Streams

Obama's Relationship to Debt Reality? Downgraded

Wednesday, April 20, 2011 - 04:27 PM

Jake Tapper highlights a very telling story today about just how out of touch the Obama administration is with reality. Earlier this week, the ratings agency Standard & Poor's changed its outlook on U.S. debt to "negative." This is bad news for America, and more evidence that we are spending way too much. Tapper reports:

Treasury administration officials – the ones in charge of selling U.S. debt - worried that the ratings agency would downgrade its long term outlook on the United States debt. They went so far as to ask S&P to hold off until President Obama was able to offer a serious proposal to reduce the debt, sources told ABC News.

John Chambers, a managing director at Standard & Poor's, tells ABC News that the ratings agency had looked to see how serious the US government was about its debt by primarily focusing on President Obama’s Fiscal Commission report, which was published in December 2010, and President Obama’s FY2012 budget.

What they found was a president un-serious about reducing our nation's crippling debt. Lest you think that's just my opinion, as an evil conservative who opposes Obama, here's what the S&P had to say:

President Obama put forward his FY2012 budget in February, proposing $1 trillion in deficit reduction over the next decade, which Chambers said the S&P committee found “disappointing.”

Three weeks ago, Rep. Paul Ryan, R-Wisc., pledged more than four times that amount -- $4.4 trillion in deficit reduction over 10 years.

... But while they waited for this presentation from the president, S&P officials saw President Obama and Congress locked in an intense budget negotiation over a relatively paltry $38.5 billion in spending cuts – one that threatened to shut down the government and only averted at the 11th hour.

This “dismayed” S&P officials, sources close to the process said.

What's amazing is that ultimately the S&P actually did wait until Obama gave his speech. It's just that while Obama and his supporters seem to think his words have magical properties, the rest of us realize that they're just words, and not particularly effective words at that.

Tim Geithner has been pushing the line that America will retain its AAA rating and will bring its deficits down. But how? Taxing "the rich" won't do it, no matter how many times we click our red slippers together. There are just not enough rich people to tax and re-tax. If we insist on going the tax-and-spend route we'll soon find that we have to raise taxes on the middle class. Is Obama ready to do that?

Of course the obvious solution is deeper spending cuts, something Barack Obama and the Democrats seem unwilling to consider. We're in a time right now where the Scott Walkers and the Chris Christies of the world are looking seriously at their budgets and making some very tough but necessary decisions. It would be great if our president would be less dazzled by his own speech-giving and more ready to make some choices America desperately needs made.

Born in the Soviet Union and raised in Brooklyn, Karol Markowicz is a public relations consultant in NYC and a veteran of Republican campaigns in four states. She blogs about politics at Alarming News and about life in the city with her husband and baby at 212 BabyShe can be followed on Twitter.

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Comments [2]

Karol from NYC

I think if they were evil conservatives like me they wouldn't have waited for him to give the speech. It's as if they *wanted* him to finally be bold in his leadership but he just wasn't. They were rooting for him and he failed. Any true evil conservative would know that Obama wasn't going to cut spending like we need to do in order to get serious about our deficit.

Apr. 23 2011 01:31 PM
Harrison Bergeron from Fair Lawn NJ

Karol,

It's been noted elsewhere, that the ratings agencies don't have a great deal of credibility, since failing to correctly judge the Great Real Estate Finance Bubble and Explosion. Also, it's possible that -- like you -- they are a bunch of evil conservatives who oppose Obama. So I'm not sure how much their word counts at all.

Also note, that the big moneylenders of the evolving world -- China, maybe Germany, the Arabs, maybe some wild card will appear that happens to have the natural resources needed by industrializing nations -- they've got their own agendas. I don't believe that their economic world is USA-centric. So I'd bet that they've already made an assessment of USA fiscal health and planned their degree of future involvement with us, and don't care about S&P or much about U$D for that matter.

But your point was the President's habit of speaking in a feel-good but non-specific way, and his inability to make hard choices.

I am tempted to agree with you on this, but instead I vote "present".

Best regards,
Carmine

Apr. 22 2011 10:33 PM

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