In case you thought Debt Ceiling Week couldn’t get any lower, a reminder from your friendly neighborhood eeyoreblogger that things can always get lower. This is the perfect ending, in fact: Now that we know the negotiations are purely political, here’s SJL accepting them on their own terms as an opportunity to grandstand in the most demagogic way possible. Yeah, granted, she thinks that there are two Vietnams, and okay, fine, she believes that repealing ObamaCare might be unconstitutional, but give credit where it’s due. She really captured the surreal unseriousness of the past week o’ news here.
Let’s see if James Pethokoukis can come up with a better reason than Jackson Lee for why the negotiations ultimately are a farce:
[H]ere is Standard & Poor’s in a report released last night:
“If a debt ceiling agreement does not include a plan that seems likely to us to credibly stabilize the U.S.’ medium-term debt dynamics but the result of the debt ceiling negotiations leads us to believe that such a plan could be negotiated within a few months, all other things unchanged, we expect to affirm both the long- and short-term ratings and assign a negative outlook, If such an agreement is reached, but we do not believe that it likely will stabilize the U.S.’ debt dynamics, we, again all other things unchanged, would expect to lower the long-term ‘AAA rating, affirm the ‘A-1+’ short-term rating, and assign a negative outlook on the long-term rating.”
Looking at the most likely scenario out there right now, Goldman Sachs has its doubts (bold is mine):
“Using our baseline projections as a starting point, the $1.7trn agreement we outline would represent substantial progress, but would probably fall short of Moody’s criteria. That said, we view any agreement that is reached this year as a first step; tax and entitlement reform efforts look likely following the election in 2013. With a cyclically-adjusted primary deficit of around 6% of GDP in 2011, additional consolidation clearly will be necessary, and thus we view this as the first round of what will ultimately need to be multiple deficit reduction measures over the next few years.”
I.e. our debt problem is so vast that even a compromise here might not avert a downgrade from Moody’s, with all the nasty knock-on effects that would entail. If Obama was serious, he would have used the bully pulpit to start pushing meaningful entitlement reform last year — not via a punt to some Deficit Commission but with his own hands on the issue. He promised America he would do so. And yet here we are, jerking around on a debt-ceiling deal that will merely slow, but not stop, us before we hit the One True Debt Ceiling and all hell really does break loose. Like I say, this is the perfect punchline to a total joke. Click the image to watch.