“Standard And Poors Blames U.S. Credit Rating Reduction On Republicans.”
The title above may upset some conservatives and of course those who consider themselves Republican, but it’s true. Standard And Poors, or if you like Standard & Poors – in ether case, the rating agency that assigns a grade for the long-term debt of nations – downgraded the United States’ long term debt to AA+ from AAA for the first time in history, and proved in the process that Tea Party Republicans don’t understand Macroeconomics.
This is what S&P wrote in its press release announcing the action on August 5, 2011:
The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction–independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners (my emphasis)–lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government’s debt dynamics, the long-term rating could stabilize at ‘AA+’.
……Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise
revenues, a position we believe Congress reinforced by passing the act.
In other words, the “Debt Limit Bill” or the “Budget Act of 2011” should have explicitly called for an elimination of the Bush-era tax cuts, but did not. The other problem is that President Obama didn’t use the 14th Amendment to override Republican actions because some on his staff believed he didn’t have the power to do so.
But the fact is, President Obama should not be in the position of having to protect the American Economy from elected officials who should know better. But, because of the outcome of the midterm elections, where many people who voted Democrat in 2008 sat it out, we’re here.
Now, those same people are complaining. You can’t moan about an economic situation if you’re not willing to take action to change it. It’s clear that we have a set of people in both houses of Congress who are completely without any idea of how their own economy works.
Kentucky Senator Rand Paul is one of those people. Senator Paul never once called for tax increased, instead only focusing on spending cuts. He cries for a balanced budget and a balanced approach, but in reality is doing NOTHING to support one.
Senator Rand Paul is to blame for helping support the idea of a non-balanced approach and saying at one point we didn’t need to increase the debt ceiling. Mr. Paul hilariously calls for Treasury Secretary Tim Geithner to resign, but if that’s the case, Paul should step down too.
Stay tuned.
Bill Carroll