geauxtohell
Choose your weapon.
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.
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:
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?
*
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?
*
Read more: Obama Announces Debt-Reduction Deal Approved by Senate, House Leaders - FoxNews.comHouse 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."