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August 06, 2011 10:00 AM What hath the GOP wrought

By Steve Benen

Standard & Poor’s dubious credibility notwithstanding, there’s no great mystery as to how we arrived at last night’s downgrade announcement.

Ordinarily, a downgrade has a fairly specific meaning: it refers to an institution that may struggle to pay its bills. No one seriously doubts whether the United States, the single wealthiest country on the planet by a large margin, will have the financial resources available to pay its bills, but the question under consideration is whether our political system will undermine our ability to be responsible.

And that’s really what the S&P announcement boils down to. This was a condemnation of American politics, not American finances. One would like to think the ratings agency used some kind of economic/fiscal/monetary measurements, applying a rigorous a test to draw an objective conclusion. In reality, however, Standard & Poor’s “is just making stuff up.”

For the conservatives celebrating this morning — I vaguely recall a time those rooting against the United States saw their patriotism called into question — it might be worthwhile to take a close look at the Standard & Poor’s report. Judd Legum highlighted some of the key takeaways from the S&P analysis:

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. […]

It appears that for now, new revenues have dropped down on the menu of policy options. […]

The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them. […]

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

It’s only fair to note that the same analysis pressed Democrats on the need to consider entitlement changes, but in reality, Democrats did put entitlements on the negotiating table, only to discover that Republicans would refuse to compromise.

The downgrade, in other words, was the direct result of Republicans playing a hopelessly insane game with the full faith and credit of the United States, and then refusing to consider even a penny of tax increases on anyone at any time. Worse, GOP leaders have spent the week boasting of their intention to do all of this again, for as long into the future as they can.

Americans elected lunatics to help run Congress; they launched a reckless scheme; and now they appear to have sabotaged our fiscal credibility and standing.

The 2010 midterms are proving to be one of the most dramatic national mistakes in generations.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

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  • DAY on August 06, 2011 10:11 AM:

    To paraphrase Trent Lott, "If only we had prayer in schools, all this could have been avoided."

  • Ronald on August 06, 2011 10:14 AM:

    Republicans want to destroy this Country It's time THEIR patriotism is called into question. Disgusting. Why do they hate Americans so much?

  • SW on August 06, 2011 10:14 AM:

    So why own why isn't the administration making the case in those terms? Not doing so amounts to political malpractice!

  • c u n d gulag on August 06, 2011 10:16 AM:

    "The 2010 midterms are proving to be one of the most dramatic national mistakes in generations."

    And with the stupid/ignorant/misinformed voters out there, I think we'll compound that mistake in 2012.

    Thanks to Banana's Republicans for the last 30+ years, we are well on our way to being a 3rd World Banana Republic.

    Ir it's any consolation to anyone, we'll still be the best armed madman in the asylum.
    Think nuclear Haiti...

  • kevo on August 06, 2011 10:17 AM:

    If Republican leaders, and their legions of Tea Partyers, don't wake up and smell the coffee being offered to them by the very markets they exult, they're as unpatriotic as they've chosen to be!

    When they shun the message of the market, they've shed themselves of reasoned sanity, and are now embracing the delusion permeating their ideological fortress!

    Yes, if Cantor, or Boehner, or McConnell shrug this off, they are aiding and abetting the sabotage of the American economy!

    Serving the great and diverse citizens of their districts, state, and our nation is not a high priority for those three politicos, but rather, their concern is wrapped around the need to protect wealth for a very small band of Americans - the uber-rich!

    Brinkmanship is no way to run a nation - it promotes what Beohner proclaims to hate, uncertainty!

    Go figure! -Kevo

  • delNorte on August 06, 2011 10:18 AM:

    For the conservatives celebrating this morning...it might be worthwhile to take a close look at the Standard & Poor's report...

    I'm assuming that Fox isn't going to report that the downgrade is due to Republican ideology and their willingness to hold America hostage in order to implement that ideology, but how are ABC, NBC, and CBS going to report it on the evening news?

    If Republicans are held accountable by the media (and it's right there in black and white, the copy already written for them) then this should increasingly filter into the consciousness of the "Average Joe" who might start paying closer attention to what's going on in Washington.

  • greennotGreen on August 06, 2011 10:20 AM:

    "The 2010 midterms are proving to be one of the most dramatic national mistakes in generations."

