The Left Blames the Tea Party, the Right Blames the Progressives. Who is really to blame for the credit downgrade? by Rachel Lynn Robinson
(libertarian)
Saturday, August 20, 2011
According to Bud Rickett of the Mansfield News Journal, the Tea Party should not be blamed for the current downgrade from Standard and Poor’s because the Tea Party backed Cap-and-Balance was the only debt deal compromise offered up that met the S&P’s requirements.
The Standard and Poor’s statement for why they downgraded the credit rating: "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics." Does that mean that Standard and Poor would have preferred the deal that the Tea Party members of congress recommended?
It is open to interpretation since nowhere in the statement does the S&P mention raising taxes as a way to maintain the credit rating. According to CSNEWS; "Blaming the Tea Party for the downgrade is like blaming the Betty Ford Clinic for alcoholism. Moreover, the only legislation that would have met the spending-restraint criteria necessary to avert a downgrade was the Cut-Cap-Balance proposal. It included $5.8 trillion in cuts, easily more than what Standard and Poor's required. But President Obama vowed not to sign it, and the Senate Democrats — here we go again with the Kerry hypocrisy — refused to consider it." So if Standard and Poor’s was wanting larger cuts in spending then the deal that the President and congress finally agreed too, then it would appear that Mr. Rickett got it right. The Tea Party is not to blame for the downgrade, they had the answer yet our spendthrift President and Congress in their rush to spend taxpayer money and spend us into an even deeper debt managed to downgrade the credit rating. Then in typical democrat fashion, rather than admit that their ill planned decision caused this fate they blame the Tea Party. The Tea Party that barely holds a minority of the seats somehow managed to force a downgrade by not wanting taxes raised.
Supporters of the Tea Party are fighting back, including creating a website called The Obama Downgrade, which suggests that the first ever credit down grade falls directly on his shoulders. Matt Kibbe of Freedom works suggests that Obama is at least partially to blame since he did not even present a debt proposal for Congress to consider.
While there is certainly enough blame to go around, we need to stop looking for who caused the downgrade and start working on fixing the problem, and not with secret meetings. Congress needs to get back to work, they know how to fix this, so does President Obama and it is not by spending more money.
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Posted By: Bill Gee
Date: August 22, 2011 07:30:39 AM
Calling the S&P downgrade the "Tea Party Downgrade" or the "Obama Downgrade" are both wrong. If you carefully review the S&P Report, which I have as part of my job, you will see that the primary reason for the downgrade is that certain economic fundamentals are not being met in order to ensure the long-term health of the economy. Namely, the fact that the Debt to GDP ratio is rapidly approaching an unsustainable level. They also sited the fact that the stalemate over the debt ceiling debate is likely to get worse prior to November 2012, not better. That is because Congress contains an extremely polarized political climate that is unable to seek compromise, no matter how dire the consequences.
I have also read the reports from Moody's and Fitch. How strange it was that they were so critical of the US debt situation prior to S&P's downgrade and how forgiving they became afterward. My only guess is that the White House lobbied very hard to those other two agencies to prevent them from following S&P's example. We already know that the White House lobbied very hard with S&P prior to the downgrade and managed to convince them to wait until after Friday, August 5th's market close in order to minimize the damage. Then they did their very best to shoot the messenger! Their argument likely hinged on the fact that the Administration believes that if all three agencies lowered their ratings the econonmic instability it would cause would actually increase the liklihood of default. Therefore, in the interest of economic stability, Moody's and Fitch are holding pat.
So I wish that the Democrats would stop blaming the Tea Party and I'd wish that the Tea Party would stop blaming the White House for this situation. This whole thing started decades ago and now that the chickens have come home to roost all you can do except clean out the barn is to blame each other for the fact that the place smells like chicken s***.
