Skip to main content

Folks, there are at least a few diaries this morning cherry picking what we want to hear on the S&P debt downgrade. But, can we look at what S&P said and at least try to be somewhat objective?

There's a front page story which does a good job of providing a more circumspective view. Hunter's front page story here:

To Summarize, what I think S&P is saying:

1. The US political system lacks the maturity, responsibility and will to deal with its long term debt crisis.

2. S&P believes we have a structural debt problem, primarily fueled by long term issues with Medicare and Social Security.

3. S&P believes we have a medium term debt problem. In other words, the debt package which was just passed had cuts which were backloaded and did nothing in the medium term.

4. S&P believes we need to increase revenues to deal with the medium term debt problem, and our political system lacks the will to do so.

5. S&P believes we need more government spending in the near term to stimulate the economy.

Some might see some of the above as in conflict with each other. I don't.

While Dems are screaming we need more stimulus and a jobs program, and to raise revenues, and Republicans scream that debt is a runaway freight train, I think S&P is saying they are both right, and that we need to deal with all of the above at the same time.

I believe S&P believes that we need more stimulus in the near term, increased taxes to deal with medium term debt, and deal with the structural issues of our long term debt, which they blame on Social Security and Medicare. And, they downgraded our rating because they believe we lack the political leadership and political will to do so. More specifically, they thought the $4 Trillion dollar package (the big deal) was the right thing to do, but we failed to do it. This was the deal Obama and Boehner were working on, but failed. That is the specific failure of political leadership. IMO, both Obama and Boehner own this failure in leadership. There is really no one else to blame. But, in the end, Obama will be punished the most severely - As in 2012, he will be known as "The President who lost the nation's sterling credit rating".

The President was right - we need to do more now - JOBS, we need to raise revenues, we need a "big deal" for long term. But, he failed to provide the strength of leadership to make that happen in a decisive way.

Originally posted to fcvaguy on Sat Aug 06, 2011 at 07:01 AM PDT.

Also republished by The Yes We Can Pragmatists.


Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip and rec'ed with one disagreement (12+ / 0-)

    "IMO, both Obama and Boehner own this failure in leadership."

    When you have the majority you can't control and say no to every element of a deal, the failure would be on Boehner and the Republicans. Obama led and got to get the country moving while being cornered to avoid a catastrophic consequences of not raising the debt ceiling. To be honest with you regarding the downgrade, it is possibly a good political ammunition the Dems can use to swing public opinion. Thanks for the summary.

    ...We have many more issues that bind us together than separate us!

    by ThisIsMyTime on Sat Aug 06, 2011 at 07:12:36 AM PDT

  •  #2 could be resolved quickly and easily (4+ / 0-)

    Medicare Buy-In for All.

    Done and done on that.

    Cutting waste is good and systems need to be put in place to help eliminate or minimize it. Obama ran on, for example, electronic medical records, which would be tremendously useful in that regard. But then, he also ran on the public option. Making the federal government the largest provider of health insurance would carry tremendous strength.

    In fact, without health insurance costs to worry about, many of our businesses would flourish, perhaps even come BACK to america. (I say this as a business owner who is leaving the US because i cannot afford to grow and pay for health coverage for my future employees. I can't afford it and it's unsustainable).

    So with ONE FELL SWOOP of advocating for medicare buy in for anyone who wants it, we could see more jobs in the US and less costs expended for medicare.

    As for social security, more workers making decent wages and contributing to the system means greater solvency.

    The problem is #1. And until and unless Americans hear in no uncertain terms that these things need to be done and why (Obama is charismatic enough and still has enough good will to pull it off if he'd just try) they will keep voting for failing philosophies.

    It's the difference between losing a fight and refusing one. (h/t Kossack james richardson)

    by mdmslle on Sat Aug 06, 2011 at 07:20:45 AM PDT

    •  I'd make it single payer for all (2+ / 0-)

      roll in all the programs including VA, Medicare, Medicaid and the general population into one, with a severe position on being able to bargain for drugs and [things]. Power law and sizing model regarding the abolition of health insurance companies, their [non] regulation, paper work, burden on the courts, and resultant fuller employment in the medical sector would get economy going immediately.

      And the wars. Cut them all off. Pentagon can go junking on their own vast seas of rotting materiel and get scrapping. All personnel over 55 gone, unless they are Doctors, nurses or CBs, some sort of brain trust tactical think tank genii. Gone.

