couldn't figure out how to use TurboTax?. I guess that makes me smarter than a Obama appointed czar

Not defending Turbo Timmy here, but the US tax code is so complex and potentially contradictory (not unlike some the gun laws across the nation) that I doubt really anyone files a correct tax return. The error might be in your favor or the governments, but I doubt any of them are absolutely correct. In the event of an audit you just hope that things are close enough not to cause you serious trouble.

[zephyp]

Yes the tax code is complex but timmy made some pretty glaring "errors." Also, due to his position at the Fed he should have been a little more familiar with the tax code. Furthermore he should have gotten help. I wont defend his failure no matter how screwed up the tax laws are. Folks like him have no excuse. Here's a brief run down:

http://online.wsj.com/article/SB123187503629378119.html

In 2006, the IRS audited Mr. Geithner's 2003 and 2004 taxes and concluded he owed taxes and interest totaling $17,230, according to documents released by the Senate Finance Committee. The IRS waived the related penalties.

During the vetting of Mr. Geithner late last year, the Obama transition team discovered the nominee had failed to pay the same taxes for 2001 and 2002. "Upon learning of this error on Nov. 21, 2008, Mr. Geithner immediately submitted payment for tax that would have been due in those years, plus interest," a transition aide said. The sum totaled $25,970.

The Obama team said Mr. Geithner's taxes have been paid in full, and that he didn't intend to avoid payment, but made a mistake common for employees of international institutions. That characterization was contested by Senate Finance Republicans, who produced IMF documents showing that employees are repeatedly told they are responsible for paying their payroll taxes.

As to why Mr. Geithner didn't pay all his back taxes after the 2006 audit, an Obama aide said the nominee was advised by his accountant he had no further liability. Senate Finance aides said they were concerned either Mr. Geithner or his accountant used the IRS's statute of limitations to avoid further back-tax payments at the time of the audit.

Other tax issues also surfaced during the vetting, including the fact Mr. Geithner used his child's time at overnight camps in 2001, 2004 and 2005 to calculate dependent-care tax deductions. Sleepaway camps don't qualify.

Amended tax returns that Mr. Geithner filed recently include $4,334 in additional taxes, and $1,232 in interest for infractions, such as an early-withdrawal penalty from a retirement plan, an improper small-business deduction, a charitable-contribution deduction for ineligible items, and the expensing of utility costs that went for personal use.

The other cloud for Mr. Geithner involved an immigrant housekeeper whose work-authorization papers expired during her tenure working for Mr. Geithner. For three months, until she stopped working for the family to have a baby, the woman was working on the expired papers. An Obama aide said the woman reapplied for the papers and received them, and now resides legally in the U.S.

[LFS]

DK, I'm with you on this. There was no excuse for him not to seek help when he didn't understand the tax code. I've had to do it many years. And I've had tax professionals screw up my returns which resulted in the IRS asking for additional payments (fortunately for me, nothing I couldn't immediately handle). Geithner had no excuse.

And yes, the tax code are the like gun laws. They are designed to ensnare law abiding citizens.

[GS78]

Tim didn't fail to understand anything about the tax code. He cheated on his taxes and would have gotten away with it free and clear if not for his appointment to this administration.PERIOD. As for the USA's credit rating? I expect it to fall. If it were my personal credit report, I wouldn't even bother looking at it. When they raised the debt ceiling to 14. whatever, they failed to announce that we would reach that ceiling in a matter of weeks. WEEKS!!! We are in for some really serious trouble in this country, and if you think its bad now, just wait a few months. It is going to get unbearable, they know it.





Did Tom Daschle "not understand" the tax code too?

[OakRidgeStars]

Did Tom Daschle "not understand" the tax code too?

About as well as Charlie Rangel does

[zephyp]

Did Tom Daschle "not understand" the tax code too?

About as well as Charlie Rangel does

Indeed and rangel heads up the tax code comitte in congress. Thats the one that makes the tax code.

I agree with GS78 - seriously believe that we are headed for big trouble. If our creditors (those that hold the bonds that Moodys is talking about) get nervous then two things will happen:

1 - they wont want to buy more treasury notes unless we raise the interest rate on them. More risk = more potential reward.
2 - some will begin to dump what they have on the open market. The Fed will buy them in an effort to help keep our good name clean which will dump massive amounts of brand new money (that didnt exist before) into the world's economy. Result = inflation of dollar. More there means less value.

The only good thing if Moodys drops the ratings is it will be more difficult for the messiah to finance more debt. This cuts both ways. But he has another source of income for his social agenda = we the people.