MINNEAPOLIS (WCCO) — Just a week ago the experts said if the US Congress failed to raise the debt ceiling the stock market would certainly crash and ratings on US debt would almost certainly be downgraded.

Congress did, in fact, raise the debt ceiling, but the stock market still crashed, US long-term debt was still downgraded and there is now widespread talk of an historic double-dip recession. According to a CBS News survey, Congress’s disapproval rating is now at a record 82 percent, with more Americans, by a narrow margin, expressing displeasure with the Republicans handling of the crisis than Democrats.

It is a week that has sent the nation reeling, and the question now is: How many years, not months, before a real economic recovery happens?

Since the 1970s, housing booms have lead the nation out of recessions, but this is a far deeper recession than any in the past two generations. Moreover, the housing market shows no sign of recovery.

It is a grim point indeed. The nation has been brought to its knees by a drawn out debate on paying its own debts, an economy tanking once again and no seemingly easy way out of the situation. America is a resilient nation, but the current crises, at least this week, are among the most crushing in recent memory.

Comments (51)
  1. O-done-a says:

    If the raters didn’t downgrade the U.S–it would have been just another shocking example of their inability to really understand. What politicians need to realize is that the rest of the world is taking this debt crisis seriously, and it’s about time they did too. If we have to suffer thru this downgrade to achieve that, so be it.

    1. easyrider says:

      Only Standard and Poor downgraded the US, but it’s not the only ratings group in the world.

      1. StraycatStrut says:

        @Easyrider…..”only” ? Its just the beginning.

        1. AAA to AA, Nice Job Congress! says:

          If it weren’t for the T.P. and the rest of the GOP we would still have a JOB KILLING AAA credit rating. Thanks for saving us from a mere non existent crisis and the threat of a dreadful AAA credit rating with its higher interest rates and higher cost to our nation. You have saved millions of americans from being pushed into a worse economic situation. THANKS REPUBLICANS!!! NOW MORE AMERICANS CAN GO FROM BEING AAA MEMBERS TO BEING AA MEMBERS.

    2. Ted says:

      In order to build a new house for the people living in it, the old one has to be knocked down first. And if those inside get hurt, so be it, it has to be done, said the man outside of the house.

      1. O-done-a says:

        OR…you can build a stronger house, while those inside the old one sit it out, protected. Then– tear down the old house when the new one is completed. Said the reasonable man.

    3. Save the Job Creators, Please!!! says:

      Good thing Republicans have pushed so hard for massive cuts in state and federal Gov. Imagine how many jobs we might have lost had they not taken such drastic measures. They really put a dent in the unemployment numbers. I just hope that they move quickly to help the JOB CREATORS. They’ve been hurt the most during this recession. Corporate Profits have suffered drastically, and you know what happens to the CEO bonuses as a result. PLEASE GOP SAVE THOSE AT THE TOP SO THAT THEY MAY ONE DAY SAVE THE REST OF US.

  2. a okay says:

    Maybe now that its more expensive to borrow trillions and trillions of dollars with no plan to ever pay it back politicians will be less likley to spend money we dont have

  3. Norge says:

    FACTS: ALL, as in every one of, the rating agencies said the ONLY thing that would have saved the AAA rating for the US was what the TEA Party put in the initial House bill,….the TEA Party tried to save the day for America, and all they got for standing up for America was denigrated by the lame-stream media, the bill tabled by dementia-Reid in the Senate, and a VETO threat from barry….and now somehow they think that we “really need to raise taxes”. They need to get a clue and they really need to slash spending. EVERY time, without exception that the government has raised taxes they have raised spending EVEN MORE…EVERY TIME…PERIOD! Kenysian economics is cave man economics, and may work at the tribal level with a strong-arm chieftan but has failed in every free society…. every time. Yet the left still clings to their fantasies of “equal wealth for all” with no regard for effort or ingenuity or risk. Their policies have now made us all lower-middle-class, if they continue we will soon have more empty homes then homeless people. 2012 may not get here soon enough! If it be Revolution that is needed…I just hope it starts before I’m too dang old. Semper FI…”ALL enemies foreign and DOMESTIC”!!

