The Obama Administration and other liberals/progressives have stepped up their blame game after Standard and Poor's (S&P) downgraded the credit of the United States from AAA to AA+ on Friday, August 5, 2011. S&P downgraded Fannie Mae, Freddie Mac, banks, and other institutions the following Monday, August 8, 2011. S&P also warned that another downgrade is possible if proper measures are not taken.
Our leaders don't seem to listen to their warnings because they were warned last April that a downgrade was possible if they didn't make appropriate changes. During the budget battle in Washington, the three main credit agencies - S&P, Moody's Investor Service, and Fitch - warned that the country faced a downgrade if Congress didn't cut spending enough. Moody's and Fitch have not yet downgraded the credit rating of the United States, but they could do it any time.
In spite of the credit downgrade by S&P, investors consider U.S. debt to be the safest place to invest, but many investors have sought refuge in buying gold, silver, and land. Scott Brown, an economist at Raymond James & Associates, said, "The S&P downgrade of U.S. government debt is the least of our problems. The bigger worry is sub par economic growth and the threat of a new recession."
Some of the points made by S&P but not clearly reported in mainstream media are: 1) "Standard and Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing." 2) "We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process." 3) "We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade." 4) "First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward." 5) "The outlook on the long-term rating is negative. We could lower the long-term rating to `AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case."
The U.S. stock market plunged 634 points on Monday also. It was already down about 400 points when Obama spoke to the nation and continued to plunge as he spoke. Obama claimed that the nation can reduce its debt and jumpstart the economy if there is "political will in Washington," and called for our political leaders to stop "drawing lines in the sand." He wants to extend an expiring payroll tax cut, extend unemployment insurance benefits, rebuild highways, bridges and ports throughout the nation in order to revive the construction industry, increase taxes on "wealthy" Americans, and make adjustments to programs like Medicare. He is obviously increasing the pressure on conservative Republicans to agree to tax increases as part of a deficit deal, but Republicans have reiterated that taxes are off the table.
The fiscal problems of the United States have come about because of actions by Presidents and Congresses from both political parties, but the debt has increased greatly under the Obama Administration. The Heritage Foundation explained how we arrived at the point we are at: "Decades of over-spending and over-borrowing by the federal government have damaged America's creditworthiness. Congress after Congress, President after President, the federal government spent every penny it took in and borrowed over $14 billion on top of that to keep happy the voters to whom the government made promises it could not afford. The government kept shifting the burden of paying the bills forward onto future generations.
"Well, the future has arrived, and it is bleak. Our economy is weak, millions of Americans are out of work, and America is so deep in debt that we have lost our good credit rating. Our nation needs to drive federal spending, including our ever-growing entitlement programs, down toward a balanced budget while maintaining our ability to protect America and without raising taxes. That is the sound path forward to a stronger economy with smaller government and more real jobs."
Obama is refusing to accept responsibility for being the only President who caused/allowed our nation to lose our prized credit rating. He and his liberal/progressives cohorts are blaming everyone but themselves for the bad rating. They are faulting S&P for the bad rating and claiming that S&P did their math wrong. They are blaming the Tea Party for the contention about raising the debt ceiling and insisting on spending cuts and no tax raises.
Obama is continuing his search for a budget agreement that will raise taxes on the wealthy while shaving little from deficits caused by entitlement spending. He is still insisting that taxes need to be raised in order to cover his huge spending spree, and he appears to not understand the serious economic situation that our nation is in. I continue to maintain my position that he is either evil and is destroying the United States on purpose or he is plain stupid and not qualified to be elected to the office of President of the United States. In any other situation, he would be able to read "the writing on the wall" and would make the necessary spending cuts.
Dave Ramsey, a man who makes his living in helping individuals and families to get out of debt, described the nation's situation as follows: "If the United States Government was a family, they would be making $58,000 a year, they spend $75,000 a year, and are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget and debt, reduced to a level that we can understand."
The family in the above example would need to cut up credit cards, stop eating out, end expensive vacations, and hunker down. They might need to sell a big house and move into a smaller home or sell an expensive vehicle and buy one they could afford. They might have to purchase their clothing at Wal-mart instead of Nordstrom's. All of these steps would be painful, but getting out of debt would be worth the pain.
Our nation is in serious fiscal danger and must go through the painful cost-cutting steps. The Republican-controlled House of Representatives passed a 2012 budget that would bring our spending under control and also passed the Cut, Cap and Balance Act. Even though the Democrat-controlled Senate has not passed a budget for over 800 days, the Senators failed to pass the House budget or the Cut, Cap, and Balance Act. Obama put forth a budget that was voted down by every Senator, and he threatened to veto the House budget and Cut, Cap, and Balance. The liberals/progressives in both parties refuse to take the necessary but painful steps to cut spending. In order to get anything passed before August 2, 2011, the Republicans had to make great compromises. Instead of getting the $4 trillion cuts that they wanted and that S&P said were needed, Republicans had to settle for half that amount.
