Tea Party Duplicity on the Debt Deal

[BDBoop]

The greatest irony of the aftermath of the debt downgrade is that the Tea Party, and most notably Michele Bachmann, have claimed political victory on the matter. To listen to Congress Woman Bachmann, the downgrade was the result of "not cutting enough" and steadfastly refused to vote to raise debt ceiling. That's about 20% right. Upon reading the S&P report, it's clear that allowing August 2nd to pass without raising the debt would have led to a larger downgrade and unlike spending cuts (which can be further addressed at a later date), the debt ceiling had a hard deadline and once that boat sailed, it would have been too late to fix the mess.

The S&P indicated in their report that the largest reason for the downgrade was the fact that there was even a debate about raising the debt ceiling before the deadline and that their fears that it wouldn't be raised in the future due to political brinksmanship.

As much as they would like to claim otherwise, the Teaparty certainly doesn't have any high ground on the issue. No so ironically, if the teaparty had gotten their way and not raised the debt ceiling, the downgrades would have been much worse.

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

Pushing Rope: Standard and Poors Places United States on Credit Watch

Not raising the debt ceiling would have been a frigging disaster. We don't have to debate it, S&P lays it out in plain English. It's futile to debate whether we would have really defaulted if the debt ceiling wouldn't have been raised. S&P and other credit agencies are in the business of predicting adverse events before they happen. They don't take a "wait and see" attitude on the matter. Not raising the debt ceiling is a sign of bad faith (like not paying off your credit card minimum).

The compromise was far from perfect, but it got us off credit watch.

More from the article:

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in
the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.

http://www.ft.com/intl/cms/af2c4fac-bfc2-11e0-90d5-00144feabdc0.pdf

In other words, the absurd "self inflicted wound" that was the debt ceiling "crisis" is exactly what led to this. The problem is that the Tea Party doesn't compromise, and Washington is built on compromise. Even when their own party brokered a deal that gave them "98% of what they wanted"* many of them (with some notable exceptions - thank you Allen West) still voted against it, to include Michele Bachmann, who wants to run the entire country.

The compromise wasn't perfect, but it likely staved off a financial meltdown. The TP ironically gets to sit back and throw stones because they didn't get their own way. If they had, we would be in an economic disaster right now.

As it stands, S&P is the only credit firm that handed us a minor downgrade and that was controversial unto itself with many analysts calling "foul". Moody's reaffirmed the AAA rating, and Fitch* just reaffirmed it as well after giving it a second look.

U.S. Sovereign Debt Rating Is Affirmed by Fitch at AAA; Outlook Is Stable - Bloomberg

We can only speculate what would have happened if the TP caucus was more sufficient and able to stymie the process. The American people aren't ignorant of this either. There is a reason the TP has falling in the polls since August 2nd. So the compromise wasn't perfect, but it was a last minute deal that averted a larger crisis.

The Tea Party hasn't proven that it possesses the adult leadership necessary to work across the aisle to take the measures necessary to right our financial ship. Tell me again why these people need to be given the keys to the kingdom?

*

House Speaker John Boehner told his Republican caucus on a Sunday night conference call that the deal isn't done yet. But Boehner said it does not violate GOP principles.

"We got 98 percent of what we wanted," he said adding that the framework cuts more spending than it raises the debt limit. It also caps future spending to limits in the growth of government."

Read more: Obama Announces Debt-Reduction Deal Approved by Senate, House Leaders - FoxNews.com

And then they mock Obama for "folding" or "caving" - when he did the only sane thing he could.

 

[BDBoop]

Of course, and the hypocrisy of the TP in hiding behind the fact that they didn't get their way. If the S&P downgraded us because we even reached a crisis on the debt ceiling, then how bad would it have been if we wouldn't have raised it?

Now tell me why the TP has any moral high ground on this issue?

QFMFT.

They don't. And the fact that they can't strap on a pair and own it is why they won't survive for any length of time.

Adults know how to own their own, learn from their mistakes, and move forward. They're stuck on stupid.

 

[Trajan]

The greatest irony of the aftermath of the debt downgrade is that the Tea Party, and most notably Michele Bachmann, have claimed political victory on the matter. To listen to Congress Woman Bachmann, the downgrade was the result of "not cutting enough" and steadfastly refused to vote to raise debt ceiling. That's about 20% right. Upon reading the S&P report, it's clear that allowing August 2nd to pass without raising the debt would have led to a larger downgrade and unlike spending cuts (which can be further addressed at a later date), the debt ceiling had a hard deadline and once that boat sailed, it would have been too late to fix the mess.

