Apparently S&P saw something in the process that was enough to spook them. If Ryan had said that simply raising the ceiling and not fixing the [longer term] problems was not solving anything and added that threatening not to raise the ceiling might have negative consequences but was worth it anyway, then I could have agreed or respectfully disagreed. The problem is in what he did say.
First off here's what he said at the convention, his other comment I'll address later:
Paul Ryan GOP Convention 8/29/12 said:
So our opponents can consider themselves on notice. In this election, on this issue, the usual posturing on the Left isn't going to work. Mitt Romney and I know the difference between protecting a program, and raiding it. Ladies and gentlemen, our nation needs this debate. We want this debate. We will win this debate.
Obamacare, as much as anything else, explains why a presidency that began with such anticipation now comes to such a disappointing close.
It began with a financial crisis; it ends with a job crisis.
It began with a housing crisis they alone didn't cause; it ends with a housing crisis they didn't correct.
It began with a perfect Triple-A credit rating for the United States; it ends with a downgraded America.
What he said is true, that is what happened and he merely states it as fact, it's rather tame actually, even as a suggestion. However I'm not really interested in semantics, because I know damn well he thinks the democrats were mostly to blame, notably because of
this:
CBS Scott Pelley said:
He spoke to CBS Evening News anchor Scott Pelley about several of the points he made in the speech.
Among the barbs was a suggestion that President Obama was responsible for a downgrade of the U.S. government's credit rating by that ratings firm Standard and Poor's during a budget and debt ceiling debate in Congress last summer.
Pelley confronted Ryan on that point, reading from the S&P's own report saying that it was Republicans' refusal to accept any revenue-raising measures that prompted the credit downgrade.
(emphasis mine)
First off, note the headline in comparison to his rather tame 'suggestion' in the speech. Then Paul Ryan
does go ahead and respond to the 'suggestion' by Pelley, and maybe he's
right! Is this true, that the Senate didn't even
bother to pass a budget? That's how it used to work, the House passes a budget, (usually more detailed as spending starts in the House and has more dedicated to the relevant committees) at more or less the same time the Senate does too, then the team members from both the House and the Senate hammer out an agreement. As you can see
here the President is supposed to start the process off, though his 'budget' can simply be a brief outline, as it's Congress who actually appropriates money, but he apparently didn't even bother either. The reason for that might be so he doesn't have to propose anything unpopular that he might have to take a political hit on, like the House Republicans did. Lemme guess, they were excoriated for 'slashing' programs? That's the way it is usually played, even through everyone knows these programs need to be fixed.
Now, see the part I
hi-lighted? You read the report, right? That's not what it says! There's a quote there that says this:
S&P Report 8/5/11 said:
Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.
However the context isn't correct, that quote isn't about
why they downgraded the rating, but the expiration of the tax cuts, which as we all know Republicans would oppose repealing. At that point they're just explaining their projection analysis, and they don't even make a negative comment about it. Aha! Some might think, it still makes it the GOP's fault, they won't raise taxes to fix it! That's
not quite it. For one thing this problem is
so severe the (relative) pittance that
should be generated from allowing the those tax cuts to expire isn't gonna help. For another, the classic Keynsian formula in circumstances such as these is to
cut taxes (to stimulate consumption and investment in new industry--jobs!) and increase government spending, running a deficit which can be paid off when the economy starts growing again. (like that ever happened
) Raising tax rates at this point could be counter-productive.
However
CBS news runs that outright disinformation and it's still on their website and they'll probably never correct it. It makes Paul Ryan look like a
liar just like they're all saying, right? The report itself tells you why they downgraded the rating, and one doesn't have to go digging through it finding out of context quotes and extrapolating, it's right in the very first section, the
overview:
S&P Report 8/5/12 said:
Overview
• We have lowered our long-term sovereign credit rating on the United
States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term
rating.
• We have also removed both the short- and long-term ratings from
CreditWatch negative.
• The downgrade reflects our opinion that the fiscal consolidation plan
that Congress and the Administration recently agreed to falls short of
what, in our view, would be necessary to stabilize the government's
medium-term debt dynamics.
• More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011.
• Since then, we have changed our view of the difficulties in bridging the
gulf between the political parties over fiscal policy, which makes us
pessimistic about the capacity of Congress and the Administration to be
able to leverage their agreement this week into a broader fiscal
consolidation plan that stabilizes the government's debt dynamics any
time soon.
• The outlook on the long-term rating is negative. We could lower the
long-term rating to 'AA' within the next two years if we see that less
reduction in spending than agreed to, higher interest rates, or new
fiscal pressures during the period result in a higher general government
debt trajectory than we currently assume in our base case.
