S&P bond rater: It’s the debt, stupid; Update: S&P official: Another downgrade will come if we don’t reduce long-term debt

posted at 12:00 pm on August 7, 2011 by Ed Morrissey

What caused the United States to lose its AAA rating for the first time in 94 years, a rating that withstood two world wars, the Great Depression and (most of) the Great Recession, and a costly military buildup that bankrupted and demolished our Cold War foe, the Soviet Union, without a direct shot fired?  Was it the dastardly Tea Party, with its demands for fiscal sanity and a solution to an oncoming tsunami of entitlement liabilities?  According to the man who rates sovereign debt for the agency that downgraded the US, not really:

The head of Standard & Poor’s sovereign ratings, David Beers told “Fox News Sunday” he did not expect “that much impact” when global markets open on Monday due to what he called a “mild deterioration” in the U.S. credit standing to AA-plus from top-tier AAA. …

He also said the downgrade announced on Friday was not due to the budget positions of any political party and that on any future agreement, “We think credibility would mean any agreement would command support from both political parties.”

So a lack of consensus was part of the problem for S&P.  But consensus about what?

Beers called the U.S. Treasury Department’s criticism of the credit rating agency’s analysis a “complete misrepresentation.” Even with the debt limit agreement passed by Congress, he said, “the underlying debt burden of the U.S. is rising and will continue to rise over the next decade.”

Actually, the Tea Party caucus in Congress had it right.  The bond raters needed to see the US take a significant step towards ending deficit spending and getting future liabilities under control.  The problem with the lack of consensus came from the resistance of Democrats to the fiscal realities of the situation we face.  Instead of addressing the real problems, Democrats blocked any attempt to deal with the entitlement crises and would only agree to address discretionary spending.

I mentioned this as an aside in my earlier post, but it bears repeating here.  Republicans cut the only deal they could get without control of the Senate and the White House.  Had they refused to take that deal, then S&P and likely Moody’s would have lowered the rating on Wednesday, and Republicans would be taking the blame.  Instead, this clearly shows that Democratic refusals to deal rationally with the entitlement crises are the reason for the decline in confidence in the US.

Call it a clarifying moment.  Discretionary spending was and is a sideshow to what concerns rational investors.  We could eliminate every cent of discretionary spending — defense, homeland security, education, welfare — and we’d still be adding $300-400 billion a year to our deficit through fixed entitlement spending.

Want to see why it’s the debt and not the taxes, Tea Party, or Congressional tiddlywinks?  Heritage’s chart showing the growing bite from entitlements in the future demonstrates the problem quite clearly:

As for the political elements of the downgrade, they’re real — but it’s not the politics of the Tea Party that are the problem.  To follow up my point in my previous post, note well how ObamaCare’s “entitlement reform” impacts the problem and “bends the cost curve.”  The invariable end is a massive amount of liabilities that a free economy cannot possibly honor.

Janet Daley draws the proper conclusions, writing that both Europe and the US are currently proving that nanny-state structures cannot coexist with free economies in the long run.  Inevitably, people have to choose between the command economies required by burdensome entitlement programs or free economies and personal responsibility:

We have arrived at the endgame of what was an untenable doctrine: to pay for the kind of entitlements that populations have been led to expect by their politicians, the wealth-creating sector has to be taxed to a degree that makes it almost impossible for it to create the wealth that is needed to pay for the entitlements that populations have been led to expect, etc, etc.

The only way that state benefit programmes could be extended in the ways that are forecast for Europe’s ageing population would be by government seizing all the levers of the economy and producing as much (externally) worthless currency as was needed – in the manner of the old Soviet Union.

That is the problem. So profound is its challenge to the received wisdom of postwar Western democratic life that it is unutterable in the EU circles in which the crucial decisions are being made – or rather, not being made. …

We have been pretending – with ever more manic protestations – that this could go on for ever. Even when it became clear that European state pensions (and the US social security system) were gigantic Ponzi schemes in which the present beneficiaries were spending the money of the current generation of contributors, and that health provision was creating impossible demands on tax revenue, and that benefit dependency was becoming a substitute for wealth-creating employment, the lesson would not be learnt. We have been living on tick and wishful thinking.

