Reuters’ Felix Salmon penned (sorry for the old-fashioned word) these words a half-hour before the S&P downgraded the U.S. debt rating:
. . . the US does not deserve a triple-A rating, and the reason has nothing whatsoever to do with its debt ratios. America’s ability to pay is neither here nor there: the problem is its willingness to pay. And there’s a serious constituency of powerful people in Congress who are perfectly willing and even eager to drive the US into default. The Tea Party is fully cognizant that it has been given a bazooka, and it’s just itching to pull the trigger. There’s no good reason to believe that won’t happen at some point.
Nowhere in S&P’s document does the phrase “Tea Party” appear. But what other group could S&P be talking about when they echo Salmon’s view with these words:
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. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.
The proponents of the “comprehensive fiscal consolidation program” included President Obama and Speaker Boehner. But that program never saw the light of day because the Speaker couldn’t muster enough votes for it among Republicans. The Tea Party Republicans opposed it and Boehner caved. The result: a fiscal consolidation program too weak to satisfy S&P.
It comes as no surprise that Republicans are already engaged in denial and obfuscation:
House Speaker John Boehner (R., Ohio) said the S&P decision was a response to a Washington spending binge that created economic uncertainty and threatened to send ‘`destructive ripple effects’’ through the credit markets. “Republicans remain committed to ensuring the United States always meets its obligations,” Mr. Boehner said in a statement. “Though we are outnumbered in Washington, we will continue to press Democrats to join us in taking meaningful steps to rein in our debt and deficits.”
Sen. Jim DeMint (R., S.C.), a tea party favorite, took a harder line, blaming government policies, from the rescue of Fannie Mae, Freddie Mac and Wall Street to the economic stimulus to this week’s passage of the debt-ceiling deal. To start down a new path, he said, President Barack Obama needs to dismiss Treasury Secretary Timothy Geithner. “The President should demand that Secretary Geithner resign and immediately replace him with someone who will help Washington focus on balancing our budget and allowing the private sector to create jobs,” he said. “Despite repeated warnings on our unsustainable debt, Secretary Geithner declared in April that the U.S. was at ‘no risk’ of being downgraded. For months he opposed all efforts to reduce the debt in return for a debt ceiling increase. His opposition to serious spending and debt reforms has been reckless and now the American people will pay the price.”
“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy,” Former Massachusetts Gov. Mitt Romney said in a statement. “Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating.”
Rep. Michele Bachmann echoed Romney in her statement, saying the downgrade reflects the president’s “failed economic policies.” “This president has destroyed the credit rating of the United States,” Bachmann said. Bachmann continued, “I call on the president to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with a list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”
Former Ambassador to China Jon Huntsman said the downgrade was a sign that Washington needed new leadership. “We need new leadership in Washington committed to fiscal responsibility, a balanced budget, and job-friendly policies to get America working again,” Huntsman said.
These and other members of the GOP are blaming the chickens for letting the fox into the chicken coop.
The blame for the sorry fiscal condition of the U.S. is shared by Democrats and Republicans. But the S&P downgrade didn’t happen because of the country’s massive indebtedness. It happened because of the inability of our political system to do what was necessary, in the rating agency’s view, to rectify the situation. That inability wasn’t the fault of the Democrats. The downgrade took place because the Tea Party wielded enough power within the Republican party to veto the Grand Bargain.
Are the American people to blame? They, after all, put Tea Party members into Congress. But they could hardly have known that their votes would later result in the loss of America’s triple-A credit rating. The Tea Partiers were sent to Congress in the hope that they could improve the job situation. Instead, the Tea Partiers’ intransigence will worsen the employment picture.
It remains to be seen whether those of our citizens who voted for Tea Party candidates in 2010 will recognize what went wrong and react accordingly in next year’s Congressional elections. One thing is certain: a blizzard of Republican soundbites designed to blot out reality. Less certain is how forcefully Democrats will counter the Republican propaganda.