Microsoft Has a Higher Credit Rating than the US Government

CommanderFrank

CommanderFrank

Cat Can't Scratch It
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May 9, 2000
Messages
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This is getting ridiculous to the extreme. First it was Apple has more money in cash reserves than the U.S. and now Microsoft has a better credit rating. Things are going to hell in a hand basket when the entire US government is being upstaged by the tech world. Microsoft is the only tech company in the U.S. with a AAA rating along with only three other non-tech companies achieving that distinction.

The US used to have a whopping 60 companies that had a AAA rating. In 1995 that number went down to about 30 or so. Today, just four US corporation have a AAA credit rating and one of them happens to be Microsoft.
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Sounds good so they should be able to burden a small tax increase now.
 
Unrelated to the article but thank you for linking directly to the article instead of linking to the [H] link to the article!:cool:
 
Not strange at all.

Many corporations, in many countries, have better credit ratings than their government. The only reason it's not apparent is because it's typically an unspoken rule that a government "must" have a better rating than the corporations they house because of their ability to raise taxes to cover any shortfall (something corporations do not have the power to do).
 
Surprising since so many are constantly taking shots at Microsoft saying it's days are coming to a close.
 
piscian18 said:
Sounds good so they should be able to burden a small tax increase now.
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No comrade we are already taxes on everything as it is. I think maybe the government needs to learn to live with in its income. Just like everyone else has to.
 
piscian18 said:
Sounds good so they should be able to burden a small tax increase now.
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MS doesn't have to have a bigger tax increase, they, as well as TONS of other US corporations, need to pay what they SHOULD owe. Loopholes need to be closed, so that companies like Google, GE, MS etc can't just get away with using tax havens to wiggle out of their responsibilities.

MS actually paid 15% in worldwide corporate taxes, which is more than Google or GE. GE has a 3.2B tax credit on 14+B of profit...Want to guess who is one of the biggest reported lobbyists?
 
MajorDomo said:
This is getting ridiculous to the extreme. First it was Apple has more money in cash reserves than the U.S. and now Microsoft has a better credit rating. Things are going to hell in a hand basket when the entire US government is being upstaged by the tech world. Microsoft is the only tech company in the U.S. with a AAA rating along with only three other non-tech companies achieving that distinction.
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Awesome! Now all we have to do is put them in charge.

Oh wait....big corp already runs the government.
 
bacon said:
No comrade we are already taxes on everything as it is. I think maybe the government needs to learn to live with in its income. Just like everyone else has to.
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Agreed. I will suggest right off the top, we close shop on the two wars, remove the Bush tax cut, close the loopholes in the tax code...Hmmm look at that, we all of a sudden have a MASSIVE surplus, what a shocker. MS is a good example on what's wrong, even though they aren't the worst offender. MS paid 15% in taxes in 2010, 21% in 2009, and 30% in 2008.
 
Correction: 17.5 percent in the last fiscal year, down from 25 percent the previous year and 31 percent in the year to June 30, 2006
 
Freddie Mac and Fannie Mae had AAA ratings while Lehman Brothers had AA, just days before their collapse.
I wonder what these ratings agencies do, or if they have a nice profit.
 
Radical said:
Oh you're right, he must have edited it :(
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No, the links always work the same way, direct link if you click the link from the main page, H page if you click the link on the ... H page. Makes no sense but yeah...
 
TheWeazmeister said:
Correction: 17.5 percent in the last fiscal year, down from 25 percent the previous year and 31 percent in the year to June 30, 2006
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Not saying you're wrong, but where did you find these figures?
A 50% tax cut for a corporation over the course of two years is eyebrow raising.
 
Chimel said:
No, the links always work the same way, direct link if you click the link from the main page, H page if you click the link on the ... H page. Makes no sense but yeah...
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Ad revenue ... :rolleyes:
 
Basically we're fucked until we get politicians willing to make the tough decisions to put us back on the right track. All they've done so far is kick the can down the road make the economy worse; because of it. They've put us so far into debt even stimulus packages are now having a negative impact on the economy; because all it does is run the deficite higher, deflate the value of the dollar and push us closer and closer to a real default.
 