The S&P indicated in their report that the largest reason for the downgrade was the fact that there was even a debate about raising the debt ceiling before the deadline and that their fears that it wouldn't be raised in the future due to political brinksmanship.

As much as they would like to claim otherwise, the Teaparty certainly doesn't have any high ground on the issue. No so ironically, if the teaparty had gotten their way and not raised the debt ceiling, the downgrades would have been much worse.

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

Pushing Rope: Standard and Poors Places United States on Credit Watch

Not raising the debt ceiling would have been a frigging disaster. We don't have to debate it, S&P lays it out in plain English. It's futile to debate whether we would have really defaulted if the debt ceiling wouldn't have been raised. S&P and other credit agencies are in the business of predicting adverse events before they happen. They don't take a "wait and see" attitude on the matter. Not raising the debt ceiling is a sign of bad faith (like not paying off your credit card minimum).

The compromise was far from perfect, but it got us off credit watch.

More from the article:

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in
the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.

http://www.ft.com/intl/cms/af2c4fac-bfc2-11e0-90d5-00144feabdc0.pdf

In other words, the absurd "self inflicted wound" that was the debt ceiling "crisis" is exactly what led to this. The problem is that the Tea Party doesn't compromise, and Washington is built on compromise. Even when their own party brokered a deal that gave them "98% of what they wanted"* many of them (with some notable exceptions - thank you Allen West) still voted against it, to include Michele Bachmann, who wants to run the entire country.

The compromise wasn't perfect, but it likely staved off a financial meltdown. The TP ironically gets to sit back and throw stones because they didn't get their own way. If they had, we would be in an economic disaster right now.

As it stands, S&P is the only credit firm that handed us a minor downgrade and that was controversial unto itself with many analysts calling "foul". Moody's reaffirmed the AAA rating, and Fitch* just reaffirmed it as well after giving it a second look.

U.S. Sovereign Debt Rating Is Affirmed by Fitch at AAA; Outlook Is Stable - Bloomberg

We can only speculate what would have happened if the TP caucus was more sufficient and able to stymie the process. The American people aren't ignorant of this either. There is a reason the TP has falling in the polls since August 2nd. So the compromise wasn't perfect, but it was a last minute deal that averted a larger crisis.

The Tea Party hasn't proven that it possesses the adult leadership necessary to work across the aisle to take the measures necessary to right our financial ship. Tell me again why these people need to be given the keys to the kingdom?

*

House Speaker John Boehner told his Republican caucus on a Sunday night conference call that the deal isn't done yet. But Boehner said it does not violate GOP principles.

"We got 98 percent of what we wanted," he said adding that the framework cuts more spending than it raises the debt limit. It also caps future spending to limits in the growth of government."

Read more: Obama Announces Debt-Reduction Deal Approved by Senate, House Leaders - FoxNews.com

why didn't Fitch ( who has just re-affirmed our AAA Bond rating btw Fitch affirms U.S. at AAA, outlook stable - Yahoo! News)
and Moddys downgrade us?

The Tea Party hasn't proven that it possesses the adult leadership necessary to work across the aisle to take the measures necessary to right our financial ship. Tell me again why these people need to be given the keys to the kingdom?

and who has proved they have the necessary were with all and maturity?

It seems to me the most powerful man in Dem. party right now is; Harry Reid- NOT Barak Obama. He was MIA and consigned himself to the fringes, popping in here and there, just where he wanted to be, leading from behind , ready to swoop in and take credit yet not to close to get dirty if it blew up.... so, I find it strange you mention 'leadership' without touching on the C in C etc. .

 

[Jarhead]

The greatest irony of the aftermath of the debt downgrade is that the Tea Party, and most notably Michele Bachmann, have claimed political victory on the matter. To listen to Congress Woman Bachmann, the downgrade was the result of "not cutting enough" and steadfastly refused to vote to raise debt ceiling. That's about 20% right. Upon reading the S&P report, it's clear that allowing August 2nd to pass without raising the debt would have led to a larger downgrade and unlike spending cuts (which can be further addressed at a later date), the debt ceiling had a hard deadline and once that boat sailed, it would have been too late to fix the mess.

