Same planet but different worlds

As everyone knows by know S&P downgraded the U.S. debt rating after the debt ceiling was raised.

I then heard some pundits on the radio saying this was the fault of the Tea Party and Republicans. If they had raised the debt ceiling earlier instead of engaging in brinkmanship it would have happened. The increased interest rates the Federal government will now have to pay will cost U.S. taxpayers hundreds of dollars each year and taxpayers can “thank” the Tea Party for that.

The major news media gleefully repeats this line:

Former White House adviser David Axelrod on Sunday pinned responsibility for the recent U.S. economic downgrade on the Tea Party movement, arguing that the group’s political “brinksmanship” during debt ceiling negotiations “brought us to the brink of a default” — and that, subsequently, “this is essentially a Tea Party downgrade.”

WHAT?!!! Where are their layers of editorial oversight?

Did anyone bother to actually read what S&P said was their reason for the downgrade? It was right there in their press release (emphasis added):

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see “Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government’s other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

The rating was lowered because progress containing the growth in public spending is less likely that previous assumed. Who was it was trying to contain growth in public spending? Unless the media and the liberal politicians are living in a different world than I am that was the Tea Party. The Tea Party was not sufficiently effective in reducing spending so S&P downgraded the debt rating.

Thomas Sowell has it right. There is no point talking to them. These people are suffering from Peterson Syndrome. They do not have the mental tools to determine truth from falsity and with the pedal to the metal they are driving the U.S. into a financial abyss.

Invest in food, gold, silver, and copper jacketed lead.

Update: The Washington Times, although somewhat more obliquely, says the same thing.

Update2: WizardPc has a humorous take on it.


10 thoughts on “Same planet but different worlds

  1. As I read it, I think you misread it. They are saying that the controversy over all of it caused them, at least in part, to reach their decision. You left out the whole first part of the sentence you quoted and that is where they said it: “…because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that …” then your quoted part comes in.

    No matter who caused the controversy, the Tea Party, The Republicans, The Demoncrats, The Socialists, The Commies, there is controversy and S&P seeminngly believes that will greatly slow down or prevent improvement. There should be controversy though over the way our economy had been going, and over how to fix it because the way they had wanted to keep destroying our economy was terrible. I say screw S&P if they do not like controversy or a really beneficial fix rather than towing the old party line of the we don’t have it but have to spend it left leaning idiots, regardless of party, in government.

    Lets just kick start by telling the countries we owe to remember their debts to us after WWII and that we will handle our current debts as they did those. So we default on them – big deal! Life will go on and we will recover with hard work and tightening of the purse strings.

    All the best,

  2. The way I understand it is the controversy prevented them from actually doing something about the growing debt. If there had been no controversy and the debt ceiling merely raised by unanimous vote days earlier S&P will have still had a problem with it.

  3. I guess I’m a Dittohead because I read it exactly the same way Glenn did. They lowered the rating because of the “prolonged controversy.”

    Also, the section where they said “Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of GREATER POLICYMAKING UNCERTAINTY”

    When they wrote this: “we view the U.S. federal government’s other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged,” they wrote it because everything aside from “prolonged controversy” and “Policymaking uncertainty” is virtually the same.

    So yeah. It’s the Tea Party’s fault. The old Republican party knew better than to pull this sort of crap. People like Michelle Bachmann are clueless.

  4. Joe,

    The debt ceiling is raised to pay for things the government has already done. To NOT raise it would be like deciding not to pay your credit card bills after you’ve already charged them to the limit.

  5. Huh. I guess I was off by a political generation… I was expecting the halfwitted pro-debt morons in our country to blame Bush… I never would have guessed that they would be stupid enough to try to blame the Tea Party, when those folks have been against spending, against debt, and against increasing the debt from day one.

    Of course, looking at UBU’s comments, given how much trouble she has with the one sentence in the Second Amendment, I should not be surprised at how much trouble she is having with the one sentence description of why the S&P downgraded us…

  6. I find it amusing that people will claim that Joe omitted a quote from the S&P release, and then proceed to tell us what S&P means … by omitting the part that Joe did quote.

  7. Quoting from an S&P spokesman:

    Beers called the U.S. Treasury Department’s criticism of the credit rating agency’s analysis a “complete misrepresentation.” Even with the debt limit agreement passed by Congress, he said, “the underlying debt burden of the U.S. is rising and will continue to rise over the next decade.”

  8. S&P complained about the “controversy.” You know, the normal state of affairs when compromise is demanded. Unfortunately for the ruling class, for once, compromise did not mean “do it the Democrat way.” THAT is the whole controversy. However, S&P also stated that the inability of Congress to address the long term debt, as demonstrated by the actual deal, was a primary reason for the downgrade.

    I’ve had liberals demand that the TP get blamed for their demand for cuts and voting no on bills, refusing to compromise. Then, said liberal also stated that the ceiling should have been raised automatically, that it was “too important” to screw around with.

    So…she got the compromise in time. And the downgrade occurred.
    The justification was the inability to cut spending.
    Said liberal’s original desire for a “clean debt ceiling raise” would have not affected spending at all except to exacerbate out of control spending. And the downgrade would have happened.

    This has been spelled out in detail to her.

    “I’m still blaming the Tea Party for putting party over country. It’s all their fault because of their stand on ideology and refusal to compromise.”

    There’s no chance in getting these liberals to do anything else but blame conservatives.

  9. To be fair, what I read is that S&P would have been happy to see spending cut or taxes raised, or any combination that controlled the growth in indebtedness.

    It didn’t happen. They downgraded.

  10. I read it as Roberta X read it as well, and I know from the arguments made before the deal was made that the Leftists considered even 1% cut in present indebtedness to be ending civilization, and they wanted the entire deficit made up in tax increases, with the possible exception of the out-year deficits which could be penciled in now as decreases in the rate of increase if the people in power then want to honor that decrease.
    Such “jam tomorrow” accounting reminds me of Eddie Murphy’s characterization of net percentage points when negotiating one’s share of movie profits as “monkey points”.

    For once the side that wanted real debt and deficit reduction tried to not settle for monkey points, and in addition to having to settle for some monkey points, they got blamed for the downgrade and called terrorists, too.

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