TheWeazmeister said:
Agreed. I will suggest right off the top, we close shop on the two wars, remove the Bush tax cut, close the loopholes in the tax code...Hmmm look at that, we all of a sudden have a MASSIVE surplus, what a shocker.
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Sorry but you neeed to look at size of US deficit - what you proposed would reduced US deficit by maybe 30% - not even close to running surplus.

 
AAA AA+ BBB CCC...

Economics is on purpose one of the (maybe just the) most complex, without any good reason, sciences that exist in our modern world. All these figures number credit ratings, everything, is only smoke and mirrors.

A fat big nothing. People living on this nothing, and if that was not a great insult already, they actually manipulate and regulate and control the lives of the rest. And I mean the ones who actually PRODUCE something.

Sad. Just sad.

PS : I have studied economics.
 
Rebel44 said:
Sorry but you neeed to look at size of US deficit - what you proposed would reduced US deficit by maybe 30% - not even close to running surplus.

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Add up all the shit below, as well as the 1.2T that is talked about when repealing the Bush tax cut add to that getting rid of the fake 1.5T that is "owed" the Fed as per Ron Paul. You now have reversed the deficit as part of the yearly budget and in ONE year, have cut the federal deficit by over a third. How many year until the US is completely out of the dept at that rate?

The Wars to date:
http://costofwar.com/en/

Corporate Avoidance:
Of the 500 big companies in the well-known Standard & Poor’s stock index, 115 paid a total corporate tax rate — both federal and otherwise — of less than 20 percent over the last five years, according to an analysis of company reports done for The New York Times by Capital IQ, a research firm. Thirty-nine of those companies paid a rate less than 10 percent.
http://www.nytimes.com/2011/02/02/business/economy/02leonhardt.html?_r=1

http://www.zerohedge.com/article/corporate-tax-avoidance

‘Dutch Sandwich’ saves Google billions in taxes Internet giant uses complex structure to keep its overseas tax rate at 2.4%

http://www.msnbc.msn.com/id/3978490...t/dutch-sandwich-saves-google-billions-taxes/
 
Stardusted said:
AAA AA+ BBB CCC...

Economics is on purpose one of the (maybe just the) most complex, without any good reason, sciences that exist in our modern world. All these figures number credit ratings, everything, is only smoke and mirrors.

A fat big nothing. People living on this nothing, and if that was not a great insult already, they actually manipulate and regulate and control the lives of the rest. And I mean the ones who actually PRODUCE something.

Sad. Just sad.

PS : I have studied economics.
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How are credit ratings "smoke and mirrors"? They are determined by studying the financial statements of said entities then rating them on their ability to service the debt they issued. It's a direct measure of financial strength. Actually perform a credit rating, then tell me it means nothing. And if it is just smoke and mirrors, then default rates should be similar for all companies, from $1,000,000 in market cap to $10 billion. Needless to say, that couldn't be further from the truth. Default rates on debt ARE different, and ratings are NOT smoke and mirrors.
 
So what exactly is the difference between AAA and AA+ ratings? What countries are in the AA+ category?
 
So if Bill Gates & Steve Jobs combined forces could they perform a hostile takeover of the US Govt?
 
Keep in mind that Standards and Poor's downgrading of US ratings is really a political critique instead of an actual valuation assessment, as no country would simply dump American treasury bonds nor would anyone just go on a buying spree on other currencies. Confidence in the American governance of finance is all that was reflected, and rightly so...
 
sfsuphysics said:
So what exactly is the difference between AAA and AA+ ratings? What countries are in the AA+ category?
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They are both under the umbrella of "investment grade" for credit ratings, meaning that the risk of default is low. Between the investment grade ratings, the actual percentage chance of default is very low. Only when you start getting into the non-investment (or speculative) grade debt, does default become a very real concern.

The main concern is that the debt of the USA is considered the gold standard in the investment community. While the difference in default probability between AAA and AA+ is small, that's not the point. The point is that an investment product which has always been considered "risk free" has now become shaken. In the investment profession, there is a large difference between 100% risk free and 99%.

Is this an issue for the typical investor? Of course not. But consider the large institutional investors around the world who use USA debt to a large extent in their massive portfolios. Many of these institutions (large pension funds for example) have rules that require the liquidation of any security which has been downgraded (like what happened to US debt). In addition, many funds allow only the very highest rated sovereign debt in their portfolios, of which the USA is no longer a member.

