Who Are You Going to Believe on the 'Tea Party Downgrade?' Palin or Kerry?

Tuesday, August 9, 2011

Democrats like our senior United States senator, John F. Kerry, are "shamelessly cynical" and "dishonest" for blaming the Tea Party for Standard & Poor's downgrading of the country's credit rating from AAA to AA+. Those are Sarah Palin's words from a message posted on her Facebook page last night.

"Blaming the Tea Party for our credit downgrade," the former Republican candidate for vice president also said, "is akin to Nero blaming the Christians for burning Rome. Tea Party Americans weren't the ones 'fiddling' while our country's fiscal house was going up in smoke."

I wonder if ex-Alaska Governor Palin, before approving that message, actually read Standard & Poor's "research update" on the downgrade, which appeared Friday afternoon, August 5, under the title, "United States of America Long-Term Rating Lowered to 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative" ?

I've read that update, (it's only seven-and-a-half pages long), and it was clear to me that the prolonged impasse in the Congress over raising the debt ceiling, a quagmire designed and constructed by the new Tea Party Republicans in the House, was the main reason, but not the only reason, Standard and Poor's dropped the credit rating of the U.S. for the first time in history.

The downgrade alone will cost our nation -- and we its taxpayers -- billions of dollars more in longterm borrowing costs over the coming years, so Democrats are hardly out of line when they point to this irony: Tea Party Republicans wouldn't compromise with President Obama because they're opposed in their marrow to any tax increases, ever, regardless of how fabulously wealthy the taxpayers in question may be. By not compromising, they helped bring about the equivalent of a tax increase on Americans in every income bracket.

Don't take my word when I say Kerry is right and Palin is wrong. Consider instead these actual words from the Standard & Poor's research update:

"We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenue is less likely than we previously assumed, and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that the Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade...

"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...

"In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging...

"A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand."

"Prolonged controversy."

"Political brinksmanship"

"Less stable," "less effective" and "less predictable" governance and policy-making.

Debt ceilings and default threats used as "political bargaining chips."

Who brought those to the sausage-making party?

Consider also this: Senator Kerry and President Obama reacted to the credit rating downgrade by calling upon leaders of both parties to return immediately to the bargaining table and create a new, much more comprehensive fiscal consolidation plan that would address precisely the concerns raised in Standard & Poor's research update. This is the kind of "grand bargain" that President Obama and House Speaker John Boehner were close to reaching at one point, roughly two weeks before the debt limit deadline of August 2, but which Boehner was forced ultimately to disavow by Tea Party Republicans because it would have raised taxes on citizens earning more than quarter-of-a-million dollars a year.

As Kerry said this past Sunday on Meet The Press, "This is the Tea Party downgrade because a minority of people in the House of Representatives countered even the will of many Republicans in the United States Senate who were prepared to do a bigger deal, to do a $4.7 trillion, a $4 trillion (deal), have a mix of reductions and reforms in Social Security, Medicare, Medicaid, but also recognized that we needed to do some revenue."

In answering a question from Meet The Press host David Gregory, Kerry also said:

"I think this is one of the most telling, important moments in our country's history right now. We've had a fairly straightforward economic road throughout the 20th Century. But now, David, this poses a set of choices. It's not just about a recession, it's about a financial crisis and a structure of our economy, which really has been misallocating capital.

"We've had an enormous amount of capital going into arbitration over these last years -- phony deals, commissions, not creating jobs. And the real problem for our country is not the short-term debt. We can deal with that. It's the long-term debt. It's the structure of Social Security, Medicare, Medicaid measured against the demographics of our nation. That, then juxtaposed to the lack of jobs and job creation and growth.

"That's our problem, structural. And what we need is a Washington that stops this bickering, that gets rid of these hard positions that I noticed even in Speaker Boehner's comments about the downgrade, politicizing it in the sense that, you know, sort of blaming it on the Democrats and the lack of decision.

"Three times he (Obama) was refused that (grand bargain) deal because there were some people in the Republican Party, and Mitch McConnell even admitted this, who wanted to default. He said there were people in his party who are willing to shoot the hostage. In the end, they found that the hostage was worth ransoming.

"This is not about ransom. This is about our nation. It's about our country. It's about growth. It's about statesmanship. I know John McCain and many of his colleagues in the Senate are prepared to sit down and be serious about how we deal with this quickly because our nation's security, our nation's future, is at stake in an unprecedented way."

To Sarah Palin, that sounds like fiddling. To me, it sounds like a very sad friend trying to stop you from killing yourself.

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