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The Other Side of the Tracks blog by Word Press

Will Americans Remember Republicans?

The Other Side of the Tracks: A Socially Speaking commentary

August 9, 2011

By Perry Redd

We’ve learned a lot about the true face of America during the most recent debt ceiling debate.  We have learned that most Americans knew nothing much about the debt ceiling and more importantly, who the enemies of America truly are.  We learned that the Socialist Commies are not coming to destroy America.  We also learned that the poor people of America are not responsible for bankrupting the country.  The most pertinent thing we learned about the debt ceiling, is that Congressional Republicans will ruin our country’s reputation for their political gain at the expense of everyone else.

Credit rating agency Standard & Poor’s (S&P) on last week elected to downgrade the credit rating of the United States, stripping the world’s largest economy of its prized AAA status. They gave a well-defined reason for doing that.  Unfortunately, this debt ceiling rise was unwittingly tied to spending cuts…an idiotic proposition.  The House Republicans were hellbent on connecting one with the other to make their political promises reality—and thus, get themselves re-elected, as opposed to doing what’s best for the country.

The Republicans haven’t always been against increasing the federal debt ceiling. This is the first time in recent history (the past decade or so) that no Republican has voted for the increase. In fact, on most of the ten other votes to increase the federal debt limit that the Senate has taken since 1997, the Republicans provided the majority of the votes in favor.

This eventuality didn’t just creep up on us; this ship saw the iceberg from afar.  In July, S&P placed the United States’ rating on “CreditWatch with negative implications” as the debt ceiling debate devolved into partisan bickering.  I recall Treasury Secretary Geithner bringing that possibility up several times.  I admit, it sounded like fear-mongering at the time.  Then the President got the bullhorn and re-iterated that reality.  Finally, the leaders of the Republican House and Senate conceded as much.  But Republican Tea Party caucus members of the House played their brand of hardball and carried on their ultra partisanship until the very last minute.  Now, the country looks like a deadbeat.

Don’t get me wrong, in the immediate, this means nothing to black people, poor people, or people of color.  Most of us never had credit to be screaming about anyway.  Ours meant absolutely nothing to Standard & Poors or any of the other credit rating agencies.  What it does mean is that when America catches a cold, black people, poor people, people of color get the flu.

To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a “credible” plan to tackle the nation’s long-term debt. That plan—which Republicans try to claim the President didn’t have—included both spending cuts and tax hikes on the wealthiest Americans and corporations.  The Republicans drew their line in the sand and, like spoiled children, refused to negotiate a compromise that would’ve spared our coveted AAA credit rating.  Now, we’re screwed.

In its report Friday, S&P ruled that the U.S. fell short: “The downgrade reflects our opinion that the … 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.”

S&P also cited dysfunctional policymaking in Washington as a factor in the downgrade. This is the part that revealed to America who the enemies of America’s democratic government are: “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.”

A senior Obama administration official is calling Standard & Poor’s move to downgrade U.S. credit “a facts-be-damned decision,” saying the rating agency admitted to an error that inflated U.S. deficits by $2 trillion.  I’m mystified how the Administration is beating back the truth of S&P…and disappointed.  Funny how the S&P was right every time before now?  Come on guys, you gotta take the good with the bad…it is what it is!  Besides, it comes down on your side.

U.S. Treasury officials received S&P’s analysis Friday afternoon and alerted the agency to the error, said the administration official, who was not authorized to speak for attribution. The agency acknowledged the mistake, but said it was sticking with its decision to lower the U.S. rating from a top score of AAA to AA+.  What’s $2 trillion between friends?

The source also said S&P didn’t give enough credit for the debt-ceiling compromise, which paved the way for more than $2 trillion in spending cuts over the next 10 years. I’d say it did.  It took into account that congress waited until the very last minute—for political reasons.  This was unnecessary and amateurish.  Now, you have to pay the price.

However, one of S&P’s explicit criticisms of the compromise was that it didn’t address the biggest drivers of the nation’s debt — Social Security and Medicare — and didn’t allow for additional tax revenue. How simple an explanation is that?  Rating agencies — S&P, Moody’s and Fitch — analyze risk and give debt a “grade” that reflects the borrower’s ability to pay the underlying loans.

With all of that done, the real question is “will Americans remember the responsible parties come November 2012?”  The Republicans had an “America be damned” attitude when it came to raising the debt ceiling just a week ago.  Democrats better remind them…it matters.

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