Quote:
Originally Posted by Tinordi
S&P said that the failure of elected officials to address the funding gap is the big reason for the downgrade. That's a shot across the no taxes bow. Everyone knows that the big entitlement programs have essentially been cut to the bone now. The only remaining option is taxes and as a result they are making a political statement on the downgrade. The markets were relatively sanguine with the debt ceiling debacle knowing that taxes could always be raised. What S&P did was cast doubt on the ease of that policy option.
It's clear to me that this is a function of the extremism in Congress on the right. Markets will be fine however though. No shortage of people wanted to invest in U.S. debt.
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And yet no democrat sponsored bill that was proposed would have hit the 'funding gap' requirements outlined by S&P either. I agree that to make up the remaining $2 Trillion gap would certainly mean higher taxes and yes the Tea Party knuckle dragging on this is a problem, but yet no democrat 'balanced plan' that emerged pledged to do what was required either.