    1. O-done-a says:

      Norge, America is no longer the economic superpower it once was. It’s a harsh reality — but the sooner we accept this, the better. It’s the only way to think rationally about what’s best for our economy and our federal budget in the long-term. And– there’s nothing to look forward to anytime soon. 2012 is going to be a living hell. All the naysayers, of the balanced approach in raising taxes and cutting spending simultaeously (easiest just to repeal the Bush tax cuts rather than raise anew in this climate), will be publically corrected (S&P’s downgrade). Hopefully at the ballot box. Republicans certainly don’t have the answer. Democrats have proven that they can’t come up with one. And we know at both state and federal level, compromise is no longer an option-in my opinion, by fault of the Tea Party and all their pledges. Time to do our research, smoke out the extremists and the unqualified, and vote the best we can for people who are serious about solutions and not political rhetoric, campaign slogans, pledges, or stop-gaps. And no more kickin’ the can, we will all suffer during the process. Since government debt sits at 94% of national revenue and U.S. household debt sits at 107% of personal income —a utilitarian understands, we all must suffer so to self-correct. 1 in 7 are now on food stamps—a 34% increase in the last 2 years. The unemployment rate stands at 9.1% and will get worse. And the housing bubble has yet to bottom out—the robo-signers come due in 2012 and the incentives to buy are surely going to be a part of the cuts in December. Oh, and the stock market fell 10% in one week. Good luck. The Presidency and Congress can no longer go to just anyone. We need a group that understands a higher degree of economics.

      1. Common Man says:

        and thanks O-done-a Wow two of the most intelegent posts I have seen in a long time. Does anyone in Government ever have these kinds of ideas or just have a conversation like that…. I wish they would… like you say with out name calling and other rhetoric, campaign slogans etc… thanks

      2. jan says:

        I wish you’d run for office, I’d gladly vote for you

    2. Common Man says:

      Very good Norge, please ignor any stupid name calling comments from morons who can not understand what you are saying. You speak honest truth but so many are so brain washed into thinking we can just tax and spend and spend and spend so no one needs to take personal responsability for them selves anymore. Again please ignor the name calling as we all do as this is the ONLY thing the left, Public Government Unions and greenies have anymore.

    3. easyrider says:

      Again, it’s not all the rating agencies of the world giving us the downgraded rating. Like it or not…inflation is with us always, debt ceilings will always have to be raised to reflect that reality unless we finally realize that the only way to stop it is to stop raising prices of goods and services …and lowering wages as is now part of the equation. Governments as well as the so called ‘private sector’ share in that blame, but in recent history, prices have kept going up while wages have decreased overall (with the exception of top execs, etc). The urge to blame those who can affect the economy the least in terms of being movers and shakers is as usual…self inflected insanity.

      1. O-done-a says:

        Yeah, I know easyrider. But S&P is, by far, the better known. Finch and Moody’s don’t tend to register with most unless your a complete financial geek (I am). A downgrade is a downgrade. To your other points, we are (I know, strange) lucky to be experiencing inflation. Deflation would be the worse of the two evils. And we can’t stop the rising prices, it doesn’t work that way. Umm…I think this is a really important concept to understand —because from where we are right now, there are really only 2 ways out. Hyperinflation or deflation. The big picture has come down to a simple question: Will foreigners (China) allow the dollar to devalue further, paving the way towards potential hyperinflation, or will capital drain from the system and induce a prolonged period of deflation? China is already throwing a tantrum in regard to this very thing. They are stuck holding 1.1 trillion of our debt. They can’t sell it, cuz it’s still the safest thing to own but they can’t stop buying it either—cuz if they don’t keep buying our treasuries, the dollar weakens and they are stuck with a devalued asset. China is, essentially, propping up he dollar right now, not by choice or desire. Hyperinflation—easiest way to describe is to say it’s a significantly lower dollar. If that occurs, it would punish savers. Believe me, savers have already been feeling this since there is no (interest) money to be made anywhere. Hyperinflation is probably preferred by the powers that be as an alternative to deflation—cuz the “haves” would fare better than “have nots” (as the costs of goods and services skyrocket). The “haves” would be able to spend, which is key to our consumer based economy. The other option (deflation) is orderly destruction of debt, deflationary pressures and an eventual path towards an “outside in” recovery that paves the way towards true globalization. The result would be a higher dollar and lower asset classes in the intermediate term but a sustainable foundation for economic expansion thereafter. Deflation means policy makers have lost control of the economy. It would also impact the top tier of our societal structure tied to the marketplace, which would be problematic for politicians and the donors that bankroll them. This is why I think hyperinflation will be the desired evil. I bet The Great Bernanke will give another dose of QE3. This will cause just the inflationary reaction the “haves” will need to keep on buying.

