John Chambers, Managing Director of S&P, said this morning that all the countries that regained their AAA credit rating after being downgraded took on fiscal reforms to reduce their debt to GDP. It certainly took time but that’s the bottom line on what we need to do as well, which is exactly the mandate that brought the Tea Party to Washington.
But what struck me was the level of emphasis he put on the damage that was done by waiting until the last minute to agree on raising the debt ceiling, or as he put it, that we were only 10 hours away from major cash flow problems. He blames it on the fact that our budget process is separate from our process to raise the debt ceiling. I disagree as I see the debt ceiling as a check on our spending levels. The real problem is that we have a radical element in our government who is trying to spend us into oblivion as fast as humanly possible, who decided to use the debt limit for hyper-partisan political games. Thus they told the public that we might default while secretly telling the banks that we wouldn’t default – all the while default was never going to happen and it was proved by the Treasury’s own figures. They took us to the brink with extremely high spending levels and then blamed the Tea Party for suggesting that spending was the problem, not revenues. In fact, if the Senate and the President had passed and signed Cut, Cap, and Balance as passed by the House (or even Paul Ryan’s budget), we wouldn’t have lost our AAA credit rating and we would be on the long road to fiscal sanity.
So when I hear Chambers suggest that there has been major damage done to our credibility as a nation over this debt limit fiasco, to me it rests in the lap of Obama and the Democrats for bringing us to this point. Need I remind you that Obama has already more than doubled the amount of debt in THREE YEARS that occurred under the Bush administration in eight years. That is an astounding figure that can’t be ignored by rational people.