Breaking: Foreign Policy President is also President Downgrade
posted at 5:23 pm on September 14, 2012 by Allahpundit
Actually, he’s been President Downgrade for more than a year now, hasn’t he?
S&P dropped U.S. credit to AA+. Egan-Jones gives us a solid AA-:
Ratings firm Egan-Jones cut its credit rating on the U.S. government to “AA-” from “AA,” citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country’s credit quality…
In its downgrade, the firm said that issuing more currency and depressing interest rates through purchasing mortgage-backed securities does little to raise the U.S.’s real gross domestic product, but reduces the value of the dollar.
In turn, this increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers thereby reducing consumer purchasing power, the firm said.
Money line (literally) from the E-J report: “From 2006 to present, the US’s debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%. In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%.” O’s reaction to last year’s downgrade was to essentially shrug it off as a result of Republican recalcitrance and to blithely insist, contra all fiscal reason, that “We’ve always been, and always will be, a AAA country.” Expect to see that soundbite in a Romney attack ad soon, presumably as part of the critique suggested by James Pethokoukis. Namely, if the Fed’s sufficiently worried about Obamanomics that it needs a third dip in the QE pool, it’s high time for another president. Stick with O and we really might end up with a, er, solid B+.