Instead of honestly dealing with the avalanche of debt threatening to bury the United States, the Obama administration attempts to persuade Standard’s and Poor to not lower credit rating. Truly the Chicago thuggery way..
Even though the White House has publicly downplayed the credit warning issued Monday from a leading agency, Obama administration officials were privately trying in recent weeks to convince Standard & Poor’s not to lower its outlook for U.S. debt from “stable” to “negative,” Fox News has confirmed.
But after a series of meetings between the Treasury Department and S&P, the ratings agency ignored the pressure and told administration officials late Friday that the U.S. government was at risk of losing its sterling credit rating, a senior administration official told Fox News.
The Washington Post first reported on the private meetings in which Treasury officials argued to S&P analysts that a ratings change was unnecessary because the nation’s $14.3 trillion debt was under control and the administration had a feasible plan in the offing. Treasury officials also contended to S&P analysts that they were overlooking the ability of U.S. lawmakers to reach a compromise to tame deficits.
But the argument failed. The agency based its assessment on the sentiment that a budget agreement addressing the country’s long-term deficit and debt problem might not be reached until after the 2012 election.
The White House has been on the defensive ever since. Treasury Secretary Tim Geithner, in an interview with Fox Business Network Tuesday morning, said there is no risk the country will lose its AAA credit rating.
“We think that the political process will outperform S&P expectations,” Carey said, adding that both parties agree on a long-term deficit-reduction target of about $4 trillion — is looking to achieve that in 12 years, while Republicans are shooting for a little bit more than that in 10 years — and that they can find common ground on how to reach it.
Republicans, though, do not appear to share that optimism, absent an agreement that ties big spending cuts to a looming vote on whether to raise the country’s $14.3 trillion debt ceiling. The White House does not want the debt-ceiling vote contingent on a spending agreement, but Republicans are pushing to link the two.
And how is Europe reacting to the S&P downgrade? We need only to look at Germany, the country after the G20 summit of 2009 announced they would not “stimulate” their economy to spur growth increase debt.
The center-left daily Frankfurter Allgemeine Zeitung writes:
“The reason for the Standard & Poor’s change to America’s rating outlook is not new financial data. Rather it is the political danger that the Democrats and the Republicans will only agree on a debt-reduction strategy after the 2012 presidential elections.”
“The primary reason for America’s political stalemate is Obama’s refusal to see that, in an aging society, social spending cannot be as generous as it has been in the past. The great social reformer Obama is at least 20 years too late with his ideas. And given the irreconcilability of the two parties, it isn’t possible that a plan to reduce national debt will take shape within the next two years. Obama only heated up the campaign atmosphere with his budget speech last week. Indeed, the top rating for US bonds is in danger.”
The center-left Süddeutsche Zeitung writes:
“The case of the US shows that it is time to limit the power of ratings agencies. Not because S&P was wrong in questioning America’s credit rating. The doubt is well founded. Indeed, one wonders why S&P, and its two competitors Moody’s and Fitch, hasn’t long since stripped the US of its AAA rating.
And why does all this matter? As the credit worthiness of the United States sinks, so does the ability to sell bonds without raising the interest rate offered to the purchasers. In the end, this increased interest rate hits the taxpayer, as the sole money the government uses to pay any and all debt, including the interest on bonds it sells comes from the taxpayer.
The house of cards both political parties have created is straining under a vast weight of irresponsible spending. Even the “deal” reached with the continuing resolution was a slide of hand. Championed as “historic” (what isn’t historic in this administartion?) the stated $38 billion in cuts was actually $352 million in real dollars.
As never before it is time for you to get involved, write your Congressperson, your Senators, let them know that you are on to their shameful ways. That as an American you are frustrated with their lack of progress in reining in the debt and that over the next year you respectfully demand they do the following:
a. Do NOT increase the debt limit
b. Pass the Full Faith and Credit Act Senator Toomey has introduced (this insures our debt will be paid first and that the US will not default on the debt.)
c. That more than $100 billion be cut from the 2011 budget.
It is always easy to sit back, express anger and frustration yet do nothing to have your voice heard. As we sit in our living room, can we imagine interest rates of 22% for a new car, or inflation at 16%? Anyone living through the Carter administartion remembers these bleak times.
This and worse is on the horizon.. your voice is the difference. Realize they (the Washington elite of both parties) believe although they may not publicly state it that they can outlast you. If you truly want this country to prosper, then it is up to you to remain active and vigilant.