A few months ago, Treasury Secretary Timothy Geithner predicted with unshakable confidence that there was “no risk” of a downgrade of U.S. debt. In fact, he argued, “things are better than they’ve been if you want to think about the prospects for improving our long-term fiscal position.”
In his self-assured cluelessness, Geithner reflected the president he serves. Upon taking office, Pres. Barack Obama gravely misread the historic moment. He has brought us to a dangerous pass where a few slips — another sharp recession, a spike in interest rates — could bring on another terrifying economic crisis. To borrow his own put-down of Congress during the debt-ceiling fight, he’s an AA+ president of an AAA country.
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Financial crises like that of 2008 always create vast overhangs of debt, but Obama believed he should heedlessly add more. And he’s never once “pivoted” to responsibility.
In February, six months before the downgrade, Obama offered a budget that increased spending and the debt. After ten years, the deficit still would have been more than $1 trillion. In April, four months before the downgrade, Obama delivered a gimmicky budget speech with no specifics. On April 11, just seven days before S&P assigned a negative outlook to our AAA rating, White House press secretary Jay Carney said the president wanted a debt-ceiling increase with no deficit reduction whatsoever.
Now that the downgrade is upon us, the administration is lashing out. It reeks of desperation and blame-shifting, but, hey, this is the way the game is played down at AA+.
Geithner scolded S&P: “They’ve handled themselves very poorly. And they’ve shown a stunning lack of knowledge about the basic U.S. fiscal budget math.” His huffiness is badly misplaced. Whatever S&P’s failings, it’s not under the misimpression that it’s okay to spend 40 percent more than you take in, which is the basic error in “budget math” of Geithner’s boss.
S&P had barely acted before every Democratic henchman hilariously deemed it “the tea-party downgrade.” S&P does complain about “political brinksmanship” in Washington. But what does it expect in a divided government? We had blissfully united government for two years in 2009–10, and it gave us a historic spending blowout vastly more irresponsible than the debt-ceiling deal.
The denial runs so deep on the left that MSNBC host Rachel Maddow insisted on Meet the Press that S&P downgraded us “not because there’s too much debt, but rather that Washington is not working.” If there weren’t such a huge and growing debt load, though, Washington’s fiscal squabbles wouldn’t be so momentous. As S&P notes, “the trajectory of the U.S.’s net public debt is diverging” from that of our former peers among AAA countries.
The reason is fundamentally political — “elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. debt burden.” Tea-partying House Republicans don’t suffer from this endemic deficiency. The Ryan budget undertook precisely the containment of entitlements that, S&P says, “we and most other independent observers regard as key to long-term fiscal sustainability.”
It’s President Obama who is “wary” to reveal his secret plan to control entitlements as part of the aborted “Grand Bargain.” As the president of a country that has just suffered a humiliating rebuke for its inability to deal frankly with entitlements, it’s now time for him to show his hand with concrete, detailed proposals. If Obama favors significant entitlement savings in private, it’s his duty to favor them in public.
To this point, Obama has put ideology and cute partisan games above the national interest in leadership worthy of AA+. He thought he could spend as much as possible in his first two years, and a favorable business cycle and rhetorical repositioning would bail him out before 2012. He didn’t count on reality having different plans.
Now, S&P has blown the whistle. Like all political malefactors, the administration isn’t sorry for what it did; it’s sorry it got caught.
This is what happens when you elect a totally unqualified man for president of the worlds most powerful nation, and whose sole job before going to congress was community organizer.
More horrible mistakes await if he isn't sent home after his pathetic first term.
The Dow dropped 200 points as President Obama spoke. Does any reasonable person need more proof that he and his confidence-crushing fiscal policies, not the Tea Party's demand for fiscal restraint, are responsible for the horrific economy? This day has been coming for decades and to blame the result of Washington's blind eye to unsustainable debt on a group of Americans who demand that something be done about it only makes things worse. It is now clear to the world that the political party that owns two-thirds of the legislative process in the United States of America, as well as the power and influence of the Oval Office, doesn't have a clue what's broken or how to fix it.
When in basic training in the Army, our platoon had a drill sergeant that would tell us to do something and if we didn't do it correctly that "he had a secret". Every time I hear "The One" say he has a plan, it reminds of the drill sergeant. After 8 weeks, we finally figured out it was just a disguise for nothing at all. Until "The One" produces his "plan", it is also a disguise for nothing at all. How about it Mr. President? Do you have a plan?
