Last night, Standard & Poor's, one of three agencies that rate the debt of governments and companies, announced that it would reduce the United States' credit rating to AA+, one notch below the top rating of AAA. Moody's and Fitch have no plan to follow suit, but even if they don't, this will be the first time in history that the U.S. credit rating has been downgraded.
The Washington Post blames spending for the downgrade, but this has nothing to do with the government's policies or its ability to pay. Our debt is measured in dollars, which means we can simply print the money if need be. With our $14 trillion economy -- and current low levels of taxation -- we are more than able to pay our debts for the next ten years and beyond.
The July employment report isn’t bad, but that doesn’t mean it’s good, either. On the bright side, total private-sector payrolls increased by 154,000, a massive increase over the 18,000 jobs created in June. What’s more, the June numbers improved as well; after revision, the Bureau of Labor Statistics found that the economy created 46,000 jobs that month. A poor number, but not as catastrophic as originally reported. Still, the picture dims as you look further into the new numbers. Total public-sector payrolls decreased by 37,000, as state and local governments cut wokers in response to slow growth and low revenues.
With Republicans beginning to focus their efforts on passing a balanced budget amendment to the Constitution, and further spending cuts via the “super committee,” it’s natural to wonder what plan – if any – Democrats have for the coming months. At a meeting this morning with liberal bloggers, House Minority Leader Nancy Pelosi explained her strategy and how Democrats would move forward after the August recess.
(AP Photo/J. Scott Applewhite) House Speaker John Boehner
To liberals, conservatives walked away from the debt-limit crisis on Tuesday with a killer deal. In exchange for lifting the debt ceiling by $2.5 trillion, they received $1 trillion in immediate spending guts, with the promise of at least $1.2 trillion more come December. In Congress, House Progressive Caucus co-chair Raul Grijalva typified the left's reaction to the agreement: "This deal trades people's livelihoods for the votes of a few unappeasable right-wing radicals."
If you want a sense of how far right the Republican base is right now, even with the GOP’s huge victory on the debt ceiling, look no further than the Republican presidential candidates and their statements on the agreement reached last night.
For erstwhile moderate Mitt Romney, the deal is a non-starter: