Blaming the Treasury debt downgrade on opposition by Republicans and Tea Partiers to tax increases in the debt-ceiling debate is comparable to blaming a fire on a neighbor who reports the blaze to the fire department.
The only budget with specific numbers submitted by President Obama called for no real debt reductions; just another increase in deficit spending. Republicans and Tea Partiers merely spotlighted the fact (obvious to everyone in the world outside liberal-progressive ranks) that the United States cannot continue expanding the national debt indefinitely.
Standard & Poors downgraded Treasury debt because the budget cuts in the deal were too small, too far in the future, and too vulnerable to later repudiation. S&P also cited uncertainties arising from the fact that debt-ceiling negotiations will have to be re-opened next year.
In its July 14 press release, Standard & Poor’s warned the Obama administration: “If Congress and the Administration reach an agreement of about $4 trillion, and if we…conclude that such an agreement would be enacted and maintained throughout the decade, we could…affirm the ‘AAA’ long-term rating and A-1+ short-term ratings on the U.S. “
The crux of the downgrade was not that Republicans and Tea Partiers balked at increasing taxes. It was simply that the deal fell well short of both the $4 trillion debt reduction, and of assurance of maintaining cuts throughout the decade.
The deal to which the administration grudgingly gave its assent calls for expenditure cuts of only $2.4 trillion over ten years, with 64% of those cuts occurring (if they actually do) more than five years from now. At the same time, the increased debt limit opens the way to wipe out almost all of those cuts, for a net cut nowhere near the S&P $4 trillion target.
Even had Republicans and Tea Partiers agreed to Obama’s tax increase demands, that would have added slightly less than $1 trillion to revenues to reduce the debt level, still far short of S&P’s parameters.
Democrat/Socialist ranting about “balanced” deals and requiring corporations and high-income individuals to “pay their fair share” is therefore blatant hypocrisy. It reveals, instead, fidelity to a basic bias of the liberal-progressive masses: a burning desire to punish people who enjoy financial success.
Back to summary...
