Not heard much about what happened on Wednesday, have you? Yeah, neither have I. We’ve all been too busy being outraged by Donald Trump’s inane tweets and utterances (which totally deserved our outrage, BTW), and being “dazzled by his barrage of “we’re number 1!” tweets. He likes us to be busy with dumbshit. Why? Because when we’re not paying attention, the fact that Donald Trump and his administration (and the farking GOP-controlled legislative branch) just ruined our credit with China will sort of slide under the radar.
Yeah, that’s right. Our credit was just downgraded from an A- to a BBB+ by China. You know, the country that holds approximately $1.2 trillion in U.S. Treasury bills? Dagong Global Credit Rating Co., LTD — the company that provides ratings on all bond issuers in China — just put the U.S. credit rating on par with that of Turkmenistan, Peru, and Columbia. Really.
Read, from Reuters:
China’s Dagong Global Credit Rating Co, one of the country’s most prominent ratings firms, on Tuesday cut the local and foreign currency sovereign ratings of the United States, citing an increasing reliance on debt in the world’s largest economy.
Dagong said in a statement that it cut the sovereign ratings to BBB+ from A- and also placed them on a negative outlook.
The growing reliance on the debt-driven mode of economic development will continue to erode the solvency of the U.S. federal government, the Beijing-based ratings agency said.
As a reminder, in December Pres. Donald Trump signed a package of tax cuts into law that are expected to add $1.4 trillion to the $20 trillion national debt over the next decade. This is making Chinese investors nervous. Apparently they’re more interested in “facts” than Trump voters are.
To be more specific, from Zerohedge:
In a statement on Tuesday, Dagong warned that the United States’ increasing reliance on debt to drive development would erode its solvency. Quoted by Reuters, Dagong made specific reference to President Donald Trump’s tax package, which is estimated to add $1.4 trillion over a decade to the $20 trillion national debt burden.
“Deficiencies in the current U.S. political ecology make it difficult for the efficient administration of the federal government, so the national economic development derails from the right track,” Dagong said adding that “Massive tax cuts directly reduce the federal government’s sources of debt repayment, therefore further weaken the base of government’s debt repayment.”
Yes, you read that correctly. Dagong specifically referenced Trump’s tax plan.
Meanwhile, Trump is tweeting this on Wednesday, hoping no one noticed what just happened to our credit in China.
Main Street is BACK! Strongest Holiday Sales bump since the Great Recession — beating forecasts by BILLIONS OF DOLLARS. https://t.co/kDcGbMieSt
— Donald J. Trump (@realDonaldTrump) January 17, 2018
Oh, and this:
ISIS is in retreat, our economy is booming, investments and jobs are pouring back into the country, and so much more! Together there is nothing we can’t overcome–even a very biased media. We ARE Making America Great Again!
— Donald J. Trump (@realDonaldTrump) January 18, 2018
(He can’t stop talking about the media, can he? And I found out why. I’ll write about it in another article.)
During the campaign, I promised to MAKE AMERICA GREAT AGAIN by bringing businesses and jobs back to our country. I am very proud to see companies like Chrysler moving operations from Mexico to Michigan where there are so many great American workers! https://t.co/hz2q9UTfnF
— Donald J. Trump (@realDonaldTrump) January 17, 2018
I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS. Huge win for American workers and the USA! https://t.co/OwXVUyLOb1
— Donald J. Trump (@realDonaldTrump) January 17, 2018Loading...
Gosh, y’all. I wonder why Trump is spending so much time tweeting about the economy today of all days?
He’s keeping his stupid flock busy orgasming over stuff that’s not quite as tangible as that $1.2 trillion… Tangible, yes. I’m not Nancy Pelosi. I know that $1,000 is a lot of money. It was to me at one time, too, and I’ll never forget it. But I will never, and I mean N E V E R, give Donald Trump the credit. Read down.
His Apple tweet references a Apple’s Wednesday press release that was targeted towards investors, but their statement is (gasp!) being taken out of context by Fox News and its sheeple (and our stupid president).
