Happy anniversary, America. One year ago today, President Obama presided over the first national credit downgrade in US history. From the August 6, 2011 edition of the Wall Street Journal:
A cornerstone of the global financial system was shaken Friday when officials at ratings firm Standard & Poor's said U.S. Treasury debt no longer deserved to be considered among the safest investments in the world. S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn't do enough to address the gloomy outlook for America's finances. It downgraded long-term U.S. debt to AA+, a score that ranks below more than a dozen governments', including Liechtenstein's, and on par with Belgium's and New Zealand's. S&P also put the new grade on "negative outlook," meaning the U.S. has little chance of regaining the top rating in the near term.
This gut-punch occurred for several reasons, all of which can be laid at the feet of the president. First, the national debt skyrocketed. President Bush added $4 Trillion to the total sum over eight years. As of last August, Obama pulled even with Bush in less than three years. Obama is now responsible for four consecutive trillion-dollar-plus annual deficits, annihilating his promise to cut the deficit in half. Second, and relatedly, the debt-to-GDP ratio entered a very serious danger zone. The gross national debt reached 100 percent of the size of the US economy. Third, S&P reckoned that America's political leadership lacked the capacity to handle and resolve the nation's climbing debt. They were right. Despite a convoluted debt deal -- which entailed fanciful cuts and farmed off much of the heavy lifting to a Super Committee that ultimately failed, due to Democrats' intransigence -- the credit agency recognized that Barack Obama's leadership was historically weak and divisive. Obama had rejected out of hand several Republican solutions on this issue (The Ryan budget and Cut, Cap, Balance), then sandbagged John Boehner with a revised "grand bargain" that included many additional tax increases at the last minute. He also turned down a separate bipartisan debt ceiling agreement. A dubious compromise was eventually forged, but the damage was done. The United States was downgraded, and has not recovered its former pristine rating. Why? Because Obama just keeps chugging along with his flailing, unserious, nakedly political program of massive deficits and class warfare. All of the problems that plagued the country in 2011 are worse than ever. Mitt Romney tees off:
“One year ago, the President’s failure to rein in reckless government spending led to a downgrade in the creditworthiness of our nation. President Obama’s spending binge now has him on pace to add more than $1 trillion to the debt for the fourth straight year. And it’s the middle class that will pay most dearly for this out-of-control spending. The contrast between President Obama and me on this critical issue could not be more clear. As Governor, I led Massachusetts to a credit upgrade. And as president, my Plan for a Stronger Middle Class will not only deliver more jobs and more take-home pay for American families, but it will also reduce spending to responsible levels. I will lead us toward a balanced budget and restore the sterling credit rating our nation lost under President Obama.”
Will the American people choose four more years of President Downgrade, or hire a CEO who specializes is successful turn-around projects?
UPDATE - The Romney campaign is sending around this flashback clip from April of 2011:
Hey look, someone who actually didn't pay his taxes. In case you were curious, Harry Reid voted to confirm this man to run the national treasury. It's also worth mentioning that Geithner has also admitted that Obama has no solutions to rein in the systemic and growing debt. The president does, however, want to spend a lot more money we don't have.
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