S & P is just a ratings agency and does not deserve the degree of respect it seems to command.
ObamAA+ is deliberately trying to bring our economy to its knees; our chief executive is surely executing our country. He only knows one thing: how to spout class warfare rhetoric; almost every action he is taken as president has certainly transformed our country-for the worse, not for the better.
The Tea Party deserves credit for being the only sane force in our federal government.
The stock market also contracted 6.66 percent in value. O My O My. that number. Barackolypse or Obamageddon?
Rev 13:17
And that no man might buy or sell, save he that had the mark
I don't know whether to laugh or cry when I hear the Left argue that "gridlock" is the reason the ratings downgrade, as if political unanimity in an agreement to add even more mountains of debt would have made S&P think better of us.
Let me know when you're ready to raise taxes on the rich. Obama's already let you know we're ready to raise the Medicaid eligibility age to 67. You see him, he'll raise you. And that's what you're afraid of.
Ryan's plan already did many things with Medicare - but he had no takers in the White House.
Boehner gave Obama 800B in revenue increases before the One balked and decided he needed 400B more because he thought he had a focus group approved message that would split the GOP. No sir - I realize a liberal sees the world differently, and for many reasons, but there is no partner in the white house to deal with. He is a game player. He just got his result.
Let me know when you are ready to raise taxes on the poor. Let's say we raise their rates to 5%, or heck, even 1% instead of the -35% they currently pay. It is quite simple really, you just can't get a bigger tax return than what you paid in taxes. If you paid $1500 in taxes you don't get a $4500 tax return. To give everybody a little skin in the game, if you paid $1500 in taxes, the most you can get in a tax return is $1495.
Who controlled House, Senate & White House from 09-10? In fact, who extended the "Bush tax cuts" in December '10 without so much as a wimper?
The Junk Bond President has no interest in addressing debt or deficit issues. He does dream of bludgeoning the GOP with taxes as an election issue. But when he had his coveted "Parliamentary Control" in 09 and 10 he spent all his political capital on Cash for Caulkers, Arabic Science Self Esteem and a sop to the health insurance companies (yeah, they endorsed Obamacare, wonder why?).
If I were a leftist, I'd be disappointed at his weak leadership too.
You need to get out more and read - of course since the One has never actually released a plan, I realize that might be difficult.
All he wanted was a clean debt increase - or have you forgotten that? Would that have cost the DOW 1000 points? 2000 points? WOuld have hated to give him what he really wanted.
Mike B--Of course he wanted to raise taxes on $250K+, because they have his money!! And that 250K is the standard leftist bait and switch tactic--the taxes will end up hitting everyone down to whatever level they can manage to stuff in the legislation passed under cover of darkness.
The hard left statists today, of which Obama is a classic example, believe that all the dollars in the economy belong to them, and therefore to the state. We work to serve them and provide the dollars to fund the programs that let them take care of us, the poor unwashed.
So, in an economy where people are out of work and just making ends meet, the answer is to take more of their money and send it to the political class in Washington? Brilliant!!
More taxes does NOT fix this problem, it only postpones it. The real problem is that most of the tax money is going down the shredder of entitlements and debt service, and these things buy us nothing. We can feed the shredder all we want, but it won't stop demanding more. At this point we are like the Europeans during WWI feeding their youngest and brightest into the death machine. They had the US to come and rescue them--there is no one to rescue us, we have to do it ourselves.
So, stop talking about taking other people's money to feed it down the maw of the government, and start talking about making that maw a lot smaller--it's the only way to get out of this.
..."they’ve shown a stunning lack of knowledge about the basic U.S. fiscal budget math.”
Translation: They don't understand Washington math. I don't blame them. Washington is the one place of which I know that a spending increase counts as a spending cut.
Mike B: There isn't enough money in the $250,000 per year class to pay the Obama deficits even if he took it all. The simple reason, there aren't enough people at that income class. The hard truth is that if you wan to raise taxes to balance the budget, you must raise middle class taxes.
Stop with the "tax the rich and all will be well" fantasy. Every time it's been tried in our history it has failed.
As S&P pointed out, its the debt (spending) that's the problem. And as the IMF has noted, you'd need tax rates of 88% to fund our entitlements "as we know them".
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