Immediatly after Standard and Poor's credit rating agency downgraded the United State's economy from AAA to AA+, Treasury Secretary Timothy Geither said, "I think S&P has shown really terrible judgement, and they've handled themselves poorly and they've shown a stunning lack of knowledge about basic U.S. fiscal budget math and I think they drew exactly the wrong conclusion from this budget agreement."
Sarah Palin took to her Facebook page last night to disagree with Geithner's statement and wonders why there is so much surprise surrounding the S&P decision. She also cautions against asking President Obama to "fix" the situation considering the more the man has tried to "fix" things through big government, the worse things get.
I’m surprised that so many people seem surprised by S&P’s decision. Weren’t people paying attention over the last year or so when we were getting warning after warning from various credit rating agencies that this was coming? I’ve been writing and speaking about it myself for quite some time.
Back in December 2010, I wrote: “If the European debt crisis teaches us anything, it’s that tomorrow always comes. Sooner or later, the markets will expect us to settle the bill for the enormous Obama-Pelosi-Reid spending binge. We’ve already been warned by the credit ratings agency Moody’s that unless we get serious about reducing our deficit, we may face a downgrade of our credit rating.” And again in January, in response to President Obama’s State of the Union address I wrote: “With credit ratings agency Moody’s warning us that the federal government must reverse the rapid growth of national debt or face losing our triple-A rating, keep in mind that a nation doesn’t look so ‘great’ when its credit rating is in tatters.”
One doesn’t need a Harvard Law degree to figure this out! Just look across the pond at Europe. European nations with less debt and smaller deficits than ours and with real “austerity” plans in place to deal with them have had their ratings downgraded. By what magical thinking did we figure we could run up perpetual trillion dollar deficits and still somehow avoid the unforgiving mathematics of a downgrade? Nothing is ever “too big to fail.” And there’s no such thing as a free lunch. Didn’t we all learn that in our micro and macro econ classes? I did at the University of Idaho. How could Obama skip through Columbia and Harvard without learning that?
Many commonsense Americans like myself saw this day coming. In fact, in June 2010, Rick Santelli articulated the view of independent Tea Party patriots everywhere when he shouted on CNBC, “I want the government to stop spending! Stop spending! Stop spending! Stop spending! STOP SPENDING!” So, how shamelessly cynical and dishonest must one be to blame this inevitable downgrade on the very people who have been shouting all along “stop spending”? Blaming the Tea Party for our credit downgrade is akin to Nero blaming the Christians for burning Rome. Tea Party Americans weren’t the ones “fiddling” while our country’s fiscal house was going up in smoke. In fact, we commonsense fiscal conservatives were the ones grabbing for the extinguishers while politically correct politicians and their cronies buried their heads in what soon became this bonfire.
With S&P and others now warning that we could face another downgrade if we don’t get serious about our debt problem (i.e., recklessly spending money we don't have), Washington needs to wake up before things get worse! We’re already hearing murmurs about QE3, which is just madness and will further debase our currency at a time when the dollar’s status as the world’s reserve currency is already being questioned. The loss of the dollar’s reserve currency status would adversely impact us in every conceivable way. Our standard of living would decline as imports become more expensive (including imports of foreign oil), government wouldn’t be able to finance deficits as cheaply, and American corporations – employers – would lose a competitive edge. It would be another crack in our status as a financial superpower.
We need to get serious about our deficit. No more accounting gimmicks. No more cuts in “out-years” that never materialize. The permanent political class in D.C. might be fooling themselves with these Enron-like accounting games, but they’re not fooling the world’s capital markets. And we don’t need any more happy talk from the White House about “investing” in solar shingles and really fast trains. The White House shouldn’t even bother floating these new spending programs. We can’t afford them. Period. We need to stop this deficit spending, balance our budget, repeal Obamacare, cancel all unused stimulus funds, and reform our entitlement programs. We have to have an adult conversation about our spending commitments; circumstances have changed, and we must adapt. I know none of this will be easy, but, “thick” or not, the average American outside the D.C. politico bubble knows that we no longer have a choice! We will have entitlement reform and a balanced budget; it’s just a matter of how. We can do it ourselves in a calm, methodical, and responsible manner, or we can wait for the world’s capital markets to ram it down on us. Let’s be responsible and do it ourselves. And let’s get serious about reducing the size of government across the board and rooting out waste. How many more reports (that today are destined to merely gather dust on the shelf) do we need about duplicative and unnecessary programs before we actually do something about government waste?
We need to get this economy moving again, and the real stimulus we’ve been waiting for is domestic energy development. We must reduce our dangerous dependence on foreign oil by responsibly developing natural resources here. This will provide good paying jobs, reduce our trade deficit, increase federal and state revenue, ensure environmental standards, and actually stimulate our economy without incurring any debt. That’s real stimulus! Affordable, plentiful, and secure energy is the foundation of every thriving economy. Let’s make it the foundation of ours. Let’s do the opposite of President Obama’s manipulation of U.S. energy supplies. Let’s drill here, build refineries, and stop kowtowing to foreign countries in asking them to ramp up energy production which makes us even more beholden to them as we rely on their foreign product. Let’s move on tapping our massive domestic natural gas reserves. Natural gas is the perfect “bridge fuel” to a future when more renewable sources are available. It’s clean, it’s green, and we’ve got a lot of it. Let’s drill. Let’s build an infrastructure for natural gas cars and power plants. Energy development can help kick start our economic engine.
In addition to energy security, I embrace a pro-growth agenda that can make American corporations far more competitive on the global stage. (I will be writing more about this in the coming days.) We need to tell the world, “America is open for business again!” And let’s welcome industry by reducing burdensome regulations. The Obama administration keeps strangling businesses in red tape. From the EPA’s rulings to that nightmare known as Obamacare, the Obama administration is hanging one regulatory albatross after another around the private sector’s neck. Let’s get government out of the way and give the private sector room to breathe, grow, and thrive. We can provide businesses confidence to expand and hire Americans in a stable environment.
Be wary of the efforts President Obama makes to “fix” the debt problem. The more he tries to “fix” things, the worse they get because his “solutions” always involve spending more, taxing more, growing government, and increasing debt. This debt problem is the greatest challenge facing our country today. Obviously, President Obama doesn’t have a plan or even a notion of how to deal with it. His press conference today was just a rehash of his old talking points and finger-pointing. That’s why he can’t be re-elected in 2012.
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