This is one of the most important messages for us to repeat until people get it.
Liberals treat raising the debt limit as if, with the stroke of a pen, we can simply authorize ourselves to spend and spend and spend more money than we have.
That’s not true.
An average citizen can, by connivance or dopey decisions by a credit card company, raise his own credit card limit or take new mortgages on his house; but just as with that average citizen, there may be very severe consequences later for living outside of one’s means.
That is, there is the arbitrary, pen-stroke raising of the debt limit.
And then there is the real credit-worthiness of a person or entity like the US, which is determined by its debt-to-revenue ratio.
Our current debt-to-revenue ratio is, in economic terms, totally fucked.
The President and his allies in the media wish to pretend these credit rating warnings are only about the risk of default due to a failure to raise the debt limit.
They’re not, as S&P makes clear:
A 50 percent likelihood that the U.S. will lose its top credit rating from Standard & Poor’s even if Congress reaches agreement on raising the debt ceiling left markets little changed.“I don’t know if anyone is taking the situation seriously at the moment,” said Marchel Alexandrovich, an economist at Jefferies International Ltd. in London. “It’s seen as a bit of a hollow threat.”
…
The U.S. will lose the AAA credit rating it has held since 1941 if New York-based S&P finds that a “credible solution” to the nation’s rising debt burden isn’t likely for the foreseeable future, the firm said yesterday. Borrowing will continue to rise unless a $4 trillion fiscal consolidation plan is agreed on, S&P said.
S&P and Moody’s are a joke. They didn’t see the bullshit that passed as “secured equities” and how toxic they were.
There is the real rating of the USG: Junk.