(emphasis mine)
The first thing they said was the compromise wasn't good enough, even after the House Republicans took it all the way to mat, I'm sure they didn't like the talk about the debt ceiling or possibly defaulting a few days or whatever it was Ryan said, but the main thing they're interested in is whether a deal can be struck
that actually fixes this problem and the deal they finally did strike wasn't good enough. That's
really what they're concerned with, whether this problem can be solved, and
just maybe that the House came up with a detailed plan and the President and the Senate didn't bother and despite it going to that extreme wouldn't give in enough suggests where the real problem is here. Maybe Paul Ryan has legitimate reason to think that credit downgrade is mainly the fault of the President and Senate, maybe they did in fact say that to him regarding the House budget plan behind closed doors.
Here's a damn good reason to think they might have. Have you read the entirety of the bi-partisan commission report on
Lucifer's Hammer the looming fiscal crisis? The one Paul Ryan voted against? I think perhaps you should, it's
quite revealing. Here's a statement of the circumstances:
The Moment of Truth bi-partisan Report 12/2010 said:
Our nation is on an unsustainable fiscal path. Spending is rising and revenues are falling short, requiring the government to borrow huge sums each year to make up the difference. We face staggering deficits. In 2010, federal spending was nearly 24 percent of Gross Domestic Product (GDP), the value of all goods and services produced in the economy. Only during World War II was federal spending a larger part of the economy. Tax revenues stood at 15 percent of GDP this year, the lowest level since 1950. The gap between spending and revenue – the budget deficit – was just under nine percent of GDP.
Since the last time our budget was balanced in 2001, the federal debt has increased dramatically, rising from 33 percent of GDP to 62 percent of GDP in 2010. The escalation was driven in large part by two wars and a slew of fiscally irresponsible policies, along with a deep economic downturn. We have arrived at the moment of truth, and neither political party is without blame. Economic recovery will improve the deficit situation in the short run because revenues will rise as people go back to work, and money spent on the social safety net will decline as fewer people are forced to rely on it. But even after the economy recovers, federal spending is projected to increase faster than revenues, so the government will have to continue borrowing money to spend. The Congressional Budget Office (CBO) projects if we continue on our current course, deficits will remain high throughout the rest of this decade and beyond, and debt will spiral ever higher, reaching 90 percent of GDP in 2020.
Over the long run, as the baby boomers retire and health care costs continue to grow, the situation will become far worse. By 2025 revenue will be able to finance only interest payments, Medicare, Medicaid, and Social Security. Every other federal government activity – from national defense and homeland security to transportation and energy – will have to be paid for with borrowed money. Debt held by the public will outstrip the entire American economy, growing to as much as 185 percent of GDP by 2035. Interest on the debt could rise to nearly $1 trillion by 2020. These mandatory payments – which buy absolutely no goods or services – will squeeze out funding for all other priorities.
Federal debt this high is unsustainable. It will drive up interest rates for all borrowers –businesses and individuals – and curtail economic growth by crowding out private investment. By making it more expensive for entrepreneurs and businesses to raise capital, innovate, and create jobs, rising debt could reduce per-capita GDP, each American’s share of the nation’s
economy, by as much as 15 percent by 2035.
Rising debt will also hamstring the government, depriving it of the resources needed to respond to future crises and invest in other priorities. Deficit spending is often used to respond to shortterm financial “emergency” needs such as wars or recessions. If our national debt grows higher, the federal government may even have difficulty borrowing funds at an affordable interest rate, preventing it from effectively responding.
Large debt will put America at risk by exposing it to foreign creditors. They currently own more than half our public debt, and the interest we pay them reduces our own standard of living. The single largest foreign holder of our debt is China, a nation that may not share our country’s aspirations and strategic interests. In a worst-case scenario, investors could lose confidence
that our nation is able or willing to repay its loans – possibly triggering a debt crisis that would force the government to implement the most stringent of austerity measures.
So why did he vote against it? There's a lot of good proposals in there, some of them measures that would have gotten a Republican called an 'extremist' back in the day--when it would have been a lot easier to fix. Some pro-growth tax policies too...I got a chance to really go through it after just glancing through it the first time and reading about it a couple places, and at first I was really starting to wonder why Ryan didn't support it. Then I figured it out: same-old, same old.
It doesn't actually fix the problem, just does
some good things, raises taxes but leaves the one set to explode alone. I'd guess that's because it was decided that despite these dire fiscal problems and the state of the economy at the time that we just had to add a new federal entitlement. I didn't follow it, but I heard some things about it, we now have some national health care plan, thus they musta left Medicare off the table while they were doing this or something, eh? I also am starting to divine just what Ryan might be getting at regarding Medicare being raided, which I just figured was turnabout Dem spin, maybe not. They...ummm...didn't exactly...do all the heavy lifting...on how this shiny new federal entitlement was gonna be funded, huh?