And Daley hits the nail on the head over who exactly has been irrational and radical in this debate:

The hardest obstacle to overcome will be the idea that anyone who challenges the prevailing consensus of the past 50 years is irrational and irresponsible. That is what is being said about the Tea Partiers. In fact, what is irrational and irresponsible is the assumption that we can go on as we are.

Exactly — and that’s exactly the point S&P made with its downgrade.

Update: If we don’t stabilize and reduce our long-term liabilities soon, we’ll get downgraded again, says S&P:

The credit rating agency’s managing director, John Chambers, tells ABC’s “This Week” that if the fiscal position of the U.S. deteriorates further, or if political gridlock tightens even more, a further downgrade is possible.

Chambers also said Sunday that it would take “stabilization and eventual decline” of the federal debt as a share of the economy as well as more consensus in Washington for the U.S. to win back a top rating.

He puts the odds of another downgrade at 3:1.  I’d call it even money, at least while Democrats continue to blame the Tea Party for, er, wanting to do exactly what S&P demands.

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Comment pages: 1 2

andy85719 on August 7, 2011 at 1:25 PM

What if they had been allowed to keep that money in the first place? Some would be living better, some would be dead broke but none of it would be the taxpayers’ problem. It these programs,Social Security or Medicare, had been perpetrated by anyone else but the government they would be in jail.

Cindy Munford on August 7, 2011 at 1:35 PM

I mentioned this as an aside in my earlier post, but it bears repeating here. Republicans cut the only deal they could get without control of the Senate and the White House. Had they refused to take that deal, then S&P and likely Moody’s would have lowered the rating on Wednesday, and Republicans would be taking the blame. Instead, this clearly shows that Democratic refusals to deal rationally with the entitlement crises are the reason for the decline in confidence in the US.

Ed, I think this is true.

Terrye on August 7, 2011 at 1:36 PM

It these programs,Social Security or Medicare, had been perpetrated by anyone else but the government they would be in jail.

Cindy Munford on August 7, 2011 at 1:35 PM

The list of crimes committed by our government that it is not prosecuted for is legion.

gryphon202 on August 7, 2011 at 1:37 PM

Second downgrade by the end of the year, Ed. I’m starting to believe the “blame the Tea Party” crap has stuck.

And I will ask one more time……When is President Downgrade going to go on the boob tube to address this, or better yet, throw the Tea Party and S & P under the bus for whole world to see?

Knucklehead on August 7, 2011 at 1:04 PM

This will not stick to the Tea Party. Sugar Daddy Downgrade is the one who owns this mess. The media can try and spin all they want, but it’s not going to work. They’ve been trying to accuse the Tea Party for years. Still hasn’t worked. The President is always to blame. Plus, attacking the voters never works.

MrX on August 7, 2011 at 1:37 PM

What if they had been allowed to keep that money in the first place? Some would be living better, some would be dead broke but none of it would be the taxpayers’ problem. It these programs,Social Security or Medicare, had been perpetrated by anyone else but the government they would be in jail.

Cindy Munford on August 7, 2011 at 1:35 PM

They have been perpetrated by the government, with the support of the people. And those people are not thieves…they paid just like they were told they should.

But when Bush tried to reform social security..what were the seniors told? That they would lose everything..that he was trying to destroy, not reform the system. And Bush did not really get the support from conservatives that he should have either.

I think there is plenty of blame to go around on this deal.

Terrye on August 7, 2011 at 1:39 PM

gryphon202 on August 7, 2011 at 1:31 PM

Sounds like they want to avoid facing any adverse consequences over their mistake. How ironic.

Christien on August 7, 2011 at 1:41 PM

Ed, I think this is true.

Terrye on August 7, 2011 at 1:36 PM

So if we balance the budget and live within our means we would still have gotten a downgrade? Go figure….

FloatingRock on August 7, 2011 at 1:42 PM

Terrye on August 7, 2011 at 1:39 PM

I definitely agree, I was just answering to a commenter suggesting that seniors are thieves because they live longer than counted on and receive more than they put in to the system.

Cindy Munford on August 7, 2011 at 1:45 PM

This will not stick to the Tea Party. Sugar Daddy Downgrade is the one who owns this mess. The media can try and spin all they want, but it’s not going to work. They’ve been trying to accuse the Tea Party for years. Still hasn’t worked. The President is always to blame. Plus, attacking the voters never works.