— FOX Business (@FoxBusiness) January 17, 2018
Whoa. Nope! Apple did NOT NOT say that. Here’s a big fat debunk.
Dagong lowered our credit rating during Pres. Obama’s first term — from AA to A+ — shortly after the GOP took the House, and again in 2013, citing at that time the possibility of a government default on our debts that was saved by a last minute agreement in Congress. The 2013 rating slip got a lot of press because of the debt ceiling and default drama — GOP-caused, by the way. As for the 2010 credit ratings slip, Dagong stated basically that the entire U.S. economic approach is flawed. From a 2010 Barron’s article dated the same day as Gagong’s hit on U.S. credit rating:
The root cause is that something is wrong with the economic development model adopted by the United States […] Due to the high economic financialization, more than half of the profits in the real economy come from the returns of financial activities. If we exclude the factor of virtual economy, the U.S. actual GDP is about 5 trillion U.S. dollars in 2009, per capita GDP about $ 15,000. Meanwhile, the total domestic consumption was 10.0 trillion U.S. dollars and government expenditure was 4.5 trillion U.S. dollars. The production capacity of real value in the national economy is the material base to arrange social distribution and consumption. As the U.S. government arranges its budget according to the GDP including the virtual value, its revenue must fall short of its expenditure, so the socialization and normalization of debts will exacerbate the environment of economic development. It is predicted that the average real GDP per year of the United States will not reach 6 trillion U.S. dollar and per capita GDP will be less than 20,000 in the coming 3-5 years.
Translation: we were screwed then thanks to George H. W. Bush’s policies, but Pres. Obama’s policies kept us going and dug us out. Republicans came in again, nearly destroying things, but “Lame Duck Pres. Obama” ended up with a booming economy — the best since Bill Clinton, with the longest streak in raising non-farm payrolls since February 1939. Details from Bloomberg:
Obama took office during the worst recession since the Great Depression, when the economy was losing 750,000 jobs a month and already had lost a record 9 percent of GDP. He completed his two terms with the largest annual gain in the value of the dollar, the biggest annual decrease in household debt as a percentage of disposable income, and the largest annual increases in car sales and hourly wages. His presidency coincided with the second-highest annual gain in home equity and trailed only the Clinton period in deficit reduction as a percentage of GDP. While non-farm payrolls under Obama had a slower annual increase than they did under Jimmy Carter, Clinton and Ronald Reagan, they rose for 75 consecutive months, the longest streak since February 1939.
Y’all ever notice every time the GOP gets some power, our credit flops around the world? Heh. On a side note, Norway’s credit is Triple A with Dagong, and that may be why we don’t get those pretty Nordic immigrants that Pres. Trump covets. Why the ACTUAL F*CK would they want to come here??? They live in one of the happiest countries in the world, with one of the best healthcare systems, and well….that delicious Triple A rating that Trump’s mess will N E V E R again have. Unless we get another Obama clone in the Oval. But I digress. I digressed hard. Ha.
Anyhow, in spite of those ^^^ facts, paid Rottweiler Sarah Huckabee-Sanders tweeted this last month.
Can't make it up: Obama now wants credit for the booming Trump economy. At least we can all agree the economy is better under President Trump.
— Sarah Sanders (@PressSec) December 10, 2017
Meanwhile, Trump is claiming credit for what is still mostly Obama’s economy.
Let’s see if he takes “credit” for this move by Dagong, IF….IF he even acknowledges it. My prediction: he won’t. If he does (somewhere besides Twitter), he’ll attempt to discredit Dagong or China…but that $2.7 trillion…
Thanks, Trump. You utter farking oaf. Oh and Trumpie? Just cuz I wrote this long rambling-azz boring article about the economy, don’t be thinkin’ I forgot about Michael Wolff’s book (still reading it and oh you are NOT playing out well in the story) or Russia. I am sitting here waiting, greedily rubbing my hands together, staring at my Twitter feed, sipping my hot cocoa, EXCITEDLY anticipating your downfall. At which point it won’t be your sheeple orgasming. 😉
A video on this development (not a great video, but just in case you prefer to watch your news).
Featured image via The Duran