This administration is quite fond of claiming every action as "historic". It is ridiculous, to be sure, but it's their habit. Today our nation's credit rating has been downgraded by Standard & Poor's for the first time in our history. We are no longer a nation with a AAA rating.
Now that's historic.
The following is a press release from Standard & Poor’s:
– We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.
– We have also removed both the short- and long-term ratings from CreditWatch negative.
– 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.
– More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
– Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.
– The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.
S&P admitted to a math error in its calculations - by about $2 Trillion. This will open the door to conspiracy theorists everywhere. They deserve it.
S&P dipped into playing politics and the results weren't too nifty. Our politicians are cowards, unwilling to make the tough calls necessary in entitlement spending and waste and fraud abuse within government spending. There is no doubt in my mind that now the Democrats will come out swinging for tax increases, feeling newly emboldened by this downgrade. Why? Because they don't get it. The $1 Trillion liberal spending experiment referred to as the Stimulus package failed magnificently. Now they only see tax increases as the solution, not spending cuts.
We are on the highway to hell, people. Prices are rising and a double dip back into another recession is predicted. The stock market suffered its biggest losses since 2008 numbers. The world is nervous.
It is not tax increases on the wealthy in this country that will pull us out of this mess. If the wealthiest were taxed at 100%, it wouldn't be enough money. Private business and opportunity provided by reduced regulations and tax breaks will do the heavy lifting. The Democrats have layered regulations and red tape on every industry in our country and it is a job killer.
Today I heard that approximately one in every seven Americans is on food stamps. It is the highest number ever. Incredible.
Now, that's historic.