"Standard & Poor's downgrade of America's debt couldn't come at a worse time. The result is likely to be higher borrowing costs for the government at all levels, and higher interest on your variable-rate mortgage, your auto loan, your credit card loans, and every other penny you borrow.
Why did S&P do it?
Not because America failed to pay its creditors on time. As you may have noticed, we avoided a default.
And not because we might fail to pay our bills at the end of 2012 if tea-party Republicans again hold the nation hostage when their votes will next be needed to raise the debt ceiling. This is a legitimate worry and might have been grounds for a downgrade, but it's not S&P's rationale.
S&P has downgraded the U.S. because it doesn't think we're on track to reduce the nation's debt enough to satisfy S&P -- and we're not doing it in a way S&P prefers.
Here's what S&P said: "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics." S&P also blames what it considers to be weakened "effectiveness, stability, and predictability" of U.S. policy making and political institutions.
Pardon me for asking, but who gave Standard & Poor's the authority to tell America how much debt it has to shed, and how?
If we pay our bills, we're a good credit risk. If we don't, or aren't likely to, we're a bad credit risk. When, how, and by how much we bring down the long term debt -- or, more accurately, the ratio of debt to GDP -- is none of S&P's business.
S&P's intrusion into American politics is also ironic because, as I pointed out recently, much of our current debt is directly or indirectly due to S&P's failures (along with the failures of the two other major credit-rating agencies -- Fitch and Moody's) to do their jobs before the financial meltdown. Until the eve of the collapse S&P gave triple-A ratings to some of the Street's riskiest packages of mortgage-backed securities and collateralized debt obligations." [Story]
Exactly Mr. Reich. Ironic indeed. The very people who are partly responsible for putting us in this mess, now have the nerve to tell us that they are going to have to downgrade our credit rating. That's like a thief coming into your home, stealing your big screen television, and then complaining to you that the picture isn't clear enough. The nerve!
Meanwhile O is still talking about our deficit problem....huh? O, here is a memo from the field: F&^% the deficit problem! We need jobs! Still, if you insist on going down this road, here is how you solve your little deficit problem: Raise taxes, get the f*&^ out of Afghanistan and Iraq, and start talking about putting people to work. We should be spending more not less. How are you going to stimulate job growth if you are cutting three trillion dollars in federal spending? That is lunacy. But it's just what these wingnuts want, to beat our government into submission. It is the fundamental difference between these folks and those of us who are... well... actually sane. We believe that it is our government's job to make society work in a better more efficient manner. The wingnut, on the other hand, sees our government as the enemy. They fail to realize, of course, that they are the government; we all are.
I will leave you with the words of Dick Polman:
"Obama, having weathered the ginned-up debt-ceiling crisis, is again declaring that he wants to "put America back to work," but those words are hollow. He's handcuffed by this deal. He and the Democrats won't have the money to launch any big job-creation programs even if they muster the will to try.
Of course, that's precisely what the Republicans intended - to starve the government. Most Americans probably don't agree with that strategy, but since when do they have a say? Polls suggest they just want to get back to work, by any means possible. Last month, when Gallup asked people to name their most important issue, 31 percent cited the "economy in general"; 27 percent cited "unemployment/jobs." A distant third, at 16 percent, was "federal budget deficit/debt."
This is a time when the jobs crisis requires more government spending, not less. Consumers won't prime the economic pump, because they're still in a fetal position. Private businesses won't hire, because they're still playing it safe. There's a myth going around - brought to you by the same people who deny climate change - that the 2009 stimulus was a failure. Congressional Budget Office and Commerce Department figures say otherwise; the stimulus plan saved millions of jobs and would have created more had it been bigger."
Thank you Mr. Polman.
Now if you will all excuse me, I have to go and check out some more bridges.
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