And Who Are Standard and Poor's to Talk?

Given Standard and Poor's decision to downgrade the United States' sovereign debt rating, this may be a good time to remind ourselves of just how culpable this company is for the financial and economic crises our nation continues to face.

As Alain Sherter explains:

‎"In the years leading up to the housing bust, Moody’s, S&P and Fitch passed out AAA ratings like candy bars at Halloween. In mid-2007 and early 2008, with the real estate market in free-fall and mortgage delinquencies soaring, they suddenly started downgrading scads of formerly top-rated securities. In January of ‘08, for instance, S&P lowered ratings on more than 6,300 and 1,900 CDOs — in a single day…"

Oops. And, as Richard B. Margolies reported:

"Prior to the bursting of the housing bubble, Moody’s, S&P and Fitch each consistently provided positive credit grades on mortgage-backed securities despite the fact that they were extremely risky products. Much of the criticism of the credit rating agencies relates to the fact that these firms are paid by the issuers they rate and therefore have a conflict of interest."

I guess the taxpayers should have paid a commission.

If there were any justice, these people would have lost their jobs well before those harmed by their malfeasance the past few years.

On Debt Ceiling, Ronald Reagan Too Liberal for Today's Republicans

Here's another example showing that Ronald Reagan would be too liberal for today's Republican Party: he didn't think fooling around with a national debt default was responsible.

On November 16, 1983, President Reagan sent a letter to the Senate (link here to pdf) in which he warned:

The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.

The Nation can ill afford to allow such a result. Indeed.

That wasn't the only time President Reagan issued such a warning. On September 26, 1987, Reagan made a similar argument in his weekly national radio address:

Unfortunately, Congress consistently brings the Government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility — two things that set us apart from much of the world.

That's also pretty clear. And could be said, word for word, today.

Rachel Maddow did an excellent segment on this subject. It's well worth your time to watch.

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National Debt Ceiling Fact

Since 1960, the national debt has been permanently increased, temporarily extended, or had its definition revised 49 times under Republican presidents and 29 times under Democratic presidents.

Yes, you read that right.

And, of course, the national debt ceiling was increased under President George W. Bush because of his fiscally irresponsible tax cuts and his wars without any controversy among Congressional Republicans.

Interesting how nothing that happened before January 20, 2009 matters, isn't it?

The GOP's Debt Hypocrisy

Columnist Matt Miller wonders why the political media are overlooking an important point about the House Republicans' budget plan:

Remember that great scene in the 1980 film classic, “The Shining,” when the wife comes upon the typewriter of the Jack Nicholson character, who’s supposed to have been working night and day for months on his novel? To her horror, she finds thousands of pages on which Jack has typed, “All work and no play makes Jack a dull boy,” formatted in countless, crazy ways. Suddenly his suspected madness becomes all too frighteningly real.

Well, debt limit mania has driven me to a similar frenzied state. If my wife came across my manuscript it would read, “The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit. The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.”

I thought about making this week’s column that one sentence printed over and over 30 times. It would have been the opinion page equivalent of a Dada-esque protest against the inanity of the debate — and a cry for every news outlet to focus on this simple, clarifying fact.

Injecting facts into a political debate? How radical.

The House Republicans' budget plan isn't real. It isn't responsible. And it isn't bias to point out that the math and the policy doesn't work.

A person cannot be in favor of both the House Republican budget plan and against raising the national debt limit. And those who do