In the wake of Standard & Poor’s decision to downgrade the United States government’s credit rating from AAA to AA+, a number of commentators on the left are directing most of the blame not at high levels of government spending, and not even at tax rates they would like to increase, but at the ratings agency itself. Since S&P made enormous mistakes in rating securities backed by subprime mortgages prior to the economic meltdown, they argue, the ratings agency has no right to judge the U.S. government today.
“These are some of the people who have the worst records of incompetence and irresponsibility around,” top House Democrat Rep. Barney Frank told MSNBC. S&P analysts, Frank continued, are “trying to justify their reputation” by being tough on the U.S. An unnamed White House official, quoted by CNBC, called S&P’s performance “amateur hour” and cited a $2 trillion math mistake made in an earlier S&P assessment. Another anonymous administration official added: “A judgment flawed by a $2 trillion error speaks for itself.”
Farther along on the left, the New York Times columnist Paul Krugman called the downgrade “an outrage” and accused S&P of “just making stuff up.” “After the mortgage debacle,” Krugman said, “they really don’t have that right.” Later, Krugman approvingly passed along a tweet from the lefty blogger Atrios, who wrote of S&P: “Apparently we’re supposed to care about what some idiots at some corrupt organization think about anything.”
There’s no doubt that S&P’s rationale for the downgrade is subjective; much of the report reads like political punditry. On the other hand, S&P’s assessment is based on a reasonable reading of trends in deficit spending that even administration officials admit are unsustainable. The bottom line of the report seems to be this: S&P’s analysts doubt that all of the spending cuts in the recent debt-ceiling deal will actually take effect. And even if all those cuts do take effect, they would not be enough for the credit agency to restore the U.S. to its former AAA rating. And even if the Bush tax cuts on higher earners were allowed to expire, that would not be enough for a restored AAA rating without more spending cuts and taxes. And if none of the second round of cuts built into the debt deal actually occur, the U.S. rating could fall again to AA.
S&P donated exclusively to democrats in the last election, so for them to now ridicule them is a big mistake.
Didn’t Barney Frank said just in case the rating get’s downgraded to just ignore them?! So what is all the indignation about now that it really happen?
And Mr. Frank would know, having one of the worst records of incompetence and irresponsibility in Congress.
And Mr. Krugman would know, as he is a highly accomplished story teller for the NYT.
No junkie likes to hear the dreaded words “You got a serious problem, and we are cutting you off. It’s cold turkey time for you!” The S&P should have cut us off years ago, along with the rest of the credit rating agencies. So now we are going to expect the hardcore money junkies that got us in this mess to get us out. Oh! I forgot! The Secret Super Committiee will save us! This would all be so darn funny, it if was not so serious. But just like junkies our politicians are the victims. How dare anyone else judge them, and their dysfunctional behaviors! Maybe between now and 2012 when things have fallen apart even more, more Americans will wake up and we can throw all the bums out. And send average and ordinary Americans to DC, and end the careers of the Professional Politician of whom some citizens think that we can’t live without.
Gary G. Swenchonis, well said, as usual, on the dot;
I wonder if we elect the majority of TEA PARTY ON EVERY CORNER OF THE WHITE HOUSE,
HOW INTERESTING AMERICA would become and how interested AMERICANS WOULD LISTEN TO THE TRUTH THEY YEARNED TO TO DO,
HECK ALL the WORLD would be listening to THE TEA PARTY, WHILE THEY DRINK THEIR TEA IN ENGLAND ALSO TO LEARN NEW WAYS TO BE THE RIGHT PARTY FOR THE BENEFIT OF HAVING A HAPPY NATION WHICH HAVE A JOB TO BE PROUD OF, A NATION OF THOSE CREATORS OF GOODIES THAT WILL GET US STRONG AGAINST THE HATERS, A NATION OF COMPANIES WHO WOULD BE HAPPY TO COME BACK AND PROVIDE THE ELEMENTS THAT ALL NEEDS MADE IN AMERICA.
A NATION THAT WALK TALL AND PROUD TO PRAY GOD AND RECITE THE CONSTITUTION
IN SCHOOL WITH THE TEACHER STANDING IN FRONT OF THE FLAG ,THE ONE AMERICA HAS
CARRIED SO RESPECTFULLY DURING THE CENTURY.
@ilovebeeswarzone: Bee I wish and hope for what you wrote! But unfortunately there are still some Americans who will keep electing the same politicians who got us in this mess. But if the economy continues to worsen, and more Americans keep losing their jobs, their savings, paying more money on their credit cards, loans, homes, etc…. then maybe those Americans will wake up and go to the polls like they did for old Ronnie back in 1980. Lets hope so before we start to see even worse economic woes, and before more people are suffering as our leaders all live like Kings and Queens and keep partying with money that we no longer have.