Another bipartisan agreement?

[Wiseacre]

Okay, this past week many of the more moderate people in both parties defied the extremists on both the left and right and voted to raise the debt ceiling. Nobody particularly liked it, but they passed it for the good of the country. At least IMHO. Just wondering if they can do it again in the 2nd part of the deal, with this super committee.

With the credit downgrade by the S&P, as of this writing the asian markets are down 3 or 4%, and the Dow futures are down over 230 basis points. If the markets do not rebound and continue to flounder for the rest of the year, one could see a lot of pressure on the president and both parties to reach a bipartisan deal with some revenue increases and sme changes to SS and healthcare programs. No trickery, dubious accounting, raise taxes now and cut spending later, but a significant agreement that most likely the TPers won'tlike and neither will the far left.

The poll numbers for everybody in Washington are steadily dropping I think, and there's no reason to doubt a continued decline. I think incumbents of both parties oughta be getting really nervous, and so a deal that is bigger than the 1.5 trillion the super commitee is supposed to come up with could happen. The odds? I'd say 50-50, but who wants to go into the next election with nothing to show for how they at least tried to be more fiscally responsible, especially after the credit rating downgrade?

 

[waltky]

Granny says, "Dat's right, dey better shape up or next `lection we gonna ship `em out - an' dat goes fer dem whiney Tea Partiers too!...

S&P downgrade of US credit rating sends clear message to Congress: shape up
August 6, 2011 - S&P, one of the three major credit-rating firms, downgraded its rating for US debt Friday night – a move that has the potential to further spook global markets and drive up borrowing costs in the US. The reason for the downgrade, S&P said, was congressional dysfunction.

In downgrading the United States credit rating for the first time in its history Friday, Standard & Poor's left little doubt that, for the moment at least, America's debt crisis is, in fact, a political crisis. The impact of the S&P decision to drop US debt from its top AAA rating to AA+ will not be more fully known until Asian markets open on Sunday night. But the move has the potential to raise interest rates on the national debt – a move that could have the knock-on effect of raising interest rates across the US economy, from mortgages to car loans.

Some evidence suggests the impact could be minimal, however, at least in the short term. Markets have guessed at a looming S&P downgrade for weeks and many might have already adjusted somewhat to account for it. Moreover, US Treasury bonds have been considered such a safe investment for both American and overseas investors for so long that they have become deeply interwoven into the global economy. Buyers might not want to risk now demanding higher interest rates from the US because of the shock it would send through markets worldwide.

And perhaps most important, the two other major credit-rating agencies – Moody's and Fitch – have maintained the US's AAA rating. But there is no doubt that the S&P downgrade is an alarm bell not only for the US economy, but more particularly for members of Congress. While S&P's ultimate concern is financial – the prospect that the national debt could expand out of control – the reason for the downgrade was congressional dysfunction.

In other words, S&P suggests that the US has the financial ability to head off a debt crisis, but doubts whether it has the political ability to strike the compromises necessary. "More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned," an S&P statement reads. Of itself, the recent debt-ceiling deal was not enough to bring federal deficits under control, yet it exposed dramatically the political fault lines that would prevent further progress.

MORE

 

[hortysir]

I don't think this country can bare another "compromise" like this last one