Obama and other liberals/progressives have resorted to name calling. They first blamed S&P for the bad reports and then turned the full force of their blame to the Tea Party for the situation our nation faces. It is a typical case of shooting the messenger when you don't like the message. The Tea Party movement has been growing since it first began two years ago and sending the message "Stop the spending!" Now that we have lost our good credit rating, it is somehow the Tea Party's fault! The following quotes illustrate the hate of liberals/progressives toward the Tea Party - Americans who are simply trying to save our nation. The poisonous venom that issues from liberals/progressives tells us that the Tea Party is having a great effect on what our federal government is doing.
In an article entitled "Washington Chain Saw Massacre," Maureen Dowd wrote: "Tea Party budget-slashers didn't sport the black capes with blood-red lining beloved by the campy Vincent Price or wield the tinglers deployed by William Castle. But in their feral attack on Washington, in their talent for raising goose bumps from Wall Street to Westminster, this strange, compelling and uncompromising new force epitomized `Invasion of the Body Snatchers" and evoked comparisons to our most mythic creatures of the night.
"They were like cannibals, eating their own party and leaders alive. They were like vampires, draining the country's reputation, credit rating and compassion. They were like zombies, relentlessly and mindlessly coming back again and again to assault their unnerved victims, Boehner and President Obama. They were like the metallic beasts in `Alien' flashing mouths of teeth inside other mouths of teeth, bursting out of Boehner's stomach every time he came to a bouquet of microphones."
An article in The Blog written by Michael Warren, described a conversation between MSNBC host Martin Bashir and Stanton Peele, a psychologist and guest on Bashir's show. Bashir asked Peele to psychologically evaluate supporters of the Tea Party, and Peele replied, "It reminds us of addiction because addicts are seeking something that they can't have. They want a state of happiness or nirvana that can't be achieved except through an artificial substance and reminds us of the Norway situation, when people are thwarted at obtaining something they can't have, they often strike out and Norway is one kind of example to one kind of reaction to that kind of frustration….
"They are adamant about achieving something that's unachievable, which reminds us of a couple of things. It reminds us of delusion and psychosis."
In an article in The Politico Jonathan Allen and John Bresnahan reported that Joe Biden, Vice President of the United States, joined House Democrats in accusing Tea Party Republicans of acting like terrorists during the debt crisis battle. They wrote that several sources were witnesses when Biden agreed with and supported Representative Mike Boyle (D-PA) who said, "We have negotiated with terrorists. This small group of terrorists has made it impossible to spend any money." Biden responded, "They have acted like terrorists." The same article reported that Biden called the Republican threat of a default on the nation's debt a "weapon of mass destruction," and Doyle stated, "They have no compunction about blowing up the economy to get what they want."
MSNBC's Christ Matthews said, "The GOP has become the Wahhabis of American government." Joan Walsh of Salon accused Tea Partiers of "hostage-taking" during the debates about the debt ceiling. Margaret Carlson, a liberal writer at Bloomberg, accused conservative Republicans of strapping "explosives to the Capital." Senator John F. Kerry said that media sources should stop carrying news articles about the Tea Party. Senator John McCain quoted a newspaper in calling Tea Partiers "hobbits."
Howard Dean, former head of the Democratic Party, said, "I think they're totally unreasonable and doctrinaire and not founded in reality. I think they've been smoking some of that tea, not just drinking it."
I suppose that I am a member of the Tea Party, and I don't particularly like being called vampires, body snatchers, cannibals, zombies, metallic beast, delusional, psychotic, addicted, terrorists, or hobbits. I am not too surprised that liberals/progressives are trying to shift the blame for their spending to someone - anyone - else, but any sane thinker should realize that the Tea Party did not cause the problem.
Republican presidential candidate and CNBC host Rick Santorum stated: "Blame the Tea Party? Geez, no wonder [John] Kerry did so well in an election. If it wasn't for the Tea Party, they would have passed the debt ceiling thumbs up, we would have been rated BBB."
The Heritage Foundation said it best: "The Tea Party's primary focus is our nation's fiscal health. If it were not for the Tea Party's positive influence, Congress would still be spending, taxing, and borrowing with little regard for the burden it is placing on future generations. Only months ago, President Obama was demanding a so-called `clean' debt limit increase that would allow him to keep on borrowing without any cuts to spending."
Now is the time for Tea Partiers to stay the course and for other conservatives to join the party. We must stand strong and insist that our national leaders make the tough decisions even though the results will be painful. This is the only way that we can save our nation!