Saturday, August 6, 2011

Grading the Downgrade

There’s a lot of twitterpation over the S&P downgrade. You can choose between the ones who think it’s a crock, like former Labor Secretary Robert Reich, and those, like Ezra Klein, who think that thanks to the debt-ceiling fustercluck, we got what we deserved. And then, of course, there will be the pundits who will come up with the brilliant theory that both sides are equally to blame.

Feh. For what it’s worth, I agree with Andrew Leonard, including the vacation part.

Who is to blame? Well, we all our have opinions. Republicans will call this Obama’s downgrade, and Democrats will call it the Tea Party’s shame. Y’all can argue about it to your heart’s content while I go on vacation.

But here’s what I think. If Obama had gotten his grand bargain — if the Republicans had agreed to some revenue increases in return for some entitlement cuts — our credit would still be good. Yes, the bargain itself, from a liberal perspective, would have been a pretty bad deal, but it would have avoided this embarrassment. I don’t know what the trickle-down effects of this downgrade will be, but if interest rates rise as a result, that could have wide-ranging effects on every aspect of our economy. Mortgage rates will rise, loans will be harder to get, the cost of borrowing for the United States government will go up.

House Republicans refused to compromise. House Republicans refused a grand bargain that liberals viewed as a massive step backwards for progressives. House Republicans own this credit downgrade.

This turd needs to be laid squarely in the lap of those who laid it: Bush, Cheney, and Wall Street, and those who wouldn’t let us do massive stimulus that would have at least gotten the recovery beyond the sitting-up-and-taking-nourishment stage: the GOP and the Blue Dog wussies. And of course the teabaggers are going to blame this all on Obama. That’s all they know how to do.

Okay, back to my vacation.