    Really? Because I would have thought the election of 2000 would have been within the current generation. Without that result (which should never have been close enough to have been stolen), we wouldn't have had the Bush tax cuts, the war in Iraq, Bush economic policies, a disastrously tilted Supreme Court (Citizens United, anyone?) Maybe we would have even avoided the successful attacks of 9/11/2001. So the 2010 election may have been a grave mistake, but it pales in comparison to the real doozy.

  • jjm on August 06, 2011 10:21 AM:

    And don't forget the blame to be placed on our unelected ruler, Grover Norquist.

    Priebus is already saying, "Look! It happened on Obama's watch!" Without mentioning that his crew of loonies made it happen.

    S&P cites the failure to include ANY revenues as part of their decision. That is squarely on the GOP's shoulders.

    So if the public is fooled by the GOP again, we can truly say that the decades long assault on education by the GOP has really worked beyond their wildest dreams.

    The GOP's 72% DISAPPROVAL rating, though, gives me some hope that people can still think.

  • Dennis on August 06, 2011 10:41 AM:

    Wishful thinking to assume away all Obama Administration's responsibility.

  • Johnny Canuck on August 06, 2011 10:41 AM:

    greennotGreen on August 06, 2011 10:20 AM:

    "The 2010 midterms are proving to be one of the most dramatic national mistakes in generations."

    Really? Because I would have thought the election of 2000 would have been within the current generation. Without that result (which should never have been close enough to have been stolen), we wouldn't have had the Bush tax cuts, the war in Iraq, Bush economic policies, a disastrously tilted Supreme Court (Citizens United, anyone?) Maybe we would have even avoided the successful attacks of 9/11/2001. So the 2010 election may have been a grave mistake, but it pales in comparison to the real doozy.

    I agree completely.

    It also amazes me how Democrats rallied around Bush rather than calling for his resignation (as would of happened in Canada in comparable circumstances, or effectively happened in UK during world war II with Chamberlain resigning and Churchill taking over.

  • Anonymous on August 06, 2011 10:46 AM:

    "Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place."

    Bush Tax Cuts, we assume, Remain In Place.

    Yeah, that makes all the difference ...

    Of course, this is also a cry to action for all patriotic Americans - vote those tax-nihilists out of Congress !

  • Alli on August 06, 2011 11:02 AM:

    For a couple of commentators up top, Obama's responsible for this how? because he made a deal to put revenues up for discussion later so as to avoid total default? Use the 14th amendment? Read what the S&P said. It looks like they would have downgraded us anyway.

    Sometimes I wonder if people can't just help themselves. You complain about the media's "both sides" fetish but never ever ever fail to blame Obama for something. Even when its clearly the GOP's doing. Its like a reflex.

  • Anonymous on August 06, 2011 11:23 AM:

    'If Republicans are held accountable by the media (and it's right there in black and white, the copy already written for them) then this should increasingly filter into the consciousness of the "Average Joe" who might start paying closer attention to what's going on in Washington'.

    The 'responsible media' will only take this line even though it is right there in black and white if the administration does. Then they will have to report on it as part of the debate. Otherwise they will not for fear of being perceived of as taking sides in the debate. It is up to the administration to use the bully pulpit to drive the point home and force the media narrative to include these facts. Failure to do so, as I said above amounts to political malpractice and adds to the growing perception that these guys are blowing this debate on purpose. That they are so in the pocket of the big money interests themselves that they really do not WANT to win this argument.

  • SW on August 06, 2011 11:34 AM:

    Now maybe this is about timing. Maybe they think that they can't come out guns blazing until the late fall which is a more traditional start of the campaign season. Perhaps they are still playing 'rope a dope' and giving the Republicans more and more rope to hang themselves with because god knows these bastards just cannot help themselves. This is the primary reason why I have not given up hope for Obama quite yet. And it could be a really devastating strategy because everyone including his friends now think they have his number. If he has been simply keeping his powder dry for the right moment, a sudden and unexpected change in tactics could be extremely effective and I believe he is shrewd enough to it in him. But it is painful to watch right now.

  • Johnny Canuck on August 06, 2011 11:37 AM:

    Anonymous on August 06, 2011 11:23 AM:

    excellent point.

    may i implore you to please adopt a handle- time is limited and i often skip over those who always say the same thing and the residual category of "anonymous" which are often below average in quality. Your comment deserves to be read.

  • SW on August 06, 2011 11:46 AM:

    'Anonymous on August 06, 2011 11:23 AM:

    excellent point.'

    Sorry, that was me. I failed to type in my name. Thanks for the kind words.