MrX on August 7, 2011 at 1:37 PM

I am not so sure about this. The Tea Party’s numbers are way down. Obama’s are down too, but not so much. Part of the reason the Tea Party got the blame is that some of the more vocal people in the movement did not want to vote for a plan to raise the debt ceiling at all..even if meant a downgrade. Now obviously, other people have done the same thing over the years. In fact Dick Durbin voted against a debt ceiling increase when Bush was president..but people were not paying that much attention back then. I am not saying it is fair, but I do think the Tea Party will get a lot of the blame..but Obama will not escape unscathed either.

Terrye on August 7, 2011 at 1:46 PM

Terrye on August 7, 2011 at 1:39 PM

I definitely agree, I was just answering to a commenter suggesting that seniors are thieves because they live longer than counted on and receive more than they put in to the system.

Cindy Munford on August 7, 2011 at 1:45 PM

Yes, and you are right too. You usually are. No kidding.

Terrye on August 7, 2011 at 1:47 PM

Sounds like they want to avoid facing any adverse consequences over their mistake. How ironic.

Christien on August 7, 2011 at 1:41 PM

There still could be adverse consequences, Chris. It’s called “the free market,” and I think we conservatives still believe in it. If S&P loses their credibility as a ratings agency, it’s not a long row to hoe for them to suffer as a for-profit publicly traded company, which they are.

gryphon202 on August 7, 2011 at 1:47 PM

gryphon202 on August 7, 2011 at 1:37 PM

With our sanction to a large degree. Obviously people have been pointing out the facts for quite some time but the public won’t hear of any changes. I realize they are being given inaccurate information but the outcome is the same.

Cindy Munford on August 7, 2011 at 1:48 PM

Terrye on August 7, 2011 at 1:47 PM

You are too kind, I think of myself as a stopped clock at best.

Cindy Munford on August 7, 2011 at 1:48 PM

Terrye on August 7, 2011 at 1:46 PM

I’ve seen a lot of reports (polls) that show a majority of Americans were against raising the debt ceiling. Just saying.

VegasRick on August 7, 2011 at 1:49 PM

With our sanction to a large degree. Obviously people have been pointing out the facts for quite some time but the public won’t hear of any changes. I realize they are being given inaccurate information but the outcome is the same.

Cindy Munford on August 7, 2011 at 1:48 PM

Hence my relatively new-found pessimism. The state of education re: The United States Constitution is beyond atrocious these days.

gryphon202 on August 7, 2011 at 1:50 PM

Speaking of Tea Parties…oy vey!

https://www.facebook.com/pages/The-Jewish-Tea-Party-of-America-JTPA/146341072100858

Del Dolemonte on August 7, 2011 at 1:51 PM

What if they had been allowed to keep that money in the first place? Some would be living better, some would be dead broke but none of it would be the taxpayers’ problem. It these programs,Social Security or Medicare, had been perpetrated by anyone else but the government they would be in jail.

Cindy Munford on August 7, 2011 at 1:35 PM

They have been perpetrated by the government, with the support of the people. And those people are not thieves…they paid just like they were told they should.

But when Bush tried to reform social security..what were the seniors told? That they would lose everything..that he was trying to destroy, not reform the system. And Bush did not really get the support from conservatives that he should have either.

I think there is plenty of blame to go around on this deal.

Terrye on August 7, 2011 at 1:39 PM

Indeed. If we are to restore our credit rating, we must reform entitlements or let those programs self-destruct. The fact that the media gives the Democrats a free-pass to pretend that they’re trying to save these programs when they’re really cheering for their destruction is disgusting.

youngTXcon on August 7, 2011 at 1:52 PM

“It’s the Debt, Stupid!”

I like it…

… I really like it!

Seven Percent Solution on August 7, 2011 at 1:56 PM

gryphon202 on August 7, 2011 at 1:50 PM

Pessimism is a new reality for me also. I’m not really crazy about it. It gets you down when you are called everything but a child of God for wanting our government to live within our means.

