Debt Ceiling: Anything But Spending Cuts

Some pundits say that it is all but certain that the major credit rating agencies (Moody's, and Standard and Poor's) will soon downgrade U.S. sovereign debt. For months, we've been told that such a downgrade would be calamitous, that interest rates would soar and that it would throw us back into recession and make 2008 look like a picnic. But the ratings agencies don't care about next year's election and whether Congress will have to revisit the debt ceiling issue in the middle of campaigns. The agencies only care about our credit worthiness. President Obama's campaign timetable has nothing to do with that. Yet, raising the debt ceiling enough to get us past the election seems to be the main consideration for Democrats. So America is looking straight into the maw of an unprecedented credit downgrade, and all that comes with it, merely because of the political calendar and the fortunes of the party that got us into the mess in the first place. The Democrats obviously have higher...(Read Full Post)