Standard and Poor has just downgraded us to AA+ rating.
There will be a lot said and a lot of finger-pointing. I’ll have more to say later (I’m traveling). But this is simply the result of 11 uninterrupted years of fiscal recklessness capped by a knock-down drag-out blue-in-the-face fight over spending cuts that wouldn’t impress the most gullible subprime loan company.
We brought this on ourselves. All of us.
Update: It bears pointing out that S&P gave AAA ratings to mortgage-backed securities. So they may be out to lunch. But the refusal to budge on either entitlements or taxes is scaring the markets.
Update: What she said:
Well, frankly, I don’t blame Standard and Poor’s. And not because we didn’t make deeper cuts–we have lower debt loads and more favorable demographics than countries like France and the UK which still have their AAA. S&P is apparently telling us exactly what this is about: the frightening breakdown in our political system. Unless those reports turn out to be wrong, everything else is excuse-making.
That means that in order to make a plausible deal, both parties are going to have to hold hands and jump together . . . and yes, that’s right, GOP, I mean compromise. I mean higher taxes. I don’t like it. But I also don’t see any way around it. Any party that tries a unilateral solution will simply be removed from office the next time around.
The Democrats played their role, obviously, by going hysterical over even the most mild budget cuts. But keep this in mind: a large fraction of the Tea Party wanted us to not raise the debt ceiling at all.