Spinning the Downgrade
On Friday, S&P downgraded the U.S. credit rating to AA+ from AAA. The downgrade report complained that the debt ceiling deal did not do enough to stem the tide of future deficits and debt.
While the report blamed no political parties, politicians, groups, or approaches as the reason for the shortfall, Democrats have been falling over themselves to blame Conservatives for the negative credit rating.
John Kerry came out and applied bias where there was none on Meet the Press Sunday.
Justin Ruben, executive director at MoveOn.org, an extreme left-wing organization, expressed outrage at the President for not taking a more aggressive stance against fiscal Conservatives.
“It’s a terrible deal that will destroy jobs and big part of reason is because president accepted the premise that it was okay to hold economy hostage,” Ruben said. “Instead of saying, ‘this is outrageous’ and ‘You will not threaten the full faith and credit of the U.S.,’ and telling America what the Republicans are doing, he sat down and said, ‘let’s bargain’ and tried to show he was more reasonable.”
Ruben’s demand for less compromise is in direct opposition to the President’s attempts to bring both sides together. Mr. Ruben’s spun the whole outcome by saying that the deal itself is what threatens the “full faith and credit of the U.S.”. Incorrect. Had Obama toed the line with Ruben’s idea of raising the debt limit without curtailing spending or raising revenue, two more ratings agencies would likely have joined in the downgrade. Only because some slowdown in spending was present in the bill at all did Fitch and Moody’s leave the nation’s AAA rating in-place.
On the Sunday circuit, progressive talking points were prevalent. “We can’t cut our way out of this recession” was heard loud and clear. This a variation on Obama’s, “we can’t cut our way to prosperity” theme. While we haven’t even tried spending cuts as a method to save the economy, we have empirical evidence that taxing and spending our way to recovery does not work.
The rising-star, progressive commentator and writer Ezra Klein tweeted, “This didn’t happen because an earthquake wrecked our factories or a plague hit our workers. It was Congress. Particularly GOP in Congress.” in reference to the S&P downgrade.
The more honest perspective is that Speaker Boehner had accepted an Obama administration deal that included over $800 Billion in revenue enhancement (lefty-speak for increased taxation). Obama then came back to the table with an additional $400 Billion in demanded taxes while still keeping Medicare, food stamps and Social Security off the table – turning compromise into arm twisting.
The spin is working. Liberal forums are full of comments where the democrat-faithful are extremely upset at the lack of reporting that the S&P report specifically calls out Republicans for having obstructed the debt deal. They will have to remain upset for quite some time as the report contains no such admonition. In fact, the report is careful to make no comments for or against either party nor does it recommend either cutting nor taxation as the chosen remedy.
S&P had needed to see $4 trillion in deficit reduction – the deal only delivered $2.7 trillion. If the democrats had gotten what they originally demanded, there would be $0.
If not for the Conservatives, this downgrade would have come faster, may have been worse (AA-) and could have included Fitch and Moody’s lowering the nation’s ratings as well. If the politicians in Washington fail to cut the deficit by much more than Conservatives already have, we will see further downgrades in the coming months and all the scary stuff that Democrats threatened the country with before the debt deal. Perhaps even that “Satan Sandwich”.