      Blackwater/Xe, gone.
      Drug patents, 2 years only.
      All other patents, review then auctions.
      Transaction fees on Wall St.
      Erase incentives for offshoring capital.
      Penalty for offshoring capital.
      Steep Tariffs on offshored goods.
      Legalize Hemp and MJ, kill the DEA.
      Ban GMOs.

      There's a lot more, but that's off the top of my head.

      Of course this makes too much sense for the 99% of us and will never get done.

      •  I agree on most of this. (3+ / 0-)

        I prefer the the medicare for all because i think it's politically possible. Everyone already knows medicare intimately. They either have parents or grandparents on it or are on it themselves. It's not a boogeyman. It's effective and its hard to argue against it politically. And in fact, if one worries about solvency, its just common sense that the more people are in it the cheaper it can be and the more doctors there will be who accept it.

        I don't think eliminating the entire for-profit insurance industry in one fell swoop is politically possible or even attractive as an option for most americans. we like choice. Let them die through attrition. Not only that, but we already have a dearth of doctors. It would be an upheaval that really couldn't be executed realistically.

        The other things you mention, I think, most are doable. drug patents maybe but possible. wall street transactions, hard but possible. tariffs on offshore goods, uphill battle but possible. The others, not sure they're possible or in the case of penalties for off shoring money, not sure how that's enforceable.

        But I feel ya. Your list reads like my paradise.

        It's the difference between losing a fight and refusing one. (h/t Kossack james richardson)

        by mdmslle on Sat Aug 06, 2011 at 07:50:46 AM PDT

        [ Parent ]

        •  There'd be plenty of doctors (2+ / 0-)
          Recommended by:
          mdmslle, sja

          and not all health requires doctors, we have nurses and PAs and EMTs.

          It would also be one of my things to open up medical school gauntlets and lower/eradicate education costs. I'm sure there's a lot people who ran out of money for school who would be doctors, or those that never started because it was too expensive. There's a lot of people out there that you wouldn't notice. A lot of doctors are in research and legal and consulting.

          •  when you start your country, baby, I'm so there! (2+ / 0-)
            Recommended by:
            WheninRome, KibbutzAmiad

            you may our last and best hope.

            I'm not kidding.

            It's the difference between losing a fight and refusing one. (h/t Kossack james richardson)

            by mdmslle on Sat Aug 06, 2011 at 08:11:10 AM PDT

            [ Parent ]

            •  Hey we're here!! (1+ / 0-)
              Recommended by:

              Who wouldn't want my list?

              I have no understanding of why people want to be rich. Because if I were, and I have imagined it, it would be to make all those things happen anyway.

              I don't think I'm that unusual. You tell me.

              •  not unusual. I am on my way to riches (1+ / 0-)
                Recommended by:

                and when i get there, I'll use my money to destroy the machine and to bring lives of decency and dignity to as many people as I can. To benefit us little folks.

                still, not kidding. I'm a single minded kinda gal.

                It's the difference between losing a fight and refusing one. (h/t Kossack james richardson)

                by mdmslle on Sat Aug 06, 2011 at 08:26:33 AM PDT

                [ Parent ]

      •  Innovation (0+ / 0-)

        IMO, Innovation has been the foundation of America's success. Some brainiac in his basement comes up with a great idea (Google, Apple, Microsoft) and it creates thousands if not millions of jobs. They deserve their patents. Without patents, those great ideas get stolen and the jobs go to China.

        •  Those are active patents, (0+ / 0-)

          we have plenty of patent abuse where innovations are quashed because some huge company bought up the patents and are sitting on them. I'm not talking about active viable patents, just the ones that are held hostage in some moldy basement somewhere.

    •  Not necessarily, mdmslle. (1+ / 0-)
      Recommended by:

      A good bit of what has to be addressed is the one way rise in medical costs, no matter who is paying them. Remember using ACA to bend the curve down?  There is a point to that. I am getting so tired of reading about the wonderful drug that costs eighty grand a year, and watching my Lipitor prescription go up twenty or thirty dollars for every ninety day refill.  Lipitor will be over in November, but the notion that cost is not and should not otherwise be any issue at all in medical care must be dealt with. That is a financial issue when Medicare must pay retail for everything, the good, the bad and the intentionally overpriced.

