Downgraded

We been downgraded.  Totally dissed.

Standard & Poors has downgraded US government debt,  and the Dow fell over 1000 points, about 9% in the past three days.  Early reports say that most of the stock sellers were in a flight to safety – to recently downgraded US government debt now with rates falling due to increased demand.   Which I suppose makes some kind of perverse sense, much like the debate which preceded it.

           The S&P action follows our national humiliation as the President and Congress tried to raise the debt ceiling,  a crisis manufactured by Republicans to assure that any economic train wreck occurred while President Obama is in office. http://contrariat.blogspot.com/2010/11/train-wreck-ahead.html.  The failure of Congress to address the nation’s debt and revenue issues was stunning and craven, and I happened to have observed the worst of it through the eyes of the world while visiting #2 Son in England.  They think we are nuts, and they are right.

           No one I know thinks much other than that there is a serious problem, and that the necessary steps to deal with it include some debatable mix of spending cuts and  revenue increases, something like what President Obama almost worked out with Speaker Boehner.  Contraria believes, however that this fight was twice lost by the Democrats.  First, in December 2010 with majorities in both houses and the 2001 tax cuts about to expire the Democrat majorities caved to the Republicans in extending the tax cuts.  The President after running and railing against the tax cuts sugar-coated his defeat by announcing that the extensions were a good way to stimulate the economy.  Bullshit, but it proved that the President could be bullied by the Republicans and that the Democrats were as usual wholly unprincipled.

           Worse was the scene after the President and the Speaker reached most of an agreement when Senator Reid announced a Democratic plan with no new revenues.  When the President stood alone against both parties in Congress Boehner could not support new revenue when Reid did not, so the negotiations collapsed.

           The Congress manufactured a crisis and failed to deal with it.

           We deserve to be downgraded, but no good will come from this.