Obama Administration In Denial

If you'll recall, S&P issued a warning to the US yesterday that unless serious steps are taken to reduce our debt, they will downgrade our credit rating within the next two years or so. That would result in higher interest rates, fiscal uncertainty, and much higher debt payments on our national debt.

Obama responded with political rhetoric, and Treasury Secretary and tax cheat Timothy Geithner responded today with complete and total denial of reality.
http://thehill.com/blogs/on-the-money/budget/156747-geithner-no-risk-that-us-loses-its-top-credit-rating

There is no chance that the U.S. will lose its top credit rating, Geithner said, forcefully disputing the notion that there was any chance that S&P or other ratings services would downgrade U.S. bonds from their current AAA rating.

"No risk of that, no risk," Geithner said on the Fox Business Network.

"Washington is a hard place to read. And it's hard for people to look past the political rhetoric and try to understand whether the leadership of Washington is going to take the tough steps necessary to get ahead of this problem," the Treasury secretary explained. "I think the prospects for a bipartisan agreement are better than they've been in a long period of time. Of course, we have to turn that into action."

I disagree totally with his overall point, but I do agree with some of his specifics... it's just that he misses the point.

I ALSO think that the chances of a bipartisan compromise are pretty good. But the odds that said agreement will be ineffective at reducing the debt are 70% or better... look at what happened with this year's budget. After promising $100 billion in spending cuts for the remainder of the 2011 fiscal year, the GOP delivered only $342 million.


But you see, we can't avoid an S&P downgrade of our credit rating with self-congratulatory smoke and mirrors. The only way to do that is to enact serious and significant spending cuts. Any agreement that looks good on TV but doesn't really address the problem will be ignored by S&P as the irrelevancy it is.

This illustrates quite well how divorced from reality the current President and his administration really are. They think a good speech and a nice magic trick can avoid the real-life consequences of their irresponsible behavior while in office, but the truth is that it doesn't work that way.

The message from S&P is simple, so simple that the liberal politicians in DC can't understand it. "Stop playing political games and cut spending dramatically, or bad things will happen."

PresBo's response to that so far has been to react with political games, and that doesn't instill much hope in me for our future.