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Who’s Really Downgrading America?
Eurasia Review ^ | August 9, 2011 | Patrick J. Buchanan

Posted on 08/09/2011 1:24:47 PM PDT by 2ndDivisionVet

The decision by Standard & Poor’s to strip the United States of its AAA credit rating, for the first time, has triggered a barrage of catcalls against the umpire from the press box and Obamaites.

S&P, we are reminded, was giving A ratings to banks like Lehman Brothers, whose books were stuffed with suspect subprime paper, right up to the day Lehman Brothers fell over dead.

Moreover, S&P made a $2 trillion error in its assessment of U.S. debt and used political criteria in making its downgrade.

All of which may be true. But none of which is relevant.

This downgrade is deeply deserved. For no one really believes the United States is going to pay its creditors back the $14 trillion it owes them, or the $21 trillion it will owe them at decade’s end, with dollars of the same value as those that the United States is borrowing today.

In the last year alone, the U.S. dollar has lost 30 percent of its value against the Swiss franc.

A Swiss citizen who exchanged francs for $100,000 in dollars in June 2010 to buy one-year T-bills, then cashed those T-bills in this June, would have gotten back $100,000 in U.S. dollars. But those dollars would now be worth 30 percent less in Swiss francs.

On “Meet the Press,” Alan Greenspan insisted that the United States is not going to default. Why not? Because our debt is denominated in dollars, and we can print dollars to pay off our creditors. Which is pretty much what

Chairman Ben Bernanke and the Fed have been doing.

With the dollar down 5 to 10 percent this year alone against the world’s more respected currencies, we are engaged in what the Romans called coin-clipping — official stealing from citizens and foreigners.

Why are the Chinese so upset?

Because they are sitting on more than $1 trillion in U.S. bonds and Treasury bills bought with dollars we paid them for Chinese-made goods, while the purchasing power of the dollars that those bonds and T-bills represent withers away every week.

“I believe this is, without question, the ‘Tea Party downgrade,’” says Sen. John Kerry.

How so? Because the Tea Party blocked the big deal President Obama sought to cut with House Speaker John Boehner to resolve the deficit-debt crisis.

The president, we are told, was prepared to accept $3 trillion in reduced future spending for entitlements like Social Security, Medicare and Medicaid, but the Tea Party caucus refused to let Boehner agree even to $1 trillion in “revenue enhancement.”

But here, a question arises: If the president believes entitlement reform is essential to get America’s deficit-debt crisis under control, why does he need Tea Party cover to do his duty?

He doesn’t. Tea Party intransigence on taxes is not the reason for Obama’s failure to cut spending. It is his excuse.

Indeed, if Obama announced tomorrow that he was going to cut future spending on entitlements by $3 trillion to restore our AAA credit rating, he would have the full support of the Tea Party.

His opposition would come from Kerry’s colleagues in the Senate and Nancy Pelosi’s in the House.

To see how absurd it is to blame Tea Party Republicans for the downgrading of America’s debt, imagine this scenario: Rep. Ron Paul is speaker of the House, Sen. Rand Paul is majority leader, and Rep. Paul Ryan is president of the United States.

Does anyone doubt this trio would restore the U.S credit rating in a New York minute? Every sacred cow in the federal pasture, from food stamps to foreign aid, would be hanging in the meat locker.

The American people have come to like the president, but a majority is coming to believe he is simply not the decisive president we need to lead us out of the morass in which he found the country and from which he has failed to extricate us.

“He made it worse!” is shaping up as the GOP slogan for 2012.

If Obama wishes to restore the AAA rating of his country, he might consider two separate and bold steps, both consistent with his professed beliefs.

First, tell the Republicans that if they will not agree to revenue enhancement, he will nonetheless do his duty and pare back spending in the entitlement programs. He would get instant GOP support.

Following this, he could go to the Republicans and tell them that if they agree to eliminate the clutter in the tax code — exemptions, loopholes, deductions — he will agree to cut tax rates for individuals and corporations alike, to make America more competitive.

Again, he would have the support of Republicans and the Tea Party. It might even advance his re-election prospects, if he could get renominated by his own party, which would rebel at both reforms because they would mean a suspension of the politics of tax and spend.

As for the S&P downgrade, again, the only surprise is it didn’t come sooner.

TOPICS: Crime/Corruption; Editorial; Government; Politics/Elections
KEYWORDS: debtceiling; economy; obama; taxes

1 posted on 08/09/2011 1:24:48 PM PDT by 2ndDivisionVet
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To: 2ndDivisionVet

mmmmmm mmmmm mmmmm Barack Hussien Obama.

2 posted on 08/09/2011 1:30:18 PM PDT by brownsfan (I miss the America I grew up in.)
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To: 2ndDivisionVet

3 posted on 08/09/2011 1:33:09 PM PDT by Bean Counter ("He who has a why to live can bear almost any how.".....Nietzsche)
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To: 2ndDivisionVet
Irrelevant arguments ~ from another point of view the Swiss franc is highly volatile and moves up and down with the whims of Saudi and Chinese purchasers of gold.

There's your gold standard for you.

The USA will, at some point, mortgage or sell some of its assets to redeem the national debt.

There's about $15 trillion in debt and well over $150 trillion in assets.

4 posted on 08/09/2011 1:33:51 PM PDT by muawiyah
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To: 2ndDivisionVet

The Federal Reserve; today it said ‘downside risks to the economy have increased’.

5 posted on 08/09/2011 1:36:11 PM PDT by Son House (The Economic Boom Heard Around The World => TEA Party 2012)
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To: muawiyah
And just WHO is going to buy $15 TRILLION in government assets???

Whether obects are worth whatever they are valued at, a buyer must buy them. And who or what has the money to buy them.

If the US government decided to do a fire sale, I think valuable objects would go for dimes on the dollar.

6 posted on 08/09/2011 1:52:34 PM PDT by mountn man (The pleasure you get from life, is equal to the attitude you put into it.)
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To: mountn man
Obviously you don't just dump trillions in oil, coal, natural gas, land, mineral wealth of all kinds, uranium, thorium, rare earths, etc.

The federal government owns 1/3 of the nation's land mass. It also owns nearly 100% of the offshore economic zone ~ which is the largest such zone on earth due to the many islands we own.

There's sufficient wealth on or in public lands to pay our debts.

That is to say ALL of our debts are, or can be, backed by assets. This is not true of many other nations!

7 posted on 08/09/2011 1:59:46 PM PDT by muawiyah
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