  • Johnny Canuck on August 06, 2011 11:51 AM:

    SW, you're welcome, and keep those ideas flowing!

  • smintheus on August 06, 2011 12:16 PM:

    I think maybe you're missing something here Steve. It's a political analysis from S&P, but they may also have a political motive.

    The problem S&P says is that partisan politics could block tax increases and entitlement cuts. But everybody knows that current GOP will never allow any tax increases. Hence what S&P is really saying is that it demands to see cuts to Medicare and Social Security to restore AAA.

    Everone saw that Dems allowed themselves to be taken hostage over the nation's creditworthiness, and now S&P is trying its hand at the same thing.

  • bardgal on August 06, 2011 12:51 PM:

    How long are the PL/EmoProgs going to continue to eat their own?

    OBAMA IS RUNNING.

    HE WILL NOT HAVE A PRIMARY CHALLENGER.

    Either switch to R, or start HELPING get us a Dem/Progressive army in 2012 so that the obstruction will stop.

    YOU are responsible for this mess we're in because YOU STAYED HOME in 2010 in a snit. There are twice the amount of registered Ds than there are Rs. The MATH from he turnout shows you to be holding the bag on this one. YOU OWN THAT.

    And EVERY SINGLE DAY you are DOING MORE DAMAGE TO YOUR OWN CAUSE.

    WAKE THE FRAK UP ALREADY!!!

  • zeitgeist on August 06, 2011 1:52 PM:

    while I agree to a large extent with your larger point, bardgal, the math does not at all show that the outspoken left "owns" the low turnout. quite the contrary, in fact.

    you start out ok: the math shows that Republican turnout was consistent with past cycles, that what changed from 06 and 08 was lower Democratic turnout.

    but most of that appears to be the new or newly energized voters that Obama brought into play in 08 stayed home -- not the political junkies. turnout among the youngest voters dropped substantially from 08 to 10; turnout among blacks dropped significantly from 08 to 10.

    part of this is neither news nor anyone "fault" -- the Democratic coalition has, at least since the 70s, had more variation between Presidential year and off year turnout than the Republican coalition, for whatever reason. but much of it is that two specific constituencies were very fired op for Obama personally and about a national race and they turned out in record numbers. two years later, Obama was not on the ticket, this was not a history-making election, the issues were more local and legislative and those two constituencies didn't come out.

    it was not the "professional left." most anyone commenting on political blogs shows up every election, no matter what (including no matter what they threaten the other 364 days of the year).

  • zeitgeist on August 06, 2011 1:57 PM:

    on a different note. . .

    Steve, it makes no sense to argue first that S&P is just "making stuff up" and then block quote with highlights parts of the S&P report that are inarguably correct.

    While S&P is inconsistent, rating CDOs with insufficient collateral as AAA while suggesting the US treasuries are not, it is hard to argue with S&P's conclusion that the US debt is less safe than it once was because it has been politicized by extremists. Cantor, McConnell et al have said they will now hold the debt ceiling hostage every time; at some point the Dems will tire of it and call their bluff - and then there really will be a default. S&P is correct to factor that in, particular as investors have no what of knowing which iteration will be "the one."

  • MattT on August 06, 2011 2:16 PM:

    Anderson Cooper had John Chambers, head of sovereign ratings at S&P, on last night:

    "COOPER: Why did S&P downgrade the United States' credit rating today?

    CHAMBERS: Well, I think there were two reasons.

    The first reason is the one that you've outlined, being our view of the political settings in the United States have been altered. We've taken them down a notch, the rating down a notch. The political brinkmanship we saw over raising the debt ceiling was something that was really beyond our expectations, the U.S. government getting to the last day before they had cash management problems..."

    In other words, the fact that the Tea Party caucus and GOP in general used the debt ceiling as a political hostage was the primary reason for the downgrade.

    Transcript: http://transcripts.cnn.com/TRANSCRIPTS/1108/05/acd.02.html

    Also Chambers, in response to a question on how the US can regain its AAA rating:
    "But I think a key debate will be coming up regarding the extension of the 2001 and 2003 tax cuts, because if you did let them lapse for the high-income earners, that could give you another $950 billion...."

    In other words, S&P feels we have both spending AND REVENUE PROBLEMS.

  • Neo on August 06, 2011 2:38 PM:

    This downgrade was the only fair thing to do.