  •  Yahoo has a great article on it and (9+ / 0-)

    includes this quote:  

    But Congressional Republicans deserve much more of the blame. For this calamity was entirely man-made -- even intentional.
     I'm hoping this downgrade will help shame us into letting the Bush tax cuts expire...that is the message S&P seems to be sending us.
  •  Symptoms of underlying problems (9+ / 0-)
    S&P believes we have a structural debt problem, primarily fueled by long term issues with Medicare and Social Security.
    We need to keep in mind that these two very serious problems are actually symptoms of the underlying causes.

    Medicare and Medicaid are unsupportable in the long term.  Their rising costs are symptoms of the fact that people do not have other, affordable options for health care.  We need to reform health care, and the Affordable Care Act does some good, but is mainly a support for the health insurance industry.

    Social Security isn't in as much trouble, but the deeper problems are that people can't afford to fund their own retirements, and we have an aging population.

    •  My hunch (4+ / 0-)

      S&P would agree with you. There are multiple ways to fix Social Security. S&P probably doesn't care what the approach is. They just care that as things stand, its a financial disaster and there's little hope that our leaders have the intestinal fortitude to fix it. We are seeing the same core issue in places like Greece and Italy.

      Imagine that, today, we are at the same level as Belgium. UGH. As an American, I'm embarrassed.

  •  Our political system at this time is reactive (2+ / 0-)

    What the S&P is calling for is a proactive system that anticipates problems and deals with them before they become problems.

    That is always difficult for a democracy but with our broken government it may be impossible.

    Not sure I agree with the downgrade but something has to give and change because right now the way we govern is not functional.

    If I am not for myself, who will be for me? If I am not for others, what am I? And if not now, when? Rabbi Hillel

    by AndyT on Sat Aug 06, 2011 at 07:28:29 AM PDT

    •  I think an interesting comparison (3+ / 0-)

      would be what did S&P do in the 1930s and 1940s. THrough that economic catastrophe, we maintained our sterling credit rating. Is it possible that despite the cost of the "New Deal", the long term debt outlook was still good at that time? and thus no credit downgrade? I think so.

      It would be consistent with what S&P said that we need more near term stimulus. S&P doesn't see near term stimulus and long term debt as diametrically opposed. But, our political leaders do.

  •  It saddens me to write this (2+ / 0-)
    Recommended by:
    fcvaguy, mochajava13

    While the Republicans behaved terribly, Obama and the Dems must own the down grade. Obama knew S & P wanted $4 trillion in cuts and revenues to maintain our AAA status.

    This is awful. Just awful. The first black president to go down in history presiding over a country with bad credit.

    •  Pres Obama had a the first (5+ / 0-)

      President (black or otherwise) to preside over the first downgrade in US history...or be the first to preside over the first default in US history.  He did the right thing.  IMO of course.

    •  Obama and Holder were looking forward and (1+ / 0-)
      Recommended by:

      not backward. They should have  been on Wall St. like white on rice the day after inauguration. They played nice and the flying monkeys of Wall St. [Rating Cos] came back to bite us in the ass. Maintaining the entire system as a baseline for reasonable commerce just went all to hell. This was malfeasance, IMO.

      The trouble with tribbles get the picture.

    •  We should remember that S & P isn't saying (2+ / 0-)
      Recommended by:
      Debby, fcvaguy

      the US has "bad credit" it just isn't sterling.

      I have been critical of President Obama for being excessively eager to deal with the Republicans, and for his willingness to cut elements of the "safety net."

      I think if he had been dealing with honest, reasonable people he could have reduced spending/raised revenue by $4Tr. He can't be held responsible both for being too eager to deal and for not going far enough. The President did what could be done.

      An optimist may see a light where there is none, but why must the pessimist always run to blow it out? Rene Descartes

      by Had Enough Right Wing BS on Sat Aug 06, 2011 at 08:18:11 AM PDT

      [ Parent ]

      •  I agree with you but... (1+ / 0-)
        Recommended by:

        The one thing Obama did NOT do was take the initiative in managing the debt issue.  He avoided it completely until he got involved in closed door meetings with congressional leadership.  

        It should have been Obama saying the things that S&P said.  I think it even would have defused the t-party some if he acknowledged that there is a debt problem and tackled it head on.  

