Election 2014: 100 days to go
Developing: U.S. Embassy in Libya evacuates personnel
**Posted by Phineas
Standard and Poor’s recently issued a warning about the credit rating of the United States of America(1). While they tried both to downplay its significance and argue that the warning paradoxically means we have to take on more debt, the truth is that the Obama administration knew this was coming and that it was bad news, because they tried to talk S&P out of it:
The Obama administration privately urged Standard & Poor’s in recent weeks not to lower its outlook on the United States — a suggestion the ratings agency ignored Monday, two people familiar with the matter said.
Treasury Department officials had been discussing with S&P whether the ratings agency should change its outlook on the United States to “negative” from “stable,” an indication that the country could lose its crucial AAA rating in coming years over its soaring debt levels.
Treasury officials told S&P analysts that they were underestimating the ability of politicians in Washington to fashion a compromise to curb deficits, a Treasury official said. They argued a change in ratings was not needed at this time because the debt was manageable and the administration had a viable plan in the works, the official said.
But S&P analysts told Treasury officials on Friday that they were unmoved — and released a report that expressed skepticism that the political parties could come together on how to bring spending in line with revenue.
Ed Morrissey examines the faulty assumptions behind Treasury’s claims(2), as well as the drop in consumer confidence following the warning that should have Obama and Geithner worried, but I want to look at another angle.
Ask yourself this: Why did the administration go quietly to S&P to ask for forbearance? Sure, the obvious answer is that a warning would shake markets’ confidence and possibly lead to higher interest costs for the US (read: “us”). But, frankly, the sorry state of US finances, the irresponsible spending and borrowing of the Democrats, and the “plans” of the administration have been long known by anyone paying attention and not smoking a pipe full of Hopium. S&P’s notice is a trailing indicator, an alarm that sounds after the fire has broken out, not an early warning.
But, what other reason could there be? Oh, yeah, there’s an election coming, and the president has just started campaigning for another four years of
selling us down the river bringing us Hope and Change. The last thing he needs is some respected agency announcing to the world in a way that can’t be ignored that Obama cannot be trusted with the nation’s finances.
And there I think is the main reason Treasury was sent on its knees to beg for more time: not to avoid spooking the markets, which already know how bad things are, but to keep the vast unaligned middle of American voters, who maybe haven’t made the connection yet between “Obama” and “fiscal train wreck,” from having the blinders ripped from their eyes, getting mad, and taking it out on The One.
In other words, it was meant to hide the truth from us, the citizens, the one group of people with the power to fire Obama. And that truth is that we are being indebted into national penury by a group of economic incompetents who are now acting like little kids who’ve been caught doing something bad and beg the one who caught them not to tattle.
2012 cannot come fast enough.
(1) In my life, I never -ever- thought I would have to write those words.
(2) Seriously? They expected S&P to take the word of the man who admitted he screwed up Turbo-Tax?
(Crossposted at Public Secrets)