Cindy Munford on August 7, 2011 at 1:58 PM

gryphon202 on August 7, 2011 at 1:47 PM

Gryph, of course, of course. Thanks for listing some of the assumptions behind my points. They might suffer a hit as a publicly traded for-profit in a market-based system, though something more symbolic should be on the table as well. TurboTax Timmy correcting your maff is pretty good optics, I reckon.

Christien on August 7, 2011 at 2:00 PM

Pessimism is a new reality for me also. I’m not really crazy about it. It gets you down when you are called everything but a child of God for wanting our government to live within our means.

Cindy Munford on August 7, 2011 at 1:58 PM

I am confident that you and I will do what we believe is right, Cindy. Even if we don’t necessarily agree on the particulars. It’s most of the rest of these brain-dead voters that worry me.

gryphon202 on August 7, 2011 at 2:00 PM

Seven Percent Solution on August 7, 2011 at 1:56 PM
This one is good also.

2008: Words win.

2012: Math wins.

beatcanvas on August 7, 2011 at 10:21 AM

Cindy Munford on August 7, 2011 at 2:01 PM

Terrye on August 7, 2011 at 1:46 PM

I’ve seen a lot of reports (polls) that show a majority of Americans were against raising the debt ceiling. Just saying.

VegasRick on August 7, 2011 at 1:49 PM

Yes, they were at best evenly split…however the same polls showed that between 60% and 70% wanted a deal…and of course people prefer cutting the military to cutting medicare and a solid majority support increasing taxes for the rich.

That is the thing about polls, there is something for everyone. On individual issues the Tea Party really does not poll badly at all, but as a movement or as a poltical block their numbers are getting worse rather than better.

Terrye on August 7, 2011 at 2:02 PM

When was the last time the US was late on a debt service payment? Oh, that’s right. Never.

Rainsford on August 7, 2011 at 2:03 PM

Gryph, of course, of course. Thanks for listing some of the assumptions behind my points. They might suffer a hit as a publicly traded for-profit in a market-based system, though something more symbolic should be on the table as well. TurboTax Timmy correcting your maff is pretty good optics, I reckon.

Christien on August 7, 2011 at 2:00 PM

I’m a conservative, Chris. I go for the practical over the symbolic every time.

gryphon202 on August 7, 2011 at 2:03 PM

When was the last time the US was late on a debt service payment? Oh, that’s right. Never.

Rainsford on August 7, 2011 at 2:03 PM

True that. But going from AAA to AA+ tells me that Standard & Poor’s believes it’s a possibility now, though a remote one. Further downgrade would mean they believe it’s more of a possibility than before.

gryphon202 on August 7, 2011 at 2:04 PM

When was the last time the US was late on a debt service payment? Oh, that’s right. Never.

Rainsford on August 7, 2011 at 2:03 PM

They downgraded our long term, not short term debt. You know, the stuff coming due in 2030 through 2040.

astonerii on August 7, 2011 at 2:05 PM

When was the last time the US was late on a debt service payment? Oh, that’s right. Never.

Rainsford on August 7, 2011 at 2:03 PM

They downgraded our long term, not short term debt. You know, the stuff coming due in 2030 through 2040.

astonerii on August 7, 2011 at 2:05 PM

debt service = interest

bond rating = principal

gryphon202 on August 7, 2011 at 2:05 PM

I am not so sure about this. The Tea Party’s numbers are way down. Obama’s are down too, but not so much. Part of the reason the Tea Party got the blame is that some of the more vocal people in the movement did not want to vote for a plan to raise the debt ceiling at all..even if meant a downgrade. Now obviously, other people have done the same thing over the years. In fact Dick Durbin voted against a debt ceiling increase when Bush was president..but people were not paying that much attention back then. I am not saying it is fair, but I do think the Tea Party will get a lot of the blame..but Obama will not escape unscathed either.

Terrye on August 7, 2011 at 1:46 PM

Are you saying they deserve the blame, the Tea Party, or that they will just get the blame? I think we were right saying do not raise the debt ceiling and that we will be downgraded either way unless they passed CC&B. Which is what S&P had said would be the right track before they passed this other debacle of a bill! Also most in the TP would have voted for a debt raise for significant action against entitlements.