I got to looking around to see if I could confirm and I came across this quote from the chairman, a guy I always really liked, in part because he'd say things like this:
Alan Simpson said:
"We're going to get rid of all earmarks, all waste, fraud and abuse, all foreign aid, Air Force One, all congressional pensions. That's just sparrow belch in the midst of the typhoon. That's about 6, 8, 10 percent of where we are. So, I'm waiting for the politician to get up and say, there's only one way to do this: you dig into the big four, Medicare, Medicaid, Social Security, and defense. And anybody giving you anything different than that, you want to walk out the door, stick your finger down your throat, and give them the green weenie."
That's pretty much how it
is, isn't it? I got to wondering just what he thought of Ryan's vote, and here it
is.
Yeah, heath care. Got to looking some more just in case as that was rather brief and found this
David Brooks article which I think is a pretty fair summation of what's going on. He isn't lying, he just wants to fix the problem for good, and he didn't really get met halfway, did he? I mean, the Dems on the commission may have voted for the report, but then it would have had to have been sold to the Congress for that up-down vote. There's a lotta things in there that would have been unpalatable to the Democrats, both in the House and the Senate.
There's no guarantee, in fact it might have been unlikely, that would have passed regardless. Hell, going by their future strategy they might well have waited for Paul Ryan to take the political hit from frenzied Groverites, then the Senate fail to pass it--perhaps placing the blame on the 'extremist' Paul Ryan who wants to push granny out the window, the hitman for
Big Oil Big Kohl.
Maybe not, maybe it would have all come to pass, but there's a history here. This sort of thing has happened before. These entitlements have been on a collision course with fiscal oblivion forever, you might say ever sense they got some 'friends' and then put on steroids, there's
those who saw it coming at the time, they were called
'extremists' or somesuch. As it turned out they were right, but
courted disaster if they touched the third rail, so they always
compromised. That made him the 'tax collector for the welfare state' to some! Lo and behold the problem
reared its ugly head again, but not even war heroes could ever get it fixed for good.
One even got himself scalped by Grover, then tag-teamed by a '
hand grenade with a bad haircut' and an
aging hippy still living the free-love lifestyle!
You see there's some
history here.
Thus while some might think that perhaps Paul Ryan needs to mellow a bit, maybe smoke a bowl with Obama, listen to some
Bob Marley, and be a little more willing to
compromise, that's not an unreasonable position, I can understand why some would feel that way. However that's also the sort of thing that has kept this powderkeg smoldering and also claimed its share of careers just for bringing it up. Thus a plan that doesn't actually
fix the problem isn't exactly a cure all and comes with much risk for just sluffing it off another five or ten years or so. That S&P report seemed
awfully interested in what might happen in the next two years, suggesting to me what they
really want is action on this where it
actually matters, that is the bottom line, and bluffing to try to get action on that bottom line might not spook them as much as one might think.
Now Michael Kinsley is a bright guy, one that usually has his head screwed on tight. For him to start thumping his chest speaking of 'honor' I gotta kinda wonder if others coulda manned-up and put their weenies in the wicker too. Maybe the
gambler in the Senate who seems so
interested in figures
now coulda put together a plan. That's usually the way it works if you want play with the Big Boys, you have to lay your cards on the table so everyone can see them. You have a house budget, a senate budget, maybe a President who'd previously put together an outline of what sorts of deficit-cutting and revenue-raising measures he'd find palatable, and the three parties deal--because everyone
knows a deal has to get done. They
always do.
It's not lying if he
believes it and it looks to me like he thinks this problem actually has to get solved, too many compromises that didn't fix it are what led to this juncture. Being as he didn't just posture with a House budget but went all the way, I'd say he lived up to the spirit of the bi-partisan commission, even if he didn't vote for the result because it didn't actually
solve the problem. I'd say it's fair that he might have reason to believe that he did his best to actually put the country on a firm financial footing, and I'm betting that's what the bean-counters at S&P
really care about. I don't think it unreasonable he might feel he wasn't met halfway and that maybe if he's gonna have to absorb '
suggestions' that he's trying to push granny off the cliff for trying to actually
solve the problem, the ones who didn't and who wield more power and have more influence ought to be the ones taking the better half of the blame for the downgrade to the credit rating, regardless of what get's said in the heat of the moment in a budget battle. I know that politicians posture, and that bureaucrats bloviate, I'm guessing S&P's know that too.
Sorry it took this long to respond, I wanted to do some research and give you a real answer. I don't think it fair to call him a 'liar,' but I can see to some he might be considered too strident. However he did compromise and adopt the Romney plan, and Mitt Romney as a former governor of Massachusettes can't really be considered a fanatic either, he musta been able to deal to run that place. I hear they're so environmentally conscious up there they put Republicans on the Endangered Species list!
