This morning I was reading a New York Times article online (I surprise myself sometime) regarding the recent S&P downgrade of the U.S. credit rating. They actually did a pretty fair job of it. What I found fascinating is not the downgrade itself but that S&P, in my opinion, appears to be becoming politicized. I don’t know why, but I just assumed a rating agency would & should have no bias. How naïve of me. I first suspected it to be so when S&P & Moody’s began pressuring Congress to do a deal. I thought, why would they care? Then I recalled a quote I had seen. “What we’re looking for is a raising of the (debt) limit. It doesn’t matter the process that they get there,” Steven Hess, the senior credit officer at Moody’s in New York, said in a telephone interview. Well, that’s odd. They should only care about our credit worthiness, not how we achieve it. Why wouldn’t he say, “ We’re looking for real spending cuts. I don’t care the process”? I was starting to surmise, the fix was in. This was another created crisis (tarp, stimulus) designed for us to succumb to evermore spending. Why not keep going to the well? It seems to work every time.
S&P defended their downgrade decision, calling the bitter stand-off between President Obama and Congress over raising the debt ceiling a “debacle,” (poll tested word, no doubt) and warning that further downgrades may lie ahead. Once again, why would they care about the process. Their one & only job (I thought) is to judge the outcome. That would be like Transunion calling you & saying they are going to lower your credit score if you don’t ask your boss for a raise. Then there is the statement, “The debacle (that word again) over the debt ceiling continued until almost the midnight hour,” said John B. Chambers, chairman of S&P’s sovereign ratings committee. Again, who cares! How is it their business?
I think the fix is indeed in. I believe the rating agencies are aligning with big spenders in Washington from both parties & are going to push until they get what they want, “a balanced approach” (another poll tested statement). That means tax increases now & spending cuts
later never. It’s an upside down world when communist China, the largest holder of United States debt seems to be the only voice of reason. Go figure. They said on Saturday that Washington needed to “cure its addiction to debts” and “live within its means,” just hours after the S&P downgrade. What a concept.