From the White House? Nothing, which the Wall Street Journal characterizes as a “leadership default” reflected in Mr. Obama’s Monday night speech, reiterating the kind of partisan rhetoric the president himself has criticized on a number of occasions. The Journal characterized it as “more like a DNC fund-raiser than an Oval Office address,” in which Mr. Obama’s demands for tax increases “have already been abandoned by Members of his own party in the Senate.” The paper then gets to the big picture:
Apart from shifting blame for any debt default, the speech was also an attempt to inoculate Mr. Obama in case the U.S. loses its AAA credit rating. He cleverly, if dishonestly, elided the credit-rating issue with the debt-ceiling debate. But he knows that Standard & Poor’s has said that it may cut the U.S. rating even if Congress moves on the debt ceiling. Mr. Obama wants to avoid any accountability for the spending blowout of the last three years that has raised the national debt held by the public–the kind we have to pay back–from 40% in 2008 to 72% next year, and rising. This will be the real cause of any downgrade.
Who does the public hold accountable? Everybody involved, with Republicans and the president getting equally blamed for the lousy economy, according to the latest Washington Post/ABC News poll. When it comes to a lack of jobs, more Americans blame Republicans than Obama, by 65-52 percent. Yet among his liberal base, Mr. Obama’s approval on job creation has dropped from 53 to 31 percent.
Will the United States default on its debt? Only if the president and Treasury Secretary Timothy Geithner consciously decide to do so. That they have both attempted to scare the American public with such a scenario, along with a media sympathetic to their ideology, is shameful. In reality, a failure to raise the debt ceiling would force both men to prioritize government outlays. Ironically, whether it has been sold as tax-and-spend liberalism, or “compassionate” conservatism, it is precisely the effort to avoid prioritizing government outlays time and time again that has led us to trillion-dollar-plus annual deficits, and $14 trillion of national deb t– both of which are unsustainable.
This long-term unsustainability is what the ratings agencies are looking at. And despite all the heated rhetoric emanating from both Republicans and Democrats in Washington, D.C., neither plan as currently proposed comes close to getting our financial house in order. Other than 87 House Republicans who are standing on principle — and getting absolutely hammered for doing so — members of both parties demonstrate a politically motivated lack of desire to make the hard choices that would accrue to the country’s economic benefit in the long run.
Why? Because many Americans, long used to a level of socialistic policies they can’t imagine living without, would find such choices abhorrent. It would take an extraordinary level of leadership to point out the painful truth that such abhorrence must be measured against the reality of crushing debt, anemic growth, and millions of un- and under-employed Americans, with no realistic end in sight.
Will the United States’ credit rating be downgraded? S&P gives that a one-in-two chance of occurring in the next three months. A downgrade of the largest economy in the history of mankind. That’s a bipartisan failure of monumental proportions.
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