      2. O-done-a says:

        Yeah, I know easyrider. I meant the raters of S&P. Moody’s and Finch, haven’t wacked us yet. I get your point. But dude, you’re off on the rest of your comment there. That’s just not how it all works. But, ya got so much going on that I just wouldn’t know where to start.

        1. easyrider says:

          I think that economics is rather basic until one plays games with it. It can’t be split up into columns where one can rule out a certain class, or rule out certain goods and services when it seems to prove a point. To discount areas of economic involvement in the total picture is just unfair and unrealistic.

          Does that help you form your salient points?

    4. @NORGE says:

      The report said 2 components Norge – cut spending and raise revenue. Which part was the only part the Tea Party accepted Norge …. aaaah, come on now. Tell the truth lol 😉

  4. Jake says:

    Esme, if I were you, I’d be keeping a really LOW PROFILE right now, because I don’t think that you know any more about the economy than my 6 year old nephew. SERIOUSLY. For REAL. For SURE.

    1. Mark from Minnesota Tax Waste says:

      Well said Jake, Esme you are a common reporter, not even close to an economist. Stay with the stories you are good at, stolen cars, tornado damage, etc.

      1. Tony Rozycki says:

        One thing for sure is we shouldn’t leave economics up to the economists!
        Alan Greenspan recently confirmed this. Besides I think Esme has a history degree from Harvard. Economics & history & many other subjects are tied together. You can’t solve or understand economics in an isolated pigeonhole
        of over-specialized jargon. What are the qualifications for “economist”? I think Obama’s spending is misdirected & out of control.

      2. Good one mark and Jake says:

        Don’t forget the all the lovefest interviews with Keith Ellison.

  5. See BS says:

    So when Nancy Pelosi was speaker of the house, Congress Approval rating was 11%, now the Republican Controlled Congress “Disapproval” rating is 82%.

    The US Taxpayer bailed out all the banks and now they are lowering our credit rating in return?

    That’s Corporate Media Fascism for you.

  6. StraycatStrut says:

    Esme…. you sound “Surprised” in your Blog. An Obama-Reid-Peloski lead country for 2 years (and huge influence in prior years) is bringing economic diaster. Not surprised here, more expected. Tell me how a Socialistic “Community Organizer” who has a hard time presenting a birth certificate…. can lead on a Capitalistic economic problem in America? There is little to no concept in the American population of the reality in the number 14.5 trillion…. which is increasing 4 billion a day. Appauling.

    1. easyrider says:

      This is Danny-boy isn’t it! Be realistic now!!

  7. I'm just sayin says:

    The first two posts say it all in a rational and direct manner. The problem is, this is 14 months away from reality and no one will even recall this conversation then, let alone have the will power to do anything about it. Anyone that has been involved in politics knows that to win a caucus, you please the handlers in front of you, that being the local extremist since that is who goes to caucuses, yet they are open to the public. Then you have to win the next three rounds, each time presenting to a more and more extreme and broader reaching audience, since that is who gets to attend the next two levels of cuts. Finally, if you sign a pledge to the far doctorines of the party, then you get the nomination and the party money. So, the place to change all this is at the first three levels. If people were to get off their rear ands and attend the first three rounds, they could see how their party intentionally eliminates the middle of the road candidates in favor of the extremist we have now. The two party system is so entrenched that only a hostile takeover will start to correct this situation. The problem is, the parties control the political process and they will surely use any mean necessary to maintain their control of our downward spiral. What will it take to end the two party system or at least to get more moderates into power? If one side of the two parties flinches, we aall are competely hosed. Esme, most people are not givign you credit for in a very one sided way doing your job, you do deserve credit for starting this conversation, but the next more important conversation is the crux of the problem, “how do we change our current bi-polar system?” We can not cut our way our of this problem, but we can not continue ot borrow money either, wehave to start to seriously reduce our debt. And oh by the way, BOTH parties got us here, it is time for BOTH parties to pay.