What does this all mean? It means that the large players in the financial markets, the large institutions, now have a very real reason not to buy US debt. When big players like these don't purchase US debt, the US government has a hard time raising money (for social programs or the like). You don't have to be a financial wizard to figure out that now may be one of the worst times for the USA to have a hard time raising money.
 
That's_Corporate said:
How are credit ratings "smoke and mirrors"? They are determined by studying the financial statements of said entities then rating them on their ability to service the debt they issued. It's a direct measure of financial strength. Actually perform a credit rating, then tell me it means nothing. And if it is just smoke and mirrors, then default rates should be similar for all companies, from $1,000,000 in market cap to $10 billion. Needless to say, that couldn't be further from the truth. Default rates on debt ARE different, and ratings are NOT smoke and mirrors.
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Really, I have had my share of the world of modern economics, inside and out of it. Things work a lot different than you think. Ratings too.

Anyway I won't try to convince you, you obviously miss the point of my post, but it's ok. They are smoke and mirrors. Feel free to believe otherwise.

One last thing. The lies of lawyers and journalists combined, can't beat the lies that surround the world of economics.
 
Maybe something would get done right if Microsoft and Apple ran the government :D
 
To be fair, if I lent microsoft and the US goverment $1000, i'd probably only expect a return from microsoft...
 
I'm amazed that the United States held onto its AAA Credit Rating for so long. I can't imagine I'd consider anyone sane to lend the United States money. The economy is in freefall, debt has been snowballing for decades with no sign of being paid back. The United States annual interest payments outweight that of its GDP. Also, hell if the United States don't want to pay their debts back who's gonna take on the job of debt collector? Kinda like 'lending' your lunch money to the school bully. I do often wonder what's gonna happen when shit hits the fan and America's creditors come to collect derelict debt and the US Government with out-turned pockets lets nothing loose but moths. As the creditors ask what assets were purchased with their loan money the government points them to all the destroyed cheap Chinese merchandise, food wrappers and advertising material in their landfills. Repossess away. Ok then we want your xxxx military xxxx as payment.. Whoop Whoop National Security Alert!! This Means War!!
 
TheWeazmeister said:
Agreed. I will suggest right off the top, we close shop on the two wars, remove the Bush tax cut, close the loopholes in the tax code...Hmmm look at that, we all of a sudden have a MASSIVE surplus, what a shocker. MS is a good example on what's wrong, even though they aren't the worst offender. MS paid 15% in taxes in 2010, 21% in 2009, and 30% in 2008.
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YAY.. another liberal that thinks raising taxes would help things.

I do think that GE should actually have to pay taxes.. but besides that:

You raise taxes on corporations, or any businesses for that matter, the prices the consumers pay just gets hiked up to cover them.

You get rid of the "Bush tax cuts" and you give the consumers even more tax liability. This in turn will let them buy less, thus driving the economy into a deeper recession.

"Loopholes" as you call them, are NOT "loopholes". They are what is there in the tax code, and thus "tax law".

If you want to take away all "loopholes" as you call them, then we would all just be slaves and everyone would send all money straight to the government. This however would never work as everybody would just stop working.

However, if you cut taxes, you effectively put more money into the economy. more people buy stuff (and pay sales tax), more companies hire people (and pay more tax), and the IRS ends up getting a lot more revenue as a result.

That has been proven time and time again, and yet liberals and their sheeple believe the opposite is true.

Another thing to add, is that we, the consumers are already being double and triple taxed on the same money.

1. You work, you pay Federal , State, Medicare, and Social Security tax.
2. You pay sales tax when you buy stuff at a retail store or for services like phone, cable, utilities (double taxation - you were already taxed on the money when you worked for it).
3. You pay property tax if you own a building (another form of double taxation).

There are other "taxes" out there that also drain your hard earned money from your hands and funnels it to the government, who from what liberals think, can definitely spend your money in ways far superior to what you could ever use it for.

Look at what shape the government is in. Now think about how much/less you would rather have them take from you and give to those who didn't earn it.
 
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