August 9, 2011
What took the S&P downgrade so long?
After the downgrade of U.S. sovereign debt by the rating agency Standard and Poor's, there came a concerted effort to blame it all on the little old Tea Party. Sen. John Kerry, David Axelrod and other progressives went on the Sunday morning talk shows and railed about the "Tea Part Downgrade." Such "playing to the peanut gallery" is pathetic, simply because the Tea Party didn't get what it wants, which is immediate and substantial budget cuts. The budget cuts for FY2012 don't even amount to one percent of this year's spending. One percent would be $37B, give or take a billion. Democrats have also been smearing Standard and Poor's, and that does have some merit. The rating agencies missed the collapse of Enron, the real estate bubble, etc. What S&P should be criticized for is their criteria for rating U.S. debt. They wanted a $4T deal rather than the $2T deal Congress struck; they wanted some "grand bargain." But the main thing they should have been looking for were the cuts in...(Read Full Post)