Debt Downgrade Update: Bye, Bye AA+, Hello AA
By Andrew Mickey, Underground Profits
Who says Washington can’t get stuff done?
U.S. debt was downgraded from AAA to AA+ came out on Saturday. The markets tanked on Monday. Now it’s Thursday, the markets are still dropping, gold is jumping $50 a day, and the “plan” has just been put in motion to get downgraded to AA before the year is out.
Think it can’t happen? Think the Tea Party will be able to force the spend-borrow-and-taxers to turn around? Think a ratings agency will not see through the next round of phantom cuts?
Over the last few hours, Congressional leaders have announced their selections for the congressional “Super Committee” charged with finding further deficit reduction and that must be voted on by December 23rd.
The congressmen selected for the Super Committee are all virtually unanswerable to the electorate. All of them are from extremely safe seats, retiring, or aren’t facing election for at least five years.
Introducing the Dirtiest Dozen
In the blue trunks we have three senators. John Kerry is from the deepest of blue states, is a proud eco-fascist, and married into enough money he’ll never have to worry about reelection. Max Baucus won Montana by more than 50% last time he was elected and will likely retire in 2014 when he’s up for reelection. Patty Murray just one a Senate seat from Washington in 2010 and won’t be up until 2016.
The remaining three of the Dirtiest Dozen representatives of the Democrat side haven’t been selected. But we do know they will be hand-picked by Nancy Pelosi. And, even if she didn’t want extremely left wing representatives on the committee, there are no moderate Democrats left after the 2010 elections.
In the red trunks, we have three senators and three House members. Jon Kyl, a Senator as mavericky as his fellow Arizona senate colleague, the ever-malleable John McCain, has announced his retirement at the end of his term in 2012. The other two, Senators Pat Toomey of Pennsylvania and Rob Portman of Ohio, were both elected in 2010 and won’t be facing reelection until 2016.
The representatives aren’t much more under the thumb of the electorate either. Rep Jeb Hensarling won his Texas district by a 70% to 27% margin in 2010. Reps Dave Camp and Fred Upton, both from Michigan, won their past elections with well over 60% of the vote. All three are in very safe seats and are known for “playing ball” on spending and taxes.
Credit Ratings Don’t Matter
I don’t see any way in which this turns out well.
We’ve got a “Super Committee” charged with finding more than $1 trillion in deficit reduction. Not spending cuts. Deficit reduction (read mix of phantom spending cuts and tax increases).
They’re in positions where they’re electorally safe and, as a result, essentially unanswerable to the people.
And President Downgrade, charged with checking and balancing Congress, has an unblemished record on signing every spending bill that has made to his desk.
Is it time to worry?
Well, a wise and experienced man once reassured me the USA “is still an AAA-nation” in his book. And the Dow only fell 6% in the following three days.
Bye, bye AA+. Hello AA.0
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