    1. bbq tonight? says:

      BRAVO for a well stated comment….some could take notes but they to blind and mad to do so

      1. Tony Rozycki says:

        Is it possible to be totally partial?

    2. O-done-a says:

      I enjoyed this post. Though I agree that the process you laid out is the way it goes, I don’t think that should deter anyone from putting in extraordinary effort prior to their vote. 2012 is a big election year and an especially big year for MN. The checks and balances of our Govt. at the fed level has been diminished (Libya) and requires a strong and reasonable Congress. A lot of these guys need to go. At our state level, well, I need not spell that out since we all watched the collapse of compromise and will live with its ridiculous outcome for years to come—‘til 2 years from now when the budget is up for its next remodel. Yippee, can’t wait. As an Independent, I have to “smoke” out the nuts prior to every time I go vote. Also, within each party, hides extremists, moderates, blue dogs, tea partiers, jesus freaks, etc. Figuring out who best represents me and will do the best job making decisions for our country (and state) is our right and privilege. The Prez is not the only job up for grabs in 2012—there’s a lot of homework to do right now. I can hear all the political ads bombarding us now—may as well know who to completely avoid from the get go.

  8. Cooked gooses says:

    S & P summed it up perfectly. You HAVE to cut spending and you have to raise revenue, as in taxes.

    Imagine that — yet neither worthless frickn party will reference the PART they don’t want that got their sleazy slimy worthless carcusses voted in to the position, the only position, their scummy bodies may ever hold as a job.

    America – we got bigger problems than the debt. We need to find those that will actually lead. I caqnnot name one in my lifetime that met that criteria, and that includes the beloved Ronnie. He was a great speaker but lots of his policies were good timing and luck

  9. jordanj says:

    Congress and Government workers believe they are entitled to everything they get and more. Look what Weiner took home. They want to make cuts to SS and Medicare which we have paid in our entire lives. What did they contribute to what they receive? How could they vote on a health care plan that they would not participate in. Good enough for us but not for them. We have to start with cuts to the top and go from there, but because these same people vote on everything that’s happening, what are we able to do? We’ll all be broke and they will all be living the best they can give themselves.

  10. Landon S says:

    I’m extremely outraged at the way congress handled the raising of the debt ceiling. The Tea Party and GOP held our economy’s future hostage in order to push their agenda of No New Taxes. Paying back our already incurred debt should never have been in question. The people arguing to not raise the debt ceiling are the same people who approved all of the spending and tax-cuts which got us to where we are today. They should be ashamed for deceiving the public and making the economic situation even worse.

    1. O-done-a says:

      More disturbing yet….Now we will see Washington at its worst, with 12 partisan hacks (the dirty dozen who will determine our fate in what cuts will occur) who are more interested in power and getting re-elected than a true solution to America’s debt crisis. And—oh boy—we get to watch them compromise again. I can understand why a U.S. representative who has a base in his district would have difficulty thinking objectively about the whole package, but America’s debt affects us all equally. We all have equal skin in this game — but somehow Congress has decided a dozen Washington insiders know best. This is the fiercest fiscal deflation applied to the U.S. economy since the Second World War, and comes at a time of zero interest rates when the offsetting impact of monetary policy is unavailable. The latest economic data show a weakening economy, but not a recessionary one. Ha! There need not be any talk of a double dip recession! I’m not convinced we ever left the first!! Unfortunately, the “data” rarely confirm anything accurately until we’re already down the river so far that we forgot what the paddle was for.