Dick Durbin & Obama have voted against raising the debt ceiling but the did it simply on a political basis. The TP is actually trying to address issues for the nation, not just one segment. If we succeed, everyone is an eventual beneficiary!

bluemarlin on August 7, 2011 at 2:09 PM

gryphon202 on August 7, 2011 at 2:03 PM

Yep, gryph. A nice symbolic hit to their credibility, followed by a practical hit.

Christien on August 7, 2011 at 2:11 PM

The janet Daley article was just linked by Gov Palin from a tweet she sent out:

SarahPalinUSA Sarah Palin
Pres Obama: you’re losing our future. No more pretending “with ever more manic protestations” that this could continue http://tgr.ph/qsHQqE

unseen on August 7, 2011 at 2:12 PM

The decision by Standard & Poor’s to affirm the U.S.’s short-term rating at the top A-1+ level even as it cut the long-term grade from AAA may help to stabilize money markets, according to strategists and economists.

astonerii on August 7, 2011 at 2:14 PM

I am not saying it is fair, but I do think the Tea Party will get a lot of the blame..but Obama will not escape unscathed either.

Terrye on August 7, 2011 at 1:46 PM

At least the Tea Party is use to being blamed, The Won doesn’t handle not getting his way very well.

Cindy Munford on August 7, 2011 at 2:14 PM

Yep, gryph. A nice symbolic hit to their credibility, followed by a practical hit.

Christien on August 7, 2011 at 2:11 PM

Keep an eye on S&P’s stock value. In this day-and-age of the internet, you can look it up in real-time at the drop of a hat. ;-)

gryphon202 on August 7, 2011 at 2:15 PM

Is there anyone here who would honestly entertain the thought of helping to elect a democrat?

gryphon202 on August 7, 2011 at 1:13 PM

There are many posters here that have said if candidate X is the Republican nominee, they will sit out the election, -so the answer is yes.

slickwillie2001 on August 7, 2011 at 2:18 PM

The idea that a capitalist economy can support a socialist welfare state is collapsing before our eyes, says Janet Daley.

unseen on August 7, 2011 at 2:12 PM

The idea that a capitalist economy can support a socialist welfare state within itself is collapsing before our eyes, says Janet Daleyastonerii.

Essentially, we pretty much supported all the socialist welfare states of Europe for several decades. Carrying their negligence as a burden, and it did not do much harm at all to our nation. When the welfare state came into being within our capitalist economy, two diametrically opposed incentives destroyed our prosperity. Capitalist greed and welfare selfishness.

The very rich never had huge incentive to have children and raise them, but did and still do. Those of middle class did have incentive to have children and raise them, that is until welfare came along and said the government will take the place of those children in caring for you in your old age, or if you become disabled. The poor have been subsidized to have children, but primarily only in single parent (women) homes. This kind of change in society is bound to have significant repercussions, and it has.

astonerii on August 7, 2011 at 2:23 PM

There are many posters here that have said if candidate X is the Republican nominee, they will sit out the election, -so the answer is yes.

slickwillie2001 on August 7, 2011 at 2:18 PM

Screw sitting out the election, I will vote Obama if the Republicans select Romney, Gingrich or any of the other absolute statist progressive Republican nominees. I can pretty much bring my entire extended family to do so as well. They always rely on me for political views.

astonerii on August 7, 2011 at 2:25 PM

Bubba tweets to BHO:

“Its the debt, stupid”

BobMbx on August 7, 2011 at 2:30 PM

There are many posters here that have said if candidate X is the Republican nominee, they will sit out the election, -so the answer is yes.

slickwillie2001 on August 7, 2011 at 2:18 PM

Well, insofar as I haven’t heard anyone talk seriously of campaigning or fundaraising for Democrats, that’s still not me. I’ve said time-and-again that I Have no intention of sitting out the general election or the primaries.

gryphon202 on August 7, 2011 at 2:32 PM

astonerii on August 7, 2011 at 2:25 PM

Well, that’s just silly. We’ll, in all likelihood, have a GOP majority House and
Senate and the Tea Party influence will be even stronger.

a capella on August 7, 2011 at 2:39 PM

The scary thing in all this – this has to be explained to members of Congress.

