Tag Archives: Standard & Poor’s

Fiscal jihad leads to downgrade of U.S. credit?

Well congratulations Republican Tea Partistas (GOTP), you’ve achieved something no one else has ever done in the history of our nation, you’ve given the nation’s full faith and credit a black eye. The Associated Press (AP) is reporting that Standard & Poor’s, one of the world’s three major credit rating agencies, cited “difficulties in bridging the gulf between political parties” as a major reason for the downgrade from U.S.’s top shelf AAA status to AA+, the next level down; of course the GOTP and Democratic law makers quickly jumped on the blame the other party bandwagon.

But whose fault is it?

Only one thing’s changed this go round of the debt ceiling argument, and that’s the introduction of the Tea Party – or as I like to call them, the Tea Partistas – who secured around 80 seats in the House of Representatives in the 2010 elections and who have been reaping havoc ever since. It was their moronic insistence the debt ceiling is tied to cutting spending, and their equally moronic insistence that taxes cannot be raised, especially not on the top 2% – or the absolutely uber-wealthy in the country.

It was the Tea Partistas’ holding the economy hostage, demonstrating to the rest of the world that we now have right-wing political Jihadists bent on bringing everything down if they don’t get their way that has shaken the world’s view of America, it’s why Standard & Poor’s lowered our rating, citing “difficulties in bridging the gulf between political parties” as a major reason for the downgrade. The rating agency has essentially lost faith in Washington’s ability to work together to address its debt.

The downgrade, hours after markets closed on Friday, is a first for the United States since it was granted an AAA rating in 1917. Reportedly S&P warned about a downgrade as far back as April. Its decision came just four days after fractious debate over raising the nation’s debt ceiling ended in a compromise that would reduce the country’s debt by more than $2 trillion. S&P said Friday the cuts did not go far enough.

This is where things become clouded and suspicious however with regards to S&P, and to which side the company is politically aligned. Only one group in Washington right now is making the same mewing as S&P and that’s the Tea Partistas. Is it possible the rating company is making a down grade in order to somehow gain by it?

AP is reporting that officials at the Treasury Department fought the downgrade until virtually the last minute, and that administration sources familiar with discussions said the S&P analysis was fundamentally flawed. S&P had sent the administration a draft document in the early afternoon Friday and the administration, after examining the numbers, challenged the analysis.

In a statement, Treasury said, “A judgment flawed by a $2 trillion error speaks for itself.”

GOTP potential opponents of the president in 2012 pounced on S&P’s announcement.

Michele “Krazy” Bachmann, the Tea Partista favorite, called on Obama to fire Geithner and quickly submit a plan to balance the budget, not just reduce deficits; and Mitt “Flopsy Mopsy” Romney said the credit downgrade was the “latest casualty” in Obama’s failed economic leadership.

S&P said in its report that downgrading the U.S.’s credit rating reflected the agency’s belief that the debt deal Congress pulled together was not sufficient “to stabilize the government’s medium-term debt dynamics.” S&P said that in addition to the downgrade, it is issuing a negative outlook, meaning that there was a chance it will lower the rating further within the next two years.

A downgrade a notch lower, to AA, will occur if the agency sees smaller reductions in spending than Congress and the administration have agreed to make, higher interest rates or new fiscal pressures during this period.

Basically S&P is now attempting to hold the country’s economy hostage too; this sounds just like the Tea Partistas. The not so subtle threat that S&P “will lower the rating further within the next two years” is highly suspicious timing basically stating it will do it again sometime during the presidential campaign cycle. Who would that benefit? The GOTP candidate and the S&P because the conservatives want to further deregulate the stock market and financial institutions. We can probably expect the stock market to plunge on Monday.

GOTP House Speaker John Boehner said he hoped the downgrade served as a wake-up call to the Democratic Party.

“It is my hope this wake-up call will convince Washington Democrats that they can no longer afford to tinker around the edges of our long-term debt problem,” Boehner said in a statement. “As S&P noted, reforming and preserving our entitlement programs is the `key to long-term fiscal sustainability.”

Again, the Speaker’s statement makes this down grade highly suspicious and suggests perhaps it was coordinated with the GOTP strategy all along? Boehner cites, “reforming and preserving our entitlement programs is the `key to long-term fiscal sustainability.” So now, according to Bonehead, and allegedly the S&P, the only way to fix the debt problem is to stick it to the poor and the elderly.

Democratic Senate Majority Leader Harry Reid believes Bonehead and his interpretation of the downgrade is wrong, and suggested S&P’s action shows that a mixed policy of raising taxes and budget cuts – was the correct way to move forward.

“The action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners,” Reid said.

S&P’s actions are suspicious, and it appears the group may have overplayed its hand, especially when the main reason it cites for the downgrade could have come straight out of Rush Limbaugh’s mouth – or the GOTP playbook; obviously a balanced approach makes the most sense.

The GOTP catapulted the economy to the brink of disaster by cutting taxes while simultaneously taking the country into two wars; it was the actions of the Bush/Cheney team – wholeheartedly supported by Bonehead and company – which put us here, coupled with Mitch McConnell’s filibustering essentially every bill passed by the House for the first two years of the Obama Administration. There is only one party to blame, it is not something both parties put us in, it was the actions of the Republicans now sealed to the Tea Partistas which has done this. If the President is able to place the blame where it belongs and convince the country of how gross negligence by the GOTP has so thoroughly screwed things up then he’s re-elected; otherwise then we are in for a long slide into economic catastrophe.

Clearly the tax cutting supply-side economics sophistry of the right has failed; it hasn’t produced any jobs and has robbed the country of much needed revenue, and the President needs to hammer away at this until it sticks. Point it out clearly and say it as many times as it takes for the majority of Americans to get it. Reaganomics doesn’t work. It didn’t work in 1980, and it doesn’t work now, even Reagan knew this; he raised taxes eleven times during his presidency to garner revenue. The GOTP just doesn’t get it, Reaganomics has become its mantra, and they’ve become fiscal jihadists willing to destroy everything if they don’t get their way – they’ve become economic terrorists.

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Posted by on August 6, 2011 in Economics


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