Surviving Collapse: Wednesday Chronicle: Steep Downgrade Plus Rising Debt

The Foundation
"I love the man that can smile in trouble, that can gather strength from distress, and grow brave by reflection." --Thomas Paine

Editorial Exegesis
The Obama road
"Whatever one thinks of the credit-rating agencies -- and we aren't admirers -- it serves no good purpose to shoot the fiscal messengers. Friday's downgrade by Standard & Poor's of U.S. long-term debt to AA+ from AAA will be the first of many such humiliations if Washington doesn't change its economic and fiscal policies. Investors and markets -- not any single company's rating -- are the ultimate judge of a nation's creditworthiness. And after their performance in fanning the credit and mortgage-security mania of the last decade, S&P, Moody's and Fitch should hardly be seen as peerless oracles. Their views are best understood as financial opinions, like newspaper editorials, and they're only considered more important because U.S. government agencies have required purchasers of securities to use their ratings. ... Yet is there anything that S&P said on Friday that everyone else doesn't already know? S&P essentially declared that on present trend the U.S. debt burden is unsustainable, and that the American political system seems unable to reverse that trend. This is not news. ... Despite S&P's opinion, there is no chance that America will default on its debts. The real importance of the downgrade will depend on the political reaction it inspires. If the response is denial and blaming the credit raters, then the U.S. will continue on its current road to more downgrades and eventually to Greece. What has already become a half-decade of lost growth will turn into a lost decade or more. If the response is to escape the debt trap by the stealth route of inflation -- a path now advocated by many of the same economists who promoted the failed spending stimulus of 2009 -- then the U.S. could spur a dollar crisis and jeopardize its reserve currency status. The better answer -- the only road back to fiscal sanity and AAA status -- is to reverse the economic policies of the late Bush and Obama years. The financial crisis followed by the Keynesian and statist revival of the last four years have brought the U.S. to this downgrade and will lead to inevitable decline. The only solution is to return to the classical, pro-growth economic ideas that have revived America at other moments of crisis." --The Wall Street Journal

Essential Liberty
"While tea party critics are re-reading the Constitution, they should also consult the Declaration of Independence. That philosophical foundation of the Constitution reserves the right of the people to change their government when it no longer serves the interests of its citizens. The Declaration outlined the proper relationship between government and citizens, noting that government derives its 'just powers from the consent of the governed' (and) 'whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.' The British no doubt considered those who wrote and believed such things 'terrorists.' We call them patriots." --columnist Cal Thomas

Upright
"The decision by credit agency Standard and Poor's to downgrade America's AAA credit rating for the first time in 70 years is a massive blow to the credibility of the Obama administration, and a damning indictment of its handling of the economy. ... These are increasingly dangerous times, with American leadership being challenged across the globe. Only an historic reduction in government spending combined with pro-growth measures including lower business tax rates to stimulate job creation and attract investment can turn the US economy around. Unfortunately, as Standard and Poor's decision has shown, this is a presidency in extreme denial over America's towering debts, leading a nation on a precipice while blindfolded to reality." --columnist Nile Gardiner
"Had the Republicans gone along with President Obama's original request for a 'clean' bill ... would that have spared the country the embarrassment of having its government bonds downgraded by Standard & Poor's credit-rating agency? To believe that would be to believe that it was the debt ceiling, rather than the runaway spending, that made Standard & Poor's think that we were no longer as good a credit risk for buyers of U.S. government bonds. In other words, to believe that is to believe that a Congressional blank check for continued record spending would have made Standard & Poor's think that we were a better credit risk." --columnist Thomas Sowell
"The White House and much of the chattering class cooed on Friday when unemployment dropped to 9.1 percent and 117,000 jobs were reportedly created in July. But these numbers, upon closer inspection, show no progress on the jobs front. Buried in the job stats was a number -- 193,000 -- that dwarfed all the rest. That is the number of workers who left the job market. If 193,000 left and only 117,000 jobs were added, we lost 76,000 jobs." --Washington Post blogger Jennifer Rubin

The Demo-gogues
Yes, we have been: "I know we're going through a tough time right now. We've been going through a tough time for the last two-and-a-half years." --Barack Obama (Punchline hat tip to the WSJ's James Taranto)
Pot and kettle: "[I]t's not a lack of plans or policies that is a problem here, it's a lack of political will in Washington, it is the insistence of drawing lines in the sand, a refusal to put what's best for the country ahead of self-interest or party or ideology. And that's what we need to change." --Barack Obama, who didn't address the credit downgrade until nearly 72 hours later
Reassuring? "Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we've always been and always will be AAA country." --Barack Obama
Time for more spending: "[T]he good news here is that by coming together to deal with the long-term debt challenge, we would have more room to implement key proposals that can get the economy to grow faster." --Barack Obama
Wait ... what? "[I]f Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I've called for, it could mean one million fewer jobs and half-a-percent less growth." --Barack Obama, who has no idea how to create or save a job
Broken record: "I've said it before, I will say it again: We can't balance the budget on the backs of the very people who have borne the brunt of this recession. Everyone's gonna have to chip in. That's only fair. That's the principle I'll be fighting for in the next phase of this process." --Barack Obama once again calling for higher taxes on job-creating Americans
This just in: "This is not rocket science in terms of how we can create more jobs in this country." --Barack Obama
Talking points: "I believe this is, without question, the Tea Party downgrade." --Sen. John Kerry
Unfair and unbalanced: "The media has got to begin to not give equal time or equal balance to an absolutely absurd notion just because somebody asserts it or simply because somebody says something which everybody knows is not factual." --John Kerry, demanding that the Tea Party not be given the time of day