I think I should send them my 12th grade economics teacher. They obviously need a refresher course.

gophergirl on August 7, 2011 at 2:47 PM

Well, that’s just silly. We’ll, in all likelihood, have a GOP majority House and
Senate and the Tea Party influence will be even stronger.

a capella on August 7, 2011 at 2:39 PM

It’s the only way we are going to fix this. The only way.

gophergirl on August 7, 2011 at 2:48 PM

It’s the only way we are going to fix this. The only way.

gophergirl on August 7, 2011 at 2:48 PM

No, a moral society is the only way we are going to fix this. The Tea Party is made up moral individuals, but the new people to the party are the just came to Jesus people. We all know how many of them fall out over time… Nope, it takes a moral people to keep a government moral.

astonerii on August 7, 2011 at 2:53 PM

gryphon202 on August 7, 2011 at 2:15 PM

LOL. Really? Gee, thanks for the hot tip, mack!

Christien on August 7, 2011 at 2:59 PM

One word: Obamaa+

faraway on August 7, 2011 at 3:11 PM

fArAwAy on August 7, 2011 at 3:11 PM

Ooo, very nice…you are so good! Maybe I suggest ObAmA+?

Christien on August 7, 2011 at 3:15 PM

All this noise, this thrashing about by the administration, Congress, the media, Wall Street and the pundits is simply the flailing of a drowning man – a nation drowning in a sea of debt. You’ll know when the nation is in it’s death throes when the rioting really catches on. When the cities start burning that’s when we totally lose the means to work and produce the revenues we will need if were ever going to get out of this mess. Not long after, the tanks will roll in the streets. While some form of order may be restored, it will be at the point of a gun. Then we will suffer oppression for decades and learn for ourselves why Soviet-style nations and economies fail. And the light of freedom, the beacon on the hill that our nation once was, will flicker and die. And there will be no one to save us. We will have done this to ourselves by allowing a century of liberal dominated education to indoctrinate and dumb us down and more than a half century of Keynesian economics to destroy our wealth and burden us to a planet-sized millstone of debt as well as allowing over a century of corrupt politicians to warp our once free, constitutional Republic into something barely recognizable that only bears the trappings (the flag, anthem, etc) of, and none of the core principles and features of, the once-free America. I have my doubts that there is any way out of this now. We may have already set an inalterable course to this awful future – a future that we are already starting to experience.

spiff on August 7, 2011 at 3:36 PM

It doesn’t bug me so much that I’m going to have to work until I die to keep the boomers in the lifestyle to which they’ve become accustomed. What really bugs me is that my children will have to work until they die to pay off the debt and interest racked up by the boomers in order to keep the in the lifestyle that they have become accustomed to. The real irony is that my kids will blame me for them getting screwed, although I’m as screwed as they are, and in spite of the fact that I’ve voted for the guy who was closer to fiscal conservatism, less spending, less taxes, smaller government every time in my adult life. I don’t blame them though. They didn’t make this mess, and what good will it do them to be mad at a bunch of dead boomers.

Immolate on August 7, 2011 at 3:43 PM

I reiterate. Scott Brown and the Maine sisters voted for Cut Cap and Balance, which, unless people are being thoroughly dishonest, was the ultimate goal here. There is no reason to believe, considering that Castle’s voting record was identical to those three, that he wouldn’t have voted for it. Same with Sue Lowden and Jane Norton, who were similarly beaten to the nomination by “True Conservative” candidates.

Instead, Chris Coons, Michael Bennet, and Harry Reid voted to kill it. Sometimes, success as a political movement means choosing where and when to fight, and making a very tough choice to side with the lesser of two evils.

KingGold on August 7, 2011 at 1:28 PM

Are you going to keep whining about O’Donnell until 2012? We’ll never know if she could have won because half of her own party stabbed her in the back the moment Castle lost the nomination. Would Castle have voted with the Republicans? Maybe. But that’s a pure hypothetical. If Castle was so liberal he couldn’t even win the Republican primary, that’s his problem. Whining about it accomplishes nothing.

Maybe next time they’ll try a candidate that’s not such a RINO.

didymus on August 7, 2011 at 3:55 PM

Are you going to keep whining about O’Donnell until 2012? didymus on August 7, 2011 at 3:55 PM

Yes.

Cindy Munford on August 7, 2011 at 4:02 PM

Yes.

