Tuesday, August 9, 2011

Desperate Times, Desperate Measures

Wow, the S&P downgrade has sent the panic in liberal Washington to incredible heights.

In what must be a coordinated effort, numerous Obama administration officials, leading Democrats, and liberal media outlets, including David Axelrod, John Kerry, Howard Dean, and the usual suspects at the New York Times, took to the airwaves and print over the weekend in an aggressive attempt to brand the S&P downgrade as the “Tea Party Downgrade.”

They’ve resorted to the theory of throwing everyone up against the blame wall in the hopes that someone sticks. The Tea Party has now joined a wall that already includes George W. Bush (ad nauseum), S&P, fat cat Wall Street bankers, China, Big Corporations, private jet owners, “millionaires and billionaires”, Boeing and pretty much everyone except themselves and their campaign contributors.

Desperate times call for desperate measures.

We do not identify ourselves as Tea Partiers. We’ve previously cautioned them to not overplay their hand during the debt ceiling debacle, for which they obliged, yet they are unjustifiably the scapegoat du jour for President Obama's administration. This is the ultimate cop-out in populist politics, shows an incredible lack of leadership and is revolting.

Let's look at the plain facts of the debt ceiling debate, the result of which led to the S&P downgrade:
  • The President wanted a clean debt ceiling increase, and has proposed a budget that increases spending to historic levels. 
  • The Tea Party opposed a debt ceiling increase, arguing that it’s too high already, and provided input into a Republican budget that significantly cuts spending in an effort to balance the budget. 
  • Congress and the President reached a compromise where the President received 100% of his debt ceiling increase, upfront, in exchange for some immaterial spending cuts over the next 10 years and the hopes of additional, yet still immaterial, cuts-to-be-named-later by another special committee that is doomed to fail.
Despite the liberal outrage, it seems that President Obama worked out a pretty good deal. He got all of his requested debt limit increase, avoiding an election season showdown, only had to agree to immaterial cuts to discretionary spending, and washed his hands of any future cuts by deferring the tough decisions to a Congressional committee. This "compromise” avoided a “default” but, in the minds of S&P, was too weak to keep us in the AAA club.

There is not a single rational reason why the Tea Party (which only recently has all of 15% of the total seats in Congress!) should get blamed for the downgrade, when they are the only party in town attempting to seriously fix the fiscal problems cited by S&P.

Additionally, what exactly did the Tea Party gain from the debt ceiling debacle? A moral victory from achieving spending cuts that are completely immaterial to the overall budget? Another opportunity to suggest sensible cuts that will ultimately get ignored by Democrats and most Republicans because supporting those cuts might hurt their ever-important re-election campaign? Their biggest win was avoiding President Obama’s last-minute, Populist Politics 101, demand for tax increases on “millionaires and billionaires” (interestingly defined as those who make more than $250,000 a year, including small businesses) that wouldn’t have made a dent in our budget problems anyway, and in fact, could actually compound the problem.

The President and Democrats were so intent on avoiding a “default” that they were happy to just kick the can down the road...again. Apparently S&P’s had enough with the can kicking and took the bold action of downgrading the US from a 0.0001% chance of default (AAA rating) to 0.001% chance of default (AA+ rating), turning a virtually meaningless downgrade into a political football.

The President and Democrats quickly punted and immediately went on defense by aggressively pointing their fingers at the Tea Party and holding yet another press conference spouting out the same meaningless clichés and talking points.

The American people want leadership in the face of our economic crisis, not blame games, condesending clichés about “shared sacrifice” and “compromise” or deferrals of important decisions to others.

Desperate times indeed.


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