        Frankly, I blame everything on Nixon.

        by J Orygun on Sat Aug 06, 2011 at 08:56:48 AM PDT

        [ Parent ]

        •  What??!??! (1+ / 0-)
          Recommended by:

          What planet are you on? In a cave?

        •  I wasn't involved in the negotiations so I have (0+ / 0-)

          no way of knowing how involved in (or prepared for) them President Obama was. The presidents' style is not as direct as mine can sometimes be. That's to his credit, in many ways.

          His approach, just like his goal, was different than mine would have been. Given the intransigence of the crazies I can't pretend a different tack would have been any more successful.

          I would have loved to hear President Obama hammer the right wing in even stronger language than S. & P. used, then again it would have been easy for the media to spin a tale of false equivalence: it's politics as usual, both sides are doing it, etc.

          I recall hearing the president make many of the same points, but in his usual understated manner. One thing that's helping me cope with him not being a fire-breather is knowing how much it upsets the DittoNazis when he stays calm.

          An optimist may see a light where there is none, but why must the pessimist always run to blow it out? Rene Descartes

          by Had Enough Right Wing BS on Sat Aug 06, 2011 at 06:07:01 PM PDT

          [ Parent ]

    •  You're joking (0+ / 0-)


  •  Great Observations n/t (2+ / 0-)
    Recommended by:
    sceptical observer, fcvaguy

    "Some men see things as they are and ask, 'Why?' I dream of things that never were and ask, 'Why not?"

    by Doctor Who on Sat Aug 06, 2011 at 07:33:53 AM PDT

  •  Who'd wodda thunk it?? (4+ / 0-)

    The S&P sounds very liberal (in the pea potty definition) don't they?  When I start agreeing with a predominately conservative group, I need to pinch myself to make sure I'm not dreaming. All of these points, IMHO, are spot on.  Short term we need spending to stimulate the economy while at the same time increasing revenue to resolve our mid to long term issues. The long term entitlement issues are the EASIEST to solve.  Raising the SS payroll tax income limit fro $106,000 to $250,000 over the next 10 years would go a long way, if not solve the SS issue for 75+years. The largest factor affecting out debt issue is rising health care costs.  A Medicare for ALL program I believe solves that issue.

    "Now watch what you say or they'll be calling you a radical, a liberal, a fanatical criminal" -- Logical Song -- Rick Davies & Roger Hodgson

    by Over50Lib on Sat Aug 06, 2011 at 07:34:22 AM PDT

  •  T&R. And for trying to write an objective (5+ / 0-)

    diary because that's what we need more of..

    I've been trying to make sense of this and diaried on Charlie Cook's take- congress is a laughing stock and he thinks most members of congress will be gone in a few years.

    My thought is the debt ceiling debacle and S&P downgrade will hurt the entire political establishment from President Obama to the Democratic Party, the Republican Party, & the tea party..

    The only people it will help is challengers especially those who campaign as the anti-Washington

    And I'm sad about it. But the political culture is what it is.

    Any Democrat on his or her worst day is better than any Republican on his or her best day.

    by joedemocrat on Sat Aug 06, 2011 at 07:35:47 AM PDT

  •  anybody (6+ / 0-)

    who proclaims that SS is part of the deficit problem and does not mention military spending in the same breath is pushing an agenda, not to mention a lying weasel.

    I wanted Obama the community organizer. I got Obama the Wall Street lawyer.

    by Van Buren on Sat Aug 06, 2011 at 07:42:59 AM PDT

  •  Lets be clear about one thing (4+ / 0-)

    This is all about how much we will suffer to preserve their profits.    Corporations should not be dictating public policy.

  •  Straw Man Alert! (3+ / 0-)

    Which Democrats exactly claim there is no medium or long-term debt problem? The Republicans claim it, but the Democrats have never disagreed.  In fact, a fair number of Dems were raising the alarm bell while we were busy piling on the spending and cutting taxes...GOP?  Not so much...

    •  The trick is getting the public (2+ / 0-)

      to pay attention to the fact that when the GOP controlled the WH and both chambers, they set about worsening our fiscal situation.

      The Bush tax cut, the unpaid wars in Afghanistan and Iraq, the unpaid Medicare drug benefit, all that happened with GOP majorities in both Houses.

      They dug the hole deeper, turning a $2.3 trillion projected surplus in 2011 into the deficit we have today.