Cindy Munford on August 7, 2011 at 4:02 PM

In other words, the people do not have the right to representation that represents themselves. People voted in the primaries, and said that Castle does not represent them and kicked him to the curb. That is right, we do not have the right to pick our representative, what we have the right is to take what we are given and the expectation we shut the hell up and like it. The voters spoke, get over it.

We had many other choices in 2008 than McCain too. We went into the election with who won the nomination. He threw the election to Obama. So, I would have to say that your side of the argument is far more flawed than you will ever realize, myopic vision is hard to overcome, you never will.

astonerii on August 7, 2011 at 4:11 PM

astonerii on August 7, 2011 at 4:11 PM

Yes, Kinggold is going to whine about O’Donnell until 2012 and beyond. He totally ignores the things that the Tea Party gave the Republicans in 2010 and focuses on those three Senate races. I would venture to say that this dislike for the Tea Party is only rivaled by the Democrats and the only thing worse than the Tea Party is Sarah Palin.

Cindy Munford on August 7, 2011 at 4:43 PM

Cindy Munford on August 7, 2011 at 4:43 PM

Sorry, misunderstanding :)

astonerii on August 7, 2011 at 4:58 PM

astonerii on August 7, 2011 at 4:58 PM

Not a problem.

Cindy Munford on August 7, 2011 at 5:34 PM

The response of the Administration (and I use that term loosely) to the S&P action, wagging their finger at a mathematical mis-calculation, is a perfect example of their response to anything, tilting at some irrelevant detail while missing the forest.

It’s akin to claiming a “gotcha” because you found a typo in your death sentence.

Or arguing over the exact angle at which the Titanic hit the iceberg, while people are in the water, clinging to the top of the grand piano from the ballroom.

Clueless. Helpless. Hopeless.

IndieDogg on August 7, 2011 at 5:44 PM

Gold futures are up almost $40 now.

Emperor Norton on August 7, 2011 at 6:41 PM

I am not saying it is fair, but I do think the Tea Party will get a lot of the blame..but Obama will not escape unscathed either.

Terrye on August 7, 2011 at 1:46 PM

It won’t stick to the Tea Party. Their approval numbers don’t matter. Whenever an economy turns badly, no one ever blames the people like the Demacrats are trying to do now. You know why? Because there are no names. That’s why it won’t stick. Who is the Tea Party? No one. You can’t point to a single person. Instead, Obama will have all of the blame.

Also, the Tea Party is not the movement. The principles came first. If the Tea Party goes away, I think the Dems will have a much bigger problem because it’ll mean that Tea Party principles have gone mainstream.

MrX on August 7, 2011 at 6:44 PM

Gold futures are up almost $40 now.

Emperor Norton on August 7, 2011 at 6:41 PM

If it is a heavy trading day, which it looks like. I have already argued the DOW will drop 700 points do to the downgrade alone. If other indicators come in negative, it could be more.

On the other hand, if it is a light trading day, Obama’s government cronies will bid prices to only a loss of $300. Yeah, call me a conspiracy nut, but while doing so, honestly argue that DOW stocks are really worth more than $9000 and I think closer to $8000 and have been priced between $12,000 and $13,000.

astonerii on August 7, 2011 at 7:07 PM

Asian markets to open soon, will get the first taste of how it’s like to be an AA+ student :-(…actually we got a bit of that bad taste, Israeli stock market fell sharply yesterday (Sun their time, their work week is Sun-Thu), by 7%…same in some rich Gulf states…

jimver on August 7, 2011 at 8:13 PM

astoneril: To increase my knowledge of the origins of US political law, I picked up Montesquieu’s ‘The Spirit of the Laws’ today.

Fascinating reading.

I’m not that far, but in the first 20 pages, he notes that a requirement for a functioning republic (which is the term used for a representative government) is an ethical franchise. If a democracy, that means the electorate. If an aristocracy, that means the aristocrats. Since we are a hybrid of the two (by design; I am using the translated terms from the book), that implies other things.

So, yes, regaining a moral society, at least where politics is concerned, has a pretty good political mind backing it.