[/url]

why didn't Fitch ( who has just re-affirmed our AAA Bond rating btw Fitch affirms U.S. at AAA, outlook stable - Yahoo! News)
and Moddys NOT downgrade us?

The Tea Party hasn't proven that it possesses the adult leadership necessary to work across the aisle to take the measures necessary to right our financial ship. Tell me again why these people need to be given the keys to the kingdom?

and who has proved they have the necessary were with all and maturity?

It seems to me the most powerful man in Dem. party right now is; Harry Reid- NOT Barak Obama. He was MIA and consigned himself to the fringes, popping in here and there, just where he wanted to be, leading from behind , ready to swoop in and take credit yet not to close to get dirty if it blew up.... so, I find it strange you mention 'leadership' without touching on the C in C etc. .

Yes...

Why is it that the left is more wrapped up in the "leadership" of a few reps in congress, but not at all interested in evaluating the perfomrance (or lack of it) of the senate majority leader?

Furthermore...I thought the Te Party was nothing more than a small group of irrlevant, unorganized, racists.

They are now the ones we should look to for leadership?

Hmmm......

 

[Trajan]

Republicans got rid of it so George W. Bush could give the rich what they needed most.

Mo' Money.

Of which Dems promised to go by PAYGO in 2007. Of course that lasted about 10 mintues.

You're mistaken.

PAYGO - Wikipedia, the free encyclopedia

mistaken? you need to be schooled in Paygo again? you do know we were still suppsoed to be operating under paygo strictures which Obama signed Feb. of 2010 ( while giving himself at that very signing, 2 more TRILLION dollars in a raised debt ceiling ) ...right? Because I have told you this straight up post to post 5 times now.

 

[theHawk]

Republicans got rid of it so George W. Bush could give the rich what they needed most.

Mo' Money.

Of which Dems promised to go by PAYGO in 2007. Of course that lasted about 10 mintues.

You're mistaken.

PAYGO - Wikipedia, the free encyclopedia

From your own source:

The PAYGO system was reestablished as a standing rule of the House of Representatives (Clause 10 of Rule XXI) on January 4, 2007 by the Democrat-controlled 110th Congress:[12][13][14]

It shall not be in order to consider any bill, joint resolution, amendment, or conference report if the provisions of such measure affecting direct spending and revenues have the net effect of increasing the deficit or reducing the surplus for either the period comprising the current fiscal year and the five fiscal years beginning with the fiscal year that ends in the following calendar year or the period comprising the current fiscal year and the ten fiscal years beginning with the fiscal year that ends in the following calendar year.[15]

Less than one year later though, facing widespread demand to ease looming tax burdens caused by the Alternative Minimum Tax, Congress abandoned its pay-go pledge.[16] The point of order was also waived for the Economic Stimulus Act of 2008 which included revenue reducing provisions and increases in spending that increased the deficit, which paygo was designed to prevent. It was again waived in May 2008, upon the consideration of the 2007 U.S. Farm Bill by the House of Representatives.

 

[Oddball]

Oooopsie!

 

[saveliberty]

Debate point with the opponents own source! Ouch, that won't grow back.

 

[Modbert]

S&P said if we didn't raise the debt ceiling, they would have lowered our credit rating to a D. The lowest of the low, even lower than Greece. Anyone who argued for us to not raise the debt ceiling and then point to the S&P downgrade as proof have no understanding of economics whatsoever.

 

[Jarhead]

S&P said if we didn't raise the debt ceiling, they would have lowered our credit rating to a D. The lowest of the low, even lower than Greece. Anyone who argued for us to not raise the debt ceiling and then point to the S&P downgrade as proof have no understanding of economics whatsoever.

S&P also said those MBS's were solid investments.

Guess some people just dont learn.

 

[Modbert]

S&P also said those MBS's were solid investments.

Guess some people just dont learn.

If you're going to be consistent, I suppose you also believe that S&P should have not downgraded us?

 

[Trajan]

S&P also said those MBS's were solid investments.

Guess some people just dont learn.

If you're going to be consistent, I suppose you also believe that S&P should have not downgraded us?

No, but I find it curious that 2 other agencies one of which has just today re-affirmed our AAA bond rating, didn't and that S&P ( and they are all whores and I have said so in any event) was the only one of 3 to do so, yet they appear to be the presumptive go to experts....?