      1. easyrider says:

        I think you missed my point a few posts ago. Recession and Depression, two things worse than inflation because they create a growing gap between the top and the bottom in human economic terms. Inflation does the opposite. It’s tendency is to shrink that gap. Money, since it’s worth is really an agreement on it’s imaginary worth, has no real value until we give it one. Once the monster ‘greed’ is let loose, we lose all rational control. Such as “MY work, is far more valuable than YOURS is.”

  11. Landon S says:

    Congress, where are the Jobs? According to most economists, all of the cuts will only hurt the economic recovery, cutting hundreds of thousands of jobs in the near future. When do they plan to begin work on what really matters? ” It’s the JOBS STUPID.”

    1. T'm just sayin says:

      Landon, Recall it took decades to get us here. I tend to think of this past state shut down and debt ceiling fiasco as a very strong reaction to a long long trend of over spending. BOTH parties are to blame, but we must correct our course or else how will we ever pay back all this borrowing? We already are spending at the 97percentile of income. That only leave 3% to pay back China, what happens when the economy dips? We need to rein in spending while at the same time figure out our income issues. What are you going to do besides sit in front of your computer and vent? I already know what I am doing and when the rest of America gets as po’d as I am, the two party system is DOA.

      1. O-done-a says:

        The big question: Will foreigners (China) allow the dollar to devalue further, paving the way towards potential hyperinflation, or will capital drain from the system and induce a prolonged period of deflation? China is already throwing a tantrum in regard to this very thing. They are stuck holding 1.1 trillion of our debt. They can’t drop it, cuz it’s still the safest thing to own but they can’t stop buying it either—cuz if they don’t keep buying our treasuries, they are stuck with a devalued asset. Hyperinflation—easiest way to describe is to say it’s a significantly weak dollar. There are advantages to a weak dollar, such as it’s easier for U.S. companies to export goods because foreign currencies can buy more against the weaker dollar and— foreigners view investment opportunities here more favorably since they can buy more for their yuan/yen/euro/pound. The disadvantages of a weak dollar are higher prices on goods/services for the American consumer. Hyperinflation is preferred by the powers that be as an alternative to deflation—cuz the “haves” fare better than “have nots” (as the costs of goods and services skyrocket). The “haves” are able to spend, which is key to our consumer based economy. The other option (deflation) is orderly destruction of debt, deflationary pressures, and a stronger dollar. A strong dollar means lower prices for imported goods and U.S. investors can buy foreign assets and investments at lower prices. The disadvantages are that it’s harder for U.S. companies to compete abroad and more expensive for foreigners to buy our junk. Deflation means policy makers have lost control of the economy. It would also impact the top tier of our societal structure tied to the marketplace, which would be problematic for politicians and the donors that bankroll them. This is why hyperinflation is the desired evil. I bet The Great Bernanke will give another dose of QE3. This will cause just the inflationary reaction the “haves” will need to keep on buying and a weak dollar to keep China happy. Or…so they think. We need to pay China its 1.1 trillion back. I don’t appreciate their bullish behavior of telling us to cut our military and welfare spending. I don’t like anyone in our business!

        1. O dummy says:

          that horse left the barn in the ’60’s O dummy A
          what rock you been sleeping under?
          I’d still like to dream the USA SuperPower #1 dream too but the days are but a distant memory.
          We wanted – we took – we got
          life will go on albeit in a much different manner …. wait. It has been and it happened already……..we hardly noticed until now is all

          1. O-done-a says:

            I’m going to take your reply as a compliment. Takin’ one for the team.

        2. easyrider says:

          Just as an additional note…in the last 30 years wages for the working class has not kept pace with the inflation of goods and services over the same period. So to cover that, we are becoming more dependent on cheap goods from China as if that’s ‘good enough’ to fool us into thinking the American Dream is still within reach of the average wage earner. We should re-examine our direction, but not on the backs of the Average American Public…or the poor. That does mean the wealthy (the biggest and wealthiest of the pork barrel feeders) need to be reined in.

          1. O-done-a says:

            easyrider….I think…you and I just met in the middle of agreement. Cool. When we see higher prices for American consumers (a weak dollar)-we don’t notice this (so much) because the Chinese yuan is tied to the dollar in such a tight range and most of our imports come from China – look at your shirt and your shoes! Trivial economics except to geeks like us.