Scott H on August 7, 2011 at 8:59 PM

Scott H on August 7, 2011 at 8:59 PM

thanks for the update. I really should start reading those things our founders read, and then read what our founders wrote. Maybe I will get an ereader in the near future.

astonerii on August 7, 2011 at 9:43 PM

Update: S&P official: Another downgrade will come if we don’t reduce long-term debt

To reduce long term debt, there has to be a plan to pay it back.

Get ready for the next downgrade.

rukiddingme on August 7, 2011 at 10:20 PM

To reduce long term debt, there has to be a plan to pay it back.

Get ready for the next downgrade.

rukiddingme on August 7, 2011 at 10:20 PM

As a percentage of GDP. it further clarified.

astonerii on August 7, 2011 at 10:27 PM

Actually, the Tea Party caucus in Congress had it right.

Better late than never, right?

Thanks for nothing, Ed.

fossten on August 7, 2011 at 10:35 PM

Face it-it is near impossible in a free democratic-based society, such as ours, for any political party to support sufficent cuts in programs, without itself being eliminated by the voters. Politicans are not a species prone to willful suicide -so we will continue to move in one direction only-off that proverbial financial cliff.

You can’t structure the fundamentals of a free society from the top down -the nanny government taking financial responsibility instead of the individuals taking care of themselves.There lies ahead little more than an utter disaster if we attempt to reverse course now and take it away.

Deliberately keeping the populace economically ignorant may work for a party on the way up, but on the way down -no lies, no manipulation of truth, no economic jargon games, will suffice to prevent rebellion.

The only question facing the USA now, isn’t who gets the blame, but how much rebellion will be acceptable before the entire enchalda crumbles. We have made a mess of what we have been handed by our forefathers.

Broken homes and free lunches without a strong moral base to repair such self-destruction, will take their toll.

Don L on August 8, 2011 at 6:10 AM

So, yes, regaining a moral society, at least where politics is concerned, has a pretty good political mind backing it.

Scott H on August 7, 2011 at 8:59 PM

Yes, but we threw God out so we could have our degeneracy without guilt ofr consequences and now we are just beginning to realize that we who have been given freedom only because we are not lesser animals (and ought not act like them) but creatures of dignity made in His image. We
cannot have that freedom given us and recognized in our constitution, without having the reponsibility and basic moral code that inseparably comes with that freedom. Life is not Swiss cheese where we can select the holes and pretend we’re still eating cheese.

Our problems aren’t just finacial – we got into financial trouble because of our moral breakdown. Greed and coveting envy -”I want it, and soak the rich” have been the core cause of our financial cancer.

The solution: We need to get our moral act together and then,after the broken homes and political victimology caused communities return to productivity, when personal want is tempered with patience, instead of the “I want it all now” culture we’ve created, when truth finally defeats the deceit inherent in PC, when we return to voting for character instead of sugar daddys, maybe then we can restore sanity to our nation -but it won’t happen until we do.

Don L on August 8, 2011 at 6:24 AM

So does this mean that when then next reporter goes down on his/her knees in front of Obama and asks him how he would grade his third year in office, he would respond “I think it would be a strong AA+”?

VelvetElvis on August 8, 2011 at 7:52 AM

The credit rating agency’s managing director, John Chambers, tells ABC’s “This Week” that if the fiscal position of the U.S. deteriorates further, or if political gridlock tightens even more, a further downgrade is possible.

Chambers also said Sunday that it would take “stabilization and eventual decline” of the federal debt as a share of the economy as well as more consensus in Washington for the U.S. to win back a top rating.

So has anyone here acknowledged this point by S & P? And does anyone know what their point even is in identifying “gridlock” as a problem? Obviously it can be read at least two ways.

Jaibones on August 8, 2011 at 8:51 AM

I look forward to crr6′s apology for smearing the Tea Party.

gwelf on August 8, 2011 at 9:15 AM

Entry in liberal lexicon:

Tea Party Terrorist/Economic Terrorist: A citizen who points out obvious fiscal realities and demands that government stop heading towards economic oblivion.

I find it ironic that the Tea Party is actually pushing for policies that will save government and Democrats are pushing towards it’s ruin. I used to wonder if Democrats really were trying to destroy our country or if they were just incompetent. This whole fiasco leaves no doubt in my mind that Democrats really do want collapse.

gwelf on August 8, 2011 at 9:19 AM

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