Nobody is going to acknowledge GOP culpability to any reasonable degree

[jpgray]

That can be said of almost anything over the last twenty years, but it is particularly relevant concerning the S&P downgrade. The downgrade in itself is political, made for expediency and not by arithmetic (evidence aplenty can be found at Krugman's blog). The significance of the timing here should be noted--not a word of downgrade was heard during the tax cut extension deal. No speculation of downgrades at the squandering of the Clinton surplus or at any point during the Bush years. In fine the decision was made to downgrade after both parties committed to austerity, and the demands from rating agencies will be for more austerity, however they portion the blame. That our deficit is not dangerous in the short or medium term, or that our interest is not significantly affected at all in this window by a trillion here or there is immaterial. It is also immaterial that a shrinking economy explodes deficit problems, while a growing economy marginalizes them. The point of the downgrade is political.

The focus will not at all be on the intransigence of the GOP or on committing to revenue increases. It will instead be on the need to reform entitlements. All of these were mentioned in the S&P release, but only one will receive significant exposure. What tax reform measures we put forward will be meager compared to the changes to entitlements, but even meager measures will be claimed as a victory, and that entitlements are only slightly undermined when they never should have been put at risk will also be claimed as a victory. The GOP will be seen as slightly worse than the Democrats, not least because our acceptance of austerity allows the GOP to blame economic misery on our refusal to be austere enough. Had we committed to oppose austerity completely with a clear alternative, we would not be open to this attack.

In the end our dangerous fiscal outlook over the long term is generated by rising health care costs. Nothing will be said or done about this. The goal here is to reform the New Deal from public programs to publicly subsidized private services. This will happen only in part to begin with, but I believe it to be the main goal of all this.

[SteveM]

1. I agree. Once the GOP sets the frame, MSM & pundits WILL follow. nt

[mmonk]

2. It is absolutely timed to affect the framework set up.

It is political.

[mckara]

3. Book Recommendations for You

We are in a battle with Neoliberalism in which many Republicans and some Democrats dwell. The foundation of our democratic Republic is at stake, and, now, we are losing the battle. Learn from these books and explain everything to anyone who believes in Social Justice, Equality, and Democracy!

Chang, Ha-joon. Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. (New York: Bloombury Press, 2009?).

Chang, Ha-joon. 23 Things They Don’t Tell You about Capitalism. (New York: Bloombury Press, 2010).

Westra, Richard. (ed). Confronting Global Neoliberalism. (Atlanta, GA: Clarity Press, Inc. 2010).

[Demoiselle]

4. Naomi Klein...Shock Doctrine.

We were warned.