 

[geauxtohell]

why didn't Fitch ( who has just re-affirmed our AAA Bond rating btw Fitch affirms U.S. at AAA, outlook stable - Yahoo! News)
and Moddys downgrade us?

LOL. Did you take the time to actually read my post, Trajan? I only ask because I noted that Fitch just reaffirmed our AAA rating and also provided a link about it (maybe even the same link).

To answer your question, I think the S&P downgrade was somewhat bullshit and certainly politically driven to an extent (regardless of their insistence that it wasn't). The fact that they did it after being notified of a 2 trillion dollar error that they acknowledged indicates to me that they were more interested in sending a message. That being said, I am not an economist, and I don't even pretend that I am very knowledgeable on economics (on the level of Toro for example).

I think Fitch and Moody's rating probably reflects our actual standing and is more quantitative. But that is just my opinion.

I think the compromise saved our rating with Fitch and Moody and from a further downgrade by the S&P. I've yet to hear any of the experts say that not raising the debt ceiling would have been "no big deal". To the contrary, I've heard that it would be deemed as an act of bad faith that would have reflected on our fiscal standing.

and who has proved they have the necessary were with all and maturity?

You aren't going to like this, but I think Obama has. I think he got how bad it would have been if August 2nd passed without raising the ceiling (and he further realized that the Dems had failed to get this done while they had power for two years) and basically caved on a deal that was heavily stacked in the GOP's favor.

It seems to me the most powerful man in Dem. party right now is; Harry Reid- NOT Barak Obama. He was MIA and consigned himself to the fringes, popping in here and there, just where he wanted to be, leading from behind , ready to swoop in and take credit yet not to close to get dirty if it blew up.... so, I find it strange you mention 'leadership' without touching on the C in C etc. .

The President doesn't control the purse strings. He can only sign what comes across his desk. Sure he can lobby for his own position, but the GOP has the house and a significant portion of that house is part of a caucus that is ideologically rigid. I think Reid is good at the backroom deal, but I think the GOP came out ahead on this compromise. That's why Boehner said they got 98% of what they wanted on the thing.

 

[geauxtohell]

The greatest irony of the aftermath of the debt downgrade is that the Tea Party, and most notably Michele Bachmann, have claimed political victory on the matter. To listen to Congress Woman Bachmann, the downgrade was the result of "not cutting enough" and steadfastly refused to vote to raise debt ceiling. That's about 20% right. Upon reading the S&P report, it's clear that allowing August 2nd to pass without raising the debt would have led to a larger downgrade and unlike spending cuts (which can be further addressed at a later date), the debt ceiling had a hard deadline and once that boat sailed, it would have been too late to fix the mess.

[/url]

why didn't Fitch ( who has just re-affirmed our AAA Bond rating btw Fitch affirms U.S. at AAA, outlook stable - Yahoo! News)
and Moddys NOT downgrade us?

The Tea Party hasn't proven that it possesses the adult leadership necessary to work across the aisle to take the measures necessary to right our financial ship. Tell me again why these people need to be given the keys to the kingdom?

and who has proved they have the necessary were with all and maturity?

It seems to me the most powerful man in Dem. party right now is; Harry Reid- NOT Barak Obama. He was MIA and consigned himself to the fringes, popping in here and there, just where he wanted to be, leading from behind , ready to swoop in and take credit yet not to close to get dirty if it blew up.... so, I find it strange you mention 'leadership' without touching on the C in C etc. .

Yes...

Why is it that the left is more wrapped up in the "leadership" of a few reps in congress, but not at all interested in evaluating the perfomrance (or lack of it) of the senate majority leader?

Furthermore...I thought the Te Party was nothing more than a small group of irrlevant, unorganized, racists.

They are now the ones we should look to for leadership?

Hmmm......

I've never referred to the Tea Party as "racist".

Furthermore, the whole point of this thread is that I hope you don't look to them for leadership. They obviously don't possess the ability to comprehend the repercussions of their actions.

 

[geauxtohell]

S&P said if we didn't raise the debt ceiling, they would have lowered our credit rating to a D. The lowest of the low, even lower than Greece. Anyone who argued for us to not raise the debt ceiling and then point to the S&P downgrade as proof have no understanding of economics whatsoever.