Dezinformatsia
It's the Constitution, stupid: "This group of people in New York [Standard and Poor's] is actually talking about more government rather than less government.... In fact, the reason they like France and Great Britain is because they're parliamentary systems where the majority gets what it wants no matter what. And the problem that we have here is the Constitution of the United States of America, which actually does require people to come together from different perspectives whether it's divided government or not." --ABC's Cokie Roberts
Wrong solutions: "The fact is we didn't spend enough money on the stimulus. So what's the Tea Party solution? Pull more money out of the economy, obviously that's gonna bring more recession, possibly depression." --Chicago Tribune columnist Clarence Page, equating government spending cuts with pulling "more money out of the economy"
Wrong lessons: "S&P says, 'The downgrade was motivated by all the debate about raising of the debt ceiling. It involved a level of brinksmanship greater than what we had expected.' That's why they say they downgraded us. Not because there's too much debt, but rather that Washington is not working." --MSNBC's Rachel Maddow
Can't we all just get along? "[The tea partiers] were like cannibals, eating their own party and leaders alive. They were like vampires, draining the country's reputation, credit rating and compassion. They were like zombies, relentlessly and mindlessly coming back again and again to assault their unnerved victims, Boehner and President Obama. They were like the metallic beasts in 'Alien' flashing mouths of teeth inside other mouths of teeth, bursting out of Boehner's stomach every time he came to a bouquet of microphones." --New York Times columnist Maureen Dowd
There are stupid questions: "Is Obama more conservative than most people think?" --CNN's Don Lemon

Newspulper Headlines:
Out on a Limb: "Obama Bid to Boost Confidence Falls Short" --The Wall Street Journal
Answers to Questions Nobody Is Asking: "Why Obama Should Be Re-Elected" --PajamasMedia.com
Breaking News From 2013: "Carney: Obama Was the Leader" --Politico.com
In This Economy, Wouldn't You?: "Geithner Says He Will Stay at Treasury" --Associated Press
Investment Tip: Buy Wheelbarrows: "No Chance of Default, US Can Print Money: Greenspan" --CNBC.com
Longest Books Ever Written: "The Dumbest Thing Said in Washington Today" --PowerLineBlog.com
We Blame Global Warming: "Why Do Russians Hate Ice?" --New York Times website
We Blame George W. Bush: "Who's to Blame for Anorexic Kindergartners?" --San Francisco Chronicle website
Bottom Story of the Day: "Obama Partisans Ignore Facts When Blaming Bush" --Washington Examiner
(Thanks to The Wall Street Journal's James Taranto)

Village Idiots
Tea Party blame: "[Republicans] played brinksmanship with the full faith and credit of the United States. This was the result in that. The fact of the matter is that this is essentially a Tea Party downgrade that clearly is on the backs of those who were willing to see the country default." --White House adviser David Axelrod
"I think this is a Tea Party problem. I think they are totally unreasonable and doctrinaire and not founded in reality. I think they've been smoking some of that tea, not just drinking it." --former DNC Chairman Howard Dean
"This 'tea party downgrade' is a shameful blow to our nation's honor and risks throwing us right back into recession. Worst of all? It was completely avoidable. But when given the choice between extremist posturing and responsible leadership, tea party Republicans chose wrong." --MoveOn.org fundraising email
Doggone it: "We do not control all levers of government, sometimes that is quite unfortunate." --White House Press Secretary Jay Carney
That'll teach 'em: "Pres Obama, show some guts & arrest the CEO of Standard & Poors." --leftist fictional filmmaker Michael Moore on Twitter
Can you say "inflation"? "The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default." --former Federal Reserve Chairman Alan Greenspan

Short Cuts
"S&P downgraded the United States from AAA to AA+, and it gets worse. Today, Italy, England and Greece un-friended us on Facebook." --comedian Jay Leno
"Blame the Tea Party? Geez, no wonder [John] Kerry did so well in an election. If it wasn't for the Tea Party, they would have passed the debt ceiling thumbs up, we would have been rated BBB." --CNBC's Rick Santelli
"Obama sympathy cards are at the printer's: 'You'll always be AAA-rated to me, America.'" --commentator S.E. Cupp
"On Thursday, in honor of Barack Obama's 50th birthday, the Dow dropped 10 points for every year he has walked among us. It was the ninth-largest drop in history. We should be relieved he wasn't turning 80." --columnist Mark Steyn
"The expression 'garbage in, garbage out' refers to the data supplied to computers. It meant that if the programmer provided it with misinformation, there was no way the machinery could correct it. That happens to be the way I view Congress and the White House: Garbage in, garbage out. Too bad we have to wait until November, 2012, for the trash collector." --columnist Burt Prelutsky