For the first time in our history, America’s credit rating is being threatened with a downgrade.
Even if an agreement is reached in Congress to raise the debt limit, a downgrade of the U.S. credit rating remains likely, unless an agreement to reduce the deficit is also reached. Of course, these are the same rating agencies that gave AAAs to the complex securities that fueled the housing bubble. But their ratings matter, regardless.
Everyone is worried about a default on August 2nd, but actually, a downgrade could be worse, leading to higher mortgage payments, credit card and car payments for any American holding debt, as well as an extra $100 billion in yearly interest payments to U.S. Treasury holders like China. If a downgrade occurs, the financial markets would suffer a huge blow, and Barack Obama’s presidency would clearly be scarred. And then there’s that elephant in the room: that America’s credit will have been downgraded for the first time, with a black man in the White House, potentially reinforcing the stereotype that black people are poor money managers.
Sure, most Americans understand that Obama came into office with a huge deficit left over by the Bush administration. But there are at least some people on Capitol Hill who seem to be trying to change that perception, to blame Obama for the current crisis (the Wall Street Journal’s Peggy Noonan even calls Obama a “loser” in her latest column) and to bring as much chaos to Obama’s presidency as possible, to instill the perception that he can’t govern, even if it means damaging the reputation of the country they claim to love.
WATCH PEGGY NOONAN ON MSNBC’S ‘MORNING JOE’:
Have you ever been in a crowded restaurant, engaged in a conversation with a friend or a significant other when suddenly, you’re abruptly interrupted by the sound of crashing dishes that a waiter has dropped? Then all of a sudden, the next thing you hear — in unison- from complete strangers, is a round of applause. It’s as if it’s part of our nature to rejoice in destruction. But who would’ve ever believed that the day would come when a number of Americans would be rooting for America to default on its financial obligations?
Could the Tea Party freshmen really have that much power (and can they be that crazy?)
In reality, this is bigger than the Tea Party.
America has been in debt for a very long time. If you didn’t know any better, you’d think it all started with the first black president.
The truth is, Jimmy Carter raised the debt ceiling 9 times from $706 billion to $995 billion and Reagan raised it 18 times, from $995 billion to $2.868 trillion! Where was the uproar from the die-hard Americans then?
Next up, George H. W. Bush raised the ceiling 9 times and pushed the debt to $4.351 trillion. Even Clinton raised it 4 times and pushed it to $5.770 trillion.
And ladies and gentlemen, no American president — and no leader in the history of the world — has spent more and created more debt than George W. Bush. He raised the debt limit 7 times and pushed it to a whopping $11.876 trillion, and again, not so much as a peep from the right. Surely, the die-hards were concerned about the future of the children back then.
It seems to me that it’s no coincidence that certain Americans are willing to wreck the country and let millions suffer, but only with this president in office.
Even when we get past this current crisis (and we will) there will be more, including the real, but largely self-imposed, jobs crisis. Responsible governing can fix the debt, but the federal government has absolutely no control over American corporations, who are overflowing with cash. In fact, corporate earnings are at all time record highs, and together, corporations are hoarding more than $2 trillion in cash.
WATCH MELISSA HARRIS-PERRY COVERAGE OF THE DEBT CEILING FIGHT:
Normally, when they have that much cash, companies begin to hire and expand their businesses. That trend has held for over 100 years. It’s called the “trickle-down effect”; the trade off for corporations enjoying hefty tax breaks and loopholes.
So what happened? What changed? Greed, politics and Barack Obama in the Oval Office.
With corporations holding back job creation, the working man suffers. And when the working man suffers, they tend to blame whoever’s in the White House. The fiscal crisis is a political opportunity for some who, like Senate Minority Leader Mitch McConnell and Congresswomen Michele Bachmann, have made preventing Obama from having a second term their top priority.
And yet I’m reminded of what my grandmother used to say: “If you’re planning to dig a hole for someone, be careful — you might just fall into the hole yourself.” It’s time for Republicans to put the shovel down.