    S&P has realized that they "dodged a bullet" with the MBS ratings. They know, based on the "fool me one, shame on you; fool me twice, shame on me" logic, that they won't get anything even approximating the "free pass" the got last time.

    If it is based on a math error, I'm sure that in no time, the government can borrow and spend their way there, unless they take it as a warning, a "wakeup call," but we all know they won't.

    The "tax increase" meme doesn't cut it because in the past virtually every effort to make "spending cuts" was answered (if it was answered at all) with stupid "accountant tricks" (remember the recent CR with $6 billion in cuts that turned out to be $0.24 billion).

    Our government, and Democrats in particular, look at "spending cuts" about the same way they look at "border security" ... it's an impediment to getting what they really want, either more "spending" or more "grateful new Democratic voters."
    It's time to make "spending cuts" mean something real, before we think about new taxes.

  • howie on August 06, 2011 2:44 PM:

    For the person above who asked how the three non-Fox networks were going to cover this, GMA managed to handle the entire story without mentioning how the report singled out rethug tactics and the lack of revenues.

    They just blamed the mess in Washington, as always.

  • Squeaky McCrinkle on August 06, 2011 3:52 PM:

    . . . our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place.

    I thought that was a likely result when I read the details of the deal on the White House site, but this is the first time I've seen it put clearly.

    So the question needs to be asked: How many Democrats in Congress and the White House have little or no desire to end the Bush tax cuts, does that number include Barack Obama, and what is their reasoning? Greed? Fear? Cynicism? What?

    Captcha: "rights llyinglo" - how apt.

  • N.Wells on August 06, 2011 4:36 PM:

    From zeitgeist: part of this is neither news nor anyone "fault" -- the Democratic coalition has, at least since the 70s, had more variation between Presidential year and off year turnout than the Republican coalition, for whatever reason. but much of it is that two specific constituencies were very fired op for Obama personally and about a national race and they turned out in record numbers. two years later, Obama was not on the ticket, this was not a history-making election, the issues were more local and legislative and those two constituencies didn't come out. it was not the "professional left." most anyone commenting on political blogs shows up every election, no matter what (including no matter what they threaten the other 364 days of the year).

    Yes, but why didn't those others show up? Part of the reason is that if the usual hard-core supporters are enthusiastic and are generating a bandwagon, then many others get excited and show up and vote (as in 2008), but if the usual supporters are bitching and moaning and whining and saying things like, "I'll hold my nose and vote for him" and "he's barely any better than Bush", then it's hardly surprising that you don't get a bandwagon effect on your side, and that your opponents become greatly encouraged. Lots of people who don't have the time or interest for following politics take their cues from political junkies that they trust among their friends, family, and coworkers.

  • tamias on August 06, 2011 4:47 PM:

    "...we are well on our way to being a 3rd World Banana Republic."

    It's worse than that, c u @10:16. We import bananas!

  • Doug on August 06, 2011 7:33 PM:

    Anyone who says "I'll hold my nose and vote for him" and then complains about voter apathy should take a course in Politics 101. That attitude is NOT going to inspire any non-base voter to make that arduous trek to the polling station and risk public shame and degradation to vote for the Democrats. Ok, I exagerrated in that last sentence, but not by much. I'm proud to be a Democrat and a progressive. I can't imagine trying to separate the two nor, barring a seismic shift in voter patterns, do I see myself voting for a "third party".
    I certainly don't approve of everything President Obama has done, or not done, but I fully recognize that NOT giving whole-hearted support to the Democratic Party in ALL elections (barring, say, an actual felon for a candidate) means I can't escape my share of the blame for any further Democratic defeats!
    "Taking responsibility" isn't just be a phrase to throw in the faces of Republican/Teabaggers...

  • bob h on August 07, 2011 6:14 AM:

    The only rays of hope emanating from this miasma of despair are that people mostly disapprove of the Republican role in this. It is not as though the Republicans have escaped blame in the public eye.

  • Terry Gibson on August 07, 2011 5:33 PM:

    All you need to understand about the current disaster that is U.S. government politics is "REPUBLICANS DON't CARE!
    If the economy falls apart, credit rating downgraded, FAA closes, etc., etc., the right wing rejoices. They want the system totally to collapse.
    The fondest dream of the Republicans is to elect a republican president in 2012 who will preside only over the Defense Department. Everything else will be closed down, defunded, or held hostage to whatever...
    If you don't support Obama and the republicans take over, we all better get tickets one way to Canada.
    Terry

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