S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficit and rising debt burden. The action is likely to eventually raise borrowing costs for the American government, companies and consumers.Of course it did. There was no way that the Democrats would allow the sorts of cuts that it would take to really change things. And the Republicans aren't keen to raise taxes.
"The downgrade reflects our opinion that the fiscal consolidation 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 said in a statement.
My congresscritter, Betty "Rubble" McCollum, has already blamed the current portion of a long-standing financial mess on the Tea Party. And I suppose she's right, since the Tea Party apparently hasn't been sufficiently persuasive enough to get its message across against the unremitting hostility of the Betty McCollums of the world and the loyal stenographers of the MSM that pass McCollum's comments along verbatim.
We've been through this before. Fundamentally, we have a lot of people in this country who believe in goverment first. That's a problem, but there's a much larger problem. We also have a great deal of people who have ordered their lives around the workings of government, both on the provider side (government workers, many unionized) and recipients of government largesse (nearly everyone else, including me). This has been the model for nearly 80 years now. A lot of what might have made sense 80 years ago doesn't make sense any more. Social Security payouts beginning at age 65 work fine when the average life expectancy is less than 65, as it was in the 1930s. Now people are living, on average, to be almost 80. And since there is, and never has been, a giant Social Security Lockbox where the money is stored, the money has always come from current receipts. The $14 trillion national debt that we hear about only represents a small fraction of the real debt we face, which is probably more like $100 trillion. Betty McCollum would rather you not think about that.
Do you suspect that we can pay that debt back? Or that we can continue to do the things we do now? I don't.
The Tea Party comes on like a bunch of Old Testament prophets and we don't like them for it. We don't like scolds. I'm guessing we won't like Standard & Poors very much, either. No one wants the party to end. But we're there. Betty wants us to go looking for an after-bar party. The Tea Party is talkin' Hazelden. We get to decide which approach to take in 2012.