Yes. Thank you. My point exactly. Something I hope that dumbass Bachmann will be hammered on.

 

[geauxtohell]

S&P also said those MBS's were solid investments.

Guess some people just dont learn.

If you're going to be consistent, I suppose you also believe that S&P should have not downgraded us?

No, but I find it curious that 2 other agencies one of which has just today re-affirmed our AAA bond rating, didn't and that S&P ( and they are all whores and I have said so in any event) was the only one of 3 to do so, yet they appear to be the presumptive go to experts....?

That's a larger issue that is beyond all of us. Frankly, if the S&P had to board their doors shut tomorrow, I'd be happy.

The point is, their opinion has weight and it obviously matters if you watched the market last week.

The damage is done.

 

[Oldstyle]

S&P said if we didn't raise the debt ceiling, they would have lowered our credit rating to a D. The lowest of the low, even lower than Greece. Anyone who argued for us to not raise the debt ceiling and then point to the S&P downgrade as proof have no understanding of economics whatsoever.

I'm sorry, Modbert but it's you that doesn't understand how the rating system works. First of all S&P wouldn't have lowered our credit rating to a D if we didn't raise the debt ceiling. They would have only done that if we defaulted on our bonds. That's an automatic thing. Since we had plenty of money coming in to cover paying our bond debts that was never an issue and anyone who tried to make it one was simply blowing smoke up your skirt.

The reason that we were downgraded was that S&P didn't think we had addressed our deficit spending problem adequately. They were looking for 4 trillion in deficit cuts...we did less than half that and those cuts aren't even specified, which led S&P to further warn that they might downgrade us even more if the proposed cuts weren't carried out by Congress.

 

[Oldstyle]

S&P said if we didn't raise the debt ceiling, they would have lowered our credit rating to a D. The lowest of the low, even lower than Greece. Anyone who argued for us to not raise the debt ceiling and then point to the S&P downgrade as proof have no understanding of economics whatsoever.

Yes. Thank you. My point exactly. Something I hope that dumbass Bachmann will be hammered on.

Come on Geaux! You try and pass yourself off as someone of intellect and then you agree with an absolutely idiotic and completely incorrect statement? Get it together...

 

[geauxtohell]

S&P said if we didn't raise the debt ceiling, they would have lowered our credit rating to a D. The lowest of the low, even lower than Greece. Anyone who argued for us to not raise the debt ceiling and then point to the S&P downgrade as proof have no understanding of economics whatsoever.

I'm sorry, Modbert but it's you that doesn't understand how the rating system works. First of all S&P wouldn't have lowered our credit rating to a D if we didn't raise the debt ceiling. They would have only done that if we defaulted on our bonds. That's an automatic thing. Since we had plenty of money coming in to cover paying our bond debts that was never an issue and anyone who tried to make it one was simply blowing smoke up your skirt.

The reason that we were downgraded was that S&P didn't think we had addressed our deficit spending problem adequately. They were looking for 4 trillion in deficit cuts...we did less than half that and those cuts aren't even specified, which led S&P to further warn that they might downgrade us even more if the proposed cuts weren't carried out by Congress.

They also wanted provisions for additional revenue. If you doubt that, you can search this thread for my post on it (use the search function) as I am tired of cutting and pasting the same blurbs from the report into threads for people who either haven't read the report, are functionally illiterate, or just dishonest.

As for the D, the ratings companies aren't gong to wait for us to default for them to downgrade for defaulting. They are in the business of predicting and mitigating risk. The whole "we would have defaulted we would not have defaulted" debate is asinine.

That's exactly what I mean when I say "playing financial chicken".

Would you have wanted to have found out the hard way in the first week of August that you were wrong?

 

[geauxtohell]

S&P said if we didn't raise the debt ceiling, they would have lowered our credit rating to a D. The lowest of the low, even lower than Greece. Anyone who argued for us to not raise the debt ceiling and then point to the S&P downgrade as proof have no understanding of economics whatsoever.

Yes. Thank you. My point exactly. Something I hope that dumbass Bachmann will be hammered on.

Come on Geaux! You try and pass yourself off as someone of intellect and then you agree with an absolutely idiotic and completely incorrect statement? Get it together...

Thanks for the Neg Rep. Between this highly intellectual post and that whooping -9 points, I really learned my lesson.