S&P verdict… Tea Party found innocent, Obama and both Congressional parties guilty

Flopping Aces ^ | 08-06-11 | Mataharley

[Starman417]

Late yesterday, the judge (the S&P) issued a verdict on the status of the case involving the US economy, and exonerating the accused defendants (the Tea Party) of all charges leveled by the plaintiffs (the WH, both parties of Congress, and the media). Said accusations? That any repercussions of the debt ceilings debate - aka national credit ratings, general Armageddon, and all ensuing fallout - were primarily the responsibility … aka *blame*… of the grassroots, unorganized and unofficial movement referred to, generically, as the "Tea Party". These accusations, without founding in any logical other than political demonization, were based on supposed influence on Congressional members, attempting to use the need for a debt ceiling increase, as the correct moment for also negotiating a path to fiscal responsibility.

Needless to say, fiscally minded tea party types were not rewarded with any action by Congress to control spending… gifted with only a patchwork promise to spend $2 trillion less than the projected $9 trillion over the next decade. So it becomes the height of irony that anyone can suggest the tea party had any significant effect on the negotiations. Instead, it came down to the age old party battles… the Dems wanting to raise taxes and ignore Medicare and Social Security reform, and the GOP wanting to cut spending, not raise taxes, and also ignore Medicare and Social Security reform.

Neither of these positions accurately reflect the Tea Party's insistence that we can no longer ignore the entitlements, that no amount of tax increases will muster up to snuff for continued Congressional spending, and that attempting to draw more blood from the taxpayer turnips in this recession is foolhardy. Additionally, fiscal conservatives are fully aware that the size of government… hopefully worthless and effectual thousands of federal agencies and not our Constitutionally mandated military… needed to be reduced in size, streamlined in efficiency, or just outright eliminated.

Were any of these points even acknowledged, let alone addressed, in the political farce that played out before our eyes these past weeks? Of course not. And perhaps the one plan that may have had a shot at achieving what was necessary - the Connie Mack "Penny Plan" - has received little press or attention from the bigwigs who hold the nation's fate in their less than adept hands. A plan that even liberal Lanny Davis said was worthy of a another look.

Unlike our current debt ceiling system, it's very responsible in the process to consider budget when raising the national credit card limit. And the US debt ceiling process is unusual compared to other developed countries, "…since the U.S. debt ceiling process moves independently of the general budgeting process."

That the authority to borrow remains so disconnected to budgetary constraints and considerations, as well as economic growth, in America is, IMHO, seriously flawed in and of itself. Other countries address their debt ceilings in ways that draw more attention to out of control fiscal spending. But the American way is, in some ways, backwards. First Congress spends, then ups the debt ceiling to pay for their spending….

As a Feb 2011 GAO study on the US debt ceiling, as compared to other nations process, notes:

The United States is unusual among the countries we reviewed in using the authorization of additional borrowing authority as an occasion to draw attention to past fiscal policy decisions. Other countries that we reviewed generally use fiscal rules or targets to increase attention to or control over fiscal policy decisions that lead to an increase in debt. Fiscal rules generally refer to permanent or multiyear constraints on fiscal policy through simple numerical limits on budgetary aggregates. For example, Switzerland has adopted a constitutional “debt brake” that places a limit on expenditures that is equal to the expected revenue for the year adjusted to reflect the country’s place in the current business cycle. Differences between estimated and actual numbers are recorded in a separate account that must by law be reduced if it reaches a certain level. Germany has adopted a “golden rule” limiting net borrowing to the amount of investment spending. Germany also approved a constitutional amendment in 2009 requiring that structural deficits not exceed 0.35 percent of gross domestic product (GDP)—or very close to balance.

~~~

The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay bills incurred. The decisions that create the need to borrow are made separately from—and generally earlier than—the decision about the debt limit. Debates surrounding the debt limit may raise awareness about the federal government’s current debt trajectory and also provide Congress with an opportunity to debate the fiscal policy decisions driving that trajectory. However, since this debate generally occurs after tax and spending decisions have been enacted into law, Congress has a narrower range of options to effect an immediate change to fiscal policy decisions and hence to federal debt.

Aside from this disconnect between spending first, then increasing the national credit card limit, it was also disingenuous of any of the negotiating parties… Obama, or either party leaders in Congress… to assume confidence that raising the debt ceiling, without considering the out of control spending, would be sufficient to maintain a good credit rating by the global agencies.

As I had mentioned in my July 14th rant against this political farce the WH and both political parties were subjecting us to, our national credit ratings were never based just on whether a debt ceiling was raised, but what measures the elected ones were going to take to get the out of control spending and debt under control down line.

Even Moody's had warned the WH and Congress that the credit ratings outlook did not rest solely on simply raising the debt ceiling. Therefore it was no surprise to anyone paying attention that the Standard & Poor rating agency, as predicted, lowered the US credit rating from AAA to AA+ on Friday. Apparently, the only ones *not* paying attention were those with the power to negotiate.

[FlingWingFlyer]

The country has been headed towards a downgrade since Barry’s ass was “elected” in 2008 and he decided he was going to “fundamentally transform” the country by “spreading the wealth around”. You’ve got to be doing a lot of recreational drugs to try to blame it on the Tea Party.

[whitedog57]

The Tea Party simply wants to stop the insanity. Since 2007 when the Dems took control of Congress and 2009 when they had a two year period of Obama/Dems transforming the economy through wealth redistribution, the evidence is clear: Gov’t went wild!

http://confoundedinterest.wordpress.com/

Look at unemployment, spending, debt increased and how consumer spending has declined. This is so sad.

[Beowulf9]

“United States of America Long-Term Rating Lowered To ‘AA”

Obama ~ ‘Present’

[Attention Surplus Disorder]

We’re a nation consumed with blaming some other entity when things go to crap. It’s like being in 3rd grade. And it goes all the way to the top of this dirtbag administration.

[tcrlaf]

Unfortunately, you are going to have to explain the to the American Media, who are gleefully shouting “TEA PARTY DOWNGRADE!!!”, as loud as they can, while completely ignoring that it was the DEMOCRATS unwillingness to compromise on ANYTHING that got us in to this mess.

Democrats are more interesting DEFLECTING BLAME away from Obama, than they are in actually finding a solution for American Citizens.

S&P is right, there is NO solution in sight, with the wide divide we currently face, and Republicans in Washington afraid to stand on principle in the face of the liberal left media.