This simple quote captures the real problem with Congress and the Administration (story by Deborah Levine; quote from Ken Jacques, credit and derivatives manager at Informa Global Markets ...whatever expertise he may have.)
August 8, 2011
Corporate, junk bonds weaken after U.S. downgrade - MarketWatch
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3 comments:
Actually, S & P blame Republicans in Congress who oppose the Administration's attempts to combine spending cuts with some measures to raise revenues. These are S & P's actual words:
"...our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues,..."
I favor an approach such as recommended by the recent Bowles-Simpson Commission, a ratio of 3:1 spending reductions:new revenue, primarily by reforming the tax code.
That seems far more productive than politicians playing the blame game. Republicans rightly oppose new taxes to get the attention of the public that the root of our problem is spending, not a shortage of revenue. Finally, we are having a discussion on the deficits and debt, rather than have debt limit increases on autopilot.
I agree that Simpson Bowles are on the right track and so do S & P. Unfortunately, Republicans (as S & P point out in their report) refused to allow ANY discussion of revenue and used the (here I also agree with you) debt ceiling as a way to force the Adminstration's hand to the detriment of the country whose debt rating has now been downgraded "because Republicans continue to resist any measure that would raise revenues". That is not politicians playing the blame game that is what S & P said.
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