Tuesday, August 9, 2011

Demint twists truth about U.S. debt downgrade perhaps to deflect blame from Tea Party

The Tea Party, bought and paid for by the Koch brothers shows over and over again that its willing to shut down the government, push the country to the brink of default on the national debt and otherwise crash the American economy in order to extract more budget cuts and tax dodges for the rich. 

Despite the fact that Standard and Poor’s explained that the number 1, 2 and 3 reasons for their recent downgrade of U.S. debt were the tea party inspired partisan brinksmanship over the debt ceiling, South Carolina Senator Jim Demint insists that the responsibility for the lowered rating rests with the Obama Administration and that somehow mismanagement by Treasury Secretary Tim Geithner is to blame. Demint and other conservatives like Republican presidential candidate Michele Bachmann have called for the Secretary's immediate resignation.

Demint’s false assertions about Treasury Secretary designed to misdirect blame and exonerate Tea Party and Republicans from the first debt downgrade in American history

The fact that the S&P statement nowhere mentioned mismanagement by the treasury department as a reason for the downgrade did not deter the "Tea Party Senator" from making their claims. Perhaps its an effort to redirect blame from the Tea Party Congressional delegation that insisted on tying an increase to the debt ceiling with deficit reduction and went on to consistently refuse to compromise on a much larger package  that would have included some additional revenues from closed corporate tax loopholes, some adjustments to deductions and some broadening of the tax base as proposed by the Obama Administration.

The Obama Administration's "grand bargain"  included $3 Trillion in budget cuts and around $800 billion in increased tax revenues substantially bigger spending cuts than ultimately were agreed upon through the final legislation. The Administration's plan would have likely satisfied the ratings agency although political 'dysfunction' initiated by the willingness of the Tea Party Republicans to push the the U.S. to the edge of default was clearly the main reason behind the credit downgrade.
“...the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges. (Standard & Poors' statement on U.S. debt downgrade)
Ironically, Demint went on to say that the downgrade could have been avoided had the debt ceiling deal included more budget cuts, precisely what the Obama Adminstration including Secretary Geithner proposed in its grand bargain. 

Republican and Tea Party resistance to eliminating Bush tax cuts cited as additional justification for the debt downgrade.

S & P also strongly indicted Republican intransigence on any revenue increases. They clearly stated their worry that the formerly “temporary” Bush tax cuts seemed to be on their way to becoming permanent.

“Compared with previous projections, 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, a position we believe Congress reinforced by passing the act.”  (Standard & Poors' statement on U.S. debt downgrade)
Read the Standard & Poors debt downgrade press release
How a downgrade on the national debt will impact South Carolina's fiscal future

1 comment:

  1. Crash the economy is putting it mildly