      Give me your tired, your poor, Your huddled masses yearning to breathe free
      ¡Boycott Arizona!

      by litho on Sat Aug 06, 2011 at 08:16:50 AM PDT

      [ Parent ]

  •  Dont spin S&P, they're incompetent, missed $2T (0+ / 0-)

    in their analysis.

  •  Bull, bull, bull!!! (0+ / 0-)

    This is not on the head of Obama or his leadership...that is total bull.  This is at the feet of the American people that did not back him by voting in 2010.  This is at the feet of Republicans that have been shoving their policies down the throats of the American people and Obama since he has been elected and long before.  This is not due to a leadership problem. There is nothing Obama can do with the people he has to work with.  If I was him I would have sat back after the elections and said "fine, let them do what they will, since you have no faith in me or Democrats, that you wouldn't even come out and vote"...instead he has been working his ass off on "damage control" of what these imbeciles are trying to push through.  I'm more impressed every day at his fortitude.  

  •  Ah fcvaguy. My favorite concern troll. n/t (0+ / 0-)


    by Aeolos on Sat Aug 06, 2011 at 10:25:00 AM PDT

    •  with that comment (0+ / 0-)

      many will likely wonder who the real troll is.

      •  Do you even know what a concern troll is? (0+ / 0-)

        Didn't think so.


        by Aeolos on Sat Aug 06, 2011 at 03:23:14 PM PDT

        [ Parent ]

        •  Given I've been here about 7 years longer than you (0+ / 0-)

          I'd say its a pretty good bet that I do. Don't call me a troll again please. In fact, there's more evidence to support that your'e the troll here given your comment record in your relatively short history here.

          •  You still haven't answered the question. (0+ / 0-)

            You haven't a clue what a concern troll is do you?  LOL.


            by Aeolos on Sat Aug 06, 2011 at 10:23:19 PM PDT

            [ Parent ]

            •  I'll give you a hint: (0+ / 0-)
              Folks, there are at least a few diaries this morning cherry picking what we want to hear on the S&P debt downgrade. But, can we look at what S&P said and at least try to be somewhat objective?

              A concern troll falsely tries to make a case that others aren't being "fair and balanced" on progressive blogs.
              The troll makes like he's concerned for an issue of importance to progressives but actually is cloaking some unsavory apologetics for the wingnut argument. Usually the person is harmless enough for being mostly unaware of the silly irrelevance of his arguments. But occasionally we witness some deeply (and long embedded) trolls who just can't help themselves in making nuisances in a context that they should just STFU in. As in this case: How misunderstood S&P and the ratings agencies are. How kossacks can't see the "objective" nature of the credit down rating.  Laughable and quite trollish.

              Where's Setrak been btw?  I sure don't miss those Drone Dairies.

              NO CE/CW. NO UNION BUSTING

              by Aeolos on Sat Aug 06, 2011 at 10:56:49 PM PDT

              [ Parent ]

  •  Consider (2+ / 0-)
    Recommended by:
    fcvaguy, Escamillo

    that one of the most attractive things to Republicans about rejecting the grand bargain (and the certain ratings downgrade) was that they calculated at least some Americans would blame Obama for failing to strike that bargain.

    Some of you seem to have bought that line of bunk. Tsk, tsk.

    •  Thank you. Boehner publicly walks away from (2+ / 0-)
      Recommended by:
      evergreen2, elmo

      the grand deal, and this site blames President Obama?

      Also, this site, other "left" sites, and the "left" talkers in the MSM were undercutting President Obama every step of the way, including damning him for pushing for the grand bargain.  Now they blame him for not getting the grand bargain?  What a joke.

      The grand bargain was always the way to go, which is one reason Boehner walked away from it (he wanted to deny President Obama that accomplishment).  The "true progressives" condemning the President for pushing for a grand deal rather than a "clean bill" didn't know what they were talking about (yet again).

  •  I have been saying this all day. (1+ / 0-)
    Recommended by:

    And linking to the statement requesting people to actually read it.

    Does anyone really disagree with the basic points?

    Now that people have tired of using Obama as a wipping post they can use S&P.

    Never mind the contradictions, this is the internat.

    What about my Daughter's future?

    by koNko on Sat Aug 06, 2011 at 11:03:51 AM PDT

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site