            1. easyrider says:

              Yes we did…actually we just realized we see eye to eye. 80% of all shoes are made in china. It’s hard to believe at first…until one takes off their shoes and actually looks at the ‘Made In’ label. It’s rather interesting to see people suddenly take off a shoe to confirm yes or no…I’ve yet to see anyone have a shoe make in any other place.

        3. Ordinary Guy says:

          First, doesn’t S&P have a credibility problem since they were caught fluffing-up Wall Street before the melt-down?

          Next, where on earth did China get all of those dollars? You.

          China is the king of currency manipulation; if we do anything, they’ll just set theirs in a position to counter it overnight.

          I don’t care if they print enough dollars to pay the Chinese off in one check, and then start over from zero. That’s better than what’s happened to the home-losers all over the country. Weep for them, not a military govenment that is a our smiling trading enemy in this trade war that we’re too stupid to admit to.

    2. just wake up America says:

      How’s about asking CORPORATE America, the one that is sitting on $1.9 trillion, repeat TRILLION, in cash, ==== where are the jobs folks. You begged – pleaded for tax cuts-tax breaks-tax-tax deductions-tax incentives-bailouts and for the last umpteen years Congress has handed them out like caandy to the kiddies.
      But in fact you were the good ol’ neighborhood bully, or rather the neighborhood thief…….. and the damn folls who authorized this still in office, we all just understanding the truw actual costs of all and you WON’T HIRE. You are the real sleezeballs in this. I detest the bottom suckers of this sytem but you folks are even worse. The bottom has nothing – you have it all.

  12. Fruit F. Fly says:

    “A OKay”? “O Done A”? What in the world?!? I get accused on the public’s television airwaves from Murphy for being “too afraid” to use my real name, and today – gasp – There’s Murphy clucking away comments from the likes of “A OKay” and “O Done A”?!

    What’s up with that Murphy? Is “A Okay” and “O Done A” available for criticism on your tawdry right-wing program too? Or is it only those who are willing to call you out on your propaganda-program that you feel compelled to call “afraid”?

    Hypocrisy is thy name, Murphy. You own it. Be proud of it.

    The Fruit Fly

    1. O-done-a says:

      I have absolutley no idea of what you are talking about. Seriously, no idea. Are you talking about radio?

      1. Frui F. Fly says:

        Esme Murphy knows exactly what I’m talking about. Unless you use your real name on this board, she’ll call you out on her Sunday AM show and call you names for it. All you folks who are using “computer nicknames” are susceptible to the same treatment that she gave me a few months ago. …Unless of course, you leave comments that are complimentary about her. Then she has no problems with that.

  13. miike says:

    Leave it to Esme (a liberal) to include a jab at Republicans as causing this problem. The spend-now-worry-later Democrats have dug us a hole that will be very difficult to get out of. I’m happy that S&P downgraded the U.S. – maybe now the Dems will finally understand the problem.

  14. HooDatIS? says:

    this nation is so battered and bruised

  15. Kathy says:

    I’m always interested in your synopsis, Esme. I think you missed on a few points that should be stated in print, as it relates to the changing climate in politics and industry. It’s inaccurate to refer to one without the other, as we are all aware.

    I listened to Candy on CNN for a few minutes today, and I can’t help but think how detached her remarks truly are. It’s almost as though if we pretend, the reality will just pass. This is the unbias cable station… huh?

    I’ll be glad to say what she and you did not. Voters disapproved in high number over many a decade, so this number of 82% disapproval means nothing by itself.

    The change isn’t about the highest on record disapproval rating, or the fact that the economy as we know it will crash. That number of 82% is the likely voter turn-out that will document an unprecedented removal of every person in government, from the President on down to the local level. Industry controls them all.

    The time is prime for the dedicated patriots to step forward and submit your candidacy for the upcoming elections. No Harvard needed. People will vote for people who don’t subscribe to politics, and they will likely be your neighbor next door types.

    “Restore” and “We Can” won’t be the campaign slogans in the future. I can imagine something closer to, “We Are” and “We Will”

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