S&P didn’t base its downgrade on a change in the U.S. fiscal and economic outlook. It based it on the political game of chicken over the debt ceiling, a game that Republicans initiated and pushed to the limit, and on a growing gloom about the partisan deadlock. Part of S&P’s gloom, moreover, stemmed explicitly from what a new assessment of the GOP’s ability to block any and all tax increases.
S&P was remarkably blunt that its downgrade was mostly about heightened political risks: “The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed,” it said.
“The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy … as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.”
In previous projections, it said, its “base case scenario” had assumed that Bush tax cuts for the wealthy would expire at the end of 2012, while tax cuts for families earning less than $250,000 a year would be extended. That, it said, would have reduced deficits about $950 billion over ten years.
But the new S&P base case assumes that Congress extends all the Bush tax cuts. “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,” S&P said.
This is the tea party effect, and the tea party downgrade.
No matter how obvious the cause of the downgrade was, the White House encouraged the Tea Party by not “waging war” on them. This only emboldens the political bullies, and why conservatives have moved so far right. No one is there to say “no.” In fact, no is still not the Democratic response, and should be:
Democrats over the weekend were quick to pin the U.S. credit downgrade by Standard & Poor's on the tea party, labeling it the "tea party downgrade." But the administration on Monday toed a softer line -- avoiding waging war against the caucus of conservative Republicans.
So, are you going to take up arms against them? Are you going to help escort them to the death camps?
ReplyDeleteAre they less human than you?
Have you no decency?
I don't think so.
Listen to yourself, who would think like that. Really, that's just odd.
ReplyDeleteMy point was that they don't have a clue, and shouldn't be taken seriously.
Projection again. Is this something you would think of doing to your enemy liberals? Yes.